Investigating the Impact of Service Quality on Customer Satisfaction

Research on the bus service industry in Pakistan

Submitted to: Mam Malka

Submitted by:
Benish sarfraz Abeera Zerlish

Investigating the Impact of Service Quality on Customer Satisfaction

Literature Review: a) Service Quality: Service firms monitor and evaluate their service quality and customer satisfaction with a purpose to influence the behavioral intentions of their customers. These intentions include: repeat purchases, customer feedback and positive word-of-mouth recommendations; which have strong impacts on the overall profitability and market share of the firm. The findings of Zeithaml et al. (1996) and Cronin et al. (2000) provide firm evidence that service quality can either influence behavioral intentions of customers directly and it can influence behavioral intentions indirectly, mediated through customer satisfaction. This establishes the importance of measuring and enhancing service quality for any services firm. One of the common definitions of Service Quality identified by different studies (Bolton and Drew, 1991; Cronin Jr. and Taylor, 1992; Parasuraman, Zeithaml and Berry, 1988; Shepherd, 1999) is, Service Quality is a form of attitude, related but not equivalent to satisfaction, that results from the comparison of expectations with performance. Since 1988, the major tool for measuring service quality has been the SERVQUAL model developed by Parasuraman Zeithaml and Berry (1988). It gives a theoretical framework of the relationship between service quality and customer satisfaction. Initially, 10 determinants of service quality were identified based on focus group interviews (Parasuraman, Zeithaml and Berry, 1985). However, later on, these 10 determinants were reduced to five dimensions. These dimentions are defined as: Tangibles are the physical facilities, equipment, and appearance of personnel. Reliability is the ability to perform the promised services dependably and accurately. Responsiveness is the willingness to help customers and provide prompt service. Assurance is the knowledge and courtesy of employees as well as their ability to inspire trust and confidence. Empathy is the provision of caring, individualized attention to customers. (Parasuraman, Zeithaml and Berry 1988) SERVQUAL consists of 2 sections: a 22-item section to measure customer service expectations of companies, within a specific sector and another 22-item section to measure customers perceptions of a particular company in that sector. The model conceptualizes service quality as a gap between customer's expectations (E) and the perception of the service providers' performance (P). According to Parasuraman et al. (1985), service quality should be measured by subtracting customer's perception scores from customer expectation scores (Q = P E). The greater the positive score represents the greater the positive amount of service quality or vice versa. Many studies (Fick and Ritchie, 1991; Sultan and Simpson, 2000) measuring service quality in the transportation industry have utilized this instrument and have found it to be in accordance with the conception of service quality proposed by Parasuraman and Berry (1988).

Thus, it can be regarded as a reliable and valid instrument for measuring service quality in the transportation industry. b) Customer Satisfaction Customer Satisfaction is a tool for predicting future consumer purchases (Newman and Werbel, 1973; Kasper, 1988). It is proved that satisfied customers have a higher tendency of repeat purchasing (Zeithaml et al., 1996), of recommending the product/service to others through positive word-of-mouth (Reynolds and Arnold, 2000; Reynolds and Beatty, 1999), and of becoming less vulnerable to the competitive offerings (Fitzell, 1998). Customer satisfaction is a psychological concept that involves the feeling of well-being and pleasure that results from obtaining what one hopes for and expects from an appealing product and/or service (WTO, 1985). While there are a variety of approaches to the explanation of customer satisfaction, the most widely used is the one proposed by Richard Oliver who has developed the expectancy disconfirmation theory (Oliver, 1980). According to this theory, which has been tested and confirmed in several studies (Oliver and DeSarbo, 1988; Tse and Wilton, 1988), customers purchase goods and services with pre-purchase expectations about anticipated performance. Once the product or service has been purchased and used, outcomes are compared against expectations. When outcomes match with the expectations, there is confirmation. However, disconfirmation occurs when there are differences between expectations and outcomes. Negative disconfirmation is when product/service performance is less than expected and positive disconfirmation is when performance of the product/service is better than expected. Satisfaction is caused by positive disconfirmation of consumer expectations, and dissatisfaction is caused by negative disconfirmation of consumer expectations (Abraham Pizam and Taylor Ellis, 1999).

Hypothesis: H1: Service quality has a positive impact on customer satisfaction.

Model:

Service Quality Tangibles Reliability Responsiveness Empathy Assurance

Customer Satisfaction

Research Tool:

Service Quality and Customer Satisfaction Survey

Dear Respondent, This survey is being conducted to investigate about the service quality of Daewoo Services and its impact on customer satisfaction. In order to ensure the authenticity of this survey, kindly fill in this questionnaire truthfully. We assure you that all information will be kept confidential and will be used for research purposes only. Thank you for sparing time.

a) Name (Optional)_________________________________ c) Age (Years) Under 20 31-40 Above 60 21-30 41-60

b) Gender d) Education Below Inter Graduate Others f)

Male

Female

Intermediate Post-Graduate

e) Income Level (Rs.) Below 21,000 41,000- 60,000 21,000-40,000 Above 60,000

If you want us to share the results of this survey with you, provide your contact details:

Mobile # ___________________________________ Email Address _______________________________

Directions The following set of statements relate to your feelings about Daewoo Travelling Services. For each statement, please show the extent to which you believe Daewoo has the feature described by the statement. Once again, circling a 7 means that you strongly agree that Daewoo has that feature, and circling a 1 means that you strongly disagree. You may circle any of the numbers in the middle that show how strong your feelings are. There are no right or wrong answers all we are interested in is a number that best shows your perceptions about Daewoo.

