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The Gap Between Expected and Actual Service Quality of Organized Retail Stores in Hyderabad

The Gap Between Expected and Actual Service Quality of Organized Retail Stores in Hyderabad

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THE GAP BETWEEN EXPECTED AND ACTUAL SERVICE QUALITY OF ORGANIZED RETAIL STORES IN HYDERABAD

ABSTRACT

This study assesses the gap between expected and actual service quality of retail stores in Hyderabad. Improving service quality is believed to improve profitability and enhance retail store performance. Such improvements however, require monitoring and continuous measurement of performance along service dimensions that determine standards of service quality. Majority of the retail stores in Hyderabad are operating the stores approximately up to the satisfaction level of their customers. Broadly, customers found no difference between their expected service quality and actual service quality of retail stores in Hyderabad.

INTRODUCTION The organized retailing is growing faster in the big Tier I cities viz., Delhi, Chennai, Mumbai, Bangalore and Hyderabad, as well as in Tier II & III cities. Still, the organized retail sector in India is at a very nascent stage and its market share is around 4% of the total market. Though, organised retail look big and growing, it is lag behind the traditional stores in satisfying a customer. Street corner mom n pop store give the benefit of accessibility along with the convenience of home delivery (even for a single unit purchase), top of which it also provides petty credit to its customers. There is a sense of trust shared between the customer and shopkeeper which in some cases come over generations of purchases. Still organized retail is not able to dent into the unorganized retail market , as they still radiate a feeling of being expensive and instigating loose buying ( especially in Tier 2 & 3 cities ). Therefore the present study focused on the assessment the gap between expected and actual service quality of organized retail stores in Hyderabad.

Improving service quality is believed to improve profitability and enhance retail store performance. Such improvements however, require monitoring and continuous measurement of performance along service dimensions that determine standards of service quality. This study assesses the service quality of retail stores in Hyderabad with special reference on expected and actual service quality.

Service Quality

Juran (1999) defines customer led quality as, “feature of products which meet customer’s needs and thereby provide satisfaction”, and service quality relates to meeting customers’ needs, ‘perceived service quality’ is identified to understand the consumer. Zeithaml (1987) defined perceived quality as ‘the consumers’ judgment about an entity’s overall excellence or superiority’, which can be viewed as distinct from ‘objective’ quality in as much as it is a form of attitude, related in part to satisfaction, and resulting from a comparison of expectations with perceptions of performance.

Measuring Service Quality Service quality is a concept that has aroused considerable interest and debate in the research literature because of the difficulties in both defining it and measuring it with no overall consensus emerging on either. There always exists an important question: Why should service quality be measured? Measurement allows for comparison before and after changes, for the location of quality related problems and for the establishment of clear standards for service delivery.

Five – Dimensions of Service Quality Dabholkar (1996) developed the Retail Service Quality Scale (RSQS) to study retailing-related dimensions. The scale that has high construct reliability and validity in measuring service quality in a department store includes:
• • • • •

Physical Aspects Reliability Personal Interaction Problem-Solving Policy

RESEARCH METHODOLOGY The purpose of the study is to assess the gap between expected and actual service quality of organized retail stores of Hyderabad. Accordingly, the study has the following objectives:

To investigate the dimensions of service quality related to the retail sector in general. To identify the service the service quality differences between the expected service and perceived services of retail stores in Hyderabad.

Sampling Method and Sample Size Simple random and convenience sampling was applied. Data was collected from the customers of various retail stores in Hyderabad. Data Collection The primary data was collected from 100 customers by administering a structured questionnaire. The secondary data was collected from various journals, magazines, and websites. The collected data was analyzed by using statistical tools such as mean and weighted averages. The attributes of each dimension is analyzed in detail.

Methods and Statistical Tools used The RSQS scale was applied to measure five-dimensions of service quality viz., Physical Aspects, Reliability, Personal Interaction, Problem-Solving Capacity and Empathy.

Likert five –point scale was also employed for the study. Respondents were asked to evaluate parameters on overall service quality in a five-point scale anchored at ‘strongly disagree’ and ‘strongly agree’. The questionnaire consists of 15 statements on expectations and 15 statements on perceptions. On comparing the two aspects like expectations and actual service encountered, one can know the gap. To test the hypothesis ?2-test is applied in appropriate context.

