Measuring and evaluating service quality

Abstract

In the past years, service quality and its influencing factors have become a recurring topic of study. Literature offers several approaches to the definition of service quality, which address the parameters affecting services based on different interpretations. The present study deals with the definition of service quality, as well as the ways of measuring service quality as seen in international models. We aim at presenting the changes in the definition of service quality over the past few years, and the factors that help identify and measure the quality of services. The course of business in companies is vastly influenced by the quality of services offered and used, therefore, this study also looks at the relationship between service quality and the course of business.

Key words: service quality, service management, quality

1. Introduction

The concept of service quality has become a focus of attention in management literature over the past few years. The interpretation of quality has considerably changed over the decades, but its accurate definition is still lacking. Previously, quality meant compliance with requirements and standards, however, over the years meeting consumer demands, environmental, social and corporate expectations have gained importance as well. Quality was first defined in the tangible products sector and quality assurance became a key issue in the 1980s. Measuring the quality of services, however, is harder to carry out than measuring the quality of products. In the case of services there is a direct contact between the provider and the customer, the service is not tangible and there is a higher risk of error. Because of the intangible, unstable nature of services, there are several factors that have to be specifically taken into consideration when measuring and evaluating the quality of services. Services cannot be stored or showcased; therefore they are difficult to standardise and control. To determine the appropriate quality of a service, customer feedback and review are viable possibilities. Customer needs stem from word of mouth communication between consumers and personal needs emerging from past experiences. In the service industry, it is harder to evaluate service quality for the opposing parties than in the case of products. Moreover, in our understanding of service quality both customer needs and the service provided play a role, thus the entire process of service provision has to be examined.

The present study deals with the definition, study and measurement of service quality. There is an emphasis on the identification of influencing factors, and on service quality measuring options, since today providing high quality services is not only a focal part of economic life, but it is also in the best interest of several trades. It is our aim to define service quality, which is dependant on several factors, such as characteristics and variables that determine services and the expectations voiced in connection with services.

2. The concept of quality

In the past decades, several researchers and practising professionals dealt with determining the concept of quality. As a result, numerous theories emerged. Quality has multiple constituents, which makes it difficult to come up with a clear definition. Its characteristics are the following:

• quality is objective and subjective simultaneously, its generalisability is limited,

• its constituents include both measurable and estimable parameters,

• it may also refer to a technical utility standard and deviation from it,

• it has observable benefit impacts and also impacts that the consumer does not perceive consciously (Veres, 2005).

In the international literature, numerous concepts were born to define quality, depending on which scientific area or trade the researchers or professionals came from. Some see quality differences as differences in the quantity of certain desirable constituents and characteristics, while others identify quality with meeting standards, or meeting customer expectations. According to Crosby (1979) and Feigenbaum (1991) quality is compliance with requirements and the best possible compliance with the conditions of the customers, these conditions being the actual use of the product and product price. They believe that these are the bases for assessing the suitability for use of the service quality, and hence studying customer satisfaction becomes important.

Quality is also often used in everyday life, mostly when referring to measuring or expressing the standard of something. Today product and service quality play an important role, as the concepts of sustainability and consumer society urge consumers to become more aware. With the advent of consumer society, there is a growing demand for products and services that comply with the expectations of customers. There are several definitions for the concept of quality in literature, from the angle of different professional areas, as shown in Figure 1. below.

The concept of quality is worth looking at from the customer, consumer point of view as well, since the ultimate goal of providers is to satisfy customer needs and to ensure customer satisfaction. This is shown in most quality related concepts, consumer needs and expectations appear in almost every one of them. However, alongside customer needs, environmental and social expectations have also appeared recently. This is reflected in Kormos’s (2000) figure as well (Figure 2.).

Over the past decade, the service sector has gained more and more economic significance. The most recent statistics show that the sector amounts to 60% of added value in the European Economic Community (Ghobadian et al., 1994). For service providers meeting their clients’ requirements is the greatest challenge, improving services is fundamental for several provider companies. Despite the significance of the sector and the importance of quality issues in the sector, research and publications in connection with service quality are incomprehensive.

