| Summary: | Service quality is a subject which has been receiving more and more attention during the past decades because of its importance for service providing companies. If service organizations want to stay competitive in the market they must understand how to deliver excellent service and know how to measure their service quality according to their customers’ perceptions. Service quality leads to higher market share, profitability, customer satisfaction, retention and loyalty. The purpose of this study is to measure service quality at one bakery in Iceland – Sandholt’s bakery, according to their customers. The research questions are: 1) is there a service quality gap at Sandholt’s bakery? 2) Does perceived service exceed customer expectations or is it less than what customers expect? 3) Which service dimension has the biggest quality gap between expected and perceived service? The SERVQUAL model, which was developed by Parasuraman, Zeithaml, & Berry in 1985, was used to measure service quality in this research. Quantitative method was used to collect data. The questionnaire was designed by using the original expectation and perception scales of the SERVQUAL model and was distributed in the bakery’s coffee shop and also sent out online to all the customers through Sandholt’s facebook webpage. Results showed that customers’ expectations are higher than their perceptions, which means that they expect to get higher service quality from Sandholt’s bakery than what they receive. There are five service dimensions defined in the SERVQUAL model – tangibles, reliability, assurance, responsiveness and empathy. According to the results obtained from this research, most improvements the managers of Sandholt should consider making are in reliability, assurance and responsiveness dimensions, because they have the biggest gap scores in their means. This indicates that in these three dimensions customers’ perceptions were lowest compared to their expectations.
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