Rahul Dixit

Measurement of Customer Satisfaction using Servqual at Indian Bank, Vellore Rahul Dixit and Dr. Bhushan D Sudhakar Professor, VIT University

Abstract Purpose:The paper aims to explore the five key dimensions of service quality (Servqual) – Reliability, Responsiveness, Assurance, Empathy, Tangibles at Indian Bank and help in the Measurement of Customer Satisfaction using the Servqual model developed by A. Parasuraman, Valarie A. Zeithaml, and Leonard Berry. Design/methodology/approach:The paper is based on the Servqual model developed by A. Parasuraman, Valarie A. Zeithaml, and Leonard Berry. The Servqual scale constructed to measure customer perceptions and expectations. It is a 44 item scale, out of which 22 items records customer expectations and 22 items records customer perceptions. The five Servqual key dimensions are Reliability, Responsiveness, Assurance, and Empathy. The present study consists of a sample of 200 actual customers of Indian bank, Vellore, comprising two branches 1) VIT branch and 2) Sathuvachari branch. The data is collected from these two branches of Indian Bank at Vellore with sample size of hundred at each branch. For this study, Descriptive Research Design is used where the data is collected through the questionnaire. The information is gathered from the different customers of the Indian bank. To determine the customer satisfaction level, the following methodology are used •

Primary data

•

Secondary data

The primary data are obtained through interviewing 200 account holders of different profession & age group. 100 from each branch of Indian bank (Vellore Institute of Technology,

Sathuvachari).Interviewing are conducted using a structured questionnaire containing 22 questions representing the five dimensions of customer satisfaction measurement. Five key dimensions of service quality — SERVQUAL ➢ Reliability ➢ Responsiveness ➢ Assurance ➢ Empathy ➢ Tangibles The secondary data are collected from published literature, journals, company information (web links), other related sources, etc. Findings:The Findings shows the mean & standard deviation scores of each dimension of customer satisfaction level along with the aggregate score of all dimensions. Aggregate Customer Satisfaction Level score of Indian Bank is 5.47 which indicate highly satisfied customers, Moreover, Indian Bank has established a strong position in terms of Assurance, Tangibility & Responsiveness with a average Servqual score of 5.5(Assurance), 5.5(Tangibility) and 5.75(Responsiveness) and needs improvement in terms of Reliability and Empathy with lower scores of 5.2(Reliability) and 5.4(Empathy). There is a positive correlation between each dimensions of Servqual. The present study contributes to the satisfaction level of the customers by examining the dimensionality of the Servqual.

Research Limitations/Implications:The report has been conducted within a limited time frame. The study is self financed. Only selected Branches in Vellore have been considered for the study. Samples were selected

conveniently. The sample size does not represent the total population. Further research in this paper should examine the reliability and empathy variables which are very low. Practical implications:The paper shows that reliability and empathy are major concern in the customer satisfaction level. If these two dimensions are improved then the satisfaction level would increase and there would be an equal score for every Servqual dimension. Keywords:Indian Bank, Customer Satisfaction, Servqual, Vellore, VIT, Sathuvachari, Assurance, Reliability Responsiveness, Empathy, Tangibility, Score. Paper type: - Research Paper

Introduction:The banking industry in India seems to be unaffected from the global financial crises which started from U.S in the last quarter of 2008. Despite the fallout and nationalization of banks across developed economies, banks in India seems to be on the strong fundamental base and

seems to be well insulated from the financial turbulence emerging from the western economies. The Indian banking industry is well placed as compare to their banking industries western counterparts which are depending upon government bailout and stimulus packages. The strong economic growth in the past, low defaulter ratio, absence of complex financial products, regular intervention by central bank, proactive adjustment of monetary policy and so called close banking culture has favored the banking industry in India in recent global financial turmoil. Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Customers in Vellore no longer want to wait in long queues and spend hours in banking transactions. This change in customer attitude has gone hand in hand with the development of ATMs, phone and net banking along with availability of service right at the customer's doorstep. With the emergence of universal banking, banks aim to provide all banking product and service offering less than one roof and their endeavor is to be customer centric. With the emergence of economic reforms in world in general and in India in particular, private banks have come up in a big way with prime emphasis on technical and customer focused issue.

HYPOTHESES:H0: There is no significance difference between age and servqual variables H01: There is no significant difference between Indian bank desks employees are neat appearing to the materials associated with the service. H02: There is no significant difference between Indian Bank performs the service right the first time to Indian bank provides its service at the time it promises to do so.

H03: There is no significant difference between Employees in Indian bank always willing to help to the employees in Indian bank are never too busy to respond to your request H04: There is no significant difference between Indian bank operating hours to the employees of Indian bank understanding specific needs

Measurement The study instrument includes 22 questions regarding customer expectations and 22 questions regarding customer perceptions. The gap between them is very less. Seven point likert scale is used with 1 = strongly disagree to 7 = strongly agree. The average scores are calculated separately and then aggregate scores are generated. It is 5.47 which is positive sign regarding customers satisfaction level. CALCULATIONS TO OBTAIN UNWEIGHTED SERVQUAL SCORE

Average Tangible SERVQUAL score

________5.5________

Average Reliability SERVQUAL score

________5.2________

Average Responsiveness SERVQUAL score

________5.75_______

Average Assurance SERVQUAL score

________ 5.5_______

Average Empathy SERVQUAL score

_________5.4_______

TOTAL

27.35

AVERAGE (= Total / 5) UNWEIGHTED SERVQUAL SCORE __________5.47________

Results: - correlation between Servqual variables

Symmetric Measures Value Interval by Interval Ordinal by Ordinal

Pearson's R Spearman Correlation

N of Valid Cases

Asymp. Std. Error

a

Approx. T

b

Approx. Sig.

