article on service gap of prime & sonali bank

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SSeerrvviiccee GGaapp ooff SSoonnaallii BBaannkk aanndd

PPrriimmee BBaannkk

11BByy MMdd.. DDeelloowwaarr HHoossssaaiinn

Service Gap of Sonali Bank and Prime B

1 Md. Delowar Hossain, student of Department of Marketing (12th Batch), University of Dhaka.

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AABBSSTTRRAACCTT

BBootthh ppuubblliicc aanndd pprriivvaattee bbaannkkss ppllaayy aa ggrreeaatt rroollee iinn tthhee eeccoonnoommyy,, mmaakkiinngg uupp oonnee ooff tthhee

bbiiggggeesstt pprroovviiddeerrss ooff sseerrvviicceess iinn tthhee BBaannggllaaddeesshhii eeccoonnoommyy.. IInn tthhee ccuurrrreenntt bbaannkkiinngg

eennvviirroonnmmeenntt,, sseerrvviiccee qquuaalliittyy iiss oonnee ooff tthhee mmaaiinn wweeaappoonnss,, wwhhiicchh eennaabblleess tthhee bbaannkkss ttoo

ddiiffffeerreennttiiaattee ffrroomm eeaacchh ootthheerr.. IItt iiss ssaaiidd tthhaatt sseerrvviiccee qquuaalliittyy hhaass bbeeccoommee aann iimmppoorrttaanntt

ffaaccttoorr ttoo ssuurrvviivvee aanndd ssuucccceeeedd iinn tthhee bbaannkkiinngg sseeccttoorr.. HHeennccee pprroovviiddiinngg aa bbeetttteerr sseerrvviiccee

qquuaalliittyy iiss vviittaall,, aass bbaannkkss hhaavvee ttoo ccoommppeettee ffoorr ccuussttoommeerrss.. IInn tthhiiss ppaappeerr,, tthhee ffaaccttoorrss

lleeaaddiinngg ttoo tthhee sseerrvviiccee pprroovviiddeerr ggaappss iinn ccaassee ooff SSoonnaallii BBaannkk aanndd PPrriimmee BBaannkk hhaavvee bbeeeenn

iiddeennttiiffiieedd aanndd mmeeaassuurreedd.. TThhiiss ssttuuddyy hhaass aallssoo ffooccuusseedd oonn tthhee rreellaattiioonnsshhiipp bbeettwweeeenn tthhee

pprroovviiddeerr ggaappss ooff tthheessee bbaannkkss aanndd tthhee ““ggaapp bbeettwweeeenn eexxppeecctteedd sseerrvviiccee aanndd ppeerrcceeiivveedd

sseerrvviiccee”” ((ccuussttoommeerr ggaapp)).. IInn tthhiiss ppaappeerr,, tthheerree iiss aann eennddeeaavvoorr ttoo rreeccooggnniizzee wwhheetthheerr tthhee

sseerrvviiccee pprroovviiddeerr ggaappss aanndd tthhee ccuussttoommeerr ggaapp aarree ccoorrrreellaatteedd.. TThhiiss ssttuuddyy ttaakkeess iinnttoo

ccoonnssiiddeerraattiioonn tthhee pprroobblleemmss ooff oorrggaanniizzaattiioonnaall qquuaalliittyy ggaappss wwhheerree tthhee qquuaalliittyy lloosssseess

ooccccuurr.. MMaannyy sseerrvviiccee qquuaalliittyy ggaappss aarree rreevviieewweedd iinn tthhiiss ppaappeerr.. TThhiiss ssttuuddyy wwiillll hheellpp tthhee

mmaannaaggeemmeenntt ooff tthheessee bbaannkkss ttoo kknnooww wwhheerree tthhee sseerrvviiccee ggaappss lliiee aanndd hhooww ttoo cclloossee tthhee

ggaappss ffoorr pprroovviiddiinngg qquuaalliittyy sseerrvviiccee ttoo iittss cclliieennttss..

11.. IINNTTRROODDUUCCTTIIOONN

The economy of a country is largely dependent on banking sector. In this case,

Bangladesh is not exceptional. Both Sonali Bank and Prime Bank are playing a great

role to develop the economy of Bangladesh. Client expectations are increasing day

by day from these banks. That is why; managers in Sonali Bank and Prime Bank are

under increasing pressure to demonstrate that their services are customer-focused

and that continuous performance improvement is being delivered. In spite of having

resource constraints, the banks must concentrate whether the customer

expectations are properly understood and measured. They will also focus on

whether any gaps from client point of view are identified. This information then

assists a manager in identifying cost-effective ways of closing service quality gaps

and of prioritizing which gaps to focus on – a critical decision given scarce

resources.

One of the aims of this study involves the use of service gap model in order to

ascertain any actual or perceived gaps between customer expectations and

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perceptions of the service offered. Another aim of this paper is to point out how

management of these banks can close these gaps effectively.

22.. LLIITTEERRAATTUURREE RREEVVIIEEWW

The service sector is expanding at an increasing rate and is becoming intensely

competitive (Chen, Gupta and Rom, 1994; Johnson, Dotson and Dunlap, 1988).

