A STUDY ON SERVICE QUALITY EVALUATION IN

EXTERNAL AND INTERNAL CHAINS OF

AUTOMOTIVE INDUSTRY IN CHENNAI
Synopsis submitted to
The Madurai Kamaraj University
For the award of the Degree of
DOCTOR OF PHILOSOPHY IN BUSINESS ADMINISTRATION

Researcher
JANET GLORY M C
(Reg. No. P3619)

Research Supervisor
Dr. D. MARIA PON REKA

DEPARTMENT OF BUSINESS ADMINISTRATION

MADURAI KAMARAJ UNIVERSITY
MADURAI – 625 021
TAMIL NADU
INDIA

MAY 2019
INTRODUCTION

Service Quality is the difference between customer expectation and customer perception of

service performance. It is also an evaluation of the delivered service and it assess whether it

matches with customer expectation. Firms, organizations and businesses evaluate the service

quality to identify the problems, causes, ways to improve the service, to bring customer

satisfaction and customer loyalty. It also measures the way in which the service is delivered to

the customers and also identifying the customers expectation. Organizations that meet the

expectations are assumed to have high service quality. There are also firms which exceed the

service quality. Service quality is equal to the difference between service perception and service

expectation. Service quality = Perception – Expectation.

There is a scope and growth of services in developing countries. Services are termed as

economic activity which brings value and benefits to customers at specific point of time.

Creation of long term relationship with customers is an important aspect in service quality. This

is due to the tough competition in the market hence customer loyalty is an important aspect in

today’s competitive market. Service quality also brings competitive advantage in the

organizations.

Quality is usually defined by customers. Since service quality has an impact on customer

satisfaction and customer loyalty, it is of great concern to all the sectors of industry. In order to

maintain a long term relationship with the customers, companies also focus on customer

retention. Service quality is given more importance because nowadays customers have
alternatives. If the customers are lost then it is quite difficult to get them back. There are

situations in which the customers move out and take the businesses from the competitors.

Parasuraman, Zeithaml and Berry are the major contributors of service quality. They proposed

that when the customers experience certain services from companies, they try to compare their

expectation with the perception of services. There are stages where the gap in service quality

appears. The customer’s satisfaction or dissatisfaction depends upon the length of the gap. The

customers are said to be satisfied if their perception is greater than the expectation. Then the

customers are said to be dissatisfied if the perception is lesser than the expectation. Parasuraman,

Zeithaml and Berry also designed the SERQUAL scale to measure the service quality.

INDUSTRY PROFILE& COMPANY PROFILE

Automotive industry is one of the sectors that bring revenue to the country. This industry

actually involves in production, design, development and selling of various components of the

automobiles. They are also called as automakers. This industry does not involve industries

allocated for the automobile maintenance, end user delivery, repairs and fuel filling. The

terminology automotive originated from the Greek and Latin. It denotes the term self power. The

automotive sector was initiated in 1890. United States led this sector for many decades. In 1929,

the United States produced 90% of the automobile and its components. After World War II

United States involved in 75% of production of auto components. In 1980 U.S was unexpectedly

upon by Japan. In 2006 Japan overtook U.S and stood in rank I till 2009. Later china also

doubled with respect to U.S production. While china was in third place. In many developed

countries automobiles are the major mode of transport. Whereas in developed economies, this

industry have slowed down. It was expected that this trend would continue for a longer time.
Government Initiatives for Automotive industry

The Indian government supports foreign investment. The initiatives taken by the government are

as follow:

 The government of India focuses on this sector for the Make in India initiative. The

government expects the passenger vehicles to triple in the market which is focused on

Auto Mission Plan.

 In 2015-16 the government declared a credit for the farmers in the union budget in order

to increase the sales of tractors.

 The government decides to enhance eco friendly cars in the country.

 The government introduced various schemes for the manufacture and introduction of

electric and hybrid cars in India.

 The government introduced different plans to sustain the growth in this sector. Certain

regulatory frameworks have established to encourage this sector.

The automotive companies show their interest on branding in order to increase their sales.

The companies work constantly to market and sell the products and components. The

spare parts market also face challenges in the business environment. The spare parts

markets face challenges from the internal and external environment. The companies have

to adopt mixed strategies to overcome the external challenges. These auto components

companies focus on after sales service so as to satisfy the customers. Many automobile

companies in India manufacture the components and vehicles by obtaining 65% of the

parts from the external suppliers. The major exports from India include motor cycle parts,

tractor parts, radiators, gears, plugs etc. India also has auto components manufacturers
throughout the country. They have the ability to design as per the customer’s

specification. The company focuses on international standards while manufacturing the

components. They use best quality materials to manufacture the components. The Indian

spare parts manufacturers experience a slow and a steady growth. This industry makes

India competitive. Research and Development activities are also carried out in India.

For the past fifty years Automotive Ancillary Services are the leading manufacturers of

auto components and supplies to tier 1 companies. They produce many auto components

to variety of applications. The manufacturing facilities are well equipped and nearly fifty

decades of experience. They have in house facility for various treatments.

Electrimech undertook a journey in automotive sector by the manufacture of fuel saver.

This saves petrol to a large extent. They are the manufacturer and wholesaler of the auto

components. Classic Moulds and Dies is the manufacturer of auto components to supply

the global needs. They obtained reputation with respect to quality and delivery. The

company confirms that their customers get the most appropriate delivery, cost and

quality. Electromags is the manufacturer of mechanical parts and spares. The auto

components have variety of applications. They also export their components. They act as

a manufacturer. These companies are excellent in their manufacturing processes and they

satisfy their customers’ needs. They concentrate on the quality of the products produced.

