Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614 Volume 2, No.

1, January 2013 _________________________________________________________________________________

An Empirical Study - Awareness of Customers on Service Quality of Public Sector Banks in Varanasi
Swati Tripathi, Research Scholar, Department of Management & Commerce, Jayoti Vidyapeeth Womens University, Jaipur, Rajasthan (India)

ABSTRACT
Service quality is a competitive weapon in the banking industry. As competition becomes more concentrated and environmental factors become more argumentative, the concern for service quality grows. Retention of customer is the ultimate successful performance of any banking sector. To develop reputation and gain customer loyalty, a study of the performance of the banks is done to see if the perception of service quality has an effect on the banks. It is also an eye-opener for the banks to see the gap between customer expectation and perceptions regarding the quality of services provide which should further act as a motivation which results, increases reputation and to achieve customer loyalty. The banks have to prepare their marketing plans and strategies on the basis of the customers segment to reap the competitive advantages. The paper aims to study the gap score of public sector banks in Varanasi city. Keywords: Service quality, expectations, perceptions, banking

Introduction
Service quality and customer satisfaction are considered as significant issues in most service industries (Zeng et al., 2010). High and unique quality is a way to win customers and make them loyal for a long time. Management literature proposes many concepts and approaches concerning how to deal with service quality. There are also many different concepts how the notion service quality should be understood (Urban, 2009). Delivering appropriate service quality plays an increasingly important role in service industries such as insurance, banking, etc as the service quality is critical to the profitability and survival of these organizations. Therefore, it is worth to measure service quality to obtain better understanding of the service quality is delivered by organizations (Tahir & Abubakar, 2007) Customer service is one of the core parts of the banking industry. Banking industry is facing challenges due to concentrated competition, changing market, risk and uncertainty, environment, and demanding customers. These changes impacted on both the structure of the industry and the nature of competition between banks. Thats been said, service quality has become an increasingly important factor for surviving and success in the banking sector and there is a need to identify the characteristic of the service quality perceived by the customers of banks. Service quality is the combination of two words i.e., service and quality which has different meaning at different sector. Each word has its own meaning: Service: A type of economic activity that is intangible is not stored and does not result in

ownership. A service is consumed at the point of sale. Services are one of the two key components of economics, the other being goods. Quality: Quality is the ongoing process of building and sustaining relationships by assessing, anticipating, and fulfilling stated and implied needs.

Meaning of Service quality

An assessment of how well a delivered service is straight to the customers expectations. Service business operative often evaluate the service quality provided to their customers in order to improve their service, to quickly identify problems, and to better review customer satisfaction. Quality in service is very important especially for the growth and development of service sector business enterprises (Powell, 1995). Service quality has been defined by Robinson (1999) as an attitude or global judgment about the superiority of a service Service quality of late has emerged as the major attractant to many banks as a competitive differentiator (Newman, 2001). Measuring the customer satisfaction helps banks to understand the customers needs and can thus change strategies accordingly. Customer satisfaction is defined as the result of a cognitive and affective evaluation, wherein a standard comparison is adopted for the actually perceived performance. Nowadays, with the increased competition, service quality has become a popular area of academic investigation and has been recognized as a key factor in keeping competitive advantage and sustaining satisfying relationships with customers (Zeithmal et al.2000).

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614 Volume 2, No.1, January 2013 _________________________________________________________________________________

Dimensions of service quality

The SERVQUAL scale was developed by Parasuraman et al. in 1985, and refined in 1988, 1991 and 1994 which would be used to measure service quality across a broad range of service categories. Within the SERVQUAL model, service quality is defined as the gap between customer perceptions of what happened during the service transaction and his expectations of how the service transaction should have been performed. Formerly 10 dimensions of service quality were proposed (reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding the consumer, and tangibles). Later these were reduced to five (reliability, responsiveness, empathy, assurances and tangibles). The later model of five quality dimensions (RATER) considered the following issues: R: Reliability: Ability to perform the promised service dependably and accurately. A: Assurance: Ability, knowledge and politeness of employees to inspire trust and confidence T: Tangibles: Physical facilities, equipment and appearance of employees E: Empathy: Individualized, caring attention that the firm provides to its customers R: Responsiveness: Willingness to help customers and provide timely service.

