Academic journal article International Journal of Marketing Studies

Relationship between Service Quality and Customer Satisfaction in Hypermarkets of Saudi Arabia

Academic journal article International Journal of Marketing Studies

Relationship between Service Quality and Customer Satisfaction in Hypermarkets of Saudi Arabia

Article excerpt

Abstract

The objective of this study is to determine the perception of retail service quality and its relationship with satisfaction for customers of hypermarkets in the Kingdom of Saudi Arabia (KSA). Data was collected through self-administered questionnaires using convenience sampling technique. Out of 220 responses, 185 were finally chosen and analyzed for descriptive statistics as well as significant relationship between hypermarket service quality and customer satisfaction. The respondents reported high levels of perceived quality and significant relationship was found between retail service quality dimensions and customer satisfaction. Out of all the dimensions of service quality, physical aspects had the maximum effect on customer satisfaction, which was attributed to the cultural traits and lifestyle of Saudi society. Retail service providers need to recognize the importance of service quality dimensions in order of their significance, and implement appropriate strategy for competitive advantage over domestic and international players vying for share of an expanding consumer base.

Keywords: retail, hypermarkets, service quality, customer satisfaction, Saudi Arabia

1. Introduction

The Kingdom of Saudi Arabia (KSA) has a population of more than 27 million with growth rate of 1.49 percent, and a median age of 26.4 years (CIA World Factbook, 2014). The KSA customer base comprises locals, who are among the most eager consumers in the world, and expatriates (more than 30 percent of population), who have a willingness to spend on convenience and shopping products (AT Kearney, 2013; CIA World Factbook, 2014). This growing population with increasing buying power is the focus of retailers.

The retail sector in Saudi Arabia is still evolving as compared to the United Arab Emirates (UAE), which is a bigger neighboring market and benefits from being a trading hub in the Middle East region. The most common formats for retail in KSA were traditional markets and convenience stores, until hypermarkets got established during the last decade. The hypermarkets are presently concentrated in big cities, such as Riyadh, Jeddah, and Dammam, but are expanding aggressively to other regions across KSA.

The increasing population, with a multitude of demands and expectations, makes the retail sector very competitive. A long term relationship is possible if the retailer can evaluate customer satisfaction with the quality of service experienced in a retail store. This is challenging because retail is a service-oriented business and the measurement of intangible elements includes factors other than the service itself. Retail companies need to create an image of service quality if present customers are to be pleased and new ones created.

Dabholkar, Thorpe, and Rentz (1996) proposed a methodology to study service quality in a retail setting through the Retail Service Quality Scale (RSQS). This scale has been tested and validated across various retail formats, regions, and countries. In several studies, the consequences of retail service quality were identified, and customer satisfaction was found to be in a significant relationship. There is scope for research on this relationship in specific formats for retail sector across Saudi Arabia, which makes it the objective of present study.

2. Theoretical Background

2.1 Retail in Saudi Arabia

The Saudi population is growing and modernizing itself within the framework of its culture, which is based on religious principles. The major source of culturally acceptable entertainment is in the form of shopping and dining in malls. The retail outlets (supermarkets and hypermarkets) with access to such facilities are ideal locations for the Saudi families to relax (Al Rajhi Capital, 2013). This trend is very common across the country and in several locations, major supermarkets and hypermarkets are a part of popular shopping malls with facilities, such as food courts, play areas, ATMs etc. …

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