Influence of Service Quality Determinants On Customer Satisfaction A Domicile Comparison

ZENITH International Journal of Multidisciplinary Research _______________ISSN 2231-5780
Vol.4 (6), JUNE (2014)

Online available at zenithresearch.org.in
1

INFLUENCE OF SERVICE QUALITY DETERMINANTS ON CUSTOMER
SATISFACTION: A DOMICILE COMPARISON
DR. S. HARI BABU
ASSISTANT PROFESSOR,
SCHOOL OF BUSINESS,
LOVELY PROFESSIONAL UNIVERSITY,
DELHI- JALANDHAR G T ROAD, JALANDHAR,
PUNJAB.

ABSTRACT
Service Quality is a buzz word to the corporate banks to sustain in the competitive environment.
Numerous studies were conducted to examine the service quality determinants and customer
satisfaction using SERVQUAL and modified SERVQUAL instrument. Few studies were
conducted to understand the difference between the service quality perceptions based on
demographic characteristics. The present study is an attempt to know the significant differences
in the perceptions of customers from different locations of Andhra Pradesh towards the service
quality determinants using service Quality instrument defined by Suresh Chander et al (2002).
The study was conducted based on the primary data collected through 903 customers of select
public and private sector banks. The results from the study support the hypothesis that domicile
differences influence the service quality perceptions. Finally the study observed that the urban
customers preferred the quality in core services whereas the semi urban and rural customers
opined human element is the most determining element on the satisfaction levels.

KEY WORDS: Banking, Service Quality, SERVQUAL, Customer Satisfaction, Domicile.

INTRODUCTION

Competition has been rampant in the global market. Fast changes in the communication and
information technology creates new opportunities for industries world-wide. In order for a
company to be competitive, the understanding and implementation of the new trend must be
fully done. Quality is proposed to be a sustenance tool to meet the fierce competition.

The Indian financial sector today is significantly different from what it used to be a few decades
back, in the 1970s and 1990s. The radical changes in the banking sector have brought a paradigm
shift in the ideology of the banks to serve customers better, resulted in innovative banking
services and products (Uppal R.K., 2009)

The basic tenet to establish the competitiveness and build loyal relationships with the customers,
it has made the customary for the companies to cultivate customer-minded corporate culture with

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A blended mix of sophisticated technology that result in superior service quality (Sandip Ghosh
Hazra, 2010). Service Quality has become the buzz word in the corporate world during the
period of liberalization and globalization. In fact, the attitudinal and behavioral loyalty of the
consumers no longer is influenced by the product quality alone. Today, service quality has
become an important research topic because of its relationship to costs and profitability
(Zeithaml, A.V., 2000); customer satisfaction (Smith, K.A., et al., 1999), customer retention
(Zeithaml, A.V., 1996) and word of mouth (Zeithaml, A.V., 1988).

In this background the current research work attempted to define a possible approach and
examine service quality dimensions. Further, the study focused on understanding the significant
relationship between service quality determinants and customer satisfaction. The study also
analyzed the significant differences in service quality perceptions of customers from different
regions of urban, semi-urban and rural areas of Andhra Pradesh.

LITERATURE REVIEW

Review of Literature is very useful in giving the back ground, identifying the research gap and
the need for the study and specifying its objectives. Therefore, the review of relevant studies
related to the topic has been carried out and is given as follows.

Previous research studies focused much attention on assessing the customer perceptions based on
SERVQUAL as designed by Berry et.al. 1983 which had been faced repeated number of changes
to surmount the criticisms by various researches across the industries. Apart from this, there
needs a substantial framework to measure the perceptions of customers considering the changing
situational and economic factors in the retail banking sector that support the cultural norms,
values and ethos by the Corporate and Indian consumers at large (Clement Sudhahar, 2007).

Grnroos (1984) opined the perceived service quality as the outcome of an evaluation process,
where the customers compare their expectations with the service they have received.
Parasuraman, et al., (1985) considered service quality as the consumers comparison between
service expectation and service performance. Further, they argued that service quality is
determined by the differences between customers expectations of the service and their
perceptions of the service experience (Parasuraman, et al., 1988).

