Chapter 1 Introduction : Service quality is an attitude or global judgment about the superiority of a service.

To be globally competitive, service industries must achieve a quality service that exceeds customers expectation. Service quality determines an organizations success or failure. Companies and organizations that virtually every industry employs customer satisfaction measures for the straightforward reason that satisfied customers are essential for a successful business. Service quality also determines a customers satisfaction. However, the determinants of service quality are complicated with the dynamic business environment. Therefore, this measurement dimension depends on the industry itself. The main objectives of this study are to identify the attributes that influence customer satisfaction and determine their relationships with customer satisfaction. The variables included in this research are place/ambience, food quality and service quality as independent variables and customer satisfaction as the dependent variable. A survey questionnaire which consists of three parts to measure demographic factors, independent variables, and dependent variables is to be designed based on items determined by past research. Many respondents from some of the well known hotels in New Delhi have been selected as a sample. The SERVQUAL instrument is discussed, and how it may be implemented by restaurants in assessing the quality of service is included. The managerial implications of using SERVQUAL as an assessment tool include meeting and managing customer expectations, managing the physical design of the product, educating service customers, developing a total quality management program, achieving continuous quality through automation, and engaging in periodic review of the procedures, personnel, and property of the operation. With the assessment knowledge generated by such a review, restaurants may then begin to manage their strengths and weaknesses productively.

Research in marketing draws from the theories of environmental psychology to examine the effects of the environment on customers and how they affect attitudes, service evaluation, and behavior and, ultimately, sales. In the context of retailing, Kotler (1973) defined atmospherics as the conscious design of space to create certain effects in buyers to enhance the likelihood of purchase. According to Kotler, the atmosphere can affect purchase behaviour in three ways. As an attentioncreating medium, atmosphere can make a store or restaurant distinctive through design, colour, motion or sound. In the Hard Rock Cafe, for example, customers are surrounded by authentic rock and roll memorabilia, such as a guitar signed by John Lennon or a leather jacket worn by Elvis
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Presley, hung on the walls. These mechanic clues help to establish the Hard Rock brand. As a message-creating medium, the atmosphere provides discriminative stimuli to buyers that enable them to recognize a restaurants differences as a basis for choosing that restaurant. For example, the soft lighting, snowy white linen tablecloths, and crystal chandeliers of an upscale restaurant communicate to customers the type of food and level of service that make up a fine-dining experience. Finally, as an effect-creating medium, atmospheric elements such as colour, smell, sound, and texture evoke visceral reactions that influence purchase probability. At Walt Disney World in Orlando, for example, the smell of chocolate chip cookies baking is piped from the underground to the parks Main Street inside the front gate to greet guests, create warm feelings, and whet their appetite for a treat. SERVQUAL and SERVPERF constitute two major service quality measurement scales. The consensus, however, continues to elude till date as to which one is superior. An ideal service quality scale is one that is not only psychometrically sound but is also diagnostically robust enough to provide insights to the managers for corrective actions in the event of quality shortfalls. Empirical studies evaluating validity, reliability, and methodological soundness of service quality scales clearly point to the superiority of them SERVPERF scale. The diagnostic ability of the scales, however, has not been explicitly explicated and empirically verified in the past. Using data collected through a survey of consumers of fast food restaurants in Delhi, the study finds the SERVPERF scale to be providing a more convergent and valid explanation of the service quality construct. However, the scale is found deficient in its diagnostic power. It is the SERVQUAL scale which outperforms the SERVPERF scale by virtue of possessing higher diagnostic power to pinpoint areas for managerial interventions in the event of service quality shortfalls. The major managerial implications of the study are: Because of its psychometric soundness and greater instrument parsimoniousness, one should employ the SERVPERF scale for assessing overall service quality of a firm. The SERVPERF scale should also be the preferred research instrument when one is interested in undertaking service quality comparisons across service industries. On the other hand, when the research objective is to identify areas relating to service quality shortfalls for possible intervention by the managers, the SERVQUAL scale needs to be preferred because of its superior diagnostic power. However, one serious problem with the SERVQUAL scale is that it entails gigantic data collection task. Employing a lengthy questionnaire, one is

required to collect data about consumers expectations as well as perceptions of a firms performance on each of the 22 service quality scale attributes.

