Page 56 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 3: Services and their Characteristics

Box 3.1: Increasing Relevance of Service Quality Management Notes

1. Companies need to find ways of creating differential advantage by having better service
levels than their competitors.
2. Increased level of consumerism and greater media attention on quality have meant that
companies have to be more responsive to quality issues.
3. There has been a growing sophistication of consumer markets, with the non-price factors of
image, product positioning and service delivery processes becoming more important.

A reputation of good quality is a major advantage because perception of risk for many service
providers is very high. Good quality bridges the gap between pre-use perceptions and post-use
experience of the service consumed.

Notes Five Stars of Service Quality (The RATER Model)

 Reliability
 Assurance
 Tangibles
 Empathy
 Responsiveness

Figure 3.2: Five Stars of Quality

Reliability

Assurance Responsiveness

Tangibles Empathy

The service providers are more likely to be successful if they can be depended upon to deliver
high quality service with respect to the quality determinants as mentioned above in relation to
competitors. Quality management approach can be divided into two categories, namely product
attributed approach and customer oriented approach.

3.3.1 Product Attributed Approach

In product-attributed approach, customers try to judge the product’s conformance to standardized
requirements, which have been set by reference to what company managers think the failure
point is. In this approach, organizations try to control their products using an internal product
perspective e.g. a manufacturer of potato chips can grade pieces of potatoes received from the
supplier according to certain objective criteria. These criteria can be weight, shape, size, color,
texture etc. From the consumer’s point of view, as an external perspective, assessment of quality

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