EXPECTATIONS AND PERCEPTIONS IN RESTAURANT SERVICES: THREE DIMENSION GAP ANALYSIS

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1 EXPECTATIONS AND PERCEPTIONS IN RESTAURANT SERVICES: THREE DIMENSION GAP ANALYSIS Ming-Chun Tsai 1, Chien-Lin Lin 2,* 1 Department of Business Administration, Chung Hua University 2 Department of Technology Management, Chung Hua University, Department of Tourism Management, Hsing Wu College, No. 707 Sec.2 WuFu Rd., Hsinchu Taiwan ROC @mail.hwc.edu.tw ABSTRACT Service quality is a crucial factor affecting customer satisfaction and business performance. The importance of service quality was recognized by Parasuraman et al. (1985). Researchers have been deeply engaged in the studies of service quality gap. Among them, Lin, et al. (2009) have developed the IPGA model by integrating the strengths of the importance-performance analysis (IPA) and the gaps analysis. This study intends to develop a three dimension service quality gap model by extending the IPGA model through adding in the construct of management perceptions of consumer expectations. Based on the model, the service quality gap will be identified and problems causing the gap analyzed. This research empirically investigates the feasibility of the model at four various restaurant outlets of a hotel in Taiwan using DINESERV, a 29-item instrument developed in 1995 by Steven, hoping to provide a guide to researchers and the service industry as well for their future study on service quality management. Keyword: Service Quality, Gap Analysis, Important-Performance Analysis, IPGA, DINESERV INTRODUCTION Service quality is a crucial factor affecting customer satisfaction and enhancing business performance. Many researchers argued that service quality does indeed increase customer satisfaction and loyalty (Bruhn and Grund, 2000; Gronholdt et al., 2000; Martensen et al., 2000; Cassel and Eklof, 2001). Hence, it has become a prime concern for the management to identify critical service attributes so as to improve service quality. The importance of service quality was also recognized by Parasuraman, Zeithaml and Berry (1985), who developed the Gaps model that defines service quality as the differences between customers expectations and perceptions. Much effort has also been put into exploration of service quality gaps. (Tsai, et al., 2007, Lee and Chen, 2009, and Lin, et al. 2009) A number of studies maintained that the Gap Analysis and the Importance-Performance Analysis (IPA) are the main analytical approaches helping professionals improve service quality (Parasuraman et al., 1985; Marr & Jeffrey, 1986; Hammasi et al., 1994; Chu and Choi, 2000; O neill and Palmer, 2004; Chen and Chang, 2005; Breiter and Milman, 2006; Abalo et al., 2007). IPA (Martilla and James, 1977) provides advantages for evaluating customer acceptance of a marketing program and gives management insights into which aspect of the marketing mix requiring more attention and identifies areas that may be consuming too many resources. Although the Gaps Analysis and IPA are considered to

