Total Quality Management & Business Excellence

ISSN: 1478-3363 (Print) 1478-3371 (Online) Journal homepage: http://www.tandfonline.com/loi/ctqm20

Service quality dimensions and customer

satisfaction: empirical evidence from retail
banking sector in Oman

Ananda S. & Sonal Devesh

To cite this article: Ananda S. & Sonal Devesh (2017): Service quality dimensions and customer
satisfaction: empirical evidence from retail banking sector in Oman, Total Quality Management &
Business Excellence, DOI: 10.1080/14783363.2017.1393330

To link to this article: https://doi.org/10.1080/14783363.2017.1393330

Published online: 21 Nov 2017.

Submit your article to this journal

Article views: 174

View related articles

View Crossmark data

Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=ctqm20
Total Quality Management, 2017
https://doi.org/10.1080/14783363.2017.1393330

Service quality dimensions and customer satisfaction: empirical

evidence from retail banking sector in Oman
∗
Ananda S. and Sonal Devesh

Postgraduate Studies and Research Department, College of Banking and Financial Studies,
Muscat, Sultanate of Oman

The purpose of this study is to examine the level of customer satisfaction on service
quality in the perception of retail banking customers in Oman. The service quality of
the banks is assessed under five dimensions with 25 different attributes. The primary
data were collected through a structured questionnaire from 152 respondents chosen
using the ‘snowball’ method. The research design is quantitative and the five-
dimensional SERVQUAL model was used to examine the service quality gaps
between customers’ expectation and perception. The effect of service quality
dimensions on customer satisfaction was estimated using descriptive statistics, one
sample t-tests, and correlation and regression analysis techniques. The results of the
study revealed that expectation of customers was higher than their perception under
all five service quality dimensions. The highest and the least service quality gap was
found in the dimension of ‘empathy’ and ‘tangibility’, respectively. The findings
indicate that all five service quality dimensions of the study exert a positively
significant effect on customer satisfaction. In competitive environment, the banks
can have a competitive edge by providing superior quality services to enhance
customer satisfaction. Hence, the findings of this study will help the Omani banks to
plan strategy in service delivery that leads to customer satisfaction.
Keywords: retail banking; service quality; customer satisfaction; customer
expectation; customer perception; SERVQUAL

Introduction
Satisfying the customers beyond their expectations is highly important in competitive
business environment. Customer satisfaction is an important aspect in bank and it is
highly related to service quality (Bolton & Drew, 1991; Cronin & Taylor, 1994; Spreng
& Mackoy, 1996). The service quality in banks plays a vital role in achieving customer
satisfaction (Galloway & Ho, 1996). Quality of services helps the banks to attract more
customers with less cost and helps to increase the volume of sales revenue (Griffin,
1995). The organisations that have maintained high service quality have achieved
market leadership in terms of sales, customer loyalty and retention (Anderson & Sullivan,
1993; Boulding, Kalra, Staelin, & Zeithaml, 1993; Eklöf & Westlund, 2002). The inte-
gration of service quality, customer satisfaction and customer loyalty creates a mutual
relationship between the service provider and the customer (Hermans, 2015). Customer
loyalty helps to improve customer tolerance in case of service failures (Low, Lee, &
Lian, 2013). The service quality also helped the banks to attract new customers due to
the advertising campaign of the positive word of mouth of the existing customers
(Singh Dhillon, 2013). Therefore, many organisations have resorted to superior service