Services can be defined as any activity or benefit that one party offers to another

that is essentially intangible and does not result in ownership of anything. Its

production may or may not be tied to a physical product. A company’s offerings

often include some services (Lovelock Christopher, 2004). The nature of most

services is such that the customer is present in the delivery process. This means

that the perception of quality is influenced not only by the ‘service outcome’ but

also by the ‘service process’ (Ghobadian Abby, Speller Simon & Jones Matthew,

1994).

Many researchers and authors define service qualities in different ways. Service

quality is defined as how well the service meets or exceeds the customers’

expectations on a consistent basis (Crosby, 1979; Parasuraman, Zeithaml and

Berry, 1985). Parasuraman et al., Liljander, and Tore agreed that service quality

is the difference between expectation and the performance of the service or the

perception of the customer. Parasuraman, Zeithaml, and Berry (1985) defined

service quality as “the comparison between customer expectations and

perceptions of service.” Liljander and Tore (1992) defined service quality as “the

difference between what a service company should offer and what it actually

does offer.” In some earlier studies, service quality has been referred as the

extent to which a service meets customers’ needs or expectations (Lewis &

Mitchell, 1990; Dotchin & Oakland, 1994).

Parasuraman, Zeithaml, and Berry (1988, p. 16) define perceived service quality

as “a global judgement, or attitude, relating to the superiority of the service.”

Additionally, they link the concept of perceived service quality to the concepts of

perceptions and expectations as follows: “perceived quality is viewed as the

degree and direction of discrepancy between consumers’ perceptions and

expectations” (Parasuraman, Zeithaml, and Berry 1988, p. 1). In the services

marketing literature, perceptions are defined as consumers’ beliefs concerning

the service received (Parasuraman, Zeithaml, and Berry 1985) or experienced

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service (Brown and Swartz 1989). Expectations are defined by Parasuraman,

Zeithaml, and Berry (1988, p.17) as “desires or wants of consumers, i.e., what

they feel a service provider should offer rather than would offer.”

Service quality is so important that companies have gone to great efforts to

evaluate and keep records of service quality levels (Hauser and Clausing, 1988;

Phillips, Chang and Buzzell, 1983; Zeithaml, Parasuraman and Berry, 1990). Not

surprisingly, there are strong linkages between service quality dimensions and

overall customer satisfaction (Anderson and Sullivan, 1993). Many industries

are paying greater attention to service quality and customer satisfaction, for

reasons such as increased competition and deregulation (Reichheld & Sasser,

1990; Schlesinger & Heskett, 1991). The academic literature proposes that

customer satisfaction is a function of the discrepancy between a consumer’s

prior expectation and his or her perception regarding the purchase (Churchill &

Surprenant, 1982; Oliver, 1977). As reported in the relevant literature high

quality service helps to generate customer satisfaction, customer loyalty, and

growth of market share by soliciting new customers, and improved productivity

and financial performance (Lewis, 1993; Andereson, Fornell, & Lehmann, 1994).

Parasuraman and his colleagues developed the service quality measurement

model known as SERVQUAL. This model is based on a comparison between the

customer's expectations of the standard of service he/she will receive and

his/her perception of the standard of service that is actually delivered.

Furthermore, Parasuraman et al. see their service quality measurement model as

one of the models that has been shown to enjoy a high degree of validity and

stability.

The most well known model is the model of Parasuraman et al. (1985) which is

widely utilized in the literature. The model attempts to show the salient

activities of the service organization that influence the perception of quality.

Moreover, the model shows the interaction between these activities and

identifies the linkages between the key activities of the service organization or

marketer, which are pertinent to the delivery of a satisfactory level of service

quality. The links are described as gaps or discrepancies: that is to say, a gap

represents a significant hurdle to achieving a satisfactory level of service quality

(Ghobadian et al., 1994).

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Gap 5

Consumer

Company

Gap 1 Gap 3 Gap 4

Gap 2

Source: Parasuraman, A., Zeithaml, V., Berry, L. L. (1985, 1998)

Figure 1: Conceptual model of service quality Gap

The upper part of the model (Figure 1.) includes phenomena tied to the consumer, while the lower part shows phenomena tied to the supplier of services. The expected service is the function of earlier experiences of the consumer, their personal needs and oral communication. Communication with the market also influences the expected service. Experienced service, here called perceived service, is the result of a series of internal decisions and activities. The management’s perceptions of the consumer’s expectations are the guiding principle when deciding on the specifications of the quality of service that the company should follow in providing service. If there are differences or discrepancies in the expectations or perceptions between people involved in providing and consuming services, a “service quality gap” can occur, as shown in figure 1. Since there is a direct connection between the quality of service and the satisfaction of clients in banking industry, it is important for the company to spot a gap in the quality of service. The primary thesis of this model is that the service quality shortfall (i.e. Gap 5, the

gap between customer service expectations and perceptions) is the result of a series

Word of Mouth

Communication Personal Needs Past Experience

Expected Service

Perceived Service

Service Delivery

Service Standards

External

Communication to

Customers

Management Perceptions of

Consumers’

Expectation

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of shortfalls within the service provider’s organization (i.e. Gaps 1-4). Thus,

improving the quality of service experienced by customers (i.e. closing Gap 5)

requires diagnosing the causes of and correcting the internal deficiencies (i.e. Gaps

1-4) (Parasuraman, 2004).

