Research into Measurement of Service Quality by utilizing the SERVQUAL tool

Published:

Kettinger et al. (1995) proposed the utilization of a modified SERVQUAL instrument in order to assess the quality of the services provided by an information services provider. Additionally, although it may be factual that the SERVQUAL instrument is a frequently used tool for the measurement of perceived service quality in both research and marketing, Kettinger and Lee recognized that a number of studies have acknowledged possible complexities related to this instrument e.g., Carman (1990), Babakus et al.(1992) and Cronin and Taylor (1992).

3.3 CUSTOMER SATISIFCATION

Probably one of the most explored phenomenons in marketing literature to measure satisfaction of customer with service provider is. Various researchers (Berry & Parasuraman, 1991; Garbarino & Johnson, 1999; Morgan & Hunt, 1994) maintained that satisfaction is not the only one important antecedent of long-term customer relationships and such antecedents as trust, commitment, etc. should be analyzed as well.

Further, an increase in customer retention leads to the increase in enterprise profitability. Owing to rapid changes in economic environment, customers are becoming more demanding and sophisticated; therefore it has become important for financial institutions to determine the factors which are pertinent to the customers' selection process (Boyd et al., 1994).

Lady using a tablet
Lady using a tablet

Professional

Essay Writers

Lady Using Tablet

Get your grade
or your money back

using our Essay Writing Service!

Essay Writing Service

Delivering high quality services is a prerequisite for achieving customer satisfaction and only through customer satisfaction can the company gain loyal customers (Grönroos, 2000).

Quality of Service is another very important factor among other factors; which can attract customer's selection process of a financial institute. Numerous authors ( Cronin & Taylor, 1994; Taylor & Baker, 1994; Teas, 1993) have defined quality as a consumer's judgment about the excellence or superiority of a service provider's performance. Further, mentioning to Bitner and Hubber (1994) customer satisfaction could be defined as "the customer overall

dis/satisfaction with the organization based on all encounters and experiences with that particular organization". Anderson and Mittal (2000) proposed the conceptual logic of relationships within the customer satisfaction chain: By improving product and service quality attributes, customer satisfaction should increase. At large the rise in satisfaction of customer should lead to customer retention and loyalty. Then, the improvement in customer retention and loyalty would lead to greater profitability. Figure 3.1 reveals the chain reaction of customer satisfaction.

Figure 2.2: Chain Reaction of Customer Satisfaction

By focusing on the retail banking industry Rust and Zahorik (1993) seek to identify the relationship among customer satisfaction, retention, and profitability, concluding that retention rates drive market share and customer satisfaction is a primary determinant of retention. On other hand Reichheld and Sasser (1990) also discuss the relationship between customer retention and company revenues. They suggest that three relationships work in conjunction in such a way that a small improvement in customer retention can have a large effect on company revenues.

CHAPTER 3:

RESEARCH METHODS

3.1Method of Data Collection

Questionners based on SERVQUAL model were served personally in different branches of banks among customers visited a particular during the study period were included. A total of 180 questionnaires were administered and all were completely filled in by respondents and backed. Thus, a response rate of 100% was achieved.

A popular method known as "pick any, tick any" (Sudhahar et al.,2006) was used where respondents were simply asked to put a tick mark in any cell given against each question in order to rank the level of their satisfaction with regard to five aspects of customer satisfaction(using SERVQUAL Model) (Parasuraman et. al 1988) , in accordance with a five-point scale ranging from "the service quality does not at all live up to your expectations " (1) to "the service quality exceeds to high degree of your expectations" (5). The five aspects are reliability, empathy, assurance, tangibility and responsiveness.

3.2 Sample Size

This study was conducted in 2009 in different cities of the Upper-Sind like Larkana, Khairpur, Shikarpur, Jacobabad etc. Almost all the major banks (under study) have their branches in above-mentioned cities of Upper-Sindh.

For this analysis, the data had been collected from the customers of Muslim Commercial Bank(MCB), United Bank Limited(UBL), Allied Bank(ABL), Bank Alfalah Limited, Askari Commercial Bank, Standard & Chartered Bank, Bank Islami, Silk Bank and Habib Bank Limited (HBL) operating commercially in the cities of Upper Sindh.

Lady using a tablet
Lady using a tablet

Comprehensive

Writing Services

Lady Using Tablet

Plagiarism-free
Always on Time

Marked to Standard

Order Now

Nine banks were selected for this analysis. The data for this study was collected from 180 bank customers through a specifically designed questionnaire covering the various attributes that can satisfy customers.

