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CUSTOMER PERCEPTION ON SERVICE QUALITY IN BANKING SECTOR: WITH SPECIAL REFERENCE TO HDFC BANK IN KASHMIR REGION.

Introd !t"on: #

It is essential for the service firms in general and banks in particular to identify what the customer's requirements are and how those customer requirements can be met effectively. In the days where product and price differences are blurred, superior service by the service provider is the only differentiator left before the banks to attract, retain and partner with the customers. Superior service quality enables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency .The benefits of service quality include increased customer satisfaction, improved customer retention, positive word of mouth, reduced staff turnover, decreased operating costs, enlarged market share, increased profitability, and improved financial performance. The construct of service quality has therefore been a subject of great interest to service marketing researchers. Service quality has been defined by various e perts in various ways as! 'Service "uality is the difference between customers' e pectations for service performance prior to the service encounter and their perceptions of the service received.' #ccording to $efan %Service quality is the subjective comparison that customers make between the qualities of service that they want to receive and what they actually get.' &arasuraman says, 'Service quality is determined by the differences between customer's e pectations of services provider's performance and their evaluation of the services they received. Service quality is 'the delivery of e cellent or superior service relative to customer e pectations. Service quality is recogni'ed as a multidimensional construct. (hile the number of dimensions often varies from researcher to researcher, there is some consensus that service quality consists of three primary aspects! outcome quality, interaction quality, and physical service environment quality. )utcome quality refers to the customer's assessment of the core service which is the prime motivating factor for obtaining the services *e.g. money received from #T+,. Interaction quality refers to the customer's assessment of the service delivery process, which is typically rendered via a physical interface between the service provider, in person, or via technical equipment, and the customer. It includes, for instance, the consumer's evaluation of the attitude of the service providing staff. The physical service environment quality dimension refers to the consumer's evaluation of any tangible aspect associated with the facilities or equipment

that the service is provided in- with. It includes, for e ample, the physical conditions of an #T+ machine. The most popular dimensions of service quality..features five dimensions! tangibles, reliability, responsiveness, empathy, and assurance. The tangibles dimension corresponds to the aforementioned physical environment aspect, the reliability dimension corresponds to the service outcome aspect, and the remaining three represent aspects of interaction quality. /oth the costs and the revenue of firms are affected by repeat purchases, positive word.of.mouth recommendation, and customer feedback. +oreover, there is strong evidence that service quality has either a direct influence on the behavioral intentions of customers and-or an indirect influence on such intentions, mediated through customer satisfaction. 0#T10 is an instrument that might be used to define and measure banking service quality and to create useful quality.assessment tools. The 0#T10 may finally provide the following benefits to the 2345 bank! 6. It is the first approach to add and mi the customers religious beliefs and cultural values with other quality dimensions. 7. It provides for multi.faced analysis of customer satisfaction. 8. It links quality with customers satisfaction and service encounter. 9. It provides information at several levels, already organi'ed into meaningful groupings. :. It is a proven approach, which results in usable answers to meet customers; needs. <. It is empirically grounded, systematic and well documented. /anks managers can use the 0#T10 model and its dimensions first to identify the following issues! To identify those areas where improvement should be made and resources can be allocated. 4or instance, they need to know the level of quality in their banks and they can manipulate to make bank.wide improvement in quality performance. #lso they can use benchmarking to compare their performance and other banks, which have already implemented quality program that will help to prioriti'e the quality management efforts. T#=$I/I>IT?! This dimension deal with modern looking equipments and visual appealing part of banks. 01>I#/I>IT?! This dimension has a direct positive effect on perceived service quality and customer satisfaction in banking institutions. /anks must provide error free service and secure online transactions to make customers feel comfortable.