2 be effective managerial tools and are widely used by researchers in various areas, each of them has its limitations that have entailed related studies on modified conceptions (Slack, 1996; Skok et al., 2001; Soetanto et al., 2001; Aigbedo and Parameswaran, 2004; Chen and Chang, 2005; Bei & Shang, 2006; Pakdil and Aydin, 2007; Abalo et al., 2007). Among them, Lin, et al. (2009), by integrating the strengths of IPA and Gap Analysis, developed the IPGA model, which has not only provided a solution to both the theoretical and practical weaknesses generated while applying IPA and Gap Analysis, but also helped redefine the actual quality attributes needed to be improved in a service system. This study intends to extend the IPGA model by Lin, et al. (2009) through adding in the construct of management perceptions on consumer expectations, in addition to the construct of consumer expectations and perceptions, so as to develop a three dimension service quality gaps model. With the model, service quality gaps can be identified and problems causing the gaps can be further analyzed. An empirical investigation into the feasibility of the model was conducted at four various restaurant outlets of a hotel in Taiwan using DINESERV, hoping to provide a guide to researchers and the service industry as well for their future study on service quality management. LITERATURE REVIEW The Gaps model & DINESERV Service quality is undeniably crucial in achieving customer satisfaction and business performance. There have been ample studies attributed to enhancing the quality of service. Researchers such as Bruhn and Grund argued that service quality helps boost customer satisfaction and loyalty (Bruhn and Grund, 2000; Gronholdt et al., 2000; Martensen et al., 2000; Cassel and Eklof, 2001). Parasuraman et al. (1985) proposed the Gaps model that defines service quality as the differences between customer expectations and perceptions. The five gaps are: Gap 1, the listening gap; Gap 2, the service designs and standards gap; Gap 3, the service performance gap; Gap 4, the communication gap; and Gap 5, the customer gap. Using SERVQUAL as the basis, Stevens et al. (1995) developed DINESERV to determine how customers view a restaurant s quality by refining LODGSERV (Knutson and Stevens,1990 ), which was drafted by Knutson and Stevens for measuring service quality for lodging properties. DINESERV has been regarded as a reliable, relatively simple tool to measure restaurant service quality. Importance-Performance Analysis The Importance-Performance Analysis (IPA), proposed by Martilla and James (1977), was originally applied to analyze the performance of the automobile industry. IPA identifies the importance of the attributes associated with a service or product as well as the degree of performance. The results are displayed on a two-dimensional grid. The importance of the service attributes is plotted as the vertical axis while their performance levels plotted as the horizontal axis. The means of performance and importance divide the grid into four quadrants: Keep up the Good Work, Concentrate Here, Low Priority, and Possible Overkill. The IPA, an effective technique for a company to evaluate its competitive position in the market and to identify its defective service qualities, has become a popular managerial tool and been widely used by researchers in various areas, such as the travel and tourism industry (Zhang and Chow, 2004; Deng, 2007), the traffic and transportation industry (Chen and

3 Chang, 2005, Tam and Lam, 2004, Leong 2008), and the hospitality industry (Chu & Choi, 2000, Janes & Wisnom, 2003, Qu & sit, 2007) etc. IPGA Model Although IPA has been considered as an effective technique, there are researchers proposing several modified conceptions, based upon two implicit assumptions about the traditional IPA: (1) attributes performance and importance are two independent variables, and (2) the relationship between attributes performance and overall performance is linear and symmetric (Lin, et al., 2009). Therefore, Matzler et al. (2003) proposed a revised IPA that derives attributes importance from partial correlation analysis between attributes performance and overall customer satisfaction. Oliver (1997) argued that confusion arises concerning the most suitable means of calculating and distributing performance and importance scores along their respective axes. Pakdil and Aydin (2007) measured airline service quality using SERVQUAL scores weighted by loadings derived from factor analysis. Deng et al. (2008) presented a revised IPA which integrates three-factor theory and benchmarking. Moreover, Lin, et al., (2009) developed the IPGA model, by integrating the strengths of the IPA and the Gaps analysis. The IPGA technique, unlike the traditional IPA, replaces the matrix s coordinate axes with the relative importance (RI) and relative performance (RP) respectively. The results are then displayed on a two-dimensional grid. The relative importance of the service attributes is plotted as the vertical axis while the relative performance is plotted as the horizontal axis. When the average importance of customer perceptions I.j of the jth attribute is equal to the total average importance of customer perceptions I.., the relative importance RI of the attribute is 1, thus the dividing point of the matrix s vertical axis is 1. In addition, when there is no significant difference between the average performance and importance of the attribute, the score of the relative performance RP is 0, and the dividing point of the matrix s horizontal axis is 0. Therefore the intersection coordinate of IPGA matrix is (0,1). The dividing point (0,1) separates the grid into four quadrants (Figure 1): FIGURE 1. Importance-Performance-Gap Matrix (IPGM) Relative Importance (RI) II. Concentrate Here I. Keep Up The Good Work High RI / Low RP High RI / High RP III. Low Priority IV. Possible Overkill Low RI / Low RP Low RI / High RP Relative Performance (RP) Quadrant I. Attributes situated in the quadrant are perceived to have high relative importance and high relative performance. Quadrant II. In the quadrant, attributes have high relative importance but low relative performance. This implies that improvement efforts should be concentrated here.

