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- International Journal of Management (IJM)
Volume 11, Issue 3, March 2020, pp. 354–365, Article ID: IJM_11_03_038
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ISSN Print: 0976-6502 and ISSN Online: 0976-6510
© IAEME Publication Scopus Indexed
SERVICE QUALITY MEASURES: HOW IT
IMPACTS CUSTOMER SATISFACTION AND
LOYALTY
Dr. Bidyut Jyoti Gogoi
Indian Institute of Management Shillong, Meghalaya, India
ABSTRACT
Tourism is a sector which invites lot of opportunities for increase in revenue
generation and development and upgradation of the local economy. The change in
information technology has facilitated the proliferation of information which has
benefited the tourism industry at large. It has facilitated the ease to know about any
tourist location, compare and make travel plans. Any shortcoming of a location is
easily identified and can be spread out within minutes through the social media. The
popularity of a tourist location is dependent on the level of satisfaction a customer
gets from visiting the location. The level of satisfaction comes from the exposure to
various touchpoints associated with the location and the service provider. The service
quality associated with the delivery of services plays a great role in developing
competitive edge of the service provider and in defining the factors of differentiation.
Since popularity of any service provider depends on the ecosystem on which it
operates, it is important to understand the dimensions of service quality which leads to
customer satisfaction and customer loyalty.
The researcher tries to find out the factors which influence customer satisfaction
and also tries to check the relationship between customer satisfaction and customer
loyalty.
A primary research was conducted to collect the responses of the customers who
like travelling.
Keywords: SERVQUAL, Customer satisfaction, Customer loyalty
Cite this Article: Dr. Bidyut Jyoti Gogoi, Service Quality Measures: How it Impacts
Customer Satisfaction and Loyalty, International Journal of Management (IJM), 11
(3), 2020, pp. 354–365.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=3
1. INTRODUCTION
Tourism is a service oriented business. The quality of services play an important role in
developing a competitive edge in the service business specially tourism (Bhat, M.A., 2012).
For sustainable development of business it is necessary to benchmark and focus on customer
services, efficient marketing, employee training and improving efficiency in operations (Bhat,
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- Dr. Bidyut Jyoti Gogoi
M.A., 2012). The attraction of a tourist location is dependent on the thrill and excitement it
creates and the popularity of the location among the customers. The success of a tourist
location is totally dependent on the outcome of the services provided. It is highly critical to
monitor and upgrade the quality of service delivery to develop efficiency and traffic volume
and stay afloat in the stiff competition (Garvin, 1983; Anderson and Zeithamal, 1984;
Babakus and Boller, 1992). In service domain it is seen that improvement in quality helps
deliver high customer satisfaction which influences the purchase intention (Oliver, 1980;
Gremler et al., 2001) of associated services. Firms concentrate on issues related to service-
quality issues to improve customer's satisfaction (Kumar et al., 2008). Issues related to
service delivery and quality are matters of concern for the firms associated with tourism.
Good quality services provide a memorable customer experience (Vieira, 2005). Popularity of
a firm is dependent on various factors such as quality of services, support systems,
infrastructure, and efficient supply chain. In this paper the research measure the response of
the customers on the factors which lead to customer loyalty. The dimensions of service
quality are used to see their impact on customer satisfaction which may enhance the loyalty of
a customer towards a service provider.
2. LITERATURE REVIEW
Tourism contributes 9.6% of the Indian GDP (ET). Travel and tourism generate INR 14.1
trillion and is considered as the 7th largest tourism economy in terms of GDP (ET). Tourism
has transformed from a business of developed economies to a globalized industry (Meethan,
K. 2003). It has an impact both in economic and social wellbeing and development. It is a key
component in the economic development policy at all levels in nations around the world
(Sharpley, Richard and Telfer & David J. 2002). It holds significant role in upgradation and
development of local areas. Tourism is considered as one of the fastest growing sector in the
last decade. Managing quality of service has been a matter of concern. Different tourists have
different requirements due to cultural diversities and habits. It is hard to predict the
requirement of a particular tourist at any particular moment of time. This is where it is found
that service providers struggle to provide the desired services. There is a need to understand
the customer perception and service requirements to bridge the gap that exists in service
delivery.
3. SERVICE QUALITY DIMENSIONS
Service Quality is an important attribute of customer perception (Takeuchi and Quelch, 1983).
The customers judge the attributes of service quality based on their expectations and the
actual performance (Lewis and Booms, 1983; Parasuraman et al., 1985, 1988; Gronroos,
1987; Mackay and Crompton, 1990). Service quality is envisioning to achieve customer
satisfaction for developing positive attitude towards the services provided (Ostrowski et al.,
1993). Service quality is a critical attribute to focus by the service provider for more
attraction (Backman and Veldkamp, 1995). Customers associate the physical environment to
evaluate the service quality due to the intangible characteristic of services (Berry, 1980;
Booms and Bitner, 1981).
