effect of service quality on behavioral intention of … nv 2019.pdf · thereafter, the overall...

EFFECT OF SERVICE QUALITY ON BEHAVIORAL INTENTION OF

CHURN IN BANKS

Dr. Apar Singh, Assistant Professor

School of Management Studies, Punjabi University, Patiala, Email: [email protected].

Jashanjeet Kaur, Research Scholar, School of Management Studies, Punjabi University,

Patiala. Email: [email protected]

Abstract

Service Quality by its very nature is an elusive, abstract and indistinct concept. Consumers do

not easily articulate their requirement; also, there are difficulties in delimiting and measuring

the concept. A handful of researchers have operationalized the concept. The premises of

‘Quality of service’ as the competitive edge in gaining market leadership has been well

recognized both in academic research and by leading service organization. However, it has

become increasingly important for organizations to find ways, not only to reach the top, but

to maintain that leadership in ever increasing competitive market place. In order to protect

their long-term interest, service organizations are seeking ways to forge and maintain service

quality. The changing focus of service quality from a mere competing instrument to that basic

core of service concept in meeting and exceeding customer expectation is an emerging

important issue in service organization. Banking services is no exception. The banking

industry, being very competitive, not only focuses on providing wide product lines to create

competitive advantages, but also emphasizes the importance of its services, particularly in

maintaining service quality. The factor analyzing technique was employed using Exploratory

Factor Analysis (EFA) and further, the Mean and Gap (P-E) in terms of customers'

expectations and perceptions for the various dimensions of service quality was analyzed.

Thereafter, the overall service quality gap between the individual service quality dimensions

of SERVQUAL were analyzed and lastly, to check the effect of Service Quality Perception

on Behavioral Intention of Churn, the Paired Sample T-Test was applied to analyze Gap

between Customers’ Expectations and Perceptions of Five Dimensions of Service Quality

with Intent to Churn and Least Intent to Churn attributes taken into consideration.

1. Introduction

Indian banking is the lifeline of the country and its people. Banking has helped in building up

the fundamental divisions of the economy and introduce another first light of advancement on

the Indian skyline. The sector has interpreted the expectations and desires of a large number

PAIDEUMA JOURNAL

Vol XII Issue XI 2019

Issn No : 0090-5674

http://pjrpublication.com/15

of people into the real world. The banking structure of each economy is going to change with

the evolving condition. In Indian setting, Characterizing the idea of service quality, along

these lines, begins from customers, as quality is all that it infers for buyers, and the premise

of their perceptions. This concludes in the way that service quality is accomplished if client

expectations are satisfied, or surpassed. The service quality as the degree to which a service

lives up to customers’ needs or expectations. Service quality would thus be able to be

characterized as the distinction between customer expectations of service and perceived

service. On the off chance that expectations are more prominent than performance, at that

point perceived quality is less than acceptable and thus customer dissatisfaction happens

(Parasuraman, 1985). Customer churn is one of the growing issues of the present rapidly

developing and intensive banking sector. The central point of the banking unit has moved

from acquiring new customers to holding existing customers on account of the related

exceptionally high costs. Customer churn happens when customers or endorsers quit working

with an association or organization, generally called customer attrition. As Reichheld and

Sasser (1990) stated, "the longer organization keeps a customer, the more money it stands to

make". Long term customers purchase more, take lesser degree of an organization's time, are

less sensitive to cost, bring new customers and have no start-up expenses. As a result, a

climbing defection rate is a certain indicator of a diminishing flow of money from customers

to the banks. By probing for the root causes of customer parting, organizations or banks with

the longing and ability to learn can distinguish business approaches that should be refined,

win the customer back and re-establish customer connections on progressively stable ground.

In spite of the fact that customer parting is a standout amongst the most lighting up measures

for organizations to analyze, few even attempt to gain from defected customers (Reichheld,

1996).

Defining service quality is troublesome when contrasted with product quality because of

certain features exclusive to services including intangibility, inseparability, heterogeneity and

perishability. The investigations of Maleeha (2015), Lee et al. (2000), Gilbert and

Veloutsou (2006), Suleiman (2011) and Buttle (1996) propose service quality prompts

customer satisfaction. To accomplish an abnormal state of customer satisfaction, most

scientists recommend that an abnormal state of service quality ought to be conveyed by the

service provider as service quality is ordinarily viewed as a predecessor of customer

satisfaction. As service quality improves, the likelihood of customer satisfaction increments.