4 Quadrant III. Attributes located in the quadrant have both low relative importance and performance Quadrant IV. The quadrant contains attributes of low relative importance with high relative performance. Present efforts on the attributes in this quadrant are over-utilized and management should consider reallocate its resources. METHODOLOGY Three dimensional service quality gaps model In the conceptual Gaps model, the customer gap (gap 5) is the result of the other four gaps, whereas the listening gap, Gap 1, deals with the differences between customer expectations and management perceptions. In most service companies, the management is responsible for the design of service quality standards. Thus management perceptions of customer expectations will affect service quality designs and standards and influence service delivery and company s external communications to customers. An inadequate understanding of customer expectations will ultimately lead to inferior service performance of the firm. It is therefore critical for the management to fully understand customers expectations. In this study Gap 1 is categorized as the construct of management perception. Gaps 2 through 4 are categorized as the constructs of management execution. To accommodate the relative importance to the customer, the relative performance level and the management perceptions of customer expectations, a three dimensional service quality gaps model is thus developed by extending the IPGA model (Lin, et al., 2009). By means of the three dimension gaps model, this study tries to further analyze the causes of service gaps which need to be improved. The three dimensional service quality gaps model is comprised of three steps as following: Step 1: Measuring customer perceptions toward the importance of service attributes, their performance levels and management perceptions for customer expectations. Assuming there are n number of respondents, m number of management personnel, p number of service attributes, CI is written indicating the cognitive importance of ij the i th respondent to the j th attribute, and CP indicating the satisfaction level ij (performance) of the i th respondent at the j th attribute. MI is written indicating the ij cognitive importance of the i th management personnel to the j th attribute Step 2: Calculating the relative importance, the relative performance levels and the relative importance of management perceptions for customer expectations. Based on the IPGA model developed by Lin et al. (2009), the definitions of the relative importance of customer perceptions (CRI), the relative performance of customer perceptions (CRP) and the relative importance of management perceptions (MRI) are as following: I. The relative importance for customer perceptions (CRI): CI n.j = i= 1 CI ij n, where n is the number of respondents; thus, CI.j is the average

5 n importance of the j th attribute; CI.. = CI np, where p is the number of p i= 1 j= 1 attributes); thus, CI.. is the total average importance of p attributes. CRI(j) = CI j / CI.., where function CRI(j) is the relative evaluation value of the importance of j th attribute as compared to the total average value. II. The relative performance for customer perceptions (CRP): CP. j = n i= 1 CP ij n performance of the j th ij, where n is the number of respondents; thus, CP is the average j attribute; CP.. = n p i= 1 j= 1, where p is the number of CP ij n attributes; thus, CP is the total average performance of p attributes. When the.. average performance of the j th attribute is significantly larger than the average importance of j th attribute, the score of the CRP(j) is written as CP. /CP, indicating j.. that the positive service gap exists in the j th attribute. When the average performance of the j th attribute is significantly smaller than the average importance of the j th attribute, the score of the CRP(j) is written as ( CP / j CP.. )-1, indicating that the negative service gap exists in the j th attribute. When there is no significant difference between the average performance and importance of the j th attribute, the score of the CRP(j) is 0, meaning there is no service gap in the j th attribute. The function CRP is the relative evaluation value of performance of j th attribute as compared to the total average value shown as following (Table 1): Table 1. The Calculation of the Relative Performance (CRP) Contingency t-test Relative performance (CRP) CP.j > CI.j Significant CP.j / CP.. -1 CP.j < CI.j Significant ( CP.j / CP..) CP.j < CI.j or.j CI.j CP > Non-significant 0 III. The relative importance for management perceptions (MRI) MI. j = m i= 1 MI ij m, where m is the number of management personnel; thus, MI is. j the average importance of management perception of the j th attribute; m p, where p is the number of attributes; thus,.. MI.. = MI mp MI is the total i= 1 j= 1 ij average importance of management perceptions of p attributes. When the average importance of management perceptions of the j th attribute is significantly larger than the average importance for the customer perceptions of j th attribute, the score of the MRI(j) is written as MI. / MI, indicating that a positive gap exists between j.. customer expectations and management perceptions in the j th attribute. When the average importance of management perceptions of the j th attribute is significantly

