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In this second paper in the series, the authors focus on special factors related to the perceived value of service and service quality. The article examines issues in the application of the concepts introduced in the first paper. A bank services scenario illustrates the concepts and guidelines for application useful to the marketing professional seeking to enhance quality of service. The conceptual relationships and fresh ideas touch on an array of topics including factors such as: critical factors, utility and psychic influences and perceived value; needs‐match uncertainty and needs‐match variance; perceptions‐reality divergence and perceptions‐reality variance; and service quality variance, service risk and quality risk. The paper provides a scenario to illustrate the application of a number of the concepts. It is rich with ideas and relationships which provide stimuli and seeds for future research. An appendix provides an excellent review of concepts and terms.

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