Over a period of time, various researchers have proved different conceptualizations that
supported various contexts. Garvin, D.A.(1987) identified eight competitive dimensions of
quality that could guide a firm in its use of quality as a competitive weapon. Garvins eight
dimensions were performance, features, reliability, conformance, durability, serviceability,
aesthetics and perceived quality. Further, Lewis (1993) and Grnroos, C. (1998) conceptualized
service quality by taking technical dimensions, functional dimensions and corporate image
dimensions in to consideration. Parasuraman et al.(1988) in their subsequent research purified
and distilled the ten dimensions into five service dimensions that were capable of discriminating
well across respondents having differing quality perceptions about firms in several categories
such as tangibility, reliability, responsiveness, assurance and empathy. Later, Avkiran (1999)

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conceptualized four discriminating factors to measure the service quality dimensions in a
banking sector which emphasized on staff conduct, credibility, communication and access to
teller services. Consequently, Suresh Chandar et al (2002) conceptualized service quality by
taking into account all aspects of customers perceived quality including those already
addressed in the existing instruments and identified five critical dimensions such as human
elements of service delivery, tangibles, core service, Systemization of service delivery and
social responsibility.

Khurana, (2010) investigated the level of customer satisfaction with the service quality of
private banks in Hissar district using SERVQUAL model. The study found that the overall
service quality provided by the private banks was below customers expectation. A comparative
study by Khare (2011) to analyze the perceptions regarding the service quality in Indian and
foreign banks using SERQUAL reveal that the customers perceptions differ significantly and
found the perceptions of different genders significantly differ. Awan et.al (2011) investigated the
service quality and its relationship to customer satisfaction among the customers of conventional
banks and Islamic banks using modified SERVQUAL By using factor analysis five service
quality dimensions were identified namely empathy, service architecture, convenience service
encounter, employee service criteria, customer focus and five customer satisfaction dimensions:
responsiveness, competency, safe transaction, competitive services, knowledge for the overall
banking industry. Abdullah, et. al. (2011) examined the applicability of BSQ (Bank Service
Quality) Index and derived three dimensions in service quality namely Systemization, Reliable
Communication and Responsiveness. Multiple regression analysis revealed that Systemization is
the most important service quality dimension within the banking sector. Tsoukatos (2011)
examined the causality of relationships between customer loyalty dimensions and the effects of
customer satisfaction on the latter using Structural equations approach in Greek banking context.
The study found that SERVQUAL instrument has outperform the other metrics such as
BANQUAL-R and BSQ metrics. Finally, it is observed that customer satisfaction campaigns
should be taken to improve attitudinal rather than behavioral loyalty. Kamble, et.al (2011)
undertook a study to assess and compare the perceived level of bank service quality and to
investigate the dimensions of quality banking service in private and public sector bank in India
using an instrument banking service quality scale (BSQ). Private Banks are perceived to be
superior on the service quality dimensions: effectiveness, access and tangibles whereas, the
public sector banks score better on the dimensions of price and reliability. Siddiqi (2011)
conducted a study on the interrelations between service quality attributes, customer satisfaction
and customer loyalty in the retail banking sector in Bangladesh. The study concluded that
customer satisfaction is positively related to customer loyalty while empathy demonstrates the
highest positive correlation with the customer satisfaction. Zalatar (2012) and Mokhlis (2012)
conducted a study to examine the role of gender on service quality perceptions and its
relationship with the customer satisfaction. The study revealed that the gender affect the service
quality perceptions and variable such as tangibles, reliability and responsiveness were the
important service quality determinants that influence the satisfaction of male and female
customers. Jain (2013) examined the influence of customer demographical characteristics such as
gender, qualification, occupation and income and their effect of banking service assurance
perception and identifies which demographical characteristics influence the assurance perception

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Of service quality. The study concluded that the qualification and occupation influence the
service assurance perception.

The above review of literature focused on the application and testing of the SERVQUAL and
modified models of SERVQUALs in banking sector .But a study is also needed to understand the
differences in the perceptions of customers on the basis of demographic characteristics. The
study conducted in the context of domicile differences has the significance in understanding the
differences in the service quality perceptions due to structural changes in the banking sector due
to BASEL II norms, implementation of reformatory changes in sector and the Government
initiatives towards the financial inclusion. All the reformatory initiatives will go in vain until and
unless the customer is satisfied with the services offered by the banks and the customer is
retained with the bank.

