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2
QUALITY SERVICE MANAGEMENT IN
TOURISM AND HOSPITALITY ( THCC 216 )

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LEARNING MODULE
BLENDED FLEXIBLE LEARNING
Quality Service Management in Tourism and Hospitality (THCC 216)

AN OVERVIEW

INTRODUCTION

Every customer has an ideal expectation of the service they want to receive when
they go to a restaurant or store. Service quality measures how well a service is delivered
compared to customer expectations. Businesses that meet or exceed expectations are
considered to have high service quality. Let's say you go to a fast food restaurant for
dinner, where you can reasonably expect to receive your food within five minutes of
ordering. After you get your drink and find a table, your order is called, minutes earlier
than you had expected! You would probably consider this to be high service quality. So
how can the business do it? We will further discuss about service quality in the
upcoming lessons.

LEARNING OUTCOMES
At the end of this module, you should be able to:

1. To differentiate the different service quality gaps.

2. To identify different dimensions of servqual model.
3. To distinguish the importance and types of customer loyalty programs.
4. To recognize the customer satisfaction as an outcome of service quality.
5. To relate the different service quality outcomes, models and programs in the
real world.

LEARNING RESOURCES

3G E-learning., (2019). Quality Service Management in Tourism and

Hospitality, 3 G E-learning LLC, USA

LEARNING INPUTS

LESSON 5 SERVICE QUALITY MEANING AND GAPS

What is Service Quality?

Every customer has an ideal expectation of the service they want to receive when
they go to a restaurant or store. In some earlier studies, service quality can be defined
as the extent to which the service fulfills the needs or expectations of the customers or
conceptualized it as the overall impression of customers as regards the weakness or
excellence of the service. Service quality measures how well a service is delivered,
compared to customer expectations. It is a product of the effort that every member of
the organization invests in satisfying customers. Businesses that meet or exceed
expectations are considered to have high service quality. However, service quality is
defined as “what the customer gets out and is willing to pay for” rather than “what the
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supplier puts in”. Let's say you go to a fast food restaurant for dinner, where you can
reasonably expect to receive your food within five minutes of ordering. After you get
your drink and find a table, your order is called, minutes earlier than you had expected!
You would probably consider this to be high service quality. Therefore, service quality
can be seen as the gap as the between the expected service and the actual perceived
service.

Service Quality Gaps

 The Customer Gap: The Gap between Customer Expectations and Customer
Perceptions

The customer gap is the difference between customer expectations and customer
perceptions. Customer expectation is what the customer expects according to available
resources and is influenced by cultural background, family lifestyle, personality,
demographics, advertising, experience with similar products and information available
online. Customer perception is totally subjective and is based on the customer’s
interaction with the product or service. Perception is derived from the customer’s
satisfaction of the specific product or service and the quality of service delivery.
This gap arises when the management or service provider does not correctly analyze
what the customer wants or needs. It also arises due to insufficient communication
between contact employees and managers. There is a lack of market segmentation. This
Gap occurs due to insufficient market research. For Instance- A café owner may think
that the consumer wants a better ambience in the café, but the consumer is more
concerned about the coffee and food they serve.

The customer gap is the most important gap and in an ideal world the customer’s
expectation would be almost identical to the customer’s perception. In a customer
orientated strategy, delivering a quality service for a specific product should be based
on a clear understanding of the target market. Understanding customer needs and
knowing customer expectations could be the best way to close the gap.

 The Knowledge Gap: The Gap between Consumer Expectation and

Management Perception

The first possible gap is the knowledge gap. The knowledge gap is the difference
between the customer’s expectations of the service provided and the company’s
provision of the service. It is the result of the differences in managing knowledge and
their real expectations. It is the difference between the customer’s expectations of the
service and the company’s provision of that service.

Essentially, this gap arises because management doesn’t know exactly what
customers expect. In this case, managers are not aware or have not correctly
interpreted the customer’s expectation in relation to the company’s services or
products.

If a knowledge gap exists, it may mean companies are trying to meet wrong or non-
existing consumer needs. This gap can lead to other gaps in the process of service
quality and is, among other things, caused by:

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o Incorrect information in market researches and demand analysis.

o Incorrect interpretations of information regarding expectations.
o Lack of information about any feedback between the company and the consumers
directed to the management.

The knowledge gap is the difference between the customer’s expectations of the
service provided and the company’s provision of the service. In this case, managers are
not aware or have not correctly interpreted the customer’s expectation in relation to
the company’s services or products.