Service quality would thus be able to be characterized as the difference between customer

PAIDEUMA JOURNAL


Issn No : 0090-5674


expectations of service and perceived service. On the off chance that expectations are greater

than performance, at that point perceived quality is less than satisfactory and subsequently

customer dissatisfaction happens. (Parasuraman, 1985)

2. Review of Literature

The purpose of this section is to present a review of literature and research gaps relating to

the effect of service quality on behaviour intention of churn in banks:

In a period of developed marketplaces and rigorous competitive compression, companies

progressively apprehend that their most valued strength is the present customer base (Van

den Poel and Lariviere, 2004; Jones et al., 2000). The economic worth of customer

retention is usually known in literature. Consistent customers buy extra, endorse the business

through optimistic word-of-mouth, are a smaller amount of pricey (Ganeshetal.,2000), and

tend to be not as much as delicate to viable marketing activities (Colgate et al., 1996).

Customer defection, also known as customer churn, exit or attrition, is defined as the

summation of a sequence of intricate interconnected actions and complications, which come

upon over time and in due course gradually lead to parting (e.g. Bejou and Palmer, 1998;

Hocutt, 1998; Steward, 1998). While earlier studies have fixated on the impact of the

extensive evaluative ideas of service quality on customer retention (Mittal et al., 1998;

Zeithaml et al., 1996), the developing literature accentuates the need to regulate the

fundamental aspects and service difficulties, which either straight impact churn/defection.

Keaveney recognized 8 classes of service problems and non-service factors that effect a

client’s decision to leave a service: pricing (problems associated with fees, rates and charges);

inconvenience (incidents where the customer felt inconvenienced by the service provider’s

location, hours of operation, etc.); core service failure (due to mistakes or technical problems

associated with the service itself); service encounters (personal interactions between

customers and employees of service firms); response to failure (incompetence of service

providers to handle a situation appropriately); competition (attractive competitive offerings);

ethical problems (deceptive, immoral or unsafe behaviours of the service provider towards

the customer); and other (factors largely beyond the control of either the customer or the

service provider). Among these 8 classes, Keaveney (1995) recommended that 5 are the

largest and perhaps maximum significant based on the proportion of individuals that cited it

PAIDEUMA JOURNAL


Issn No : 0090-5674


as zones on for switching services, namely pricing, core service failures, ethical problems,

service encounter failures, and competition.

A comprehensive study was carried out by Parasuraman et al (1985) to identify the

determinants of perceived service quality. They have identified ten determinants of service

quality. The determinants are reliability, responsiveness, competence, access, courtesy,

communication, credibility, security, understanding/knowing the customer, and tangibles.

Subsequent research, analysis and testing by Parasuraman et al (1988) have condensed

these into five dimensions of service quality namely Tangibles, Reliability, Responsiveness,

Assurance and Empathy. Fein burg and de Ruyter (1995) supported this idea as they

postulate that the dimensions are instruments for measuring perceived service quality. They

also posit that consumer-perceived service quality is usually seen as a multidimensional

construct.

3. Objectives of The Study

To check the effect of service quality perception on behavioral intention of churn.

There is any relationship between Service Quality Perception and Behavioral

Intention of Churn.

To study which service failures, play the most important role in customers’ decision

to leave a service provider.

4. Research Methodology

4.1 Scope of the study: As the scope of the is concerned, this study compared and

analyzed customers of four banks including two public and two private i.e. SBI (State Bank

of India) and PNB (Punjab National Bank) from public and HDFC bank and ICICI bank from

private. Further the banks selected have large divergence in total assets as per the balance

sheet available from money control website.

4.2 Research Design: The study being undertaken is Descriptive in nature. The major purpose

of descriptive research is description of the state of affairs, as it exists at present, while

studying the research problem, scientific method is followed.

4.3 Sampling Unit: In this study, the sampling unit taken is CASA Account holders having

business above five lacs.

PAIDEUMA JOURNAL


Issn No : 0090-5674


4.4 Sampling Size: The sample size is so selected that it should be adequate enough to

represent the whole population, and also give the true picture. The total sample size was

restricted to 400.

4.5 Sampling Design: Keeping in Mind the nature of data required for the study, Probability

Random Sampling Method is used. The respondents for the survey to be selected from banks

of Patiala.

4.6 Data Collection: Questionnaire Method: The primary data is to be collected by

administering structured questionnaire to the banking customers which are CASA Account

holders having business above five lacs who belongs to Patiala.