As twenty respondents were required to be selected from each bank under study.Thereofre, in order to select twenty repondents, Simple Random Probability sampling technique was adopted because it assures that each element in the population has an equal chance of being of selected for a sample (Zikmund, 2006). A particular branch of each bank was selected, based on its location and its willingness to cooperate in different cities of the said region.

3.3 Research Instruments of Data Collection

Questionnaires are one of the most popular data collection tool in any research involving human subjects (Pickard  ,2007). Amongst the most popular assessment tool of service quality is SERVQUAL. Therefore a questionnaire based on SERVQUAL model was used to collect the data. As discussed in the previous section, perceived quality is the result of customer's comparison of expected service with the service received. According to Othman and Owen (2001a), SERVQUAL has proven to be the most popular instrument for measuring service quality because it affords technology techniques for measuring and managing service quality.

The instrument (Questionnaire) included only 25 closed-ended questions along with questions about the respondents' demographic information, including name of the bank they use for baking dealings, gender, age category, length of Banking usage and frequency of banking transactions per month. Furthermore, in order to keep the respondents easier to answer the questions, the author used the "Zone of tolerance" notion (Vasya Kenova et al., 2006), shaded in grey color and including points three, four and five in the questionnaire. Further questions were organized into five sections. Section one consisted of 08 questions regarding reliability. Section two focused on 04 questions about responsiveness. In section three, 04 questions were asked about assurance. While in section four total 04 questions were given regarding empathy and in last section, total 05 questions were focused regarding tangibility.

In order to have complete description of the questions relating to each quality dimension and their number in the questionnaire please refer to an Appendix C.

3.4 Validity of Instrument

A major concern in research is the validity of research instrument used in data collection. An instrument can be considered valid when the result of the measuring process has really measured what it was intended to measure. Further validity is the ability of a scale or measuring instrument to measure what is intended to measure (Zikmund, 2006).

Hardy and Bryman (2004)stated that there are different types of validity:

Face validity needs a detailed examination of the wording of the items included in the instrument and their connection to the relevant frame of reference used in the particular study. Through the use of the opinion and judgment of experts concerning the items and wording used, face validity can also be examined.

Criterion-related validity assesses a scale with regard to a criterion on which people incline to differ. This includes concurrent and predictive validity.

Construct validity - requires "an examination of the theoretical inferences that might be made about the underlying construct".

While the face validity has been applied in this thesis, where the validity of the study has been confirmed over complete pre-testing, rearranging the rewords and reevaluation of the instrument used.

3.5 Reliability of Instrument

Reliability of an instrument is considered effective when the result of the measuring process is reproducible. In this regard Zikmund (2006) has defined reliability defined as: "The degree to which measures are free from error and therefore yield consistent results" In order to assess reliability of instrument a method of test-retest method (Zikmund, 2006) was used. Where the questionnaires (Instrument) were served to the similar respondents at two distinct times to test its stability and were found correct.

3.6 Training

Lynch (1992) distinguishes three training methods: on-the-training, training as apprentice and off-the-job training. However in this study only off-the-job training has been selected. Training for purpose of this study was defined as any training provided by organization (bank) which is intended to foster learning among staff members in such a way as they can contribute to organizational effectiveness. Formal training consists of organized and scheduled courses or instructions conducted on-the-job site by company experts or hired consultants. Further general and specific are two major types of training. A definition was given by Becker (1962) that general training as a human capital investment that advances a worker's productivity at other employers to the same degree as at the employer that provides the training. Similarly, specific training was defined as human capital investment productivity only employer provides training. In order to arrange data regarding trainings of staff members of observed banks, their annual schedules for the year 2009 were collected from those banks. Further from training schedules of different banks, data for specific and general training, data for upper and lower employees training, data for in-house and ex-house trainings and lastly data for no of trainings provided in a year were separated and collected.

