stages in consumer decision making process

7/29/2019 Stages in Consumer Decision Making Process

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STAGES IN CONSUMER DECISION MAKING PROCESS

An individual who purchases products and services from the market for his/her own personal

consumption is called as consumer. To understand the complete process of consumer decision

making, let us first go through the following example: Tim went to a nearby retail store to buy a

laptop for himself. The store manager showed him all the latest models and after few rounds of

negotiations, Tim immediately selected one for himself.

1. Step 1 - Need is the most important factor which leads to buying of products and services.Need infact is the catalyst which triggers the buying decision of individuals. An individual

who buys cold drink or a bottle of mineral water identifies his/her need as thirst. However in

such cases steps such as information search and evaluation of alternatives are generally

missing. These two steps are important when an individual purchases expensive

products/services such as laptop, cars, mobile phones and so on.

2. Step 2 - When an individual recognizes his need for a particular product/service he tries togather as much information as he can. An individual can acquire information through any of

the following sources:

Personal Sources - He might discuss his need with his friends, familymembers, co workers and other acquaintances.

Commercial sources - Advertisements, sales people (in Tims case it was thestore manager), Packaging of a particular product in many cases prompt

individuals to buy the same, Displays (Props, Mannequins etc)

Public sources - Newspaper, Radio, Magazine Experiential sources - Individuals own experience, prior handling of a

particular product (Tim would definitely purchase a Dell laptop again if he

had already used one)

3. Step 3 - The next step is to evaluate the various alternatives available in the market. Anindividual after gathering relevant information tries to choose the best option available as per

his need, taste and pocket.

4. Step 4 - After going through all the above stages, customer finally purchases the product.


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5. Step 5 - The purchase of the product is followed by post purchase evaluation. Post purchaseevaluation refers to a customers analysis whether the product was useful to him or not,

whether the product fulfilled his need or not?

The Gap Model: Customers compare the service they 'experience' with what they 'expect' and

when it does not match the expectation, a gap arises.

GAP 1: Gap between consumerexpectation and management perception: arises when themanagement orserviceprovider does not correctly perceive what the customers wants or

needs.

GAP 2 : Gap between management perception and service quality specification: this is whenthe management or service provider might correctly perceive what the customer wants, but

may not set a performance standard.

GAP 3: Gap between service quality specification and service delivery: may arise pertainingto the service personnel. This could arise due to there being poortraining, incapability or

unwillingness to meet the set service standard.

GAP 4 : Gap between service delivery and external communication: consumer expectationsare highly influenced by statements made by company representatives and advertisements.

The gap arises when these assumed expectations are not fulfilled at the time of service

delivery.

GAP 5: Gap between expected service and experienced service: this gap arises when theconsumer misinterprets the service quality.

Service: Services are a form of product that consists of activities, benefits or satisfactions

offered for sale that are essentially intangale and do no result in the ownership of anything.

That means services is not physical form of product but intangle and it only indicates the

activities or benefits or satisfaction that can offer in market for sale and it can satisfy the

consumer need and wants. It can not separate from the service providers and vary person toperson.

MARKETING IMPLICATIONS

Implications of intangibility: Let us first take intangibility. The intangibility of services holds

many special implications in marketing. A majority of them relate to quality assurance. First,
https://www.boundless.com/marketing/definition/consumer/https://www.boundless.com/marketing/definition/perception/https://www.boundless.com/marketing/definition/service/https://www.boundless.com/marketing/definition/service-quality/https://www.boundless.com/marketing/definition/training/https://www.boundless.com/marketing/definition/communication/https://www.boundless.com/marketing/definition/communication/https://www.boundless.com/marketing/definition/training/https://www.boundless.com/marketing/definition/service-quality/https://www.boundless.com/marketing/definition/service/https://www.boundless.com/marketing/definition/perception/https://www.boundless.com/marketing/definition/consumer/


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because of the intangibility, in assessing the quality of a service, the customer relies more on

subjective impressions and less on concrete evidence. Second, prescribing standards of quality in

a service situation is also difficult. Third, intangibility also implies that the customer has to have

faith in the person providing the service and has to go by trust to a large extent in judging the

service quality. After all, no service can be seen in advance by the customer; and hence, he

cannot judge its quality and value in advance; he cannot sample it in advance as with a physical

product. Even the sampling job in the attempt at standardization quality poses some unusual

problems in a service situation. As a combined result of all these factors, assuring quality and

creating customer satisfaction in a service situation becomes more difficult. Moreover, because

of the intangibility, it becomes impossible to patent a service or have copyright for it.