∗
Corresponding author. Emails: anand@cbfs.edu.om; anands66@gmail.com

# 2017 Informa UK Limited, trading as Taylor & Francis Group

2 A.S. and S. Devesh

quality to boost their efficiency and profitability (accountinglibrary.com, 2016) and to also
achieve customer loyalty and retention (Angelova & Zekiri, 2011).
Banking sector is one of the key drivers of the economic development of any country.
The Omani banking sector comprises nine local banks, two specialised banks, nine foreign
commercial banks and two fully fledged Sharia-compliant banks (CBO-Oman.org, 2015).
The top three institutions contribute around 62% of total sector assets with the leading
player, Bank Muscat, accounting for 37.26% of total sector assets (thebusinessyear.com,
2015). The Central Bank of Oman has consistently implemented several initiatives to
enhance the quality of services. The trend of adopting quality standards is catching up
among all banks to enhance the service quality to the stakeholders.
There are two schools of thought on measuring the quality of service offered by
business organisations. The first one is the two-dimensional model which measures the
technical and functional quality of services delivered (Nordic school based on Grönroos,
1984). The second one is the five-dimensional SERVQUAL model which measures the
tangibility, reliability, responsiveness, assurance and empathy of services delivered
(North American school based on Parasuraman, Zeithaml, & Berry, 1988). Rust and
Oliver (1994) have tested the service quality based on service product, service environ-
ment and service delivery. Brady and Cronin (2001) have argued that interaction
quality and physical environment quality have an impact on outcome quality. The
quality is observed as a major factor in reference to customer acquisition and retention
(Galloway & Ho, 1996). Maximising customer satisfaction through quality customer
service has been described as the ultimate weapon by Davidow and Uttal (1989). The
present-day customers are well educated and have high standards of living. They
compare their bank’s quality of service with that provided by other banks. Asubonteg,
McCleary, and Swan (1996) defined service quality as the difference between customers’
expectations about the service before its use and their perceptions after receiving the
service. This leads to a comparison of services they expect and the services they perceive
from banks. Several studies have measured the effectiveness of service quality by compar-
ing customers’ expectations with the company’s performance in delivering the service
(Angelova & Zekiri, 2011). Furthermore, banks are becoming increasingly competent in
providing quality service, as they know that at this juncture they need not only to create
new customers but also to concentrate on customer retention. With appropriate customer
relationships management, banks could maximise the profits of each customer base (Best,
2005). Hence, customers will change the provider if they are not receiving the service they
expect. Earlier studies have found that there is a high correlation among service quality,
customer satisfaction and customer loyalty (Yi, 1990; Anderson & Sullivan, 1993; Bould-
ing et al., 1993).
Several models have been developed by various authors to examine and measure the
factors influencing the service quality. Many research studies have been conducted using
either the same or a modified version of SERVQUAL model (Parasuraman et al., 1988;
Fick & Ritchie, 1991; Coyle & Dale, 1993; Smith, 1995; Lam, Wong, & Yeung, 1997;
Lim & Tang, 2000; Gounaris, Stathakopoulos, & Athanassopoulos, 2003). The universal
application of five-dimensional SERVQAL model has been questioned by some research-
ers (Carman, 1990; Cronin & Taylor, 1992; Buttle, 1996). It is noteworthy that there have
been theoretical and operational criticisms with regard to interpretation and implemen-
tation of this model (Babakus & Boller, 1992; Smith, 1995; Lam et al., 1997; Newman,
2001; Ladhari, 2008). The related research studies described service quality as a multi-
dimensional construct. However, the number and nature of service dimensions change
on the basis of service contexts. The evaluation and assessment of service quality differ
 Total Quality Management 3

from one customer group to another and from one circumstance to another (Ladhari,
2008). Both expectation and perception can be different for different populations and
hence the results may not be generalised (Ilyas et al., 2013). Despite these criticisms,
SERVQUAL instrument has been widely applied to measure the perceived service
quality of banking sector (Katircioglu, Araşlı, & Salime, 2005; Brahmbhatt & Panelia,
2008), hospitality sector (Nadiri & Hussain, 2005), public services (Anbori, Ghani,
Yadav, Daher, & Su, 2010; Kumasey, 2014), as it clearly identifies gaps in the quality
of service and finds out dimensions of customer satisfaction. Abdullrahim and Robson
(2017) have identified and compared the importance of service quality using an extended
SERVQUAL model to Muslim consumers with an Islamic or non-Islamic bank account in
Britain. This study considered responsiveness, credibility, Islamic tangibles, accessibility
and reputation as service quality dimensions.
Thus, the fundamental questions addressed in the study are: how the bank customers
perceived the service quality? How to estimate gap analysis between expected and per-
ceived service quality? How to find the service quality dimensions that lead to overall cus-
tomer satisfaction? In the light of the above literature review, this study seeks to examine
the service quality expectations and perceptions of bank customers of various demo-
graphic profiles. Hence, there is a need to measure the customer satisfaction towards
bank service quality across various banks in Oman. If expectations are greater than per-
formance, then the perceived quality is less than satisfactory and hence customer dissatis-
faction occurs (Parasuraman, Zeithaml, & Berry, 1985; Lewis & Mitchell, 1990).

Methodology
Sample and data collection
The population of this study comprises customers of banks in Oman. The primary data were
collected through a structured questionnaire using SERVQUAL model. The ‘Snowball’
sampling method (David Morgan, 2008;Tuncalp, 1988) was used for the study. The
sample data were collected through an online link sent to 1073 respondents which
allowed them to answer the questions asked in the questionnaire. Out of these, complete
response from 152 respondents was obtained, yielding a response rate of 14.17%. Of the
total respondents, 67.76% were male and the remaining were female (32.24%). Of the
respondents, 36.84% were Omani Nationals and the rest were Expatriates (63.16%). The dis-
tribution was spread across 11 different banks. Most were customers of Bank Muscat
(62.5%), followed by National Bank of Oman (9.9%), HSBC Oman Bank (6.6%) and
Oman Arab Bank (5.3%). The majority of respondents were utilising their bank services
for more than five years (63.8%; 21.7% of respondents were customers of the bank for
three to five years, 13.2% of customers were for one to three years and 1.3% of respondents
were customers for less than one year. The response count percentage indicates that majority
of respondents have savings bank account (81.6%), followed by current account (59.2%),
credit card (43.4%) and loan account (32.9%) with their respective banks. Furthermore,
the response count analysis indicates that when the respondent thinks of bank, ATM facility
(46.7%) comes first to their mind followed by customer service (42.1%), computerisation
(34.9%), personalised service (31.6%) and branch network (30.3%).

