Customer Satisfaction and Customer Loyalty through Service Quality Evaluated under SERVQUAL Model- A study on Banking Industries of Bangladesh
Science Journal of Business and Management
Volume 1, Issue 4, December 2013, Pages: 88-97
Received: Dec. 7, 2013; Published: Dec. 30, 2013
Views 4673      Downloads 589
Authors
Md. Ariful Islam, BASIC Bank Limited, Khulna, Bangladesh
Kh. Fahim Hossain, Chevron Bangladesh, Dhaka, Bangladesh
Md. Rayhan Islam, Business Administration Discipline, Khulna University, Khulna-9208, Bangladesh
Mahmudul Hasan Siddiqui, Unilever Bangladesh Limited, Gulshan-1, Dhaka-1212, Bangladesh
Article Tools
PDF
Follow on us
Abstract
Contemporary business world is very much competitive and the success in the competition is achieved mainly through giving satisfaction to the ultimate consumer. In service oriented industry, it is very difficult to set a standard rule to satisfy customers. Several factors influence customer’s decision making to take the service from an organization. The banking industry is a service industry; it provides the customer various financial services. So a banking organization must be keen in identifying the factors which influence their decision in taking the financial service. Thus the bank also needs to know the perception and satisfaction level of the customers about their performance. From the study it is found that significant portion of customers is businessman and private service holder. The customers’ satisfaction level towards the overall performance level is quite better. The most positive response factors are products (Average mean value 4.41), procedures of services (average mean score 3.99, charges (average mean score 4.00) and performance of the employee (average mean value 4.11). They are neutral in rate of interest (average mean score 3.67) and physical environment and support (average mean value 3.60). In the last part analysis of the variation in opinion due to demographic difference, it is found that the businessmen are more satisfied by the overall services of BASIC Bank Ltd, Khulna Branch than the service holders. And the customer whose income is between TK. 10000-40000 is more satisfied than the other two groups on average. Moreover, customers whose income is between TK.40000-80000 is less satisfied on average of the six factors. So BASIC Bank Ltd, Khulna Branch need to be concern to remove their dissatisfaction through adopting new mechanism and it will help the bank win customers and increase their profitability.
Keywords
Satisfaction, Customer, Banking, Environment, Attitude, Loyalty, Servqual, Service Quality
To cite this article
Md. Ariful Islam, Kh. Fahim Hossain, Md. Rayhan Islam, Mahmudul Hasan Siddiqui, Customer Satisfaction and Customer Loyalty through Service Quality Evaluated under SERVQUAL Model- A study on Banking Industries of Bangladesh, Science Journal of Business and Management. Vol. 1, No. 4, 2013, pp. 88-97. doi: 10.11648/j.sjbm.20130104.15
References
[1]
Afsar, et al. (2010) Determinants of customer loyalty in the banking sector: The case of Pakistan. African Journal of Business Management, 4 (6), pp. 1040-1047.
[2]
aims-bangladesh.com (2002) Swinging Banking: Not Very Promising. Available from: http://www.aims-bangladesh.com/special/BankingSector.pdf [accessed on August 15, 2012].
[3]
Andaleeb, S.S. and Basu, A.K., (1994) Technical Complexity and Consumer Knowledge as moderators of service quality evaluation in the automobile service industry. Journal of Retailing, 70(4), pp.367-381. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[4]
Anderson, J.C. and Gerbeing, D.W. (1988). Structural equation Modeling in Practice: A Review and Recommended Two-Step Approach. Psychological Bulletin, 103(3), pp.411-423. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[5]
Angur, M.G., Natarajan, R. and Jahera, J.S. (1999) Service quality in the Banking Industry: An Assessment in a Developing Economy. International Journal of Bank Marketing, No.3, pp.116-123. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[6]
Avkiran, N. K. (1994) Developing an instrument to measure customer service quality in branch banking. International Journal of Bank Marketing. 12 (6), 10-18. Cited in: Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[7]
Bahar, H. (2009) Financial Liberalization and Reforms in Bangladesh. In: National Workshop on Strengthening the Response to the Global Financial Crisis in Asia-Pacific: The Role of Monetary, Fiscal and External Debt Policies, Session 2: Effective Monetary Policy Under the Global Financial and Economic Crisis. Thimphu: UNESCAP/UNDP/Royal Monetary Authority of Bhutan. Available from: http://www.unescap.org/pdd/calendar/Bhutan_Dec09/papers/2_Bahar_paper.pdf [accessed on August 15, 2012].
