Page 542 - Business Principles and Management

Chapter 19 • Product Planning and Production Management

With so much online competi-
tion today, how can video stores
improve service and maintain a
loyal customer base?

PHOTO: © BANANASTOCK.

providing both opportunities and challenges for service businesses. For example,
it is easier to get information to customers using the Internet. Pizzas, CDs, and
videotapes can now be ordered online. However, when customers can download
movies via the Internet or place grocery orders at their favorite supermarket and
have products delivered to their door, traditional businesses must consider the
potential impact on their sales and profits.

SERVQUAL
Business researchers have developed a means of measuring service quality, the
SERVQUAL survey. This survey measures five dimensions that customers con-
sistently rank as important to service quality:
• Tangibles: the appearance of physical facilities, equipment, personnel,
and promotional material
• Reliability: the ability to perform the promised service dependably and
accurately
• Responsiveness: the willingness to help customers and provide prompt
service
• Assurance: the knowledge and courtesy of employees and their ability to
convey trust and confidence
• Empathy: the caring and individualized attention the business provides its
customers

The SERVQUAL survey measures service quality perceptions of customers,
service providers (individuals who deal directly with customers), and managers.
Researchers look at the differences, or gaps, between these groups to identify
differences in expectations and service quality perceptions.

STANDARDIZING SERVICES

Franchises for service businesses are becoming quite common. Franchising allows
a service to be provided in a variety of locations while maintaining a consistent

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