Intangibility also results in some complexity in the matter of advertising and promotion. That is

why in a service situation. Often, making the intangible tangible to some extent possible

becomes a key task.

Implications of Inseparability:

The inseparability factor tends to localize the production and marketing of services.

Consequently, it tends to limit the market quantitatively as well as in the geographical sense.

Inseparability also limits the scope in the matter of distribution and restricts the use of marketing

channels/intermediaries. Due to the inseparability factor, customers form their opinions services

through their interaction with the service personnel who directly come in contact with them.

They also form their impressions based on the physical surroundings in which they receive the

service. They tend to equate the service quality with quality of this interaction.

Implications of Variability/ individuality /Heterogeneity:

The variability factor often leaves the consumer confused. He feels that services performance is a

non-standard affair, varying widely and is dependent on who actually performs the service.

Implications of Perish ability:

The perishable or un-storable character of services accentuates the risk and uncertainly that is

generally associated with any business. It enhances the problem of demand-supply mismatch. In


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the first place, fluctuation is particularly striking in services. Added to that, service supply cannot

be easily increased or decreased so as to match the changes in demand. As a combined effect of

the perish ability factor and the fluctuating nature of demand service marketing has to face

special problems in product planning, capacity planning and scheduling, and pricing.

Interaction between Service provider and consumer: The requirement of close interaction

between the service provider and the consumer limits the choice for the consumer. Consumers

are generally left with fewer of alternatives in services. They also find making the selection from

out of the limited alternatives more difficult here compared to a product buying situation. All the

concepts, principles and techniques of marketing apply equally to product and service marketing.

Service marketers have to develop and offer services that meet the needs of the customers just as

product marketers have to do. Also, service marketers have to score over their competitors just asproduct marketers have to do. Naturally, all basic principles of marketing should apply equally to

product and service marketing.

Classification of services:

1. On the basis of the END USER the services can be classified into following categories: Consumer : leisure, hairdressing, personal finance and package holidays Business to Business: advertising agencies, printing, accountancy, Consultancy Industrial: Plant Maintenance and repair, workwear and hygiene, installation and

project management.

2. The DEGREE OF TANGIBILITY can be used to classify a service. Highly tangible: car rental, vending machines, telecommunications Service linked to tangible goods: domestic appliance repair, car service. Highly tangible: psychotherapy, Consultancy , legal services.

3. Services can be broken down into LABOR INTENSIVE (PEOPLE based) and EQUIPMENTbased services. This can also be represented by degree of contact.

People based services: high contact : education, dental care, restaurants and medicalservices

Equipment based: low contact: automatic car wash, launderette, vending machine,cinema.


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4. The EXPERTISE and SKILLS of the service provider can be broken down into the followingcategories:

Professional: medical services, legal services, accountancy, tutoring. Non Professional: baby sitting, care taking, and casual labor.

5. The overall BUSINESS ORIENTATION ( PROFIT) is a recognized means ofclassifications:

Not for profit: The Scouts Association, charities, and public sector leisure facilities. Commercial: banks, airlines, tour operators, hotel and catering services

Christopher Lovelock gives another classification of services based on the customer

involvement in production process:

People processing: tangible actions to peoples bodies, such as airline transportation,haircutting and surgery. Customers need to be physically present throughout service delivery

in order to receive the desired benefits of such services. It is important to figure the process

and output to identify the benefits created. Also some non- financial costs are to be identified

such as time, mental and physical effort and even tear and pain that customers incur in

obtaining these benefits.

Possession Processing: Tangible actions to goods and other physical possessions, such as airfreight, lawn mowing, and janitorial services. In these instances, the object requiring

processing must be present, but the customer need not be.