Design and measurement

Service quality is the psychological ‘experience’ of the customers in comparison with
their ‘expectation’. The gap between the customers’ expectations about service and
4 A.S. and S. Devesh

the perceived service helps to measure the effectiveness of delivered service. A cross-
sectional study design with a quantitative and qualitative approach was used in this
study. The service quality of banks in Oman was measured by using the SERVQUAL
model which identifies ‘gaps’ in the delivery of service. SERVQUAL, the most
popular standardised questionnaire of Parasuraman et al. (1988) and its subsequent
modification (1990, 1993 and 1994), is used to measure the service quality. The original
instrument consists of 22 structured and paired questions to assess customers’ expec-
tation and perception of service quality. In this study, three questions were added to
the original instrument to capture the service quality of e-banking. The questionnaire
comprised demographic profile of the respondents and 25 paired questions on customers’
expectation and perception about bank service quality under the following five service
quality dimensions:

(i)Tangibles: Physical facilities, equipment and appearance of personnel.

(ii)Reliability: Ability to perform the promised service dependably and accurately.
(iii)Responsiveness: Willingness to help customers and provide prompt service.
(iv) Assurance (including competence, courtesy, credibility and security): Knowl-
edge and courtesy of employees and their ability to inspire trust and
confidence.
(v) Empathy (including access, communication, understanding the customer):
Caring and Individualised attention that the firm provides to its customers.

The gap in score is calculated by finding the difference between the mean scores of expec-
tation (E) and perception (P), as customers’ satisfaction depends on the perception on
delivery of service quality in relation to their expectation. Thus, if ‘E’ is greater than
‘P’, then the customer is dissatisfied and if ‘E’ is less than ‘P’, then the customer is satis-
fied (Kotler & Armstrong, 1999; Parasuraman et al., 1988). A seven-point Likert scale was
used for all responses varying from 1 to 7 points (1 ¼ strongly disagree, 2 ¼ disagree, 3 ¼
somewhat disagree; 4 ¼ neither agree nor disagree, 5 ¼ somewhat agree, 6 ¼ agree, 7 ¼
strongly agree) to evaluate the service quality of their respective banks. Lewis (1993)
found that 7-point scales resulted in a stronger correlation with t-test results. Foddy
(1994) concludes that a minimum of 7 categories is required to ensure scale validity
and reliability. Hence, a 7-point scale is considered in this study, as it is better in terms
of obtaining more variation in responses.
Descriptive and inferential statistics have been applied in the data analysis. Statistical
Package of Social Sciences (SPSS) for Windows was used to analyse the data. Descriptive
statistics such as mean, number of respondents and standard deviation were calculated for
categorical variables. The data were analysed by finding the mean scores of the various
SERVQUAL attributions and dimensions for both expectations and perceptions and
thus the service quality gaps were calculated. The reliability test and t-test were used as
inferential statistics. T-tests were executed to test for the significant difference between
the means of expectation and perception.
A multivariate regression analysis has been applied to examine the relationship
between service quality dimensions and the overall level of customer satisfaction in
retail banking. In this study, the linear regression analysis was conducted using the
Overall Satisfaction (S) as the dependent variable and the five dimensions of service
quality: Tangibility (T ), Reliability (R), Responsiveness (Res), Assurance (A) and
Empathy (Em) as independent variables. The relationship between the independent and
 Total Quality Management 5

dependent variables in the regression model can be represented as follows:

Y = b0 + b1 X1 + b2 X2 + b3 X3 + b4 X4 + b5 X5 + 1i

where Y is the Overall Customer Satisfaction (S), b0, b1, . . . b5 are parameters, X1 is the
Tangibility (T ), X2 is the Reliability (R), X3 is the Responsiveness (Res), X4 is the Assur-
ance (A), X5 is the Empathy (Em) and e i is the statistical independent error.
The above equation helps to estimate the effect of SERVQUAL dimensions on the
overall level of customer satisfaction in retail banking and also gives an indication of
the relative contribution of each SERVQUAL dimension on the level of customer
satisfaction.

Theoretical model
See Figure 1 and Table 1.

Validity and reliability

The questionnaire was validated by randomly selected bank executives and customers.
The changes in the questionnaire were accommodated accordingly for easy understanding
of the samples. The objective of this part is to test the reliability of attributes of the five-
dimensional SERVQUAL instrument in the Omani retail banking context. The reliability
of the questionnaire was found by using Cronbach’s Alpha to check whether the respon-
dents’ score on each attributes tends to be related to their scores on the other attributes
(Bryman & Bell, 2007). Table 2 presents the values of Cronbach’s Alpha for both expec-
tation and perception which proves the internal consistency of the questionnaire.
The Cronbach’s Alpha varied from 0.8583 (tangibility) to 0.9592 (empathy) for expec-
tation and from 0.9062 (responsiveness) to 0.9743 (reliability) for perception. The Cron-
bach’s Alpha values exceeded the minimum standard value of 0.7 (Nunnally, 1978) for all
five service quality dimensions of E and P. The internal consistency in the modified
SERVQUAL instrument was assessed by calculating the overall reliability which is
equal to 0.969 for expectation and 0.975 for perception. The overall reliability of Parasura-
man et al. (1988) study was 0.92. This proves that the SERVQUAL instrument used for
this study is highly reliable and internally consistent.