4.7 Instrument used: All responses were coded and analyzed by computer using the

programming of Statistical Packages for Social Sciences (SPSS) version 23.

5. Data Analysis and Interpretation

Service Quality and Factor Analysis:

Apart from descriptive statistics, Exploratory Factor Analysis (EFA) was used to categorize

the measurement items into the valid factors through confirming the extracted factors that

were affecting service quality perceptions of respondents on the behavioral intention of churn

in selected banks. Thereafter, the reliability of all items was tested through Alpha value and

Communality values accordingly. Subsequently, items were factor analyzed using

Exploratory Factor Analysis (EFA) and these dimensions were evaluated based on the

customers’ Expectations and Perceptions. Further, these Mean and Gap (P-E) in terms of

customers' expectations and perceptions for the various dimensions of service quality and

here, Bartlett’s Test of Sphericity was also applied. Under EFA, the principal component

method with Varimax rotation method was applied. Once the factors were extracted than the

next step is to interpret and name the factors. Factor naming is done based on the membership

of various items in various factors. Then, Service Quality Gap Analysis was tested for all

variables concerned like, empathy, assurance, tangibility, responsiveness, reliability of

SERVQUAL SCALE. Thereafter, the overall service quality gap between the individual

service quality dimensions of SERVQUAL were analyzed and the results were extracted.

Lastly, to check the effect of Service Quality Perception on Behavioral Intention of Churn,

the Paired Sample T-Test was applied to analyze Gap between Customers’ Expectations and

PAIDEUMA JOURNAL


Issn No : 0090-5674


Perceptions of Five Dimensions of Service Quality with Intent to Churn and Least Intent to

Churn attributes taken into consideration.

5.A. Descriptive Statistics

Table 5.1: Descriptive Statistics

Variables Perception

Mean

Expectation

Mean

Gap

(P-E)

Present bank has operating hours

convenient to their customers.

3.91 4.09 -0.18

Present bank has employees who give

customers personal attention.

3.86 4.01 -0.15

Present bank gives customers individual

attention.

3.84 3.98 -0.14

Employees of present bank understand

specific needs of customers.

4.06 4.16 -0.10

Present bank has their customers best

interest at heart.

3.95 4.07 -0.12

Customer of present bank will feel safe in

their banking transactions.

4.22 4.32 -0.10

The behavior of employees in present

bank is increasing confidence in

customers.

4.16 4.30 -0.14

Employees of present bank will be

consistently courteous with customers.

4.15 4.22 -0.07

Employees of present bank have

knowledge to answer customer questions.

4.09 4.25 -0.16

The physical facilities at present bank are

visually appealing.

4.02 4.08 -0.06

Materials associated with service are

visually appealing.

4.13 4.24 -0.11

Present bank has modern equipment’s. 3.87 4.17 -0.19

The frontline employees at present bank

are neat in appearance.

3.63 3.85 -0.22

Employees of present bank give prompt

services to customers.

4.14 4.23 -0.08

Employees of present bank are always

willing to help customers.

4.04 4.11 -0.07

Employees of present bank tell customers

exactly when service will be performed.

3.97 4.06 -0.09

PAIDEUMA JOURNAL


Issn No : 0090-5674


Employees of present bank are never too

busy to respond to customers request.

4.01 4.12 -0.11

Present bank performs the service right at

the first time.

4.07 4.08 -0.01

Present bank insists on error free records. 4.23 4.27 -0.04

When present bank promises to do

something by certain time, it does.

4.18 4.22 -0.03

When customer has problem, present bank

shows sincere interest in solving.

4.13 4.24 -0.11

Present bank will provide the service at

the time they promise to do so.

4.14 4.19 -0.05

This part shows the Mean and Gap (P-E) in terms of customers' expectations and perceptions

for the various dimensions of service quality. The mean score for all the variables comes

close to 3.5- 4.5 which shows that all the variables of service quality are important for

retention of the customers. Also, there is very less deviation except two or three variables.

5.B. Exploratory Factor Analysis

Table 5.2: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy. .898

Bartlett's Test of Sphericity Approx. Chi-

Square

10590.64

1

df 231

Sig. .000

Significance value of Bartlett’s Test of Sphericity from Table 5.2 is 0.00 that is less than 0.05

which stipulates that data is multivariate normal and acceptable for factor analysis. Moreover,

KMO value is 0.898 that indicates that data set considered to be highly suitable for factor

analysis.