If a knowledge gap exists, it may mean companies are trying to meet wrong or non-
existing consumer needs. In a customer-orientated business, it is important to have a
clear understanding of the consumer’s need for service. To close the gap between the
consumer’s expectations for service and management’s perception of service delivery
will require comprehensive market research.

 The Policy Gap: The Gap between Management Perception and Service Quality
Specification

According to Kasper et al, this gap reflects management’s incorrect translation of the
service policy into rules and guidelines for employees. Some companies experience
difficulties translating consumer expectation into specific service quality delivery. This
can include poor service design, failure to maintain and continually update their
provision of good customer service or simply a lack of standardization. This gap
arises when the management or service provider might correctly
comprehend what the customer requires, but may not set a
performance standard. It can be due to poor service design,
Inappropriate Physical evidence, Unsystematic new service
Development process.
An example would be restaurant Managers who may tell the waiters
to provide the order of the consumer quick, but do not specify “How
Quick”.
This gap may see consumers seek a similar product with better service elsewhere.

 The Delivery Gap: The Gap between Service Quality Specification and Service
Delivery

This gap exposes the weakness in employee performance. Organizations with a

Delivery Gap may specify the service required to support consumers but have
subsequently failed to train their employees, put good processes and guidelines in
action. As a result, employees are ill equipped to manage consumer’s needs. This gap
may arise in situations existing to the service personnel. It may occur due to improper
training, incapability or unwillingness to meet the set service standards. It can be due to
inappropriate evaluation and compensation systems. Ineffective Recruitment is the
main cause of this gap.

The failure to match the supply and demand can create this gap. There is also a lack
of empowerment, Perceived Control, and framework. An example would be a
restaurant having very specific standards of the food communicated but the restaurant
staff may not be given proper instruction as to how to follow these standards.
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Some of the problems experienced if there is a delivery gap are:

o Employees lack of product knowledge and have difficulty managing customer
questions and issues
o Organizations have poor human resource policies
o Lack of cohesive teams and the inability to deliver

 The Communication Gap: The Gap between Service Delivery and External
Communications

In some cases, promises made by companies through advertising media and

communication raise customer expectations. When over-promising in advertising does
not match the actual service delivery, it creates a communication gap. Consumers are
disappointed because the promised service does not match the expected service and
consequently may seek alternative product sources. Consumer Expectations are
highly influenced by the statements made by the company
representatives and advertisements. This gap arises when these
assumed expectations are not fulfilled at the time of Delivery of
Service. 
An example would be a restaurant that has printed on its menu that it
serves 100% Vegetarian Food but in reality, it serves Non-Vegetarian
Food as well. In this situation, consumer expectations are not met. 

LESSON 6 SERVQUAL MODEL AND 5 DIMENSIONS

Servqual Model

The Service Quality Model or SERVQUAL Model was developed and implemented by
the American marketing gurus , well-known academic researchers in the field of services
marketing, Valarie Zeithaml, A. Parasuraman and Leonard Berry in 1988. It is a method
to capture and measure the service quality experienced by customers.

As is indicated by the name of this model, SERVQUAL is a measure of service quality.

This model is also referred to as the RATER model, which stands for the five service
factors it measures, namely: reliability, assurance, tangibles, empathy and
responsiveness. It is a measure of service quality. Essentially it is a form of structured
market research that splits overall service into five areas or components. The SERVQUAL
model features in many services marketing textbooks, usually when discussing customer
satisfaction and service quality. It was developed in the mid 1980’s by well-known
academic researchers in the field of services marketing, namely Zeithaml, Parasuraman 
and Berry.

The ten original dimensions of the SERVQUAL model or service quality

model are-
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1. Tangibles
2. Reliability
3. Responsiveness
4. Communication
5. Credibility
6. Security
7. Competence
8. Courtesy
9. Understanding
10. Access

Servqual’s five dimensions

In the original instrument, service quality theory was defined through 10 dimensions. As
later suggested by the original developers of the SERVQUAL model, the easy way to
recall the five dimensions are by using the letters of RATER, as follows:

R = Reliability
A= Assurance
T = Tangibles
E = Empathy
R = Responsiveness

According to the original academic journal article:

 Tangible refers to physical facilities, equipment and appearance of personnel.

 About the existence and use of up-to-date equipment

 1.2 If the physical facilities are visually appealing
 1.3 If the employees are well-dressed/neat
 1.4 Is the appearance of the physical facilities are consistent with the type of
service industry

 Reliability is the firm’s ability to perform the promise service accurately and
dependably. This is the ability of the firm to perform the service
effectively and accurately. It measures whether the firm lived up to
its promises or not.