[8]
Bebko, C.P., (2000) Service intangibility and its impact on consumer expectations of service quality. Journal of Services Marketing, 14(1), pp.9-26. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[9]
Berry, L.L., Shostack, G. and Upah, G. (Eds) American Marketing Association, Chicago, IL 99-107. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66
[10]
Bitner, M. J. (1990) Evaluating service encounters the effects of physical surroundings and employee responses. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[11]
Bloemer, J. (1999). Linking perceived service quality and service loyalty: a multi-dimensional perspective. European Journal of Marketing, 33(11, 12), 1082-1106. Cited in: Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[12]
Brady, M.K., and Robertson, C.J., (2001) Searching for a consensus on the antecedent role of service quality and satisfaction: an exploratory cross national study. Journal of Business Research, 51(1), pp.53-60. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[13]
Brown, T.J., Churchill, G., and Peter, J., (1993) Research note: improving the measurement of service quality. Journal of Retailing, 69(1), pp.127-139. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[14]
Caruana, A. (2002) Service loyalty. The effects of service quality and the mediating role of customer satisfaction. European Journal of Marketing, 36(7/8), 811-828. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[15]
Caruana, A. (2002). Service Loyalty: The Effects of Service Quality and the Mediating role of Customer Satisfaction. European Journal of Marketing, 36(7), 811-828. Cited in: Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[16]
Cronin Jr, J. J. & Taylor, S. A. (1992). "Measuring service quality: a reexamination and Extension". Journal of Marketing, 56 (July), 55-68. Cited in: Thakur, S. (2011) Service quality, customer satisfaction and customer loyalty: a study with special reference to Indian banking industries. The Journal of Sri Krishna Research & Educational Consortium, 1(5), pp.83-93.
[17]
Cronin, J.J., and Taylor, S.A., (1992) Measuring service quality: a re-examination and extension. Journal of Marketing, 56(3), pp.55-68. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[18]
Cronin, J.J., Brady, M.K., and Hult, T.M., (2000) Assessing the effects of quality, value, customers satisfaction on consumer behavioral intentions in service environment. Journal of Retailing, 76(2), pp.193-216. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[19]
Dalholkar, P.A., (1995) A contingency framework for predicting causality between satisfaction and service quality. Advances in consumer research, vol.22, Association for consumer research, Provo, UT., pp.101-106. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[20]
Danaker, P.J. (1997) Using Congest Analysis to Determine the Relative Importance of Service Attributes measured in Customer Satisfaction Surveys. Journal of Retailing, No.2, pp.235-260. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[21]
Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[22]
Ennew, C.T., and Binks, M.R. (1996) The impact of service quality and service characteristics on customer retention: small businesses and banks in the UK. British Journal of Management, 7, 219-230. Journal of Marketing, 52(2), 69-82. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[23]
Gronroos, C (1990) Service Management and Marketing. Lexington Books, Lexington, MA. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[24]
Gronroos, C. (2000) Service management and marketing. John Wiley & sons Ltd. Cited in: Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[25]
Gronroos, C. (1988) Service Quality : the six criteria of good perceived service quality Review of Business, 9(3), pp.10-13. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22. IL 99-107. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[26]
Gupta, S.P. and Gupta, M.P. (2005) Business Statistics. 14th ed. New Delhi: Sultan Chand & Sons.
[27]
Jamal A, Kamal N (2004) Customer satisfaction and retail banking: an assessment of some of the key antecedents of customer satisfaction in retail banking. International Journal of Bank Mark, 20(4),pp 146-160. Cited in: Afsar, et al. (2010) Determinants of customer loyalty in the banking sector: The case of Pakistan. African Journal of Business Management, 4 (6), pp. 1040-1047.