Customer perceived quality, the difference between the service expectations and service
performance, is of significant importance in determining service quality (Lewis & Booms,
1983; Gronroos, 1984; Zeithaml, 1988; Parasuraman et al., 1983, 1985, 1994). Parasuraman
et al. (1985, 1988, and 1994) used both qualitative and quantitative research to develop the
SERVQUAL (service quality) scale which is widely used measurement instrument of service
quality. SERVQUAL is an instrument for measuring service quality in five dimensions
(Parasuraman et al., 1988). The SERVQUAL model developed by Parasuraman et al. (1998),
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- Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty
identifies the service quality gaps. Five dimensions of service quality tangibility, reliability,
responsiveness, assurance, empathy were used to access the level of service quality along
each dimension and overall (Parasuraman et al., 1988, 1991). The model helps analyze the
strengths and weaknesses in service delivery (Bhat, M.A., 2012).
SERVQUAL is a tool for measuring and managing service quality (Buttle, F., 1996).
Service quality is found to have an influence on customer satisfaction (Bolton and Drew,
1991; Boulding
et al., 1993) and aids customer retention (Reichheld and Sasser, 1990) and helps spreading
positive word of mouth (Buttle, F., 1996). Service quality has a direct relationship with costs
(Crosby, 1979), and helps improve profitability (Buzzell and Gale, 1987; Rust and Zahorik,
1993).
In order to survive today and in the future the improvement in services are critical (Badler,
H. 2004). Firms in the tourism sector deals with both products and services which makes it
quite difficult to attain desirable customer satisfaction (Chi and Gursoy, 2009; Dotson and
Allenby, 2010). Increased competition, customer demands and availability of complex
products and processes has increased the demand for providing better customer services.
Customer Satisfaction in service quality can be measured through the dimensions of service
quality (SERVQUAL) viz. tangibility (appearance of physical facilities, equipment,
personnel, and communication materials), reliability (ability to perform the promised service
dependably and accurately), responsiveness (willingness to help customers and provide
prompt service), assurance (knowledge and courtesy of employees and their ability to convey
trust and confidence), and empathy (caring, individualized attention the firm provides its
customers). Service quality is important to generate favorable communications (word-of
mouth) and satisfaction of the customer (Lang, 2011). The research intend to see if the
dimensions of service quality has a role to play in enhancing customer satisfaction. Based on
this premise the following hypotheses are developed.
H1: Tangibility has a positive influence on customer satisfaction
H2: Empathy has a positive influence on customer satisfaction
H3: Reliability has a positive influence on customer satisfaction
H4: Responsiveness has a positive influence on customer satisfaction
H5: Assurance has a positive influence on customer satisfaction
4. CUSTOMER SATISFACTION
Customer service is important for good performance of a firm (Denizci and Li, 2009; Morgan
et al., 2005). Good customer service leads to customer satisfaction. In the hospitality and
tourism sector, studies were conducted in the areas of lodging (Gagnon and Roh, 2008;
Loureiro and Kastenholz, 2011), restaurants (Andaleeb and Conway, 2006; Arora and Singer,
2006; Namkung and Jang, 2007; Qin and Prybutok, 2008; Wu and Liang, 2009; Hwang and
Zhao, 2010;), and tourism (Huang and Chiu, 2006; Wu, 2007) to understand the importance
customer satisfaction. Customer satisfaction is an important criterion for evaluating quality
(Grigoroudis and Siskos, 2010). Customer satisfaction is a factor which influences firm
performance (Luo and Homburg, 2007) and used in measurement (Morgan et al., 2005) of the
firm’s competitiveness. Customer satisfaction has a positive impact on return on investment
and return on assets (Zeithaml, 2000; Rust et al., 2002) and net profit (Manafi et al., 2011).
New customer acquisition costs five times more in terms of time, money and resources to
servicing an existing customer (Kotler et al, 2016). Hence it is profitable for a firm to keep a
loyal customer base. A loyal base of customers can be maintained only if the customers find
value in the firm’s offerings.
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- Dr. Bidyut Jyoti Gogoi
A loyal base of customers helps in spreading positive word of mouth about a location and the
services associated. Based on the discussion above the following hypothesis is proposed.
H8: Customer satisfaction has a positive influence on customer loyalty
Based on the premises developed a conceptual framework is developed as depicted in Fig. 1
Tangibility
Reliability
Customer Customer
Responsiveness
Satisfaction Loyalty
Assurance
Empathy
Figure 1. The Conceptual Model
5. METHODOLOGY
Descriptive research methodology was used for the research. A primary survey was carried
out to collect data from customers who liked to travel. The research was carried out using a
structured questionnaire. The parameters for measurement used were Tangibility (TAN),
Reliability (REL), Responsiveness (RESP), Assurance (ASSUR), Empathy (EMP), Customer
Satisfaction (SAT), and Customer Loyalty (LTY).