01S&)=SI@1=1SS! 5ustomers e pect that the banks must respond their inquiry promptly. 0esponsiveness describes how often a bank voluntarily provides services that are important to its customers. 0esearchers e amining the responsiveness of banking services have highlighted the importance of perceived service quality and customer satisfaction. #SSA0#=51! 5ustomer e pects that the bank must be secured and the behavior of the employees must be encouraging. 3I+1=SI)=S )4 S10@I51 "A#>IT? 1+&#T2?! individual attention, customi'ed service and convenient banking hours are very much important in todays service. In order to achieve better understanding of service quality in banking sector, the proposed five service quality dimensions are conceptuali'ed to illustrate the overall service quality of the banking in relation to customers and providers perspective. /anking was in the sector featuring medium goods and higher customer producer interactions, since in banking, consumers and service providers interact personally and the use of goods is at a medium level. 2ence, in banking, where there are high customer.producer interactions, the quality of service is determined to a large e tent by the skills and attitudes of people producing the service. In the case of services, because customers are often either direct observers of the production process or active participants, how the process is performed also has a strong influence on the overall impression of the quality of service. # well.performed service encounter may even overcome the negative impression caused by poor technical quality as well as generate positive word.of.mouth, particularly if customers can see that employees have worked very hard to satisfy them in the face of problems outside their control. 1mployees are part of the process, which connects with the customer at the point of sale, and hence employees remain the key to success at these service encounters or Bmoments of truthC. It is these encounters with customers during a service that are the most important determinants of overall customer satisfaction, and a customer;s e perience with the service will be defined by the brief e perience with the firm;s personnel and the firm;s systems. The rudeness of the bank;s customer service representative, the abruptness of the employee at the teller counter, or the lack of interest of the person at the check deposit counter can alter one;s overall attitude towards the service, perhaps even reversing the impression caused by high technical quality. #nother important service quality factor, competence, is defined by whether the bank performs the service right the first time, whether the employees of the bank tell customers e actly when services will be performed, whether the bank lives up to its promises, whether customers feel safe in their transactions with the bank and whether

the employees show a sincere interest in solving the customers problems. In short, this dimension is related to the banks ability to perform the promised service accurately and dependably. &erforming the service dependably and accurately is the heart of service marketing e cellence. (hen a company performs a service carelessly, when it makes avoidable mistakes, and when it fails to deliver on promises made to attract customers, it shakes customers confidence in its capabilities and undermines its chances of earning a reputation for service e cellence. It is very important to do the service right the first time. In case a service problem does crop up, by resolving the problem to the customer;s satisfaction, the company can significantly improve customer retention. 2owever, companies fare best when they prevent service problems altogether and fare worst when service problems occur and the company either ignores them or does not resolve them to the customer;s satisfaction. &erforming the service accurately is perhaps the most important factor in service quality e cellence. The cost of performing the service inaccurately includes not only the cost of redoing the service but also the cost associated with negative word.of.mouth generated by displeased customers. In case of services, the factory is the field. #gain, services are intangible and hence the criteria for flawless services are more subjective than the criteria for defect.free tangible goods. 2ence for most services, customers perceptions of whether the service has been performed correctly, and not provider.established criteria, are the major determinants of reliability. The service quality factor tangible is defined by whether the physical facilities and materials associated with the service are visually appealing at the bank. These are all factors that customers notice before or upon entering the bank. Such visual factors help consumers form their initial impressions. # crucial challenge in service marketing is that customers cannot see a service but can see the various tangibles associated with it . all these tangibles, the service facilities, equipment and communication materials are clues about the intangible service. If unmanaged, these clues can send to the customer;s wrong messages about the service and render ineffective the marketing strategy of the company. )n the other hand, improving quality through tangibles means attention to the smallest details that competitors might consider trivial. ?et, these visible details can add up for customers and signal a message of caring and competence. 5ustomers may reveal new aspects of service quality in banking that are important to them, and these would have to be incorporated in the scale so as to further e plore the concept of service quality in the banking arena. N$$d o% t&$ St d' (R$)$*r!& +*,-

4rom the literature above it can be concluded that despite attempts have been made to study service quality provided by the banks, but in Dashmir region very less study has been done on perceptions and the actual service quality of the bank. The results of the study would be able to recogni'e the lacunae in the system and thus provide key areas where improvement is required for better performance and success ratio. In the days of intense competition, superior service is the only differentiator left before the banks to attract, retain and partner with the customers. Superior service quality enables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency in banking sector of Eammu and Dashmir.

OB.ECTIVES To study and compare the degree of S" across perceptual response of the customers from the service quality offered by the banks. To know which service quality dimension of the bank is performing well. To identify which dimension of service quality needs improvement so that the quality of service of 2345 banks is enhanced To draw out conclusion and recommend on the basis of the findings. HYPOTHESIS This study will test following hypothesis!
SQ being offered by the HDFC Bank is fairly good. "uality of service provided by various branches of 2345 is same.

#ll five dimensions of service quality are equal of 2345 banks

RESEARCH METHODLOGY (ith a view to achieve objectives and test the hypotheses laid, the data shall be collected through both primary and secondary sources. &rimary data will be collected through a structured questionnaire administered to teaching, non.teaching staff and students from different Aniversities in Eammu and Dashmir. The technique of stratified random sampling shall be used to select the sample for obtaining data pertaining S".

