Academic journal article Management Dynamics

The Interrelationship between Service Quality, Satisfaction and Behavioural Intention by Customer Stage in the Service Delivery Process

Academic journal article Management Dynamics

The Interrelationship between Service Quality, Satisfaction and Behavioural Intention by Customer Stage in the Service Delivery Process

Article excerpt

ABSTRACT

The purpose of this study is to test the invariance of a theoretical model in order to examine the interrelationship between overall perceptions of service quality, satisfaction and behavioural intentions, based on the customer's stage in the service delivery process. The data were collected through a survey of 260 ''early stage" and 264 "late stage" banking customers. In order to test invariance, a structural equation model (SEM) with maximum likelihood estimates of the model parameters was used. The results revealed that the SEM model was invariant across the two service delivery stages, meaning that the same theoretical model is valid for both service delivery stages. The findings provided support for the hypothesis that satisfaction mediates the relationship between service quality and behavioural intentions for both service delivery stages.

INTRODUCTION

Ever since Parasuraman, Zeithaml and Berry (1985) first published their research on measuring and managing service quality, the services-marketing literature has been dominated by research on developments, refinements and refutations of service quality measurement instruments. In the banking industry today, SERVQUAL (Parasuraman, Zeithaml and Berry, 1988) and its various adaptations and alternatives are used in hundreds of proprietary and published studies (for a comprehensive review, see Ladhari, 2008; Seth, Deshmukh and Vrat, 2005; Buttle, 1 996). Most of this research has focused on the dimensions of service quality in order to better understand the processes underlying the perception of service quality. Despite the numerous studies on measuring service quality, relatively little attention has been devoted to modelling the time dimension of service delivery and key service outcomes.

It is only in the last ten years that the extant service literature has begun to focus on how service delivery in a particular time-period affects behavioural intentions such as customer recommendation and loyalty (Dagger and Sweeney, 2007; Parasuraman, Zeithaml and Malhotra, 2005; Mittal, Kumar and Tsiros, 1999). Bolton and Lemon (1999) point out that many service encounters do not take place as a static once-off encounter, but rather unfold over a number of interactions between the customer and the service organisation over an extended period of time. In fact, Mittal et ah (1 999) argue that many services that were once offered as a standalone service are now characterised by a significant service subsystem ("consumption system") where consumption occurs over multiple time periods. Many services such as health care, education and banking involve the dynamic interaction of the customer and the service organisation over time, and are often continuously provided by the service organisation. In banking, for example, activating a credit card account requires a customer to engage in a series of encounters with the bank from the initial application, activating the account, to continually receiving and paying credit card statements.

Bolton (1998) analysed the customers' rating of a service organisation at various stages of the relationship. Bolton's results indicated that a customer's ratings of the service provider obtained prior to a decision to cancel or stay loyal to the service organisation were positively related to the length of the relationship. This conclusion led both Bolton and Lemon (1999) and Rust et al (1999) to argue that understanding the dynamics of customers' perceptions of service quality over time are critical for these types of services to better develop customer retention and relationship management strategies. So, while some authors on service quality such as Ziethaml, Berry and Parasuraman (1996) and Zeithaml (2000) emphasised the importance of service quality as a driver of positive behavioural intentions, other authors such as Rust et al. (1999) and Mittal et al. (1999) emphasised the importance of the dynamics of how service perceptions change and adapt during the service encounter, and the impact of these changes on customer retention (Naray andas, 1998) and profitability (Rust, Lemon and Zeithaml, 2004; Rust, Moorman and Dickson, 2002), and ultimately on the building of long-term relationships with customers (Rust and Chung, 2006) and Customer Lifetime Value (Venkatesan and Kumar, 2004). …

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