Dimensions The following sub-dimensions were included in the questionnaire: Physical Aspects 1.

o o o

This store has modern-looking equipment and fixtures. The physical facilities at this store are visually appealing. Materials associated with this store’s service (such as shopping bags, catalogs, or statements) are visually appealing. This store has clean, attractive, and convenient public areas (restrooms, fitting room). The store layout makes it easy for customers to find what they need. The store layout makes it easy for customers to move around the store.

o

o

o

Reliability
• •

When this store promises to do something by a certain time, it will do so. This store insists on error-free sales transactions and records.

Personal Interaction
• •

Employees in this store give prompt service to customers. Employees in this store are never too busy to respond to customer’s requests. Employees in this store are consistently courteous with customers.

Problem-Solving Capacity

When a customer has a problem, this store shows a sincere interest in solving it. Employees of this store are able to handle customer complaints directly and immediately.

Empathy
• •

This store offers high quality merchandise. This store gives customers individual attention.

Hypothesis

personal interaction.The current study presumed that there is no significant difference between the expected and actual service quality of retail stores in Hyderabad. reliability. reliability. Gender Frequency Percentage Male 86 86% Female 14 14% Total 100 100% Table 1: Gender Figure 1: Gender Source: Primary data . Further it is assumed that there is no significant difference between expected physical aspects. problem solving and empathy and actual physical aspects. Demographic Profile of Respondents Gender The majority of respondents (86%) were male (Table 1). problem solving and empathy. personal interaction.

20001-25000 10 0 10 . Table 2: Income Status Income Range Male Female Total Up to Rs. The majority of respondents (52%) were from the income group of 10001-20000. 5000 12 2 14 Rs.Income Status The respondents were from all income groups (Table 2). 5001-10000 16 2 18 Rs. 10001-15000 20 6 26 Rs. 15001-20000 24 2 26 Rs.

catalogs. 25000 4 2 6 Total 86 14 100 Source: Primary data Figure 2: Income Status Physical Aspects Table 5 shows that materials associated with retail store’s services (such as shopping bags. or statements) are visually appealing.Above Rs. The respondents feel that modern-looking equipment and fixtures. physical facilities. the ambience and store layout are up to the mark. Table 3: Expected physical Aspects Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents .

attractive.The store has modern-looking equipment and fixtures (A) 0 10 26 42 22 100 The physical facilities at this store are visually appealing (B) 0 12 14 62 12 100 Materials associated with this store’s service (such as shopping bags. catalogs. and convenient public areas (restrooms. fitting room) (D) 2 12 20 42 24 . or statements) are visually appealing (C) 2 12 34 40 12 100 The store has clean.

100 The store layout at this store makes it easy for customers to find what they need (E) 6 2 28 46 18 100 The store layout at this store makes it easy for customers to move around the store (F) 0 6 24 42 28 100 Total 10 54 146 274 116 600 Source: Primary data Figure 3: Expected physical Aspects Table 4: Actual physical Aspects Parameters Strongly .

Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents The store has modern-looking equipment and fixtures (A) 0 10 40 40 10 100 The physical facilities at this store are visually appealing (B) 0 22 18 54 6 100 Materials associated with this store’s service (such as shopping bags. or statements) are visually appealing (C) 6 4 36 . catalogs.

attractive.42 12 100 The store has clean. fitting room) (D) 6 22 30 24 18 100 The store layout at this store makes it easy for customers to find what they need (E) 0 8 36 42 14 100 The store layout at this store makes it easy for customers to move around the store (F) 2 12 32 42 12 100 Total 14 . and convenient public areas (restrooms.

30 Materials associated with this store’s service (such as shopping bags.48 .74 3.26 The physical facilities at this store are visually appealing (B) 3.78 192 244 72 600 Source: Primary data Figure 4: Actual physical Aspects Table 5: Physical Aspects Parameters Expected service (E) (weighted average) Actual Service (A) (weighted average) Difference (E-A) (weighted average) The store has modern-looking equipment and fixtures (A) 3.44 0.76 3.50 0. catalogs. or statements) are visually appealing (C) 3.

26 0.50 -0.48 The store layout at this store makes it easy for customers to find what they need (E) 3.68 3. Hence.92 3.06 The store layout at this store makes it easy for customers to move around the store (F) 3. We can thus conclude that. the table value for 5 degrees of freedom at 5% level of significance is 11. fitting room) (D) 3.42 Source: Primary data Figure 5: Physical Aspects Null Hypothesis There is no significant difference between expected and actual physical aspects. the result of the experiment supports the hypothesis.07. attractive.50 0.62 0. By applying Chi-square test. The calculated value of ?2 0. “There is no significant difference between actual and expected physical aspects”.9996 is much lower than the table value.02 The store has clean.74 3.3. and convenient public areas (restrooms. Reliability .

