Influence of Service Quality Determinants on Customer Satisfaction a Domicile Comparison

8/12/2019 Influence of Service Quality Determinants on Customer Satisfaction a Domicile Comparison

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ZENITH International Journal of Multidisciplinary Research _______________ISSN 2231-5780Vol.4 (6), JUNE (2014)Online available at zenithresearch.org.in

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INFLUENCE OF SERVICE QUALITY DETERMINANTS ON CUSTOMER

SATISFACTION: A DOMICILE COMPARISON

DR. S. HARI BABU

ASSISTANT PROFESSOR,SCHOOL OF BUSINESS,

LOVELY PROFESSIONAL UNIVERSITY,

DELHI- JALANDHAR G T ROAD, JALANDHAR,PUNJAB.

ABSTRACT

Service Quality is a buzz word to the corporate banks to sustain in the competitive environment.Numerous studies were conducted to examine the service quality determinants and customer

satisfaction using SERVQUAL and modified SERVQUAL instrument. Few studies were

conducted to understand the difference between the service quality perceptions based ondemographic characteristics. The present study is an attempt to know the significant differences

in the perceptions of customers from different locations of Andhra Pradesh towards the service

quality determinants using service Quality instrument defined by Suresh Chander et al (2002).The study was conducted based on the primary data collected through 903 customers of select

public and private sector banks. The results from the study support the hypothesis that domicile

differences influence the service quality perceptions. Finally the study observed that the urban

customers preferred the quality in core services whereas the semi urban and rural customersopined human element is the most determining element on the satisfaction levels.

KEY WORDS: Banking, Service Quality, SERVQUAL, Customer Satisfaction, Domicile.

INTRODUCTION

Competition has been rampant in the global market. Fast changes in the communication and

information technology creates new opportunities for industries world-wide. In order for acompany to be competitive, the understanding and implementation of the new trend must be

fully done. Quality is proposed to be a sustenance tool to meet the fierce competition.

The Indian financial sector today is significantly different from what it used to be a few decadesback, in the 1970s and 1990s. The radical changes in the banking sector have brought a paradigm

shift in the ideology of the banks to serve customers better, resulted in innovative bankingservices and products (Uppal R.K., 2009)

The basic tenet to establish the competitiveness and build loyal relationships with the customers,

it has made the customary for the companies to cultivate customer-minded corporate culture with


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A blended mix of sophisticated technology that result in superior service quality (Sandip GhoshHazra, 2010). Service Quality has become the buzz word in the corporate world during the

period of liberalization and globalization. In fact, the attitudinal and behavioral loyalty of the

consumers no longer is influenced by the product quality alone. Today, service quality hasbecome an important research topic because of its relationship to costs and profitability

(Zeithaml, A.V., 2000); customer satisfaction (Smith, K.A., et al., 1999), customer retention(Zeithaml, A.V., 1996) and word of mouth (Zeithaml, A.V., 1988).

In this background the current research work attempted to define a possible approach and

examine service quality dimensions. Further, the study focused on understanding the significantrelationship between service quality determinants and customer satisfaction. The study also

analyzed the significant differences in service quality perceptions of customers from different

regions of urban, semi-urban and rural areas of Andhra Pradesh.

LITERATURE REVIEW

Review of Literature is very useful in giving the back ground, identifying the research gap andthe need for the study and specifying its objectives. Therefore, the review of relevant studiesrelated to the topic has been carried out and is given as follows.

Previous research studies focused much attention on assessing the customer perceptions based onSERVQUAL as designed by Berry et.al. 1983 which had been faced repeated number of changes

to surmount the criticisms by various researches across the industries. Apart from this, there

needs a substantial framework to measure the perceptions of customers considering the changing

situational and economic factors in the retail banking sector that support the cultural norms,values and ethos by the Corporate and Indian consumers at large (Clement Sudhahar, 2007).

Grnroos (1984) opined the perceived service quality as the outcome of an evaluation process,where the customers compare their expectations with the service they have received.

Parasuraman, et al., (1985) considered service quality as the consumers comparison between

service expectation and service performance. Further, they argued that service quality is

determined by the differences between customers expectations of the service and their

perceptions of the service experience (Parasuraman, et al., 1988).