The survey was conducted in Assam and Meghalaya. The sample size of the survey was
408. The respondents were customers who loved to travel. Random sampling method was
used.
Variables
All the variables were measured on a five point Likert’s scale, 1 representing strongly
disagree to 5 representing strongly agree.
6. DATA ANALYSIS
Data was analyzed using SPSS 22.
6.1. Gender
Out of 408 respondents surveyed 66.2% were male respondents and 33.8% were female
respondents.
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- Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty
6.2. Income
36.5% of the respondents have an annual household income of less than INR 4 LPA, 59.3%
of the respondents have an annual household income INR 400001 to 7 LPA, 3.7% of the
respondents have an annual household income of INR 700001 to 10 LPA, and 0.5% of the
respondents have an annual household income of INR 1000001 to 13 LPA.
6.3. Factor Analysis
Table 1
Structure Matrix Cronbach’s
Component Alpha
1 2 3 4 5 6 7
TAN1 0.732
TAN2 0.687 0.769
TAN3 0.956
REL1 0.816
REL2 0.778 0.770
REL3 0.785
RESP1 0.878
RESP2 0.681 0.722
RESP3 0.546
ASSUR1 0.686
ASSUR2 0.634
ASSUR3 0.572 0.777
ASSUR4 0.920
EMP1 0.915
EMP2 0.899 0.738
EMP3 0.897
SAT1 0.809
SAT2 0.750 0.742
SAT3 0.632
LTY1 0.910
LTY2 0.914 0.861
LTY3 0.926
LTY4 0.997
Extraction Method: Principal Component Analysis.
Rotation Method: Promax with Kaiser Normalization.
Cronbach’s Alpha value of the overall reliability is 0.764
69.9% of the variance is explained by the 7 factors in table 1. The items are all distributed
properly under the 7 respective constructs. Thus all the items under each construct are able to
define the constructs well. The Cronbach’s alpha reliability of all the individual constructs
are 0.77 and above. The overall Cronbach’s alpha reliability is 0.764. This meets the
reliability requirement for the scale adopted.
6.4. Regression Analysis
Regression analysis is conducted to test the relationship between
1) SAT and (TAN, REL, RESP, ASSUR, EMP)
2) POP and SAT
Hence Regression is done twice as shown below: Regression Model 1 and Regression Model
2
The results of the regression analysis is shown below.
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- Dr. Bidyut Jyoti Gogoi
6.5. Regression Model 1
Table 2
Model Summaryb
Std. Error
Adjusted R of the Durbin-
Model R R Square Square Estimate Watson
1 .352a .124 .113 .501 1.079
a. Predictors: (Constant), EMP, ASSUR, TAN, REL, RESP
b. Dependent Variable: SAT
Table 3
ANOVAa
Sum of Mean
Model Squares Df Square F Sig.
1 Regression 14.282 5 2.856 11.365 .00001b
Residual 101.037 402 .251
Total 115.319 407
a. Dependent Variable: SAT
b. Predictors: (Constant), EMP, ASSUR, TAN, REL, RESP
Table 4
Coefficientsa
Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
Model B Error Beta t Sig. Tolerance VIF
1 (Constant) .362 .557 .649 .517
TAN .202 .075 .126 2.681 .008 .983 1.017
REL .188 .050 .180 3.751 .000 .951 1.051
RESP .129 .079 .079 1.639 .102 .937 1.067
ASSUR .212 .061 .170 3.485 .001 .914 1.095
EMP .093 .044 .100 2.136 .033 .991 1.009
a. Dependent Variable: SAT
R square from table 2 is 0.124 and standard error of the estimate is 0.501. The F test from
table 3 shows high significance. The tolerance and VIF values from table 4 is well within
limits. There is no sign of multicollinearity. Durbin Watson value from table 2 shows no
sign of autocorrelation. This shows that the model is fit.
6.6. Regression Model 2
Table 5
Model Summaryb
Std.
Error of
R Adjusted the Durbin-
Model R Square R Square Estimate Watson
2 .147a .022 .019 .653 1.547
a. Predictors: (Constant), SAT
b. Dependent Variable: LTY
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- Service Quality Measures: How it Impacts Customer Satisfaction and Loyalty
Table 6
ANOVAa
Sum of Mean
Model Squares df Square F Sig.