Mental Stimulus Processing: intangible actions directed at peoples mind, such asbroadcasting and education. In this instance the customers must be present mentally but can

be located either in specific service facility or in a remote location connected by broadcast

signals or telecommunication linkages. Services that interact with peoples mind have the

power to shape attitudes and influence behavior. So when the customer is in a position of

dependency or there is a potential for manipulation, strong ethical standards and careful

oversight is required. This type of service can easily be converted to digital bits or analog

signals, recorded for prosperity, and transformed into a manufactured product, such as a

compact disc, videotape, or audio cassette, which may then be packaged and marketed

much like any other physical good


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Information Processing: Intangible actions directed at intangible assets, such as insurance,investment banking, and Consulting. For these services, no direct involvement with the

customer may be needed, once the request for the service is initiated. Services highly

dependent on effective collection and processing of information include financial services,

accounting, law, marketing research, management consulting, medical diagnosis and a

variety of other professional services. Tradition and a personal desire to meet the supplier

than often determine the extent of customer involvement in such services more by the needs

of operation process.

POINTS OF

DIFFERENCEGOODS SERVICES

PHYSICAL

EXISTENCE

Goods have physical existence and

they can be touched, smelled or seen.

Examples: Soap, Shirt, Cell phone

Services have not any physical

existence and they cant be touched,

smelled or seen.

Examples: Teaching, Managing,

Singing

STORING

Goods may be perishable or non-

perishable depending on the

circumstances. But perishable goods

still can be stored for a longer period

of time.

Examples: Vegetables, Tools and

Leather can be stored.

Services are only perishable products.

They cant be stored for a longer

period of time. Because they vary with

environment.

Examples: Singing, Teaching and

Managing cant be stored.

QUALITY

Once produced, the quality of theGoods remains uniform. Their

quality cant be changed after they

have been produced.

Examples: Tea, Milk and Juice have

The quality of the Service varies withthe change in environment. Once

discovered, its quality improves with

the passage of time and with the

change in the environmental

conditions.


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the quality unchangeable. Examples: Singing quality can be

improved by learning more. Same

scenario is with managing and

teaching.

PRODUCTION

CYCLE

Goods are produces through a

proper production cycle, which

involves purchasing of raw materials,

processing and finishing.

Examples: Shampoo, Tea and Juice

are produced by purchasing the

fruits, leaves etc.

A Service is not produced, instead it is

discovered. There is no need to follow

a specific production cycle to discover

it.

Examples: Singing is not produced by

purchasing something. The singer is

competent for it. Same is with

managing and teaching.

OWNERSHIP

The rights of ownership of Goods

are transferable.

Examples: Car, when with company

is its own, but its ownership is

transferred to customers when they

purchase it.

There is no ownership involved in

Services, and if there is, then it will not

be transferable.

Example: A teacher cant transfer his

teaching to someone else. Because

only he can provide this service well.

CONSUMPTION

Goods are produced first, then sold,

then consumed.

Examples: Soaps are first produced,

then they are sold to customer and

then customer uses it.

Most services are sold first and then

consumed.

Examples: A teacher coaches whole

the month and after one month, he

will get his salary.

SEPARATION

Goods can be separated from their

producers.

Examples: When producer produces

shampoo, it is with him, but when a

customer purchases it, it no longer

remains with producer.

Services cant be separated from the

persons who provide them.

Examples: If a manager hires a trainee

and trains him, still he has managing

knowledge and can serve the

company.


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On the basis of Offering

POINTS OF

DIFFERENCE

GOODS SERVICES

TRANSFER

Goods are transferred by hiring a

cargo and they can then be easily

transferred from one place to

another.

Examples: Unilever transfers its

products through cargo.

Services cant be transferred. The person

or individual, who is serving in an

organization cant transfer his service to

another person. Only he can serve it

well.

Examples: There is no need of any cargo

for a manager, who serves anorganization.

DISTRIBUTION

Goods are often distributed

through proper medium. This

medium includes the personals

(Wholesalers/Retailers) that make

the good reach the customer.

Examples: Tea bags are distributed

through wholesalers in the market.

Services are not distributed through

such a chain of personals.