Over a period of time, various researchers have proved different conceptualizations that

supported various contexts. Garvin, D.A.(1987) identified eight competitive dimensions of

quality that could guide a firm in its use of quality as a competitive weapon. Garvins eight

dimensions were performance, features, reliability, conformance, durability, serviceability,

aesthetics and perceived quality. Further, Lewis (1993) and Grnroos, C. (1998) conceptualizedservice quality by taking technical dimensions, functional dimensions and corporate image

dimensions in to consideration. Parasuraman et al.(1988) in their subsequent research purified

and distilled the ten dimensions into five service dimensions that were capable of discriminatingwell across respondents having differing quality perceptions about firms in several categories

such as tangibility, reliability, responsiveness, assurance and empathy. Later, Avkiran (1999)


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conceptualized four discriminating factors to measure the service quality dimensions in abanking sector which emphasized on staff conduct, credibility, communication and access to

teller services. Consequently, Suresh Chandar et al (2002) conceptualized service quality by

taking into account all aspects of customers perceived quality including those alreadyaddressed in the existing instruments and identified five critical dimensions such as human

elements of service delivery, tangibles, core service, Systemization of service delivery andsocial responsibility.

Khurana, (2010) investigated the level of customer satisfaction with the service quality of

private banks in Hissar district using SERVQUAL model. The study found that the overall

service quality provided by the private banks was below customers expectation. A comparativestudy by Khare (2011) to analyze the perceptions regarding the service quality in Indian and

foreign banks using SERQUAL reveal that the customers perceptions differ significantly and

found the perceptions of different genders significantly differ. Awan et.al (2011) investigated theservice quality and its relationship to customer satisfaction among the customers of conventional

banks and Islamic banks using modified SERVQUAL By using factor analysis five service

quality dimensions were identified namely empathy, service architecture, convenience serviceencounter, employee service criteria, customer focus and five customer satisfaction dimensions:responsiveness, competency, safe transaction, competitive services, knowledge for the overall

banking industry. Abdullah, et. al. (2011) examined the applicability of BSQ (Bank Service

Quality) Index and derived three dimensions in service quality namely Systemization, ReliableCommunication and Responsiveness. Multiple regression analysis revealed that Systemization is

the most important service quality dimension within the banking sector. Tsoukatos (2011)

examined the causality of relationships between customer loyalty dimensions and the effects of

customer satisfaction on the latter using Structural equations approach in Greek banking context.The study found that SERVQUAL instrument has outperform the other metrics such as

BANQUAL-R and BSQ metrics. Finally, it is observed that customer satisfaction campaigns

should be taken to improve attitudinal rather than behavioral loyalty. Kamble, et.al (2011)undertook a study to assess and compare the perceived level of bank service quality and to

investigate the dimensions of quality banking service in private and public sector bank in India

using an instrument banking service quality scale (BSQ). Private Banks are perceived to besuperior on the service quality dimensions: effectiveness, access and tangibles whereas, the

public sector banks score better on the dimensions of price and reliability. Siddiqi (2011)

conducted a study on the interrelations between service quality attributes, customer satisfaction

and customer loyalty in the retail banking sector in Bangladesh. The study concluded thatcustomer satisfaction is positively related to customer loyalty while empathy demonstrates the

highest positive correlation with the customer satisfaction. Zalatar (2012) and Mokhlis (2012)

conducted a study to examine the role of gender on service quality perceptions and its

relationship with the customer satisfaction. The study revealed that the gender affect the servicequality perceptions and variable such as tangibles, reliability and responsiveness were the

important service quality determinants that influence the satisfaction of male and female

customers. Jain (2013) examined the influence of customer demographical characteristics such asgender, qualification, occupation and income and their effect of banking service assurance

perception and identifies which demographical characteristics influence the assurance perception
http://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1998&year2=2012&o=2&q=Sunayna%20Khuranahttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1998&year2=2012&o=2&q=Arpita%20Kharehttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1992&year2=2012&o=2&q=Evangelos%20Tsoukatoshttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1992&year2=2012&o=2&q=Sachin%20S.%20Kamblehttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1992&year2=2012&o=2&q=Sachin%20S.%20Kamblehttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1992&year2=2012&o=2&q=Evangelos%20Tsoukatoshttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1998&year2=2012&o=2&q=Arpita%20Kharehttp://www.inderscience.com/dev/search/index.php?action=basic&wf=author&year1=1998&year2=2012&o=2&q=Sunayna%20Khurana


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Of service quality. The study concluded that the qualification and occupation influence theservice assurance perception.