6 smaller than the average importance for the customer perceptions of j th attribute, the score of the MRI(j) is written as 1 ( MI. j / MI..), indicating a negative gap exists between management perceptions and customer expectations in the j th attribute. When there is no significant difference between the average importance of management perceptions and the average importance of the customer perceptions of the j th attribute, the score of the MRI(j) is 0, namely there is no gap between management perceptions and customer expectations in the j th attribute. The calculations of the relative importance of management perceptions for customer expectations (MRI) are shown as following (Table 2): TABLE 2. The calculations of the relative importance of management perceptions of customer expectations (MRI) Contingency t-test Relative Important for Manager s Perception (MRI) MI.j > CI.j Significant MI.j / MI.. -1 MI.j < CI.j Significant ( MI.j / MI..) MI.j > CI.j or.j CI.j MI < Non-significant 0 Step 3: Find the attributes in the eight quadrants of the Three Dimension Service Quality Gaps The relative importance of the service attributes is plotted as the vertical axis while the relative performance is plotted as the horizontal axis. When the average importance CI of the j th attribute is equal to the total average importance. j CI, the.. score of relative importance CRI of the attribute is 1, thus the dividing point of the matrix s vertical axis is 1. When there is no significant difference between the average performance and importance of the attribute, the score of the relative performance CRP is 0, and the dividing point of the matrix s horizontal axis is 0. In addition, when there is no significant difference between the average performance and importance of the attribute, the score of the relative performance MRI is 0, and the dividing point of the matrix s 3 rd axis is 0.Therefore the intersection coordinate of the three dimensional matrix is (0,1,0). The dividing point (0,1,0) separates the matrix into eight quadrants(figure 2): FIGURE 2. The three dimension service quality gaps matrix High CRP Low Low CRI High High MRI Low

7 Gap 1 is categorized as the construct of management perception. Gaps 2 through 4 are categorized as the constructs of management execution. Thus all the service attributes are divided into the eight quadrants with the two constructs (Table 3). TABLE 3. The Eight Quadrants of the Three Dimension Service Quality Gaps CRI CRP MRI Results 0 I. Quality leading attributes 0 < 0 II. Quality risk attributes III. Leading faulty attributes on management 1 0 execution < 0 IV. Leading faulty attributes on management < 0 perceptions V. Resources overflow attributes on management 0 perceptions 0 VI. Resources overflow attributes on management < 0 execution < 1 VII. Secondary faulty attributes on management 0 execution < 0 < 0 VIII. Secondary faulty attributes on management perceptions The management applications of the three dimension service quality gaps are as following: Quadrant I. Attributes situated in quadrant I are perceived to have high relative importance, high relative performance and positive management perceptions of customer expectations. Attributes in this quadrant are categorized as quality leading attributes. Managers should keep up the good work and maintain their quality edge. Quadrant II. Attributes situated in quadrant II are perceived by the customer to have high relative importance and high relative performance, but a negative gap exists between management perceptions and customer expectations (Gap 1 exists). Customers consider these attributes very important and the firm is currently performing well on those areas. However, the management may fail to realize their importance and run the risk of causing service quality gaps in the future. Attributes that fall in this quadrant are categorized as quality risk attributes. Quadrant III. Attributes in quadrant III are perceived to have high relative importance both by the customer and the management, but of low relative performance. This implies problems causing the service quality gap are from the construct of management execution (Gap 2 through Gap 4). Therefore, we named these attributes as leading faulty attributes on management execution. Improvement efforts should be concentrated on customer-driven service designs and standards, service delivery and external communications to customers etc. Quadrant IV. Attributes in quadrant IV are perceived to have high relative importance by the customer but with low relative performance and a negative gap exists between management perceptions and customer expectations. This implies that problems causing the gap are from the construct of

