SERVICE QUALITY AND PROFITABILITY

Abstract

In recent years there have been changes in marketing focus. For ‘50s we may say it was period of mass marketing, for ‘70s the time of marketing segmentation, and ‘90s represents period of personalized marketing. Today’s accent is on the concept of relationship. Importance of relationship marketing, in the area of services, is directly linked with principle that customer’s satisfaction and loyalty are closely related to profitability. This article presents analysis of new service paradigm which foregrounds satisfaction of the customers and satisfaction of the employees. The idea about connection between service quality and productivity was developed in service-profit chain that connects quality of service delivered to employees by others within organization with service delivered to customers. This strategy provides complete overview of business system, i.e. what happens during the movement of customers through service capacity, although there are other ways of making profit.