The above review of literature focused on the application and testing of the SERVQUAL andmodified models of SERVQUALs in banking sector .But a study is also needed to understand the

differences in the perceptions of customers on the basis of demographic characteristics. Thestudy conducted in the context of domicile differences has the significance in understanding thedifferences in the service quality perceptions due to structural changes in the banking sector due

to BASEL II norms, implementation of reformatory changes in sector and the Government

initiatives towards the financial inclusion. All the reformatory initiatives will go in vain until andunless the customer is satisfied with the services offered by the banks and the customer is

retained with the bank.

RESEARCH OBJECTIVESOn the basis of the above discussion, the present study has been conducted achieve the following

objectives.

1.

To know the significant determinants which influence the service quality perceptions ofthe customers of retail banking in India.2. To study whether there is any significant relationship between the service quality

determinants and the customer satisfaction in retail banking context in India.

3. To know whether there are any differences in the service quality perceptions towardsretail banking services between urban, semi-urban and rural customers.

RESEARCH METHODOLOGY

SAMPLE DESIGN

The study was conducted in the Visakhapatnam, East and West Godavari Districts of Andhra

Pradesh and a sample of 903 (325 from urban, 281 from Semi-Urban and 297 from ruralsegments)customers of five banks in public and private banks each, namely State Bank of India ,

Canara Bank, Bank of India, Andhra Bank and Central Bank of India whereas, ICICI Bank,

HDFC Bank , Axis Bank, Karur Vysya Bank and ING Vysya Bank were taken for the study.These banks were selected on the basis of number of bank branches located in all urban, semi

urban and rural areas of Visakhapatnam, East and West Godavari Districts of Andhra Pradesh.

Judgment and Convenience sampling technique was used for the collection of data and proper

care was taken to ensure that the respondents possess at least one account in any of the bankingbranches.

DATA COLLECTION INSTRUMENT, RELIABILITY AND VALIDITY

A retrospective methodology was adopted in this study. A semi-structured questionnaire wasdeveloped based on the proposed service quality dimensions to measure service quality. For the

purpose of canvassing a schedule, well trained management graduates were deputed and proper

care was taken to assure the complete fill of the schedules by the select respondents.Respondents were requested to respond for the statements that measure the quality in the services

rendered by the employees of banking branch. Each of these was measured on 1 to 5 Likert type


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Scales. In the second step, we assessed the construct validity of the scales being developed andcorrected ambiguous or confusing scale items by pretesting the schedule. The pretest sample

included 50 individuals covering all the segments of the profile of respondents. The Correlation

coefficient calculated upon the responses of the respondents was found to be 0.936 indicating thescales internal validity.

HYPOTHESIS OF THE STUDY

The following hypothesis were made for the study

HYPOTHESIS-1:There is significant difference in the influence of domicile profile of the

customers on their perceptions towards service quality determinants.

1. H1a: There is no positive correlation between core service elements of service quality andcustomer satisfaction in the banking sector.

2. H1b: There is no positive correlation between human elements of service quality andcustomer satisfaction in the banking sector.

3. H1c: There is no positive correlation between non- human elements of service quality andcustomer satisfaction in the banking sector.4. H1d: There is no positive correlation between tangible elements of service quality andcustomer satisfaction in the banking sector.

5. There is no positive correlation between social responsibility elements of service qualityand customer satisfaction in the banking sector.

HYPOTHESIS-2: There is significant difference in the influence of domicile profile of the

customers on their perceptions towards service quality determinants.

OBJECTIVE-1: To know the significant determinants which influence the service quality

perceptions of the customers of retail banking in India?

According to the above discussions on various dimensions of service quality, it is found thatdifferent authors have proposed different dimensions of service quality. For having a quick look,

all dimensions of service quality proposed by different authors mentioned above are shown in the

following table.


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Table -1: Possible approach to analyzing service quality dimensions for Retail BankingDimensions Specific elements L

P

A G S

Tangibles

Ambient conditions at bank branch and at ATM machine. X X X X

Appearance and personality of service personnel.

