finance article
-
Upload
waqasrashid75 -
Category
Documents
-
view
224 -
download
0
Transcript of finance article
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 1/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
1 9
IMPACT OF SERVICE QUALITY IN COMMERCIAL BANKS ON THE
CUSTOMERS SATISFACTION: AN EMPIRICAL STUDY
DR. S. FATIMA HOLY GHOST*; DR. M. EDWIN GNANADHAS**
*Assistant Professor in Commerce, Holy Cross College,Kanyakumari District, Tamil Nadu.
**Associate Professor in Commerce, Scott Christian College,Kanyakumari District, Tamil Nadu.
ABSTRACT
Quality in service is very important especially for the growth and development of
service sector business enterprise. It works as an antecedent of customer's satisfaction .In
the past, quality was measured only for the tangible products because of less dominance of service sector in the economy. Due to the increasing importance of service sector in the
economy, the measurement of service quality became important. Undoubtedly owing to the
belief that delivery of high service quality is a must for attaining customers satisfaction
and a number of other desirable behavioural outcomes, recent years have incensed a flurry
of research exploring interrelationship between service quality, satisfaction and
behavioural outcomes. The objective of the present study are to identify the customer's
perception on service quality factors in commercial banks and the customers satisfaction
towards the banks ;to analyse the impact of perception on service quality factors
in commercial banks among the different group of customers based on their demographics.
The applied sampling technique is purposive sampling. The present study concludes that
there is a close link between the customer's perception on the service quality factors andthe customer satisfaction. But the impacts of service quality factor on customer satisfaction
among the customer are not unique. It depends upon the demographic profile of the
customers.
KEYWORDS: Assurance, Empathy , Reliability , Responsiveness and Tangibles.
INTRODUCTION
During the past two decades or so, regulatory, structural and technological factors have
significantly changed the banking environment throughout the world (Angur et al., 1999). In a
milieu which becomes increasingly competitive, service quality as a critical measure of
organizational performance continues to compel the attention of banking institutions and
remains at the forefront of services marketing literature and practice (Lasser et al., 2000;
Yavas and Yasin, 2001). The interest is largely driven by the realization that higher service
quality results in customers satisfaction and loyalty, greater willingness to recommend to
someone else, reduction in complaints and improved customer retention rates (Danaher,
1997; Magi and Julander, 1996; Levesque and Me Dougall, 1996).
Undoubtedly owing to the belief that delivery of high service quality is a must for
attaining customers satisfaction and a number of other desirable behavioural outcomes,recent years have incensed a flurry of research exploring interrelationship between service
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 2/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 0
quality , satisfaction and behavioural outcomes (Festus and Hsu, 2006; Hsu, et al., 2006;
Thamarai selvan and Raja, 2007).
QUALITY IN SERVICE INDUSTRY
Quality in service is very important especially for the growth and development of
service sector business enterprise (Powell, 1995). It works as an antecedent of customer's
satisfaction (Ruyter and Bloemer, 1995). In the past, quality was measured only for the
tangible products because of less dominance of service sector in the economy. Due to the
increasing importance of service sector in the economy, the measurement of service quality
became important. Crosby (1979) defined quality as the 'Conformance to requirements'. The
guru of quality movement Juran (1988, 1992) defined quality as 'fitness for use while
servicing (1986) viewed quality as a process promising to result in products and services.
In late 1980s, Parasuraman et al., (1985) explained quality as a gap between what
customers feel to be offered and what is provided. Even though there is no single definitionon quality they all have a single focus on how users look at it (Piji, 1994; Zeithaml, 1988;
Khader, 1997). Ramaswamy (1996) identified three different sets of measures for service
quality such as service performance, customer measure and financial measure. The other
researchers such as Lilijander, (1995). Prakash and Lounsbury (1984) and Swan (1988)
suggested many possible comparison standards including predicted service, comparative
expectations and fairness. However, SERVQUAL only incorporates a rough aggregated
mixture of a selection of these.
ESTABLISHING CURRENT UNDERSTANDING OF SERVICE QUALITY
Parasuraman et al., (1985) developed the Gap analysis model. In his model, hemeasured the gap between expected service and perception of service among the
customers. Later it was refined to SERVQUAL scale (Parasuraman et al., 1988). It is
designed to measure consumers perceptions of the identified dimensions of tangibles,
empathy, assurance, responsiveness and reliability relative to consumers expectations
SERVQUAL critics, have voiced their concerns for many years with respect to
contextual, dimensional and empirical correctness considerations (Asubonteng et al., 1996;
Finn and Lamb, 1991).
Boulding et al., (1993) are among those who consider service quality to be
performance-based and hence take perceptions, rather than expectations, as they are of
departure in developing their dynamic process model. They see perception of functions of what the consumer's expectations will occur and what should occur during the service
encounter. But Boulding et al., (1993) also assume service quality as perceived with
respect to Parasuraman's et al., (1988) five dimensions.