CHAPTER 4:

RESULTS

4.1 Findings and Interpretation of the results

Lady using a tablet
Lady using a tablet

This Essay is

a Student's Work

Lady Using Tablet

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Examples of our work

In this study all the six hypotheses were tested, by applying technique of Correspondence Analysis to assess the impact of staff training on customer satisfaction. Correspondence Analysis technique aims at explaining inertia (variance) in cross-tabulation with n number of categories and columns. The output of this technique provides key statistics for attribute and objects being studied. Among these are absolute and relative contribution to inertia of each attribute and each object. It is useful in determining the relative association or positions of attributes and objects in the same two-dimensional map. While one may argue that chi-square analysis can be performed in such a situation, but chi-square is not effective for large numbers of categories and columns with different frequencies in the cells (like in this study number of categories and columns are involved). Behavioral scientists consider this technique as parallel to Factor Analysis. The basic job of Factor analysis is to describe relationships between variables in a low-dimensional space. On the other hand, factor analysis necessitates interval data, and the number of observations should be five times the number of variables. While a technique of Correspondence analysis needs nominal variables and can explain the relationships between categories of each variable, as well as the relationship between the variables. Correspondence analysis frequently performed through advanced statistical packages like SPSS. For this study it was performed through SPSS 14.0 version.

Further T-Test (refer table Appendix C) was also applied to ensure the accomplished results.

Since the hypotheses are:

4.1 H1: Retail banks with higher frequency of staff training will attain improved results with respect to reliabilty in terms of customer satisfication.

The hypothesis is rejected owing to no significant change in figures of of trainings and reliability. It has been observed from data that a bank which has provided less no. of trainings (112), its standard deviation is .40250 and a bank which has provided large no. of trainings (315), its standard deviation is .55836. While in other cases somewhat same pattern can be observed except two cases where S.Ds (.73011 and .63466) and training (288 and 286). Hence there is no significant difference between figures of relaibility and training. Therfore, customers of banks with high frequency of trainings and customers of banks with low frequency of trainings have highly same attitide about customer services with regard to reliability of their banks and hence no impact of higher frequency of training on customer satisfication with regard to reliability has been observed. Table 4.1 presents the basic results for reliability and trainings and customers satisfication.

Table 4-1 Impact of Training on Relibility

Total Training

N

Mean

Std. Deviation

Variance

Minimum

Maximum

112

20

3.4375

0.4025

0.162

3

4.38

138

20

3.2438

0.39419

0.155

2.25

3.88

142

20

4.0563

0.45789

0.21

3.38

4.75

286

20

3.6375

0.63466

0.403

1.88

4.88

288

20

3.1625

0.73011

0.533

1.88

4.38

294

20

3.2813

0.52389

0.274

2.5

4.5

299

20

3.8313

0.30692

0.094

3.38

4.38

303

20

3.1625

0.30913

0.096

2.38

3.63

315

20

3.475

0.43604

0.19

2.63

4.25

Total

180

3.4764

0.55836

0.312

1.88

4.88

4.2 H2: Retail banks with higher frequency of staff training will attain improved

results with respect to empathy in terms of customer satisfication.

This hypothesis is again rejected by applying a test of the Correspondence Analysis. The results for relation between higher frequency of trainings and customer satisfaction with regard to empathy are slight. It has been observed from data that a bank which has provided less no. of trainings (112), its standard deviation is .69301 and a bank which has provided large no. of trainings (315), its standard deviation is .64520 and hence very slight differnece is there. Further table no:2 shows that slight variances are existing among various figures of trainings and customer satisfication

with regard to empathy. While there is only one bank where S.Ds (.86783) of trainings (294) is high then others again which show greater change in the reponse of customers. In conclusion it has been learnt that only by increasing number of training is not enough for an organization (a Bank) to satisfy customers by its services provided by staff members after getting trainings. Table 4.2 presents the basic results for empathy and trainings and customers satisfication.

Table 4-2 Impact of Training on Empathy

Total Training

N

Mean

Std. Deviation

Variance

Minimum

Maximum

112

20

3.5

0.69301

0.48

2.75

5

138

20

3.2

0.47016

0.221

2.5

4

142

20

3.925

0.65945

0.435

2.75

5

286

20

3.6375

0.51603

0.266

2.75

4.25

288

20

3.2125

0.77492

0.6

1.75

4.75

294

20

3.2375

0.86783

0.753

1.5

4.75

299

20

3.9375

0.43585

0.19

3

5

303

20

3.125

0.4624

0.214

2.75

5

315

20

3.5875

0.6452

0.416

1.75

4.5

Total

180

3.4847

0.68308

0.467

1.5

5 4.3 H3: Retail banks with higher frequency of staff training will attain improved results with respect to responsiveness in terms of customer satisfication.