Noise and odour prevailing in the bank's premises. X X X

Physical layout of equipment and other furnishings.X XVisually appealing materials and facilities associated with service. X X

Adequate parking nearby. X X X X

Adequate physical security at Bank and ATMs X X X X X

Reliability

Ability to perform the promised service dependably and accurately. X X

Dependability in handling Customers service problems. X X

Accuracy of records. X X

Credit cards and Debit Cards Utility X X X X X

Online and Internet banking accuracy X X X X X

Privacy of transaction through ATMs X X X X X

Responsiveness

Inter-personal interactions between employees and customers

Civilized conduct.

Provide prompt of service XClear and detailed statement of accounts X X X X

Flexibility to conduct bank transactions by phone. X X X X X

Feedback from customers is used to improve service standards. X X X X X

Assurance

Knowledgeable employee to answer customer questions. X X

Politeness and Courtesy of staff X

Solving the problems immediately when it arises. X X

Trustworthiness and confidence

Empathy

Caring, easy access, effective communication X X

Individualized attention given to customers X X

Adequacy of number of branch staff serving customers X

Effective communication of any change in the rates X X X X

Social

Responsibility

Competitive Charges for transactions. X X X X

Having branch locations in most places convenient to all sections X X X X

Bank personnel punctual, regular, sincere and without going on

strikes.X X X X

Priority lending to the priority customers. X X X X X

Easily available loans at affordable interest rates. X X X X

Source: Lewis@

(1993), Parasuraman et al.(1988)#, Avkiran (1999)

$, Grnroos (1984), Suresh

Chandar et al., (2002)

Table -1indicates that all authors mentioned above do not have the same thought of school with

every aforementioned specific element of quality dimensions. However, all the above sub-

dimensions in each dimension might be applied in previous research studies but do not bring

comprehensive coverage in the present scenario of Banking Sector reforms.In fact, the variables considered for the study matches with almost majority of the sub-

dimensions as defined by Grnroos (1984), Parasuraman et al. (1988) and Suresh Chandar et al.,

(2002). Therefore, it is proposed a modified version of Parasuraman et al.(1988) and Suresh


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Chandar et al., (2002) for measuring the Service Quality in Retail Banking sector. As a result, theproposed instrument for measuring service quality in retail banking sector covers six dimensions

such as tangibles, reliability, responsiveness, assurance, empathy and social responsibility and

the sub dimensions proposed for the study are presented in table-2.

Table- 2: Proposed service quality dimensions to measure Service Quality and their sub-dimensions

Dimensions Specific elements

Core

Service

Diversity and range of services (having a wider range of financial services from the

bank, e.g. deposits, retirement accounts, loans for purchases of cars, houses, foreign

exchange, traveller's cheques, safe deposit lockers, etc.), Intensity and depth of service(having more number of options in every service/transaction, e.g. various fixed deposit

or recurring deposit schemes with different interest rates, quick cheque clearing facility

with a higher service charge, etc.), Service innovation (providing information/details

on a regular basis through post; telephonic banking; ATM; room service facility; cardsto defence personnel, etc.), Availability of most service operations in every

branch/department of the bank, Convenient operating hours and days (e.g. working onSaturdays and Sundays, extended service hours during evenings, weekdays, etc.).

Human

Elements

Providing services as per the promised schedule, Willingness to help customers and thereadiness to respond to customers' requests, Extent to which the feedback from

customers are used to improve service standards, Regularly apprising the customers

about information on service quality and actual service performance versus targets in

the organization, Employees instill confidence in customers with pleasing andcourteous behavior, Speed of solving the customer grievances is effective, Givingcaring and individual attention to customers by having the customers' best interests at

heart, Employees who understand the needs of their customers with individual

attention and customers best interest.

Non-human

elements

Having a highly simplified and structured delivery processes so that the servicedelivery times are minimum, Enhancement of technological capability (e.g.

computerization, networking of operations, etc.) to serve customers more effectively,

Degree to which the procedures and processes are perfectly fool-proof.

Tangibles

The physical layout in the bank premises is comfortable to get the services from bank

employees, Visually appealing materials, symbols, advertisement boards, pamphletsand other artifacts associated with the bank, Employees who have a neat and

professional appearance.

