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International Journal of Multidisciplinary Research

Vol.1 Issue 6, October 2011, ISSN 2231 5780

w w w . z e n i t h r e s e a r c h . o r g . i n

1 9

IMPACT OF SERVICE QUALITY IN COMMERCIAL BANKS ON THE

CUSTOMERS SATISFACTION: AN EMPIRICAL STUDY

DR. S. FATIMA HOLY GHOST*; DR. M. EDWIN GNANADHAS**

*Assistant Professor in Commerce, Holy Cross College,Kanyakumari District, Tamil Nadu.

**Associate Professor in Commerce, Scott Christian College,Kanyakumari District, Tamil Nadu.

ABSTRACT

Quality in service is very important especially for the growth and development of

service sector business enterprise. It works as an antecedent of customer's satisfaction .In

the past, quality was measured only for the tangible products because of less dominance of service sector in the economy. Due to the increasing importance of service sector in the

economy, the measurement of service quality became important. Undoubtedly owing to the

belief that delivery of high service quality is a must for attaining customers satisfaction

and a number of other desirable behavioural outcomes, recent years have incensed a flurry

of research exploring interrelationship between service quality, satisfaction and

behavioural outcomes. The objective of the present study are to identify the customer's

perception on service quality factors in commercial banks and the customers satisfaction

towards the banks ;to analyse the impact of perception on service quality factors

in commercial banks among the different group of customers based on their demographics.

The applied sampling technique is purposive sampling. The present study concludes that

there is a close link between the customer's perception on the service quality factors andthe customer satisfaction. But the impacts of service quality factor on customer satisfaction

among the customer are not unique. It depends upon the demographic profile of the

customers.

KEYWORDS: Assurance, Empathy , Reliability , Responsiveness and Tangibles.

INTRODUCTION

During the past two decades or so, regulatory, structural and technological factors have

significantly changed the banking environment throughout the world (Angur et al., 1999). In a

milieu which becomes increasingly competitive, service quality as a critical measure of

organizational performance continues to compel the attention of banking institutions and

remains at the forefront of services marketing literature and practice (Lasser et al., 2000;

Yavas and Yasin, 2001). The interest is largely driven by the realization that higher service

quality results in customers satisfaction and loyalty, greater willingness to recommend to

someone else, reduction in complaints and improved customer retention rates (Danaher,

1997; Magi and Julander, 1996; Levesque and Me Dougall, 1996).

Undoubtedly owing to the belief that delivery of high service quality is a must for

attaining customers satisfaction and a number of other desirable behavioural outcomes,recent years have incensed a flurry of research exploring interrelationship between service



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quality , satisfaction and behavioural outcomes (Festus and Hsu, 2006; Hsu, et al., 2006;

Thamarai selvan and Raja, 2007).

QUALITY IN SERVICE INDUSTRY

Quality in service is very important especially for the growth and development of

service sector business enterprise (Powell, 1995). It works as an antecedent of customer's

satisfaction (Ruyter and Bloemer, 1995). In the past, quality was measured only for the

tangible products because of less dominance of service sector in the economy. Due to the

increasing importance of service sector in the economy, the measurement of service quality

became important. Crosby (1979) defined quality as the 'Conformance to requirements'. The

guru of quality movement Juran (1988, 1992) defined quality as 'fitness for use while

servicing (1986) viewed quality as a process promising to result in products and services.

In late 1980s, Parasuraman et al., (1985) explained quality as a gap between what

customers feel to be offered and what is provided. Even though there is no single definitionon quality they all have a single focus on how users look at it (Piji, 1994; Zeithaml, 1988;

Khader, 1997). Ramaswamy (1996) identified three different sets of measures for service

quality such as service performance, customer measure and financial measure. The other

researchers such as Lilijander, (1995). Prakash and Lounsbury (1984) and Swan (1988)

suggested many possible comparison standards including predicted service, comparative

expectations and fairness. However, SERVQUAL only incorporates a rough aggregated

mixture of a selection of these.

ESTABLISHING CURRENT UNDERSTANDING OF SERVICE QUALITY

Parasuraman et al., (1985) developed the Gap analysis model. In his model, hemeasured the gap between expected service and perception of service among the

customers. Later it was refined to SERVQUAL scale (Parasuraman et al., 1988). It is

designed to measure consumers perceptions of the identified dimensions of tangibles,

empathy, assurance, responsiveness and reliability relative to consumers expectations

SERVQUAL critics, have voiced their concerns for many years with respect to

contextual, dimensional and empirical correctness considerations (Asubonteng et al., 1996;

Finn and Lamb, 1991).