IMPORTANCE OF SERVICE QUALITY IN COMMERCIAL BANKS
Increased competition, highly educated consumers, and increase in standard of living
are forcing many businesses to review their customer service strategy. Many business firms
are channeling more efforts to retain existing customers rather than to acquire new ones
since the cost of acquiring one new.customer is greater than cost of retaining existing
customers. There is enough evidence that demonstrates the strategic benefits of quality incontributing to market share and return on investment (Adiran, 1995; Bakesm, 1995;
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 3/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 1
Reichhel and Sasser 1990). Maximizing customer satisfaction through quality customer
service has been described as 'the ultimate weapon' by Davidow and Vital (1989).
According to them in all industries, when competitors are roughly matched, those with stress
on customer's service will win.
In view of the abovementioned facts, an analysis of service quality perceptions
from customer's point of view may be sound and interesting at this juncture. Such an
analysis will provide banks, a quantitative estimate of their services being perceived with
intricate details such as whether banks are meeting or not meeting the customer's
expectations. The present paper, therefore attempts to achieve the following objectives.
CONCEPTUAL FRAMEWORK
Actually, the conceptualization and measurement of service quality began in the
marketing literature in 1985. Service Quality is a vital antecedent of customer's
satisfaction (Cronin and Taylor, 1992). In turn customer satisfaction is believed to affect post-purchase and perception and future decisions. Subsequent works on service quality.
(Parasuraman et al., 1993; Cronin and Taylor, 1994; Avkiran, 1994; Teas, 1994; Newman
and cowling, 1996) not withstanding, the debate has not yet reached a point of solution. In
its wake, however, it has raised many issues for both academicians and parishioners by
providing important but some-what conflicting in rights into the conceptual, the
methodological, analytical and practical issues related to the service quality concept. For
instance, Cronin and Taylor (1992, 1994) argue the measuring of service quality using a
performance -minus - expectation (SERVQUAL) basis inappropriate and suggest the
performance - only (SERVPERF) measurement is a better method.
However, Parasuraman, Zeithaml and Berry (1994) contend that the SERVQUALscale using the expectations / performance gaps method is a much richer approach to
measuring service quality and augment that earlier assertion (e.g. Parasuraman et al., 1988,
1993) that service quality is a multi dimensional rather than a one- dimensional construct.
SERVQUAL has been widely used (Dabholhar et al., 1996; Hurswey, 1999; Getz et al.,
2001). There have been a few empirical studies that dealt with the application of SERVQUAL
instrument in the banking industry such as Natarajan et al., (1999) and Lassar et al., (2000).
At the same time, the empirical evidence of using SERVPERF scale in banking industry are
the studies by Howcaft (1991) and Newman and Cowling (1996). In the present study,
the performance only measurement (SERVPERF) has been used to analyse the customer's
perceptions in banking.
RELATED REVIEWS
The literature pertaining to relationship among service quality, customer's satisfaction
and their behavioural intention can be divided into two groups. The first, service
management literature, proposes that the service quality influences the customer
satisfaction (Cronin et al., 2000; Dabholkar et al., 2000 and Schemenner 2004). The
service quality is identified as the determinants of customer satisfaction in banking
(Naceur et al., 2002). The relative importance of service quality attached with customer
satisfaction and their behavioural intention is highlighted by Niki et al., (2006). The direct
and indirect links between service quality and the customers satisfaction and their
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 4/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 2
behavioural intention are analysed with the help of structural equation modeling (Festus and
Maxwell, 2006).
RESEARCH GAP
The above said previous studies are analyzing the perception on service quality
in commercial banks by performance only on the SERVQUAL scale measure. There is
no exclusive study on the impact of perception on SQFs on customer's satisfaction under
different demographic profile. Hence, a research models have been generated to fill up
the research gap.
PROPOSED RESEARCH MODEL
OBJECTIVES OF THE STUDY
The objective of the present study is summarized below:
1) To identify the customer's perception on service quality factors in
commercial banks and the customers satisfaction towards the banks;
Demographics
Customers
in different
group of
banks
Age of the
customers
Education
of the
customers
Service
Quality
Factors in
Banks
Customer
SatisfactionNativity
of
customers
Gender of
customer
Income of
customers
Occupation
of
customers
Denographics
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 5/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 3
2) To analyse the impact of perception on service quality factors in
commercial banks among the different group of customers based on their
demographics.
METHODOLOGY
The descriptive research designs have been followed to fulfill the objectives of the
research.
SAMPLING PROCEDURE
The total number of commercial banks in Kanyakumari district is 143 branches. Out
of the 143 branches, 112 branches are Public Sector Banks (PSBs), 25 branches are Private
Sector Banks (PrSBs) and only 6 banks are New Private Sector Banks NPrBs. In total, a
maximum of 79 branches are seen in semi urban area whereas 44 branches are at urban area.
The remaining 20 branches are at rural area. In all the three areas, the numbers of PSBs areidentified as higher as compared to other two groups of banks. 5 customers from each bank
were selected as the sample respondents. Hence the sample size came to 715. Here the
applied sampling technique is purposive sampling. The required data have been collected
through the structured questionnaire which consists of, profile of the customer and
perception on service quality of banks and their overall attitude towards the banks.
