SERVICE QUALITY AND PROFITABILITY

In recent years there have beenchanges in marketing focus. For ‘50s we may say itwas period of mass marketing, for ‘70s the time ofmarketing segmentation, and ‘90s representsperiod of personalized marketing. Today’s accent ison the concept of relationship. Importance ofrelationship marketing, in the area of services, isdirectly linked with principle that customer’ssatisfaction and loyalty are closely related toprofitability. This article presents analysis of newservice paradigm which foregrounds satisfaction ofthe customers and satisfaction of the employees.The idea about connection between service qualityand productivity was developed in service-profitchain that connects quality of service delivered toemployees by others within organization withservice delivered to customers. This strategyprovides complete overview of business system, i.e.what happens during the movement of customersthrough service capacity, although there are otherways of making profit.