Marketing and Services Management

Introduction

The GAP Model of the Service Quality is regarded as one of the essential tools for the identification of the service quality and above all this the relationship between an organization and the customers. This becomes beneficial for the companies for sustainable competitive advantage and further growth. The strategy of providing excellent service quality to the customers for receiving elevated level of customer satisfaction that has become a challenge for most of the companies in the face of steep competition in the market. This has been the constructive reason of increased significance for the practitioners in the field of marketing.

Discover additional insights on model answer writing by navigating to our other resources hub.

GAP Model

The organizations have been investing a huge amount on the improvement of service quality for the last few decades. Rapid development in the service quality has increased the importance for the organizations for measurement and evaluation (Ali and Garg 2017). Service quality can be defined as a difference between the perceived service and the expectations of the customers about a service (Collier et al. 2018). When the expectations are higher than the performance, the perceived quality is found to be less than the satisfactory that leads to customer dissatisfaction (Ahmadi and Habibi2017). The measurement in the service quality helps in comparing before the changes and after it. This is in relation to the quality related problems as well as establishment of certain clear standards for the delivery of service. The initiation point for the development of quality in services is analysis as well as measurement.

Model of Service Quality Gaps

The model of Service Quality involves seven critical and major gaps. Of these, the three significant gaps are Gap1, Gap5 and Gap6. The reason is that it has a direct relation with the customers.

Management perceptions versus customers’ expectations:

This gap is caused due to the lack of marketing research orientation, inappropriate and inadequate upward communication and presence of many layers in the hierarch of the management.

Perceptions of management versus specifications of a service:

This is the outcome of inadequate commitment of the employees and the management to the quality of service, a perception regarding unfeasibility, inadequacy in the standardisation of task and an absence of setting goals in the organization.

Service delivery versus service specifications:

This gap is due to the result of an ambiguity in the role and conflicts, poor job fit of the employees as well as poor job fit regarding technology, inappropriate control systems of supervision, lack of proper teamwork and absence of perceived control.

External communication versus service delivery

The reason of creation of this gap is inadequate horizontal communications as well as propensity to over-promise (Wu, Zhang and Waley 2017).

The discrepancy between the expectations of the customers and their perceptions of the employees:

This gap is resulted from the influences that have been impacted from the side of the customers and the gaps from the part of the service provider. In this regard, the expectations of the customers are impacted by the level of personal needs, recommendation though word-of-mouth and past experiences about service (Wu, Zhang and Waley 2017).

The discrepancy between the perceptions of management and the perceptions of the employees:

This is the gap which has resulted from the differences in the proper understanding regarding the expectations of the customers by the service providers belonging to the front-line (Wu, Zhang and Waley 2017).

The discrepancy between the perceptions of the employees and the perceptions of the managers:

This gap is the outcome of the differences created in the proper understanding regarding the expectations of the customers between the service providers and managers.

This model is one of the most heuristically valuable contributions to the service industry and is very important for managing service quality. The first six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6 and Gap 7) can be identified as functions of the diverse ways in which the services are delivered. On the other hand, Gap 5 is related to the customers and it acts as an actual measure of the service quality. The methodology of service quality has the most influence on the Gap5.

Strengths and weakness of GAP Model

The GAP model has strengths as well as weaknesses. It can add values to an organization. This model helps in understanding as well as prioritizing the needs of a business organization by identifying the deficiencies and overcoming them at the earliest. A GAP analysis helps in knowing what a business can do in future. There can be gaps in various categories of a business namely people, technology and processes. The gaps in people can be the resources that lack of proper skill, or the responsibilities are not well defined. The gap in technology can be incapability in technology or usage of systems that are incompatible (Waterson 2014). There has been an analysis on the part of the authors that whether service quality in the stage of service encounter has impacts on the perceived value as well as the willingness of the customers to purchase. It has been revealed that the perceptions of the service quality can affect the consumers more than the quality of the products. Thus, the gaps in the service need to be addressed at the initial phases. Some of the factors that have been identified as the service quality level is completeness, security, attitude, condition, training of service provides and availability. On the other hand, technical quality, corporate image and functional quality are the factors that become significant as the main dimensions for service quality. A model was developed by Brady and Cronin that stated that interaction quality was formed by expertise, behaviour and attitude. On the other hand, physical service environment was constituted by ambient conditions, social factors and design as well as quality of outcome which was created by tangibles, waiting time and valence that can affect quality of service (Balaji, Roy and Lassar 2017).

