Services Marketing: Are Perceptions of Service Quality Predictors of Behavioral Intentions? the Banking Industry Perspective

By Ndubisi, Nelson Oly | Journal of Commercial Banking and Finance, Annual 2004 | Go to article overview

Services Marketing: Are Perceptions of Service Quality Predictors of Behavioral Intentions? the Banking Industry Perspective


Ndubisi, Nelson Oly, Journal of Commercial Banking and Finance


ABSTRACT

This research was conducted to verify the influence of perceived service quality on behavioral intentions of customers of Malaysia banking services. The results provide support for association between perceived service quality dimensions such as tangibles, reliability, assurance, and empathy in one hand, and word-of-mouth (WOM) communications, patronage intentions, and complaining behavior in the other. Responsiveness had no influence on any of the dimensions of behavioral intentions. Theoretical and managerial implications of the findings are discussed.

Key Words:

* Behavioral Intentions

* Patronage Intentions

* Services Marketing

* Word-of-Mouth (WOM)

* Complaining Behavior

* Perceived Service Quality

INTRODUCTION

The issue of customer retention is an important one for service organizations. Ndubisi (2003) has related superior service with customer perceived mutualism (in customer-firm interaction), which is associated with customer support, which outcomes are increasing market share and/or profits. The study also related poor service with customer perceived commensalism and parasitism, which lead customer resistance, and in turn erosion of profits and/or market share. It has also been suggested that service quality has a direct effect on organizations' profits, since it is positively associated with customer retention and customer loyalty (Baker & Crompton, 2000; Zeithaml & Bitner, 2000). Studies have shown that it costs six times more to attract new customers than to retain the existing ones (Rosenberg & Czepiel, 1983). Reports have also shown that the net increase of the present value of profits that results from 5 percent increase in customer retention varies between 25 percent and 95 percent over different industries (Oliver, 1999). Ndubisi (2003) and Zeithaml et al., (1996) proposed different models of the behavioral consequences of service quality. Ndubisi suggested that customers perceive their relationship with the firm in three different lights (i.e. mutualism, commensalism, and parasitism) depending on whether (in the customer's eyes) value was created and delivered or not, and these perceptions will predict the kind of response (either support or resistance) customers give to services providers, each having different implications on the firm's profits and/or market share. Zeithaml et al. proposed that perceived service quality was related with positive behavioral intentions, which could be viewed as signals of retention or defection. According to the latter model, behavioral intentions are a multi-dimensional concept, consisting of word-of-mouth (WOM), purchase intentions, price sensitivity, and complaining behavior. Fishbein and Ajzen (1975) and Ajzen and Fishbein (1980) suggested that behavioral intentions, when properly measured, could to a large degree predict actual behavior. Since then, a number of research has used intention to predict behavior (e.g. Davis 1989; Davis et al., 1989; Mathieson 1991; Taylor & Todd 1995; Venkatesh 2000), while others have seriously questioned intention as a predictor of actual behaviour (Straub et al. 1995; Bentler & Speckart 1979; Songer-Nocks 1976). Nonetheless, Baker and Crompton (2000); Bloemer et al., (1999) applied Zeithaml et al.'s (1996) model and found evidence for its usefulness in predicting elements of customer loyalty. All three studies indicated a need for further research on the relationship between service quality and behavioral intentions, in a variety of service sectors.

In view of the practical value of research on customer retention, combined with the limited published research on Malaysia banking services, the current work aims to evaluate the degree to which service quality dimensions can predict the multi-dimensional model of behavioral intentions, as suggested by Zeithaml et al. (1996) among bank customers in Malaysia. …

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