Hypothesis
The study concentrates on the dimensions of service quality that lead to customer satisfac-
tion. In this backdrop, the following hypothesis statements were formulated in consistent
with the literature review which provides the scope and depth of the study.

Figure 1. Research framework.

6 A.S. and S. Devesh

Table 1. Dimension-wise service quality attributions.

Service quality dimension Service quality attributions
Tangibility Modern infrastructure and facilities
Appealing physical facilities
Neat appearance of employees
Materials associated with the service are visually appealing
Bank provide e-banking facilities
Reliability Employees’ keeping up of promise
Sincere interest in solving customers’ problems
Employees performing the service right at the first time
Provide the services at the time they promise to do so
Banks’ insistence on error-free records
Responsiveness Employees telling customers exactly when services will be performed
Prompt services to the customers
Employees’ willingness to help the customers
Prompt response to customers from the employees
Computerisation has reduced the waiting time for bank transaction
Overall service efficiency has increased due to bank computerisation
Assurance Employees’ behaviour instils confidence in customers
Customers feel safe in their transactions
Courtesy and friendliness of employees with customers
Employees having knowledge to answer customers’ questions
Empathy Individual customer attention given by employees
Convenient operating hours
Personal services to customers by the employees
Employees always work for customers’ best interest
Employees understand the specific needs of the customers

H01: There is no significant difference between the overall customers’ expectation and percep-
tion with respect to all the attributes of service quality dimensions.
H02: There is no significant difference between the customers’ expectation and perception
with respect to Tangibility.
H03: There is no significant difference between the customers’ expectation and perception
with respect to Reliability.
H04: There is no significant difference between the customers’ expectation and perception
with respect to Responsiveness.
H05: There is no significant difference between the customers’ expectation and perception
with respect to Assurance.

Table 2. Reliability analysis.

Expectation (E) Perception (P)
Service quality No. of Cronbach’s Cronbach’s
dimensions items Mean SD Alpha Mean SD Alpha
Tangibility 5 6.1341 0.8636 0.8583 5.6921 0.9464 0.9091
Reliability 5 6.0276 1.0472 0.9272 5.0013 1.4284 0.9743
Responsiveness 6 6.2445 0.8468 0.8911 5.1382 1.0291 0.9062
Assurance 4 6.2023 0.955 0.9574 5.222 1.2752 0.9364
Empathy 5 6.0408 1.022 0.9592 4.9132 1.3235 0.9162
Overall consistency 25 0.969 0.975
 Total Quality Management 7

H06: There is no significant difference between the customers’ expectation and perception
with respect to Empathy.
H07: The SERVQUAL dimensions have no significant effect on customer satisfaction.

Results and analysis

Descriptive analysis of grand mean gap of overall service quality attributions
The overall service quality is measured by averaging the scores of all service attributes
(Brown, Churchill, & Peter, 1993). The analysis of attributes identifies the results
between the expectation and perception of the customer in terms of service quality. All
25 statements are rearranged so that the questions related to each dimension are not
grouped together in order to avoid biasness.
The grand mean scores of the sample respondents in terms of their expectation and per-
ception related to attributes of service quality of the banks are presented in Table 3. The
table shows the grand mean scores of the attributes of service quality on the basis of their
expectation (6.1316) and perception (5.1899). This shows that the majority of the custo-
mers’ opinions are skewed towards ‘agree’ for expectation and ‘somewhat agree’ for per-
ception in the Likert scale. Comparing between the grand mean of expectation and
perception, it is observed that the grand mean score of expectation is greater than percep-
tion, which proves that the customers’ expectation is higher than their perception. The
standard deviation of expectation is 0.849 and that of perception is 1.1516 which indicate
the lesser deviation of the responses from respective means and better overall reliability of
the score. The skewness values of 21.91 (expectation) and 20.863 (perception) indicate
that the scores are deviated towards the right, which means that there is no much difference
between the scores of expectation and perception. The kurtosis value of expectation
(4.552) when compared to that of perception (0.526) indicates the clustering of values
away from the mean in the case of perception.
It is revealed from the study that the service attribute ‘appealing physical facilities’
carries the least mean gap score (0.2895) and ‘employees behaviour instils confidence
in customers’ carries the highest mean gap score (1.2434). It is observed that none of
the attributes showed a negative mean gap score, indicating satisfaction of service
quality of banks according to customers’ opinions.

Descriptive analysis of grand mean gap of service quality dimensions

Table 4 shows the descriptive grand mean scores of expectation and perception for all five
service quality dimensions considered in the study and also the grand mean gap score

Table 3. Grand mean scores of customers’ expectation and perception for service quality
attributions.
Descriptive statistics Expectation (E) Perception (P) Grand mean score gap (G)
Mean 6.1316 5.1899 0.9417
Median 6.1184 5.0987 0.54
Minimum 2.12 1.52 21.56
Maximum 7.00 7.00 5.04
Standard Deviation 0.849 1.1516 1.2415
Skewness 21.91 20.863 1.082
Kurtosis 4.552 0.526 1.1
Note: Scale: 1 (strongly disagree) to 7 (strongly agree).
8 A.S. and S. Devesh

