Determinants of service quality pdf

Technology has been widely adopted in service delivery. However, most major banks invest heavily on internet banking in order to protect or improve their innovator image Valakas and Chaniotakis, as customers are more likely to trust proven innovators when the internet banking market really opens Jayawardhena and Foley, EMJB Research instrument and data collection 5,1 A five sections research instrument demographics, service expectations, service performance, overall satisfaction and word-of-mouth communication was especially designed and used for data collection.

Service expectations and performance scores were measured in identical seven-point Likert scales as was overall satisfaction and intentions to recommend the bank to friends and relatives. Parasuraman et al. Respondents were adults, residing in Greece but not necessarily Greek nationals, consumers of both traditional and automated retail banking services who had at least one face-to-face banking transaction during the last month.

The major weakness of convenience sampling is that it does not provide any built-in means of eliminating or assessing sampling bias Tsoukatos, Its adequacy for conducting the appropriate statistical analyzes is discussed later on in this paper.

The research instrument was administered through personal interviews conducted on the spot inside branch premises. To minimize bias, caused by poor service, prospective respondents were approached and interviewed prior to conducting their intended transactions.

Sample size adequacy assessment. For a value exceeding 6. As regards factorial analysis, Fabrigar et al. In this study, the first PCA eigenvalue is These, in combination with the KMO statistic 0. For linear regression the minimum sample size is determined as a function of four parameters: a the probability of Type I error alpha level , b the number of predictors excluding the intercept , c the expected effect size f-square and d the desired statistical power level Cohen et al.

Scale purification. Factorial analysis. The R-type approach is employed for Exploratory Factor Analysis, as the study deals with relations between variables Stewart, A combination of PCA, for initial extraction, and varimax rotation revealed an orthogonal Tabachnick and Fidell, four-factor structure, explaining The number of factors was determined by a combination of the roots and scree-test criteria Stewart, , while the threshold for meaningful factor loading was set to 0.

Moreover, out of the 27 factor loadings, nine were in excess of 0. Reliability and validity assessment. Construct Service quality in validity is secured on the grounds that the battery of service attributes comes from retail banking theoretically well-supported literature sources including SERVQUAL Parasuraman et al.

Both regression models produced statistically significant adjusted R-square scores of 0. The latter is mainly associated with service innovation leading to increased intangibility of previously tangible service components such as physical records, archives etc.

In line with a recent similar finding of Tsoukatos and Rand in Greek retail insurance, a notable key feature of the BANQUAL-R scale is the complete absence of tangible elements, such as equipment, facilities etc, from its battery of attributes. Although no solid evidence exists for this repeated finding, it may be attributed to that customers take tangible elements of service for granted as banks and other financial institutions have been and still are investing heavily on equipment and facilities.

Last but not least, the validity assessment of the scale reconfirms that service quality is an antecedent of customer satisfaction and customer loyalty. The study contributes to the ever persisting debate over the appropriateness of generic e. Glaveli et al. Asubonteng et al. Findings are clearly in favour of the setting-specific perspective. At the same time, the study backs previous research findings indicating that service quality in the banking sector is not so much different from service quality in general Bahia and Nantel, This dimensionality provides support to the argument that although SERVQUAL cannot be the exclusive base for service quality assessment Zeithaml and Parasuraman, it should not be disregarded as it provides the skeleton on which any industry or setting specific service measure is built Parasuraman et al.

However, following our previous argument about the setting-specific perspective of service quality scales, BANQUAL-R should be treated with caution as service settings elements change with time. The absence of Tangible elements from the BANQUAL-R battery of items, consistent with the similar finding of Tsoukatos and Rand in retail insurance, implies that financial institutions in general and banks in particular should redirect resources from Tangibles to other, more important to customers, elements of service.

A plausible explanation might be that banks are by-definition considered reliable and so, Reliability is taken for granted. Similarly, the last position of Confidence implies that customers have finally overcome their concerns regarding the use of ICT in banking transactions. Limitations of the study and avenues for further research Service quality in Despite its important findings, the study suffers a number of limitations namely retail banking convenience sampling and drawing from a single banking industry.

Although, convenience sampling is common practice in management studies e. Brady et al. Nevertheless, given the time and cost constraints the sampling procedure is considered adequate. Such an examination would strengthen the value of this study. It is obvious that a replication of this study on evidence from a number of retail banking industries would give the opportunity to examine more combinations of situational variables among which culture.

Finally, the evolution of service expectations is related to the financial market conditions Hennig-Thurau et al. This leads to the necessity of re-examining the scale after the current financial crisis will come to an end.

It builds on previous research regarding service quality measurement in retail banking, especially in view of current financial crisis conditions creating increased needs for constant service monitoring. With regard to practice the study provides a reliable and valid scale for measuring service quality in retail banking that can be exploited in managerial decision making in banking.

However, further research is needed to improve our knowledge on service quality measurement in retail banking. The study provides the methodological framework for its replication in a multitude of combinations of situational variables in domestic or international settings.

