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MKT203 Services Marketing And Service Functions

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  • Course Code: MKT203
  • University: Kaplan Business School
  • Country: United States


You are required to choose a recent service failure experience you have encountered.
You are to apply service quality and customer satisfaction theories learnt in class and analyse the service experience. You are then required to develop a service recovery strategy and customer service function that will assist in improving the customer post purchase behaviour and promote customer loyalty.
Your report must include following
Clear description of service delivery failure incident/scenario. Include analysis of the roles and scripts of the service personnel
Based on theory studied in weeks 9-12, identify type of complaint, root cause.
Propose a service recovery program and strategies for your chosen incident.
Recommendations for maintain customer loyalty and retention in the same context of your incident/scenario.



In this report service failure experiences have been demonstrated and examined by application of service quality and customer satisfaction theory. Also identification of different kind of complaints has been made along with proposal of recovery program and strategy for the discussed incident. Lastly some recommendations to retain and improve customer loyalty have been made to facilitate better service delivery. 

There are various demonstrated kinds of service failures in context to online shopping that can result from failure of primary services, service procedures or personnel interactions to which customers are exposed to during their online shopping encounters. As stated by Balaji, Roy and Quazi (2017) these types of service failures can arise due to payment security, sensitivity of customer’s personal information etc. As such service failures are described as condition that arises to make customer feel unhappy during the consumption procedure where customers point the service failures during online shopping to retailers or their staffs. These service failures are categorised into result and process failure where result failure is related to primary services that fails to deliver customer expectations. Whereas process failure points to condition in which customers are dis-satisfied with aspect of service offered to them.   

Description of service delivery failure scenario

In a recent encounter of online shopping experience I came across a service failure incident where the Sennheiser HD headphones that I ordered for a premium one day delivery service from a reputed e-commerce retailing platform was delivered with a packaging damage during transit that affected the original quality of the product. I received a package where I found the headphone’s wire was damaged and also there was a bad scratch on the over head portion of the headphone. This was a poor service encounter for me as I ordered the product on priority basis and spent extra money for single day delivery service.

After I received the damaged product I called the customer support service where I described the issue to the concerned service agent over call. After listening to the entire incident the service agent promptly apologised to me for the service failure that occurred and noted down detailed interpretation to understand exactly the reasons and state of service failure that I encountered after receiving damaged product. The agent immediately offered physical compensation by returning and replacing the product and also gave me free of cost postage offer to cope with the service failure that occurred. The agent lastly regretted for the inconvenience caused due to their service mistake to deal with situation and I felt satisfied with the manner the service agent of the online shop dealt with the concern. Moreover I felt relaxed with recovery initiatives that were taken by the online retailer to cope with my problem.

Service quality and customer satisfaction theory

According to Singh and Crisafulli (2016) in this model there exists four forms of gaps i.e. knowledge gap, standards gap, delivery gap, communication gap and service gap. The knowledge gap occurs due to disparity between management’s assumptions of customer expectations and expectation that is actually perceived by a customer related to the service.  This gap occurs due to gaps in level of managing the services or lack of research acclimatization.

As opined by Hur and Jang (2016) the other gap that arises is standards gap which occurs due to discrepancies between standards specified for a service to be delivered and the management’s perception about consumer’s expectations. As such this gap is formed by assumption of utility, management’s promise to deliver a set service quality against their low cost and short term profits, lack of adequate methods of evaluating quality or transforming those dimensions into standards or due to complications in endeavour to describe the justification for a specific attitude of employees.

As stated by Choi and Choi (2014) the third gap is delivery gap that occurs due to discrepancy amid quality standard established for service delivery and actual quality of service delivered. As such this gap occurs due to low enthusiasm to perform, gap between employee-job fit, contention and uncertainty of roles, inappropriate support and diffusion of supervision.  According to Kazi and Prabhu (2016) the fourth gap is communication gap that arises due to discrepancy between absolute quality of service forwarded and quality of service specified in company’s external communication.  As such this gap occurs due to predisposition of overstating service quality that can be delivered and lack of horizontal interaction.   

In the scenario of service failure of receiving damaged headphones due to packaging damage that affected the product quality the gap of service quality that occurred was due to delivery gap as the online retailer provided a service delivery that was contrasting to actual standard that was set for the given service. Also according to theory of customer satisfaction the positive encounters that are received from service experience of a service delivery that is either unanticipated or beyond common apprehensions tends to create happiness amongst customers (Fukawa and Erevelles 2014).  In context to the service failure incident though the quality of service delivered witnessed a delivery gap and was unanticipated that led to displeasure but the manner the failure was handled by the online retailer’s service executive on duty resulted into a positive customer satisfaction due to the manner the problem was handled and due to prompt recovery measures that were taken. As such in context with responsiveness dimension the employee of the online retailing service provider gave an instant service recovery measure with a willingness to help which made the encounter passive due to positive customer satisfaction that was received post service delivery.    

There are four forms of complaints: (Cheng, Chang, Chuang and Liao 2015)

Instrumental: in this complaint is asserted with intention of alarming an unexpected state of encounter.

Non-instrumental: in this complaint is asserted without expectancy that an uncertain state of encounter could be rectified.