Out of 715 customers only 43.64 per cent of the customers responded the
questionnaire. The number of responded customers in PSBs, PrSBs and NPrSBs are 194,
89 and 29 respectively. At the same time, in urban, semi urban and rural areas, these are 104,
159 and 49 customers respectively.
RESULTS AND DISCUSSION
CUSTOMER SATISFACTION
The customer satisfaction is the collective opinion on various aspects in commercial
banks. The primary motto of any commercial banks in the globalized era is customer
satisfaction. Even though the customers satisfaction is derived from the customer's attitude
towards various variables related to banks, the present study confines these variables to only
12 variables. These variables are given in Table 1.1
TABLE 1.1
VARIABLES IN CUSTOMER’S SATISFACTION
Sl.No Variables Sl.No Variables
1.
2.
3.
4.
Decision to use this bank
Experience with this bank
My choice towards this bank
Employed behavior
7.
8.
9.
10.
Relationship marketing adopted by
the bank.
Customer’s orientation of the bank
Handling of complains
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 6/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 4
5.
6.
Accessibility of the bank
Trust worthiness towards the bank
11.
12.
Reporting system of the bank
Quality of the service
Cost of the services offered
The identified variables are related to the service offered by the banks, service
provider (employees) and service cost. The customers are asked to rate the twelve
variables at five point scale. The assigned scores on these scales are from 5 to 1
respectively. The score have been included for reliability test with the cronbach alpha.
Since the cronbach alpha is 0.8119, the included 12 variables explain the customer
satisfaction to the extent of 81.19 per cent.
CUSTOMERS SATISFACTION INDEX (CSI) AMONG THE CUSTOMERS
The customer satisfaction is derived from the score of all 12 variables included
it. The score of customer satisfaction is summated with the help of an index called as
'Customer Satisfaction Index' (CSI). It is computed by
n
i
i l
n
i
i l
SVCS
CSI 100
MSVCS
Whereas
SVCS - Score of variables in customers satisfaction
MSVCS - Maximum score of the variables in customers satisfaction
i = 1... .n - Variables in customers satisfaction
The customer satisfaction among the customers has been measured with the help of an
index called as Customers Satisfaction Index (CSI). It reveals the summative view on the
customers' satisfaction towards the various aspects related to the banking. The CSI in the present study is confined to less than 21 per cent, 21 to 40, 41 to 60, 61 to 80 and above 80
per cent. The customers with CSI of less than 21 per cent constitutes only 21 .08 per cent to
the total whereas the customers with the CSI of 21 to 40 per cent constitutes 28.49 per cent
to the total. The total 39.17 per cent of the customers are with the CSI of 41 to 60 per cent
whereas 7.31 per cent of the customers are with CSI of 61 to 80 per cent. The customers
with the CSI of above 80 per cent constitutes 3.95 per cent to the total.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 7/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 5
CUSTOMER PERCEPTION ON SQFs
The Service Quality Factors (SQF) in commercial banks identified by Avkiran,
(1994); Howcraft (1991); Laural and Nasser, 2002; and Leversque and Gordon, (1996) are
five factors. These are Reliability, Responsiveness, Assurance, Tangibles and Empathy. Thesame five factors have been included in the present study. Since the reliability of the
variables in each SQF have been already tested by Vanniarajan and Gurunathan, (2007)
and Jabnour and Hussein (2002), the present study is not conducting any reliability test. The
customers are asked to rate each SQFs five point scale according to their order of satisfaction.
The mean score of each SQFs, its standard deviation and co-efficient of variation is given in
Table 1.2.
TABLE 1.2
CUSTOMER’S PERCEPTION ON SQFs
Sl.No. SQFs Mean score Standarddeviation
Co-efficient of variation
1.
2.
3.
4.
5.
Reliability
Responsiveness
Assurance
Tangibles
Empathy
2.9978
2.6085
2.7179
3.0544
2.5085
0.6876
0.9943
1.0365
0.8544
0.9902
22.94
38.12
38.14
27.97
39.47
The highly perceived SQFs among the customers is 'Tangibles' since its mean
score is 3.0544 which has a co-efficient of variation of 21.91 per cent. The second
SQFs perceived by the customer's is 'Reliability' since their mean score is 2.9978 with
the co-efficient of variation of 22.94 per cent. The next two SQFs perceived by the
customers is assurance and responsiveness since their mean scores are 2.7179 and
2.6085 respectively.
IMPACT OF SERVPERF SCALE ON SQFs ON CSI IN DIFFERENT BANKS
The perception on SQFs may have its own influence on the customer
satisfaction. In order to analyse the impact of SQFs on customer satisfaction
among the customers, the multiple regression analysis have been administered. The
fitted regression model is
Y= a+b1x1+b2x2+b3x3+b4x4+b5x5+e
Y=customer satisfaction Index any the customers
Whereas X1 - Score on Reliability among the customers
X2 - Score on Responsiveness among the customers
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 8/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 6
X3 - Score on Assurance among the customers
X4 - Score on Tangibles among the customers
X5 - Score on Empathy among the customers
b1,b2….bn - Regression co-efficient of independent variables
a - Intercept and
e - Error term
Initially, the impact of SQFs on the customer satisfaction among the business in Public
Sector Banks (PSBs) Private Sector Banks (PrSBs) and New Sector Banks (NPrSBs) have
been examined separately. The result of regression analysis is given in Table 1.3
TABLE 1.3
IMPACT OF SERVPERF SCALE ON SQFs ON CSI
Sl.No. SQFs
Regression Co-efficient among customer in
PSBs PrSBs NPrSBs
1.
