Royal Restaurant in Australia, Application of ServQual Model - Case Study Example

Letter of Transmittal Johnson Mike Richard, Cooperative company, MMLStreet Australia 15th, October, 2011. The CEO, Royal Restaurant, DDN Street, Australia. RE: The Report details Dear Sir, With reference to the meeting we had last week I hereby submit the report of the findings from the investigations I did. The report focuses on the issue of customer satisfaction based on an occurrence that happened in the Royal restaurant a few weeks ago. My analysis on the issue of customer satisfaction using the expectations prior to the service encounter including levels of expectations, factors that influenced the expectations and zone of tolerance, Application of Service Gaps Model , Level of satisfaction with the service encounter disconfirmation of expectations model shows a great level o dissatisfaction on the side of customers meaning great effort must be put to solve the problem for the sake of giving the business a platform for competition and for the business to maintain its market share. It is important to note that Service has several levels). The first level is that a service is an intangible offering which has little or no transfer of physical products to the consumer. The second level is that a service is one part of product service mix that is offered to consumers. Another level of services is that a service is provided in the main product offering. The final level is that all products or services or a combination of both involves provision of a service to customers. Services are increasingly contributing to the advancement in technology, growth in per capita income, deregulation, and increased growth in retailing as a result of an increase in propensity to consumer. It will be my pleasure to discuss any arising matters with regard to the report. Yours Sincerely, Johnson Mike Richard, Executive summary This paper gives details on the level of customer satisfaction with the services offered in a restaurant caller Royal restaurant in Australia. Service marketing is a type of marketing which involves the selling of services. The approach used to sell services differs from that employed in product selling. Services are marketed in order to get people to do business with a certain firm which is often in a specified location. For instance, in restaurant business food is provided to customers. When such a business is marketing itself, it ought to convince its customers that it is preferable to other restaurants and that its facility is worth the trip . Just like product marketing, service marketing covers issues such as what is on offer, the price point, and comparison to similar things and why customers ought to choose that specific iteration over other alternatives. Since services are intangible in nature, customers ought to be convinced that the service is something that has some benefit to them and that they need it. The report gives details on the experience in restaurants which were very poor. The entire experience is narrated and the analysis given on the basis of the theories of service marketing, the gap model and the SERVQUAL is a model. The level of customer satisfaction is also discussed and rated accordingly. The report also gives a conclusion on the basis of service marketing and the recommendation to the management of the restaurant for the purposes of improving. Table of contents I. Executive summary--------------------------------------------------------------- 2 II. Table of contents------------------------------------------------------------------- 3 1. Introduction------------------------------------------------------------------------- 4 2. Background ----------------------------------------------------------------------- 4 3. The negative service encounter --------------------------------------------------- 5 4. The expectations prior to the service encounter including levels of expectations, factors that influenced the expectations and zone of tolerance 5 5. Discussion of satisfaction level--------------------------------------------------- 6 6. Level of satisfaction with the service encounter disconfirmation of expectations model------------------------------------------------------------------ 6 7. relevant service marketing theories or concepts to analyze the encounter-- 6 8. Application of Service Gaps Model --------------------------------------------- 8 9. Recommendations for closing service gaps------------------------------------- 8 10. Recommendations using the prescriptions for closing the gaps-------------- 8 11. Application of ServQual Model and recommendations------------------------ 9 12. Conclusions and recommendations----------------------------------------------- 9 Reference -------------------------------------------------------------------------------- 11 1. Introduction Marketing refers to the process of determining the services or the products that are of interest to the company’s or business customers, business development, communication strategies and strategies to be used for the sales (Armstrong & Kotler, 2007). This is usually a very integrated process through which the business builds for itself very strong value and customer relationship for themselves and customers. The essence for all this is to identify the customers that are involved, satisfy them and keep them for itself. This will enable to company to always offer the customers excellent services which will ensure the customers keeps coming back for the services. 