Strongly Disagree

Strongly Agree

1. 2. 3. 4. 5. 6. 7. 8. 9.

Daewoo has up-to-date equipment. Daewoos physical facilities are visually appealing Daewoos employees are well dressed and appear neat When Daewoo promises to do something by a certain time, it does so. When you have problems, Daewoo is sympathetic and reassuring. Daewoo is reliable. Daewoo provides its services at the time it promises to do so. Daewoo keeps its records accurately. You can trust employees of Daewoo.

1 1 1 1 1 1 1 1 1 1 1 1 1 1

2 2 2 2 2 2 2 2 2 2 2 2 2 2

3 3 3 3 3 3 3 3 3 3 3 3 3 3

4 4 4 4 4 4 4 4 4 4 4 4 4 4

5 5 5 5 5 5 5 5 5 5 5 5 5 5

6 6 6 6 6 6 6 6 6 6 6 6 6 6

7 7 7 7 7 7 7 7 7 7 7 7 7 7

10. You feel safe in your transactions with Daewoo employees. 11. Employees of Daewoo are polite. 12. The price of the ticket is reasonable. 13. I am satisfied with how Daewoo had taken care of me. 14. I am satisfied with Daewoo as compared to other low cost travelling services.

References: Abraham Pizam, Taylor Ellis, (1999),"Customer satisfaction and its measurement in hospitality enterprises", International Journal of Contemporary Hospitality Management, Vol. 11 Iss: 7 pp. 326 - 339 Bolton RN, Drew JH. A longitudinal analysis of the impact of service changes on customer attitudes. Journal of Marketing 1991; 55(January):19. Cronin Jr JJ, Taylor SA. Measuring service quality: A reexamination and extension. Journal of Marketing 1992; 56(July): 5568. Cronin, J.J. Jr, Brady, M.K. and Hult, T.M. (2000), Assessing the effects of quality, value, customer satisfaction on consumer behavioral intentions in service environment, Journal of Retailing, Vol. 76 No. 2, pp. 193-216. Fick, G.R. and Ritchie, J.R. (1991), Measuring service quality in the travel and tourism industry, Journal of Travel Research, Vol. 30, fall, pp. 2-9. Kasper, H. (1988), On problem perception, dissatisfaction and brand loyalty, Journal of Economic Psychology, Vol. 9 No. 3, pp. 387-97. Oliver, R.L. (1980), A cognitive model of the antecedents and consequences of satisfaction decisions'', Journal of Marketing Research, Vol. 17, pp. 460-9. Oliver, R.L. and DeSarbo, W.S. (1988), ``Response determinants in satisfaction judgments'', Journal of Consumers Research, Vol. 14, pp. 495-507. Newman, J.W. and Werbel, R.A. (1973), Multivariate analysis of brand loyalty for major household appliances, Journal of Marketing Research, Vol. 10 No. 4, pp. 404-9. Parasuraman A, Zeithaml VA, Berry LL. A conceptual model of service quality and its implications for future research. Journal of Marketing 1985; 49(Fall):4150. Parasuraman A, Zeithaml VA, Berry LL. SERVQUAL: A multiple item scale for measuring consumer perceptions of service quality. Journal of Retailing 1988; 64(1):1240. Reynolds, K. and Arnold, M. (2000), Customer loyalty to the salesperson and the store: examining relationship customers in an upscale retail context, Journal of Personal Selling & Sales Management, Vol. 20, April, pp. 89-97. Shepherd CD. Service quality and the sales force: A tool for competitive advantage. Journal of Personal Selling & Sales Management 1999; 19(3):7382. Sultan, F. and Simpson, M.C. Jr (2000), International service variants: airline Passenger expectations and perceptions of service quality, Journal of Services Marketing, Vol. 14 No. 3, pp. 188-216. Tse, D.K. and Wilton, P.C. (1988), ``Model of Consumer Satisfaction Formation: An Extension'', Journal of Marketing Research, Vol. 25, pp. 204-12. WTO (1985), Identification and Evaluation of those Components of Tourism Services which have a Bearing on Tourist Satisfaction and which can be Regulated, and State Measures to Ensure Adequate Quality of Tourism Services, World Tourism Organization, Madrid. Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1996), The behavioral consequences of service quality, Journal of Marketing, Vol. 60 No. 2, pp. 31-46.