RESEARCH OBJECTIVES
On the basis of the above discussion, the present study has been conducted achieve the following
objectives.
1. To know the significant determinants which influence the service quality perceptions of
the customers of retail banking in India.
2. To study whether there is any significant relationship between the service quality
determinants and the customer satisfaction in retail banking context in India.
3. To know whether there are any differences in the service quality perceptions towards
retail banking services between urban, semi-urban and rural customers.

RESEARCH METHODOLOGY

SAMPLE DESIGN
The study was conducted in the Visakhapatnam, East and West Godavari Districts of Andhra
Pradesh and a sample of 903 (325 from urban, 281 from Semi-Urban and 297 from rural
segments) customers of five banks in public and private banks each, namely State Bank of India ,
Canara Bank, Bank of India, Andhra Bank and Central Bank of India whereas, ICICI Bank,
HDFC Bank , Axis Bank, Karur Vysya Bank and ING Vysya Bank were taken for the study.
These banks were selected on the basis of number of bank branches located in all urban, semi
urban and rural areas of Visakhapatnam, East and West Godavari Districts of Andhra Pradesh.
Judgment and Convenience sampling technique was used for the collection of data and proper
care was taken to ensure that the respondents possess at least one account in any of the banking
branches.

DATA COLLECTION INSTRUMENT, RELIABILITY AND VALIDITY
A retrospective methodology was adopted in this study. A semi-structured questionnaire was
developed based on the proposed service quality dimensions to measure service quality. For the
purpose of canvassing a schedule, well trained management graduates were deputed and proper
care was taken to assure the complete fill of the schedules by the select respondents.
Respondents were requested to respond for the statements that measure the quality in the services
rendered by the employees of banking branch. Each of these was measured on 1 to 5 Likert type

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Scales. In the second step, we assessed the construct validity of the scales being developed and
corrected ambiguous or confusing scale items by pretesting the schedule. The pretest sample
included 50 individuals covering all the segments of the profile of respondents. The Correlation
coefficient calculated upon the responses of the respondents was found to be 0.936 indicating the
scales internal validity.

HYPOTHESIS OF THE STUDY

The following hypothesis were made for the study
HYPOTHESIS-1: There is significant difference in the influence of domicile profile of the
customers on their perceptions towards service quality determinants.
1. H
1
a: There is no positive correlation between core service elements of service quality and
customer satisfaction in the banking sector.
2. H
1
b: There is no positive correlation between human elements of service quality and
3. H
1
c: There is no positive correlation between non- human elements of service quality and
4. H
1
d: There is no positive correlation between tangible elements of service quality and
5. There is no positive correlation between social responsibility elements of service quality
and customer satisfaction in the banking sector.

HYPOTHESIS-2: There is significant difference in the influence of domicile profile of the

OBJECTIVE-1: To know the significant determinants which influence the service quality
perceptions of the customers of retail banking in India?
According to the above discussions on various dimensions of service quality, it is found that
different authors have proposed different dimensions of service quality. For having a quick look,
all dimensions of service quality proposed by different authors mentioned above are shown in the
following table.

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Table -1: Possible approach to analyzing service quality dimensions for Retail Banking
Dimensions Specific elements L
@
P
#
A
$
G

Tangibles
Ambient conditions at bank branch and at ATM machine. X X X X
Appearance and personality of service personnel.

Noise and odour prevailing in the bank's premises. X X X
Physical layout of equipment and other furnishings. X X
Visually appealing materials and facilities associated with service. X X
Adequate parking nearby.
X X X X
Adequate physical security at Bank and ATMs X X X X X
Reliability
Ability to perform the promised service dependably and accurately. X X
Dependability in handling Customers service problems. X X
Accuracy of records. X X
Credit cards and Debit Cards Utility X X X X X
Online and Internet banking accuracy X X X X X
Privacy of transaction through ATMs X X X X X
Responsivenes
s
Inter-personal interactions between employees and customers

Civilized conduct.