Luk and Layton (2002) developed the traditional model of Parasuraman et al.

(1998) by adding two more gaps. They reflect the differences in the understanding

of consumer expectations by manager and front-line service providers and the

differences in consumer expectations and service providers' perception of such

expectations. This model is illustrated in Figure 2.

Source: Parasuraman et al., 1985; Curry, 1999; Luk and Layton, 2002

Word of mouth

Communications

Personal needs

Past experience

Expected service

Consumer

Gap5 servic

e

Perceived service

Gap6 servic

e

Provider

Service delivery

(including pre-and

post contacts)

Gap4service

External

communications

to customers

Gap3 service

Gap1service

Employee

perceptions of consumers'

expectation

Translation of

perceptions into

service quality

specifications

Gap2 service

Gap7 service

Management

perceptions of

Consumers’

expectations

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Figure 2: Conceptual model of service quality Gap. These seven gaps are described below briefly.

GAP 1: Customers’ expectations versus management perceptions: This gap

occurs because of the lack of a marketing research orientation, inadequate

upward communication and too many layers of management.

GAP 2: Management perceptions versus service specifications: It happens

because of inadequate commitment to service quality, a perception of

unfeasibility, inadequate task standardization and an absence of goal setting.

GAP 3: Service specifications versus service delivery: The third gap takes

place because of role ambiguity and conflict, poor employee-job fit and poor

technology-job fit, inappropriate supervisory control systems, lack of perceived

control and lack of teamwork.

GAP 4: Service delivery versus external communication: It arises from

inadequate horizontal communication and propensity to over-promise.

GAP 5: The discrepancy between customers’ expectations and their

perceptions of the service delivered: Because of the influences exerted from

the customer side and the shortfalls (gaps) on the part of the service provider,

the fifth gap that is known as customer gap, happens.

GAP 6: The discrepancy between customers’ expectations and employees’

perceptions: This gap is created because of the differences in the understanding

of customers’ expectations by front-line service providers.

Gap7: The discrepancy between employee’s perceptions and management

perceptions: The seventh gap happens because of the differences in the

understanding of customers’ expectations between managers and service

providers.

According to Brown and Bond (1995), "the gap model is one of the best received and

most valuable contributions to the services literature". The model identifies seven

key discrepancies or gaps relating to managerial perceptions of service quality, and

tasks associated with service delivery to customers. The first six gaps (Gap 1, Gap 2,

Gap 3, Gap 4, Gap 6 and Gap 7) are identified as functions of the way in which

service is delivered, whereas Gap 5 pertains to the customer and as such is

considered to be the true measure of service quality.

At past many studies were done using the service gap model and SERVQUAL model.

Such as Ivanković Jadranka (2006) used both SERVQUAL and service gap model in

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food industry. He focused on skillful personnel to provide better service to the

customers. He also emphasized on CRM to understand the customer needs and

expectations.

Alam M.M.D. and Momotaz S.N. (2008) measured the Diagnostic Centers’

expectations and perception about service of local customized software of

Bangladesh. They found out the gap between the clients’ expectations and

perception using SERVQUAL model. They also showed the relationship between the

five dimensions (reliability, responsiveness, assurance, empathy and tangibility) and

client satisfaction.

Urban W. (2009) also worked for service industry on Poland. He used the service

gap model developed by Parasuraman et al. (1985). He highlighted the four provider

gaps (GAP 1, GAP 2, GAP 3, and GAP 4) to determine how much internal gaps existed

in the service industry in Poland.

There have been a number of studies of retail bank service quality. Most of these studies have measured service quality by replicating or adapting the SERVQUAL model. In the study of service quality in the banking sector in Turkish banking, Yavas et. al.

(1997), focused on the relationship between service quality on consumer

satisfaction, complaint behaviour and commitment. Their study found that overall

service quality was a significant determinant customer satisfaction, complaint

behaviour and commitment. Bahia and Nantel (2000) suggested alternative scale for

the measurement of perceived service quality in retail banking. Their study found

that when comparing BSQ dimensions and SERVQUAL, it seemed that BSQ

dimensions were more reliable than SERVQUAL. Jabnoun and Al-Tamimi (2002)

examined service quality at UAE commercial banks using SERVQUAL model and

included thirty items in the five dimensions of SERVQUAL. When they tested the

developed instrument for reliability and validity, they found that the instrument had

only three dimensions. Arasli et al. (2005) studied service quality perceptions of

Greek Cypriot bank customers using SERVQUAL model. They however, extend the

study by looking at the relationship between service quality, customer satisfaction

and positive word of mouth. They found that the expectations of bank customers

were not met where the largest gap was obtained in the responsiveness-empathy

dimension. In addition, the reliability items had the highest effect on customer

satisfaction, which in turn had a statistically significant impact on the positive word

of mouth. Finally, in 2008 Amin and Isa examined the relationship between service

quality perception and customer satisfaction in Malaysian Islamic banking. Amin

and Isa found that the relationship between service quality and customer

satisfaction was significant.

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From the literature review it can be easily known that most of the past studies

emphasized on SERVQUAL model to analyze the service quality of a service firm.