Boulding et al., (1993) are among those who consider service quality to be

performance-based and hence take perceptions, rather than expectations, as they are of

departure in developing their dynamic process model. They see perception of functions of what the consumer's expectations will occur and what should occur during the service

encounter. But Boulding et al., (1993) also assume service quality as perceived with

respect to Parasuraman's et al., (1988) five dimensions.

IMPORTANCE OF SERVICE QUALITY IN COMMERCIAL BANKS

Increased competition, highly educated consumers, and increase in standard of living

are forcing many businesses to review their customer service strategy. Many business firms

are channeling more efforts to retain existing customers rather than to acquire new ones

since the cost of acquiring one new.customer is greater than cost of retaining existing

customers. There is enough evidence that demonstrates the strategic benefits of quality incontributing to market share and return on investment (Adiran, 1995; Bakesm, 1995;



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Reichhel and Sasser 1990). Maximizing customer satisfaction through quality customer

service has been described as 'the ultimate weapon' by Davidow and Vital (1989).

According to them in all industries, when competitors are roughly matched, those with stress

on customer's service will win.

In view of the abovementioned facts, an analysis of service quality perceptions

from customer's point of view may be sound and interesting at this juncture. Such an

analysis will provide banks, a quantitative estimate of their services being perceived with

intricate details such as whether banks are meeting or not meeting the customer's

expectations. The present paper, therefore attempts to achieve the following objectives.

CONCEPTUAL FRAMEWORK

Actually, the conceptualization and measurement of service quality began in the

marketing literature in 1985. Service Quality is a vital antecedent of customer's

satisfaction (Cronin and Taylor, 1992). In turn customer satisfaction is believed to affect post-purchase and perception and future decisions. Subsequent works on service quality.

(Parasuraman et al., 1993; Cronin and Taylor, 1994; Avkiran, 1994; Teas, 1994; Newman

and cowling, 1996) not withstanding, the debate has not yet reached a point of solution. In

its wake, however, it has raised many issues for both academicians and parishioners by

providing important but some-what conflicting in rights into the conceptual, the

methodological, analytical and practical issues related to the service quality concept. For

instance, Cronin and Taylor (1992, 1994) argue the measuring of service quality using a

performance -minus - expectation (SERVQUAL) basis inappropriate and suggest the

performance - only (SERVPERF) measurement is a better method.

However, Parasuraman, Zeithaml and Berry (1994) contend that the SERVQUALscale using the expectations / performance gaps method is a much richer approach to

measuring service quality and augment that earlier assertion (e.g. Parasuraman et al., 1988,

1993) that service quality is a multi dimensional rather than a one- dimensional construct.

SERVQUAL has been widely used (Dabholhar et al., 1996; Hurswey, 1999; Getz et al.,

2001). There have been a few empirical studies that dealt with the application of SERVQUAL

instrument in the banking industry such as Natarajan et al., (1999) and Lassar et al., (2000).

At the same time, the empirical evidence of using SERVPERF scale in banking industry are

the studies by Howcaft (1991) and Newman and Cowling (1996). In the present study,

the performance only measurement (SERVPERF) has been used to analyse the customer's

perceptions in banking.

RELATED REVIEWS

The literature pertaining to relationship among service quality, customer's satisfaction

and their behavioural intention can be divided into two groups. The first, service

management literature, proposes that the service quality influences the customer

satisfaction (Cronin et al., 2000; Dabholkar et al., 2000 and Schemenner 2004). The

service quality is identified as the determinants of customer satisfaction in banking

(Naceur et al., 2002). The relative importance of service quality attached with customer

satisfaction and their behavioural intention is highlighted by Niki et al., (2006). The direct

and indirect links between service quality and the customers satisfaction and their



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behavioural intention are analysed with the help of structural equation modeling (Festus and

Maxwell, 2006).

RESEARCH GAP

The above said previous studies are analyzing the perception on service quality

in commercial banks by performance only on the SERVQUAL scale measure. There is

no exclusive study on the impact of perception on SQFs on customer's satisfaction under

different demographic profile. Hence, a research models have been generated to fill up

the research gap.