.381

.089

5.802

.000

.259

.066

3.770

.000

c c

200

a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

There is a positive correlation between Indian bank modern looking equipment to Indian bank’s physical facilities is visually appealing, since the value is 0.381 which is in between 0 and 0.5.

Symmetric Measures Value Interval by Interval Ordinal by Ordinal

Pearson's R Spearman Correlation

N of Valid Cases

Asymp. Std. Error

a

Approx. T

b

Approx. Sig.

.256

.072

3.733

.000

.198

.069

2.850

.005

c c

200

a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

There is a positive correlation between Indian bank sincere interest in solving problem to its promises to do something by a certain time, since the value is 0.256 which is in between 0 and 0.5.

Chi-square tests:-

H01: There is no significant difference between Indian bank desks employees are neat appearing to the materials associated with the service C h i-S q u a reT e s ts

V a lu e P e a rso n C h i-S q u a re L ike lih o o dR a tio L in e a r-b y-L in e a r A sso cia tio n No fV a lid C a se s a .

A sym p . S ig . (2 -sid e d )

d f

4 3 .4 0 4

a

2 5 .7 6 0 .3 1 7

1 6

.0 0 0

1 6

.0 5 8

1

.5 7 3

2 0 0

1 3ce lls(5 2 .0 % )h a vee xp e cte dco u n t le ssth a n 5 .T h em in im u m e xp e cte dco u n t is.0 4 .

Reject Ho1: There is a significant difference between Indian bank desks employees are neat appearing to the materials associated with the service H02: There is no significant difference between Indian Bank performs the service right the first time to Indian bank provides its service at the time it promises to do so C h i-S q u a reT e s ts

V a lu e P e a rs o n C h i-S q u a re L ik e lih o o dR a tio L in e a r-b y -L in e a r A s s o c ia tio n N o fV a lid C a s e s a .

A s y m p . S ig . (2 -s id e d )

d f

2 8 8 .4 1 3 5 7 .0 4 2 9 .0 6 0

a

3 0

.0 0 0

3 0

.0 0 2

1

.0 0 3

2 0 0

3 0c e lls(7 1 .4 % )h a v ee x p e c te dc o u n tle s sth a n 5 .T h em in im u m e x p e c te dc o u n t is.0 1 .

Reject Ho2: There is a significant difference between Indian bank performs the service right the first time to Indian bank provides its service at the time it promises to do so.

Conclusion:-

Customer satisfaction is an important theoretical as well as practical issue for most marketers and consumer researchers. Customer satisfaction is increasingly becoming a corporate goal as more and more companies strive for quality in their products and services. Customer satisfaction is the feeling or attitude of a customer towards a product or service after it has been used and is generally described as the full meeting of one's expectations. Customer satisfaction is a major outcome of marketing activity whereby it serves as a link between the various stages of consumer buying behavior. The main contention of the study is to highlight the customer satisfaction through service quality provided by the Indian Bank, Vellore. Another contention is to demonstrate the performance of each dimension of the servqual variables. Customer satisfaction level should be measured based on the customer’s perception of the services offered & received. Customer perception of the services offered & received is a significant determinant of Customer Satisfaction measurement. This perception may be developed from past or present experience. The Findings shows the mean & standard deviation scores of each dimension of customer satisfaction level along with the aggregate score of all dimensions. Aggregate Customer Satisfaction Level score of Indian Bank is 5.47 which indicate highly satisfied customers, where satisfactory level is considered in between 5.00 to 5.50. Moreover, Indian Bank has established a strong position in terms of Assurance, Tangibility & Responsiveness, indicating that customers of Indian Bank are very much reliable on the services it provides. Overall the customers have expressed positive perception in terms of Reliability and Empathy.

References:Websites ➢ www.indianbanksassociation.org

➢ www.indian-bank.com ➢ www.wikipedia.com

➢ www.researchandmarket.com Books and Journals ➢ Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1994), "Reassessment of expectations

as a comparison standard in measuring service quality: implications for future research", Journal of Marketing, Vol. 58, pp. 111-124. ➢ Interrogating SERVQUAL: a critical assessment of service quality measurement in a

high street retail bank, Karin Newman, Professor, Middlesex University Business School, London, UK ➢ Lovelock, Cristopher, 2001, service Marketing: People, Technology, Strategy, 4the Edition, Prentic Hall ➢ Jha, S. M. 2000, Bank Marketing Millennium Edition, Mumbai: Himalaya ➢ Bitner, MJ, and AR Hubbert, 1994, "Encounter Satisfaction versus overall Satisfaction versus Quality", in Rust, R T and Oliver, R L (Eds), Service Quality: New Directions in Theory and Practice, London: Sage ➢ Oliver, R L, 1980, "Cognitive Model of the Antecedents and Consequences of satisfaction Decisions", Journal of marketing Research, Vol. 17, No, pp 460-9 ➢ A. Parasuraman, Valarie A. Zeithaml, and Leonard Berry, SERVQUAL: A Multiple Item Scale for Measuring Customer Perceptions of Service Quality, Journal of Retailing 64 (1988). ➢ Anne M. Smith, "Measuring Service Quality: Is SERVQUAL Now Redundant?" Journal of Marketing Management (Jan/Feb/Aril 1955) pp 257-276