Impact of Service Quality on Satisfaction in the Indian Banking Sector

Abstract

This study attempts to know relationship Between service quality and customer satisfaction through two puBlic sector Banks at Sikar district in Rajasthan. Data was collected from 150 customers. Three aspects of service quality-people, process through technology and physical evidence-are considered for study. Findings indicate that service quality has a significant impact on customer satisfaction. People aspect of service quality is found more important than physical evidence and process through technology aspect of service quality.IntroductionFinancial institutions have undergone intense competition and a change in customers' expectations over last few years (Cheng et al., 1996). Intense competition and endlessly evolving customer demands have led Indian Banks to identify drivers of customer satisfaction and loyalty (Lenka et al., 2009). satisfaction is key for survival in market. Cost of acquiring a new customer is much more than cost of retaining customer. Customers are given top priority, and according to their expectations, new products and services are Being developed to satisfy them with special focus on service quality. New marketing concepts and strategies (Ennew et al., 1993), are paying greater attention to identifying customer needs and expectations (Morgan, 1989), and offering high service quality to customers (Lewis, 1993; and Thwaites and Vere, 1995). The interest is largely driven By realization that high service quality results in customer satisfaction and loyalty with product or service, greater willingness to recommend someone else, reduction in complaints and improved customer retention (Zeithaml et al., 1996).This paper examines whether service quality influences customer satisfaction in Indian commercial Banks. The study is conducted in Sikar district in Rajasthan.Literature ReviewCustomer SatisfactionCustomer satisfaction is Buzz word of marketing. According to Oliver (1980), Customer satisfaction is a summary psychological state when emotions surrounding disconfirmed expectations are coupled with consumers prior feelings aBout consumption experience. Kotler (2000) also expresses that satisfaction is a person's feelings of pleasure or disappointment resulting from comparing a product's perceived performance (or outcome) in relation to his or her expectations. Howard and Sheth (1969, p. 18) defined customer satisfaction as the Buyer's cognitive sate of Being adequately or inadequately rewarded for sacrifices he has undergone. satisfaction results when customers either confirm their pre-purchase expectations for a purchased service or positively disconfirm (exceed) their expectations regarding purchased services, resulting in some level of post-purchase affect toward experience (Cardozo, 1965).Service QualityService quality, as perceived By customers, involves a comparison of what they feel service should Be (expectation, E) with their judgement of services they received (perceptions, P) (Parasuraman et al., 1985). It is defined as difference Between customer expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less than satisfactory and hence customer dissatisfaction occurs (Parasuraman et al., 1985; and Lewis and Mitchell, 1990). Parasuraman et al. (1988) developed a measurement scale, SERVQUAL, which has 22 items to assess service quality on five dimensions: reliaBility, responsiveness, assurance, empathy and tangiBility. ReliaBility, responsiveness, assurance and empathy dimensions are related to people aspect of service quality and tangiBle aspect is related to physical evidence. SERVQUAL instrument has Been suBjected to criticism (Brown et al., 1993). Process through technology aspect is not considered in SERVQUAL model. This aspect plays an important role in customer satisfaction as it helps in overcoming proBlem of inseparaBility of production and consumption. …