Gap analysis

Gap analysis is a managerial tool used to compare a company’s performance or customer expectations with current outcomes. It is used both in product MANAGEMENT and SERVICES marketing to evaluate and improve business performance. In product management, gap analysis can be used to measure current PRODUCT quality against desired standards. Any difference between product quality and desired standards reveals a gap. Managers sometimes create product specifications based on PRODUCTION technology or regulatory standards, but they do not create product specifications consistent with their understanding of consumer’s expectations. Changing product quality can take time and be costly, but it can also make the difference between success and failure. Marketers use service gap analysis to measure the difference between expectations and perceived outcomes. One potential gap is the difference between management perceptions of consumer expectations and actual consumer expectations. Many marketers are surprised when consumers occasionally express their expectations (usually an expression of their disappointment with the service received). A second potential gap can be the difference between managers’ perceptions of consumer expectations and the service quality specifications that managers create. Service quality includes timeliness, accuracy, friendliness, and attentiveness. Managers who emphasize fast service may miss consumers’ need for friendliness or attentiveness. United Parcel Service (UPS), known for its hustling employees, learned customers would like to talk longer with UPS delivery people. The company adjusted expected deliveries per hour to allow delivery people to take time to communicate with customers. A third potential gap can exist between service quality standards set by management and the actual service quality delivered. Just because managers set a standard does not mean it will be attained or maintained. Another service quality gap can exist between what is provided and what is promised. Many marketing people have learned from customers about assurances made by senior managers. Communications gaps are a common problem between all levels of organizations. An additional service quality gap can exist between received service and expected service. Consumers develop expectations regarding service quality through experience and observation. Miscommunication and misinterpretation can lead to a gap between expectations and perceived service received. Gap analysis can help define problems. It often involves creating rating scales used to survey both internal staff members and external constituents. Differences in the average ratings between customers and companies signal a potential gap for further evaluation. Reducing and eliminating gaps improves CUSTOMER RELATIONS / SATISFACTION, leading to repeat purchases and stronger marketing relationships.
See also RELATIONSHIP MARKETING.