Services are increasingly becoming dominant in world economies and so is the competition
between the service organizations. With the increasing role of services, quality issues are
becoming major areas of concern for both organizational stakeholders and researchers
because of their significant contribution to cost, business performance, customer satisfaction
and loyalty (Silvestro and Cross, 2000; and Sureshchandar et al., 2002).
Package delivery service market has three distinct segments: business-to-business,
business-to-customer and customer-to-customer on individual basis. Service quality is a
composite summary reflection on several dimensions of expected performance of a service
provider, for it impacts all segments secularly. Opportunities of service failures can
pressurize the performance, which, therefore, requires to be sought after for elimination.
Nevertheless, service failures keep emerging and keep impacting the service businesses,
which adds a dimension that absence and/or extinction of service failures has a positive
impact on service quality across all market segments. This requires a two-pronged
approach of assessment and instituting the remedial measures. Although the service business managers in package delivery businesses and elsewhere have been addressing
these challenges via service recovery measures on the assessed failures, the role of service
failure prioritization remained there implicit at the most, or went unaccounted for by
default at the worst, whereas the prioritization of failures of incidence rate and intensity
can bring more discipline to service recovery and make them sharper.