Only Urban W. (2009) used four provider gaps (GAP 1, GAP 2, GAP3, and GAP4) of

the service gap model to find out the internal gaps of the service industry. In this

study, I have done same job. But I have focused on six provider gaps (GAP 1, GAP 2,

GAP 3, GAP 4, GAP 6, and GAP 7). I have also shown the relationship between these

provider gaps and the customer gap (GAP 5).

Variation between

expected service

& perceived service

(CUSTOMER GAP)

a

b

c

e

f

Management’s

unawareness about

employees’

perception of customers’

expectations (GAP 7)

Employees’

unawareness

about customers’

expectations

(GAP 6)

Management’s

unawareness about customers’ expectations

(GAP 1)

Not selecting right

service designs &

standards (GAP 2)

Not delivering to

service standards

(GAP 3)

Figure 3: Key factors leading

to the customer gap

d

Not matching

performance to

promises (GAP 4)

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In this paper, I have used service provider gaps as independent variables. These are

a. Management’s unawareness about customers’ expectations (GAP 1)

b. Not selecting right service designs & standards (GAP 2)

c. Not delivering to service standards (GAP 3)

d. Not matching performance to promises (GAP 4)

e. Employees unawareness about customers’ expectations (GAP 6)

f. Management’s unawareness about employees’ perception of customers’

expectations (GAP 7)

Here dependent variable = “Variation between expected service & perceived service

(CUSTOMER GAP)”

Figure 3 shows how the provider gaps, the independent variables, lead to the

customer gap (GAP 5).

In this paper, I have focused on following factors to measure the provider gaps.

a. Management’s unawareness about customers’ expectations (GAP 1) Whether the managers perfectly understand customers’ expectations Whether the management emphasizes on customer relationship Whether the marketing research conducted in the company concerns

service quality b. Not selecting right service designs & standards (GAP 2)

Whether quality standards of service reflect managers’ perception of customers’ expectations

Whether there is the same pressure on the quality improvement like on the sale of services

Whether equipments to deliver service are modern looking Whether physical facilities are visually appealing

c. Not delivering to service standards (GAP 3)

Whether the service is provided perfectly according to the set standards and specifications

Whether employees have appropriate skills to realize the service well Whether employees know which aspects of service are particularly

important from customer point of view Whether employees are eager to learn new things for better service

providing

d. Not matching performance to promises (GAP 4) Whether advertisement and other communications perfectly reflect

services which are provided Whether advertisement announcements have an effect on the contact

personnel

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Whether there are adequate communications to educate the customers

e. Employees unawareness about customers’ expectations (GAP 6)

Whether employees enquire customers’ expectations Whether employees have friendly interaction with customers Whether employees give individual attention to every customer

f. Management’s unawareness about employees’ perception of customers’

expectations (GAP 7) Whether the managers encourage contact personnel to share

customers’ opinion Whether the management has frequent face-to-face contact with the

contact personnel Whether there are only a few layers between contact personnel and

top management

3. METHODOLOGY The data of this paper have been collected both from primary and secondary

sources of information. Primary data have been collected from the respondents of

Sonali Bank and Prime Bank situated in Dhaka City through questionnaire. And the

secondary data have been collected from various published materials and Internet

resources in 2010. Major findings of the study are represented in the tabular and

text format.

Types of Research:

Since the past studies identified the factors affecting the service quality, I did not

used exploratory research here. I have conducted ‘Descriptive Research’ to measure

the extent of the problem. I have also conducted ‘Regression Analysis’ to show how

the provider gaps affect the customer gap.

Sources of Data:

This study covered two types of data, which are

1. Primary data:

Survey method

Personal observation

2. Secondary data:

Web information

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Journals

Published reports on service quality of Sonali Bank and

Prime Bank

Sampling Process:

The target population for the questionnaire is defined as below:

Sampling and Sample size:

I have used simple random sampling technique. That means I have collected data

from the respondents randomly.

The sample size for Sonali Bank is 27. 81.5% of respondents are male and 18.5% are

female. Among the respondents, 11.1% are students, 70.4% are service holder, 7.4%

are businessperson, 3.7% are teachers, and 7.4% are others.

I have selected 26 respondents for Prime Bank. Among them 69.2% are male and

30.8% are female. Here 38.5% are students, 23.1% are service holder, 23.1% are

businessperson, and 15.4% are female.

Questionnaire Development:

I have used a structured questionnaire here to collect data. The questionnaire has

been developed in a way that reveals the respondent’s response related to each of

the independent variables. The questionnaire has been formed on seven point Likert

Scale to measure the degree of perception of respondents on each variable. The

respondents were asked to rate statements based on their perception; from 1 to 7.

1= Strongly Disagree 2= Disagree 3= Some what Disagree

4= Neutral 5= Some what Agree 6= Agree

7= Strongly Agree

Target Population

Elements

Service holder

Business people

Students

Teacher

Doctor

Others

Area

Dhaka City

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Data analysis:

Since the first purpose of this study is to measure the provider gaps, I have found out the average (mean) value of each sub-variable under the independent variables (provider gaps) and then subtracted the mean value from the maximum value 7 to find out the gap. Thus, determining the average of these sub-variable gaps, I have determined and measured the each provider gap. Another purpose of this paper is to determine the correlation between the provider gaps (independent variables) and customer gap (dependent variable). I have also detected and analyzed the relationship between them using a linear regression analysis. In this analysis, the coefficient correlation indicates how strong the relationship is. Here both t-value and significance designate the nature and importance of the relationship.