2.
3.
4.
5.
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R
2
F-Statistics
0.1814*
0.0933
0.1044
0.1133
0.1681*
0.9194
0.6345
8.0828*
0.2492*
0.1891*
0.1044*
0.1338*
0.2096*
1.3039
0.7569
11.1083*
0.2096*
0.1443*
0.1862*
0.2101*
0.2633*
1.5238
0.7161
9.8689*
* Significant at five per cent level.
The significantly influencing SQFs on the CSI among the customers in PSBs
is reliability and empathy. A unit increase in the perception on reliability and empathy
result in an increase in CSI among the customers in PSBs by 0.1814 and 0.1681 units
respectively. Among the customer in PrSBs, the significantly influencing SQFs are
the perception on reliability, responsiveness, tangibles and empathy since their
respective regression co-efficients are significant at five percent level. A unit
increase in the perception on the above said SQFs results in a increase in CSI by
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 9/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 7
0.2492, 0.1891, 0.1338 and 0.2096 units respectively. Among the customers in
NPrSBs, a unit increase in the perception on reliability, responsiveness, assurance,
tangibles and empathy result in an increase in customer satisfaction index by 0.2096,
0.1443, 0.1862, 0.2101 and 0.2633 units respectively. The changes in the
perception on SQFs explain the changes in CSI among the customers in PSBs andPrSBs is to the extent of 63.45 and 75.69 per cent respectively. Whereas among the
customers in NPrSBs, it is to the extent of 71.61 per cent. The analysis reveals the
importance of SQFs is customer satisfaction. The satisfaction 'F' statistics reveal the
validity of fitted regression models. In total, the degree of impact of SQFs on
customers satisfaction in PrSBs is greater than in NPrSBs and PSBs.
IMPACT OF SERVPERF SCALE OF SQF ON CSI AMONG THE URBAN AND
RURAL CUSTOMERS
On the basis of nativity, the customers are classified into urban and rural customers.
Since the perception on SQFs among the group of customers may have different customer satisfaction, the present study has made an attempt to analyse the degree of influence of
SQFs on customer satisfaction among the urban and rural customers separately. It is highly
imperative to identify the impact of each SQFs on the CSI for some policy implications. The
multiple regression analysis have been executed to find out such impact. The ordinary least
square method is followed to fit the multiple regression models. The resulted regression co-
efficient of the SQFs are given in Table 1.4.
TABLE 1.4
IMPACT OF SERVPERF SCALE ON CSI AMONG THE URBAN AND RURAL
CUSTOMERS
Sl.No SQFs
Regression co-efficient among customers in
Urban Rural
1.
2.
3.
4.
5
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R 2
F-Statistics
0.3109*
0.2411*
0.1002
0.0917
0.1861*
1.2146
0.7339
11.2308*
0.1461
0.2201
0.0968
0.1947
0.2868
0.6861
9.3091*
* Significant at five per cent level..
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 10/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 8
The significantly influencing SQFs on customers satisfaction among the urban
customer are reliability, responsiveness and empathy since their respective regression co-
efficients are significant at five per cent level. A unit increase in the perception on above
said SQFs result in an increase in customer satisfaction by 0.3019, 0.2411 and 0.1861
units respectively. The changes in the perception on SQFs explain the changes incustomer satisfaction index to the extent of 73.39 per cent since their respective R 2 is
0.7339.
Among the rural customers, the significantly influencing perceptions on SQFs are
reliability, responsiveness, tangibles and empathy. A unit increase in the perception on
above said SQFs result in an increase in CSI by 0.1461, 0.2201, 0.1947 and 0.2868
units respectively. The changes in the perception on SQFs explain the changes in
customer satisfaction index to the extent of 68.61 per cent only. The analysis reveals
that the most significantly influencing SQFs on the customer satisfaction among the
urban and rural customers are reliability and empathy respectively.
IMPACT OF SERVPERF SCALE OF SQFs ON THE CSI AMONG
DIFFERENT AGED CUSTOMERS
The degree of influence of the SERVPERF scale of SQFs on the level of
satisfaction (CSI) is examined to identify the importance of SQFs in the customer
satisfaction among the different age group of customers. The perception score on five
SQFs is treated as the score of independent variables whereas the CSI is considered as
the score of dependent variables. The impact of independent variables on the
dependent variable is examined with the help of multiple regression analysis. The
results are given in Table 1.5.
TABLE 1.5
IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG DIFFERENT AGED
GROUPS
Sl.No SQFs Regression co-efficient among customers in
Youngsters Middle aged Aged
1.
2.
3.
4.
5.