PROPOSED RESEARCH MODEL

OBJECTIVES OF THE STUDY

The objective of the present study is summarized below:

1) To identify the customer's perception on service quality factors in

commercial banks and the customers satisfaction towards the banks;

Demographics

Customers

in different

group of

banks

Age of the

customers

Education

of the

customers

Service

Quality

Factors in

Banks

Customer

SatisfactionNativity

of

customers

Gender of

customer

Income of

customers

Occupation

of

customers

Denographics



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2) To analyse the impact of perception on service quality factors in

commercial banks among the different group of customers based on their

demographics.

METHODOLOGY

The descriptive research designs have been followed to fulfill the objectives of the

research.

SAMPLING PROCEDURE

The total number of commercial banks in Kanyakumari district is 143 branches. Out

of the 143 branches, 112 branches are Public Sector Banks (PSBs), 25 branches are Private

Sector Banks (PrSBs) and only 6 banks are New Private Sector Banks NPrBs. In total, a

maximum of 79 branches are seen in semi urban area whereas 44 branches are at urban area.

The remaining 20 branches are at rural area. In all the three areas, the numbers of PSBs areidentified as higher as compared to other two groups of banks. 5 customers from each bank

were selected as the sample respondents. Hence the sample size came to 715. Here the

applied sampling technique is purposive sampling. The required data have been collected

through the structured questionnaire which consists of, profile of the customer and

perception on service quality of banks and their overall attitude towards the banks.

Out of 715 customers only 43.64 per cent of the customers responded the

questionnaire. The number of responded customers in PSBs, PrSBs and NPrSBs are 194,

89 and 29 respectively. At the same time, in urban, semi urban and rural areas, these are 104,

159 and 49 customers respectively.

RESULTS AND DISCUSSION

CUSTOMER SATISFACTION

The customer satisfaction is the collective opinion on various aspects in commercial

banks. The primary motto of any commercial banks in the globalized era is customer

satisfaction. Even though the customers satisfaction is derived from the customer's attitude

towards various variables related to banks, the present study confines these variables to only

12 variables. These variables are given in Table 1.1

TABLE 1.1

VARIABLES IN CUSTOMER’S SATISFACTION

Sl.No Variables Sl.No Variables

1.

2.

3.

4.

Decision to use this bank

Experience with this bank

My choice towards this bank

Employed behavior

7.

8.

9.

10.

Relationship marketing adopted by

the bank.

Customer’s orientation of the bank

Handling of complains



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5.

6.

Accessibility of the bank

Trust worthiness towards the bank

11.

12.

Reporting system of the bank

Quality of the service

Cost of the services offered

The identified variables are related to the service offered by the banks, service

provider (employees) and service cost. The customers are asked to rate the twelve

variables at five point scale. The assigned scores on these scales are from 5 to 1

respectively. The score have been included for reliability test with the cronbach alpha.

Since the cronbach alpha is 0.8119, the included 12 variables explain the customer

satisfaction to the extent of 81.19 per cent.

CUSTOMERS SATISFACTION INDEX (CSI) AMONG THE CUSTOMERS

The customer satisfaction is derived from the score of all 12 variables included

it. The score of customer satisfaction is summated with the help of an index called as

'Customer Satisfaction Index' (CSI). It is computed by

n

i

i l

n

i

i l

SVCS

CSI 100

MSVCS

Whereas

SVCS - Score of variables in customers satisfaction

MSVCS - Maximum score of the variables in customers satisfaction

i = 1... .n - Variables in customers satisfaction

The customer satisfaction among the customers has been measured with the help of an

index called as Customers Satisfaction Index (CSI). It reveals the summative view on the

customers' satisfaction towards the various aspects related to the banking. The CSI in the present study is confined to less than 21 per cent, 21 to 40, 41 to 60, 61 to 80 and above 80

per cent. The customers with CSI of less than 21 per cent constitutes only 21 .08 per cent to

the total whereas the customers with the CSI of 21 to 40 per cent constitutes 28.49 per cent

to the total. The total 39.17 per cent of the customers are with the CSI of 41 to 60 per cent

whereas 7.31 per cent of the customers are with CSI of 61 to 80 per cent. The customers

with the CSI of above 80 per cent constitutes 3.95 per cent to the total.