Table 6: Expected Reliability Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents When this store promises to do something by a certain time.Table 8 shows that there is no remarkable difference between expected and actual reliability with reference to time management and error-free sales transactions and records by the retail stores. it will do so (A) 4 4 26 40 26 100 This store insists on error-free sales transactions and records (B) 2 8 .

20 44 26 100 Total 6 12 46 84 52 200 Source: Primary data Figure 6: Expected Reliability Table 7: Actual Reliability Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total .

Number of Respondents When this store promises to do something by a certain time. it will do so (A) 10 18 34 32 6 100 This store insists on error-free sales transactions and records (B) 2 10 42 36 10 100 Total 12 28 76 68 16 200 Source: Primary data Figure 7: Actual Reliability .

the table value for 1 degrees of freedom at 5% level of significance is 3. it will do so (A) 3.74 This store insists on error-free sales transactions and records (B) 3.42 Source: Primary data Figure 8: Reliability Null Hypothesis There is no significant difference between actual and expected reliability by customers. By applying Chi-square test.84 3.841.42 0.06 0.80 3.Table 8: Reliability Parameters Expected service (E) (weighted average) Actual Service (A) (weighted average) Difference (E-A) (weighted average) When this store promises to do something by a certain time.663 is much lower than the . The calculated value of ?2 0.

Similarly. the result of the experiment supports the hypothesis. Table 9: Expected Personal Interaction Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents Employees in this store give prompt service to customers (A) 4 4 24 42 .table value. 26 percent of the respondents strongly agreed that the employees in the stores are consistently courteous with customers. We can thus conclude that. 26 percent of the respondents strongly agreed that the employees in the stores give prompt service to customers. “There is no significant difference between actual and expected reliability”. Personal Interaction From Table 11 it is clear that the customers feel that employees are consistently courteous with customers. Hence. 28 percent of the respondents strongly agreed that employees in the stores are never too busy to respond to customer’s requests.

26 100 Employees in this store are consistently courteous with customers (B) 2 12 22 38 26 100 Employees in this store are never too busy to respond to customer’s requests (C) 0 12 20 40 28 100 Total 6 28 66 120 80 300 Source: Primary data Figure 9: Expected Personal Interaction Table 10: Actual Personal Interaction Parameters .

Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents Employees in this store give prompt service to customers (A) 2 16 20 48 14 100 Employees in this store are consistently courteous with customers (B) 2 10 38 36 14 100 Employees in this store are never too busy to respond to customer’s requests (C) 2 18 .

50 0.24 Employees in this store are never too busy to respond to customer’s requests (C) .26 34 20 100 Total 6 44 84 118 48 300 Source: Primary data Figure 10: Actual Personal Interaction Table 11: Personal Interaction Parameters Expected service (E) (in terms weighted average) Actual Service (A) (in terms weighted average) Difference (E-A) (in terms weighted average) Employees in this store give prompt service to customers (A) 3.82 3.74 3.56 0.26 Employees in this store are consistently courteous with customers (B) 3.

971 is much lower than the table value. the table value for 2 degrees of freedom at 5% level of significance is 5. Problem-Solving Capacity Table 14 shows that sales persons are able to handle customer complaints directly and immediately. The calculated value of ?2 0. 48% of the respondents are strongly agreed that employees of the store are able to handle customer complaints directly and immediately. “There is no significant difference between actual and expected personal interaction of executives with customers”. Hence.52 0. the result of the experiment supports the hypothesis.32 Source: Primary data Figure 11: Personal Interaction Null Hypothesis There is no significant difference between actual and expected personal interaction of executives with customers. Table 12: Expected Problem-Solving Capacity Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree .991.3. We can thus conclude that. the store shows a sincere interest in solving it. 34% of the respondents are agreed that when a customer has a problem. By applying Chi-square test.84 3.

Total Number of Respondents When a customer has a problem. this store shows a sincere interest in solving it (A) 2 4 28 34 20 100 Employees of this store are able to handle customer complaints directly and immediately (B) 0 8 10 34 48 100 Total 2 12 38 68 68 200 Source: Primary data .

Figure 12: Expected Problem-Solving Capacity Table 13: Actual Problem-Solving Capacity Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents When a customer has a problem. this store shows a sincere interest in solving it (A) 6 16 26 32 20 100 .