Table 5.3.: Communalities

Initial Extraction

The behavior of employees in present bank is increasing

confidence in customers.

1.000 .918

Customer of present bank will feel safe in their banking

transactions.

1.000 .922

Employees of present bank will be consistently courteous

with customers.

1.000 .912

Employees of present bank has knowledge to answer

customer questions.

1.000 .935

PAIDEUMA JOURNAL


Issn No : 0090-5674


Table 5.3. shows the communalities values of all the 5 factor of service quality. Here, all the

values are above 0.5 which suggest that the data set was appropriate for further analysis.

Table 5.4.: Total Variance Explained

Comp

onent

Initial Eigenvalues

Extraction Sums of

Squared Loadings

Rotation Sums of

Squared Loadings

Tota

l

% of

Varian

Cumula

tive % Total

% of

Varian

Cumula

tive % .Total

% of

Varian

Cum

ulativ

Present bank gives customers individual attention. 1.000 .886

Present bank has operating hours convenient to their

customers.

1.000 .885

Present bank has employees who give customers personal

attention.

1.000 .862

Employees of present bank understand specific needs of

customers.

1.000 .915

Present bank has their customers best interest at heart. 1.000 .910

When present bank promises to do something by certain time,

it does.

1.000 .910

When customer has problem, present bank shows sincere

interest in solving.

1.000 .903

Present bank performs the service right at the first time. 1.000 .770

Present bank insists on error free records. 1.000 .764

Present bank will provide the service at the time they promise

to do so.

1.000 .768

Employees of present bank tell customers exactly when

service will be performed.

1.000 .753

Employees of present bank give prompt services to

customers.

1.000 .737

Employees of present bank are always willing to help

customers.

1.000 .796

Employees of present bank are never too busy to respond to

customers request.

1.000 .786

Present bank has modern equipment’s. 1.000 .775

The physical facilities at present bank are visually appealing. 1.000 .760

The frontline employees at present bank are neat in

appearance.

1.000 .869

Materials associated with service are visually appealing. 1.000 .874

Extraction Method: Principal Component Analysis.

PAIDEUMA JOURNAL


Issn No : 0090-5674


ce ce ce e %

1 9.88

5 44.930 44.930 9.885 44.930 44.930 4.579 20.812

20.81

2

2 2.97

4 13.520 58.451 2.974 13.520 58.451 3.656 16.619

37.43

1

3 2.36

0 10.729 69.179 2.360 10.729 69.179 3.531 16.050

53.48

1

4 2.19

8 9.992 79.171 2.198 9.992 79.171 3.485 15.841

69.32

2

5 1.11

4 5.065 84.236 1.114 5.065 84.236 3.281 14.914

84.23

6

6 .981 4.459 88.695

7 .301 1.368 90.063

8 .299 1.357 91.420

9 .265 1.206 92.626

10 .234 1.062 93.688

11 .205 .931 94.619

12 .181 .821 95.440

13 .159 .721 96.161

14 .146 .664 96.825

15 .130 .593 97.418

16 .119 .540 97.957

17 .109 .495 98.453

18 .083 .379 98.831

19 .080 .364 99.196

20 .073 .331 99.526

21 .062 .283 99.809

22 .042 .191 100.000


All the 5 factors in Table 5.4 accounted for 84.236 percent of the variance. Total variance

explained (84.236 percent) by these 22 components exceeds the 60 percent threshold

commonly used in social sciences.

Table 5.5.: Rotated Component Matrixa

Component

1 2 3 4 5



.912



.911

PAIDEUMA JOURNAL


Issn No : 0090-5674



attention.

.905



.897


interest at heart.

.893

Customer of present bank will feel safe in

their banking transactions.

.914

The behavior of employees in present bank

is increasing confidence in customers.

.906



.904

Employees of present bank has knowledge

to answer customer questions.

.882

The physical facilities at present bank are

visually appealing.

.902


visually appealing.

.896

Present bank has modern equipment’s. .889

The frontline employees at present bank are

neat in appearance.

.884



.800



.796

Employees of present bank tell customers

exactly when service will be performed.

.791



.776

Present bank performs the service right at

the first time.

.844

Present bank insists on error free records. .835



.459 .692

When customer has problem, present bank

shows sincere interest in solving.

.442 .687

Present bank will provide the service at the

time they promise to do so.