Examples: To serve a college, the

teacher needs no wholesaler who makes

the teaching reachable to students.

REVERSING

Goods, once produced and sold,

cant be reversed to the position in

which they were before

production.

Examples: A shampoo, after its

sale, cant be reversed to its raw

material, by which it was produced.

Services, when provided and sold, can

be reversed to its original form in which

they were before providing.

Examples: A research goes wrong, still it

can be reversed by ignoring the wrong

concepts and perceptions.

Tertiary sector of the economy

The tertiary sector of the economy (also known as the service sector or the service industry) is one of

the three economic sectors, the others being these condary sector (approximately the same as


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manufacturing) and the primary sector (agriculture, fishing ,and extraction such as mining).The

service sector consists of the "soft" parts of the economy, i.e. activities where people offer their

knowledge and time to improve productivity, performance, potential, and sustainability. The

basic characteristic of this sector is the production of services instead of end products. Services

(also known as "intangible goods") include attention, advice, experience, and discussion. The

production of information is generally also regarded as a service, but some economists now

attribute it to a fourth sector, the quaternary sector. The tertiary sector of industry involves the

provision of services to other businesses as well as final consumers. Services may involve the

transport, distribution and sale of goods from producer to a consumer, as may happen in

wholesaling and retailing, or may involve the provision of a service, such as in pest control or

Entertainment. The goods may be transformed in the process of providing the service, as happens

in the restaurant industry. However, the focus is on people interacting with people and serving

the customer rather than transforming physical goods.

For the last 30 years, there has been a substantial shift from the primary and secondary sectors to

the tertiary sector in industrialized countries. This shift is called tertiarisation. The tertiarysector is now the largest sector of the economy in the Western world, and is also the fastest-

growing sector.

Overview

Service marketing is a subfield of marketing, which can be split into the two main areas of

goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and

durables) and services marketing.

Services marketing typically refers to both business to consumer (B2C) and business to

business (B2B) services, and includes marketing of services like telecommunications services,

financial services, all types of hospitality services, car rental services, air travel, health care

services and professional services.

Services are economic activities offered by one party to another. Often time-based,

performances bring about desired results to recipients, objects, or other assets for which

purchasers have responsibility. In exchange for money, time, and effort, service customers

expect value from access to goods, labor, professional skills, facilities, networks, and systems;

but they do not normally take ownership of any of the physical elements involved.

Evolution in service sector:
http://en.wikipedia.org/wiki/Western_worldhttp://en.wikipedia.org/wiki/Western_world


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The service sector occupies an important place in the modern economies in as much as about

55% of jobs are being offered by the service sector by marketing numerous types of services to

customers, such as food, personal care, entertainment, banking, insurance, transport, consultancy,

tourism, office services, professional services etc. Service sector has a vital role to play in the

economic, political and administrative changes that are taking place in India. The problems of

adaptation and achievement are more acute in India as the development here has taken place in a

span of few decades in few segments unlike other countries. With the increasing awareness the

people look forward to better service sector, these expectations may be more. With a democratic

political setup and too many expectations from the governments side will lead to deterioration in

the quality of service to be provided. With the plan of expansion in new areas asking for

introduction of new services and other areas demanding improvement in quality of service, the

government is constantly under pressure to provide services quantitatively and qualitatively.

The service sector management as a profession would contain the following:

1. Service deliverers: This involves the pure service rendered by the professional staff like

doctors in hospitals, teachers in academics.

2. Service managers: The personnel who provide the supporting managerial services like

administratione.g. a registrar in a University.

3. Service analysts: People who are entrusted with the task of concurrent review and evaluation

of services in the organizatione.g. personal manager in a HRD.

4. Supporting staff: Personnel employed in manual jobs in the service organizations such as

nurses in hospitals.

Growth in service sector:

Service sector is the lifeline for the social economic growth of a country. It is today the largest

and fastest growing sector globally contributing more to the global output and employing more

people than any other sector.

The real reason for the growth of the service sector is due to the increase in urbanization,


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privatization and more demand for intermediate and final consumer services. Availability of

quality services is vital for the well being of the economy.