Chapter 2 Literature Review :

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Review of work already done on the subject Food quality has the greatest impact on satisfaction levels in terms of chain restaurants, whereas, server responsiveness is the driving force behind satisfaction as it relates to independent restaurants.Service quality is crucial to the success of any service organization. Since customers participate in delivery and consumption of services, they interact closely with various aspects of organizations. Restaurants with good service quality will therefore improve their market share and profitability (Oh and Parks, 1997). In a highly competitive hospitality industry, individual restaurateurs must find ways to make their products and services stand out among the others. To achieve this, restaurateurs must understand their customers needs and then set out to meet (or exceed) these needs. As Fache (2000) has observed, one of the most important developments in the hospitality industry is the growing attention to service quality from the customers perspective. Among all customer demands, quality service has been increasingly recognized as a critical factor in the success of any business (Gronoos, 1990; Parasuraman et al,1988).The most widely accepted measurement scale for service quality (Parasuraman et al,1985;1988), consists of five essential service quality dimensions. This framework measures service quality by considering gaps between expectation and performance with sub-factors including tangibles, reliability, assurance, responsiveness, and empathy. Cronin and Taylor (1992) introduced another performance-based measurement scale, arguing that customer preferences are more relevant to a long-term service quality than impending differences in expectations and performance. Cronin and Taylor (1992) suggest that the performance-based scale is more efficient than the previous one, as it reduces the number of variables that must be measured to arrive at conclusions. Perceived service quality is said to be a reflection of the firms performance. On using the firms service, customers are said to form an attitude towards service quality performance. This satisfaction level with regard to the products / services indicates how the firm performs. As the services possess the element of intangibility, it is very difficult to have a standardized and scientific tool for measurement (Carman, 1990, Crosby, 1979; Parasuraman et al., 1985, 1988). However, a 22-item scale was developed to measure service quality along five dimensions: reliability, responsiveness,
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assurance, empathy, and tangibles. The instrument has been revised and used extensively in a variety of service settings such as banking, credit card services, repair and maintenance and long distance telephone services in developed nations. It has been subjected to criticism on the basis of theoretical and operational aspects, despite its contribution to academia and business world. While failing to confirm the five-dimensional factor structure various studies have considered the importance of context in influencing it and reported problems on the use of expectations as the standard of comparison (Carman, 1990; Cronin and Taylor, 1992). The SERVPERF model claims that to find the performance of a firm (i.e. its service quality) all that is required is to collect data by directly asking the customer through a simple survey and a questionnaire. McDougall and Levesque (1994) have claimed that knowing the relative importance of each dimension of service quality can help service providers to prioritize their efforts and resources and deploy them more effectively to improve each dimension of service quality. This knowledge allows managers to concentrate on those dimensions that offer the greatest opportunity to enhance customer satisfaction and their loyalty. To sum up, measuring service quality seems to pose difficulties for service providers because of the unique features of service (Bloemer, J., and Kasper, H. , 1995). Unlike SERVQUAL, SERVPERF does not differentiate service quality from customer satisfaction, SERVQUAL measures performance based on the gap between expectation and perception while SERVPERF measures actual performance based on customer satisfaction. Literature suggests that the customer is the only real arbiter of service quality. However, this approach can be criticized as it fails to take into account the differing perceptions of custom`ers. For restaurant managers it is necessary to employ a multi-faceted approach that incorporates quantifiable measures,customer assessments that should also include employee perceptions of customer satisfaction. There is no doubt that customer satisfaction is the major issue for all firms. A number of studies on customer satisfaction in the hospitality industry have focused on identifying service attributes; that is, a customers needs and wants. From a marketing perspective, customer satisfaction is achieved when the customers needs and wants are fulfilled (Lam and Zhang, 1999). Lam and Zhang (1999) conducted a study to assess customers expectations and perceptions of service quality, and identified a gap between the two. They also explored the impact of service quality factors on overall customer satisfaction. Their findings revealed that reliability and responsiveness and assurance are the most significant factors in predicting customer satisfaction. The concept of customer satisfaction refers to an evaluation or judgment upon both the good performance of a service or product and the fitness of a product or service for a given purpose (Teas, R.K., 1994).
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According to the American Marketing Association (AMA), customer satisfaction is the degree to which a customers expectations are fulfilled or surpassed by a product. Oliver (1980) argued that customer satisfaction implies a comprehensive mental state derived from a combination of emotions caused by a customers actual experience and disconfirmation of expectation and emotions prior to the buying experience. Numerous researches have been vigorously conducted on customer satisfaction, and developed the expectation-disconfirmation paradigm to explain the variables deciding customer satisfaction. According to the paradigm, a disconfirmation between prior expectation and product performance affects customer satisfaction/dissatisfaction, and customer satisfaction is determined based upon a customers internal determinants and perceived performance (Oliver, 1980).It is also defined as the consumers response to an evaluation of the perceived discrepancy between prior expectations and the actual performance of the product perceived after its consumption. In terms of customer loyalty, Oliver (1999) defined it as the in depth involvement of a customer, which triggers a continuous purchase of a preferred product or service. It has been suggested that a customer that is loyal to a particular product or service would not alter their own buying behaviour despite the marketing attempts of substitute products or services. Referral or wordof-mouth were considered significant means of marketing communication, since the information transferred via this means has been recognised as credible and accurate, and exerts a critical impact on a firms reputation, affecting other customers buying behaviour.