2 Regression 3.817 1 3.817 8.939 .003b
Residual 173.376 406 .427
Total 177.193 407
a. Dependent Variable: LTY
b. Predictors: (Constant), SAT
Table 7
Coefficientsa
Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
Model B Error Beta t Sig. Tolerance VIF
2 (Constant) 3.241 .258 12.557 .000
SAT .182 .061 .147 2.990 .003 1.000 1.000
a. Dependent Variable: LTY
R square from table 5 is 0.022 and standard error of the estimate is 0.653. The F test from
table 6 shows high significance. The tolerance and VIF values from table 7 is well within
limits. There is no sign of multicollinearity. Durbin Watson value from table 5 shows no
sign of autocorrelation. This shows that the model is fit.
6.7. Hypotheses Test Results
From the Regression Model 1 and Regression Model 2 analysis, the summary of the
hypotheses test is given in Table 8 below.
Table 8
Summary of Hypotheses Testing Results
Relationship Coefficient (β) t value p Results
TAN → SAT .202 2.681 .008 Accept H1
REL → SAT .188 3.751 .000 Accept H2
RESP → SAT .129 1.639 .102 Reject H3
ASSUR →SAT .212 3.485 .001 Accept H4
EMP → SAT .093 2.136 .033 Accept H5
SAT → POP .182 2.990 .003 Accept H6
Note: β = standardized beta coefficients; *p< 0.05 (tested at 5% significance level)
7. CONCLUSION
Dimensions of service quality (SERVQUAL) viz. Tangibility, Reliability, Assurance and
Empathy has a positive influence on customer satisfaction. A tourist looks out for a clean,
decent and safe place to spend some quality time in his spare time or holidays. A location
which is attractive, has a clean image supported with reliable services and facilities makes the
traveler comfortable. The warm welcome by the service providers even make the trip
memorable.
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- Dr. Bidyut Jyoti Gogoi
Though Responsibility is an important parameter in improving service quality, from the
analysis, it is seen that responsibility do not influence customer satisfaction. Though the
customers perceive that the service providers should see the concerns of the customer yet it
seems they do not expect the same response from the service providers. This may be the
experience of a bad service encountered. Responsibility helps the service providers to
improve their brand image if they train their employees to focus on the customer’s issues. It
helps well if firms are able to communicate to the customers that they understand the
customer concerns.
Customer satisfaction has a positive influence on the customer loyalty. A satisfied
customer spreads good word of mouth about the experience encountered. The journey of the
customer begins right from choosing a location to exploring the place and back home. The
customer remembers the good moments in the entire journey and relates it to his everyday
experiences. If the entire journey at the location is cherished upon, this spreads out faster than
any promotional campaigns. This is what the service providers should think of capitalizing
on instead of looking out for new customers and new promotional techniques. There exists a
direct relationships between the capability of employee, customer satisfaction, customer
loyalty and the firm's profit (Morris, B., 1998). A customer has a preconceived perception
about the quality and pricing. Charging very high for short term gains may spoil the
reputation of the whole location. It is important to understand how firm’s create and deliver
value and how the customers evaluate the offerings (Bowman & Ambrosini, 2000; Lepak,
Smith, & Taylor, 2007; O'Cass & Ngo, 2011; Priem, Li, & Carr, 2012; Sparks, Bradley, &
Jennings, 2011; Ulaga & Eggert, 2006). This will help in designing better services and
improving the performance.
In conclusion, an enterprise will flourish if it helps in creating memorable experience with
the traveler.
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APPENDIX
Parameters Statements
TAN Tangibility
TAN1 I prefer to go to a service provider that have well developed facilities
TAN2 Physical facilities of the service providers available should be good and appealing
TAN3 I like to go to places with neat, cleaning and pleasing employees.
REL Reliability
REL1 The service providers should have reliable services at the moment it promises to do so
REL2 The service providers should be sympathetic and reassuring
REL3 The service providers should be accurate in its billing
RESP Responsiveness
RESP1 There should be adequate information on services availability
RESP2 Employees of the service providers should deliver prompt services
RESP3 Employees of service providers should be always willing to help the customers
ASSUR Assurance
ASSUR1 Customers should feel safe in their interactions with service providers
ASSUR2 The service providers should be knowledgeable
ASSUR3 The service providers should be polite
The service providers should get adequate support from the management to do their jobs
ASSUR4 well
EMP Empathy
EMP1 The service providers should give tourists personal attention
The service providers should have convenient working hours to accommodate the tourist's
EMP2 requirements
EMP3 The service provider has customer’s best interests at heart
SAT Customer Satisfaction
I would be satisfied if the service provider meets all the service quality requirements as
SAT1 promised
SAT2 I would be satisfied if the service provider charges as per the season and availability
SAT3 I would be satisfied if the service provider takes care of all customer needs
LTY Customer Loyalty
LTY1 I would prefer to use the services of a service provider who meets my expectations
I would prefer to use the services of a service provider which I was satisfied even if the
LTY2 prices rise due to peak demand
LTY3 I would prefer to use additional products and services of my preferred service provider
LTY4 I would recommend my preferred service provider to others
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