Provide prompt of service
X
Clear and detailed statement of accounts X X X X
Flexibility to conduct bank transactions by phone. X X X X X
Feedback from customers is used to improve service standards. X X X X X
Assurance
Knowledgeable employee to answer customer questions. X X
Politeness and Courtesy of staff
X
Solving the problems immediately when it arises. X X
Trustworthiness and confidence

Empathy
Caring, easy access, effective communication X X
Individualized attention given to customers X X
Adequacy of number of branch staff serving customers X
Effective communication of any change in the rates X X X X
Social
Responsibility
Competitive Charges for transactions. X X X X
Having branch locations in most places convenient to all sections
X X X X
Bank personnel punctual, regular, sincere and without going on
strikes.
X X X X
Priority lending to the priority customers. X X X X X
Easily available loans at affordable interest rates. X X X X
Source: Lewis
@
(1993), Parasuraman et al.(1988)
#
, Avkiran (1999)
$
, Grnroos (1984)
, Suresh
Chandar et al., (2002)

Table -1 indicates that all authors mentioned above do not have the same thought of school with
every aforementioned specific element of quality dimensions. However, all the above sub-

dimensions in each dimension might be applied in previous research studies but do not bring
comprehensive coverage in the present scenario of Banking Sector reforms.
In fact, the variables considered for the study matches with almost majority of the sub-
dimensions as defined by Grnroos (1984), Parasuraman et al. (1988) and Suresh Chandar et al.,
(2002). Therefore, it is proposed a modified version of Parasuraman et al.(1988) and Suresh

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Chandar et al., (2002) for measuring the Service Quality in Retail Banking sector. As a result, the
proposed instrument for measuring service quality in retail banking sector covers six dimensions
such as tangibles, reliability, responsiveness, assurance, empathy and social responsibility and
the sub dimensions proposed for the study are presented in table-2.

Table- 2: Proposed service quality dimensions to measure Service Quality and their sub-
dimensions
Dimensions Specific elements
Core
Service
Diversity and range of services (having a wider range of financial services from the
bank, e.g. deposits, retirement accounts, loans for purchases of cars, houses, foreign
exchange, traveller's cheques, safe deposit lockers, etc.), Intensity and depth of service
(having more number of options in every service/transaction, e.g. various fixed deposit
or recurring deposit schemes with different interest rates, quick cheque clearing facility
with a higher service charge, etc.), Service innovation (providing information/details
on a regular basis through post; telephonic banking; ATM; room service facility; cards
to defence personnel, etc.), Availability of most service operations in every
branch/department of the bank, Convenient operating hours and days (e.g. working on
Saturdays and Sundays, extended service hours during evenings, weekdays, etc.).
Human
Elements
Providing services as per the promised schedule, Willingness to help customers and the
readiness to respond to customers' requests, Extent to which the feedback from
customers are used to improve service standards, Regularly apprising the customers
about information on service quality and actual service performance versus targets in
the organization, Employees instill confidence in customers with pleasing and
courteous behavior, Speed of solving the customer grievances is effective, Giving
caring and individual attention to customers by having the customers' best interests at
heart, Employees who understand the needs of their customers with individual
attention and customers best interest.
Non-human
elements
Having a highly simplified and structured delivery processes so that the service
delivery times are minimum, Enhancement of technological capability (e.g.
computerization, networking of operations, etc.) to serve customers more effectively,
Degree to which the procedures and processes are perfectly fool-proof.
Tangibles
The physical layout in the bank premises is comfortable to get the services from bank
employees, Visually appealing materials, symbols, advertisement boards, pamphlets
and other artifacts associated with the bank, Employees who have a neat and
professional appearance.
Social
Responsibili
-ty
Equal treatment stemming from the belief that everyone, big or small, should be treated
alike, Giving good service at a reasonable cost, but not at the expense of quality,
Having branch locations in most places convenient to all sections and strata of the
society (e.g. villages, downtown, areas, etc.), A sense of public responsibility among
employees (in terms of being punctual, regular, sincere and without going on strike).
Customer
Satisfaction
I will recommend the bank for my friends, neighbors, relatives etc, I will take
additional services required from this bank

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DATA ANALYSIS AND INTERPRETATION
The demographic profile of the respondents presented in the table -3 that covers the entire gamut
of all kinds of respondents.