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References Cited

Bloemer, J., and Kasper, H. (1995). The complex relationship between consumer satisfaction and brand loyalty. Journal of Economic Psychology, 16 (2), 311329. Cronin Jr., J.J., and Taylor, S.A. (1992). Measuring service quality: a re-examination and extension. Journal of Marketing, 56 (3), 5569. Cronin Jr., J.J., and Taylor, S.A. (1994). SERVPERF vs. SERVQUAL: reconciling performance based and perceptions-minus-expectations measurement of service quality. Journal of Marketing, 58 (1), 125131. Fache, W. (2000). Methodologies for innovation and improvement of services in tourism. Managing Service Quality, 10 (6), 356-66. Gronoos, C. (1984). An applied service marketing theory. European Journal of Marketing, 16 (17) Gronroos, C. (1990). Service Management and Marketing. Lexington; Lexington Books. Lam, T., and Zhang, H. (1999). Service quality of travel agents: the case of travel agents in Hong Kong. Tourism Management, 20, 341349. McDougall, G.H.G., and Levesque, T. (2000). Customer satisfaction with services: putting perceived value into the equation. Journal of Services Marketing, 14 (5), 392410. Oliver, Richard L. 1980. "A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions." Journal of Marketing Research 17 (September): 460-469. Parasuraman, A., Zeithaml, V., and Berry, L.L. (1985). A conceptual model of service quality and its implications for future research. Journal of Marketing, 49 (4), 4151. Parasuraman, A., Zeithaml, V., and Berry, L.L. (1988). SERVQUAL: a multiple item scale for measuring consumer perceptions of service quality. Journal of Retailing, 6 (1), 1240. Parasuraman, A., Zeithaml, V., and Berry, L.L. (1994). Reassessment of expectations as a comparison standard in measuring service quality: implications for further research. Journal of Marketing, 58 (1), 111125. Teas, R.K. (1994). Expectations as a comparison standard in measuring service quality: an assessment of a reassessment. Journal of Marketing, 58 (1), 132140.
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