Chapter 1

INTRODUCTION

1.1 Background of the Study

Service quality has gained a considerable amount of interest for researchers and
practitioners in the past two decades. The practitioners believe that service quality can
increase the performance of a firm (Al-Hawari, 2006; Black, Briggs, & Keogh, 2001;
Caruana, Money, & Berthon, 2000; Cheruiyot & Maru, 2013; Haynes & Fryer, 2000;
Yoo & Park, 2007). However, practitioners refer service quality and customer satisfaction
as interchangeable terms. Past studies relate the concept of service quality and customer
satisfaction to each other (Amin & Isa, 2008; Angur, Nataraajan, & Jahera Jr, 1999;
Arasli, Katircioglu, & Mehtap-Smadi, 2005; Avkiran, 1994; Awan, Bukhari, & Iqbal,
2011; LeBlanc & Nguyen, 1988). Further, a considerable amount of work has been done
in different service industries to better understand the dimensions of service quality and
customer satisfaction (Chumpitaz & Paparoidamis, 2004; Lewis, 1991; Pantouvakis,
2013; Zhu et al., 2002). This research tries to associate the relationship between service
quality and customer satisfaction in the educational consultancies of Kathmandu.
An Educational Consultancy is an organization which helps parents/students and
organizations with educational planning. It is established with an objective of catering
proper information and guidance to parents interested in sending their offspring for
abroad studies. They are the chain between the students and international
universities/colleges. They provide the services such as counselling, preparing financial
documents and VISA processing. Some also do provide preparation services of Language
Efficiency Tests such as IELTS, TOEFL and PTE. It is one of the emerging service
sectors in Nepal as more students seek to aboard for their further study.
Outbound mobility of students has been booming since 2000, the number of Nepali
students enrolled in degree programs abroad soared by 835 percent and stood at 44,255
students in 2017 (UIS). Nepal’s outbound mobility ratio almost doubled over the past
decade and is now more than twelve times as high as in neighboring India. In 2016,
Nepal’s mobility ratio was 12.3 percent, compared to 0.9 percent, 1.9 percent and 3
percent in India, China and Vietnam, respectively (UIS).
It is likely that outbound student mobility from Nepal is going to increase further in the
near term. The country’s population is becoming more affluent and is growing – the
government expects the population to increase from 29 million to 33.6 million by 2031.
Demographically, Nepal is currently experiencing a “youth bulge phase”: World Bank
data shows that the share of university-age youths among the Nepali population (ages 20

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to 29) stood at about 36 percent in 2016 and analysts expect Nepal to be among the
countries with the fastest growing population of 18 to 22-year-olds in the coming years.
With all this data, we can see that Educational Consultancy business in Nepal is in
booming phase and the increasing trend will continue to rise in future. The major clients
of this industry are the students who seek to pursue their career in aboard. These students
have large number of choices in case of Educational consultancies. Thus, it is a challenge
for the institutions to improve their service quality, so that they could provide best
services to their clients. This research aims to apply SERVQUAL method to determine
the factors that influence the customer satisfaction in Educational Consultancy industry.
1.2 Statement of Problem
Previously, many studies have been conducted in the context of service quality and
customer satisfaction (Ahmed et al., 2010; Arasli et al., 2005; Caruana et. al., 2000;
Newman & Cowling, 1996; Peterson & Wilson, 1992; Rust & Oliver, 1994; Taylor &
Baker, 1994; Wang et al., 2003; Woodside, Frey, & Daly, 1989; Yavas et al., 1997; Zhu
et al., 2002). These studies suggest that service quality and customer satisfaction are key
factors of service industry. Parasuraman et al. (1985) argued that the service quality
concept is inconclusive in the context of customer satisfaction
Despite the existing literature on service quality, fewer studies have been conducted on
service quality and customer satisfaction in the Educational Consultancy sector. Up till
now, to the best of the authors’ knowledge, no such studies have been found relative to
service quality dimensions and customer satisfaction specifically in Educational
Consultancy in Nepal.
This research tries to quantify the impact of service quality to the customer satisfaction
through SERVQUAL model.