2. Background This report is about is about services offered in a restaurant caller Royal restaurant in Australia. This restaurant has been in existence for the last one decade. It offered all types of food, both the fast food and other types of foods including the soft drinks. During that period the business through the excellent services it has been offering has won the confidence and trust of the customers. The operation of the company is one that has been a good example to many of other entrepreneurs in the business line of restaurant. The relation of the management and employees has been very good and the communication is also one of the best, this because the horizontal communication among the employees is very effective and the vertical communication between the management and the employees is very well coordinated. The services that are offered in the restaurant are generally satisfying to the customers and that explains why the restaurant has maintained its customer. The food prepared is well cooked, the services offered by the waiters and the cashiers is of high quality. Most of the report that are given by the customers who visit the premise is good until recently when there was a change in the management of the restaurant. This is whereby the manager was sacked and a new one employed. Apparently on taking up the responsibilities he fired most of the workers and employed new ones. 3. the negative service encounter This restaurant has been in existence for ten years and there has never been complain concerning then services offered there but the experience that occurred a week ago was incredible. On that material day, as usual, one makes an order and within a few minutes the exact order that was given is brought. That day, the order was coffee and sausage. Apparently the waiter took the order but on return which was after thirty minute brought tea accompanied by bread. That was not the order definitely ordered so the waiter was question first for delaying the order and then bringing the wrong food. He was very rude and so the matter was forwarded to the manager who took the side of the customer. He forgot the business slogan that says “the customer is always right” He claimed that the waiters he has are the best in the industry and there is no way they could have been wrong at all. The customer’s expectations would have been for manager to carefully listen to both sides of the story and since the business is all about satisfying try to solve the issue and serve the customer accordingly. 4. The expectations prior to the service encounter including levels of Expectations, factors that influenced the expectations and zone of tolerance This is a restaurant that has been known to offer one of the best and high quality services. The level of expectations was not less than usual. This is explained by the fact that the waiting though very long the customer was willing to wait. Usually the service doe not take long but the assumption was that there could have been a good explanation for the delay which would be explained by the waiter or the management on service delivery. The fact that the order that was delivered was different was also something that was taken like a mix up in that the waiter could have brought someone else’s order but the waiter was rude when asked for an explanation. Realistically, it was expected that he would apologize and rectify the mistake and since that was not possible; the management had to be involved. On the other hand, the management was expected to take responsibility and solve the customer’s complain which it did not. 5. Discussion of satisfaction level The level of satisfaction was very poor. First the waiter was not hospitable at all. He was not offering the services with the interest of the customers at heart and this is why he was able to bring the wrong order to the customer. The delay was also a sign of inefficiency and ineffectiveness in the deliver y of the services. All those incidences are an evidence of poor quality of services rendered to the customers. 6. Level of satisfaction with the service encounter disconfirmation of expectations model This theory explains that the individual expectation in conjunction with the perceived performances leads to the customer’s post purchase satisfaction. This is a result of the positive and the negative disconfirmation of the customer between the performance and the expectations. In this case, a negative disconfirmation resulted whereby the services of the restaurant fell short of the expectations that as a customer I had. The anticipated behavior from the management and the waiter was negative and that lead to my dissatisfaction. The standard of the restaurant have been very good but at that juncture all of my expectations were cut off. By the poor services they rendered. 7. relevant service marketing theories or concepts to analyze the encounter Marketing strategies are in such a way that they offer the customer the services he or she needs (Hisrich, 2000). The theories of marketing are related to the marketing strategies that the businesses must apply to ensure they offer efficient and effective services. In the very competitive environment in terms of business, a business must have a strategic plan so that it can be able to stand in the platform of competition. The following are the five processes that are involved in the process of formulating a business strategy; objectives and mission formulation, environmental scanning, formulation of the strategy, implementation of the strategy and finally the control and the evaluation of the strategy. It is the mission that describes the vision of the company, values, goals and the objectives in order for the business to pursue its future opportunities in terms of the market share. The environmental scanning entails external analysis and internal analysis helpful in understanding the weaknesses, strength, threats and opportunities of the business. According to Palmer (2000), the concept of