Table -3: Demographic Profile of Respondents
Domicile Profile of Respondents
S No Domicile Respondents Percent
1 Urban 325 36.0
2 Semi-urban 281 31.1
3 Rural 297 32.9
Total 903 100.0
Duration of Bank Account Holder
S No
Duration of Bank Account Holder Respondents Percent
1
Less than 6 months 55 6.1
2
More than 6 months but less than 1 year 298 33.0
3
More than 12 months but less than 18 months 339 37.5
4 More than 18 months 211 23.4
Total 903 100.0
Types of services received very recently
S No
Types of services received very recently Respondents Percent
1 Deposit Cash in to account 295 32.7
2
Receipt and repayment of loan principal and
interest
238 26.4
3
Withdrawl of cash from account
130 14.4
4 Obtain Demand Draft 39 4.3
5 Deposit cheque in to the account 161 17.8
6
Obtain bank account/updation in pass book of
account
22 2.4
7
Other allied services such as forex services,
demat account, insurance services
18 2.0

Total 903 100.0
Source: Compiled from Primary data

The demographic profile of the respondents presented in the table -3 reveals that the majority of
respondents i.e. 36.0 percent of respondents belong to urban region followed by rural (32.9 per
cent). Due care is taken to bring a right mix of respondents covering all the demographic regions,
however, based on the filling of the schedules differences in the composition of respondents was

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observed. It is also observed from the table, the respondents in the age group 26-35 constitute a
major composition in the respondents. 80.7 per cent of respondents are male while their counter
parts constitute 19.3 per cent that reveals accessibility of banking branches to the women is still
in under scan. Private employees (28.1 per cent) followed by Government employees (22.9 per
cent) and self-employed (21.4 per cent) are the large group of respondents visiting the banking
branches for the services. The income profile of the respondents presents that 28.6 per cent of
respondents fall in the income group between Rs 1,20,001 to Rs 2,40,000 followed by the
respondents with an income level below Rs 1,20,000. Most of the respondents availing the
banking services in the select demographic regions possess Graduation (Non-technical) as
education profile while 21.0 per cent of respondents completed their Intermediate education.
Necessary care is taken to collect the responses from the respondents in such a way that the
respondents should be the potential user of the services. The respondents holding the bank
account for the last 18 months constitute a major segment of the respondents while the
respondents holding the account for more than 6 months but less than 12 months are 33.0 per
cent. The table also presents the utility of services provided by banks and respondents were
selected so that they have availed at least one service in the last six months. Most of the
respondents visited the banking premises for opening and depositing the cash in their accounts
(32.7 per cent) followed by receipt and repayment of loan and interest (26.4 per cent) and
depositing cheques in to the account (17.8 per cent).

OBJECTIVE -2: To study whether there is any significant relationship between the service
quality determinants and the customer satisfaction in retail banking context in India.

To study whether there is any significant relationship between the service quality determinants
and the customer satisfaction in the retail banking context in India, the Friedmans mean ranks are
calculated for Customer satisfaction statements and are tabulated in Table -4. Subsequently,
Canonical Correlation Coefficients are also calculated to test the hypothesis in Statistica 10.0 and
the results are tabulated in Table-5

Table -4: Results of Friedmans Mean Test
S.
No
Label
Customer Satisfaction Statements
Urban
Semi-
Urban
Rural
1 CUS1
I will recommend the bank for my friends,
neighbors, relatives and others
15.38 14.91 14.55
2 CUS2
I will take additional services required from
this bank
14.55 12.85 14.57
Source: Primary Data

As can be seen from the table-4, urban customers (15.38) felt satisfied with the quality of
services provided by the banks and they are willing to recommend the bank for the friends and
relatives and further the urban customers are ready to accept the additional services (14.55) from
the select banks for the study. In terms of attitude to recommend the banking services to others
semi-urban customers are open to recommend (14.91) while the rural customers are prepared to
take additional services from the banks.

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HYPOTHESIS-2: Service Quality determinants have no positive relation with the customer
satisfaction.