Chapter 2: Literature Review

2.1 Theoretical Review
2.1.1 SERVQUAL Model
The SERVQUAL scale was developed based on a marketing perspective with the support
of the Marketing Science Institute (Parasuraman, Zeithaml, and Berry 1986). Its purpose
was to provide an instrument for measuring service quality that would apply across a
broad range of services with minor modifications in the scale. SERVQUAL provides a
foundation for a growing body of research that pertains to the creation of quality among
service industries. The developers of the scale contend that, while each service industry is
unique in some aspects, there are five dimensions of service quality that are applicable to
service-providing organizations in general. These dimensions are: (1) tangibles-physical

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facilities, equipment, and appearance of personnel; (2) reliability-ability to perform the
promised service dependably and accurately; (3) responsiveness/willingness to help
customers and provide prompt service; (4) assurance-knowledge and courtesy of
employees and their ability to inspire trust and confidence; and (5) empathy-caring, the
individualized attention the firm provides its customers (Parasuraman, Zeithaml, and
Berry 1988). The scale was developed and tested across four service environments:
banking, credit card services, repair and maintenance, and long distance telephone
services. In its final form, SERVQUAL contains 22 pairs of items. Half of these items are
intended to measure consumers) expected level of service for a particular industry
(expectations). The other 22 matching items are intended to measure consumer
perceptions of the present level of service provided by a particular organization
(perceptions). Both sets of items are presented in sevenpoint Likert response format, with
the anchors "strongly agree" and "strongly disagree." Service quality is measured on the
basis of the difference scores by subtracting expectation scores from the corresponding
perception scores. Putting service quality into operation as a difference or "gap" score is a
consistent extension of the theoretical work of Parasuraman and his colleagues on the
determinants of service quality. It is unique in the sense that the definition of the
construct is based on the difference between expectations and perceptions. The construct
is differentiated from consumer satisfaction in a way that defines the expectations/
perceptions "gap" as an enduring perception about the overall excellence of a particular
firm. This approach to defining and measuring service quality as the difference between
expectations and perceptions is a major departure from previous scale development
efforts in health care services (e.g., Bopp 1990; Casarreal, Mills, and Plant 1986; Ware
and Snyder 1975). While it should be pointed out that SERVQUAL is intended to
measure functional quality rather than technical quality, this limitation is inherent in the
fact that the technical aspects of the delivery process are, in most cases, industry specific
(e.g., health care versus banking services). Hence, SERVQUAL can help researchers to
identify general principles of functional service quality and to test the effectiveness of a
given model among service-providing industries.
2.1.2 Customer satisfaction
In 1980, Oliver referred customer satisfaction to the complete fulfilment of one’s
expectations. It is an attitude or feeling that results from having used some product or
service. Marketing activities are directly linked to customer satisfaction and sometimes it
is associated with consumer buying behaviour. If a customer is satisfied with a service or
product after having used it, then the chances are increases in repeat purchase of that
service or product (East, 1997). The intentions to repeatedly purchase the product rely
heavily on customer satisfaction (Taylor & Baker, 1994). Not only this, the satisfied
customer shares his positive experience with others and becomes a source of word-of-
mouth advertising. On the other hand, a dissatisfied customer results in negative word-of-
mouth advertising and is more likely to switch the brand or product.
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2.2. Service quality
Past research findings validate the fact that service quality is a better measurement of
customer satisfaction (Anderson & Sullivan, 1993; Cronin Jr & Taylor, 1992; Levesque
& McDougall, 1996a; Taylor & Baker, 1994). Most of the empirical investigations have
tried to propose a causal relationship between service quality and customer satisfaction.
This means that service quality is viewed at the global level (Bitner, 1990; Oliver, 1981;
Parasuraman et al., 1988), while customer satisfaction is treated at the experimental level.
Bitner (1990) study investigated the linkage between customer satisfaction judgement
and service quality of travellers. Evidence suggests that customer satisfaction judgements
are antecedents of service quality. In addition, the study further proposed a research
dimension for the causal linkage between customer satisfaction and service quality. The
performance of a company in the long run is dependent on the quality of a good product
and services. A business can grow by improving its quality, which leads to increase in
market share and market expansion as well (Buzzell & Gale, 1987). For a service
business, issues related to the delivery of services and customers’ experience are the key
factors to improve the quality of services. Past literatures on service quality paid much
attention to quality perception and customer satisfaction (Cronin Jr & Taylor, 1992;
Taylor & Baker, 1994). Evidences provided in the literature suggest that good service
quality increases customer satisfaction and helps attract new customers and also retain
existing ones (Keiser, 1993; Lian, 1994a, 1994b). Similarly, the majority of the banks
believe that service quality should refer to service excellence in order to gain customer
satisfaction (Mahoney, 1994). One study of Madsen (1993) suggested a brief definition of
service excellence that firms can exceed customer satisfaction to delight and retain them.
He further explains service excellence as listening, and allowing customers to be a part of
action, innovation and empowerment. Previous studies suggest that service quality is not
associated with a unidimensional construct. However, most of the researchers support
service quality as a multidimensional construct such as tangibles, responsiveness,
reliability, empathy and assurance (Amin & Isa, 2008; Bitran & Lojo, 1993; Carman,
1990; Lewis, 1993; Parasuraman et al., 1985, 1988). Generally, service quality has two
overriding dimensions (Gro ¨nroos, 1984; Levesque & McDougall, 1996b; McDougall &
Levesque, 1994; Parasuraman, Berry, & Zeithaml, 1991). The first dimension is referred
to as the core aspect of the service (reliability), whereas the second dimension is referred
to as process aspects of the service (tangibles, responsiveness, empathy and assurance).
More precisely, reliability is mainly associated with the service outcome, while tangibles,
responsiveness, empathy and assurance are associated with the deliverance of service
(Parasuraman et al., 1991). Supporting these facts, this study suggests that both the
aspects are essential and interactive dimensions of service quality and can be antecedents
of customer satisfaction.