Every gap is different and requires different approaches. Priorities can be set differently. This model can help in the identification of the gaps, root causes and the appropriate solutions for overcoming the gaps. This provides the decision-makers an overview of the entire organization across distinct functions such as accounting, operations and information technology. The managers and the leaders can determine the departments that need resources urgently. These resources can be allocated efficiently, and the budgets can be designed properly. These give rise to stakeholder satisfaction. The motivation of the employees is enhanced, and these have positive impacts on the life cycle of a project. Risks and losses are reduced considerably because of the GAP model. It also helps in studying the differences in the standard that is being set and the ones that is delivered. Other significant gaps that could be identified are service design gap, management understanding gap, service delivery gap, communication gap and service quality gap.

Service Design Gap

This gap is caused between the perception of the management about customers’ expectations and that of the development of the perception into standards of delivery (Naor, Druehl and Bernardes 2018). This gap is reduced by the GAP analysis.

Service Delivery Gap

This is the gap between the established delivery standards and the service that has been delivered (Rasul and Rogger 2018). This is also being addressed by the model.

Communication Gap

The gap between what is communicated to the customers and what they understand can be ascertained using this model (Ohar et al. 2017).

Management Understanding Gap

The model helps in understanding of the quality that the customers expect and the perceptions of the management about this expectation (Eikey et al. 2015).

Service Quality Gap

This helps in identifying the difference between the service that is expected by the customers and the service offered to them. There are certain disadvantages of the GAP model. Firstly, questions have been raised about the validity of the SERVQUAL model whether it is a generic model for the measurement of the service quality across diverse sectors. The SERVQUAL is the process that emphasizes on the process of service delivery and about the results of the service that is being offered. It is a major disadvantage. Moreover, the five dimensions of SERVQUAL are not universal. Moreover, it is based on the expectation model in lieu of an attitudinal one. This model also fails to draw any theory regarding economy and psychology. Time and cost are major disadvantages of conducting the gap analysis. On the other hand, involving a consultant to perform a gap analysis might create suspicion among the employees and affect their morale.

Customer Loyalty Ladder and Customer Pyramid

Every organization has the onus of providing service of high quality to the customers to retain them and increase the market share. The customer loyalty ladder helps the companies in understanding of the loyalty that they must maintain and the ways through which it can be gained. This is also known as branding ladder.

This model deals with five stages based on the interest of the customers regarding a product or service.

The suspect: This is the first stage that includes an individual who comes to know about an advertisement, go through the brochures and various other types of promotions (Hill et al. 2017). This defines that the individual has a touch with the company.

The prospect: This involves the individuals who pay attention to the promotional activities given by the company.

The customers: These are the persons who purchase products and services from a company.

The client: This defines the customers who buy for the second time. This is done when the service offered by the company matches the expectation of the customers.

The advocate: It provides a representation of the customers who provides unpaid ads for the services of a company. Word-of-mouth is considered in this stage. This ladder helps in increasing the service quality that can lead to increase in customer loyalty and retention of employees.

Customer Pyramid

A customer pyramid helps an organization to supercharge the profits through the process of customization of responses. It helps in strengthening the relation between the service quality and profitability and for the determination of the optimal allocation of scarce resources for profit maximization.

The above pyramid shows that there are four tiers namely platinum, gold, iron and lead tier. The platinum tier describes the profitable customers of the organization who heavily use the products, not much price sensitive, have the willingness to invest and try new offerings of the company as well as have commitment towards the firm (Srivastava 2017). The profitability levels in the gold tier are not so high. The reason could be that the customers want price discounts limiting margins. These customers are not so loyal and can reduce the risk by working with more than one vendor apart from the focal company. On the other hand, the iron tier takes into consideration the customers that can provide the volume which is needed for the utilization of the company’s capacity, but the spending levels, profitability and loyalty are not enough. The lead tier includes the customers that are costly to the company and demand more attention than their spending as well as profitability. These are known as problem customers at some point of time. They complain about the organization and tie up the resources of the firm.