References Aldlaigan, A. Anderson, E. Angur, M. Asubonteng, P. Balestrini, P. Beckett, A. Berry, L. Brady, M. Capon, N. Chi Cui, C. Cohen, J. The bank asked for the study to be limited to four branches, and it was agreed that these would cover two large and two small branches; one in each category was chosen to be a rural branch and the other an urban branch.

The bank agreed to provide the names and addresses of a 10 per cent sample of its customers at the four branches. The sample of customers was identified by selecting every tenth customer from the alphabetical computer records in each area this avoided selecting customers with multiple bank accounts.

If a selection was a company account, the previous account was selected. More than 10 per cent of the questionnaires were returned, yielding completed questionnaires. With the 6,5 exception of age range, these demographics were consistent with the population of over 16 year-olds with bank accounts. Either all the samples in all four branches were biased towards this age group, or perhaps this age group included more people who were prepared to give the time needed 60 to complete these questionnaires.

Given the high degree of correlation between the age profiles between the branches variance ratio was 0. Classification of anecdotes A number of the responses were found to be unusable. Some of the respondents had left one or other of the categories blank.

Just five had left the two main questions blank but completed the demographic questions. These responses were excluded, so the net number of usable satisfaction anecdotes was and the number of dissatisfaction anecdotes was The richness of the remaining anecdotes was surprising. Most respondents described in considerable detail their experiences of the incident in question. Many of the respondents provided anecdotes exceeding words in length; some, however, were very short — on occasions, just a few words.

The average anecdote length was just over 30 words. This was then recorded on an index card. Two sets of cards were created, one for the anecdotes relating experience of good service the satisfiers and one for the anecdotes of poor service the dissatisfiers.

The summaries were then classified independently by two researchers, using the 17 quality determinants provided by Johnston and Silvestro as a base. Discrepancies were identified, discussed and resolved. In most cases, this was a straightforward, though time-consuming, activity.

However, three problems arose. This actual provision of assistance did not fit precisely with any of the categories. The impression of being willing, however, is not quite the same as actually providing help. The title and definition of this quality determinant was amended see the Appendix. Second, there was an overlap between security and integrity that was Determinants of highlighted by a difficulty in deciding on the final classification in a number of service quality cases.

Both definitions had some concern for confidentiality. To remove this overlap, it was decided to define integrity as being concerned primarily with honesty, justice, fairness and trustworthiness, and security as being concerned with feelings of safety and the maintenance of 61 confidentiality see the Appendix. Third, five anecdotes did not fit, even closely, with any of the categories. In some cases the worker has taken the initiative and changed the service or the product in some way to suit the particular needs of the customer.

In another situation, although it was bank policy not to give cheque accounts to children under a certain age, the service worker was able to make a special arrangement for the child involved. These examples are of service that goes beyond attentiveness the actual or apparent willingness to serve , or the availability of goods and services, or responsiveness the prompt response to a request for service and, indeed, beyond competence and commitment the carrying out of correct procedures and the expertise and professionalism with which they are carried out.

To deal with these situations a further determinant was added — flexibility see the Appendix. The notion of flexibility exercised by service workers is not new to the literature. The customization of a service for an individual customer has been used as a key dimension in classifying services see, for example, Chase, ; Johnston and Morris, ; Maister and Lovelock, The idea of flexibility as a strategy has also been discussed in the manufacturing literature see, for example, Slack, , and more recently in the service literature see, for example, Fitzgerald et al.

Analysis and discussion It is interesting to note that out of the returns, there were more anecdotes relating to satisfaction than there were to dissatisfaction Furthermore, several respondents explained that they had to go back ten or 20 years to find an incident that led to a feeling of dissatisfaction.

This should be compared with just 12 per cent who left the very satisfied question blank or said they had never felt very satisfied. Thirteen per cent gave very brief replies to this question, stating that they were satisfied with the service but not explaining why. This, however, 6,5 makes analysis of the satisfaction and dissatisfaction anecdotes more significant, as over 5 per cent of the dissatisfaction anecdotes expressed either a desire or an intention to change banks, and a small proportion had just done so.

The amount of high 62 levels of satisfaction and dissatisfaction encountered might be small, but their results could be seen to be significant for the retention and capture of customers. There was no significant difference between any of the locations at over the 99 per cent confidence level. Pairwise comparisons of variances yielded rs of between 0. The frequency of mention for the four locations were then combined see Table I.

In all, there were references covering 17 of the 18 quality determinants. The physical comfort of the service environment and facilities was not mentioned in any of the anecdotes. Most of the references were satisfying. Overall, there was an average of 1. Just seven determinants accounted for 80 per cent of the mentions and eight accounted for less than 5 per cent. The null hypothesis was that there was no difference between the satisfiers and dis- satisfiers.

The null hypothesis was rejected at the 90 per cent level, suggesting that the determinants associated with dissatisfaction are significantly different from those that create satisfaction. Furthermore rs was about 0. This suggests no correlation rather than an inverse correlation. Berry et al. This does not seem to be the case, e. There were only four exclusive determinants of satisfaction or dissatisfaction with the bank: 1 integrity dissatisfaction ; 64 2 commitment satisfaction ; 3 aesthetics dissatisfaction ; and 4 cleanliness satisfaction.