Table 4. Grand mean score of customers’ expectation and perception for service quality
dimensions.
Grand mean score gap of service quality dimensions
Tangibility Reliability Responsiveness Assurance Empathy
Expectations (E) 6.1342 6.0276 6.2445 6.2023 6.0408
Perceptions (P) 5.6921 5.0013 5.1382 5.2221 4.9131
Grand mean score gap 0.4421 1.0263 1.1063 0.9802 1.1276
(G ¼ E2P)
Median (G) 0.2 0.4 0.667 0.75 0.8
Standard Deviation (G) 0.9611 1.626 1.4278 1.4493 1.5143
Skewness (G) 0.853 1.195 1.024 1.098 0.779
Kurtosis (G) 2.844 0.995 0.64 1.174 0.62

between them. In Table 4, on comparison of grand mean score values of customer expec-
tation and perception, it is observed that there is closeness in the opinion of customers with
respect to service dimensions. This proves that the respondents have a similar opinion on
attributes. The evaluation of grand mean scores of all five service dimensions indicates that
the customers’ expectation is higher than the perception which exerts positive grand mean
gap scores for all five dimensions. This proves that the services offered by the banks are
not up to the expectations of the retail customers. Table 4 shows that the highest mean gap
score is found for empathy and responsiveness; and the least gap was found for tangibility
and assurance service dimensions. Furthermore, the dimension-wise analysis shows that
the highest level of gap is observed in empathy (1.1276) which comprises five attributes.
The least gap is observed in tangibility (0.4421) which also comprises five attributes. In the
light of this analysis, it is found that the service delivery was weakest in the empathy and
responsiveness dimensions in retail banking in Oman. The service quality of tangibility
dimension is, however, not above but yet close to the expectations of the customer. The
standard deviation of service quality dimensions is quite low which shows less inter-
response variability. Overall, the results surpass significantly the above-average score of
4 in the 7-point Likert scale for expectations and perception on service quality attributions
and dimensions.
The findings of the study indicate the customers’ dissatisfaction under all 25 service
quality attributes and all five service quality dimensions. The attribution (employee behav-
iour instils confidence in customers, 1.2434) having the highest gap falls under assurance
dimension, followed by empathy dimension (Employees always work for customers’ best
interest, 1.2236). Furthermore, the widest service quality gap was found in the dimension
of empathy (1.1276) and the least was found in tangibility (0.705). This result further con-
firms the findings in the study conducted by Kwan and Hee (1994) which examined
measuring the service quality in Singapore retail banks using SERVQUAL model (Para-
suraman et al. 1988). Furthermore, the findings of the study revealed that the customers of
Omani retail banks expected a higher level of service quality than offered by the banks. In
most of the SERVQUAL applications, it is observed that reliability is the most important
dimension, interchangeably followed by responsiveness and assurance (Zeithaml, Para-
suraman, & Berry, 1990). In this study, it is found that empathy is the most important
service element followed by responsiveness, while reliability is in the third position (Evan-
gelos and Evmorfia, 2010).
 Total Quality Management 9

Correlation matrix of gaps of service quality dimension

Table 5 summarises the correlation coefficient of gaps of service quality dimension which
are significantly positive. This indicates that there is consistent relationship among the
dimensions of service quality with customer satisfaction in retail banking in Oman.

Testing of research hypotheses

Table 6 indicates the grand mean scores of all five service dimensions on the basis of gap
scores. The t-test is used to examine the significance of difference between expectation and
perception of all five dimensions of service quality. The calculated t-values indicate that
there is a significant difference between expectation and perception with respect to tangi-
bility, reliability, responsiveness, assurance and empathy at the 95% level of significance
(p ≤ 0.05). Overall, the results of the t-test indicate the rejection of H01 to H06 research
hypotheses, thus proving that there is a significant difference between customers’ expec-
tation and perception on service quality.

Regression analysis
Table 6 provides the results of multivariate regression model. This model is used to test the
effect of SERVQUAL dimensions on the customer satisfaction in the retail banking in
Oman.

Table 5. Correlation matrix.

Tangibility Reliability Responsiveness Assurance Empathy
Tangibility 1.000 0.566 0.545 0.558 0.479
Reliability 0.566 1.000 0.829 0.839 0.718
Responsiveness 0.545 0.829 1.000 0.905 0.833
Assurance 0.558 0.839 0.905 1.000 0.84
Empathy 0.479 0.718 0.833 0.84 1.000

Table 6. One sample t-test for gaps of service quality attributions and dimensions.
Test value ¼ 0
95%
Confidence
interval of the
Service Quality Grand Mean Std. difference
Attributions/ Difference error of
Dimensions (E2P) mean t-value p-value Lower Upper Conclusion
Service quality 0.9417 0.1007 9.35 0.000 1.1405 .7426 Unsatisfactory
attributions
Tangibility 0.442 0.0779 5.671 0.000 .2881 .5961 Unsatisfactory
Reliability 1.0263 0.1319 7.782 0.000 .7657 1.2869 Unsatisfactory
Responsiveness 1.1063 0.1158 9.553 0.000 .8775 1.3352 Unsatisfactory
Assurance 0.9802 0.0775 8.339 0.000 .7480 1.2125 Unsatisfactory
Empathy 1.1276 0.1228 9.18 0.000 .8849 1.3703 Unsatisfactory
10 A.S. and S. Devesh