 2.1 Does the firm meet their promised time-frames for response
 2.6 Does the firm have an approach that is sympathetic and
reassuring when the customer has problems
 2.7 If they are dependable
 2.8 Do they offer their services at the times promised

 Responsiveness is the firm’s willingness to help customer and provide prompt

service. This dimension is related to the firm and its ability and willingness to aid
customers and provide apt service as promised.

 3.1 Should they tell customers exactly when the service will be
performed
 3.2 Should they expect prompt service from employees
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 3.3 Will the employees be willing to help customers

 3.4 How and when employees should respond to customer requests

 Assurance is knowledge and courtesy of employees and their ability to inspire trust
and confidence. This dimension depends on the employees of the firm.
It is their skill to produce trust and credibility in minds of the
consumer. It requires proper knowledge and dedication.

 4.1 Are the employees trustworthy

 4.2 Do customers feel safe when transacting with employees
 4.3 Are the employees polite
 4.4 Do the employees have adequate support from the firm to do
their job well

 Empathy is caring and individualized attention paid to customers. This dimension

refers to the attention and priority the organization gives to the needs and requests
of the customers.

 5.1 Do the firms give each customer individualized attention

 5.2 Do the employees give each customer individualized attention
 5.3 Do the employees fully understand the needs of the customer
 5.4 Do the employees have the best interests of the customer at the
heart
 5.5 Do the firms operate at hours convenient to all customers

LESSON 7 CUSTOMER SATISFACTION AS AN OUTCOME OF SERVICE QUALITY

Customer Satisfaction

Customer service is the ability of an organization to satisfy its customers. Customer

satisfaction is defined as a measurement that determines how happy customers are
with a company’s products, services, and capabilities. Customer satisfaction
information, including surveys and ratings, can help a company determine how to best
improve or changes its products and services.

An organization’s main focus must be to satisfy its customers. This also applies to
industrial firms, retail and wholesale businesses, government bodies, service companies,
nonprofit organizations, and every subgroup within an organization.

There are two important questions to ask when establishing customer satisfaction:

 Who are the customers?

Customers include anyone the organization supplies with products or services. 

 What does it take to satisfy the customer?

Organizations should not assume they know what the customer wants. Instead, it is
important to understand the voice of the customer, using tools such as
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customer surveys, focus groups, and polling. Using these tools, organizations can gain
detailed insights as to what their customers want and better tailor their services or
products to meet or exceed customer expectations.

Total Customer Satisfaction

Total customer satisfaction is a business strategy aimed toward ensuring that the

overall customer experience is good, in addition to providing a quality product or
service. This is particularly important when competitors offer similar or identical
products or services for similar prices. The business that can provide the best overall
experience will likely be more successful than the others simply because customers find
conducting business there more satisfying overall. Adopting customer satisfaction as a
primary business goal can sometimes be costly and difficult, but doing so is likely to pay
off over time.

A business must, first of all, offer a good product or service if total customer
satisfaction is to be achieved. Even if the customer is treated well and has an overall
positive experience purchasing the product or service, he will probably not recommend
or return to the business if the product is not satisfactory. A business must, quite simply,
be good at providing the product or service that it offers or customers will not be
satisfied overall.

Focus on customers is another important element, since a customer who is

acknowledged, well taken care of, and respected will likely have a better experience.
Poor service in the form of excessive focus on profits or efficiency over concern for the
customer can undermine attempts to achieve customer satisfaction, even when a good
product or service is offered. A customer who feels that a business cares only about the
money and has no concern for him will likely not be completely satisfied.

In many cases, total customer satisfaction is a concern even after the customer
purchases a product or service. Some services, such as Internet or phone service, are
sustained over a period of time. Additionally, products may stop working properly, or a
customer may have questions about how to use a product. Businesses that offer timely,
helpful, and respectful support are much more likely to bring about customer
satisfaction than businesses that do not offer support after a purchase.

It can, at times, be difficult for a business owner to know precisely what brings
about total customer satisfaction. In such cases, many businesses ask for customer
feedback through surveys or in conversations with managers. Doing so serves a twofold
purpose: it allows the customer to provide valuable feedback that can be used to
improve the overall customer experience, and asking for such feedback also tells the
customer that the business is, indeed, concerned about his needs and opinions.