8 management perception. Hence, these attributes are named as the leading faulty attributes on management perceptions. Managers should first concentrate on acquiring accurate information about customer expectations through marketing research such as surveys or customer feedback systems etc., and examine possible flaws of their service implementations. Quadrant V. Attributes in quadrant V are perceived by the customer to have low relative importance, but high relative performance and a positive gap exists between management perceptions and customer expectations. Managers may overestimate the importance of these attributes and present efforts on the attributes are over-utilized. These attributes are so named as resources overflow attributes on management perceptions. The management is encouraged to pay less attention to these attributes and start allocating their resources in a reduced manner. Quadrant VI. Attributes in quadrant VI are perceived by the customer to have low relative importance, but high relative performance and a negative gap exists between management perceptions and customer expectations. This implies resources are over-utilized on these attributes even the customer and management recognize them as being low importance. These attributes are named as resources overflow attributes on management execution. When attributes fall in this quadrant, the management is advised to re-examine its service designs and standards as well as service delivery to avoid possible resources overkill. Quadrant VII. Attributes in quadrant VII are perceived to have low relative importance and performance by the customer, while the management thinks highly of these attributes. The result is an indication that the customer does not perceive the attributes to be very important. Though the quality of the attributes needs to be improved, it should be low on the list of priorities. These attributes are named as secondary faulty attributes on management execution. When attributes fall in this quadrant, the management should go over its service designs and standards, service delivery, etc. Quadrant VIII. Attributes in quadrant VIII are perceived by the customer to have low relative importance and relative performance and a negative gap exists between management perceptions and customer expectations. Since the result is largely due to management perceptions, these attributes are therefore named as secondary faulty attributes on management perceptions. The management should first raise its awareness over the attributes and then consider necessary rectifications relating its performance. However, the priority for the improvement is low. EMPIRICAL RESEARCH The following is an example case presented to demonstrate the application of the three dimensional service quality gaps model. Scope and object of study and data collection This research was undertaken at four fine dining restaurants of a hotel with 337 rooms in Hsin Chu, a city in northern Taiwan. A survey was administered during a two-week span in Nov., The questionnaires were designed in two different formats separately for guests and supervisors and managers. As a result, 204 effective

9 responses were obtained from the guests, and 49 from the supervisors and managers. Measures Customers service quality expectations and perceptions of the restaurants were measured using DINESERV. The 29-item DINESERV instrument includes 10 items for tangibles, 5 items for reliability, 3 items for responsiveness, 5 items for assurance and 5 items for empathy (Stevens et al. 1995). The customer questionnaire consists of two parts. The first part is designed to measure the respondents expectations and perceptions regarding the quality of services offered by the restaurants. Customers were asked to rate the service attributes, using 5-point Likert scale. Prior to the survey, a pilot test had been conducted to assess the reliability of the attributes, and to ensure that the wording of the questionnaire was clear. Twenty-nine questionnaires were completed by master and doctoral students who had dined at hotel restaurants. Reliability analysis was also applied to test the internal consistency of each expectation and perception attribute. The results showed that the Cronbach s α coefficients for the expectation and perception attributes are and respectively, which means they were internally consistent and reliable. Means analysis for restaurant attributes According to Table 4, the respondents perceived all restaurant attributes as important ( ) and the mean is Among them, has dining areas that are thoroughly clean, serves your food exactly as you ordered it, and provides an accurate guest check were considered the most important attributes. On the contrary, respondents regarded the attributes, has a visually attractive menu that reflects the restaurant s image, has visually attractive building exteriors, and has a menu that is easily readable as the least important attributes. The respondents perceptions of the attributes performance ranged from 3.72 to 4.01 with the grand mean at has a dining area that is comfortable and easy to more around and has staff members who are clean, neat and appropriately dressed were the only two attributes with satisfaction ratings greater than 4. The next highest ratings included provides an accurate guest check and has a visually attractive dining area. Conversely, the respondents were least satisfied with the attributes of has a visually attractive menu that reflects the restaurant s image, anticipates your individual needs and wants, and gives extra effort to handle your special requests. The managers perceived all restaurant attributes of customer expectations as important ( ) and the mean was The most important attributes of customer expectations perceived by the managers were has dining areas that are thoroughly clean, is dependable and consistent, and provides an accurate guest check. In contrast, the least important attributes of customer expectations perceived by the managers were has visually attractive building exteriors, has a visually attractive menu that reflects the restaurant s image, and makes you feel special. Gaps analyses Paired sample t-tests were used to test if such the customer gap, Gap 5, existed. The average means of service performance perceived by the customers were all lower than those of their expectations (Table 4). Twenty seven out of twenty nine of these differences were statistically significant at the 0.05 level. The largest gaps existed in the attributes such as has employees who can answer your questions completely, seems to give employees support so that they can do their job well and serves your food exactly as you ordered it.

