Academic journal article IUP Journal of Marketing Management

Service Quality Management in Retail Banking with Reference to Satisfaction and Switching Intentions of the Customers

Academic journal article IUP Journal of Marketing Management

Service Quality Management in Retail Banking with Reference to Satisfaction and Switching Intentions of the Customers

Article excerpt


The era of economic liberalization has ushered in a rapid change in the service industry in India. The service industry which is emerging as the dominant sector in every economy in the world today, has a substantial contribution of over two-thirds of the gross domestic product. This shows that services hold immense potential to accelerate the growth of an economy and promote general wellbeing of the people. Along with all the changes evolving in the service industry a sea change is also witnessed in the buyer behavior. The new generation buyers are more aware, educated, informed and self motivated. As the country showcases growth in per capita income and prosperity of the people, they tend to become more conscious of their demands and look for sophistication. It becomes imperative for the service provider to display a competitive edge and eye for corporate image which would steer customer growth as well as customer satisfaction. This prompts the service businesses to continuously explore their behavior, lifestyle and demographics and thus get innovative insights for development. All the studies of marketing focus on researching into consumer needs and wants as they are the best source to create a competitive edge for a business. They not only suggest improvements but also provide ideas which are new and vital to the existence of business. Thus, 'Quality' can prove to be a magic bullet in this world of aware and urbane customers. It not only increases number of customers and profits but also lower costs and assures longer survival under competitive pressures. Without managing quality, assuring and adding value becomes an impossible proposition.

Among the service organizations, the banking sector primarily caters to the needs of all classes of society and is large enough to capture and represent almost all the facets of service quality assessment. Usually the literature on growth in the banking sector focuses on the productivity and the financial aspects, so it is interesting to study the service quality perspective and understand the management's commitment towards the same. Recognition of service quality as a competitive weapon is relatively a recent phenomenon in the Indian banking sector. Banks lately realized that attracting and retaining satisfied customers would undoubtedly bring growth in the organization (Kailash, 2011) and revolutionize the perceived corporate image in the minds of the consumers. There has been a tremendous change in the perceptions of customers due to the very obvious reasons like increased education and incomes, upward social mobility and immense involvement of expressive and collaborative social media.

"Quality in a service or product is not what you put into it. It is what the client or customer gets out of it."

- Peter Drucker

Thus, it calls for evaluation of the need for the banks to have a more customercentric approach and a continuous flow of innovative offerings which can redefine their corporate image and boost profitability.

Hence, this study aims to adopt an interdisciplinary comprehensive approach to investigate the management of service quality by banks of Ahmedabad. The same was operationalized by modifying the SERVPERF model (Cronin and Taylor, 1994).

Literature Review

Abbasi et al. (2011) in their paper focused on the relationship among employee empowerment, service quality and customer satisfaction in the banking sector of Pakistan. Most of the studies in service quality management investigate the customer's viewpoint. But they discovered a strong correlation between employee empowerment and service quality. It was reinforced from the results of various studies that employees will only be successful in dealing with the customers when the management gives the authority and necessary support to them, which is termed as 'employee empowerment'. A conceptual model was constructed on the basis of studies of Goodale et al. (1997), Moore et al. …

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