[28]
Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[29]
Lehtinen, U., and Lehtinen, J.R. (1982) Service quality- a study of dimensions. unpublished working paper, Service Management Institute, Helsinki, 439-460. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[30]
Levesque, T. and Mc Dougall, G.H.G. (1996) Determinants of Customer Satisfaction in Retail Banking. International Bank Marketing, No.7, pp.12-20. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[31]
Lewis, B.R., Orledge, J. and Mitchell, V.W. (1994) Service quality: Student’s assessment of banks and building societies. International Journal of Bank Marketing, 12 (4), pp.3-12. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[32]
Lewis, R.C., and Booms, B.H. (1983) The marketing aspects of service quality. Emerging Perspectives in Service Marketing, in Berry, L.L., Shostack, G. and Upah, G. (Eds) American Marketing Association, Chicago,
[33]
Magi, A. and Julander, C.R., (1996) Perceived service quality and customer satisfaction in a store performance framework. Journal of Retailing and Consumer Services, No.1, pp.789-209. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[34]
Morgan, G., Leech, N., Gloeckner, G., and Barrett, K. (2004). SPSS for Introductory Statistics. 2nd ed. New Jersey: Lawrence Erlbaum Associates, Inc. Cited in: Siddiqi, K. O. (2011) Interrelations between Service Quality Attributes, Customer Satisfaction and Customer Loyalty in the Retail Banking Sector in Bangladesh. International Journal of Business and Management [online], 6 (3), pp. 12-36. Available from: http://socialwork.academia.edu/kaziomarsiddiqi/Papers/1157050/Interrelations_between_Service_Quality_Attributes_Customer_Satisfaction_and_Customer_Loyalty_in_the_Retail_Banking_Sector_in_Bangladesh [accessed 16 August 2012]
[35]
Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[36]
Newman, K., (2001) Interrogating SERVQUAL: A critical assessment of service quality measurement in a high street retail bank. The international Journal of Bank Marketing, 19(3), pp.126-139. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[37]
Oliver, R.L., (1997) A Behavioral Perspective on the Consumer, Mc.Graw, Hill, New York. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[38]
Olsen, S.O., (2002) Comparative evaluation and the relationship between quality, satisfaction and repurchase loyalty. Journal of the academy of marketing sciences, 30(3), pp.240-249. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[39]
Parasuraman, A., Zeithaml, V. and Bery, C. (1985) A Conceptual Model of Service Quality and its Implications for Future Research. Journal of Marketing, Fall (49), pp.41-50. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[40]
Parasuraman, A., Zeithaml, V. and Bery, C. (1988) SERVQUAL: A Multiple-item scale for measuring consumer perceptions of Service Quality. Journal of Retailing, Spring (64), pp.12-40. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[41]
Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988) SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64(1), Spring. Cited in: Kheng, L. L. (2010) The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 2(2), pp.57-66.
[42]
Peeler, G. H. (1996). Selling in the quality era. Blackwell Business, USA. Cited in: Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[43]
Peter, J., Churhill, G. and Prown, T., (1993) Contain in the uses of difference scores in consumer research. Journal of Consumer Research, 19(4), pp.655-662. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[44]
Rashid, M. (2010) Banking sector challenges in Bangladesh. In: The Daily Star, on Sunday, September 19, 2010. Available from: http://www.thedailystar.net/newDesign/news-details.php?nid=154934 [accessed on August 15, 2012].
[45]
Rust, R.T., and Oliver, R.L., (1994) Service Quality: insights and managerial Implications from the frontier, Sage Publications, Thousand Oaks, CA., pp.72-94. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22
[46]
Spohrer, J. & Maglio, P. (2008) The emergence of service science: Toward systematic service innovations to accelerate co-creation of value. Production and Operations Management, 17(3), 238-246. Cited in: Mosahab, R. et al. (2010) Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation. International Business Research, 3(4), pp.72-80.
[47]
Srinivasan SS, Anderson R, Ponnavolu K (2007) Customer loyalty in e-commerce: an exploration of its antecedents and consequences. Journal of Retailing, 78(1), pp. 41-50. Cited in: Afsar, et al. (2010) Determinants of customer loyalty in the banking sector: The case of Pakistan. African Journal of Business Management, 4 (6), pp. 1040-1047.
[48]
Szymigin, I., and Caruigan, M., (2001) Wherefore customers loyalty? Journal of Financial Services Marketing, 6(2), pp.6-8. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[49]
Takeuchi, H., and Quelch, J.A., (1983) Quality is more than making a good product. Harvard Business Review, July-August, pp.139-145. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[50]
Thakur, S. (2011) Service quality, customer satisfaction and customer loyalty: a study with special reference to Indian banking industries. The Journal of Sri Krishna Research & Educational Consortium, 1(5), pp.83-93.
[51]
Winstanley, M., (1997) What dries customers satisfaction in commercial banking. Commercial Leading Review, 12(3), pp.36-42. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[52]
Zeithaml, V.A., (1988) Consumer perceptions of price, quality and value: a means – end model and synthesis of evidence. Journal of Marketing, 52 (July), pp.2-22. Cited in: Dhandabani, S. (2010) Linkage between service quality and customers loyalty in commercial banks. International Journal of Management & Strategy, 1 (1), pp.1-22.
[53]
Zeithaml, V.A., (2003) Services Marketing. 4th ed. New Delhi: Tata McGraw-Hill Publishing Company Limited.
[54]
Fornell, C and Larcker, D.M. (1981), "Evaluating Structural equation models with unobservable variables and measurement error", Journal of Marketing Research, 18(1), pp.39-50. Cited in: Thakur, S. (2011) Service quality, customer satisfaction and customer loyalty: a study with special reference to Indian banking industries. The Journal of Sri Krishna Research & Educational Consortium, 1(5), pp.83-93.
ADDRESS
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
U.S.A.
Tel: (001)347-983-5186