This hypothesis is being rejected on the ground that those banks which have provided less no. of trainings (112, 138) to their staff memebers have higher rate of satisfication with low variability (.36814, .32922) in term of reponsiveness in comparing to those bank which have provided higher trainings (315, 303) with higher variaibility(.68765, .70373) received by applying Correspondence Analysis. By observing various values of training and customer satisfaction from table no: 3, it has learnt that only increasing number training is not adequate but by providing less but quality trainings, banks can increase satisfaction level of their customers. Table 4.3 presents the basic results for responsiveness and trainings and customers satisfaction.

Table 4-3 Impact of Training on Responsiveness

Total Training

N

Mean

Std. Deviation

Variance

Minimum

Maximum

112

20

3.2

0.36814

0.136

3

4

138

20

3.1125

0.32922

0.108

2.75

4

142

20

4.425

2.27269

5.165

2.5

13.75

286

20

3.55

0.48395

0.234

2

4

288

20

3.425

0.74824

0.56

2

4.75

294

20

3.1375

0.56473

0.319

2

4

299

20

3.9375

0.44334

0.197

3.5

5

303

20

3.4125

0.70373

0.495

2.25

5

315

20

3.5625

0.68765

0.473

2

5

Total

180

3.5292

0.9878

0.976

2

13.75

4.4 H4: Retail banks with higher frequency of staff training will attain improved results with respect to assurnace in terms of customer satisfication.

The null hypothesis for for assurane have been proved rejected owing to whatever number of training may be provided but customers remain indifferent regarding the assurance in different banks like when 112 trainings were adminstrated by such a bank its S.D. is .53496 and in case of 138 trainings again in-significant value of S.D.(.48259) is available. Resultantly customers still consider no difference in the services of those banks with high frequency of trainings and banks with low frequency of trainings. Hence it has been concluded that customers can not be got satisifed only through increasing number of trainings. Table 4.4 presents the basic results for responsiveness and trainings and customers satisfaction.

Table 4-4 Impact of Training on Assurance

Total Training

N

Mean

Std. Deviation

Variance

Minimum

Maximum

112

20

3.375

0.53496

0.286

3

4.75

138

20

3.15

0.48259

0.233

2

4.5

142

20

4.05

0.57124

0.326

3.25

5

286

20

3.8375

0.59202

0.35

2.5

4.75

288

20

3.5

0.72548

0.526

2.25

4.5

294

20

3.6125

0.64622

0.418

2

4.5

299

20

3.9875

0.46222

0.214

3.25

5

303

20

3.4625

0.72218

0.522

2.75

5

315

20

3.5625

0.67315

0.453

2.25

4.5

Total

180

3.6153

0.65607

0.43

2

5

4.5 H5: Retail banks with higher frequency of staff training will attain improved results with respect to tangibility in terms of customer satisfication.

The results of trainings do not find any noteworthy imapct on customer satisfication with regard to tangibility and mix type of impact has been shown. Higher variability of S.D.(.77296) can be found in Table No:5 When less number of trainings (112) have been administrated. In another case from table no:5 total 303 trainings have been provided in a year by a such bank but its S.D(.32622) is very low. That means customers of this bank are more satisfied with this bank with respect to tangibility. But over owing high variability of S.D. it can be assumed that customers do not find equipment, accounting system, layout and state of cleanliness of the banks under study. This may due to their locality because mostly branches of these banks are operating in interior Sindh. Table 4.5 presents the basic results for tangibility and trainings and customers satisfaction.

Table 4-5 Impact of Training on Tangibility

Total Training

N

Mean

Std. Deviation

Variance

Minimum

Maximum

112

20

3.78

0.77296

0.597

3

5

138

20

3.49

0.73835

0.545

2

4.8

142

20

4.1

0.52915

0.28

3

4.8

286

20

4.53

0.45085

0.203

3.4

5

288

20

3.87

0.75749

0.574

2.6

5

294

20

3.31

0.85956

0.739

1

4.4

299

20

4.15

0.68017

0.463

2

5

303

20

3.23

0.32622

0.106

2.6

3.8

315

20

4.01

0.57847

0.335

3.2

5

Total

180

3.83

0.75472

0.57

1

5

4.6 H6: Retail banks with higher frequecny of staff training will attain improved results with respect to over all customer satisfication.

About testing the sixth hypothesis, as the results of other tables showed this hypothesis also rejected and it can concluded the rejection of null hypothesis. It means that by only increasing number of trainings customers cannot be come to be satisfied. In number of cases of in table no: 6 as number of trainings is increasing, on other hand satisfaction of customer with regard to reliabilty, empathy responsiveness, assurnace and tangibility is decreasing. Like when 138 trainings have delivered to staff members, S.D is .26907 and 299 trainings have been conveyed to staff memebers again somewhat low S.D. is.25704. It shows clearly that higher frequency of trainings do not have any impact customers with regard to overall satisfication but if quality trainings with even less frequency provided surely these quality trainings would make customers saisfied. Table 4.6 presents the basic results for over all customer satisfication and trainings and customers satisfaction.