.449 .664


Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.

PAIDEUMA JOURNAL


Issn No : 0090-5674


Rotated component matrix Table 5.5 represents the strength of relationship between the item

and factor and membership of the item under one factor. Here the membership of the item in

factor is determines by identifying the highest loading in one factor. The loading values

ranges between the 0 and 1. Value close to 1 indicated the highest factor loading. Another

important thing is that while determining the factor membership, negative sign of the factor

is being ignored. Generally, factor loading higher than 0.5 is acceptable but as per the Hair

(2006), for sample size of 400 factor loading of 0.40 is also acceptable.

5.B. Factor Naming

Once the factors extracted than the next step is to interpret and name the factors. Factor

naming is done based on the membership of various items in various factors as follows:

Factor 1

Table 5.6: Factor Loadings for variables of Factor

“Empathy”

Variables Factor

Loadings

Present bank has operating hours convenient to their customers. .912

Present bank has employees who give customers personal

attention.

.911

Present bank gives customers individual attention. .905

Employees of present bank understand specific needs of

customers.

.897

Present bank has their customers best interest at heart. .893

Variance % 20.812%

Cumulative % 20.812%

The first factor is a linear combination of items listed in table 5.6. All the items are

pertaining to the bank employees’ attentiveness, their ability to understand the customer

needs, promptness in services, problem solving and their easy accessibility. Considering

these items factor 1 is named as Empathy.

It refers to the individualized attention the service provider gives to its customers.

Furthermore, the variables included in this factor are Bank employees giving customers

individual attention, bank employees deal with customers in a caring fashion, bank

employees have the customer’s best interest at heart, bank has hours convenient to all

customers and bank employees understand the individual needs of their customers.

Factor 2


PAIDEUMA JOURNAL


Issn No : 0090-5674


“Assurance”

Variables Factor Loadings

Customer of present bank will feel safe in their banking

transactions.

.914

The behavior of employees in present bank is increasing

confidence in customers.

.906

Employees of present bank will be consistently courteous with

customers.

.904

Employees of present bank have knowledge to answer customer

questions.

.882

Variance % 16.619%


This factor is a linear combination of item listed in table 5.7. These items comprise of

variables related to the knowledge and courtesy of employees and their ability to inspire

trust and confidence. The factors are included in the assurance are employees instill

confidence in customers, bank employees make customers feel safe in their transaction, bank

employees are consistently courteous and bank employees have the knowledge to answer

customer Questions.

Factor 3


“Tangibility”


The physical facilities at present bank are visually appealing. .902

Materials associated with service are visually appealing. .896

Present bank has modern equipment’s. .889

The frontline employees at present bank are neat in appearance. .884

Variance % 16.050%


This factor is a linear combination of item listed in table 5.8. These items comprise of

cleanliness in the bank’s premises and bank’s various materials like pamphlets, brochures

etc. As per the literature of service quality, all these items are a part of Physical Evidence

and hence named as Tangibility.

It means the things which are physically observed by the customers in the bank branch

including employees have a neat, professional appearance, the bank has modern equipment,

the bank has visually appealing material associated with the service and the facilities of

banks are visually appealing may represent tangibles. These qualities provide concrete cues

for customers to evaluate the capability of the service provider.

PAIDEUMA JOURNAL


Issn No : 0090-5674


Factor 4


“Responsiveness”


Employees of present bank give prompt services to customers. .800

Employees of present bank are always willing to help customers. .796

Employees of present bank tell customers exactly when service

will be performed.

.791

Employees of present bank are never too busy to respond to

customers request.

.776

Variance % 15.841

Cumulative % 69.322

This factor is linear combination of items listed in Table 5.9 that represent availability of

various bank’s products such as mutual fund, insurance policies and locker facility. As the

items grouped in this factor represent the various banking product through which bank offer

exact required services to its customers with necessary competitive promptness and hence

this factor is named as Responsiveness.

It refers to the service provider willingness to help customers and provide prompt service. It

can be measured by the variables like bank employees provide prompt service to customers,

bank employees are always willing to help customers, bank employees are ready to respond

to customers request and bank employees are never too busy to respond to customer

questions.

Factor 5


“Reliability”


Present bank performs the service right at the first time. .844

Present bank insists on error free records. .835

When present bank promises to do something by certain time, it

does.

.692

When customer has problem, present bank shows sincere interest

in solving.