Relationship Marketing

Relationship Marketing can be defined as a set of networks as well as interactions (Viio and Grönroos 2014). It is important to strengthen the network of relationships in a regular basis where the company’s objectives can be accomplished (Pappu and Quester 2016). It has also been argued that, relationship is not only restricted to the relationship between an organization and its clients but also considers the organization and all the stakeholders (Soltani and Navimipour 2016). There is an existence of a significant as well as positive impact on the exchange relationships between the different parties (Jaafar and Rafiq 2017). Loyal customers can be regarded as those who have positive thinking and talk positively about a company to other people (Kuban et al. 2016). Proper relationship marketing helps in the creation of loyal customers. It has also been stated that relationship marketing can be regarded as a strategic organization. Relationship marketing can be clarified in three significant steps namely attract, maintain and improve. However, this process is not applied in all circumstances and for all customers. According to Jiang et al. (2016), the success of the organizations in the competitive market depends on the network of professional relationships. It is being considered that investment in building the relationships can lead to the creation of customer loyalty. Trust, commitment, satisfaction and quality of relationship have a direct as well as indirect influence on the performance. Relationship Marketing is a process that attracts develops and maintains relationships with the customers (Strong 2015). Relationship is a major part of the relationship marketing that puts the focus on building mutually beneficial relations with the customers that can reduce the transaction costs and any future uncertainties (Hudson et al. 2015). Satisfaction and trust have been identified as the factors for creating loyal customers. Cooperation is a very crucial factor that is necessary for creating good relations with the customers. It can be defined as an action that is coordinated and designed between the different partners who are involved in the exchange in achieving the objectives.

Digital marketing in real business case

Customer Relationship Management is an enterprise wide process for a proper understanding as well as influencing the behaviour of the customers through proper communication of the service and product values for the improvement of customer acquisition, customer loyalty, customer profitability and customer retention. It is a comprehensive business strategy for the empowerment of the internal functioning of the organization. The main objective is the identification, acquiring, delivery, development and retention of customers. With the changing technology the process aims at integrating the various functions of the organization such that it can be effective in the long run. Customer Relationship Management is significant as it is costlier to acquire a new customer than retention. An increase in the rate of customer retention by around 5 percent can enhance the profits by about 9 percent. The Customer Relationship Management focuses on promotional marketing that can be linked with the tools of database management. Customer Relationship Management also helps the companies in addressing the gaps in the provision of services and the find out solutions to give high value services to the customers. This process can be analysed from three significant factors such as pull of demand, pull of technology and update of management concept (Khodakarami and Chan 2014).

Zappos has been one of the successful companies and a leader in the online shoe industry (Cook 2016). It has invested heavily on the marketing campaigns so that a good relation is built with the customers. It has worked hard for the making its presence in the market. It has addressed the needs and wants of the customers. Amazon.com is another renowned company that has a superior quality service for the customers (Tang 2017). It provides books, games and music apart from toys, apparel, groceries, general home, garden items and sports. The company has been very successful in the online business and trying to close the gaps in services as a strategy to meet the expectations of the customers. Amazon understands the expectations of the customers from the time they start shopping. Amazon also selects the delivery mode and states the number of days it can take to reach the merchandise to the customers. It addresses the gaps in the delivery of the products to the customers within time. The company has gone one step further and delivers the promises.

Conclusion

The corresponding essay makes a detailed discussion about the gaps that are very prevalent in the services being offered to the customers by the organizations. The GAP Model helps in the identification of the gaps that are common in services and the reasons of the gaps. It deals with seven significant gaps that are being described in detail. The importance of relationship marketing in the creation of customer loyalty is immense and that has been considered in the essay. Some of the models such as Customer Pyramid Model and Customer Ladder Model have described certain significant steps in providing valuable service to the customers.