positive effect on the bottom-line performance of a firm and thereby on the competitive advantages that could be gained from an improvement in the quality of the service offered so that the perceived service exceeds the service level desired by customers (Caruana, 2002; Chumpitaz, 2004). According to Joshua A J and Moli.P.Koshi(2005) Expectation and perception of service quality in old and new generation banks, observed that the performance of the new generation banks across all the service quality dimensions are better than those of old generation banks. Valarie A Zeithaml, Mary Jo Bitner, Dwayne D Gremler and Ajay Pandit (2008) in their study on customers hold different types of service expectations: Desired service, which reflects the customers want; Adequate service, what customers are willing to accept; and Expected service, what customers believe they are likely to get. While service quality, the customers perception of the service constituent of a product, is a critical determinant of customer satisfaction, in case of a pure service, service quality may be the most critical determinant of satisfaction. They mentioned the service encounters or moments of truth as the building blocks for both satisfaction and quality. Service encounter is an opportunity to build perceptions of quality and satisfaction. So it is important to manage the evidence of service in each and every encounter. Harsh V. Verma (2009) also confirmed that in services, quality is not objective; to a certain extent it is perceived. Quality in services is based on customers judgment of superiority on intangible dimensions. He describes a framework which views quality in services as made up of two dimensions of technical and functional quality. Technical quality refers to the outcome while functional or process quality refers to the quality of process through which the outcomes are transferred to the customer. Sandip Gosh Hasra and BL Srivastava (2009) in their study indicated that the bank should pay attention to these dimension of service quality and pay more attention to dimension of assuranceempathy to increase loyalty to a company, willingness to pay, customer commitment and customer trust.

Review of Literature
One of the most often used measures is the SERVQUAL based on extensive research in basic determinants of perceived service quality (Parasuraman, Berry et al. 1985; Parasuraman, Berry et al. 1988; Zeithaml, Parasuraman et al. 1990; Parasuraman, Berry et al. 1991; Parasuraman, Berry et al. 1993; Parasuraman, Berry et al. 1994). Various models have been developed measuring service quality (Stafford, 1996; Bahia and Nantel, 2000). The SERVQUAL model of Parasuraman et al. (1988) proposed a five dimensional construct of perceived service qualitytangibles; reliability, responsiveness, assurance and empathy- with items reflecting both expectation and perceived performance. Service quality can be defined as the difference between customers expectations of service performance earlier to the service encounter and their perceptions of the service received (Asubonteng et al., 1996). Quality service has a

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614 Volume 2, No.1, January 2013 _________________________________________________________________________________

Research Objectives
1. To study the awareness of the customer on service quality. 2. To determine and evaluate the quality of service in selected private sector banks in Varanasi district. 3. To determine the gap between customer expectation and perception 4. To determine the areas that needs to get better by banks to deliver better-quality of service. Sampling: Respondents for this study are the private sector banks account holders. Convenience sampling method was used. The reasons of using this sampling type are dual. First, it saves times and costs since the respondents can be randomly selected. Second, it offers an easy way to obtain the raw data for the further analysis. 300 survey questionnaires were distributed among the participants, 270 questionnaires were filled and returned, and 250 fully filled questionnaires were taken for the final analysis. Thus the effective response rate of survey is 83.34%. After discarding incomplete and indistinct responses 250 responses were taken for final analysis. The data was collected for the study based on convenience and administered a modified SERVQUAL questionnaire containing two sections: customers expectations and customers perception each consisting of 32 questions of 9 dimensions. The respondents were asked to rate their expectations and perceptions of service offered by the respective banks. A seven point Likert scale was used.

scales use fixed choice response formats and are designed to measure attitudes or opinions. These ordinal scales measure levels of agreement/disagreement.

Demographic profile of the respondents

Table 1: Customer Profile Sample Size: 250 Parameter Frequency >30 yrs 27 Age 30-40 yrs 117 40-60 yrs 61 <60 yrs 45 Male 198 Gender Female 52 Up to HSC 45 Graduate 63 Education Post 81 Graduate Professional 61 Salaried 108 Self 18 Employed Occupation Business 34 Professional 27 Student 36 Retired 18 House Wife 09

% 10.8 46.8 24.4 18 79.2 20.8 18 25.2 32.4 24.4 43.2 7.2 13.6 10.8 14.4 7.2 3.6

DATA COLLECTION
Data was collected from two sources: (1) Primary data Primary Data has been collected from Public undertaking banks customers as well as bank managers from the area of Varanasi region by administering the questionnaire and personal interview. (2) Secondary data Journals, Books, Magazines, Electronic Data