10 Gap 1, the listening gap, is the difference between customer expectations and management perceptions of those attributes. Independent sample t-tests were used to test if Gap 1 existed. The managers overestimated the respondents expectations on twenty five out of the twenty nine attributes (Table 4). Fourteen items showed a statistically significant difference at the 0.05 level. The largest gaps appeared in such attributes as has dining areas that are thoroughly clean, is dependable and consistent, and makes you feel personally safe. However, the managers underestimated such attributes as has visually attractive building exteriors, makes you feel special, seems to have the customers best interests at heart and has a visually attractive menu that reflects the restaurant s image. TABLE 4. Gap Analysis for Restaurant Service Attributes Restaurant Service Attributes Mean(CI) Mean(CP) Mean(MI) Gap 5 CP-CI Gap 1 MI-CI 1. has visually attractive parking areas *** has visually attractive building exteriors has a visually attractive dining area *** ** 4. has staff members who are clean, neat and appropriately dressed *** 5. has a décor in keeping with its image and price range *** has a menu that is easily readable ** has a visually attractive menu that reflects the restaurant s image *** has a dining area that is comfortable and easy to move around in *** has restrooms that are thoroughly clean *** *** 10. has dining areas that are thoroughly clean *** *** 11. serves you in the time promised *** *** 12. quickly corrects anything that is wrong *** *** 13. is dependable and consistent *** *** 14. provides an accurate guest check *** *** 15. serves your food exactly as you ordered it *** during busy times has employees helping each other to maintain speed and quality *** ** of service. 17. provides prompt and quick service *** ** 18. gives extra effort to handle your special requests *** has employees who can answer your questions completely *** *** 20. makes you feel comfortable and confident in your dealings with them *** *** 21. has personnel who are both able and *** 0.148

11 willing to give you information about menu items, their ingredients, and methods of preparation. 22. makes you feel personally safe *** *** 23. has personnel who seem well-trained, competent, and experienced *** seems to give employees support so that they can do their job well *** has employees who are sensitive to your individual needs and wants, rather than always relying on policies and *** procedures. 26. makes you feel special *** anticipates your individual needs and wants. 28. has employees who are sympathetic and reassuring if something is wrong. 29. seems to have the customers best interests at heart. *p<0.1, **p<0.05, ***p< *** *** ** *** The three dimension service quality gaps analysis The measurement of relative performance is based on the transformation of its gap 1 direction by means of the function CP. j /CP.. or ( CP. j / CP.. ). From the results in Table 5, there were two service attributes without significant difference between the average relative importance and performance. Hence, their scores of CRPs were 0. The two attributes showing no gap were has visually attractive building exteriors and has staff members who are clean, neat and appropriately dressed. Most of the restaurant service attributes had negative gaps and the scores of their relative performance were between and , with the exception of two attributes. As Table 5 shows, the relative importance scores for the restaurant service attributes ranged from to The measurement of relative performance is based on the transformation of its gap direction by means of the function MI. / MI or j.. 1 ( MI. j / MI..). As indicated in Table 5, there were fifteen attributes without significant difference between the average relative importance and performance. Hence, the scores of MRP were 0. The scores of the other fourteen attributes ranged from to which indicated that managers overestimated the importance of the customers expectations on these fourteen attributes. TABLE 5. The Three Dimension Service Quality Gaps Analysis Restaurant Service attributes CRI CRP MRI 1. has visually attractive parking areas *** has visually attractive building exteriors has a visually attractive dining area *** **