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CUSTOMER PERCEPTION ON SQFs

The Service Quality Factors (SQF) in commercial banks identified by Avkiran,

(1994); Howcraft (1991); Laural and Nasser, 2002; and Leversque and Gordon, (1996) are

five factors. These are Reliability, Responsiveness, Assurance, Tangibles and Empathy. Thesame five factors have been included in the present study. Since the reliability of the

variables in each SQF have been already tested by Vanniarajan and Gurunathan, (2007)

and Jabnour and Hussein (2002), the present study is not conducting any reliability test. The

customers are asked to rate each SQFs five point scale according to their order of satisfaction.

The mean score of each SQFs, its standard deviation and co-efficient of variation is given in

Table 1.2.

TABLE 1.2

CUSTOMER’S PERCEPTION ON SQFs

Sl.No. SQFs Mean score Standarddeviation

Co-efficient of variation

1.

2.

3.

4.

5.

Reliability

Responsiveness

Assurance

Tangibles

Empathy

2.9978

2.6085

2.7179

3.0544

2.5085

0.6876

0.9943

1.0365

0.8544

0.9902

22.94

38.12

38.14

27.97

39.47

The highly perceived SQFs among the customers is 'Tangibles' since its mean

score is 3.0544 which has a co-efficient of variation of 21.91 per cent. The second

SQFs perceived by the customer's is 'Reliability' since their mean score is 2.9978 with

the co-efficient of variation of 22.94 per cent. The next two SQFs perceived by the

customers is assurance and responsiveness since their mean scores are 2.7179 and

2.6085 respectively.

IMPACT OF SERVPERF SCALE ON SQFs ON CSI IN DIFFERENT BANKS

The perception on SQFs may have its own influence on the customer

satisfaction. In order to analyse the impact of SQFs on customer satisfaction

among the customers, the multiple regression analysis have been administered. The

fitted regression model is

Y= a+b1x1+b2x2+b3x3+b4x4+b5x5+e

Y=customer satisfaction Index any the customers

Whereas X1 - Score on Reliability among the customers

X2 - Score on Responsiveness among the customers



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X3 - Score on Assurance among the customers

X4 - Score on Tangibles among the customers

X5 - Score on Empathy among the customers

b1,b2….bn - Regression co-efficient of independent variables

a - Intercept and

e - Error term

Initially, the impact of SQFs on the customer satisfaction among the business in Public

Sector Banks (PSBs) Private Sector Banks (PrSBs) and New Sector Banks (NPrSBs) have

been examined separately. The result of regression analysis is given in Table 1.3

TABLE 1.3

IMPACT OF SERVPERF SCALE ON SQFs ON CSI

Sl.No. SQFs

Regression Co-efficient among customer in

PSBs PrSBs NPrSBs

1.

2.

3.

4.

5.

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R

2

F-Statistics

0.1814*

0.0933

0.1044

0.1133

0.1681*

0.9194

0.6345

8.0828*

0.2492*

0.1891*

0.1044*

0.1338*

0.2096*

1.3039

0.7569

11.1083*

0.2096*

0.1443*

0.1862*

0.2101*

0.2633*

1.5238

0.7161

9.8689*

* Significant at five per cent level.

The significantly influencing SQFs on the CSI among the customers in PSBs

is reliability and empathy. A unit increase in the perception on reliability and empathy

result in an increase in CSI among the customers in PSBs by 0.1814 and 0.1681 units

respectively. Among the customer in PrSBs, the significantly influencing SQFs are

the perception on reliability, responsiveness, tangibles and empathy since their

respective regression co-efficients are significant at five percent level. A unit

increase in the perception on the above said SQFs results in a increase in CSI by



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0.2492, 0.1891, 0.1338 and 0.2096 units respectively. Among the customers in

NPrSBs, a unit increase in the perception on reliability, responsiveness, assurance,

tangibles and empathy result in an increase in customer satisfaction index by 0.2096,

0.1443, 0.1862, 0.2101 and 0.2633 units respectively. The changes in the

perception on SQFs explain the changes in CSI among the customers in PSBs andPrSBs is to the extent of 63.45 and 75.69 per cent respectively. Whereas among the

customers in NPrSBs, it is to the extent of 71.61 per cent. The analysis reveals the

importance of SQFs is customer satisfaction. The satisfaction 'F' statistics reveal the

validity of fitted regression models. In total, the degree of impact of SQFs on

customers satisfaction in PrSBs is greater than in NPrSBs and PSBs.

IMPACT OF SERVPERF SCALE OF SQF ON CSI AMONG THE URBAN AND

RURAL CUSTOMERS

On the basis of nativity, the customers are classified into urban and rural customers.