Lesson 8 CUSTOMER LOYALTY AS AN OUTCOME OF SERVICE QUALITY

Customer Loyalty

Customer loyalty is a measure of a customer’s likeliness to do repeat business with

a company or brand. It is the result of customer satisfaction, positive customer

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experiences, and the overall value of the goods or services a customer receives from a
business. When a customer is loyal to a specific brand, they are not easily influenced by
availability or pricing. They are willing to pay more as long as they get the same quality
product or service they are familiar with and love. Other characteristics of a loyal
customer include the following:

 they are not actively searching for different suppliers;

 they are more willing to refer a brand to their family and friends;
 they are not open to pitches from competing companies;
 they are open to other goods or services provided by a particular business;
 they are more understanding when issues occur and trust a business to fix them;
 they offer feedback on how a brand can improve its products or services;
 as long as there is a need, they will keep purchasing from a business.

Example:

A typical example of customer loyalty is Starbucks. The company has managed not
only to retain its customers but also to expand its customer base through exemplary
loyalty programs. Capitalizing on the fact that it has created a successful, recognizable
brand worldwide, Starbucks seeks to enhance the customer experience every time,
every time, at the same rate of success. On top of that, the company offers the My
Starbucks Rewards customer loyalty program. Starbucks’ loyalty program features a
mobile app that allows customers to pay their coffee with built-in payments. In that
way, customers can pay for their coffee easily and swiftly while reducing the use of
credit cards. In turn, Starbucks compensates them with loyalty points and discounts.

Importance of Customer Loyalty

Regardless of the size of a company, customer loyalty is essential. First-time

customers are harder to convince because they do not have any experience with the
services or goods offered by a business. As such, the brand needs a
comprehensive marketing funnel to get them to purchase. However, customers who
have already shopped from a particular store are more accessible to sell to because they
know what to expect.

That said, here some reasons why customer loyalty is essential:

 Repeat customers spend more than first-time customers. They have a way higher
average order value that increases with the duration they have been doing
business with a brand. 

 Loyal customers produce higher conversion rates. Existing customers have way

higher conversion rates than new ones. The average conversion rate of a loyal
customer is 60% to 70%, while that of a new one is 5% to 20%

 It boosts profits. To enjoy better profits, brands need to foster customer loyalty.
Business profits go up by 25% to 95% when customer retention rates are
increased by only 5%.

 Retaining an existing customer is cheaper than acquiring a new one. It is cheaper

to keep an existing customer than to bring a new one on board. Studies show

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that getting a first-time customer is 5X more expensive than retaining a loyal

one.

 Customer loyalty helps in effective planning. Customer loyalty enables

businesses to predict growth more effectively, thus helping in financial planning.
Marketing teams can identify committed customers who can be relied upon
hence making it easier to make anticipatory decisions based on their budget.

 Loyal customer shop regularly. Given their good experience with a brand, repeat
customers have higher chances of returning. Moreover, their likelihood of
making future purchases increases as they make more transactions.

 Repeat customers spend more during the holidays. While all customers tend to
spend more on busy holiday seasons, loyal customers tend to perform way
better. 

Customer Loyalty Programs

A customer loyalty program is a structured and long-term marketing effort, which

provides incentives to repeat customers who demonstrate loyal buying behavior.
Successful programs are designed to motivate customers in a business's target market
to return often, make frequent purchases, and shun competitors.

 Points System: Allowing frequent customers to earn points that convert into

rewards is the basic building block of a loyalty program. This works best for quick,
inexpensive purchases at retailers such as fashion outlets and grocery stores. It’s
important to make the relationship between points and tangible rewards as simple
and intuitive as possible.
 Tiered Rewards: A tiered loyalty program typically offers a small incentive for
making an initial purchase. The value of the rewards increases as the customer
moves up the loyalty ladder. This type of program tends to work better for higher-
commitment and price-point businesses such as airlines, hotels, and insurance
companies.
 Charging an upfront fee: It can be a good strategy to ask customers to pay a one-
time fee that allows them to bypass common purchase barriers later on. Amazon
Prime’s upfront membership fee, for example, allows subscribers to make frequent,
repeat purchases without worrying about inconveniences such as taxes and
shipping.
 Distinctive rewards: A bonus for purchasing a company’s products need not be a
discount on future purchases. Customers who spend at a certain threshold could
receive free tickets to events, or subscriptions to other products and services.
Remember, too, that two-thirds of customers are more willing to invest in brands
that take stances on social and political issues they care about. Customer loyalty
programs can tap into this sense of altruism — for example, a percentage of every
purchase could go to charity.

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