12 4. has staff members who are clean, neat and appropriately dressed *** 5. has a décor in keeping with its image and price range *** has a menu that is easily readable ** has a visually attractive menu that reflects the restaurant s image. 8. has a dining area that is comfortable and easy to move around in *** ** has restrooms that are thoroughly clean *** *** 10. has dining areas that are thoroughly clean *** *** 11. serves you in the time promised *** ** 12. quickly corrects anything that is wrong *** *** 13. is dependable and consistent *** *** 14. provides an accurate guest check *** *** 15. serves your food exactly as you ordered it *** during busy times has employees helping each other to maintain speed and quality of service *** ** 17. provides prompt and quick service *** ** 18. gives extra effort to handle your special requests *** has employees who can answer your questions completely. 20. makes you feel comfortable and confident in your dealings with them. 21. has personnel who are both able and willing to give you information about menu items, their ingredients, and methods of preparation ** *** ** *** makes you feel personally safe *** *** 23. has personnel who seem well-trained, competent, and experienced. 24. seems to give employees support so that they can do their job well. 25. has employees who are sensitive to your individual needs and wants, rather than always relying on policies and procedures *** *** *** makes you feel special *** anticipates your individual needs and wants *** has employees who are sympathetic and reassuring if something is wrong *** ** 29. seems to have the customers best interests at heart *** *p<0.1. **p<0.05. ***p<0.001 Three dimension service quality gaps matrix In order to identify the service quality gaps and further analyze the problems causing the gaps, this study applied the intersection coordinate (0,1,0) to set the three

13 dimension service quality gaps matrix. The dividing point (0,1,0) separates the matrix into eight quadrants. As shown in Table 6, twenty attributes in quadrant III had high relative importance perceived both by the customers and the management, but had low relative performance. This conveys a message that extra work is needed here and it also implies the problems causing the service quality gaps were from the constructs of management execution (Gap 2 through Gap 4). These attributes were thus named as leading faulty attributes on management execution. Improvement efforts should be concentrated on customer-driven service designs and standards, service delivery and external communications to customers etc. Seven attributes were situated in quadrant VII which had low relative importance and performance perceived by the customers, while the management thought highly of these attributes. These attributes were thus named as secondary faulty attributes on management execution. Though the attributes needs to be improved, their priorities are not to be placed overly. Only two attributes were situated in quadrant V perceived by the customer to have low relative importance, but high relative performance and a positive gap existed between management perceptions and customer expectations. These attributes were thus named as resources overflow attributes on management perceptions. Managers might have overestimated the importance of these attributes and present efforts on the attributes have been over-utilized. The restaurant managers are encouraged to pay less attention to and consider cutting back their resources on these attributes. TABLE 6. The Three Dimension Service Quality Gaps Model Restaurant Service attributes CRI CRP MRI Quad. 1. has visually attractive parking areas. 1 <0 0 III 2. has visually attractive building exteriors. <1 0 0 V 3. has a visually attractive dining area. 1 <0 0 III 4. has staff members who are clean, neat and appropriately dressed. <1 0 0 V 5. has a décor in keeping with its image and price range. <1 <0 0 VII 6. has a menu that is easily readable. <1 <0 0 VII 7. has a visually attractive menu that reflects the restaurant s image. 8. has a dining area that is comfortable and easy to move around in. <1 <0 0 VII 1 <0 0 III 9. has restrooms that are thoroughly clean. 1 <0 0 III 10. has dining areas that are thoroughly clean. 1 <0 0 III 11. serves you in the time promised. 1 <0 0 III 12. quickly corrects anything that is wrong. 1 <0 0 III 13. is dependable and consistent. 1 <0 0 III 14. provides an accurate guest check. 1 <0 0 III 15. serves your food exactly as you ordered it. 1 <0 0 III 16. during busy times has employees helping each other to maintain speed and quality of service. 1 <0 0 III 17. provides prompt and quick service. 1 <0 0 III