Table 5: Results of Canonical Correlation Analysis
S. No Independent
Variables
Dependent Variables Canonical (R)
Correlation
Chi-
square
p -
value
1 Core Service Customer Satisfaction 0.1319 19.236 0.037
2 Human Element Customer Satisfaction 0.2855 90.662 0.000
3 Non-human
element
Customer Satisfaction 0.2666 112.74 0.000
4 Tangibles Customer Satisfaction 0.0923 10.790 0.952
5 Social
Responsibility
Customer Satisfaction 0.2904 97.580 0.000
Source: Primary Data

H
1
a: There is no positive correlation between core service elements of service quality and
From the table 5, it can be seen that the Canonical correlation (R) between Core service and
customer satisfaction is 0.1319 and it is significant at 0.037 which is less than 0.05. Hence we
reject the null hypothesis and concluded that there is lower (R= 0.1319) relationship between
core service and customer satisfaction in the retail banking sector.

H
1
b: There is no positive correlation between human elements of service quality and customer
satisfaction in the banking sector.

The table 5 also presents that the Canonical Correlation (R) between Human elements and
customer satisfaction at 0.2855 which is less than p= 0.005. Therefore we reject the null
hypothesis and revealed that there is moderate (R= 0.2855) relationship between the human
elements and customer satisfaction in the retail banking sector.

H
1
c: There is no positive correlation between non- human elements of service quality and
As can be seen from the table- 5, the canonical correlation between the set of statements for non-
human elements and customer satisfaction is 0.2666. The results revealed that the null hypothesis
is rejected as canonical correlation (0.2666) is significant at 0.000 less than 0.05 which means
that the there is positive correlation between non-human elements of service quality and
customer satisfaction in the retail banking sector.

H
1
d: There is no positive correlation between tangible elements of service quality and
It is presented in the table that the tangibles elements have very low Canonical Correlation
(0.0923) between the tangible statement and customer satisfaction. The results revealed that the
null hypothesis is accepted as the canonical correlation is significant at p value (0.952) is more

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than 0.05. This reveals that the tangible elements of service quality have no significant influence
on the customer satisfaction in the banking sector.

H
1
e: There is no positive correlation between social responsibility elements of service quality
and customer satisfaction in the banking sector.
As can be seen from the table- 5, the canonical correlation between the set of statements for
social responsibility elements and customer satisfaction is 0.2904. The results revealed that the
null hypothesis is rejected as canonical correlation (0.2904) is significant at 0.000 less than 0.05
which means that the there is positive correlation between social responsibility elements of
service quality and customer satisfaction in the retail banking sector.

OBJECTIVE-3: To know whether there are any differences in the service quality
perceptions towards retail banking services between urban, semi-urban and rural
customers.

Table 6 presents the Cronbachs Alpha and Means of the items of service quality as defined by
Suresh Chander (2001) which was modified for the study. As can be seen from the table except
items in Non- Human element (0.539) all the items in the instrument presented above 0.6.
Among the items used in the instrument, the mean values of items in Social Responsibility
presented highest mean value (3.685) followed by Human element (3.615), Non- human element
(3.400) and Tangibles (3.247). Core Service element revealed the least mean value (2.823). The
mean value of Customer loyalty (3.645) reveals that the existing customers of banks are loyal to
the banks. The overall means domicile wise reveals that Semi- urban has recorded highest
mean (3.475) followed by Urban (3.383) and rural (3.348). Among each Service Quality element
vis-a- vis domicile human element (3.583) for urban, social responsibility for semi-urban (3.889)
and rural (3.620) are the most influencing factors on the loyalty towards the bank.

Table -6 : Cronbachs Alpha and Means of the Items
S.
No
Item Cronbachs
Alpha
Mean
Mean
Urban
Semi-
Urban
Rural
1 Core Service 0.897 2.823 2.873 2.848 2.745
2 Human Element 0.786 3.615 3.583 3.707 3.562
3 Non- Human Element 0.539 3.400 3.330 3.511 3.371
4 Tangibles 0.803 3.247 3.282 3.216 3.239
5 Social Responsibility 0.689 3.685 3.568 3.889 3.620
6 Customer loyalty 0.775 3.645 3.717 3.621 3.588
3.383 3.475 3.348
Source: Primary data

In order to determine whether domicile differences in the service quality perceptions towards
retail banking services, Independent Kruskall Wallis Test was applied. Table 7 presents the
statistical results. As can be seen in the table-5, items of the instrument 3, 7, 8, 10, 11, 14, 15, 20,
21, 22 reject the null hypothesis.