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R 2
0.1408*
0.0924
0.1661*
0.1024
0.0439
0.8565
0.6962
0.0818
0.1816*
0.2145*
0.0776
0.1337*
1.3817
0.7412
0.2417*
0.2133*
0.0948
0.1471*
0.2803*
1.8916
0.7966
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 11/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
2 9
F-Statistics 8.4336* 10.2449* 12.3908*
Among the youngsters, the significantly influencing SQFs on their CSI are
reliability and assurance. A unit increase in the perception on above said two SQFs result inan increase in CSI by 0.1408 and 0.1661 units respectively. Among the middle aged
customers, these independent variables are responsiveness, assurance and empathy since
their respective regression co-efficient are significant at five per cent level. A unit
increase in the perception on above said three SQFs result in an increase in CSI by 0.1816,
0.2145 and 0.1337 units respectively. Among the aged customers, the significantly
influencing SQFs are reliability responsiveness, tangibles and empathy. A unit
increase in the above said SQFs result in an increase in CSI by 0.2417, 0.2133, 0.1471
and 0.2803 units respectively.
IMPACT OF SERVPERF SCALE OF SQFs ON CUSTOMERS SATISFACTION
AMONG MALE AND FEMALE CUSTOMER
The gender may play an important role in the degree of influence of SQFs on the
customer satisfaction towards their banks. The present analysis has made an attempt to
analyse the impact with the help of multiple regression analysis. The included independent
variables are the perception on SQFs whereas the dependent variable is their CSI. The
impact of perception on SQFs on the CSI among the male and female customers has
been examined separately. The resulting regression co-efficients of SQFs is
summarized in Table 1.6.
TABLE 1.6
IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG THE MALE AND
FEMALE CUSTOMERS
Sl.No SQFs
Regression co-efficients among
Male Female
1.
2.
3.
4.
5
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R 2
F-Statistics
0.2217*
0.1414*
0.0962
0.1084
0.0869
09946
0.8241
14.9817*
0.1044
0.2104*
0.1616*
0.2069*
0.3144*
1.2142
0.7433
10.3914*
* Significant at five per cent level.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 12/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 0
The significantly influencing SQFs on CSI among the male customers is reliability
and responsiveness since their regression.co-efficients are significant at five per cent level.
A unit increase in the perception on reliability and responsiveness result in an
increase in CSI by 0.2217 and 0.1414 units respectively. Among the female customers,
the significantly influencing SQFs on the CSI are responsiveness, assurance, tangibles andempathy. A unit increase in the perception on above said SQFs result in an increase in their
CSI by 0.2104, 0.1616, 0.2069 and 0.3144 units respectively. The changes in the perception
on SQFs explain the changes in their CSI among the female customers to the extent of
74.33 per cent. The analysis reveals that the perceptions on SQFs have a higher influence on
CSI among the female customers than the male customers. The important SQFs among the
female customers are empathy and responsiveness whereas among the male customers, it is
reliability.
IMPACT OF SQFS ON CSI AMONG DIFFERENT EDUCATED GROUPS
The level of eduation among the customers may influence their perception on SQFssince their level of awareness and banking knowledge are different. By the level of
education, the customers are grouped into lesser educated ,educated and highly educated
groups. The perception on SQFs among the three groups of customers based on education
may have its own impact on the CSI. It is imperative to identify the significantly
influencing SQFs on CSI and also compare the degree of influence by each SQFs on CSI
among each group of customers separately for some policy implications. The multiple
regression analysis has been executed to analyse such impact. The resulted regression co-
efficients are given in table 1.7
TABLE 1.7
IMPACT OF SERVPERF SCALE OF SQFS ON CSI AMONG DIFFERENTEDUCATED CUSTOMERS
Sl.No SQFs
Regression co-efficient among customers in
Lesser Educated Educated Highly Educated
1.
2.
3.
4.
5.
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R 2
F-Statistics
0.1013
0.2817*
.0.1868*
0.0866
0.1217
0.8587
0.6247
7.5868*
0.2117*
0.1338*
0.1142
0.0911
0.1904*
1.2348
0.7667
10.3441*
0.2021*
0.1917*
0.1436*
0.1011
0.1803*
1.4508
0.8134
12.4561*
* Significant at five per cent level.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 13/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 1
The significantly influencing SQFs on CSI among the lesser educated customers
are responsiveness and assurance since their respective regression co-efficient are
significant at five per cent level. A unit increase in the perception on responsiveness and
assurance result in an increase in CSI by 0.2817 and 0.1868 units respectively. Among the
educated customers, these significant SQFs are reliability, responsiveness and empathy. Aunit increase in the perception on the above said three SQFs result in an increase in CSI by
0.2117, 0.1338 and 0.1904 units respectively.
Among the highly educated customers, the significantly influencing SQFs are
reliability, responsiveness, assurance and empathy. A unit increase in the perception on
the above said SQFs result in an increase in CSI by 0.2021, 0.1917, 0.1436 and 0.1803
units respectively. The changes in the perception on SQFs explain the changes in the CSI
among the higher educated customers are identified as higher as to the extent of 81.34
per cent. The analysis reveals that the perceptions on SQFs have higher impact on
CSI among the highly educated customers than the other two groups of customers.
