Service failure and recovery strategies in the restaurant sector : an Indo-US comparative study.

GROUP MEMBERSAnish gulatiDeepak bhattKaran kharaSurya veer singh chauhanUrvashi mishra

“A solid service failure response is the best customer loyalty program that any retail organization can have”

7 P’s for pizza hut

PRODUCT-Pizza Hut follows a “multiple product

strategy.appetizersbeveragesdessertsPastaPizza - Pan Pizza, Stuffed Crust Pizza,

Sausage Crust Pizza, Thin Crust Pizza, Twisted Crust pizza

PRICE- Pizza Hut follows “A High/Low Pricing”(“Price

Skimming”)strategy as far as its new product are concerned where it fixes the price higher than its competitors and then gradually lowers the price

below the competitor’s prices.PLACE- The first method of distribution used by Pizza Hut is

delivery customers to dine-in . One of Pizza Hut's largest

competitive advantages is its restaurant style facility .  The third method of distribution is Online ordering

PEOPLE Pizza hut have trained employees with them.  All the employer who are working there are skilled employees. They always appear clean and well groomed. They maintain the customer and employee relationship in good

manner. Deliver consistent standards of hospitality. Pizza hut have a standard uniform for their employers

PROCESS The food manufacturing process at pizza hut is completely

transparent. The customers are invited to check the ingredients used in

pizza . Delivery on time or free next time. Take away refined carryout procedures to provide faster, more

efficient service rapidly expanded the delivery operations throughout the country implementing combination operations.

PROMOTIONAdvertisingSales PromotionPublic RelationsEvents and experiencesCoupons, Discounts.PHYSICAL EVIDENCEThey have a pleasing environment, nice

interior decoration which looks rich. Pizza hut focuses on neat and clean environment. Pizza hut Staff believes that they are providing the superior quality to their every customer.

Moment of truth: pizza hutGreetingTaking OrdersMenuDeliveryThe bell- Bye & Thanks.

Customers perception about intensity of service failureAbout 48% of the customers in India feel the

intensity of their problem encountered in restaurant is extremely serious, US its 41%.

Managing customers interest and making them feel their interest is close to heart is a high priority for Indian restaurant, as compared to US.

This leads to a state of fear of confronting an irate client, motivational training and support, team structures & team leadesr can be a way out.

Strategies employed for service failure recovery In India 60%- apology & offering assistance

short of compensation. In US 68%- apology & assistance along with

compensation.Significant to relate lower percent of

complaints in US.Double the % of aggrieved clients in US

ready to return to same outlet and recommend as well, compared to India.

Indicative of compensation an important service recovery strategy, points towards poor empowerment environment in Indian restaurant, lack of laid down system to handle customer complaints.

ZONE OF TOLERANCE Desired expectations: Customers typically hold similar desired expectations across

categories of service. A customer’s desired service expectation for fast food restaurant is

quick, convenient, tasty food in a clean setting.

Adequate service expectation: It varies for different firms within a category or subcategory. For ex. Within fast-food restaurants, a customer may hold a higher

expectation for McDonald’s than for Burger King, having experienced consistent service at McDonald’s over time and somewhat inconsistent service at Burger King.

RATER

Reliability Assurance Tangibility Empathy Responsiveness

Perform services right & accurately

Employee behaviour

Employees appearance

Problem solving

Providing services as promised

Provide services on time

Knowledgeable employees

Comfortable environment

Understanding needs of customers

Performing services right the first time

Correct mistakes & errors

courtesy Ingredients of food

Caring attitude towards customers

Providing services at the right time

Timely home delivery

attitude freshness Individual attention

Maintaining error free records

Hospitality hygiene Convenient business hours

SERVICE QUALITY GAPS Gap1: Customers’ expectations versus management

perceptions This gap arises in case of pizza hut during peak hours. Generally a single pizza takes 7 minutes to get prepared but at peak

hours service provider takes 3 times more than the usual time.

Gap2: Management perceptions versus service specifications.

Gap3: Service specifications versus service delivery.

Gap4: Service delivery versus external communication. This gap arises when the services are not provided as promised. For example, in one of their ads they talk of pizza in just Rs. 199, but

the actual cost of that pizza is more than 199 after including VAT & other taxes.

Customer’s perception about recovery strategyWill add later

Example of Service Recovery Strategy by various RestaurantsA solid service failure response is

the best customer loyalty program that any retail organization can have.

McDonald’s replaces your burger if you do not find it good without any questions asked.

Rs 300 discount if pizza is not delivered on time by pizza hut.

Some Service failure very common in Indian Restaurants Slow Service Foreign object in

food/beverage (insect-related; human-related; non human related)

Dirty cutlery (greasy) Dirty surroundings

(animals; insects; dirt) Dirty seating condition

(cutlery left by previous customer)

Bad odour (toilet, drain) Poor seating design

(crowded; broken table and chair)

Dim lighting Inaccurate menu list Inoperative machinery

(water dispenser, roaster, steamer)

Inoperative air-conditioning (poor ventilation)

Offensive staff’s appearance (sweating; without apron)

Offensive staff’s behaviour (sweeping; smoking)

Some of Service Failure Techniques CorrectionApologyReinstatementAssistanceReplacementManagement/

employee intervention

Explanation of the reason for the failure

Correction plus

Acknowledgement of the problem

EmpathySymbolic AtonementFollow-upCompensationEmpowermentCouponFree foodDiscountRefund

Service GuaranteeService guarantee builds trust in

customers which is very important for QSVR Restaurants

Pizza Hut guarantee that if you are not satisfied with your pizza, we’ll make it right and return your money back.

Also if the pizza is not delivered Hot you can always return the pizza.

Dominoes gives a 30 min guarantee of pizza delivery

Point of Discussion: Does giving Service Guarantee always benefit the

company

Customer Feedback

ConclusionMost of the Indian customers verbalise their complain

on the other hand In US customers like to register their complaint

Most of the Service failure in India are immediately dealt by an apology and offering assistance while in US apology is followed by a compensation

The root cause of inefficient service failure recovery is Indian managers are not empowered enough to deal with situations, also there is no fixed guidelines in most cases

Indian consumers do not return back to the restaurant where a service failure has happened while not true with US.

Indian customer often feel cheated during a service failure while in US it is considered a one-off mishap

RecommendationsIndian managers should offer compensation

more often as compensation works better in getting repeat customers.

But before there should be manager empowerment program and manager training must be done.

Slowness of service which is a major service failure needs to be resolved by having more operational efficient systems by improving cycle time

Also Indian managers need to understand 80% of customers’ problems are caused by bad systems and not bad people

Referenceshttp://retailindustry.about.com/od/r

etailbestpractices/a/retailcustomerservicefailurerecoverycornerbakery.htm

http://www.onlinereview.segi.edu.my/pdf/vol3-no1-art9.pdf

“Service recovery strategies in western based fast food restaurants: a structural equation model test” by Ernest Cyril de Run and Heriyadi Kusyarnadi

Services Marketing – By Zeithaml