In service provision, customer participation in processes is more pronounced than in the case of producing activities, but it creates tension between service quality and the effectiveness of service provision. One of the consequences of this tension is the fact that control process standards cannot improve control quality. Therefore, successful cooperation is of paramount importance in order to improve control quality (Tomchuk et al., 2018; Knechel et. al., 2019). Determining and measuring service quality is more difficult than measuring product quality. In the case of services, there is direct contact between the provider and the customer, the service provided is intangible and there is a high risk of error. Customer feedback and review may help decide whether the quality of a service is appropriate or not. Customers’ needs might emerge from word-of-mouth communication or their personal needs emerging from their past experiences. However, there are no requirements laid down in advance in connection with customer competence. Another important factor is the role of customer sentiments in service experience (Edvardsson, 2005). Due to the intangible and unique nature of services, measuring and evaluating quality can only be done specifically. Several factors, such as customer competence, their previous experience and expectations or the type of service, have to be taken into account (Becser, 2007).

3. Approaches in measuring service quality

In this study, the classification of service quality models and their applicability in service quality research is based on Seth, Deshmuk and Vrat’s (2005) work. In their article, they examined 19 service quality models ranging from Grönroos’s 1984 model (Grönroos, 1984) to Santos’s 2003 model (Santos, 2003). From the 20 years of research, the models related to, or originating from the GAP-model are relevant in studying customer and client perceptions (Réthi et al., 2014).

As a result of our investigation, it can be said that in the past two decades service quality models have undergone a huge development in their focus. We may also draw the conclusion that today there is a shift from the product-based value logics to service-based value logics described by Vargo and Lusch (2004a, 2004b), which is reflected in both service models and in service quality definitions. The development of models shows a linearity as novel models are the continuation of earlier ones, they build on previous findings and suggestions. Grönroos (1984) was the first to identify and incorporate the word-of-mouth (WOM) theory into a model, which is a more effective influencing tool than traditional, usual marketing tools in reaching potential clients and consumers. His work is a significant milestone in service quality literature (Kang – James, 2004). Later, Parasuraman and his co-authors (Parasuraman, Zeithaml, Berry, 1985) incorporated WOM as one of the key factors in expected service quality into the well-known GAP model. SERVQUAL, the measuring tool for the quality of services, was born from the reviewed and improved model. Afterwards, the GAP model and SERVQUAL served as the basis for Frost and Kumar’s (Frost – Kumar, 2000) internal service quality model. It can also be identified that Brogowicz and his co-authors (Brogowicz, Delene, Lyth, 1990) developed their service quality model from the synthesis of the Grönroos (1984) and GAP models (Parasuraman et al., 1985).

Cronin and Taylor (1992), just like Teas (1993) sharply criticised using the GAP and SERVQUAL models for measuring service quality, and suggested the application of the SERVPERF model and evaluated performance (EP). The SERVPERF model is a service quality tool that only measures perceptions. Haywood-Farmer (Haywood-Farmer, 1988), and Philip and Hazlett (1997) prefer the application of the attribute service quality model.

Cronin and Taylor’s (1992) shift towards perceptions is a key moment since a large proportion of later models originates from this approach. (Figure 3.). They believed that service quality is a prerequisite for consumer satisfaction, which has a major influence on purchase intent or availing a service. Based on this, Spreng and Mackoy (1996) created the model of perceived service quality and satisfaction. Dabholkar and his co-workers (Dabholkar, Shepherd, Thorpe, 1997), as well as Bei and Chiao (2001) later examined the link between these factors, and the de Ruyter, Bloemer and Peeters (1997) trio also dealt with the relationship between service quality and customer satisfaction. They pointed to the fact that clients and customers do not always use the best quality services, in many cases they make their decision based on service evaluation (Cronin – Taylor, 1992). This resulted in the birth of more and more models that integrated the concept of service value, understanding service quality and the process of value creation (Mattsson, 1992; Oh, 1999; Sweeney, Soutar, – Johnson, 1997).

In addition, the development of information technology that began in the mid-1990s, and further increased at the turn of the millennium, also had a major impact on the evaluation of service quality and its constituents. Information technological devices became an integral part of provider companies’ activities, enabling them to transfer higher quality, more convincing services, include more extras in their service packages and collect information about service performance more efficiently for the management (Friedman, 2008; Furey, 1991). This development significantly influenced consumers’ service perception and their understanding, which also shows in the later models (Berkley – Gupta, 1994; Brady – Cronin, 2001; Broderick – Vachirapornpuk, 2002; Dabholkar, 1996; Martínez Caro – Martínez García, 2008; Santos, 2003; Zhu, Wymer, – Chen, 2002). At the turn of the millennium, due to these developments a Data Envelopment Analysis (DEA) based model was born, which also reflected on practising professionals’ need for information (Soteriou – Stavrinides, 2000). The DEA is a performance measuring method used in the evaluation of the productive efficiency of decision-making units, however, it is also applicable for measuring service quality and benchmarking (Lee – Kim, 2014).