IMPACT OF SERVPERF SCALE ON SQFs ON CSI AMONG DIFFERENT
INCOME GROUPS
One of the important demographics of customers is their income. Since the income
may influence the level of awareness and knowledge on banking, it is included one of the
profile variables. By the level of income, they are classified into Lower Income Groups
(LIG), Middle Income Groups (MIG) and Higher Income Groups (HIGs).
The impact of SERVPERF scale of SQFs on CSI among the customer has been
examined with the help of multiple regression analysis. The impact has been examined
among LIG, MIG and HIG separately. The results are given in Table 1.8
TABLE 1.8IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG DIFFERENT INCOME GROUPS
Sl.No SQFs
Regression co-efficient among customers in
LIG MIG HIG
1.
2.
3.
4.
5.
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R 2
F-Statistics
0.1817*
0.1202
0.1144
0.0981
0.2114*
0.9411
0.7028
8.1443*
0.2144*
0.2639*
0.664
0.0917
0.1438*
1.2433
0./7949
10.3842*
0.3142*
0.2108*
0.1440*
0.1664*
0.1649*
1.8246
0.8144
14.2841*
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 14/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 2
Among the LIG, the significantly influencing SQFs on CSI are reliability and
empathy. A unit increase in the perception on above said SQFs result is an increase in CSI
among the LIG by 0.1817 and 0.2114 units respectively. The significantly influencing
SERVQUAL scale on SQFs among the middle income are reliability, responsiveness and
empathy. A unit increase in the perception on above said three SQFs result in an increase inCSI by 0.2144, 0.2639 and 0.1438 units respectively.
Among the HIG, the significantly influencing SQFs on the CSI are reliability,
responsiveness, assurance, tangibles and empathy. A unit increase in the perception on above
said SQFs result in an increase in CSI by 0.3142, 0.2108, 0.1440, 0.1664 and 0.1649
respectively. The changes in the perception on SQFs explain the changes in CSI among the
HIG to the extent of 81.44 per cent. The analysis reveals that the perceptions on SQFs are
relatively influencing on the CSI at higher rate among the HIG than the MIG and LIGs.
IMPACT OF SERVPERF SCALE ON SQFs ON CSI AMONG DIFFERENT
OCCUPIED CUSTOMERS
The occupation of the customers determines their level of requirements, expectation
and perception on banking services. Hence, it is included as one of the demographic profile
of the customers. By the occupation, the customers are classified into agriculturalists,
employees and businessmen. The impact of SERVPERF scales on SQFs on the CSI among
the agriculturalists employees and businessmen have been analysed with the help of multiple
regression analysis. The CSI among the customers is treated as the score of the dependent
variables whereas the SERVPERF scale on SQFs is treated as the score of independent
variables. The Ordinary Least Square (OLS) method has been followed to identify the degree
of influence of SQFs on CSI among three group of customers separately. The results are
shown in Table 1.9.TABLE 1.9
IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG DIFFERENT OCCUPIED CUSTOMERS
Sl.No SQFs
Regression co-efficient among customers in
Agriculturalists Employees Businessmen
1.
2.
3.
4.
5.
Reliability
Responsiveness
Assurance
Tangibles
Empathy
Constant
R 2
F-Statistics
0.1427*
0.0933
-0.0438
0.1081
0.1884*
0.9134
0.7872
8.1816*
0.1819*
0.1502*
0.1617*
0.0961
-0.0539
1.2441
0.8194
10.3326*
0.2424*
0.1761*
0.0669
0.1104
0.2478*
1.8569
0.8646
12.8603*
* Significant at five per cent level.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 15/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 3
Among the agriculturalists, the significantly influencing SERVPERF scales of SQFs
on the CSI are reliability and empathy since their respective regression co-efficient are
significant at five per cent level. A unit increase in CSI by 0.1427 and 0.1884 units
respectively. The changes in the SERVPERF scale on SQFs explain the changes in CSI to
the extent of 78.72 per cent.
The significantly influencing SERVPERF scale of SQFs on CSI among the
employees are reliability, responsiveness and assurance. A unit increase in the SERVPERF
scale on the above said SQFs result in an increase in CSI by 0.1819,0.1502 and 0.1617 units
respectively. The changes in SERVPERF scale on SQFs explain the changes in CSI among
the employees to the extent of 81.94 per cent. Among the businessmen, a unit increase in
the SERVPERF scale on reliability, responsiveness and empathy result in an increase in
CSI by 0.2424, 0.1761 and 0.2478 units respectively. The changes in the SERVPERF
scale on SQFs among the businessmen explain the changes in CSI to the extent of 86.46
per cent. The analysis reveals that the businessmen are highly influenced by the
SERVPERF scale on SQFs compared to other two groups of customers.