This table shows the demographic profile of the customers. In this table customers age, gender, education and occupation are included in it. Table 2: Analysis of Gap Score Statements Reliability: Banks promise to do something by a certain time, they do. Bank will show a sincere interest in solving it. Bank will perform the service right the first time Banks provide the service at the time they promise to do so. Error free records Assurance Instills confidence Employees are always wellmannered Employee have enough Knowledge Tangibility Modern looking equipment The physical facilities P 6.5 E 5.7 E-P 0.8

6.6 6.7 6.6

6.1 5.7 5.4

0.5 1.0 1.2

DATA ANALYSIS
Each questionnaire item was scored on seven point numerical scale, where 1= extremely dissatisfied, 2 = highly dissatisfied, 3 = Dissatisfied, 4 = neither satisfied nor dissatisfied, 5 = satisfied, 6 = highly satisfied, 7 = extremely satisfied and customers were asked to respond to the statements in the SERVQUAL model. Likert (1932) developed the principle of measuring attitudes by asking people to respond to a series of statements about a topic, in terms of the extent to which they agree with them, and so tapping into the cognitive and affective components of attitudes. Likert-type or frequency

6.6 6.6 6.7 6.6

5.8 5.6 5.5 5.7

0.6 1.0 1.2 0.9

6.7 6.6

5.9 5.6

0.4 1.0

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614 Volume 2, No.1, January 2013 _________________________________________________________________________________
Tidy manifestation of employee Materials associated with the service Empathy: Gives individual attention Convenient working hours Gives personal attention Best interest in heart Responsiveness: Prompt service to customers. Banks will always be willing to help customers. Tell you about performance of service Willingness to help Not busy to respond queries Ease of Use: Convenient branch locations Extended working hours ATM network Secure net banking Variety of product: The bank recommend products and services according to the needs of individual The bank recommend a extensive range of products and services 6.7 6.7 5.7 5.9 1.0 0.8 In table 3 the average gap score of public sector bank customers are recorded in it. This shows that each dimension has different point of view of customers. Each point in all dimensions has its own importance and also to calculate its average. TABLE NO: 4 HIGHEST & LOWEST GAP SCORE OF PUBLIC SECTOR BANKS Attributes Highest Score: Banks provide the service at the time they promise to do so. Employees are always well-mannered Gives individual attention Banks will always be willing to help customers. Lowest Score: Modern looking equipment Bank will show a sincere interest in solving it. ATM network Error free records Gives personal attention Dimensions Reliability Gap score 1.2

6.5 6.7 6.5 6.6 6.7 6.6 6.5 6.6 6.5 6.7 6.6 6.7 6.7 6.5

5.3 5.9 5.9 5.7 5.7 5.4 5.7 5.9 5.6 5.8 5.7 6.1 5.9 5.5

1.2 0.8 0.6 0.9 1.0 1.2 0.8 0.7 0.9 0.9 0.7 0.6 0.8 1.0

Assurance Empathy Responsiveness

1.2 1.2 1.2

Tangibility Reliability Ease of use Tangibility Empathy

0.4 0.5 0.6 0.6 0.6

6.6

5.7

0.9

The table 2 shows the various dimensions of the service quality. In this table perceptions and expectation of the customers are taken for the study and also to calculate the service gap i.e. (expectations- perceptions). TABLE NO: 3 AVERAGE GAP SCORE OF PUBLIC SECTOR BANKS (UNWEIGHTED) S.No Dimensions Gap score 1 Average score for 0.820 Reliability 2 Average score for 1.03 Assurance 3 Average score for 0.800 Tangibility 4 Average score for Empathy 0.875 5 Average score for 0.920 Responsiveness 6 Average score for Ease of 0.725 Use 7 Average score for Variety 0.950 of Product Total 6.12 Average e un-weighted score 0.874

Presumption
The table 4 represents the attributes having the highest and lowest scores observed from the table. These attributes shows that there is highest and lowest gap between customer expectation and perceptions of bank services. Highest scores indicate that the customers are not satisfied with the services provided by the bank. Hence it was observed that the more gaps are identified in reliability, assurance etc whereas the lowest score indicates that the customers are satisfied with the services provided by the bank. Hence it was observed that the fewer gaps are identified in empathy, ease of use.

