4/8/2013 “Thess- Logisti”| |

CITY COLLEGE | Application of the GAP model of Service Quality |

EXECUTIVE SUMMARY

Aim of the study is evaluation of consumer satisfaction in Greek finance market in terms of quality of services in case of accounting and finance consulting agency “Thess-Logisti”. The main information about the company and gaps faced in front of the company were identified from the interview with the CEO of agency Mr. Chatziarapis. Also, the identification of gaps are identified from the private observation and analysis from the past perceived services by the agency for the “Papadopoulos Apostolos&sons” Ltd, which operating in the sector of production of halva in the Drama region in a small village – Kirgion.
The first part of assignment is based on the theoretical background with brief identification of service quality, customer satisfaction and the gap model. The main purpose of the research paper was to identify the gaps accessed from observation of current agency and analyzing the main gaps. Finally, was given the proposal of some solutions which could be used to resolve the issues according service offering and to improve firm’s performance and service quality.

Contents EXECUTIVE SUMMARY 2 1. Introduction 4 2. Literature Review 5 2.1. SERVICE QUALITY and CUSTOMER SATISFACTION. 5 2.2. Gap Model 6 3. Identification of Gaps in company’s operation 8 4. Proposed solutions to close the Gaps 11 5. Key points learned from this project 12 6. Conclusion 12 Reference List 13 Appendices: 15

1. Introduction
During the last few decades marketing of services and generally service sector of economy becomes an important topic of researches and studies. Services and service quality attract more and more the attention of academics, managers, practitioners and researchers in order to identify the service quality affect on business performance (Newman, 2001; Guru, 2003).
Accounting and Finance consulting agencies faces in the Greek market large competition, where the important factor for them to survive is the improvement of the quality of their services. Further, the growth of customers’ preferences and expectations toward accounting agencies and their products influence them to make the service quality as a priority. In order to provide high quality services the accounting agencies need to investigate the level of customers’ expectations and perceptions to the service quality from customers’ perspective.
The main purpose of the current research paper is to provide service quality theoretical background and application of Gap model. The evaluation of the level of service quality is a complex process, since until recently the quality was perceived by a large number of consumers, as an abstract, immeasurable and subjective concept. The quality assurance systems as well as the turn of several businesses are the improvement of the quality of their products and services in order to increase their competitiveness; they have contributed, but not very much to reverse this situation. Having thus as given the need to ensure a high level of quality, in the present study determined the concept of quality of service and would specify the individual quality assurance criteria for these. The proposed quality dimensions grouped according to the model SERVQUAL, which is a service quality measurement model (Kang and James, 2004).
The SERVQUAL model was developed by Zeithaml, Parasuraman and Berry and it is a general method for measuring of service quality as the difference between the performance which is expected by consumers and the performance which is perceived by business. From this difference ultimately measured the customer satisfaction. The model of the gaps or otherwise SERVQUAL Gaps is a conceptual model, which was presented in an article in the newspaper «Journal of Marketing» which was published by Parasuraman, Zeithaml and Berry and developed specifically for the qualitative measurement of service quality. The gaps model identifies and mapping five generally gaps which apply regardless of the thematic type of service: 1) lack of knowledge about consumer expectations, 2) the wrong quality designs services, 3) the gap of performance services, 4) non-relevance of promises with actual delivery and 5) The difference between customer perception and expectation (Parasuraman, A., Zeithaml, V.A. and Berry, L.L. ,1988).
2. Literature Review
2.1. SERVICE QUALITY and CUSTOMER SATISFACTION. About the definition and term of “Service Quality” is a lot of debates and discussions and to define service quality is not easy. The researchers argue that the concept is personal and subjective according to service quality and the customers’ expectations and perceptions constitute an element of its conceptualization. According to Parasuraman et.al (1988), the most applicable definition of service quality relies to consumer judgment of the superiority of the service by integrating customer expectations of the service and perceptions of the company providing the service. For the measurement of service quality is common used the SERVQUAL model, which is used to identify the gaps between customers’ expectations of the service and the perceptions of the perceived performance of the service. The SERVQUAL model includes five dimensions of service: * Tangibles – the tangibles aspects or physical surroundings represented by objects or subjects (for example: furniture design or dress appearance of employees). * Reliability- usually concerns the firm’s ability to provide services accurately and dependability.

* Responsiveness – is the willingness of the firm’s to help the customers by offering fast and efficiently the services.

* Assurance- most based on the features which provide confidence to customers.

* Empathy- firm’s capabilities and readiness to provide to every customer the service in a personal manner.