CONCLUDING REMARKS
The present study concludes that there is a close link between the customer's
perception on the service quality factors and the customer satisfaction. But the impacts of
service quality factor on customer satisfaction among the customer are not unique. It
depends upon the demographic profile of the customers. For example, the degree of
influence of the service quality factors on customer's satisfaction is higher among the male,
higher income group and highly educated customers. It may be because of their level of
knowledge and awareness on the banking services offered at the industry. Hence, the bank
managers are advised to formulate appropriate marketing strategy to satisfy their customers. Even though the scope of the study is limited to Kanyakumari district, it may be
extended to the customers at the state level in near future. The customers at various
districts may be analysed and also the important discriminant service quality factors
among them.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 16/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 4
REFERENCES
1. Angur, M.G., Natarajan, R and Jahera, J.S., (1999), "Service quality in the banking
industry: an assessment in a developing economy," International Journal of Bank
Marketing, No. 3, pp 116-123.
2. Asubonteng, P., McClearly, K.J., and Swan, J.E., (1996), SERVQUAL
Revisited: A Critical Review of Service quality, Journal of Service Marketing,
10(6), pp.62-81.
3. Avkiran, N.K., (1994), "Developing and instrument so measure customer service
quality in branch," International Journal of Bank Marketing, 12(6), pp. 10-18.
4. Bakeson, J.E.G., (1995), Managing Service Marketing: Text and Readings,
The Dryden Press, New York.
5. Balanced, R and Gelloway, R.; (1994), "Quality in Retail Banking.
International Journal of Service Industry Management, 5(4), pp.5-23,
6. Boulding, W., Kalva, A. Staelvi and Zeithaml, V., (1993), "A dynamic Process
Model of Service Quality: From expectations of Behavioural Intentions. Journal
of Marketing Research, 3091), pp.7-27.
7. Brown, S., and Swnatz, T., (1989). A Gap Analysis of Professional Service Quality,
Journal of Marketing 53(2), pp.92-98.
8.
Carman, J., (2000), Patient Perceptions of Service Quality: Combining thedimensions, Journal of Service Marketing, 14(4&5), pp.337-351.
9. Cronin, J.J. and Taylor, S.A., (1992). Measuring Service Quality: a re-
examination and extension. Journal of Marketing, 56(July), pp.55-68.
10. Cronin, J.J., and Taylor, S.A., (1994). SERVPERF versus SERVQUAL,
reconciling performance based and perceptions-minus-expectations
measurement of Service Quality, Journal of Marketing, 58(January), pp.1245-
131.
11. Cronin, J.J., Jr., Brady, and Hult, T.M., (2000), "Assessing the effects of quality
value, customer satisfaction on consumer behaviuoural intentions in service
environment", Journal of Retailing, 76(2), pp. 193-218.
12. Crosby, P.B., (1979), Quality is Free: The Art of Making Quality Certain Mc-Graw-
Hill, New York.
13. Dabholkar, P.A., Thorpe, D.I. and Rentz, J.O., (1996), A Measure of service quality in
Retail stores: Scale Development and Validation, Journal of the Academy of
Marketing Science, 24(1), pp.3-16.
14. Danaher, P.J., (1997), "Using conjoint analysis so determine the relative
importance of service attitudes measured in customer satisfaction surveys," Journal of Retailing, No-2, pp.235-260.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 17/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 5
15. Davidow, A., and B. Uttal (1989). Total customer Service: The ultimate weapon,
New York: Hopper and Row.
16. Festus ol Orunniwo and Max well K.Hsu (2006), "A typology analysis of service
quality, customer satisfaction and behavioral intentions in mass services,"Managing Service Quality, 16(2), pp.106-123.
17. Festus Olorunniwo and Maxweli K.Hsu (2006), "A typology analysis of service
quality, customer satisfaction and behaviour alintention in mass services",
Managing Service Quality, 16(2), pp. 106-123.
18. Finn, D and C. Lamb (1991), An Evaluation of the SERVQUAL Scales in a Retail
Setting. Advances in Consumer Research, 18(1), pp.483-490.
19. Getz, D., Neill, M.O., and Carlsen, J., (2001), Service Quality evaluation at events
through service mapping, Journal of Travel Research, 39(4), pp.380-389.
20. Groonroos, C, (1984), A Service Quality model and its marketing
Implications, European Journal of Marketing, 18(4), pp.36-44.
21. Howcraft, J.B., (1991), "Customer satisfaction in Retail Banking", Service Industry
Journal, January, pp. 11-17
22. Hussey, M.K., (1999), Using the concept of Loss: an alternative
SERVQUAL measure, Service Industry Journal, 19(4), pp.89-101.
23.
Journal, A and Nasser, K., (2002), "Customer satisfaction and retail Banking:An Assessment of some of the key antecedents of customer satisfaction in retail
banking," International Journal of Bank Marketing, :" 20(4&5),pp.I46-160.
24. Juran, J. (1988), Journal of planning for Quality. American Society for Quality Control,
Bilwankee, Wl.23
25. Juran,J., (1992), Juran on Quality by Design, Free Press, New york.
26. Khadar, S.., (1997), Total Quality Management and Beyond, Management and Productivity
Dnhancement New Approaches, Asian Productivity Organisation, Tokyo, pp.30-72
27. Klaus, P., (1985). Quality Epiphenomenon: The conceptual understanding of Qualityin Face-to-face service Encounters. In John A. Czepiel, Michael, R.Solomen and
carol F. Suprement (Eds). The Service Encounter: Managing
Employees/customer Interaction in Science Business (pp. 17- 33). Lexington, MA:
Lexington Books.