marketing assumes that the consumers have clear goals and pursue them rationally. This is not true because they get buffeted in most cases by all kind of forces. It is evident that, many respond to hyped products and stories around them. Therefore, for the marketers to be effective, they need skills, which go beyond APIC (analysis, planning, implementation and control). Marketers need to be able to create new realities, dramas, artificial scarcities and celebrations among others. On the other hand, strategic human resource management is one of the most important practices in any given organization especially if the organization has to succeed in service marketing. This means that for organizations to be strategic, the focus on strategic Human Resource and management must be very important. The process of management of human resource refers to coherent, recruitment as well as strategic management of all the employees that are working for an organization and collectively or even individually contribute to achievement of all the organization’s goals as well as objectives (Zeithaml & Bitner, 2000). 8. Application of Service Gaps Model According to this theory the difference between the perceptions of the consumer and the expectations depends on the directions and the size of the four gaps. Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4). The services that are offered are affected by the direction and the magnitude of the gap. Gap three is usual very favourable whenever the service delivery exceeds the required standards of the organization but it will be unfavourable if the quality of the services does not reach the specifications of the company in standards (Olson et el, 2005). Gap one entails the difference that exists between the management perception and the customer’s expectation. Gap two, entails the difference between customer’s expectations and management perception as far as the quality and the designs are concerned. Gap three entails the difference between the actual delivery of the services and service quality of the standards. Gap four involves difference between the promises offered by the firm and service delivery with reference to the quality of the services. 9. Recommendations for closing service gaps The services that were offered by the restaurant had a big gap as far as the management services offered and the customer’s expectations. The customer services offered were poor. The manner in which the waiter served was way under the expectations of the customer. First he was late to service and then he rudely treats the customers. The management on the other hand did not look at the customer satisfaction in terms of the needs of the customers (Rix, 2007). 10. Recommendations using the prescriptions for closing the gaps. The management should have dealt with the employee who messed up with the order but first it should have ensured the needs of the customer are taken care of The employees must be trained on the issue of offering the right services to the employees. 11. Application of ServQual Model and recommendations SERVQUAL is a model that deals with ten aspects of quality in service offering namely access, courtesy, competence, responsiveness, reliability, understanding of the customer, security, credibility, communication and the understanding tangibles (Nyeck et el, 2002). It is usually in measuring the gap existing between the experiences of the customer and expectations. Clearly the above factors of SERVQUAL reveals that the quality of the services offered were poor. The gap between what the managers thought the customer needed and the expectation of the customers were differing greatly. The gap was very big in that there was total dissatisfaction of the customer. 12. Conclusions and recommendations The 4Ps model is internally oriented, product oriented, lacks human element, lacks interactivity with customers, lacks quality element and relation building and communication is absent in the 4Ps approach. This makes it inappropriate for service marketing that requires personalized relationship. Thus to address these shortcomings, service marketing has devised the services marketing mix. This is where the issues of employee motivations comes in, branding of the products and servives, knowledge management as well as integration of the departments in the company to ensure there is a connection between the employees and the customers in the process of service production so that the needs of the customers can be met effectively (Deborah et el, 2007). The following are the recommendations; There must be an effective communication system linking all departments The gaps must be reduced at whatever the cost The management must train the employees to work with the needs of the customers at heart. References Armstrong, G. & Kotler, P. 2007. Marketing: an introduction (8th Ed). Pearson Prentice Hall: New Jersey. Deborah, M., Mark, S. & Jennifer, Y. 2007, “Perceived Service Quality and Shopping Motivations: A Dynamic Relationship,” Services Marketing Quarterly, 29 (1), pp. 1-21. Hisrich R. 2000. Marketing (2nd Ed.). New York: Barron's Educational Ser Nyeck, S., Morales, M., Ladhari, R., & Pons, F. (2002). "10 years of service quality measurement: reviewing the use of the SERVQUAL instrument." Cuadernos de Diffusion, 7(13), pp. 101-107. Olson, E., Slater, S. & Hult, G. 2005. The Performance Implications of Fit Among Business Strategy, Marketing Organization Structure, and Strategic Behavior. Journal of Marketing, vol. 69, no. 3, pp. 49-65 Palmer, A. 2000. The principles of services marketing. 3rd ed. London: McGraw-Hill. Zeithaml,V. & Bitner, M. 2000. Services marketing. London: McGraw-Hill. Rix, P. , 2007. Marketing: A Practical Approach (6th Ed.). McGraw-Hill: Australia Read More