Despite of the service quality the customer satisfaction is another important factor in the service sector. However, if consumers perceive equally the service quality and satisfaction then raises the debate according to the definition of the satisfaction (Spreng and Mackoy, 1996). According to Cronin et.al (2000), the interrelation of customer satisfaction and service quality does not mean that they are similar and identify some differences in some respects. As result, the customer satisfaction depends on individual or global transactions, whereas service quality includes the general impression of the superiority or inferiority of the service offering. The main viewpoint taken by debate is that perceived service quality is defined as the customer’s perception of a firm’s offering which is illustrated as an antecedent of customer satisfaction which is interrelated with customer loyalty. Cronin and Taylor (1992) define, that customer satisfaction is affected both from the service quality and price with convenience. Also, most of the authors argue that perceived service quality goes with assumption of its positive relationship with the performance of the firms and especially with the profitability through customer loyalty. In order to assume that relationship below is represented the thesis by Boulding et.al (1993): “Delivery of high service quality is presumed to relate positively to the success of the firm. Interestingly, no empirical research outside a laboratory setting has been reported that supports this relationship between service quality perceptions and behavioral outcomes of importance to the firm.”
2.2. Gap Model The measurement of service quality was largely researched by academics and practitioners the last decades of years due to the increased importance of marketing of services and especially the evaluation of markets and service quality. According to Bolton and Drew (1991), service quality or product quality affect directly the performance of the firm and it is crucial factor for the success and the long-term viability of the firm. Gremler and Gwinner (2000) suggest that service quality lead the company to gain customer satisfaction which in a process has a positive effect on customer’s loyalty. Also, service quality in overall lead to buying intentions as spread of positive messages or positive word-of-mouth to other customers. The globalization implications and affection on the global markets has influenced the companies to identify the dramatic competition in a global market. In order to create the competitive advantage companies more and more try to develop their strategies to satisfy in more intensive level their needs and expectations. In the academic environment, the development of tools to measure the service quality becomes crucial area of studies and researches. It is obvious that the definition and measurement of service quality is not easy task due to the nature of services which are identified as intangible. The Parasuraman et.al (1985) created the gap model (see table 1) and identified four gaps which influence the customer perceptions of quality in an organization.
Below will be presented briefly four gaps with key factors which leading to each gap:
Table 1:

Source: Parasuraman et.al (1988).
Gap 1: “Knowledge gap”
The gap 1 is based on differences between consumer expectations and perceptions from the management side. Executive level or managers do not always know the customer expectations and needs. The factors which are leading to the “Knowledge” gap are: the low degree of orientation of marketing research, the level of management, customer relationship tactics and the extent and low quality of the contact in upwards communication.
Gap 2: “Standards gap”
The gap 2 is based on difference between the perceptions of management’s expectations of customers’ specifications or standards and quality of services. In this case, the managers correctly identified the needs and desires of customers; on other hand they not designed effectively the standards and services provision. The factors which are leading to the “Standards gap” are: standardization of work process, the ability to meet customers’ expectations and the level of firms objectives associated with quality.
Gap 3: “Delivery gap”
The gap 3 illustrates the difference between the standards and quality of services with the delivered service quality. In this case the employees do not have the capabilities or standards to provide adequate level of quality and to meet the standards. The key factors which are leading to the “Delivery gap”: Employees’ motivation and training, empowerment issues, teamwork, lack of control and the level of uncertainty regarding the employees’ role.
Gap 4: “Communication gap”
The gap 4 is based on difference between the service delivery and external communications with the customer. Usually this gap presents that the customer expectations are influenced by communications tools like personal selling, advertising and generally the promises of the firms. The main factors that lead to the “Communication gap” are: overpromising, level of horizontal communication and internal issues regarding the communication.
Also, each gap has a cumulative influence from the previous gaps. Another fifth gap is identified as the total assumption of previous four gaps and represents the difference between expectations and perceived service.
3. Identification of Gaps in company’s operation
The company of Mr. Chatziarapi Jordan and his associates under the name THESS-LOGISTI located in the city of Thessalonikis and housed in privately owned offices in Mesologgi Street 71 in Evosmos. From the 1993 THESS-LOGISTI, provides high quality services, advising and guiding its customers with the goal of accurate and timely resolution issues faced by businesses and individuals in the financial sector. Seeks to lead firms in the achieving positive financial results by increasing and maintaining competitiveness.
Gap 1: “Knowledge gap”
Tangibles
Regarding the workplace, our expectations differed in many things from what we saw. We expect to see a functional space that would be cool. Instead we saw a place with lots of papers, relating messy, not so attractive but modernized. Still we hope to there was a reception room, new facilities, parking, meeting room, from which only the reception was. This brings many questions in relation to the characteristics of both the firm and of the customer and the impact they have in their expectations. As regards professional equipment we expected there is modernized technological equipment with all necessary appliances that serve absolutely needs an office and with updated accounting programs. In this case there was complete identification of our expectations and the perception of the business. In terms of appearance and dressing workers our expectations converged in professional decent dressing but not too formal but functional. What we are interested most is the behavior of workers. At this point there was identification of our expectations with the concept of business as employees were professional dress not uniformly neither farfetched.
Reliability
Our expectations for the completion time of a job is to be done as fast as possible and are within the agreed framework. While on the side of workers believe that work should be done at time zero as soon as possible. At this point there is no divergence, but from our side we show a more flexible attitude than what we saw. Regarding the features you would like to have employees in the accounting office is politely helpfulness, to have the necessary level of knowledge and to be effective communication and to help understand a problem. At this point, our expectations identified 100% with the perception of the company. Finally, concerning information would prefer be spending more time and there is personal information every two months or quarterly. The perception of the company believes that the telephone briefing to what frequent base is more important. At this point our expectations differ from the perception of the company.
Responsiveness
As regards the state of preparedness we are to responds the office when we need it and without mistakes. And we believe that with proper training and the right equipment can be ready. At this point, employees have a full understanding of customer expectations. We would like everyone in the company to be aware of the problems but the perception of the company is different because this is not possible and believes that seeking a relationship of trust and friendly. As we wish complete briefing and at the beginning and end of a working something that done. Overall in this dimension there is no a big gap. The employees seem to know our expectations.
Assurance
In this dimension, as regards the confidence expect to be to a large extent the company satisfies absolutely our expectations. As regards the features you would like to have an accountant to be trusted is seriousness, knowledge of both the object and around the market and exists of some recommendations. At this stage the employees of matching with our expectations as they have knowledge, inspire confidence and seriousness. There is no gap in this dimension.
Empathy
What we wanted from the accounting office was to have contact, continuous information and advice for our company. Be able to identify problems and to appreciate the potential results, still we can find the employees when we wanted. The company covers all the above that we wanted, and save time and money. However, the real highlight here the requirements as indicated in combination accounting and consulting services. At this point there existed a gap something which can lead to improved services office.
Gap 2: “Standards gap”
As has been mentioned the size of the gap 2 is linked with how the management is committed to providing quality service to how the objectives associated with the quality, standardization of work and perceptions of employees to cover the customer expectations. All employees and management of the company have a clear understanding of what is quality. Besides the incorrect planning and organizing time we noticed, all employees have not minimum threshold performance in terms quantitative characteristics (such as time recording invoices in the system), despite the fact that some processes are automated and are quite different in terms of processing and integration. They are polite and correct in their behavior to serve their customers. We believe that they can meet in our expectations.
Gap 3: “Delivery gap”
The size of the gap 3 depends on how much team spirit they have employees, how each employee fits into the post assigned to it, how the equipment fits in the requirements of the job how much controlled the behavior of employees towards the customers, whether there are conflicts role and how much are unclear the responsibilities towards their customers. The employees seem to cooperate quite well, something that we understood by the good atmosphere and the team spirit that existed within the company. As regards the appropriate position of each employee, we believe that the posts of employees are absolutely correct because for every problem we had they recommended us to a colleague who had experience in this field. Another employee informed us and check through the accounting books, another employee there was for the outdoor tasks and other to solve critical problems. Regarding the equipment we noticed that they have the necessary equipment and software to cope their work apart from the photocopier. We observed some conflicts between them but they give different priority, predominates the officer of the company. Each employee has separation positions. All employees have clarified the roles and duties.
Gap 4: “Communication gap”
The size of the gap 4 related to the degree of horizontal communication and the trend to have better promises than can be offered. We noticed that there was continuous communication both horizontal and vertical communication. As for the promises we noticed that they do not promise things that will not be realized and always keep their promises.
4. Proposed solutions to close the Gaps The analysis of the gap model and implementation of it has identified some gaps in the company used for the research. Through the comparison analysis was spun some dimensions in the gap model which could be improved. Below is the list with proposed solutions to close the identified gaps:
1. In the main office was identified the lack of photocopiers and the office place displays chaos because of large amount of papers, documents and folders that would like a little bigger environment and more efficient. 2. The second issue which could be improved is the working time and programming time. In past experience was identified some issues regarding the deadlines for accounting services and processes. The executive board of the agency needs to improve and to resolve the issues concerning the delay issues.
3. From the interview with the CEO of the agency was identified from the complaints of customer that agency need to provide more information and consultancy to the customer in order to decrease the risk in term of decision making.
4. Another task that customers identified as the disadvantage in the service provision is the lack of control and empowerment issues. Most of the employees do not make decisions without the directors of each department.
5. Key points learned from this project * Application of Gap model of Service Quality * Identification of Service Quality * Identification of gaps in practice and solutions to resolve them * Customer Satisfaction * Customer Loyalty * Five dimensions of service
6. Conclusion To sum up, in the competitive market the firms need to develop their competitive advantage which for the companies providing services could be the service quality. In the current research paper was identified some gaps which need to be improved or closed according to the service quality provided by firm. The solutions for improvement identified that some of the improvement regarding the staff of the firm. The improvement arises in a form of more careful recruitment and staff training. Also, from the theoretical background were identified dimensions which affect the service quality. Some of complaints regarding the tangible dimension of service quality are associated with the working place, which also influence the brand image of the firm.