&arasuraman et al. argued that in order to measure service quality, customers; e pectations compared to perceive service quality levels should be evaluated. To gain a better understanding of service quality in an educational situation, this study seeks to e amine customers; e pectations and perceptions of banking services rendered by 2345 bank. S10@"A#> instrument comprising of 77 statements besides adding few more questions to it which shall be developed from the insights from literature if deemed proper shall be administered to the customers of the /ank. These dimensions of service quality include the following! T#=$I/I>IT?! This dimension deal with modern looking equipments and visual appealing part of banks. 01>I#/I>IT?! This dimension has a direct positive effect on perceived service quality and customer satisfaction in banking institutions. /anks must provide error free service and secure online transactions to make customers feel comfortable. 01S&)=SI@1=1SS! 5ustomers e pect that the banks must respond their inquiry promptly. 0esponsiveness describes how often a bank voluntarily provides services that are important to its customers. 0esearchers e amining the responsiveness of banking services have highlighted the importance of perceived service quality and customer satisfaction. #SSA0#=51! 5ustomer e pects that the bank must be secured and the behavior of the employees must be encouraging. 1+&#T2?! individual attention, customi'ed service and convenient banking hours are very much important in today;s service. In order to achieve better understanding of service quality in banking sector, the proposed five service quality dimensions are conceptuali'ed to illustrate the overall service quality of the banking in relation to customers and providers perspective. The service quality model developed by Feithamal, &arsuraman and /erry *6GHH, has been used in the present study. The main assumption of the model is that service quality is multidimensional concept. These dimensions contribute to the assessment of the service quality in any setting. The statements in the construct are one.dimensional and performance based, which incorporate the statements of IS10@"A#>; model that can be used as measurement *5ronin Er. J Taylor, 6GG7,. The statements have been grouped under five dimensions mentioned earlier. In order to ascertain the perceptions of service quality, >ikert;s :. point scale has been used for its suitability to estimate the range and variations in the perceptions. The scale 6 K : represents I:; as mostly agree and I6; as mostly disagree.

S#+&>I=$ &>#=! Since it is not possible to study whole universe, it becomes necessary to take sample from the universe to know about its characteristics. Sampling Anits will be the 5ustomers of 2345 bankL Sample Technique will be 0andom Sampling. S#+&>1 SIF1! The work is a case of 2345 /ank, one of the largest banks of Indian banking industry together representing over 7: per cent of the market share of Indian banking space. The survey will be conducted in the Dashmir region with 7M branches of 2345 /ank, with 6M:M customers as respondent. Tools for analysis! . S&SS *mean standard deviation, etc,

TENTATIVE CHAPTER SCHEME:52#&T10 .6. I=T0)3A5TI)= This chapter shall give an overview of the emergence and history of banking sector in India. This chapter shall also provide information about 5)+&#=? &0)4I>1 of 2345 /#=D and 0/I, its upcoming as the central bank and its various functions. 52#&T10 .7 REVIEW OF I!ER"!#RE$
!his %ha&ter shall e'a(ine the &ast resear%h done in this area of resear%h and the need for the &resent st)dy* also gives details about S10@I51 "A#>IT? I= /#=DS its role and importance in banking.

52#&T10 .8 RESE"RCH +E!HODO O,-$


!his %ha&ter .ill des%ribe the resear%h (ethodology to be )sed to in/estigate the &roble( and the ad/antages of the (ethodology in the %onte't of the &resent resear%h st)dy. F)rther* this shall highlight the li(itation of the %)rrent st)dy. 52#&T10 .9 "0" -SES "0D D"!" I0!ER1RE!"!IO0 In this %ha&ter an atte(&t shall be (ade to identify nat)re and di(ensions of SQ &re/alent in the hdfc bank according to customer response.

52#&T10 KH 4I=3I=$S, SA$$1STI)=S #=3 015)++1=3#TI)=S This chapter will put forward suggestions and recommendations based on 4I=3I=$S if any for 2345 /ank. 52#&T10 K G >I+IT#TI)=S )4 T21 01S1#052

In this chapter the focus will be on the various limitations and problems that we come across while working on this project. 52#&T10 .6M 5)=5>ASI)=S This chapter shall provide the overall conclusion and will highlight major findings of the s

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