Findings
Customers expectations of service quality in banks are high and perceived quality of service is quite lower across public sector banks. For Public sector banks the most prominent gap is in reliability, empathy, responsiveness dimension of the service quality. Banks have to understand the shifting needs of customers, their objectives and opportunities to create value. Banks should have a strong customer relationship management system

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614 Volume 2, No.1, January 2013 _________________________________________________________________________________
that would specify the importance of the customer and able to be aware of their needs. [5] Chumpitaz, Ruben and Paparoidamis, Nicholas.G, Service quality and marketing performance in B2B: exploring the mediating role of client satisfaction, Managing Service Quality, Vol.14 No.2/3, pp.235-248, 2004. [6] Dharmalingam. S; Kannan. K. V, Customer perception on service quality of new private banks in Tamil Nadu- An empirical study, Journal on Banking Financial Services & Insurance Research, Vol.1 No.5, pp.39-49, 2011. [7] Joshua A J, V Moli, P. Koshi Expectation and perception of service quality in old and new generation banks, Indian Journal of Marketing, Vol.37 (3), pp. 18, 2005. [8] Parasuram, A, Ziethaml, V.A., and Berry, L.L, A Conceptual Model of Service Quality and its Implication for Future Research, Journal of Marketing, Vol. 49, pp. 41-50, 1985. [9] Robinson, S. Measuring service quality: current thinking and future requirements, Marketing Intelligence & Planning, Vol.17, No.1, pp. 21-32, 1999. [10] Sandip Ghosh Hazra and Kailash BL Srivastava Impact of service quality on customer loyalty, commitment and trust in the Indian banking sector ICFAI Journal of Marketing Management, Vol .3 No 3&4, pp. 75-95, 2009. [11] Saraswathi. S Perception of customers on the performance of the private banks - a study with servqual, International Journal of Management & Business Studies, Vol.1 No. 3, pp.95-99, 2011. [12] Stafford, Maria Royne Demographic Discriminators of Service Quality in the Banking Industry. The Journal of Services Marketing, 10 (4), 6-22, 1996. [13] Tahir I and Abubakar N Service quality gap and customers satisfactions of commercial banks in Malaysia. Intl. Rev. Business Res. Papers. 2007, 3(4), 327-336, 2007. [14] Urban W Service quality gaps and their role in service enterprises development. Technol. & Econom. Develop. Econom. 15(3), 631645, 2009. [15] Valarie A Zeithaml, Dwayne D Gremler, Mary Jo Bitner and Ajay Pandit, Services Marketing, 4th Edition, The McGraw-Hill companies, New Delhi.Thompson, Philip., DeSouza, Glenn. and Gale, Bradley T. (1985), the Strategic Management of Service Quality, Cambridge, MA, 2008. [16] Zeithmal, V.A., service quality delivery trough websites critical review of extant knowledge, Journal of the academy of

Conclusion
This study observes the perception level of customers towards the service quality by the public sector banks with the popular and extensively used instrument SERVQUAL consisting of five dimensions of service quality. The banking business is becoming more and more multifaceted as a result of liberalization and globalizations. With hostile marketing strategies for making business opportunities, banks have developed innovative products, keeping in view the needs of different classes of individual customers. Banks may pursue a feedback system to know the customers expectations for improving the level of customer satisfaction to the maximum level. Responses on service reliability should be continuously obtained from customers. This will improve their service quality to a large extent. This study meets the desired objective, but it suffers from three setbacks: The restricted number of public sector banks (only three banks) enclosed under the study. The sample size and the number of definite customers are limited and Finally, a more strong investigation is needed to reach a strong conclusion. Hence, it can be accomplished that reliability, assurance, empathy and responsiveness are the dimensions which needs to be taken utmost care by the banks to improve the customers satisfaction. References: [1] Ananth.A, Ramesh.R, Prabaharan.B A Service Gap Analysis in private sector banks - an empirical study of customers expectations vs. perceptions, Sri Lankan Journal of Management, Vol.15 No. 2, 3 &4, pp. 44-53, 2011. [2] Arora .NA comparative study of customer perception and expectation: public sector banks and private banks International Journal of Research in Computer Application & Management, Vol.1, No. 3, pp. 120-125, 2011. [3] Asubonteng, P., McCleary, K.J. and Swan, J.E. SERVQUAL revisited: a critical review of service quality, Journal of Services Marketing, Vol. 10, No. 6, pp. 62-81, 1996. [4] Caruana, Albert Service quality- The effects of service quality and the mediating role of customer satisfaction, European Journal of Marketing, Vol.36 No.7/8, pp.811-828, 2002.

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614 Volume 2, No.1, January 2013 _________________________________________________________________________________
marketing science, vol.30 no.4, pp.362-75, 2000. [17] Zeng F Yang Z Li Y and Fam K Small business industrial buyers' price sensitivity: Do service quality dimensions matter in business markets? Indus. Marketing Managt. Doi: 10.1016/ j.indmarman.08.008, 2010.

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