.687

Present bank will provide the service at the time they promise to

do so.

.664

Variance % 14.914%


PAIDEUMA JOURNAL


Issn No : 0090-5674


This factor is a linear combination of item listed in table 5.10. These items epitomize the

philosophy of the bank so far as ethics are concern and it results in creating a good and

reliable service provider in the market. Therefore, this factor is named as Reliability.

Reliability refers to the trust in bank’s ability of performing service in a proper way, such as

acting according to promises and declarations. A reliable service means the banker is bank

employees provide services as promised, bank employees are dependable in handling

customer’s service problems, bank employees perform services right at the first time and

bank employees provide services at the promised time.

5.C. Service Quality Gap Analysis

5.C.1. Service Quality Gap Analysis in Empathy of SERVQUAL SCALE

A total of 5 variables are considered under dimension “Empathy” of SERVQUAL scale and

the analyzed service quality gap for each variable is listed below:

Table 5.11: Mean Comparison between expectation and perception and gap

analysis in “Empathy” of SERVQUAL scale

Empathy Perception

Mean

Expectation

Mean

Gap (P-E)



3.91 4.09 -0.18



3.86 4.01 -0.15


attention.

3.84 3.98 -0.14



4.06 4.16 -0.10


interest at heart.

3.95 4.07 -0.12

The service quality gap (P-E) is negative for all the variables and the average ratings varies

between 3.5 and 4.5 for expected and perceived items of empathy. In both expectation and

perception items, the highest rating given by the bank customer is noticed with “Employees

of present bank understand specific needs of customers” (4.16) and (4.06) respectively and

the lowest rating given by the bank customer is noticed with “Present bank give customers

individual attention” (3.84) and (3.98) respectively for expectation and perception towards

the dimension of “Empathy”. The ratings given by the respondents vary between 1 (Strongly

PAIDEUMA JOURNAL


Issn No : 0090-5674


Disagree) to 5 (Strongly Agree). The above mean rating shows that, on average, the ratings

of the respondents fall between close to Agree and below Strongly Agree.

Regarding Service Quality gap, it is seen that large gap is notice with “Present bank have

operating hours convenient to their customers” (-.018) and the least service quality gap is

noticed with “Employees of present bank understand specific needs of customers” (-.10).

5.C.2. Service Quality Gap Analysis in Assurance of SERVQUAL SCALE

A total of 5 variables are considered under dimension “Assurance” of SERVQUAL scale

and the analyzed service quality gap for each variable is listed below:


analysis in “Assurance” of SERVQUAL scale

Assurance Perception

Mean

Expectation

Mean

Gap (P-E)

Customer of present bank will feel safe

in their banking transactions.

4.22 4.32 -0.10

The behavior of employees in present

bank is increasing confidence in

customers.

4.16 4.30 -0.14



4.15 4.22 -0.07

Employees of present bank have

knowledge to answer customer

questions.

4.09 4.25 -0.16


between 3.5 and 4.5 for expected and perceived items of assurance. In both expectation and

perception items, the highest rating given by the bank customer is noticed with “Customer of

present bank will feel safe in their banking transactions” (4.22) and (4.32) respectively and

the lowest rating given by the bank customer is noticed with “Employees of present bank

will be consistently courteous with customers” (4.15) and (4.22) respectively for

expectation and perception towards the dimension of “Assurance”. The ratings given by the

respondents vary between 1 (Strongly Disagree) to 5 (Strongly Agree). The above mean

rating shows that, on average, the ratings of the respondents fall between close to Agree and

below Strongly Agree.

Regarding Service Quality gap, it is seen that large gap is notice with “Employees of banks

have knowledge to answer customer questions” (-.016) and the least service quality gap is

PAIDEUMA JOURNAL


Issn No : 0090-5674


noticed with “Employees of present bank will be consistently courteous with customers” (-

.07).

5.C.3. Service Quality Gap Analysis in Tangibility of SERVQUAL SCALE

A total of 4 variables are considered under dimension “Tangibility” of SERVQUAL scale



analysis in “Tangibility” of SERVQUAL scale

Tangibility Perception

Mean

Expectation

Mean

Gap (P-E)

The physical facilities at present bank

are visually appealing.

4.02 4.08 -0.06


visually appealing.

4.13 4.24 -0.11

Present bank has modern equipment’s. 3.87 4.17 -0.19

The frontline employees at present bank

are neat in appearance.