Table 7 provides the model summary of the regression model which indicates the cus-
tomer satisfaction as a function of service quality dimensions. The R value (0.963) pre-
sented in the model summary table indicates a high degree of correlation among all five
service quality dimensions. The R2 (0.928) value indicates how much of the total variation
in the dependent variable (overall satisfaction) is being explained by the independent vari-
ables (tangibility, reliability, responsiveness, assurance and empathy). In this study, R2 is
0.928, indicating that 92.8% of the variations in the overall customer satisfaction are
explained by tangibility, reliability, responsiveness, assurance and empathy which is
quite good.
Table 8 provides the results of the ANOVA test of the model which indicates customer
satisfaction as a function of all service quality attributes and dimensions. The results also
show that the regression model predicts the dependent variable significantly well. Service
quality attributes of SERVQUAL dimensions are statistically significant for the overall
satisfaction of the retail banking customers. F-statistics state that the overall model is
highly significant and a good fit at the 5% level (0.000 , 0.05) of significance, indicating
that the model is significantly predicting the overall satisfaction.
Table 9 presents the results of model predicting customer satisfaction through the vari-
ables of service quality dimensions. All the variables have positive and statistically

Table 7. Model summary.

Model R R2 Adjusted R2 Std. Error of the Estimate
1 0.963a 0.928 0.926 2.43262
a
Predictors: (Constant), Empathy, Tangibility, Reliability, Responsiveness, Assurance.

Table 8. ANOVA.a
Model Sum of squares df Mean square F Sig.
Regression 11,188.234 5 2237.647 378.131 0.000b
Residual 863.976 146 5.918
Total 12,052.211 151
a
Dependent Variable: Overall Satisfaction.
b
Predictors: (Constant), Empathy, Tangibility, Reliability, Responsiveness, Assurance.

Table 9. Coefficients.a
Unstandardised
coefficients
Standardised coefficients
Model b Std. error Beta t Sig.
(Constant) 0.309 1.236 0.250 0.803
Tangibility 0.705 0.300 0.074 2.350 0.020
Reliability 2.619 0.266 0.426 9.847 0.000
Responsiveness 0.695 0.332 0.103 2.094 0.038
Assurance 1.353 0.436 0.199 3.107 0.002
Empathy 1.669 0.320 0.247 5.210 0.000
a
Dependent Variable: Overall Satisfaction.
 Total Quality Management 11

significant coefficients. The overall regression results suggest that attributes of all five
service quality dimensions have exerted a positively significant effect on the overall cus-
tomer satisfaction in retail banking in Oman. Therefore, the hypothesis H07 regarding the
relationship of service quality dimensions and customer satisfaction is rejected.
The Overall Satisfaction (S) regression model can be written as:

S = 0.309 + 0.705(T) + 2.619(R) + 0.695(Res) + 1.353(A) + 1.669(Em)

The results of the regression model indicate that reliability (2.619), empathy (1.669)
and assurance (1.353) dimensions have the highest impact on customer satisfaction.
This result showed consistency with Parasuraman et al. (1988) where the customer satis-
faction is highest in the reliability dimension. Furthermore, responsiveness (0.695) and
tangibility (0.705) dimensions have a comparatively lower impact on the customer satis-
faction. It may be understood from the study that any improvement in the delivery of these
service quality dimensions will have a positive impact on the level of customer satisfaction
in the retail banking in Oman.

Conclusion
In this paper, an attempt has been made to investigate the service quality from the perspec-
tive of Omani retail banking customers. The overall results indicate that service delivery as
perceived by the customers was below their expectation across all five service quality
dimensions. The grand mean scores gap between expectation and perception is a clear
indication that the customers’ expectations were not met by the banks in Oman in their
service delivery. Hence, the study concludes that the retail banking sector in Oman is
not able to meet the expectations of the customers in service delivery. The results of
regression analysis indicate that the attributes of all five service quality dimensions
have a positively significant effect on the overall customer satisfaction.
The results of the study have significant implications to understand the pattern of cus-
tomer satisfaction in terms of service quality for retail banking sector in Oman. It also
helps in developing a suitable strategy for differentiating and customising banking ser-
vices for retail customers in order to satisfy them beyond their expectation. In this back-
drop, more focus is seen to be needed in the improvement of service attributes of empathy,
responsiveness and reliability dimensions of service quality which carries the highest
service quality gap. Reduction of these gaps is needed by giving individual attention to
understand customers’ specific needs, personalised services, convenient operating hours
and working towards customers’ best interest in order to meet the higher customer expec-
tations. Further to the above, the attributes of the four other dimensions where the gap in
the level of satisfaction is insignificant also need to be the focus for an improved quality of
service. The service quality attributes under all five dimensions provided in Table 1 enable
the banks to understand the specific action that needs to be focused in their strategy in
order to reach customer expectations and also allocate resources for implementing the stra-
tegic plan.
As the market grows, customers demand higher quality of service. The bank manage-
ment should take steps to deliver quality services and be honest in making feasible prom-
ises to the customers. The banks should motivate employees to make friendly interaction
with the customers and pay more attention to solve customers’ specific problems by treat-
ing them personally. This will result in enhancing good rapport among customers and
banks.
12 A.S. and S. Devesh

Limitation of the study

The study examines the service quality only from the perspective of retail banking custo-
mers, whereas the perceptions of customers of other segments were not considered in the
study. The time frame and the sample size of the study were limited. The study considered
only five major service quality dimensions and also assigned equal weights for these
dimensions.