Since the perception on SQFs among the group of customers may have different customer satisfaction, the present study has made an attempt to analyse the degree of influence of

SQFs on customer satisfaction among the urban and rural customers separately. It is highly

imperative to identify the impact of each SQFs on the CSI for some policy implications. The

multiple regression analysis have been executed to find out such impact. The ordinary least

square method is followed to fit the multiple regression models. The resulted regression co-

efficient of the SQFs are given in Table 1.4.

TABLE 1.4

IMPACT OF SERVPERF SCALE ON CSI AMONG THE URBAN AND RURAL

CUSTOMERS

Sl.No SQFs

Regression co-efficient among customers in

Urban Rural

1.

2.

3.

4.

5

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R 2

F-Statistics

0.3109*

0.2411*

0.1002

0.0917

0.1861*

1.2146

0.7339

11.2308*

0.1461

0.2201

0.0968

0.1947

0.2868

0.6861

9.3091*

* Significant at five per cent level..



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The significantly influencing SQFs on customers satisfaction among the urban

customer are reliability, responsiveness and empathy since their respective regression co-

efficients are significant at five per cent level. A unit increase in the perception on above

said SQFs result in an increase in customer satisfaction by 0.3019, 0.2411 and 0.1861

units respectively. The changes in the perception on SQFs explain the changes incustomer satisfaction index to the extent of 73.39 per cent since their respective R 2 is

0.7339.

Among the rural customers, the significantly influencing perceptions on SQFs are

reliability, responsiveness, tangibles and empathy. A unit increase in the perception on

above said SQFs result in an increase in CSI by 0.1461, 0.2201, 0.1947 and 0.2868

units respectively. The changes in the perception on SQFs explain the changes in

customer satisfaction index to the extent of 68.61 per cent only. The analysis reveals

that the most significantly influencing SQFs on the customer satisfaction among the

urban and rural customers are reliability and empathy respectively.

IMPACT OF SERVPERF SCALE OF SQFs ON THE CSI AMONG

DIFFERENT AGED CUSTOMERS

The degree of influence of the SERVPERF scale of SQFs on the level of

satisfaction (CSI) is examined to identify the importance of SQFs in the customer

satisfaction among the different age group of customers. The perception score on five

SQFs is treated as the score of independent variables whereas the CSI is considered as

the score of dependent variables. The impact of independent variables on the

dependent variable is examined with the help of multiple regression analysis. The

results are given in Table 1.5.

TABLE 1.5

IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG DIFFERENT AGED

GROUPS

Sl.No SQFs Regression co-efficient among customers in

Youngsters Middle aged Aged

1.

2.

3.

4.

5.

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R 2

0.1408*

0.0924

0.1661*

0.1024

0.0439

0.8565

0.6962

0.0818

0.1816*

0.2145*

0.0776

0.1337*

1.3817

0.7412

0.2417*

0.2133*

0.0948

0.1471*

0.2803*

1.8916

0.7966



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F-Statistics 8.4336* 10.2449* 12.3908*

Among the youngsters, the significantly influencing SQFs on their CSI are

reliability and assurance. A unit increase in the perception on above said two SQFs result inan increase in CSI by 0.1408 and 0.1661 units respectively. Among the middle aged

customers, these independent variables are responsiveness, assurance and empathy since

their respective regression co-efficient are significant at five per cent level. A unit

increase in the perception on above said three SQFs result in an increase in CSI by 0.1816,

0.2145 and 0.1337 units respectively. Among the aged customers, the significantly

influencing SQFs are reliability responsiveness, tangibles and empathy. A unit

increase in the above said SQFs result in an increase in CSI by 0.2417, 0.2133, 0.1471

and 0.2803 units respectively.

IMPACT OF SERVPERF SCALE OF SQFs ON CUSTOMERS SATISFACTION

AMONG MALE AND FEMALE CUSTOMER

The gender may play an important role in the degree of influence of SQFs on the

customer satisfaction towards their banks. The present analysis has made an attempt to

analyse the impact with the help of multiple regression analysis. The included independent

variables are the perception on SQFs whereas the dependent variable is their CSI. The

impact of perception on SQFs on the CSI among the male and female customers has

been examined separately. The resulting regression co-efficients of SQFs is

summarized in Table 1.6.

TABLE 1.6

IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG THE MALE AND

FEMALE CUSTOMERS

Sl.No SQFs

Regression co-efficients among

Male Female

1.