Social

Responsibili

-ty

Equal treatment stemming from the belief that everyone, big or small, should be treatedalike, Giving good service at a reasonable cost, but not at the expense of quality,

Having branch locations in most places convenient to all sections and strata of the

society (e.g. villages, downtown, areas, etc.), A sense of public responsibility amongemployees (in terms of being punctual, regular, sincere and without going on strike).

CustomerSatisfaction

I will recommend the bank for my friends, neighbors, relatives etc, I will takeadditional services required from this bank


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DATA ANALYSIS AND INTERPRETATIONThe demographic profile of the respondents presented in the table -3 that covers the entire gamut

of all kinds of respondents.

Table -3: Demographic Profile of Respondents

Domicile Profile of RespondentsS No Domicile Respondents Percent

1 Urban 325 36.0

2 Semi-urban 281 31.1

3 Rural 297 32.9

Total 903 100.0

Duration of Bank Account Holder

S NoDuration of Bank Account Holder Respondents Percent

1 Less than 6 months 55 6.1

2 More than 6 months but less than 1 year 298 33.0

3 More than 12 months but less than 18 months 339 37.5

4 More than 18 months 211 23.4

Total 903 100.0

Types of services received very recently

S No Types of services received very recently Respondents Percent

1 Deposit Cash in to account 295 32.7

2Receipt and repayment of loan principal and

interest

238 26.4

3 Withdrawl of cash from account130 14.4

4 Obtain Demand Draft 39 4.3

5 Deposit cheque in to the account 161 17.8

6Obtain bank account/updation in pass book of

account

22 2.4

7Other allied services such as forex services,demat account, insurance services

18 2.0

Total 903 100.0

Source: Compiled from Primary data

The demographic profile of the respondents presented in the table -3 reveals that the majority ofrespondents i.e. 36.0 percent of respondents belong to urban region followed by rural (32.9 per

cent). Due care is taken to bring a right mix of respondents covering all the demographic regions,

however, based on the filling of the schedules differences in the composition of respondents was


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observed. It is also observed from the table, the respondents in the age group 26-35 constitute amajor composition in the respondents. 80.7 per cent of respondents are male while their counter

parts constitute 19.3 per cent that reveals accessibility of banking branches to the women is still

in under scan. Private employees (28.1 per cent) followed by Government employees (22.9 percent) and self-employed (21.4 per cent) are the large group of respondents visiting the banking

branches for the services. The income profile of the respondents presents that 28.6 per cent ofrespondents fall in the income group between Rs 1,20,001 to Rs 2,40,000 followed by therespondents with an income level below Rs 1,20,000. Most of the respondents availing the

banking services in the select demographic regions possess Graduation (Non-technical) as

education profile while 21.0 per cent of respondents completed their Intermediate education.Necessary care is taken to collect the responses from the respondents in such a way that the

respondents should be the potential user of the services. The respondents holding the bank

account for the last 18 months constitute a major segment of the respondents while the

respondents holding the account for more than 6 months but less than 12 months are 33.0 percent. The table also presents the utility of services provided by banks and respondents were

selected so that they have availed at least one service in the last six months. Most of the

respondents visited the banking premises for opening and depositing the cash in their accounts(32.7 per cent) followed by receipt and repayment of loan and interest (26.4 per cent) anddepositing cheques in to the account (17.8 per cent).

OBJECTIVE -2: To study whether there is any significant relationship between the service

quality determinants and the customer satisfaction in retail banking context in India.

To study whether there is any significant relationship between the service quality determinants

and the customer satisfaction in the retail banking context in India, the Friedmans mean ranks arecalculated for Customer satisfaction statements and are tabulated in Table -4. Subsequently,

Canonical Correlation Coefficients are also calculated to test the hypothesis in Statistica 10.0 and

the results are tabulated in Table-5

Table -4: Results of Friedmans Mean Test

S.

NoLabel

Customer Satisfaction StatementsUrban

Semi-

UrbanRural

1 CUS1I will recommend the bank for my friends,

neighbors, relatives and others15.38 14.91 14.55

2 CUS2I will take additional services required from

this bank14.55 12.85 14.57

Source: Primary Data

As can be seen from the table-4, urban customers (15.38) felt satisfied with the quality ofservices provided by the banks and they are willing to recommend the bank for the friends andrelatives and further the urban customers are ready to accept the additional services (14.55) from

the select banks for the study. In terms of attitude to recommend the banking services to others

semi-urban customers are open to recommend (14.91) while the rural customers are prepared totake additional services from the banks.