Future research
The future research should concentrate on a larger sample size and customers from all seg-
ments of banks. There is a scope to conduct a future study using SERVQUAL instrument
by assigning weights for the service quality dimensions to identify the important service
quality dimensions to the customers. The study can also be extended to compare the
service quality of conventional banking versus Islamic banking. Further study could be
conducted by comparing the service quality of Omani banks versus GCC banks. Moreover,
as e-banking is gaining popularity across the world, a stand-alone study on measuring the
quality of e-banking services may also be conducted. The study could also be replicated in
other service sectors (insurance, tourism, health, higher education, etc.) at the national
level.

Disclosure statement
No potential conflict of interest was reported by the authors.

Funding
This work was supported by College of Banking and Financial Studies [grant number 101/2015-16].

ORCID
Ananda S. http://orcid.org/0000-0001-5565-6048
Sonal Devesh http://orcid.org/0000-0002-2318-8670

References
Abdullrahim, N., & Robson, J. J. (2017). The importance of service quality in British Muslim’s
choice of an Islamic or non-Islamic bank account. Journal of Financial Service Marketing,
22(2), 54 –63.
accountinglibrary.com. 2016. Retrieved from http://www.accountinglibrary.com/articles/customer-
service-improvement
Anbori, A., Ghani, S. N., Yadav, H., Daher, A. M., & Su, T. T. (2010). Patient satisfaction and
loyalty to the private hospitals in Sana’a, Yemen. International Journal for Quality in
Health Care, 22(4), 310 –315.
Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satis-
faction for firms. Marketing Science, 12(2), 125–143.
Angelova, B., & Zekiri, J. (2011). Measuring customer satisfaction with service quality using
American customer satisfaction model (ACSI model). International Journal of Academic
Research in Business and Social Sciences, 1(3), 232– 258.
Asubonteg, P., McCleary, K. G., & Swan, J. E. (1996). SERVQUAL revisited: A critical review of
service quality. Journal of Services Marketing, 10(6), 62 –81.
Babakus, E., & Boller, G. W. (1992). An empirical assessment of the SERVQUAL scale. Journal of
Business Research, 24(2), 253 –268.
Best, R. (2005). Market based management. Maidenhead: McGraw-Hill.
 Total Quality Management 13

Bolton, R. N., & Drew, J. H. (1991). A multistage model of customers’ assessments of service
quality and value. Journal of Consumer Research, 17(3), 375–384.
Boulding, W., Kalra, A., Staelin, R., & Zeithaml, V. A. (1993). A dynamic model of service quality:
From expectations to behavioral intentions. Journal of Marketing Research, 30(2), 244– 249.
Brady, M. K., & Cronin, J. J. (2001). Some new thoughts on conceptualizing perceived service
quality: A hierarchical approach. Journal of Marketing, 65(3), 34–49.
Brahmbhatt, M., & Panelia, D. (2008). An assessment of service quality in banks. Global
Management Review, 2(4), 37 –41.
Brown, T. J., Churchill, G. A., Jr., & Peter, J. P. (1993). Improving the measurement of service
quality. Journal of Retailing, 69(Spring), 127–139.
Bryman, A., & Bell, E. (2007). Business research methods. Oxford: Oxford University Press.
Buttle, F. (1996). SERVQUAL: Review, critique, research agenda. European Journal of Marketing,
30(1), 8 –32.
Carman, J. (1990). Consumer perceptions of service quality: An assessment of the SERVQUAL
dimensions. Journal of Retailing, 66(1), 33–55.
CBO-Oman.org. 2015. Retrieved from https://www.cbo.org
Coyle, M. P., & Dale, B. G. (1993). Quality in the hospitality industry: A study, international.
Journal Hospitality Management, 12(2), 141 –153.
Cronin, J. J., & Taylor, S. A. (1992). Measuring service quality: A reexamination and extension.
Journal of Marketing Research, 56(3), 55 –68.
Cronin, J. J., & Taylor, S. A. (1994). SERVPERF versus SERVQUAL: Reconciling performance
based and perception minus expectations measurement of service quality. Journal of
Marketing, 58(1), 125 –131.
David Morgan, L. (2008). The SAGE encyclopedia of qualitative research methods. Thousand Oaks,
CA: SAGE Publications, Inc.
Davidow, W. H., & Uttal, B. (1989). Service companies: Focus or falter. Harvard Business Review,
67(4), 77 –85.
Eklöf, J. A., & Westlund, A. (2002). The pan-European customer satisfaction index programme –
current work and the way ahead. Total Quality Management, 13(8), 1099–1106.
Evangelos, T., & Evmorfia, M. (2010). Key determinants of service quality in retail Banking.
EuroMed Journal of Business, 5(1), 85 –100.
Fick, G. R., & Ritchie, J. R. B. (1991). Measuring service quality in the travel and tourism industry.
Journal of Travel Research, 30(2), 2–9.
Foddy, W. (1994). Constructing questions for interview and questionnaires: Theory and practice in
social research. Cambridge: Cambridge University Press.
Galloway, L., & Ho, S. (1996). The model of service quality for training. Training for Quality, 4(1),
20 –26.
Gounaris, S. P., Stathakopoulos, V., & Athanassopoulos, A. D. (2003). Antecedents to perceive
service quality: An exploratory study in the banking industry. International Journal of
Bank Marketing, 21(4), 168 –190.
Griffin, J. (1995). Customer loyalty: How to earn it, How to keep it. San Francisco: Jossey-Bass.
Grönroos, C. (1984). A service quality model and its marketing implications. European Journal of
Marketing, 18(4), 38 –44.
Hermans, O. (2015). Service integrated relationships (SIR): A strategic process framework for mana-
ging the customer as a resource. Journal of Creating, 1(1), 119–129.
Ilyas, A., Nasir, H., Mallik, M. R., Mirza, U. I., Munir, S., & Sajid, A. (2013). Assessing service
quality of bank using SERVQUAL model. Interdisciplinary Journal of Contemporary
Research in Business, 4(11), 390 –400.
Katircioglu, S. T., Araşlı, H., & Salime, M. S. (2005). A comparison of service quality in the banking
industry: Some evidences from Turkish and Greek speaking areas of Cyprus. International
Journal of Bank Marketing, 23(7), 508 –523.
Kotler, P., & Armstrong, G. (1999). Principles of marketing. Englewood Cliffs, NJ: Prentice-Hall.
Kumasey, A. S. (2014). Service quality and customer satisfaction: Empirical evidence from the
Ghanaian public service. European Journal of Business and Management, 6(6), 172–181.
Kwan, W., & Hee, T. J. (1994). Measuring service quality in Singapore retail banking: A gap analy-
sis and segmentation approach. Singapore Management Review, 16(2), 1–24.
Ladhari, R. (2008). Alternative measure of service quality: A review. Journal of Managing Service
Quality, 18(1), 65 –86.
14 A.S. and S. Devesh