4. RESULTS & FINDINGS In this research the gaps have been calculated by subtracting the found score from

the maximum score 7. Past studies suggest that service provider gaps affect the

customer gap i.e. the gap between customer expectation and customer perception of

service. In this study also, a relationship between the provider gaps and customer

gaps is reviewed. The results are shown in the following tables.

A. SONALI BANK

Descriptive Analysis Average gap score of seven gaps is 3.922333. Though the score of the smallest gap,

gap 1 is higher than the average score of seven gaps, it shows that the management

has somewhat knowledge about the customer expectations. Gap between customer

expectations and employees’ perceptions (gap 6) is found as the largest quality gap.

Table 1: Gap 1 according to the research

Research items (GAP 1) N Mean

Score SD GAP

Managers perfectly know customers’ expectations. 27 3.6296 1.86358 3.3704 Management emphasizes on customer relationship 27 3.1481 1.51159 3.8519 Marketing research conducted in the company concerns service quality.

27 2.2593 1.63125 4.7407

Gap between customers’ expectations and management perceptions

3.6296 1.86358 3.3704

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Research items (GAP 2) N Mean Score

SD GAP

Quality standards of service reflect managers’ perception of customers’ expectations.

27 2.5926 1.71552 4.4074

There is the same pressure on the quality improvement like on the sale of services.

27 3.1481 1.23113 3.8519

Equipments to deliver service are modern looking.

27 3.5185 1.88864 3.4815

Physical facilities are visually appealing. 27 2.4815 1.57798 4.5185 Gap between management perceptions and service specifications

2.9352 1.04604

4.0648



SD GAP

The service is provided perfectly according to the set standards and specifications

27 2.9259 1.43918 4.0741

Employees have appropriate skills to realize the service well

27 3.4815 1.78391 3.5185

Employees know which aspects of service are particularly important from customers point of view

27 3.3333 1.73205 3.6667

Employees are eager to learn new things for better service providing

27 2.8519 1.83353 4.1481

Gap between service specifications and service delivery

3.1481 1.15663

3.8519



SD GAP

Advertisement and other communications perfectly reflect services which are provided

27 3.0000 1.35873 4

Personal selling perfectly reflects services that are

provided 27 3.1111 1.33973

3.8889 Advertisement announcements have an effect on the

contact personnel 27 3.6667 1.44115

3.3333 There are adequate communications to educate the

customers 27 2.8148 1.41522

4.1852 Gap between service delivery and external communication

3.1481 1.06125 3.8519

15



SD GAP

Employees enquire customers’ expectations 27 1.8889 .80064 5.1111 Employees have friendly interaction with customers 27 3.0370 1.45395 3.963 Employees give individual attention to every

customer 27 2.7407 1.60750

4.2593 Gap between customer expectations and employees’ perceptions

2.5556 1.05003

4.4444 Table 6: Gap 7 according to the research


Score SD GAP

the management encourages contact personnel to share customers opinion

27 3.0000 1.35873 4

the management has frequently face-to-face contact with the contact personnel

27 3.1111 1.21950 3.8889

there are only a few layers between contact personnel and top management

27 3.0370 1.60484 3.963

Gap between employee’s perceptions and management perceptions

3.0494 1.13869

3.9506 The average of seven gaps 3.077667

3.922333

Though in this study, gap 1 is appeared as the lowest gap in case of Sonali Bank; still

there exists a significant gap. This gap refers that the management is yet unable to

understand the customer expectations properly. We see that insufficient marketing

research is a major contributor to gap 1. Customer relationship is not focused in this

bank.

Empirical findings show that service specifications and design (gap 2) exerts a

significant impact on service quality. It is the second largest internal gap of Sonali

Bank. Lack of customer driven standard and poor visually appealing physical

facilities of this bank, increase the customer dissatisfaction in a great extent.

We see here that gap 6 represent the largest quality gap for Sonali Bank. Lack of

friendly interaction between the employees and the customers and employees

unawareness of customer expectations are great impediments to improve service

quality of Sonali bank.

Score of gap 3, gap 4, and gap 7 are also very close to the score of largest gap. This

indicates that there is a lack of coordination among the inter and intra departments

16

of Sonali Bank. That is why; large service gaps exist which decrease service quality

and causes poor customer satisfaction.

Regression analysis

Table 7: Model summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .698a .487 .333 1.36580

a. Predictors: (Constant), Average score of GAP 7, Average score of GAP 1, Average score of GAP 6, Average score of GAP 3, Average score of GAP 2,

Average score of GAP 4 Positive Value of coefficient correlation (R) indicates that there is a positive

relationship between the independent and dependent variables. Value of R is 0.698,

which indicates there is a moderate relationship between the dependent variable

(Variation between expected service and perceived service) and the independent

(GAP 1, GAP2, GAP 3, GAP 4, GAP 6, and GAP 7) variables considered at the model.

The value of coefficient of determination (R2) is 0.487 and this specifies that 48.7%

of the variation in the dependent variable be explained by the independent

variables. That means 51.3% variation in the dependent variable is clarified by

other external variables.