In advanced economies the growth in the primary and secondary sectors are directly dependent

on the growth of services like banking, insurance, trade, commerce, entertainment etc.

Indian Service Sector

In alignment with the global trends, Indian service sector has witnessed a major boom and is one

of the major contributors to both employment and national income in recent times. The activities

under the purview of the service sector are quite diverse. Trading, transportation and

communication, financial, real estate and business services, community, social and personal

services come within the gambit of the service industry. One of the key service industry in India

would be health and education. They are vital for the countrys economic stability. A robust

healthcare system helps to create a strong and diligent human capital, who in turn can contribute

productively to the nations growth.

Subsectors

Information Technology Industry

The Information Technology industry has achieved phenomenal growth after liberalization. The

industry has performed exceedingly well amidst tough global competition. Being knowledge

based industry; India has been able to leverage the global markets, because of the huge pool of

engineering talent available and the proficiency in English language among the middle class.

ITES sector

The ITES sector has also leveraged the global changes positively to emerge as one of the

prominent industries. Some of the services covered by the ITES industry would be:

Customer interaction services -Non voice and Voice. Back office, revenue accounting, data entry, data conversion, HR services. Medical Transcription.


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Content development and animation. Remote education, market research and GIS

Retailing

Prior to liberalization, India had one of the most underdeveloped retail sectors in the world. After

liberalization the scenario changed dramatically. Organized retailing with prominence on self

service and chain stores has changed the dynamics of retailing. In most of the tier I and tier II

cities supermarket chains mushroomed, catering to the needs of vibrant middle class. This

indirectly contributed to the growth of the packaged food industry and other consumer goods.

Financial Services-Banking And Insurance

Prior to liberalization these two sectors were controlled and regulated by the government.Nationalized banks and insurance companies had a firm grip over the market. After liberalization

the banking and insurance domain opened up for private participation.

Banking Sector

The three major changes in the banking sector after liberalization are:

Step to increase the cash outflow through reduction in the statutory liquidity and cashreserve ratio.

Nationalized banks including SBI were allowed to sell stakes to private sector andprivate investors were allowed to enter the banking domain. Foreign banks were given

greater access to the domestic market, both as subsidiaries and branches, provided the

foreign banks maintained a minimum assigned capital and would be governed by the

same rules and regulations governing domestic banks.

Banks were given greater freedom to leverage the capital markets and determine theirasset portfolios. The banks were allowed to provide advances against equity provided as

collateral and provide bank guarantees to the broking community.

Insurance Sector

The Insurance Regulatory and Development Authority Act 1999 (IRDA Act) allowed the

participation of private insurance companies in the insurance sector. The primary role of IRDA


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was to safeguard the interest of insurance policy holders, to regulate, promote and ensure orderly

growth of the insurance industry. The insurance sector could invest in the capital markets and

other than traditional insurance products, various market link insurance products were available

to the end customer to choose from.

HDFC Standard Insurance Co Ltd ICICI Prudential Insurance Co Ltd Max New York Insurance Co Ltd

Future Trends

Globally outsourcing industry would continue to grow. Following the success of US and UK, more countries in the European Union would

outsource their business.

Technological power shift from the West to the East as India and China emerge as majorplayers.

Political backlash over outsourcing would come down as companies reap the benefit ofoutsourcing.

Nature of service marketing:

Services are consumed as it is produced Services marketing has limited influence on customers prior to purchase than goods

Need to experience intangible service to know it Experience influences Post-Sale marketing Experience influences word-of-mouth communication

Services marketers can create brand awareness & induce trial Experience of benefits builds brand preference and brand value Services marketing is also done by service providing personnel

How they conduct themselves with customers What they say, What they dont say


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How they behave, How they act Overall appearance

All these influences customer satisfaction and customer retention Delivering excellent quality service is the key!!