Lam, T., Wong, A., & Yeung, S. (1997). Measuring service quality in clubs: An application of the
SERVQUAL instrument. Journal of Hospitality Marketing, 4(1), 7–14.
Lewis, J. R. (1993). Multipoint scales: Mean and median differences and observed significance
levels. International Journal of Human-Computer Interaction, 5, 383–392.
Lewis, B. R., & Mitchell, V. W. (1990). Defining and measuring the quality of customer service.
Marketing Intelligence & Planning, 8(6), 11 –17.
Lim, P. C., & Tang, N. K. H. (2000). A study of patients’ expectations and satisfaction in Singapore
hospitals. International Journal of Health Care Quality Assurance, 13(7), 290–299.
Low, W.-S., Lee, J.-D., & Lian, W.-C. (2013). Can loyal customers tolerate service failure? The
moderating roles of service failure severity and transaction frequency in a B2B context.
Journal of Service Science and Management, 6(5), 12 –19.
Nadiri, H., & Hussain, K. (2005). Perceptions of service quality in North Cyprus hotels.
International Journal of Contemporary Hospitality Management, 17(6), 469–480.
Newman, K. (2001). Interrogating SERVQUAL: A critical assessment of service quality measure-
ment in a high street retail bank. International Journal of Bank Marketing, 19(3), 126– 139.
Nunnally, J. C. (1978). Psychometric theory. New York: McGraw-Hill.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and
its implications for future research. Journal of Marketing, 49(5) 41-50.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiple-item scale for
measuring perceptions of service quality. Journal of Retailing, 64(1), 12–40.
Rust, R. T., & Oliver, R. L. (1994). Service quality: Insights and managerial implications from the
frontier in rust. In R. T. Rust, & R. L. Oliver (Eds.), Service quality: New directions in theory
and practice (pp. 1 –20). London: Sage Publications.
Singh Dhillon, J. (2013). Understanding Word Of Mouth (WOM) communication: A case study of
banking sector in India. IOSR Journal of Business and Management, 9(3), 64– 72.
Smith, S. (1995). The quality revolution. Mumbai: Jalco Publishing House.
Spreng, R. A., & Mackoy, R. D. (1996). An empirical examination of a model of perceived service
quality and satisfaction. Journal of Retailing, 72(2), 201–214.
thebusinessyear.com. 2015. Retrieved from https://www.thebusinessyear.com/oman-2015/bank-on-
oman/review
Tuncalp, S. (1988). The marketing research scene in Saudi Arabia. European Journal of Marketing,
22(5), 15 –22.
Yi, Y. J. (1990). A critical review of consumer satisfaction. In V. Zeithaml (Ed.), Review of market-
ing (pp. 68 –123). Chicago: American Marketing Association.
Zeithaml, V. A., Parasuraman, A., & Berry, L. L. (1990). Delivering quality service. New York, NY:
The Free Press.