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Using the SERVQUAL Model to Assess Service Quality and Customer Satisfaction

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Using the SERVQUAL Model to Assess Service Quality and Customer Satisfaction Using the SERVQUAL Model to assess Service Quality and Customer Satisfaction. An Empirical study of grocery stores in Umea. Authors: Chingang Nde Daniel Lukong Paul Berinyuy Supervisor: Sofia Isberg Student Umeå School of Business Spring semester 2010 Master thesis, one-year, 15 hp Abstract Service quality and customer satisfaction are very important concepts that companies must understand in order to remain competitive in business and hence grow. It is very important for companies to know how to measure these constructs from the consumers’ perspective in order to better understand their needs and hence satisfy them. Service quality is considered very important because it leads to higher customer satisfaction, profitability, reduced cost, customer loyalty and retention. Purpose – The main purpose of this study theoretically is finding out how applicable the SERVQUAL model is in the context of grocery stores and empirically, describe how consumers (students) perceive service quality and whether they are satisfied with services offered by these stores in Umea. Design/methodology/approach – A self-completion questionnaire was developed from the SERVQUAL instrument and distributed using a convenience sampling technique to students in the Umea University campus to determine their perceptions of service quality in grocery stores. Findings – From the analysis carried out, it was found out that, the SERVQUAL model was not a good instrument to measure service quality because some of the items under the dimensions overlapped and regrouped under different dimensions from the factor analysis carried out. It also showed some items associated to more than one component. Some dimensions showed a reliability scale of less than 0.7 which could have been as result of the wordings used in the questionnaires or the number of items used under each dimension. Also, it was found that the overall service quality perceived by consumers was not satisfactory meaning expectations exceeded perceptions and all the dimensions showed higher expectations than perceptions of services. Research implications – Theoretically, from the findings, it implies that the SERVQUAL model is not the best tool to use measure service quality in grocery stores because the dimensions do not best measure the construct in that context. Practical implications suggest that grocery stores in Umea are not providing the level of service quality demanded by customers. The findings suggest that grocery stores need to improve all the dimensions of service quality from the gap analysis carried out. Originality/value – This study contributes to the already existing studies examining service quality in grocery stores using the SERVQUAL model and also provides empirical results that could guide management dealing with retail activities to take corrective actions that lead to growth in the company. Key words – SERVQUAL, Service quality, customer satisfaction, grocery stores Summarily, in this research work, the SERVQUAL model is discussed and how it can be applied in the context of grocery stores in assessing service quality. Data was collected from the students in Umea University, Sweden in order to assess their expectations and perceptions of services received. After an extensive literature review, the SERVQUAL model was modified by adding an additional dimension (products) to the five dimensions because products form a core dimension for consumers shopping in grocery stores in order to assess service quality customer satisfaction. The discrepancy 1 between expectations and perceptions (Perception – Expectation) formed the gap scores that were used to assess service quality and customer satisfaction. Negative gap scores show that service quality is perceived poor and hence no customer satisfaction while positive gap scores show that higher service quality and hence customer satisfaction. From the study, it was found that overall service quality was perceived low (-0.7932) meaning expectations exceeded perceptions of services. The implications of using this model in assessing service quality and customer satisfaction from the consumer’s perspective include knowing about customers’ perceptions on service quality, trying to meet and manage customers’ expectations, improving quality management by identifying areas that have weaknesses in terms of satisfying customers’ needs. 2 Acknowledgements We would begin by sincerely thanking our supervisor, Sofia Isberg for the unyielding support she gave to us in order to produce this write-up. We appreciate her efforts because she offered us all the necessary guidelines we needed in order to achieve this academic task. Also, we deeply thank our families and friends for all the encouragements they gave to us during this study. Special thanks to all our respondents for giving us answers to our questionnaires and those who gave extra support in making our work have a better quality. Above all, we thank the Almighty Lord for the strength and knowledge He gave us to carry out the academic work. 3 Contents CHAPTER 1: INTRODUCTION ........................................................................................................ 7 1.1 General Discussion of Concepts .......................................................................................... 7 1.2 Need for the Study ............................................................................................................ 12 1.3 Research Questions ........................................................................................................... 13 1.4 Research Purpose .............................................................................................................. 13 1.5 Delimitation of study ......................................................................................................... 14 1.6 Disposition of thesis .......................................................................................................... 14 CHAPTER 2: METHODOLOGY ...................................................................................................... 17 2.1 Choice of Study .................................................................................................................. 17 2.2 Research Philosophy ......................................................................................................... 18 2.1.1 Ontological Assumptions ................................................................................................ 18 2.2.2 Epistemological Assumptions ......................................................................................... 19 2.3 Research Approach ........................................................................................................... 20 2.4 Research Strategy .............................................................................................................. 21 2.5 Research Design ................................................................................................................ 21 2.6.1 Selection of Sample .................................................................................................... 22 2.7 Design of Questionnaire: ................................................................................................... 24 2.8 Testing of the questionnaire: ............................................................................................ 25 2.9 Data Analysis Method ....................................................................................................... 25 2.10 Ethical Considerations ..................................................................................................... 26 CHAPTER 3: THEORY .................................................................................................................... 27 3.1 Choice of Theories ............................................................................................................. 27 3.3.1 Product Quality .......................................................................................................... 31 3.3.2 Service quality Concept .............................................................................................. 32 3.4 Customers’ Expectations compared to Perceptions ......................................................... 33 3.5 Customer satisfaction ........................................................................................................ 34 3.6 Factors that Affect Customer Satisfaction ........................................................................ 35 3.7 Relationship between service quality and customer satisfaction ..................................... 37 3.8 Service Quality Models ...................................................................................................... 38 3.9 The Development and Evolution of the SERVQUAL Model .............................................. 41 3.9.1 Functioning of the SERVQUAL .................................................................................... 42 3.9.2 Criticisms of SERVQUAL Model (Buttle, 1996, p.10‐11) ............................................. 43 3.9.3 Application of the SERVQUAL Model in Different Contexts ....................................... 44 4 3.10 Our case ........................................................................................................................... 45 3.11 Conceptual Framework ................................................................................................... 46 CHAPTER 4: EMPIRICAL
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