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Table -7: Results of Friedmans Mean Test and Independent Sample Kruskal - Wallis Test
S. No

Statements
Friedmans Mean Ranks
Independent
Sample Kruskal-Wallis
Test
Urban
Semi-
urban
Rural Sig Decision
1 CS1
Diversity and range of services (having a wider
range of financial services from the bank, e.g.
deposits, retirement accounts, loans for purchases
of cars, houses, foreign exchange, traveller's
cheques, safe deposit lockers, etc.).
9.82 8.83 9.29 0.386
Retain the
null
hypothesis
2 CS2
Intensity and depth of service (having more
number of options in every service/transaction,
e.g. various fixed deposit or recurring deposit
schemes with different interest rates, quick
cheque clearing facility with a higher service
charge, etc.).
11.11 9.81 10.39 0.166
Retain the
null
hypothesis
3 CS3
Service innovation (providing information/details
on a regular basis through post; telephonic
banking; ATM; room service facility; cards to
defence personnel, etc.).
9.42 10.10 8.57 0.009
Reject the
null
hypothesis
4 CS4
Availability of most service operations in every
branch/department of the bank. 9.23 9.54 9.74 0.257
Retain the
null
hypothesis
5 CS5
Convenient operating hours and days (e.g.
working on Saturdays and Sundays, extended
service hours during evenings, weekdays, etc.).
11.34 9.87 10.62 0.100
Retain the
null
htpothesis
6 HE1
Providing services as per the promised schedule.
15.44 14.60 14.95 0.481
Retain the
null
hypothesis
7 HE2
Willingness to help customers and the readiness
to respond to customers' requests. 14.74 15.24 13.92 0.000
Reject the
null
hypothesis
8 HE3
Extent to which the feedback from customers are
used to improve service standards. 12.44 13.58 12.69 0.000
Reject the
null
hypothesis
9 HE4
Regularly apprising the customers about
information on service quality and actual service
performance versus targets in the organization.
14.27 13.51 13.98 0.365
Retain the
null
hypothesis
10 HE5
Employees instill confidence in customers with
pleasing and courteous behaviour. 13.38 14.59 13.96 0.000
Reject the
null
hypothesis
11 HE6
Speed of solving the customer grievances is
effective. 13.76 15.39 14.23 0.000
Reject the
null
hypothesis
12 HE7
Giving caring and individual attention to
customers by having the customers' best interests
at heart.
14.54 13.96 15.28 0.794
Retain the
null
hypothesis
13 HE8 Employees who understand the needs of their 14.31 14.01 14.02 0.512 Retain the
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13

customers with individual attention and
customers best interest.
null
hypothesis
14 NHE1
Having a highly simplified and structured
delivery processes so that the service delivery
times are minimum.
12.93 13.71 13.01 0.000
Reject the
null
hypothesis
15 NHE2
Enhancement of technological capability (e.g.
computerization, networking of operations, etc.)
to serve customers more effectively.
12.78 13.48 13.28 0.015
Reject the
null
hypothesis
16 NH3
Degree to which the procedures and processes are
perfectly fool-proof. 11.44 11.66 12.00 0.336
Retain the
null
hypothesis
17 T1
The physical layout in the bank premises is
comfortable to get the services from bank
employees.
13.41 12.12 12.89 0.233
Retain the
null
hypothesis
18 T2
Visually appealing materials, symbols,
advertisement boards, pamphlets and other
artifacts associated with the bank.
12.63 11.41 12.90 0.366
Retain the
null
hypothesis
19 T3
Employees who have a neat and professional
appearance. 11.22 10.89 11.91 0.744
Retain the
null
hypothesis
20 SR1
Equal treatment stemming from the belief that
everyone, big or small, should be treated alike. 14.42 14.96 15.73 0.019
Reject the
null
hypothesis
21 SR2
Giving good service at a reasonable cost, but not
at the expense of quality. 13.27 15.70 12.39 0.000
Reject the
null
hypothesis
22 SR3
Having branch locations in most places
convenient to all sections and strata of the society
(e.g. villages, downtown, areas, etc.)
13.30 15.46 14.60 0.000
Reject the
null
hypothesis
23 SR4
A sense of public responsibility among
employees (in terms of being punctual, regular,
sincere and without going on strike).
15.88 14.82 15.52 0.537
Retain the
null
hypothesis
24 CUS1
I will recommend the bank for my friends,
neighbors, relatives etc
15.38 14.91 14.55
25 CUS2
I will take additional services required from this
bank
14.55 12.85 14.57
Note: Asymptotic Significance was displayed.
Source: Primary data