3.63 3.85 -0.22


between 3.5 and 4.5 for expected and perceived items of tangibility. In both expectation and

perception items, the highest rating given by the bank customer is noticed with “The

physical facilities at present bank are visually appealing” (4.13) and (4.24) respectively and

the lowest rating given by the bank customer is noticed with “The frontline employees at

present bank are neat in appearance” (3.63) and (3.85) respectively for expectation and

perception towards the dimension of “Tangibility”. The ratings given by the respondents

vary between 1 (Strongly Disagree) to 5 (Strongly Agree). The above mean rating shows

that, on average, the ratings of the respondents fall between close to below Agree to

Strongly Agree.

Regarding Service Quality gap, it is seen that large gap is notice with “The frontline

employees at present bank are neat in appearance” (-.022) and the least service quality gap is

noticed with “The physical facilities at present bank are visually appealing” (-.06).

5.C.4. Service Quality Gap Analysis in Responsiveness of SERVQUAL SCALE

A total of 4 variables are considered under dimension “Responsiveness” of SERVQUAL

scale and the analyzed service quality gap for each variable is listed below:


analysis in “Responsiveness” of SERVQUAL scale

PAIDEUMA JOURNAL


Issn No : 0090-5674


Responsiveness Perception

Mean

Expectation

Mean

Gap (P-E)



4.14 4.23 -0.08



4.04 4.11 -0.07

Employees of present bank tell

customers exactly when service will be

performed.

3.97 4.06 -0.09



4.01 4.12 -0.11



perception items, the highest rating given by the bank customer is noticed with “Employees

of present bank give prompt services to customers” (4.14) and (4.23) respectively and the

lowest rating given by the bank customer is noticed with “Employees of present bank tell

customers exactly when service will be performed” (3.97) and (4.06) respectively for

expectation and perception towards the dimension of “Responsiveness”. The ratings given

by the respondents vary between 1 (Strongly Disagree) to 5 (Strongly Agree). The above

mean rating shows that, on average, the ratings of the respondents fall between close to

below Agree to Strongly Agree.

Regarding Service Quality gap, it is seen that large gap is notice with “Employees of present

bank are never too busy to respond to customers request” (-.011) and the least service

quality gap is noticed with “Employees of present bank are always willing to help

customers” (-.07).

5.C.5. Service Quality Gap Analysis in Reliability of SERVQUAL SCALE

A total of 4 variables are considered under dimension “Reliability” of SERVQUAL scale



analysis in “Reliability” of SERVQUAL scale

Reliability Perception

Mean

Expectation

Mean

Gap (P-E)

Present bank performs the service right

at the first time.

4.07 4.08 -0.01

Present bank insists on error free

records.

4.23 4.27 -0.04

PAIDEUMA JOURNAL


Issn No : 0090-5674




4.18 4.22 -0.03

When customer has problem, present

bank shows sincere interest in solving.

4.13 4.24 -0.11

Present bank will provide the service at

the time they promise to do so.

4.14 4.19 -0.05



perception items, the highest rating given by the bank customer is noticed with “Present

bank insist on error free records” (4.23) and (4.27) respectively and the lowest rating given

by the bank customer is noticed with “Present bank performs the service right at the first

time” (4.07) and (4.08) respectively for expectation and perception towards the dimension of

“Reliability”. The ratings given by the respondents vary between 1 (Strongly Disagree) to 5

(Strongly Agree). The above mean rating shows that, on average, the ratings of the

respondents fall between close to below Agree to Strongly Agree.

Regarding Service Quality gap, it is seen that large gap is notice with “When customer has

problem, present bank show sincere interest in solving” (-.011) and the least service quality

gap is noticed with “Employees of present bank are always willing to help customers Present

bank performs the service right at the first time” (-.01).

5.C.6. Gap Analysis with SERQUAL Dimensions

In this section, the overall service quality gap between the individual service quality

dimensions of SERVQUAL were analyzed and the result extracted is given below:


analysis of SERVQUAL scale Dimension

S.No. Service

Quality

Dimension

Perception Expectation Service

Quality

Gap

(P-E)

‘t’

Value Mean SD Mean SD

1. Empathy 19.69 3.78 20.36 3.54 -0.67 4.92

2. Assurance 12.46 2.12 12.81 2.03 -0.35 4.26

3. Tangibility 15.63 2.87 16.34 2.79 -0.71 5.26

4. Responsiveness 20.37 3.54 20.89 3.19 -0.52 3.64

5. Reliability 20.78 3.31 21.02 3.18 -0.24 1.83

The above table explained the mean score and standard deviation of Perception and

Expectation pf customers in view of SERVQUAL dimensions like Empathy, Assurance,

Tangibility, Responsiveness and Reliability. From the result, it is inferred that large service

quality gap is noticed with Tangibility (-.071) and the least service quality gap is notices with

PAIDEUMA JOURNAL


Issn No : 0090-5674


Reliability (-.024) which revealed that the expectation level is more than the perception level

in view of service quality.

