Academic journal article IUP Journal of Management Research

Evaluation of Customer Satisfaction by Service Dominant Logic for Banking Sector: An Indicative Study Based on HDFC Bank

Academic journal article IUP Journal of Management Research

Evaluation of Customer Satisfaction by Service Dominant Logic for Banking Sector: An Indicative Study Based on HDFC Bank

Article excerpt

Introduction

Banking as a service industry is customer-oriented and the business of the banks largely depends on customer satisfaction or the ability of a bank to meet or surpass customer expectation. With the rapid increase in the country's internet usage and the rising demand for online banking services, service quality and customer satisfaction are going to be the key determinants of future success of the banking industry. Designing of strategies to attract a higher number of customers towards the banks by offering better service and improved customer satisfaction are now becoming important areas of focus in order to survive in the highly competitive banking industry. Indian banks, including private sector banks like the HDFC Bank, are constantly trying to improve customer service through interaction with their customers. This is the basic premise of value co-creation based on Service Dominant Logic (SDL). Service-dominant (S-D) logic is a meta-theoretical framework for explaining value creation, through exchange, among configurations of actors.

Banking Sector Under Service Dominant Logic

Like other financial institutions, the banking institutions, are also facing a diversified market that is changing at a rapid pace. New innovations are being introduced under the fear of economic uncertainties. Customers generally are at an advantage because of the convenience, flexibility and literally 24-hour banking solutions in their hands and the banks get benefited with lower operating costs, wider geographical reach and reduced customer pressure on their branches. In developing countries, it is very important that banks decide the factors of service quality, which are pertinent to the customer's satisfaction process, in view of greater than before competition, with the start of international banking. Better service quality typically can help to get higher market share and better returns (Slu and Mou, 2003). It is desirable for service providers to uncover what attributes consumers utilized in their assessment of overall service quality. The customers may be involved in co-creation of values based on SDL (Vargo and Lusch, 2008) of marketing. According to Kuzgun and Asugman (2015), an integrative value approach provides a structure to incorporate different value conceptualizations under one common scheme. It is derived from SDL of marketing and value-in-context concept of Chandler and Vargo (2011) to evaluate the overall synergistic effects of various value concepts from the viewpoint of customers and help in analyzing the dynamics of customer satisfaction.

Literature Review

According to Parasuraman et al. (1988) service quality is the customers' judgment of overall excellence of the service or the difference between customers' expectation and the actual service performed or perceived. Gronroos (1984) defines perceived service quality as a consumption process in which the customer is part of the service process that leads to an outcome or result. The way the customer perceives the service process at the time of the service is more important than the outcome of the service. The customers' expectation and perception of the service becomes important when the customer thinks back to see if the perception exceeded the expectations (Siu and Cheung, 2001; and Kang and James, 2004). Parasuraman et al. (1988) developed a service quality model and termed it as gap model. The gap model is about giving managers the tools to improve service quality. The consumer gap is the difference between the customers' expectations of the services and the perception of the services. To measure it a 22-item scale called SERVQUAL (Service Quality) was used. SERVPERF (Service Performance) is similar to SERVQUAL, in that it uses the same 22-item scale to measure service quality, but differs in the number of times the service quality is measured. SERVPERF (Cronin and Taylor, 1992) uses the 22-item scale once to measure the perception of service quality; whereas the SERVQUAL uses the scale twice, once to measure the expected service quality and once to measure the perceived service quality (Table 1). …

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