Given that aesthetics and cleanliness had very few mentions and that the other 13 determinants lead to some level of dissatisfaction or satisfaction, it would appear that most determinants can be a source either of satisfaction or of dissatisfaction. The most frequently mentioned sources of satisfaction were attentiveness, responsiveness, care and friendliness accounting for out of the mentions — 74 per cent.

All of these determinants concern the intangible nature of the service and correspond to Berry et al. This seems to be somewhat at odds with their later contention that empathy was the least important of the five dimensions Zeithaml et al. The main source of dissatisfaction with the bank was integrity: the honesty, justice, fairness and trust with which customers are treated by the service organization. This includes the ability to maintain confidence and mutual trust between customer and service provider.

The other predominant dissatisfiers were reliability, responsiveness and availability — which have both tangible and intangible aspects — and functionality, which is purely tangible.

This would add some support to Zeithaml et al. It is interesting to note that the top ten determinants in terms of frequency of mention are concerned primarily with the intangible side of service reliability and availability, which in some cases referred to the reliability or availability of associated goods or equipment. It would seem that the intangible aspects of the staff-customer interface have significant effect, both negative and positive, on service quality. Responsiveness, as Berry et al.

This study not only supports that contention, but emphasizes that it is a crucial factor, as it is a key component in providing satisfaction and the lack of it is a major source of dissatisfaction.

Reliability, however, was tenth on the list of satisfiers, accounting for only 2 per cent of mentions, and second in importance as a dissatisfier. This partly conflicts with Berry et al. However, Berry et al. Reliability is important, but affects dissatisfaction more than it does satisfaction. There is a need to try to provide as reliable a service as possible, but moving an 65 unreliable one to a reliable one will not necessarily result in a high level of customer satisfaction.

The quality determinants identified as predominantly satisfying or dissatisfying were the same as those in the earlier study by Johnston and Silvestro , though the ordering was slightly different. One key difference between this study and that was that the percentages were much more pronounced in this single industry survey. The main sources of dissatisfaction are integrity, reliability, responsiveness, availability and functionality.

Furthermore, this investigation into a subset of customers — personal bank account holders — in a single organization not only provided similar results to the broader-based study by Johnston and Silvestro , but gave more pronounced frequencies.

This might suggest that for a single organization, although the same satisfying and dissatisfying factors might apply, a number of the factors are relatively more important than others. Implications for service managers It would appear that increasing the number of satisfying experiences is a relatively easy and self-supporting recipe for success.

There is a need to engender a helpful, caring, friendly and committed approach in staff. Additional satisfaction can also be gained by providing the service more quickly than expected. The presence of these satisfying factors may also create positive, virtuous circles, reinforcing the bond between contact staff and customers.

Reducing the number of dissatisfying experiences may be less easy. For the bank, this would suggest that there is a need to consider the stocking policies of currencies, the selection and maintenance of equipment, the removal of potential errors from the complex cheque-processing and standing-order systems, for example.

These are complex issues requiring more systemic solutions than merely the encouragement of appropriate traits in front-office staff. Attempts to increase satisfaction rather than the removal of dissatisfaction maybe has been the downfall of many quality improvement or so-called TQM programmes.

Some such programmes have focused on the activities of the front-office staff — smile campaigns, for example, without getting to grips with the, albeit more difficult, issues of dissatisfaction removal.

Limitations The study has several limitations and was based on a number of assumptions which need to be recognized and perhaps overcome in future research.

It is not appropriate for this study to make the claim that the findings are applicable to all industries. However, it is hoped that the study can be reproduced to test the extent of the applicability of the findings. A major assumption in the work is that service quality can be described and captured by the 18 quality determinants.

This may not be the case. Examines the assessment of service quality as perceived by consumers. Identifies and ranks the attributes for good and poor quality of five selected types of services. The five types of services … Expand. View 3 excerpts, references background. This research investigates the antecedents and consequences of customer satisfaction.

We develop a model to link explicitly the antecedents and consequences of satisfaction in a utility-oriented … Expand. View 2 excerpts, references background. The existing literature strongly supports the notion that consumer perceptions of service quality, consumer satisfaction, and service value are fundamentally linked to organizational strategies and … Expand.

View 1 excerpt, references background. Quality Measurement in Service Industries. A number of writers in the service management literature have observed that because service quality is difficult to measure there is a danger that service organisations will neglect to measure it, … Expand. The authors respond to concerns raised by Parasuraman, Zeithaml, and Berry about the relative efficacy of performance-based and perceptions-minus-expectations measures of service quality.

They … Expand. Abstract The definition and measurement of service quality as a 5-dimensional construct, as in SERVQUAL, appears to suffer from a number of methodological shortcomings.

A review of the potential … Expand. The motivation to work. Quality work that fosters job satisfaction and health enjoys top priority in industry all over the world. This was not always so. Until recently analysis of job attitudes focused primarily on human … Expand. Marketing Services: Competing Through Quality. Excellent service is the foundation for services marketing, contend Leonard Berry and A.

Parasuraman in this companion volume to "Delivering Quality Service. Highly Influential. View 5 excerpts, references background. View 2 excerpts, references results.