Table 4-6 Impact of Training on Customer Satification

Total Training

N

Mean

Std. Deviation

Variance

Minimum

Maximum

112

20

3.468

0.32885

0.108

3

4.04

138

20

3.25

0.26907

0.072

2.64

3.8

142

20

4.102

0.61043

0.373

3.28

5.56

286

20

3.8345

0.44121

0.195

2.56

4.48

288

20

3.408

0.58307

0.34

2.28

4.44

294

20

3.3085

0.55819

0.312

2.2

4.25

299

20

3.954

0.25704

0.066

3.52

4.32

303

20

3.276

0.26656

0.071

2.96

3.84

315

20

3.628

0.40567

0.165

2.8

4.36

Total

180

3.581

0.5192

0.27

2.2

5.56

Hypotheses

Results

4.1 H1: Retail banks with higher frequency of staff training will attain improved results with respect to reliability in terms of customer satisfaction.

Rejected

4.2 H2: Retail banks with higher frequency of staff training will attain improved results with respect to empathy in terms of customer satisfaction.

Rejected

4.3 H3: Retail banks with higher frequency of staff training will attain improved results with respect to responsiveness in terms of customer satisfaction.

Rejected

4.4 H4: Retail banks with higher frequency of staff training will attain improved results with respect to assurnace in terms of customer satisfication

Rejected

4.5 H5: Retail banks with higher frequency of staff training will attain improved results with respect to tangibility in terms of customer satisfaction.

Rejected

4.6 H6: Retail banks with higher frequency of staff training will attain improved results with respect to overall customer satisfaction.

Rejected

4.2 Hypotheses Assessment Summary

CHAPTER 5:

DISCUSSION, CONCLUSION AND RECOMMENDATION

5.1 Discussion

Resultantly it has been learnt that no substantial impact has been found on customer satisifcation by providing higher frequency of training. As all hypotheses in this study have been rejected with regard to all factors of SERVQUAL model, therefore respondents clearly believe that increasing number of trainings do not contribute in their satisfication. Besides the training, all other human resources practices (Career Planning, Compensation etc.) should be followed and be provided to staff memebers in order to motivate staff memebers to learn from trainings and finally they can tranfer the knowledge, skills, attitudes and behavior they learnt from general and specific trainings.

This study also discloses that although all Pakistani banks believe in the importance of the training and their annual schedules also confirm their commitment with. On other hand results of this study unveil that banks are trying to increase number of trainings only and paying no attention that either proper conduction of training.

5.2 Conclusion

It has been learnt in this study that only by providing ever increasing opportunities of trainings for staff members, banks cannot achieve satisfaction of customers. But banks are required to measure training that either trainees have become fully involved in training sessions and also being properly trained by trainers or not. Because if trainees (staff members) are not learning knowledge, skills, attitudes and behaviors provided to them in training sessions how tranfer of training can be occured when trainess have learnt nothing. Therefore it is highly important for banks (organizations) to evaluate trainings. There are so many models are available for evaluation of trainings. In case of tangibility very mixed results were found and most of respondents were dissatisfied from this factor. Therefore banks must look in this matter and provide error-free accounting system, cleaned office spaces, properly designed layout of their branches with modern equipment.

Limitations of the study

This study was very choosy and its focus was only to measure impact of training retail banks customers. While area from which sample data drawn comprised on few areas of interior Sindh where all under study banks are operating their branches. It studied only the current market players from banking industry in Pakistan.

5.4 Recommendations

The results of this research were very advantageous for managers and bankers that quantity of training is not plentiful but quality of training and effective conduction of training sessions with competent trainers is highly important. An other very important factor is proper evaulation of training. Because training sessions are properly evaulted then possibly encourging outcomes can be achieved and this practice (eveaulation) leads to a clear commitment to invest more and more in training. More importantly training should not provided because it has become a fashion and other organizations and competitors are providing thereofre. Further alongwith training, certain other factors are also important to proivde to bank emplyees to encourage them to serve customers in well manner.

5.5 Further study

Additional studies into the following subjects are recommended:

Analyzing the impact of training on service quality in other service oriented sectors such as hotels, call centers, and airlines.