Employees of this store are able to handle customer complaints directly and immediately (B) 4 32 12 26 26 100 Total 10 48 38 58 46 200 Source: Primary data Figure 13: Actual Problem-Solving Capacity Table 14: Problem-Solving Capacity Parameters Expected service (E) (weighted average) Actual Service (A) (weighted average) Difference (E-A) (weighted average) When a customer has a problem. this store shows a sincere interest in solving it (A) 3.90 3.44 .

34% of the respondents also agreed that the store gives customers individual attention. The calculated value of ?2 0.22 3.0.46 Employees of this store are able to handle customer complaints directly and immediately (B) 4. the result of the experiment supports the hypothesis.841. 34% of the respondents are agreed that the store offers high quality merchandise. Hence. Empathy According to Table 17. . We can thus conclude that. “There is no significant difference between actual and expected customer problem solving capacity to store executives”.731 is much lower than the table value. the qualities of merchandise are up to mark and employees are giving individual attention to the customers. the table value for 1 degrees of freedom at 5% level of significance is 3. By applying Chi-square test. Similarly.52 Source: Primary data Figure 14: Problem-Solving Capacity Null Hypothesis There is no significant difference between actual and expected customer problem solving capacity to store executives.70 0.

Table 15: Expected Empathy Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents The store offers high quality merchandise (A) 6 8 34 34 18 100 This store gives customers individual attention (B) 2 18 26 34 20 100 Total .

8 26 60 68 38 200 Source: Primary data Figure 15: Expected Empathy Table 16: Actual Empathy Parameters Strongly Disagree Disagree Neutral Agree Strongly Agree Total Number of Respondents The store offers high quality merchandise (A) 6 10 34 .

46 4 100 This store gives customers individual attention (B) 8 18 24 32 18 100 Total 14 28 58 78 22 200 Source: Primary data Figure 16: Actual Empathy Table 17: Empathy Parameters .

the ambience and store layout are up to the mark. FINDINGS • The materials associated with retail store’s services (such as shopping bags. “There is no significant difference between actual and expected store empathy”. By applying Chi-square test. Further it is found that there is no significant difference between actual and expected reliability. Hence.841. the table value for 1 degrees of freedom at 5% level of significance is 3. There is no remarkable difference between expected and actual reliability with reference to time management and error-free sales transactions and records by the retail stores.892 is much lower than the table value. The respondents feel that modern-looking equipment and fixtures.Expected service (E) (in terms weighted average) Actual Service (A) (in terms weighted average) Difference (E-A) (in terms weighted average) The store offers high quality merchandise (A) 3. physical facilities. or statements) are visually appealing. The customers feel that employees are consistently courteous with customers. We can thus conclude that. It can also found that there is no significant difference between actual and expected physical aspects. the result of the experiment supports the hypothesis.34 0.18 Source: Primary data Figure 17: Empathy Null Hypothesis There is no significant difference between actual and expected store empathy.32 0.50 3. catalogs.18 This store gives customers individual attention (B) 3.52 3. 26 percent of the respondents strongly agreed that the • • . The calculated value of ?2 0.

they should give common attention towards the customers irrespective of their economic and social status. . 28 percent of the respondents strongly agreed that employees in the stores are never too busy to respond to customer’s requests. customers found no difference between their expected service quality and actual service quality. Similarly. • CONCLUSION Majority of the retail stores in Hyderabad are operating the stores approximately up to the satisfaction level of their customers. Further it is also found that there is no significant difference between actual and expected customer problem solving capacity to store executives. the store shows a sincere interest in solving it. The direction and information boards should be written in local language. still they are lag behind the traditional stores in attracting and satisfying a customer. Small sized retail stores along with more accessibility and convince of home delivery even for a single unit purchase. It can also found that there is no significant difference between actual and expected personal interaction of executives with customers. the current study revels that organized retail stores are operating up to the desired level of its customers. Some of the main tips for the modern retail sector to attract all types of customers are: i. iii.employees in the stores give prompt service to customers. Broadly. 34% of the respondents are agreed that when a customer has a problem. 48% of the respondents are strongly agreed that employees of the store are able to handle customer complaints directly and immediately. The employees and management should be well versed with local language. Similarly. 26 percent of the respondents strongly agreed that the employees in the stores are consistently courteous with customers. sales persons handle complaints effectively and the quality of merchandise are satisfactory. It is also found that there is no significant difference between actual and expected store empathy. ii. • Sales persons are able to handle customer complaints directly and immediately. Similarly. there is good reliability. employees are consistently courteous. 34% of the respondents also agreed that the store gives customers individual attention. Also majority of the customers strongly agreed that the physical facilities associated with the retail stores are visually appealing. SUGGESTIONS Though. 34% of the respondents are agreed that the store offers high quality merchandise. The qualities of merchandise are up to mark and employees are giving individual attention to the customers.