Reference List

Ahmadi, R. and Habibi, H., 2017. Identification and prioritization of factors affecting services provided by Real Estate Registration Organization of Iran using analytical Hierarchy process (AHP) from viewpoint of clients (case study: Real Estate Registration Organization of Bandar Abbas. RevistaPublicando, 4(13 (2)), pp.637-685.
Ali, I. and Garg, R.K., 2017. Marketing of Services: Challenges & Opportunities in Context of the Globalization of Business. International Journal of Engineering and Management Research (IJEMR), 7(3), pp.522-526.
Balaji, M.S., Roy, S.K. and Lassar, W.M., 2017. Language divergence in service encounters: Revisiting its influence on word-of-mouth. Journal of Business Research, 72, pp.210-213.
Collier, J.E., Barnes, D.C., Abney, A.K. and Pelletier, M.J., 2018. Idiosyncratic service experiences: When customers desire the extraordinary in a service encounter. Journal of Business Research, 84, pp.150-161.
Cook, S., 2016. Leading the Customer Experience: Inspirational Service Leadership. London: Routledge.
Eikey, E.V., Murphy, A.R., Reddy, M.C. and Xu, H., 2015. Designing for privacy management in hospitals: Understanding the gap between user activities and IT staff’s understandings. International journal of medical informatics, 84(12), pp.1065-1075.
Hill, A., Cuthbertson, R., Laker, B. and Brown, S., 2017. Service fitness ladders: improving business performance in low cost and differentiated markets. International Journal of Operations & Production Management, 37(10), pp.1266-1303.
Hudson, S., Roth, M.S., Madden, T.J. and Hudson, R., 2015. The effects of social media on emotions, brand relationship quality, and word of mouth: An empirical study of music festival attendees. Tourism Management, 47, pp.68-76.
Jaafar, H.S. and Rafiq, M., 2017. Logistics Service Quality and Commitment in Third Party Logistics. Gading Journal for the Social Sciences, 9(01), pp.65-79.
Jiang, Z., Shiu, E., Henneberg, S. and Naude, P., 2016. Relationship quality in business to business relationships—Reviewing the current literatures and proposing a new measurement model. Psychology & Marketing, 33(4), pp.297-313.
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.
Kuban, K.C., Joseph, R.M., O'shea, T.M., Allred, E.N., Heeren, T., Douglass, L., Stafstrom, C.E., Jara, H., Frazier, J.A., Hirtz, D. and Leviton, A., 2016. Girls and boys born before 28 weeks gestation: risks of cognitive, behavioral, and neurologic outcomes at age 10 years. The Journal of pediatrics, 173, pp.69-75.
Magatef, S.G. and Tomalieh, E.F., 2015. The impact of customer loyalty programs on customer retention. International Journal of Business and Social Science, 6(8), pp.78-93.
Naor, M., Druehl, C. and Bernardes, E.S., 2018. Servitized business model innovation for sustainable transportation: Case study of failure to bridge the design-implementation gap. Journal of Cleaner Production, 170, pp.1219-1230.
Ohar, J., Braman, S., Carlin, B., Dhand, R., Hanania, N., Mahler, D.A., Pinto-Plata, V. and Eubanks, D., 2017. The Communication Gap Between Patients with COPD and Pulmonologists Regarding Inhalation Delivery Devices: Results From Paired On-Line Surveys. . New York: Amer Thoracic Soc.
Pappu, R. and Quester, P.G., 2016. How does brand innovativeness affect brand loyalty?. European Journal of Marketing, 50(1/2), pp.2-28.
Rasul, I. and Rogger, D., 2018. Management of bureaucrats and public service delivery: Evidence from the nigerian civil service. The Economic Journal, 128(608), pp.413-446.
Sirakaya-Turk, E., Ekinci, Y. and Martin, D., 2015. The efficacy of shopping value in predicting destination loyalty. Journal of Business Research, 68(9), pp.1878-1885.
Soltani, Z. and Navimipour, N.J., 2016. Customer relationship management mechanisms: a systematic review of the state of the art literature and recommendations for future research. Computers in Human Behavior, 61, pp.667-688.
Srivastava, R., 2017. Identification of customer clusters using rfm model: a case of diverse purchaser classification. International Journal of Information, Business and Management, 9(4), pp.201.
Strong, C., 2015. Antecedents of a Customer Orientation: The case of European High-tech Organizations. Global Perspectives in Marketing for the 21st Century, pp. 49-50.
Tang, B., 2017. The Emergence of Artificial Intelligence in the Home: Products, Services, and Broader Developments of Consumer Oriented AI.
Viio, P. and Grönroos, C., 2014. Value-based sales process adaptation in business relationships. Industrial Marketing Management, 43(6), pp.1085-1095.
Wu, Q., Zhang, X. and Waley, P., 2017. When Neil Smith met Pierre Bourdieu in Nanjing, China: bringing cultural capital into rent gap theory. Housing Studies, 32(5), pp.659-677.

sample

Strategic Management