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Chapter 3: Research Questions and Hypotheses
3.1 Research Objectives
The objective of this research is to examine SERVQUAL factors affecting the customer
satisfaction in Educational Consultancies in Kathmandu:
 To examine the impact of Reliability (ability to perform services accurately) on
customer satisfaction of Education Consultancies of Kathmandu.
 To examine the impact of Tangibles (physical facilities, staff, equipment,
building, appearance etc.) on customer satisfaction of Education Consultancies of
Kathmandu.
 To examine the impact of Responsiveness (willingness to help and respond to
customer needs) on customer satisfaction of Education Consultancies of
Kathmandu.
 To examine the impact of Empathy (attention, caring and individual service is
given to the customer) on customer satisfaction of Education Consultancies of
Kathmandu.
 To examine the impact of Assurance (staff ability to inspire, confidence, trust and
courtesy) on customer satisfaction of Education Consultancies of Kathmandu.
3.2 Research Questions
 Does the Reliability (ability to perform services accurately) affect the customer
satisfaction of Education Consultancies of Kathmandu?
 Does the Tangibles (physical facilities, staff, equipment, building, appearance
etc.) affect the customer satisfaction of Education Consultancies of Kathmandu?
 Does the Responsiveness (willingness to help and respond to customer needs)
affect the customer satisfaction of Education Consultancies of Kathmandu?
 Does the Empathy (attention, caring and individual service is given to the
customer) affect the customer satisfaction of Education Consultancies of
Kathmandu.
 Does the Assurance (staff ability to inspire, confidence, trust and courtesy) affect
the customer satisfaction of Education Consultancies of Kathmandu?

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3.3 Theoretical Framework

Reliability

Tangibles

Customer
Satisfaction Responsiveness

Empathy

Assurance

3.4 Conceptual Framework

3.4.1 Independent Variable
The Independent variables are briefly described below (BATESON and HOFFMAN,
2001; LOVELOCK, 2001):
BATESON, J. E. G.; HOFFMAN, K. D. Marketing de serviços. 4. ed. Porto Alegre:
Bookman, 2001.
Reliability
Reliability refers to ability to perform the promised service dependably and accurately. It
depicts the answer for the questions like is the company reliable in providing the service?
Does it provide as promised? Reliability reflects a company’s consistency and certainty
in terms of performance. Reliability is the most important dimension for the consumer of
services;