Name: ----------------------------------------------------------------------------2.000 2.001-25. Respondent’s details or responses will be analyzed. Rs. Married ( ) 5. information will not be forwarded to any for commercial purposes. Above Rs. Unmarried ( ) . v.000 3. 20. Personal data provided by respondents will be processed and kept confidential.000 5. Rs. 5. which in some cases come over generations of purchases. Male ( ) ii.000 6. Rs. Marital Status: i. The stores should take steps to minimize the waiting time of the customers before the billing line and delivery line etc.000 4. 5.001-20. 15.001-15. Rs. 10. Up to Rs.iv. Occupation: 6. THE GAP BETWEEN EXPECTED AND ACTUAL SERVICE QUALITY OF ORGANIZED RETAIL STORES IN HYDERABAD Please note that this research is being conducted purely in the interests of academic research and is not funded by any institute. Age: ----------------------------------4.000 ii. Female ( ) 3. Gender: i.001-10. Section A: Demography of Respondent 1. Income Category: 1. The employees should pay attention always while inviting customer to enhance the sense of trust shared between the customer and the store. 25.

The store has modern-looking equipment and fixtures. The physical facilities at the store are visually appealing. Strongly Disagree Disagree Neutral Agree Strongly Agree 1.Section B: Please express your opinion on the following questions regarding a ‘More Retail Store’ by marking an appropriate number. 1 2 3 4 5 2. 1 2 3 4 .

5 3. and convenient public areas (try rooms. catalogs. Materials associated with store’s service (such as shopping bags. 1 . 1 2 3 4 5 4. The store layout makes it easy for customers to find what they need. attractive. fitting room) 1 2 3 4 5 5. The store has clean. or statements) are visually appealing.

1 2 3 4 5 7.2 3 4 5 6. The store layout makes it easy for customers to move around the store. it will do so. When the store promises to do something by a certain time. 1 2 3 4 .

Sales person in the store are consistently courteous with customers. 1 2 3 4 5 10. The store insists on error-free sales transactions and records. Sales person in the store give prompt service to customers. 1 . 1 2 3 4 5 9.5 8.

1 2 3 4 5 12.2 3 4 5 11. 1 2 3 4 . The store offers high quality merchandise. Sales person in the store are never too busy to respond to customer’s requests.

Sales person of the store are able to handle customer complaints directly and immediately. The store gives customers individual attention. 1 . When a customer has a problem.5 13. 1 2 3 4 5 14. the store shows a sincere interest in solving it. 1 2 3 4 5 15.

A Retail store should have modern-looking equipments and fixtures. Strongly Disagree Disagree Neutral Agree Strongly Agree 1.2 3 4 5 Section C: Please express your opinion on the following questions regarding a Retail Store by marking an appropriate number. 1 2 3 4 5 .

1 2 3 4 5 3. fitting room). Materials associated with a Retail store’s service (such as shopping bags.2. A Retail store must have cleaned. 1 2 . The physical facilities at a Retail store should be visually appealing. catalogs. and convenient public areas (try rooms. or statements) should be visually appealing. attractive. 1 2 3 4 5 4.

1 2 3 4 5 6.3 4 5 5. The store layout at a Retail store should make it easy for customers to find what they need. The store layout at a Retail store should make it easy for customers to move around the store. 1 2 3 4 .

Sales persons in a Retail store should give prompt service to customers. 1 2 .5 7. 1 2 3 4 5 8. When a Retail store promises to do something by a certain time. 1 2 3 4 5 9. A Retail store must insist on error-free sales transactions and records. it should do so.

1 2 3 4 . 1 2 3 4 5 11. Sales persons in Retail store should never too busy to respond to customer’s requests. Sales persons in a Retail store should be consistently courteous with customers.3 4 5 10.

A Retail store should offer high quality merchandise. 1 2 3 4 5 13. A Retail store should give customers individual attention. 1 2 3 4 5 14. When a customer has a problem.5 12. Retail store’s person must show a sincere interest in solving it. 1 2 .

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