Tittle of The Study

Tittle of the Study:
“A comparative study of service quality of public sector and private sector banks:
With reference to North Gujarat Region”
Objective of the Study:
1) To assess the various dimensions affecting service quality of public sector and private
sector banks in the context of North Gujarat Region
2) To compare the different dimensions of service quality in public sector and private
sector banks in the context of North Gujarat Region
3) To clarify which dimension has major impact on service quality in public sector and
private sector banks
Hypothesis Development:
H1: Reliability has significant and positive impact on service quality of public sector and
private sector banks.
H2: Responsiveness has significant and positive impact on service quality of public sector
and private sector banks.
H3: Tangibility has significant and positive impact on service quality of public sector and
H4: Assurance has significant and positive impact on service quality of public sector and
H5: Empathy has significant and positive impact on service quality of public sector and
Literature review
Service quality is a vital antecedent of customer satisfaction (Cronin and Taylor, 1992). In

turn, customer satisfaction is believed to affect post purchase and perception and future
decisions. Parasuraman et al. (1985) have originally identified ten determinants
of service quality generic to the service industry. These determinants were tangibles,
reliability, responsiveness, competence, courtesy, credibility, security, access,
communication, and understanding the customer.
At a later stage, Parasuraman et al. (1988) developed a 22-item instrument, recognized as
SERVQUAL, that has become widely used as a generic instrument
for measuring service quality. The instrument items represent the five dimensions explained
below:
(1) Reliability. This dimension refers to the ability to perform the service dependably and
accurately.
(2) Responsiveness. This dimension refers to the willingness to help customers and provide
prompt service.
(3) Tangibles. This dimension refers to the Physical facilities, equipment, and appearance of
personnel.
(4) Assurance. This dimension refers to employees knowledge, courtesy and ability to convey
trust and confidence.
(5) Empathy. This dimension refers to the level of caring and individual attention provided to
customers.
SERVQUAL consists of two sections. A 22-item

section measuring the service quality expectation within a specific sector and a corresponding
22-item section measuring the perception of service quality of a particular company in that
sector (Parasuraman et aL, 1988, 1991). SERVQUAL scores were defined as the differences
between the expected service quality and the perceived one. No particular study investigated
the difference in significance between the five dimensions of SERVQUAL. Parauraman et al.
(1988, 1991) have consistently observed that reliability had the strongest regression
coefficient, assurance and responsiveness had the next strongest coefficients, and empathy
and tangibles had the weakest coefficients. These observations were, however, not verified
statistically.
SERVQUAL has been widely used (Dabholkar et al., 1996; Hussey, 1999; Nielsen and Host,
2000; Engelland et al., 2000; Getz et al., 2001). It was however challenged in a number of
subsequent studies (Carman, 1990; Babakus and Boller, 1992; Cronin and Taylor, 1992,
1994; Teas, 1993, 1994; Brown et al., 1993; Chase and Stewart, 1994). Van Dyke and
Kappelman (1997) and Babakus and Boller (1992) questioned the conceptual appropriateness
of SERVQUAL. They challenged the operationalization of perceived service qualityas a
difference or gap score, the ambiguity of the expectations construct, and the unsuitability
across different industries.
The psychometric properties of SERVQUAL have been examined in many studies. The
evidence provides general support for the validity and reliability, of the instrument (Finn and
Lamb, 1991; Kettinger and Lee, 1995; Lam, 1997). The major empirical problems of the
instrument lie in its unstable dimensionality (Carman, 1990; Van Dyke et al. 1997) and in
using measures defined as differences in a multivariate analysis. Cronin and Taylor (1992)
have examined a performance-based measure of service quality, called SERVPERF in four
industries (banking, pest control, dry cleaning and fast food). SERVPERF is composed of the
22 perception items in the SERVQUAL scale, and therefore excludes any consideration of
expectations. They found that this measure explained more of the variance in an overall
measure of service quality than did SERVQUAL. They also indicated that a psychometrically
superior assessment of service quality can be obtained through the SERVQUAL performance
items alone. Babakus and Boller (1991) also found that perception scores, by themselves, had
stronger correlation with independent measures, such as overall quality, than do the
SERVQUAL measures (expectations minus perceptions). Babakus and Roller (1992)
suggested that: the dimensionality of servicequality may depend on the type of industry being
studied. They further argued that measures designed for specific industries are more
appropriate than using a generic one.
There have been a few empirical studies that dealt with the application of SERVQUAL
instrument in the banking industry such as Kwan and Lee (1994), Blanched and Galloway
(1994), Jun et al. (1999), Natarajan et al. (1999) and Lassar et al. (2000).
Jun et al. (1999) studied the service quality of delivering loan products. They found out that
substantial differences existed between bankers and customers groups in
the perceived importance of service quality dimensions. Blanched and Galloway (1994) used
the SERVQUAL technique in examining quality in retail banking. In order to provide useful
insights into how service might be improved, the authors attempted to develop an alternative
model. They, however, adopted most of the items of the original model in their survey. They
claimed that their model was general enough to be very widely applicable, and specific
enough to give actionable diagnostic information. Natarajan et al. (1999) examined the
continuous improvement of service operations in which the actual serviceexperience is
assessed through a customer survey. Their study was condcuted on the Ram Najar branch of
the bank of Bangalore in Bangalore, India. The SERVQUAL instrument was not used,
though many of its items were adopted.
Finally, Lassar et al. (2000) adopted two techniques in their study of service quality in private
banking. The first technique was SERVQUAL and the second was a measure of
technical/functional. Technical quality involves what service is provided while
functional quality considers how it is provided (Arora and Stoner, 1996). The
two service quality measures were subsequently compared and contrasted as their ability to
predict customer satisfaction. The study provides initial support in favor of the idea that
SERVQUAL- and technical/functional-quality-based models may be unequally or
asymmetrically applicable across differing settings and situations. The authors suggested to
employ both of these two measures in varying situations and contexts, as well as with
different customer groups.
Research Methodology
4 disrtrict*13 samples*8 banks=416 samples
North Gujarat district
Banaskantha (100)
Patan 100 samples
Sabarkantha
mehsana

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Tittle of the Study:

Objective of the Study:

Service quality is a vital antecedent of customer satisfaction (Cronin and Taylor, 1992). In

SERVQUAL consists of two sections. A 22-item

4 disrtrict13 samples8 banks=416 samples

North Gujarat district

Patan 100 samples

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