2.

3.

4.

5

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R 2

F-Statistics

0.2217*

0.1414*

0.0962

0.1084

0.0869

09946

0.8241

14.9817*

0.1044

0.2104*

0.1616*

0.2069*

0.3144*

1.2142

0.7433

10.3914*




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The significantly influencing SQFs on CSI among the male customers is reliability

and responsiveness since their regression.co-efficients are significant at five per cent level.

A unit increase in the perception on reliability and responsiveness result in an

increase in CSI by 0.2217 and 0.1414 units respectively. Among the female customers,

the significantly influencing SQFs on the CSI are responsiveness, assurance, tangibles andempathy. A unit increase in the perception on above said SQFs result in an increase in their

CSI by 0.2104, 0.1616, 0.2069 and 0.3144 units respectively. The changes in the perception

on SQFs explain the changes in their CSI among the female customers to the extent of

74.33 per cent. The analysis reveals that the perceptions on SQFs have a higher influence on

CSI among the female customers than the male customers. The important SQFs among the

female customers are empathy and responsiveness whereas among the male customers, it is

reliability.

IMPACT OF SQFS ON CSI AMONG DIFFERENT EDUCATED GROUPS

The level of eduation among the customers may influence their perception on SQFssince their level of awareness and banking knowledge are different. By the level of

education, the customers are grouped into lesser educated ,educated and highly educated

groups. The perception on SQFs among the three groups of customers based on education

may have its own impact on the CSI. It is imperative to identify the significantly

influencing SQFs on CSI and also compare the degree of influence by each SQFs on CSI

among each group of customers separately for some policy implications. The multiple

regression analysis has been executed to analyse such impact. The resulted regression co-

efficients are given in table 1.7

TABLE 1.7

IMPACT OF SERVPERF SCALE OF SQFS ON CSI AMONG DIFFERENTEDUCATED CUSTOMERS

Sl.No SQFs


Lesser Educated Educated Highly Educated

1.

2.

3.

4.

5.

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R 2

F-Statistics

0.1013

0.2817*

.0.1868*

0.0866

0.1217

0.8587

0.6247

7.5868*

0.2117*

0.1338*

0.1142

0.0911

0.1904*

1.2348

0.7667

10.3441*

0.2021*

0.1917*

0.1436*

0.1011

0.1803*

1.4508

0.8134

12.4561*




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The significantly influencing SQFs on CSI among the lesser educated customers

are responsiveness and assurance since their respective regression co-efficient are

significant at five per cent level. A unit increase in the perception on responsiveness and

assurance result in an increase in CSI by 0.2817 and 0.1868 units respectively. Among the

educated customers, these significant SQFs are reliability, responsiveness and empathy. Aunit increase in the perception on the above said three SQFs result in an increase in CSI by

0.2117, 0.1338 and 0.1904 units respectively.

Among the highly educated customers, the significantly influencing SQFs are

reliability, responsiveness, assurance and empathy. A unit increase in the perception on

the above said SQFs result in an increase in CSI by 0.2021, 0.1917, 0.1436 and 0.1803

units respectively. The changes in the perception on SQFs explain the changes in the CSI

among the higher educated customers are identified as higher as to the extent of 81.34

per cent. The analysis reveals that the perceptions on SQFs have higher impact on

CSI among the highly educated customers than the other two groups of customers.

IMPACT OF SERVPERF SCALE ON SQFs ON CSI AMONG DIFFERENT

INCOME GROUPS

One of the important demographics of customers is their income. Since the income

may influence the level of awareness and knowledge on banking, it is included one of the

profile variables. By the level of income, they are classified into Lower Income Groups

(LIG), Middle Income Groups (MIG) and Higher Income Groups (HIGs).

The impact of SERVPERF scale of SQFs on CSI among the customer has been

examined with the help of multiple regression analysis. The impact has been examined

among LIG, MIG and HIG separately. The results are given in Table 1.8

TABLE 1.8IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG DIFFERENT INCOME GROUPS

Sl.No SQFs


LIG MIG HIG

1.

2.

3.

4.

5.

