Assessing recommendation on a combination analysis of SERVPERF (or SERVQUAL) and IPA

The literature on service quality recommends one to find an efficient direction for revising service quality with a combination analysis of a measurement model of service quality (SERVQUAL or SERVPERF) and the importance-performance analysis (IPA). This paper analytically assesses this recommendation. To this end, it presents a simple rule with which service firms can optimally allocate their limited resources for service quality. The simple rule revises service attributes to be proportional to the normalised demand elasticities with respect to the service attributes. This paper shows that such a combination analysis can efficiently revise service quality based on the simple rule, supporting the recommendation. However, such a combination analysis may not be efficient when the marginal costs of service attributes are not equal. This paper presents an extended rule reflecting different marginal costs of service attributes. The extended rule can be used in an extended combination analysis with a measurement model evaluating the marginal costs. We end this paper with some practical guidance for the combination analysis.