The effect and role of the development of information technology in services is still an important factor in examining the link between service quality and its perception (Zhao, Lu, Zhang, Chau, 2012). Web-based services and the relevant service quality (Oriol, Marco, Franch, 2014), as well as online service quality studies (Munthiu, Velicu, Tuțǎ, Zara, 2014) also belong here.

The majority of models stems from the GAP model (Figure 4.) and SERVQUAL; despite all the criticism, these models have the largest support in literature. However, there are also models that are based on different assumptions (Seth et al., 2005).

Besides this classification, in development terms it is also worth mentioning that the identification of external and internal clients and catering to their needs is getting higher and higher recognition in models. This logic leads to the model of internal and external gaps (Dimitriadis – Stevens, 2008). From the point of view of service provision, the differing needs – that require different handling – of the two client groups have to be acknowledged, however, it has to be noted that there is some sort of interdependence between them. Internal clients are the employees of the provider company, who, by means of word of mouth communication express needs that are necessary for appropriately carrying out their own tasks – and therefore for the provision of appropriate quality service – and that can be met by their immediate co-workers. This relationship is reflected in the overall quality of the service, which is evaluated by the external clients. Dedicated internal clients are indispensable for making external clients satisfied. From the point of view of management, when looking at the development of service quality the effect of different types of services and organisational cultures on service quality, just as the effect of service quality on consumer attitudes, which influences future evaluations, have to be taken into consideration (W.-B. Lin, 2007).

One of the most popular phenomena in the past few years, McDonaldization and Disneyization also apply the modified versions of original principles in their everyday operation (Heidrich – Réthi, 2012). The original dimensions described by Ritzer (Ritzer, 1993) and Bryman (Bryman, 2004) (McDonaldization: efficiency, predictability, reliability, technological control; Disneyization: theming, combined consumption, merchandising, role-based work) have significantly changed due to the effect of customer perceptions and behaviour, even if they retained their original interpretations. McDonaldization as an example of standardisation and Disneyization as an example of modularisation had to adapt to consumer differences and fine-tune their services based on the rate of consumer inclusion. This is all highly significant because services require such corporate activities that involve the service-user client in the process of service provision to a smaller or greater extent, thus the evaluation of service quality becomes subjective. This characteristic feature of services makes it important to assess and interpret perceptions of the participants in the processes.

It is typical of services that the different elements of the servicing process have differing transparency for the consumer and the service provider, and consequently, they find different factors relevant. This could also have a major influence on service quality evaluation, as providers need to persuade the consumer to cooperate to a certain extent in order to provide an appropriate quality of service.

4. Summary

The changes and development of service quality models is well visible in the literature. This article presented the classification of service quality models and their applicability. Our research results show that over the past few years, there has been a significant development in the focus of service quality models, with a shift from product-based to service-based value logic. The literature review revealed that the newer models of services and service quality are an integral continuation of earlier models, which build on previous assumptions and suggestions. The study of literature also showed that there is not a single concept generally accepted that could efficiently measure service quality. Most models attempt to measure service quality by combining expected and perceived parameters of service quality. We van conclude that service providers are able to identify their consumers and their expectations, but not their personal needs, therefore, the communication gap becomes a major factor.

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Martina Zsófia Török
doctoral student, Szent István University, assistant lecturer, Budapest Business School

Dr. Mónika Pónusz
Deputy Head of Institute -Education and Studies
Associate Professor, Institute of Economics and Management
Faculty of Law of the Károli Gáspár University of the Reformed Church in Hungary

Dr. Karabassov Rassul Ph.D.
Candidate of Sciences in Economics. Associate Professor Acting. Republic of Kazakhstan, S.Seifullin Kazakh Agro Technical University

Dr. Róbert Tóth Ph.D.
Chief Economist, PhD in Economics, Szent Istvan University, Hungarian Chamber of Commerce and Industry