Services marketing: 7Ps, gaps model and SERVQUAL
Services are intangible, inseparable, variable and perishable, so marketers add people, process and physical evidence. Quality is the gap between expectations and perceptions, measured by SERVQUAL.
Characteristics of services (IHIP)
| Feature | Meaning | Marketing response |
|---|---|---|
| Intangibility | Cannot be seen, touched or tried before purchase | Make it tangible: physical evidence, brand, testimonials |
| Inseparability | Produced and consumed at the same time; the provider is part of the service | Train staff; manage customer participation |
| Variability (heterogeneity) | Quality depends on who delivers it, when and where | Standardise processes, blueprint the service, track satisfaction |
| Perishability | Cannot be stored; unused capacity is lost | Manage demand (off-peak pricing, reservations) and supply (part-time staff, shared services) |
| Lack of ownership | The buyer gets access, not title | Memberships and loyalty schemes |
Gaps model (Parasuraman, Zeithaml and Berry, 1985)
| Gap | Between | Common name |
|---|---|---|
| Gap 1 | Customer expectations and management's perception of them | Knowledge (listening) gap |
| Gap 2 | Management's perception and the service quality specifications | Standards (design) gap |
| Gap 3 | Specifications and the service actually delivered | Delivery (performance) gap |
| Gap 4 | Service delivered and external communications to customers | Communication gap |
| Gap 5 | Expected service and perceived service | Customer (service quality) gap; depends on gaps 1-4 |
SERVQUAL dimensions (1988)
| Dimension | Meaning |
|---|---|
| Reliability | Performing the promised service dependably and accurately (rated most important) |
| Assurance | Knowledge and courtesy of staff, and their ability to inspire trust and confidence |
| Tangibles | Physical facilities, equipment, staff appearance and materials |
| Empathy | Caring, individual attention to each customer |
| Responsiveness | Willingness to help and give prompt service |
Worked example: SERVQUAL gap scores
A bank's customers rate expectations (E) and perceptions (P) on a 7-point scale: Tangibles E 5.5, P 5.8; Reliability E 6.4, P 5.1; Responsiveness E 6.0, P 5.0; Assurance E 6.1, P 5.6; Empathy E 5.7, P 5.2. Find each gap and the average gap.
- Gap score = P − E for each dimension.
- Tangibles 5.8 − 5.5 = +0.3; Reliability 5.1 − 6.4 = −1.3; Responsiveness 5.0 − 6.0 = −1.0.
- Assurance 5.6 − 6.1 = −0.5; Empathy 5.2 − 5.7 = −0.5.
- Sum = 0.3 − 1.3 − 1.0 − 0.5 − 0.5 = −3.0; average = −3.0 ÷ 5 = −0.6.
- Check: average P = 26.7 ÷ 5 = 5.34; average E = 29.7 ÷ 5 = 5.94; 5.34 − 5.94 = −0.6.
Average gap −0.6: service falls short overall. The biggest shortfall is reliability (−1.3), the dimension customers weigh most, so fix it first.
Service brands and strategies
- Service marketing triangle: external marketing (company → customers), internal marketing (company → employees), interactive marketing (employees → customers).
- Grönroos (1984): technical quality (what is delivered) and functional quality (how it is delivered).
- Service-profit chain (Heskett and colleagues, 1994): internal service quality → satisfied, loyal employees → service value → satisfied, loyal customers → growth and profit.
- Service brands rest on the customer's experience with staff and outlets: Taj Hotels (IHCL, a Tata company) trains its staff as the face of the brand.
- Shostack: the goods-services continuum (1977) and service blueprinting with a 'line of visibility' (1984).
- SERVPERF (Cronin and Taylor, 1992) measures performance only. The zone of tolerance lies between desired and adequate service.
- Booms and Bitner's added Ps: people (staff and customers), process (procedures and flow), physical evidence (setting and tangible cues).
NET asks you to number the gaps (gap 5 = expected vs perceived), match RATER dimensions with meanings, name the 7Ps' additions, and attribute SERVQUAL to Parasuraman, Zeithaml and Berry.
Typical MCQ: “Which gap lies between management's perception of customer expectations and the service quality specifications?” Gap 2, the standards (design) gap. Trap: gap 1 lies between customer expectations and management's perception.
Typical MCQ: “Which SERVQUAL dimension do customers rate as most important?” Reliability. Trap: tangibles is usually rated least important.
Typical MCQ: “Hotel rooms left empty tonight cannot be sold tomorrow. Which service characteristic is this?” Perishability. Trap: it is not intangibility, which is about not being able to see or touch the service.
SERVQUAL = RATER: Reliability, Assurance, Tangibles, Empathy, Responsiveness. Gaps run K-S-D-C, then gap 5: Knowledge, Standards, Delivery, Communication, Customer.