Table 8: Coefficient correlation

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Analysis of co-efficient provides us which independent variables have significant

relationship with the dependent variable. So,

Variation between expected service and perceived service (Customer gap) (Ŷ) = 1.694 +

0.102* X1 + 0.928* X2+ 0.424* X3 -0.753* X4 + 0.38* X5 -0.206* X6

Where, X1 = GAP 1, X2 = GAP 2, X3 = GAP 3, X4 = GAP 4, X5 = GAP 6, and X6 = GAP 7

From the table it can be seen that only the significance level for GAP 2 (gap between

management perceptions and service specifications) (0.006), and GAP 4 (gap

between service delivery and external communication) (0.036) are less than level of

significance (0.05). Hence, there may have a significant relationship between the

“Customer gap” and GAP 2 and GAP 4. But for all other variables, significance level is

higher than 0.05. So, we can conclude that there may not have any significant

relationship between “Customer gap” and GAP 1, GAP 3, GAP 6, and GAP 7.

B. PRIME BANK

Descriptive Analysis

The average gap score of seven gaps is 2.4279. The score of smallest gap, gap 2

shows that service design standard and service specifications of Prime Bank are

desirable. According to the research, service specifications are considered as the

smallest problem concerning quality losses. In case of Prime Bank, Gap between

customer expectations and employees’ perceptions (gap 6) is found as the largest

quality gap.



Score SD GAP

Managers perfectly know customers’ expectations. 26 4.7692 1.55712 2.2308 Management emphasizes on customer relationship 26 5.3462 1.54770 1.6538 Marketing research conducted in the company concerns service quality.

26 4.3077 1.71509 2.6923

Gap between Customers’ expectations and management perceptions

4.8077 1.40846 2.1923

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SD GAP

Quality standards of service reflect managers’ perception of customers’ expectations.

26 5.0000 1.54919 2

There is the same pressure on the quality improvement like on the sale of services.

26 5.1154 1.45126 1.8846

Equipments to deliver service are modern looking.

26 5.5000 1.42127 1.5

Physical facilities are visually appealing. 26 5.0000 1.49666 2 Gap between management perceptions and service specifications

5.1538 1.05375



SD GAP

The service is provided perfectly according to the set standards and specifications

26 4.7692 1.58260 2.2308

Employees have appropriate skills to realize the service well

26 5.0000 1.74356 2

Employees know which aspects of service are particularly important from customers point of view

26 4.8077 1.64971 2.1923

Employees are eager to learn new things for better service providing

26 4.1923 1.54969 2.8077


4.2019 .81246



SD GAP

Advertisement and other communications perfectly reflect services which are provided

26 4.7308 1.58890 2.2692

Personal selling perfectly reflects services that are

provided 26 4.6538 1.41258

2.3462 Advertisement announcements have an effect on the

contact personnel 26 4.5769 1.55366

2.4231 There are adequate communications to educate the

customers 26 4.3462 1.64784

2.6538 Gap between service delivery and external communication

4.5769 1.32055

2.4231

19



SD GAP

Employees enquire customers’ expectations 26 4.3846 2.04112 2.6154 Employees have friendly interaction with customers 26 5.5000 1.70294 1.5 Employees give individual attention to every

customer 26 4.6154 1.79057

2.3846 Gap between customer expectations and employees’ perceptions

4.0385 1.05547



Score SD GAP

the management encourages contact personnel to share customers opinion

26 4.9615 1.48272 2.0385

the management has frequently face-to-face contact with the contact personnel

26 4.6538 1.44062 2.3462

there are only a few layers between contact personnel and top management

26 4.3462 1.57334 2.6538

Gap between employee’s perceptions and management perceptions

4.6538 1.26660

2.3462 Average of seven gaps 4.5721 2.4279

The issue of how to match employees’ perception and customers’ expectations in

the organization is important difficulty (gap 6) for the Prime Bank. In the researched

bank, apparently, it is a little bit challenging to educate and make qualify the

personnel to understand the customers’ need and expectation from the bank.

According to the study in this area of the bank, it comes to the largest distortion of

customer requirements and expectations.

Empirical findings show that performance according to the set standards and

specifications (gap 3) exerts a significant impact on service quality. It is the second

largest internal gap of Prime Bank. Ineffective recruitment, failure to meet clients’

demand in rush period, difficulty of controlling quality and consistency of this bank

increase the customers’ dissatisfaction in a great extent.

Apparently, the internal gaps-gap 1, gap 2, gap 4, and gap 7 of Prime Bank may be

seen as minor. But here still exists some problems, which cause the service quality

to deteriorate. So, management is expected to take corrective measures where

needed as par the reports. For example, in order to reduce long queue at service

20

point, management may decide to install one more service counter (Faruk ANM,

2010).

Regression Analysis

Table 15: Model summary

Model R R Square Adjusted R

Square Std. Error of the

Estimate

1 .765a .585 .454 1.15395

a. Predictors: (Constant), Average score of GAP 7, Average score of GAP 2, Average score of GAP 4, Average score of GAP 6, Average score of GAP 1,

Average score of GAP 3

Positive Value of coefficient correlation (R) indicates that there is a positive

relationship between the independent and dependent variables. Value of R is 0.765,

which indicates there is a strong relationship between the dependent variable

(Variation between expected service and perceived service) and the independent

(GAP 1, GAP2, GAP 3, GAP 4, GAP 6, and GAP 7) variables considered at the model.