28. Lassar, N.M., Manolis, C and Winsor, R.D., (2000), "Service quality
perspectives and satisfaction in private banking," International Journal of Bank
Marketing, No.7, pp. 12-20.
29. Lasser, W.M., Monolis, C and Winsor, R.D. (2000). Service quality
perspectives and satisfaction in private banking, Journal of Services Marketing14(2&3), pp.244-272.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 18/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 6
30. Levesque, T. and McDougall, G.H.G., (1996), "Determinations of customers
satisfaction in retail banking," International Bank Marketing, No.7, pp.12-20.
31. Lewis, R., and Booms, B., (1983). The Marketing Aspects of service Quality.
In L.L., Berry, L.G., Shostack and G.D., upah (Eds). Emerging Perspectives onServices Marketing, Chicago: American Marketing Association, pp.25-28.
32. Lilijandr, V., (1995). A Comparison Standards in erceived Service Quality
publication of the Swedish School of Economics and Business Administration,
Helsinki, finland, No. 63.
33. Magi, A., and Julander, C.R., (1996), "perceived service quality and
customers satisfaction in a store performance frame work," Journal of Retailing
and Consumer Services, No-1, pp.189-209.
34. Maxwell K. Hsu, Festus olorunniwo and Godwin J. Vdo, (2006), "Sendee quality,customers satisfaction and behavioral intention in the service factory," Journal of
Services Marketing, 20(1), pp.59-72.
35. Naceur Jabnour and Hussein (2002), "Measuring Perceived service quality at UAE
Commercial Banks", International Journal of Quality and Reliability
Management 20(4), pp.458-472.
36. Naceur Jabnour and Hussein (2002), "Measuring Perceived service quality at
Commercial banks", International Journal of Quality and Reliability
Management, 20(4), pp.458-472.
37. Natarajan, R., Balaram, A., and Ramana, V., (1999), Continuous
improvement of service operations: applications of service template. Total Quality
Management 10(6), DD.877-885.
38. Newman, K and Cowling, A., (1996). Service quality in retail banking: The
experience of two British clearing banks. The International Journal of Bank
Marketing, 14(6), pp.3-11.
39. Niki Glaveli, Chris Liassides and Spathis (2006), "Band Service Quality evidence
from five Balkan Countries", Managing Service Quality, 16(4), pp.380-394.
40. Parasuraman, A., Zeithammal, V., and Berry, C, (1985), A Conceptual Model of
Service Quality and its implications for future Research, Journal Marketing, 4994,
pp.69-81.
41. Pijil G.J, Van Der (1994). Measuring The Strategic Dimensions of the Quality
of Information, Journal of Strategic Information Systems, 3(3), pp.179-190.
42. Powell, T.C., (1995), Total Quality Management as competitive advantage: A
Review and Empirical Study, Strategic Management Journal, 16(2), pp. 15-37
43. Reichheld, F. Ford Sasser, E.W., (1990), Zero Defections: Quality comes to service.
Harvard Business Review, September-October, pp.105-1 1 1.
7/27/2019 finance article
http://slidepdf.com/reader/full/finance-article 19/19
ZENITH
International Journal of Multidisciplinary Research
Vol.1 Issue 6, October 2011, ISSN 2231 5780
w w w . z e n i t h r e s e a r c h . o r g . i n
3 7
44. Schmenner, R.W., (2004), Service Business and Productivity, Decision Sciences,
35(3), pp.333-347.
45. Swan, J.E., (1988), A Consumer Satisfaction Related to Disconfirmation of
Expectations and Product Performance, Journal of Consumer Satisfaction andDissatisfaction and Complaining Behaviour, 1(1), pp.40-47.
46. Teas, K.T., (1994), Expectations as a comparison standard in measuring service
quality an assessment of a reassessment, Journal of Marketing, 58(January),pp.l32-
139.
47. Terrence Levesque and Gurdon, H.G. Me Dor gull (1996), "Determination of
customer satisfaction in retail banking", International Rural Bank
Marketing, 14(7), pp. 12-20. . .
48. Thamaraiselvan, N., and J. Raja, (2007), "Customer Evaluation of Automated Teller Machines, service Encounters - An Empirical Model", The
Journal of Contempora ry Managem ent Research, 1 ( 1 ) , March, pp.52-71.
49. Vanniarajan, T. and Gurunathan, P., (2007), "SERVPERF analysis in retail
banking: Review of Professional Management, 5(1), January-June, pp.11-22.
50. Yavas, V and Yasin, M.M (2001), "Enhan ching organizational performance in banks
a systematic approach," Journal of Services Marketing, No.6, pp.444-453.
51. Zeithammal, V., Parasuraman, A., and Berry, L., (1988), SERVQUAL: A Multi-
Item scale for measuring Consumer Perceptions of Service Quality,Journal of Retailing, 64(Spring), pp. 12-40.