Ostensive: in this complaint aimed at someone or something is beyond the dimension of complainer  

Reflexive: in this complain aims at certain internal expression of complainer

According to this theory the complaint that was raised in the present context of service failure where a damaged product was received from the online retailer due to packaging defect was identified to be instrumental complaint as in this the complaint was voiced to raise an alarm for the damage of product that had occurred during transit due to packaging defect which was unanticipated form of confrontation on part of customer (Riaz and Muhammad 2016).  The customer’s or complainant’s root cause of raising the complaint in this incident of service failure was to rectify an unanticipated situation so as to get a certain control in form of service recovery measure such as refund or replacement of order for the headphone product.


Recommendation and Service recovery strategy

As per this archetype the service recovery proposal for online retailer involved in case incident can be based on the above feedback loop. The retailer can build a workplace culture among the CRM department executives based on focused recovery culture where after a complaint is received the service agent should attempt to apologise or soothe the service failure experience of customer through their behaviour and practices. Like listening to explanation of customer and apologising for inconvenience. The next stage in loop is failure identification where after recognising associated result failure in service the executives should respond immediately with appropriate physical compensations such as replacement, discount or refunds (Zhu and Zolkiewski 2015).  The following stage is failure attribution where concerned executives of CRM department of retailer should try to analyse and investigate the causes behind the service failure which can be either employee or external sources; then should examine whether the root cause behind failure can reiterate and initiate control measures over the cause to avert likely incidence in future. After this stage comes recovery strategy selection where retailer should train their front line executives on various strategies of control that should be applied so as to mitigate the poor customer encounter by being apologetic or by offering compensatory, reimbursement or restoration options for service delivery (Fan-Yun Pai, Yeh and Liang-Yu  2017)  The next stage is recovery implementation where retailer should establish recovery results, procedure or interactional justice for customer to handle the poor service delivery followed by last stage i.e. tracking, monitoring and evaluating effectiveness of recovery program, where retailer can establish process that can identify systematic failures, monitor reviews and assess recovery effectiveness through organisational/employee/ customer benefits.


  • The online retailer of the case incidence can improve their customer after-purchase behaviour dimension to retain and maintain customer loyalty by focusing on building their employees expertise and role in dealing with unanticipated customer encounters. The company can train their employees to make them learn strategies that can be applied to manage service failures and should also train employees on soft skills like passion where employees can engage with customers to deliver better experiences that can build loyalty by pacifying their bad encounters and building positive impressions with proper response.    
  • The service executive of retailer can seek for constructive feedback from customer so as to communicate a sense that their voice is being heard and taking proactive actions to reach to customers on frequent basis to figure out what they perceive and what can be improvised further in service process delivery.    


Thus it can be concluded that adequate and effective response can help to restore confidence of customers after they have experienced service failures with proper knowledge of recovery measures and approaches and with constructive behaviour of employees who interact with customers. As some service failures are accidental so identifying and analysing mitigation steps helps to not only avert future incidences of service failure but also helps to retain customer loyalty with better recovery initiatives taken by service organisation.



Balaji, M. S., Roy, S. K. and Quazi, A. (2017). Customers’ emotion regulation strategies in service failure encounters. European Journal of Marketing, [Online] 51(5), 960-982. Available: doi: [Accessed on 6 Oct. 2018]

Cheng, Y., Chang, C., Chuang, S. and Liao, Y. (2015). Guilt no longer a sin: The effect of guilt in the service recovery paradox. Journal of Service Theory and Practice, [Online] 25(6), 836-853. Available: [Accessed on 6 Oct. 2018]

Choi, B. and Choi, B. (2014). The effects of perceived service recovery justice on customer affection, loyalty, and word-of-mouth. European Journal of Marketing, [Online] 48(1), 108-131. Available: doi:    [Accessed on 6 Oct. 2018]

Fan-Yun Pai, Yeh, T. and Liang-Yu, L. (2017). Relationship level and customer response to service recovery. Social Indicators Research, [Online], 1-19. Available: doi:  [Accessed on 6 Oct. 2018]

Fukawa, N. and Erevelles, S. (2014). Perceived reasonableness and morals in service encounters. Journal of Business Ethics, [Online] 125(3), 381-400. Available: doi:  [Accessed on 6 Oct. 2018]

Hur, J. and Jang, S. (2016). Toward service recovery strategies: The role of consumer-organization relationship norms. The Journal of Services Marketing, [Online] 30(7), 724-735. Available:[Accessed on 6 Oct. 2018]

Kazi, R. and Prabhu, S. (2016). Literature review of service failure, service recovery and their effects on consumers and service employees. Telecom Business Review, [Online] 9(1), 39-45. Available: [Accessed on 6 Oct. 2018]

Riaz, Z. and Muhammad, I. K. (2016). Impact of service failure severity and agreeableness on consumer switchover intention. Asia Pacific Journal of Marketing and Logistics, [Online] 28(3), 420-434. Available: doi: [Accessed on 6 Oct. 2018]

Singh, J. and Crisafulli, B. (2016). Managing online service recovery: Procedures, justice and customer satisfaction. Journal of Service Theory and Practice, [Online] 26(6), 764-787. Available: [Accessed on 6 Oct. 2018]

Zhu, X. and Zolkiewski, J. (2015). Exploring service failure in a business-to-business context. The Journal of Services Marketing, [Online] 29(5), 367-379. Available: [Accessed on 6 Oct. 2018]


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