5.C.7. Effect of Service Quality Perception on Behavioral Intention of Churn: Paired

Sample T-Test to Analyze Gap between Customers’ Expectations and Perceptions of

Five Dimensions of Service Quality: Intent to Churn and Little Intent to Churn

H0: There is no significant relationship between Service Quality Perception and Behavioral

Intention of Churn.

In this part, in view of finding association between the type of churn of the respondents and

their level of perception on service quality dimension of SERVQUAL, paired sample ‘t’ test

is applied since it has only two attributes and the result obtained from the analysis is shown in

the table below:

Table 5.17: Association between the service quality perception of the respondents

and their behavioral intention of churn

S.No. Service

Quality

Dimension

Mean Score of Service Quality

Dimensions with Type of Bank

of Respondents

‘t’-Statistics

Intent to

churn

Little Intent

to churn

1. Empathy 19.43 21.10 3.63

2. Assurance 12.34 13.09 2.82

3. Tangibility 15.37 17.06 4.83

4. Responsiveness 20.58 21.85 3.11

5. Reliability 20.13 21.67 3.55

From the above table it is revealed that there is a significant association found between the

type of churn of the respondents and their level of perception on all service quality

dimensions of SERVQUAL scale as the ‘t’ value is statistically significant at .5% level of

significance in public and private sector banks. Highest mean score (21.85) is found with

“Responsiveness” of service quality dimension under little Intent to churn category and least

mean score (12.34) is found with “Assurance” under Intent to churn category of respondents.

In the above table, it has been examined that gap between expectation and perception of the

customers is significant in the intent to churn and little intent to churn. Therefore, the null

PAIDEUMA JOURNAL


Issn No : 0090-5674


hypothesis has not been accepted. This shows that there is a significant effect of service

quality perception on behavioral intention of churn.

Bibliography:

Bejou, D., & Palmer, A. (1998). Service failure and loyalty: an exploratory empirical study of

airline customers. Journal of services marketing, 12(1), 7-22.

Colgate, M., Stewart, K., & Kinsella, R. (1996). Customer defection: a study of the student

market in Ireland. International Journal of Bank Marketing, 14(3), 23-29.

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate

data analysis 6th Edition. Pearson Prentice Hall. New Jersey. humans: Critique and

reformulation. Journal of Abnormal Psychology, 87, 49-74.

Keaveney, S. M. (1995). Customer switching behavior in service industries: An exploratory

study. Journal of marketing, 59(2), 71-82.

Maleeha, M. (2015). The Relationship Between Service Quality In Banks And Customer

Satisfaction: A Case Of Islamic Banks In Nairobi (Doctoral dissertation, United States

International University-Africa).

Mittal, B., & Lassar, W. M. (1998). Why do customers switch? The dynamics of satisfaction

versus loyalty. Journal of services marketing, 12(3), 177-194.

Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service

quality and its implications for future research. Journal of marketing, 49(4), 41-50.

Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). Servqual: A multiple-item scale for

measuring consumer perc. Journal of retailing, 64(1), 12.

Reichheld, F. F., & Sasser, W. E. (1990). Zero defections: Quality comes to services. Harvard

business review, 68(5), 105-111.

Reichheld, F. F. (1996). Learning from customer defections. Harvard business review, 56-69.

Stewart, K. (1998). An exploration of customer exit in retail banking. International Journal of

Bank Marketing, 16(1), 6-14.

PAIDEUMA JOURNAL


Issn No : 0090-5674


Van den Poel, D., & Lariviere, B. (2004). Customer attrition analysis for financial services

using proportional hazard models. European journal of operational research, 157(1),

196-217.

Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of

service quality. Journal of marketing, 60(2), 31-46.

PAIDEUMA JOURNAL


Issn No : 0090-5674


effect of service quality on behavioral intention of … nv 2019.pdf · thereafter, the overall...

Documents