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HYPOTHESIS-2: Service Quality determinants have no positive relation with the customer

satisfaction.

Table5: Results of Canonical Correlation Analysis

S. No Independent

Variables

Dependent Variables Canonical (R)

Correlation

Chi-

square

p -

value1 Core Service Customer Satisfaction 0.1319 19.236 0.037

2 Human Element Customer Satisfaction 0.2855 90.662 0.000

3 Non-human

element

Customer Satisfaction 0.2666 112.74 0.000

4 Tangibles Customer Satisfaction 0.0923 10.790 0.952

5 SocialResponsibility

Customer Satisfaction 0.2904 97.580 0.000

Source: Primary Data

H1a: There is no positive correlation between core service elements of service quality and

customer satisfaction in the banking sector.From the table 5, it can be seen that the Canonical correlation (R) between Core service and

customer satisfaction is 0.1319 and it is significant at 0.037 which is less than 0.05. Hence we

reject the null hypothesis and concluded that there is lower (R= 0.1319) relationship betweencore service and customer satisfaction in the retail banking sector.

H1b: There is no positive correlation between human elements of service quality and customer

satisfaction in the banking sector.

The table 5 also presents that the Canonical Correlation (R) between Human elements and

customer satisfaction at 0.2855 which is less than p= 0.005. Therefore we reject the null

hypothesis and revealed that there is moderate (R= 0.2855) relationship between the humanelements and customer satisfaction in the retail banking sector.

H1c: There is no positive correlation between non- human elements of service quality and

customer satisfaction in the banking sector.

As can be seen from the table- 5, the canonical correlation between the set of statements for non-

human elements and customer satisfaction is 0.2666. The results revealed that the null hypothesisis rejected as canonical correlation (0.2666) is significant at 0.000 less than 0.05 which means

that the there is positive correlation between non-human elements of service quality and

customer satisfaction in the retail banking sector.

H1d: There is no positive correlation between tangible elements of service quality andcustomer satisfaction in the banking sector.

It is presented in the table that the tangibles elements have very low Canonical Correlation(0.0923) between the tangible statement and customer satisfaction. The results revealed that the

null hypothesis is accepted as the canonical correlation is significant at p value (0.952) is more


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than 0.05. This reveals that the tangible elements of service quality have no significant influenceon the customer satisfaction in the banking sector.

H1e: There is no positive correlation between social responsibility elements of service quality

and customer satisfaction in the banking sector.

As can be seen from the table- 5, the canonical correlation between the set of statements forsocial responsibility elements and customer satisfaction is 0.2904. The results revealed that thenull hypothesis is rejected as canonical correlation (0.2904) is significant at 0.000 less than 0.05

which means that the there is positive correlation between social responsibility elements of

service quality and customer satisfaction in the retail banking sector.

OBJECTIVE-3: To know whether there are any differences in the service quality

perceptions towards retail banking services between urban, semi-urban and rural

customers.

Table6 presents the Cronbachs Alpha and Means of the items of service quality as defined by

Suresh Chander (2001) which was modified for the study. As can be seen from the table exceptitems in Non- Human element (0.539) all the items in the instrument presented above 0.6.Among the items used in the instrument, the mean values of items in Social Responsibility

presented highest mean value (3.685) followed by Human element (3.615), Non- human element

(3.400) and Tangibles (3.247). Core Service element revealed the least mean value (2.823). Themean value of Customer loyalty (3.645) reveals that the existing customers of banks are loyal to

the banks. The overall means domicile wise reveals that Semi- urban has recorded highest

mean (3.475) followed by Urban (3.383) and rural (3.348). Among each Service Quality element

vis-a- vis domicile human element (3.583) for urban, social responsibility for semi-urban (3.889)and rural (3.620) are the most influencing factors on the loyalty towards the bank.

Table -6 : Cronbachs Alpha and Means of the Items S.