14 18. gives extra effort to handle your special requests. <1 <0 0 VII 19. has employees who can answer your questions completely. 1 <0 0 III 20. makes you feel comfortable and confident in your dealings with them. 21. has personnel who are both able and willing to give you information about menu items, their ingredients, and methods of preparation. 1 <0 0 III <1 <0 0 VII 22. makes you feel personally safe. 1 < has personnel who seem well-trained, competent, and experienced. 24. seems to give employees support so that they can do their job well. 25. has employees who are sensitive to your individual needs and wants, rather than always relying on policies and procedures. III 1 <0 0 III 1 <0 0 III <1 <0 0 VII 26. makes you feel special. 1 <0 0 III 27. anticipates your individual needs and wants. <1 <0 0 VII 28. has employees who are sympathetic and reassuring if something is wrong. 1 <0 0 III 29. seems to have the customers best interests at heart. 1 <0 0 III CONCLUSION The main purpose of this study was to identify current service gaps by applying the IPGA technique. A three dimension gaps model was proposed by adding in the construct of management perception of customer expectation in order to find out the problems causing the aforementioned gaps. Based on the model, this research empirically investigates the feasibility of the model at four various restaurant outlets of a hotel in Taiwan using DINESERV, a 29-item instrument developed in 1995 by Steven. The main results are the development of a three dimension model that integrates the perception of customers and managers. By the three dimension model, the service quality gaps can be identified and problems causing the gaps further analyzed. In the empirical research, the intersection coordinate (0,1,0) was applied to divide the three dimension gaps matrix into eight quadrants. Twenty attributes were identified as the leading faulty attributes on management execution in quadrant III. Improvement endeavor should be concentrated on customer-driven service designs and standards, service delivery and external communications to customers. Seven attributes named as the secondary faulty attributes on management execution were situated in quadrant VII. Though the need for improvement on the attributes is certain, their priorities should not be overly emphasized. Only two attributes named as resources overflow attributes on management perceptions were situated in quadrant V. The implications are that the managers might stress excessive importance of these attributes and current endeavor on the attributes was more than enough. The restaurant managers are encouraged to pay less attention to these attributes and start allocating their resources in a reduced manner. To sum it up, all 29 attributes were categorized into three quadrants, quadrants III, V and VII. Twenty-seven of the attributes fell in quadrants III and VII which occur due to the problems of execution. It is manifest that certain

15 rectifying measures need to be taken by the restaurant management with regard to the service designs and standards, service delivery, such as human resources policies, a proper employee training system, and external communications to customers such as appropriate pricing and advertising etc. Fifteen of the attributes showed no significant difference between the average importance of management perceptions and the average importance of the customer perceptions. It demonstrates that the restaurant managers had a clear picture of what their customers expected. The managers overemphasized the importance of the customers expectations on the other fourteen attributes. This study presents a framework for further exploring the knowledge about customer expectations and identifying areas for service improvement and resources allocation. The IPGA model is an effective tool for measuring service quality with relative importance and perceptions perceived by the customer. By connecting with relative management perceptions of customer expectations, the three dimension service quality gaps model is able to single out not only problems but, more importantly, who or what caused the problems in service gaps. Therefore, it makes it more efficient and accurate for the management to develop a successful strategy for improving service quality. In this study, the three dimension model can be used to identify the service quality gaps and then the problems causing the gaps can be further analyzed. But the model can only distinguish the gaps into problems of management perceptions (gap 1) or problems of management execution (gap 2~gap 4). For future research, it is suggested to distinguish from gap 2 to gap 4 for problems of management execution. REFERENCES Abalo, J., Varela, J. and Manzano, V Importance Values for Importance- Performance Analysis: A Formula for Spreading Out Values Derived from Preference Rankings. Journal of Business Research, 60(2), Aigbedo, H. & Parameswaran, R Importance-Performance Analysis for Improving Quality of Campus Food Service. The International Journal of Quality & Reliability Management, 21(8), Bei, L. T. & Shang, C. F Building Marketing Strategies for State-Owned Enterprises against Private Ones Based on the Perspectives of Customer Satisfaction and Service Quality. Journal of Retailing and Consumer Services, 13(1), Breiter, D. & Milman, A Attendees Needs and Service Priorities in A Large Convention Center: Application of The Importance-Performance Theory. Tourism Management, 27(6), Bruhn,M. & Grund, M. A Theory, development and implementation of national customer satisfaction indices: The Swiss Index of Customer Satisfaction(SWICS). Total Quality Management, 11(7), Cassel, C. & Eklof, J.A Modelling customer satisfaction and loyalty on aggregate levels: Experience from the ECSI pilot study. Total Quality Management, 12(7), Chen, F. Y. & Chang, Y. H Examining Airline Service Quality from A Process Perspective. Journal of Air Transport Management, 11(2), Chu, R. K. S. & Choi, T An importance-performance analysis of hotel selection factors in the Hong Kong hotel industry: A comparison of business and leisure travelers. Tourism Management, 21,

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