Scope of service marketing: There are five broad categories within the non-ownership

framework

1. Rented goods services: These services enable customers to obtain the temporary right touse a physical good that they prefer not to own (e.g. boats, costumes)

2. Defined space and place rentals: These services obtain use of a defined portion of alarger space in a building, vehicle or other area which can be an end in its own right (e.g.

storage container in a warehouse) or simply a means to an end (e.g. table in a restaurant,

seat in an aircraft)

PeopleThings

TangibleActions

IntangibleActions

Services directed atpeoples bodies.( People Processing)

Health Care

Beauty Salons Restaurants

PublicTransportation

Services directed atgoods and otherphysicalpossessions( PossessionProcessing )

FreightTransportation

Repair /Maintenance

Dry CleaningServices directed atpeoples minds.( Mental StimulusProcessing )

Education

Theaters

InformationServices

Services directed atintangible assets.( InformationProcessing )

Banking

Legal Services

Insurance


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3. Labor and expertise rental: People are hired to perform work that customers eitherchoose not to do for themselves (e.g. cleaning the house) or are unable to do due to the

lack of expertise, tools and skills (e.g. car repairs, surgery)

4. Access to shared physical environments: These environments can be indoors oroutdoors where customers rent the right to share the use of the environment (e.g.

museums, theme parks, gyms, golf courses).

5. Access to and usage of systems and networks: Customers rent the right to participate ina specified network such as telecommunications, utilities, banking or insurance, with

different fees for varying levels of access and use.

Characteristics of Services Marketing:

Intangibility:

One of the fundamental differences between product and service cited by authors (e.g.

Srinivasan, 2007; Kotler & Keller, 2008; Lovelock, Wirtz & Chatterjee, 2006 and many others)

is Intangibility. Services are intangible. They do not have physical appearance like product s.

They cannot be felt; touched until they are bought for example a person getting cosmetic surgery

cannot be seen until he or she purchase or use the service. So a company should demonstrate

their service quality through physical evidence. (Srinivasan, 2007) So, it is very important for

any company to show physical evidence of their service to customers for example FedEx. It isone of the largest logistic and courier services provide company. It is in both businesses

Business to Business where it helps companies in import-export of raw material and Business to

Customers. It has many evidence of service quality or physical evidence for example FedEx

puts every courier in wood box for protection, they package it in proper manner, it has scheme

like if a courier will not reach at a time then it will pay back all money to its consumers. In the

same way FedEx has their huge transport services such as Cargo planes, Trucks, Van. FedEx

have good technologies such as internet service, ERP, GPS software which help them to find out

the position of courier. It provides free insurance of the courier to their customers so if the

courier lost then they will pay compensation. They have their huge logo, dress, branch in all

cities whether it is metropolitan or tire one or two cities which is totally vice-versa to Indian Department of Post where they do not have good infrastructure, technology and trained

workforce. If there is good physical evidence then it will make great impact on customers.


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Challenges:

Intangibility of services can cause lack of assurance and confidence on the part of the customers.

There are some issues like it is complicated for customers to evaluated the service quality and

similarly it is difficult for firm to set the price advertise and display the services. To overcome

this customers tend to look for evidence in quality. Service companies should try to express their

service quality through presentation and physical evidence of efforts made by firm to provide

good quality service. How to overcome from these challenges?

Place: If we take retail sector as an example the interiors and exteriors of store shouldhave clean line. The layout of chairs, and desks, visual merchandising of the store and the

traffic flow should be planned carefully. The billing line should not get overly long.

People: There should be sufficient numbers of billing counters and employees in retailstore to manage the crowed. They should always be ready to help customers.

Equipments: Computers, chairs, desks, background music, paintings, trolleys and otherimportant products should be and look like State of the Art.

Symbols and communication materials: Printed materials and symbols such as text,photos and name should suggest fast services. (Bruhn & Georgi, 2006)

Perishability:

Challenges:

Service cannot be inventoried therefore Perishability can be a problem when demand fluctuates.

The process, service relevant resources and the system are assigned for delivery of a service

during a set period of time. If the schedule customer does not request and consume the service

during the set time then the service cannot be stored and performed next time for him for an

example a barber can serves another client when scheduled time started or time slot is over but a

plane cannot charge for an empty seat after departure. The main challenge for service providingcompanies is if the schedule customer does not request and consume the service during the set

time then the service cannot be stored and performed next time for him. A service provider

cannot charge any service charge from customers as he can do in product oriented situation.