No

Item Cronbachs

Alpha

Mean

MeanUrban

Semi-

UrbanRural

1 Core Service 0.897 2.823 2.873 2.848 2.745

2 Human Element 0.786 3.615 3.583 3.707 3.562

3 Non- Human Element 0.539 3.400 3.330 3.511 3.371

4 Tangibles 0.803 3.247 3.282 3.216 3.239

5 Social Responsibility 0.689 3.685 3.568 3.889 3.620

6 Customer loyalty 0.775 3.645 3.717 3.621 3.588

3.383 3.475 3.348

Source: Primary data

In order to determine whether domicile differences in the service quality perceptions towards

retail banking services, Independent Kruskall Wallis Test was applied. Table 7 presents the

statistical results. As can be seen in the table-5, items of the instrument 3, 7, 8, 10, 11, 14, 15, 20,21, 22 reject the null hypothesis.


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Table -7: Results of Friedmans Mean Test and Independent Sample Kruskal - Wallis Test

S. No Statements

Friedmans Mean Ranks

Independent

Sample Kruskal-WallTest

UrbanSemi-urban

Rural Sig Decision

1 CS1

Diversity and range of services (having a widerrange of financial services from the bank, e.g.

deposits, retirement accounts, loans for purchasesof cars, houses, foreign exchange, traveller'scheques, safe deposit lockers, etc.).

9.82 8.83 9.29 0.386

Retain th

nullhypothesis

2 CS2

Intensity and depth of service (having morenumber of options in every service/transaction,

e.g. various fixed deposit or recurring depositschemes with different interest rates, quickcheque clearing facility with a higher servicecharge, etc.).

11.11 9.81 10.39 0.166Retain thnull

hypothesis

3 CS3

Service innovation (providing information/detailson a regular basis through post; telephonic

banking; ATM; room service facility; cards to

defence personnel, etc.).

9.42 10.10 8.57 0.009Reject thnullhypothesis

4 CS4

Availability of most service operations in every

branch/department of the bank. 9.23 9.54 9.74 0.257

Retain th

nullhypothesis

5 CS5Convenient operating hours and days (e.g.working on Saturdays and Sundays, extended

service hours during evenings, weekdays, etc.).

11.34 9.87 10.62 0.100Retain thnull

htpothesis

6 HE1

Providing services as per the promised schedule.

15.44 14.60 14.95 0.481

Retain th

nullhypothesis

7 HE2Willingness to help customers and the readinessto respond to customers' requests. 14.74 15.24 13.92 0.000

Reject thnullhypothesis

8 HE3Extent to which the feedback from customers areused to improve service standards. 12.44 13.58 12.69 0.000

Reject thnull

hypothesis

9 HE4

Regularly apprising the customers about

information on service quality and actual serviceperformance versus targets in the organization.

14.27 13.51 13.98 0.365

Retain th

nullhypothesis

10 HE5Employees instill confidence in customers with

pleasing and courteous behaviour. 13.38 14.59 13.96 0.000Reject thnull

hypothesis

11 HE6

Speed of solving the customer grievances is

effective. 13.76 15.39 14.23 0.000

Reject th

nullhypothesis

12 HE7

Giving caring and individual attention to

customers by having the customers' best interestsat heart.

14.54 13.96 15.28 0.794

Retain th

nullhypothesis

13 HE8 Employees who understand the needs of their 14.31 14.01 14.02 0.512 Retain th


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customers with individual attention and

customers best interest.

null

hypothesis

14 NHE1

Having a highly simplified and structured

delivery processes so that the service deliverytimes are minimum.

12.93 13.71 13.01 0.000

Reject th

nullhypothesis

15 NHE2Enhancement of technological capability (e.g.computerization, networking of operations, etc.)to serve customers more effectively.

12.78 13.48 13.28 0.015Reject thnullhypothesis

16 NH3

Degree to which the procedures and processes are

perfectly fool-proof. 11.44 11.66 12.00 0.336

Retain th

nullhypothesis

17 T1The physical layout in the bank premises iscomfortable to get the services from bankemployees.

13.41 12.12 12.89 0.233Retain thnullhypothesis

18 T2Visually appealing materials, symbols,advertisement boards, pamphlets and otherartifacts associated with the bank.

12.63 11.41 12.90 0.366Retain thnullhypothesis

19 T3

Employees who have a neat and professional

appearance. 11.22 10.89 11.91 0.744

Retain th

nullhypothesis

20 SR1Equal treatment stemming from the belief thateveryone, big or small, should be treated alike. 14.42 14.96 15.73 0.019

Reject thnullhypothesis

21 SR2

Giving good service at a reasonable cost, but not

at the expense of quality. 13.27 15.70 12.39 0.000

Reject th

nullhypothesis

22 SR3

Having branch locations in most places

convenient to all sections and strata of the society(e.g. villages, downtown, areas, etc.)