From the table, heterogenous responses were observed from the respondents which were
presented based on Friedmans mean ranks. As can be seen from the table, the respondents of
Urban locations opined diversity and range of services (9.82), intensity and depth of services
(11.11), convenient operating hours (11.34), providing services as per the schedule (15.44),
regular appraising taken from customers (14.27) and the comfort ability in banks layout to get
the services and employees being punctual, regular, sincere and without going on strike (15.88)
are the most important factors in service quality.

Vol.4 (6), JUNE (2014)
14

In table 7 , it is also observed that providing innovative services on regular basis (10.10),
willingness of employees to respond to customers request (15.24), the implementation of
feedback of customers to improve service standards(13.58), effectively solving the issues of
customers (15.39), technological enhancement in service delivery (13.48) and offering service
without compromising on the quality of services and establishment of banking branches in
various strata to make it convenient to all sections of the society (15.46) are the important factors
for the respondents in semi- urban area.
Availability of varied services (9.74), executing care and concern about the customers (15.28),
providing services with complete security and flawless procedures(12.00 ), equal treatment for
all the kinds of customers (15.73) and attempt to disclose the kind of services that banking
branches offer in rural areas (12.90) are the most important factors for the respondents in rural
areas.

From above discussion, it can be inferred that the urban customers prioritized for the core service
facilities of the banks through internet banking and mobile banking due to technological
advancements to get the services with a click from their door-steps which made them loyal to the
existing banks. However, the semi- urban customers gave priorities for the items which cover the
human element in the services while availability of the banking branches and services followed
by bringing accessibility of services through various initiatives are also prioritized factors that
affect the rural customers loyalty towards the banking branches.

Hypothesis-2: There is significant difference in the influence of domicile profile of the

In order to test the hypothesis that there is no significant differences in the influence of domicile
profile of the customers on their perceptions towards service quality determinants, Independent
Sample Kruskal- Wallis test is applied. From the table-5, the items of the instrument 3, 7, 8, 10,
11, 14, 15, 20, 21, 22 reject the null hypothesis. For the remaining statements of the instrument
the null hypothesis is accepted stating that there is significant difference in the perceptions of
customers based in different locations towards the service quality determinants.

On the basis of the hypothesis testing from the table- 7 and subsequent analysis reveals that the
service quality determinants such as core service, human elements, non-human elements and
social responsibility have positive influence on the customer satisfaction while tangible have a
very low significant influence.

CONCLUSION
Service Quality has become the buzz word in the academics, research and the corporate arena.
To sustain in the bitter competitive environment the companies have realized the importance of
delivering quality services in an effective and an urge for the innovations in services brought a
sea change in the field of services sector. The study was taken to define a capsulated form of
service quality model comparing with the other services model as defined by Lewis

(1993),
Parasuraman et al.(1988), Avkiran (1999)
,
Grnroos (1984) , Suresh Chandar et al., (2002)

.

Vol.4 (6), JUNE (2014)
15

The survey findings revealed that the human element in service delivery, especially, in the
banking services is major influencing factor. The customers expect to be well treated in the by
the banking personnel in banking premises and the recognition they receive bring the moment of
truth in the service delivery. Further, there no discrimination in the views of customers in respect
of human element but the urban customers prefer the quality in core services, next to the human
element followed by the fool-proof procedures. The rural customers are satisfied with the quality
of core services and the financial inclusion strategies being implemented by the RBI, the
regulatory body brought enormous opportunities to the banking sector to deliver various kind of
services. Findings from the study also reveal that the rural customers are open to the changes in
the banking sector to avail the benefits of the being banked.

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