How to overcome from these challenges? On the supply side:


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A company should use better technology to improve their work efficiency.On demand side:

Reservation system can be a way which can help company to manage the demand.Variability:

Challenges:

The other difference between product and service is Variability. Variability and People (1st

p of

3P) are one of the main part of Service Marketing. Each time service is differ and varies for the

next delivery even if the same service provider serves the same service and same service

consumer requests the same service. Because of the service quality depends on who provides

them, where, when and to whom services are highly variable. Those companies who have people

base service process it is difficult for them to deliver same kind of service every time constantly.

It is difficult to achieve the control on quality. (Bruhn & Georgi, 2006)

Inseparability:

Challenges:

The other difference between product and service is Inseparability. Whereas physical goods are

firstly manufactured, put in to stock, distributed through wholesalers and retailers and consumed

later but services are produced and consumed simultaneously. A barber cannot cut hair without

the presence of customer. (Hoffman & Bateson, 2006)

How to overcome from these challenges?

To make services more effective a company should focus on these factors such as:

Training: Every company should provide training to its employees to improve theirproductivity so they can help to achieve the economics of scale.

Customer involvement: There should be customer involvement in process of servicedelivery such as self services.


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Convenience: Location of the store, the opening and closing time of store must beconvenient for customers.

Service quality involves a comparison of expectations with performance. According to Lewis

and Booms (1983) service quality is a measure of how well a delivered service matches the

customers expectations. Generally the customer is requesting a service at the service interface

where the service encounter is being realized, then the service is being provided by the provider

and in the same time delivered to or consumed by the customer. The main reason to focus on

quality is to meet customer needs while remaining economically competitive in the same

time.[1]

This means satisfying customer needs is very important for the enterprises survive. The

outcome of using quality practices is:[2]

Understanding and improving of operational processes Identifying problems quickly and systematically Establishing valid and reliable service performance measures Measuring customer satisfaction and other performance outcomesService quality is abusiness administration's term and describes the degree of achievement of an

orderedservice.In this connection,objectiveandsubjectiveservice quality can be distinguished.

Objective service quality is the concrete measurable conformity of a working result with theprevious defined benefit; since the measurability is remarkable dependent on the definition's

accuracy, a measurable quality criterion easily can turn out as a subjective one.[5]

Subjective service quality is the customers perceived conformity of the working result withthe expected benefit; this perception is overlayed with the customers original imagination of

the service and the service providers talent to present his performance as a good one.[6]

Service quality can be related to service potential, service process or service result.

In this way for example, potential quality can be understood as the co-workers qualification,

process quality as the speed of the generated service and result quality as how much the

performance matched the customers wishes.

Criteria of service quality

Word-of-mouth, personal needs and past experience create an expected service (Expectation of

the service). The perceived service will be compared with the expected service by the customer.

And leads to the perceived service quality as a result. Between the expected and the perceived
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service can appear a gap if the perceived service does not match with the expected service.

Factors which influence the appearing of the gap were found by Parasuraman, Zeithaml and

Berry in 1985.

Parasuraman, Zeithaml and Berry (1985) identified ten determinants of service qualitythat may relate to any service:

Tangibles (Physical evidence of the service: appearance of physical facilities, tools andequipments used to provide the service, appearance of personnel and communication

materials)

Reliability (The ability to perform the promised service dependably and accurately:consistency of performance and dependability, service is performed right at the first time, the

company keeps it's promises in accuracy in billing and keeping records correctly, performingthe services at the designated time)

Responsiveness (The willingness and/ or readiness of employees to help customers and toprovide prompt service, timeliness of service: mailing a transaction slip immediately, setting

up appointments quickly)

Assurance(The knowledge and courtesy of employees and their ability to convey trust andconfidence: competence (possession of the required skills and knowledge to perform the

service), courtesy (consideration for the customer's property, clean and neat appearance ofpublic contact personnel), trustworthiness, security (safety and confidentiality))

Empathy (The provision of caring, individualized attention to customers: informing thecustomers in a language they can understand, Understanding customer's specific needs,

Providing individualized attention)
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stages in consumer decision making process

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