They also focus on the cost and the delivery of goods to the intermediaries and the

customers. These companies concentrate on selling and marketing their products around

the globe.
PROBLEM IDENTIFICATION

 In the present business environment most of the industries are customer driven. For

companies to sustain in the competitive environment, customers have to be retained and

satisfied through service quality. Customer satisfaction is an important attribute in the

organization’s growth.

 Customer satisfaction leads to customer loyalty. The key lies in service quality.

 The expectation of service quality and the perception of service quality with respect to

employees and customers again a factor to be considered. This can be analyzed only

through service quality and its dimensions which lead to the development of gap model.

 The gap model in service quality helps the organizations in the present scenario.

 The difficulties in identifying the relationship between customer satisfaction, customer

loyalty, and employee loyalty can be determined through service quality.

OBJECTIVES OF THE STUDY

 To evaluate the service quality in external and internal chains of automotive industry in

Chennai.

 To determine the relationship between service quality dimensions with respect to

customer satisfaction and customer loyalty.

 To identify the factors influencing service quality.

 To analyse the challenges of an automotive industry while rendering service quality to its

customers.

 To develop a service quality model for an automotive industry.

REVIEW OF LITERATURE

According to Parasuraman et al (1985) In this business environment providing service quality

is the important action plan to achieve the goal and success. The framework for determining the

service quality and measuring the gap was developed. The SERVQUAL is an important

instrument to determine the service quality and the gap. SERVQUAL is the most effective tool in

measurement of service quality.

Sureshchandar et al (2001) explained the application of this instrument is vast in the industries

like banks, hospitals, education, travel and tourism.

Groonoos (1988)stated thatservice qualities are the variation between the service delivered by

the organization and what the customers receive.

Oliver and Bitner (1990)described the model that evaluates the expected and perception is

called disconfirmation model. The ten levels are as follows: reliability, responsiveness,

competence, access, courtesy, communication, credibility, security, understanding and tangibles.

Parasuraman et al (1988) explained the service quality dimensions are reduced into five. They

are tangibles, reliability, responsiveness, assurance and empathy. There were number of

criticisms for the SERVQUAL model. They disagreed that SERVQUAL model changes with the

types of industries.

According toCronin and Taylor (1992)they argued that there is no standard way to determine

the gap between perception and expectation of service quality. Service quality and satisfaction

are firmly related.

Parasuraman et al (1994) argued that SERVQUAL is the standard scale to measure the service

quality gaps and it is the better approach to measure the service quality.

Zeithaml et al (1990)stated that service quality can be determined by employee satisfaction.

Improvement and quality is focused by employees who are satisfied. Also the employees are

committed to provide quality service. Employees are in a crucial role while delivering service

quality to its customers.

Yoon, Beatty and Suh (2001)analyzed a system of links between employee satisfaction and

customer perception of service quality. Yee et al (2008) found that there is relationship between

employee satisfaction and service quality and it is also related to customer satisfaction. Allred

(2001) stated that the difficult task in service quality is the continuous improvement in the

performance of services. Cronin and Taylor (1992) described that satisfaction acts as an

intermediary between customer perceptions and a person’s perception to engage in the behavior.

Yang and Peterson (2004) explained that behavioral intensions are carried out to measure the

customer loyalty.

Judge et al (2001) described that satisfied employees leads to the improvement of job

performance. Loveman (1998) stated that the employees who are loyal are ready to deliver

higher service quality. Schneider and Bowen (1985)analyzed the behavior of the employees and

their interpersonal skills have to be focused to increase service quality to a higher extent. So that

they focus more on customers. According to Bitner (1990) the behavior of the employees impact

the perception of customers.

RESEARCH METHODOLOGY

Data collection Method: Primary Method of data collection through questionnaires and

secondary method of data collection

Research Design: Descriptive Research Design

Sampling Technique: Simple Random Sampling

Sample Size: 400

STATISTICAL TOOLS USED

 Percentage analysis and graph for personal information

 Reliability analysis

 Exploratory Factor analysis (EFA)

 Correlation analysis

 Regression analysis

 Confirmatory Factor analysis (CFA)

 Structural Equation Modeling (SEM using AMOS Software)

CHAPTER SCHEME

The research study has been divided into the following chapters

Chapter one is about the introduction to service quality, the various determinants of

service quality, customer satisfaction and customer loyalty. It also tells about the

conceptual framework, relationship between service quality and customer satisfaction,

service quality and customer loyalty. The problem identification along with the

objectives, need, and scope of the study is also given in this chapter.

Chapter two is about the review of literature. In this chapter the contributions of different

authors and researchers are given. The variables and the hypothesis are explained in this

chapter.

Chapter three is about the research methodology. This chapter explains about the research

process, research design, population, sample size and sampling technique. This chapter

also explains the data collection method and questionnaire.

In chapter four, the data collected are analysed and interpreted. The data collected are

analysed by different statistical tools. The hypothesis testing is allowed in this chapter.

Chapter five presents the findings, suggestion and conclusion of the research study.
BIBLIOGRAPHY

Asadollahi, A. Rajabi, A. and Fallahhoseini, S.S., (2011), Evaluation of Service Quality,

Customer Satisfaction, American Journal of Scientific Research, (39), 78-90.

Kotler, P. and Keller, K. (2009).Marketing Management, Prentice Hall; 13th Edition.

Parasuraman, A., Zeithaml, V.A. and Berry, L. SERVQUAL: A multiple-item scale for
measuring consumer perceptions of service quality. Journal of Retailing 64 (1): 14–40, 1988.

Parasuraman, A., Zeithaml, V.A. and Berry, L. A conceptual model of service quality and its
implications for future research. Journal of Marketing 49 (4): 41–50, 1985.

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