13.30 15.46 14.60 0.000

Reject th

nullhypothesis

23 SR4 A sense of public responsibility amongemployees (in terms of being punctual, regular,sincere and without going on strike).

15.88 14.82 15.52 0.537 Retain thnullhypothesis

24 CUS1I will recommend the bank for my friends,neighbors, relatives etc

15.38 14.91 14.55

25 CUS2I will take additional services required from this

bank14.55 12.85 14.57

Note: Asymptotic Significance was displayed.

Source: Primary data

From the table, heterogenous responses were observed from the respondents which were

presented based on Friedmans mean ranks. As can be seen from the table, the respondents of

Urban locations opined diversity and range of services (9.82), intensity and depth of services(11.11), convenient operating hours (11.34), providing services as per the schedule (15.44),regular appraising taken from customers (14.27) and the comfort ability in banks layout to get

the services and employees being punctual, regular, sincere and without going on strike (15.88)

are the most important factors in service quality.


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In table 7 , it is also observed that providing innovative services on regular basis (10.10),willingness of employees to respond to customers request (15.24), the implementation of

feedback of customers to improve service standards(13.58), effectively solving the issues of

customers (15.39), technological enhancement in service delivery (13.48) and offering servicewithout compromising on the quality of services and establishment of banking branches in

various strata to make it convenient to all sections of the society (15.46) are the important factorsfor the respondents in semi- urban area.Availability of varied services (9.74), executing care and concern about the customers (15.28),

providing services with complete security and flawless procedures(12.00 ), equal treatment for

all the kinds of customers (15.73) and attempt to disclose the kind of services that bankingbranches offer in rural areas (12.90) are the most important factors for the respondents in rural

areas.

From above discussion, it can be inferred that the urban customers prioritized for the core servicefacilities of the banks through internet banking and mobile banking due to technological

advancements to get the services with a click from their door-steps which made them loyal to the

existing banks. However, the semi- urban customers gave priorities for the items which cover thehuman element in the services while availability of the banking branches and services followedby bringing accessibility of services through various initiatives are also prioritized factors that

affect the rural customers loyalty towards the banking branches.

Hypothesis-2: There is significant difference in the influence of domicile profile of thecustomers on their perceptions towards service quality determinants.

In order to test the hypothesis that there is no significant differences in the influence of domicileprofile of the customers on their perceptions towards service quality determinants, Independent

Sample Kruskal- Wallis test is applied. From the table-5, the items of the instrument 3, 7, 8, 10,

11, 14, 15, 20, 21, 22 reject the null hypothesis. For the remaining statements of the instrumentthe null hypothesis is accepted stating that there is significant difference in the perceptions of

customers based in different locations towards the service quality determinants.

On the basis of the hypothesis testing from the table- 7 and subsequent analysis reveals that the

service quality determinants such as core service, human elements, non-human elements and

social responsibility have positive influence on the customer satisfaction while tangible have a

very low significant influence.

CONCLUSION

Service Quality has become the buzz word in the academics, research and the corporate arena.

To sustain in the bitter competitive environment the companies have realized the importance ofdelivering quality services in an effective and an urge for the innovations in services brought a

sea change in the field of services sector. The study was taken to define a capsulated form of

service quality model comparing with the other services model as defined by Lewis(1993),

Parasuraman et al.(1988), Avkiran (1999),

Grnroos (1984) , Suresh Chandar et al., (2002)

.


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The survey findings revealed that the human element in service delivery, especially, in thebanking services is major influencing factor. The customers expect to be well treated in the by

the banking personnel in banking premises and the recognition they receive bring the moment of

truth in the service delivery. Further, there no discrimination in the views of customers in respectof human element but the urban customers prefer the quality in core services, next to the human

element followed by the fool-proof procedures. The rural customers are satisfied with the qualityof core services and the financial inclusion strategies being implemented by the RBI, theregulatory body brought enormous opportunities to the banking sector to deliver various kind of

services. Findings from the study also reveal that the rural customers are open to the changes in

the banking sector to avail the benefits of the being banked.

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Influence of Service Quality Determinants on Customer Satisfaction a Domicile Comparison

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