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R 2

F-Statistics

0.1817*

0.1202

0.1144

0.0981

0.2114*

0.9411

0.7028

8.1443*

0.2144*

0.2639*

0.664

0.0917

0.1438*

1.2433

0./7949

10.3842*

0.3142*

0.2108*

0.1440*

0.1664*

0.1649*

1.8246

0.8144

14.2841*



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3 2

Among the LIG, the significantly influencing SQFs on CSI are reliability and

empathy. A unit increase in the perception on above said SQFs result is an increase in CSI

among the LIG by 0.1817 and 0.2114 units respectively. The significantly influencing

SERVQUAL scale on SQFs among the middle income are reliability, responsiveness and

empathy. A unit increase in the perception on above said three SQFs result in an increase inCSI by 0.2144, 0.2639 and 0.1438 units respectively.

Among the HIG, the significantly influencing SQFs on the CSI are reliability,

responsiveness, assurance, tangibles and empathy. A unit increase in the perception on above

said SQFs result in an increase in CSI by 0.3142, 0.2108, 0.1440, 0.1664 and 0.1649

respectively. The changes in the perception on SQFs explain the changes in CSI among the

HIG to the extent of 81.44 per cent. The analysis reveals that the perceptions on SQFs are

relatively influencing on the CSI at higher rate among the HIG than the MIG and LIGs.

IMPACT OF SERVPERF SCALE ON SQFs ON CSI AMONG DIFFERENT

OCCUPIED CUSTOMERS

The occupation of the customers determines their level of requirements, expectation

and perception on banking services. Hence, it is included as one of the demographic profile

of the customers. By the occupation, the customers are classified into agriculturalists,

employees and businessmen. The impact of SERVPERF scales on SQFs on the CSI among

the agriculturalists employees and businessmen have been analysed with the help of multiple

regression analysis. The CSI among the customers is treated as the score of the dependent

variables whereas the SERVPERF scale on SQFs is treated as the score of independent

variables. The Ordinary Least Square (OLS) method has been followed to identify the degree

of influence of SQFs on CSI among three group of customers separately. The results are

shown in Table 1.9.TABLE 1.9

IMPACT OF SERVPERF SCALE OF SQFs ON CSI AMONG DIFFERENT OCCUPIED CUSTOMERS

Sl.No SQFs


Agriculturalists Employees Businessmen

1.

2.

3.

4.

5.

Reliability

Responsiveness

Assurance

Tangibles

Empathy

Constant

R 2

F-Statistics

0.1427*

0.0933

-0.0438

0.1081

0.1884*

0.9134

0.7872

8.1816*

0.1819*

0.1502*

0.1617*

0.0961

-0.0539

1.2441

0.8194

10.3326*

0.2424*

0.1761*

0.0669

0.1104

0.2478*

1.8569

0.8646

12.8603*




ZENITH




3 3

Among the agriculturalists, the significantly influencing SERVPERF scales of SQFs

on the CSI are reliability and empathy since their respective regression co-efficient are

significant at five per cent level. A unit increase in CSI by 0.1427 and 0.1884 units

respectively. The changes in the SERVPERF scale on SQFs explain the changes in CSI to

the extent of 78.72 per cent.

The significantly influencing SERVPERF scale of SQFs on CSI among the

employees are reliability, responsiveness and assurance. A unit increase in the SERVPERF

scale on the above said SQFs result in an increase in CSI by 0.1819,0.1502 and 0.1617 units

respectively. The changes in SERVPERF scale on SQFs explain the changes in CSI among

the employees to the extent of 81.94 per cent. Among the businessmen, a unit increase in

the SERVPERF scale on reliability, responsiveness and empathy result in an increase in

CSI by 0.2424, 0.1761 and 0.2478 units respectively. The changes in the SERVPERF

scale on SQFs among the businessmen explain the changes in CSI to the extent of 86.46

per cent. The analysis reveals that the businessmen are highly influenced by the

SERVPERF scale on SQFs compared to other two groups of customers.

CONCLUDING REMARKS

The present study concludes that there is a close link between the customer's

perception on the service quality factors and the customer satisfaction. But the impacts of

service quality factor on customer satisfaction among the customer are not unique. It

depends upon the demographic profile of the customers. For example, the degree of

influence of the service quality factors on customer's satisfaction is higher among the male,

higher income group and highly educated customers. It may be because of their level of

knowledge and awareness on the banking services offered at the industry. Hence, the bank

managers are advised to formulate appropriate marketing strategy to satisfy their customers. Even though the scope of the study is limited to Kanyakumari district, it may be

extended to the customers at the state level in near future. The customers at various

districts may be analysed and also the important discriminant service quality factors

among them.



ZENITH




3 4

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