The value of coefficient of determination (R2) is 0.585 and this specifies that 58.5%

of the variation in the dependent variable be explained by the independent

variables. That means 41.5% variation in the dependent variable is clarified by

other external variables.

Table 16: Coefficient correlation

21

Analysis of co-efficient helps us know which independent variables have significant

relationship with the dependent variable. So,

Variation between expected service and perceived service (Customer gap) (Ŷ) = -0.787 +

0.426* X1 + 0.264* X2 +0.628* X3 +0.255* X4 -0.137* X5 -0.196* X6

Where, X1 = GAP 1, X2 = GAP 2, X3 = GAP 3, X4 = GAP 4, X5 = GAP 6, and X6 = GAP 7

From the Table 16, we see that the significance levels for all provider gaps are higher

than level of significance (0.05). Hence, there may not have any significant relationship

between the “Customer gap” and GAP 1, GAP 2, GAP 3, GAP 4, GAP 6, and GAP 7.

Table 17: Comparative review of service quality and service gap

Service gaps Sonali

Bank

Prime

Bank

Gap between customers’ expectations and management

perceptions (GAP 1)

3.3704 2.1923

Gap between management perceptions and service

specifications (GAP 2)

4.0648 1.8462


(GAP 3)

3.8519 2.7981

Gap between service delivery and external communication

(GAP 4)

3.8519 2.4231

Gap between customer expectations and employees’

perceptions (GAP 6)

4.4444 2.9615

Gap between employee’s perceptions and management perceptions (GAP 7)

3.9506 2.3462

The average of seven gaps 3.922333 2.4279

After a comparative analysis of Sonali Bank and Prime Bank, it can be concluded that

the internal (provider) gaps of Sonali Bank are higher than that of Prime bank.

Though Sonali Bank is largest commercial bank in our country, it cannot fulfill its

customer expectations. Sonali Bank has a higher average of seven internal gaps,

which states that the service quality and customer satisfaction are very poor in

Sonali Bank. On the other hand, the internal service gaps in case of Prime Bank are

lower. That means the service quality of Prime Bank is better than that of Sonali

Bank. But the authority of Prime Bank should be conscious of existing service gaps

to ensure more quality service and customer satisfaction.

22

5. LIMITATIONS OF THE STUDY The findings of this study can be generalized after taking into consideration certain

limitations. A small number of respondents (27 for Sonali Bank, and 26 for Prime

Bank) from Dhaka city have been used in this study. The respondents were selected

on the basis convenience. So, the samples may not represent the population of the

country. Besides, there were time and financial constraints to perform the study.

Finally, in this study I have focused on the perception of the clients of the service of

the banks, which may not perfectly represent the actual service gaps of these banks.

So the future researchers are suggested to remember the limitations of the study in

further research in this area.

6. CONCLUSION AND RECOMMENDATION Since Sonali Bank is the largest commercial bank in Bangladesh, its clients expect

something more from it. But it cannot meet the ever-increasing demand of the

clients. In the competitive banking industry to compete with other banks, Sonali

Bank has to improve its capability and remove the internal problems. From this

study, we can learn that there is a huge gap in service providing process. To remove

this gap, the overall organizational system should be changed and improved.

Following criteria are recommended from clients’ viewpoint to reduce the service

gaps and increase customer satisfaction.

The company mission should include a focus on customers. A strong relationship with existing customers prevents Gap 1 from occurring

and companies are more able to understand the changing needs and expectations of their existing customer base.

Employees have to express solidarity with the customer. Employees have to be aware of customer expectations. As this is the largest commercial bank of country, more employees have to be

engaged here to serve the customers properly. Skilled personnel have to be employed here. Training and motivational programmes should be introduced to improve the

employee skill. The bank should take steps to minimize the operation time. The bank should establish sufficient number of counter to reduce the long

queue. More modern equipments have to be introduced here to provide better

service. To provide better transaction facilities, new ATM booth should be

established.

23

There is a messy environment in this bank. There should have a disciplined work procedure.

There is a bureaucratic practice in this bank. This bureaucratic relationship between the management and front line personnel should be removed.

From the study, we have known that though the performance of Prime Bank is satisfactory, there is a huge gap between customer expectations and employees’ perceptions. Beside that, still some clients are not satisfied with the service of this bank. So, it is high time the bank would give proper attention to the problem of employees’ unawareness about customer expectations and improve its overall service quality.

Every client should be focused individually. The bank has to be more conscious of building customer relationship. To do

this, the bank can consider “Customer Involvement Program.” To meet the demand of increasing number of clients, work force has to be

enlarged. The bank management should ensure that all employees posses skill and

quality. Employees should have a friendly interaction with the clients. The bank should be fast to provide service to the clients. More counters have

to be established to afford quick service. Front desk service may be introduced here.