Reference List

Bitner, M.J., Hubbert, A.R. (1994), "Encounter satisfaction versus overall satisfaction versus quality", Service Quality: New Directions in Theory and Practice, Sage Publications, Thousand Oaks, CA, pp.72-94.

Bolton, R. N. and Drew, J.H. (1991) “A longitudinal analysis of the impact of service changes on customer attitudes,” Journal of Marketing, Vol. 55, January, pp. 1-9.

Boulding, W, Kalra, A, Staeling, R and Zeithaml, V A (1993) 'A dynamic process model of service quality: from expectations to behavioral intentions' Journal of Marketing Research 15 (1) 7-27

Carillat, F.A., Jaramillo, F., Mulki, J.P. (2008), "The validity of SERVQUAL and SERVPERF scales: a meta-analytic view of 17 years of research across five continents", International Journal of Service Industry Management, Vol. 18 No.5, pp.472-90.

Carman, J.M. (1990), “Consumer perceptions of service quality: an assessment of the SERVQUAL dimensions”, Journal of Retailing, Vol. 66, pp. 33-55.

Cronin J, Brady M, Hult T. Assessing the effects of quality, value, and customersatisfaction on consumer behavioral intentions in service environments. J Retail2000;76(2):193–218.

Cronin, J.J. Jr and Taylor, S.A. (1992), “Measuring service quality: a re-examination and extension”, Journal of Marketing, Vol. 56, pp. 55-68.

Gremler, D.D. and Gwinner, K.P. (2000), ``Customer-employee rapport in service relationships’’, Journal of Service Research, Vol. 3, August, pp. 82-104.
Gronroos, C. (2001), “The perceived service quality concept – a mistake?”. Managing Service Quality, Vol. 11 No. 3, pp. 150-2.

Gupta, A., McDaniel, J.C. and Herath, S.K. (2005). Quality management in service firms: sustaining structures of total quality service. Managing Service Quality, 15(4): 389-402.

Guru, C. (2003), “Tailoring e- service quality through CRM”, Managing Service Quality, Vol. 13 No. 6, pp. 20-531.

Kang, G.-D. and James, J. (2004), “Service quality dimensions: an examination of Gronroos’s service quality model”, Managing Service Quality, Vol. 14 No. 4, pp. 266-77.

Newman, K. (2001), “Interrogating SERVQUAL: a critical assessment of service quality measurement in a high street retail bank”, International Journal of Bank Marketing, Vol. 19No. 3, pp. 126-39.

Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985), “A conceptual model of service quality and its implications for future research”, Journal of Marketing, Vol. 49, pp. 41-50.

Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988), “SERVQUAL: a multiple item scale for measuring consumer perception of service quality”, Journal of Retailing, Vol. 64 No. 1,

Pinho, J., Macedo, I. and Monteiro, A. (2007), "The impact of online SERVQUAL dimensions on certified accountant satisfaction: the case of taxation services", EuroMed Journal of Business, Vol. 2 No.2, pp.154-72.

Rust, R.T., Oliver, R.L. (1994), "Service quality: insights and managerial implications from the frontier", iService Quality: New Directions in Theory and Practice, Sage Publications, Thousand Oaks, CA., pp. 12-37.

Appendices:
Figure 1.

Source: Parasuraman et.al(1988)
Figure 2:

Figure 3:

Source: http://thess-logisti.gr/%CF%85%CF%80%CE%B7%CF%81%CE%B5%CF%83%CE%AF%CE%B5%CF%82/

Figure 4:

Source: http://thess-logisti.gr/