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Tangibility
Tangibility refers to physical facilities, equipment, and appearance of personnel. It
depicts the answer for the questions like how are the service provider’s physical
installations, equipment, people and communication material? Since there is no physical
element to be assessed in services, clients often trust the tangible evidence that surrounds
it when making their assessment;
Responsiveness
Responsiveness refers to willingness to help customers and provide prompt service. It
depicts the answers to the questions like are company employees helpful and capable of
providing fast service? It is responsible for measuring company and employee
receptiveness towards clients;
Assurance
Assurance refers to knowledge and courtesy of employees and their ability to inspire trust
and confidence. It depicts the answers to the questions like are employees well-informed,
educated, competent and trustworthy? This dimension encompasses the company’s
competence, courtesy and precision
Empathy
Empathy refers to caring, the individualized attention the firm provides its customers.
This is the capacity a person has to experience another’s feelings. It depicts the answer to
the question of Does the service company provide careful and personalized attention?
3.5 Hypotheses
Based on past empirical findings, the research hypotheses of the present study are as
follows:
H1: Reliability dimension of service quality will have a positive impact on customer
satisfaction.
H2: Tangibility dimension of service quality will have a positive impact on customer
satisfaction.
H3: Responsiveness dimension of service quality will have a positive impact on customer
satisfaction.
H4: Assurance dimension of service quality will have a positive impact on customer
satisfaction.
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H5: Empathy dimension of service quality will have a positive impact on customer
satisfaction.
Chapter 4: Research Methodology
This chapter will discuss the methodology opted for the study. A brief discussion on
research design will follow first, and then sample will be determined, followed by an
examination of the data collected, namely closed ended and structured questions. This
chapter will also discuss the data analysis process and ends with the limitations of the
methodology opted.
4.1 Research Design
Quantitative methods emphasize objective measurements and the statistical,
mathematical, or numerical analysis of data collected through polls, questionnaires, and
surveys, or by manipulating pre-existing statistical data using computational techniques.
Quantitative research focuses on gathering numerical data and generalizing it across
groups of people or to explain a particular phenomenon. (Babbie, Earl R. , 2010).
Therefore, based on this approach, this study will examine impact of service quality on
customer satisfaction through SERVQUAL method on Educational Consultancies of
Kathmandu.
4.2 Sources of Data
This study will use primary data, the source of which will be a structured questionnaire,
delivered to students who are currently processing through various consultancies of
Kathmandu valley and those who have already been to aboard. Hence a purposive
sampling technique is used to select the respondents(students seeking aboard studies)
within Kathmandu valley.
4.3 Methodology
Figure 1 shows the conceptual model of the study. The SERVQUAL measurement model
comprises five dimensions such as reliability, tangibility, responsiveness, assurance and
empathy. These dimensions are used to measure service quality in Educational
consultancies in Kathmandu. In addition, based on the past literature, Figure 1 further
illustrates the relationship between service quality and customer satisfaction.
4.4 Instruments
The SERVQUAL five dimensions are suggested by Parasuraman (1998), Jabnoun and
Hassan Al-Tamimi (2003) and Othman and Owen (2001, 2002), which are further
modified and adapted by this study. Questionnaire items were modified and substituted
carefully in the service industry, specifically Educational Consultancies of Kathmandu..
A pilot study is to be conducted and the questionnaire is to be distributed to students who

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are currently processing and who have gone to aboard for higher studies through
educational consultancies. It is therefore confirmed that all items are relevant and it is
convenient to understand the instrument. A 5-point Likert scale ranging from (1)
‘strongly disagree’, (2) ‘disagree’, (3) ‘neutral’, (4) ‘agree’ and (5) ‘strongly agree’ is to
be used to measure the perception of service quality.
Data collection is to be done via survey method – questionnaires and Google Forms. This
study aims to target those students who are processing and who have gone to aboard for
higher studies through educational consultancies. Data collection will be based on a 5-
point Likert scaling questionnaire which was adopted in the previous literature. The
present study is to be conducted in August– November 2019, and a non-probability
sampling technique (convenience sampling) is to be applied.
During the data collection time, all respondents and their information will be kept
confidential. In addition, the questionnaire will be based on service quality dimensions
(independent variables) such as reliability, tangibility, responsiveness, assurance and
empathy, whereas customer satisfaction (dependent variable) will be tested with these
service quality dimensions.
The basic regression model service quality dimensions and customer satisfaction are
written as follows:

yn = α + β x n + εn
where y denotes a dependent variable (customer satisfaction) and α denotes the intercept
term. x represents explanatory variables (reliability, tangibility, responsiveness, assurance
and empathy), while b represents the regression coefficient. The basic functional form of
the study model is as follows:
Customer satisfaction = f (reliability, tangibility, responsiveness, assurance and empathy).
From the above discussion, the following regression model is used in this study:

CSn = α + β1 RELn + β2 TANn + β3 RESn + β4 ASRn + β5 EMPn + εn,

where CS represents customer satisfaction, REL is reliability, TAN shows tangibility,
RES denotes responsiveness, ASR represents assurance, EMP reflects empathy, while ε
is the error term. The conceptual model of this study is presented in Figure 1.
4.5 Limitations of the Methodology
This study will have some limitations. This study will primarily limit to its small sample
size (i.e. few responses in Kathmandu district will be studied). A larger sample with a
greater number of participants would have benefitted results and enhanced the
generalizability of the study. However, results fit with those of other researchers. Further,

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over the time, perceptual and actual performance may change so the findings of the study
may vary.
References

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