Smart and polite personnel should be engaged in the cash counters. To reduce customer queue time, token system may be introduced. Clients’ problems should be solved swiftly. Service providing procedure should be simple and easy. In this bank, the employees are always in a pressure. They may be provided

some recreational facilities to offer them mental satisfaction. The bank should give not only attention to the contemporary services but

also certainty to provide these services. The bank should give special attention to “One Stop Service.” Retail banking functions should be more expanded. The bank has to start any branch banking service properly. E-banking facilities of this bank have to be more improved. The bank should provide technological facilities incessantly. The bank should develop own ATM or CDM system to provide service

quickly and comfortably. The number of ATM booth should be increased immediately.

Often the ATM booths of the bank become disabled. The concerned authority should remove this problem.

More branches have to be established in district level.

24

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27

APPENDICES

Questionnaire Name: …………………………………………………………………………………………….. Contact Number…………………………………………………….

5. Do you have a bank account? 1. Yes 2. No 6. If yes, in which bank; 1. Sonali Bank 2. Prime Bank 3. Others…………………. 7. Your expected service and perceived service match with this bank.

Strongly Disagree

Disagree Some what Disagree

Neutral Some what agree

Agree Strongly Agree

1 2 3 4 5 6 7

3. Your Education:

Higher Secondary 1

Graduation 2

Post Graduation 3

1. Your Gender:

Male 1

Female 2

2. Your Age:

18 to 23 years 1

24 to 29 years 2

30 to 35 years 3

Above 36 years 4

4. Your Profession:

Student 1

Service Holder 2

Businessperson 3

Teaching 4

Doctor 5

Others:________ 6

28

8. Management’s unawareness about customers’ expectations (GAP 1)

Stro

ngl

y

Dis

agre

e

Dis

agre

e

Som

e w

hat

Dis

agre

e

Neu

tral

Som

e w

hat

ag

ree

Agr

ee

Stro

ngl

y

Agr

ee

1. Managers perfectly know customers’ expectations.

1 2 3 4 5 6 7

2. Management emphasizes on customer relationship.

1 2 3 4 5 6 7

3. Marketing research conducted in the company concerns service quality.

1 2 3 4 5 6 7

9. Not selecting right service designs and standards (GAP 2)

St

ron

gly

D

isag

ree

Dis

agre

e

Som

e w

hat

D

isag

ree

Ne

utr

al

Som

e w

hat

ag

ree

Agr

ee

Stro

ngl

y

Agr

ee

1. Quality standards of service of an excellent bank reflect customers’ expectations. It is also seen in case of this bank.

1 2 3 4 5 6 7

2. Like an excellent bank, there is the same pressure on the quality improvement like on the sale of services.

1 2 3 4 5 6 7

3. Equipments to deliver service are modern looking.

1 2 3 4 5 6 7

4. Physical facilities are visually appealing. 1 2 3 4 5 6 7

10. Not delivering to service standards (GAP 3)

Stro

ngl

y

Dis

agre

e

Dis

agre

e

Som

e w

hat

Dis

agre

e

Neu

tral

Som

e w

hat

agre

e

Agr

ee

Stro

ngl

y A

gree

1. Having a customer driven standard, the service is provided according to the set standards and specifications.

1 2 3 4 5 6 7

2. Employees have appropriate skills to provide the service well.

1 2 3 4 5 6 7

3. Employees know which aspects of service are particularly important from customers’ point of view.

1 2 3 4 5 6 7

4. Employees are eager to learn new things for better service providing.

1 2 3 4 5 6 7

29

11. Not matching performance to promises (GAP 4)

Stro

ngl

y

Dis

agre

e

Dis

agre

e

Som

e w

hat

Dis

agre

e

Neu

tral

Som

e w

hat

agre

e

Agr

ee

Stro

ngl

y

Agr

ee

1. Advertisement perfectly reflects services that are provided.

1 2 3 4 5 6 7

2. Personal selling perfectly reflects services that are provided.

1 2 3 4 5 6 7

3. Advertisement announcements have an effect on the contact personnel

1 2 3 4 5 6 7

4. There are adequate communications to educate the customers

1 2 3 4 5 6 7

12. Employees’ unawareness about customers’ expectations (GAP 6)

Stro

ngl

y

Dis

agre

e

Dis

agre

e

Som

e w

hat

D

isag

ree

Ne

utr

al

Som

e w

hat

ag

ree

Agr

ee

Stro

ngl

y A

gre

e

1. Employees enquire customers’ expectations 1 2 3 4 5 6 7

2. Employees have friendly interaction with customers.

1 2 3 4 5 6 7

3. Employees give individual attention to every customer.

1 2 3 4 5 6 7

13. Management’s unawareness about employees’ perception of customers’ expectations (GAP 7)

Stro

ngl

y

Dis

agre

e

Dis

agre

e

Som

e w

hat

D

isag

ree

Neu

tral

Som

e w

hat

ag

ree

Agr

ee

Stro

ngl

y A

gree

1. This bank always improves services according to the customers’ expectations.

1 2 3 4 5 6 7

2.

Your bank’s understanding of customers’ expectations refers that management of the bank has frequent face-to-face contact with contact personnel.

1 2 3 4 5 6 7

3. Their response speed refers that there is a less bureaucratic relationship between the top management and the contact personnel.

1 2 3 4 5 6 7

article on service gap of prime & sonali bank

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