Characteristics of service quality:
Superiority: a quality service is a service that demonstrates its superiority compared to other similar services.
Characteristic: service quality is the sum of the core and most quintessential aspects crystallized in the service, creating the characteristic of the service, but in reality these characteristics are only relative.
Service delivery: service quality is closely linked to the process of implementing and delivering services to customers. This is an internal factor that depends on the performance of the provider.
Satisfaction of needs: services are created to meet customer needs, so service quality must satisfy customer needs and customer requirements must be the basis for service improvement.
Value creation: service quality is closely linked to the values created to serve customers. The consideration of service quality or more specifically the values brought to customers depends on the customer's assessment, not the bank's. Therefore, value creation is a basic characteristic and the foundation for building and developing the bank's service quality.
1.2.2 Customer satisfaction
According to Philip Kotler, customer satisfaction is the level of a person's emotional state that comes from comparing the results obtained from consuming products and services with their own expectations. The level of satisfaction depends on the difference between the results received and expectations. If the actual results are lower than expectations, the customer is not satisfied. If the actual results are equal to expectations, the customer is satisfied. If the actual results are higher than expectations, the customer is very satisfied. Customer expectations are formed from shopping experiences, from friends, colleagues, and from information from sellers and competitors.
To improve customer satisfaction, businesses need additional investments.
1.2.3 The difference between service quality and customer satisfaction
Parasuraman argues that there is a difference between service quality and customer satisfaction: perceived service quality is a decision or attitude related to the superiority of a service, while customer satisfaction is related to a specific transaction (Parasuraman et al., 1988). Many other researchers have also investigated the relationships between service quality and customer satisfaction.
Rust and Oliver (1994) describe the model of customer satisfaction in service theories as follows: Customer satisfaction is a totality of cognitive and affective responses to a service issue (or sometimes a long-term service relationship). Satisfaction (or dissatisfaction) results from customers comparing the quality of service they experienced with their expectations (Oliver, 1980).
Based on previous studies, we can identify several important factors that differentiate service quality from consumer satisfaction:
Table 1.1: Table distinguishing between service quality and customer satisfaction
Quality of service
Customer satisfaction | |
Factors measuring service quality specific | Satisfaction is related to many factors. factors other than service quality. |
Expectations of service quality are based on perceptions of perfection. | In addition to service quality, satisfaction assessment involves many factors. other factors |
Perceptions of quality depend less on experience with the service and provider. service level | Satisfaction assessment depends on the experience with the service and the service provider. service. |
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(Source: Rust and Oliver, 1994; Spreng and Mackoy, 1996)
1.3 Research model on customer satisfaction used in the retail banking sector
1.3.1 Service quality models FSQ and TSQ (Grönroos,1984)
Grönroos argues that the perception of a given service quality is the result of an evaluation process, in which the customer compares his or her expectations with the perceived performance. The result of this process is the perception of service quality.
According to Grönroos, the three factors that influence service quality are technical quality, functional quality and corporate image. Grönroos describes three separate but related factors.
Technical Service Quality (TSQ) is the outcome that customers perceive from their interactions with the service provider, whether it be employees, management, or the organization as a whole. Technical quality is related to the customer's objective assessment of what they receive when using the service. There are five factors to evaluate technical quality including:
Problem solving ability (Technical solutions);
Employees' knowledge;
Machine quality;
Employees' technical ability;
Computerised systems
Functional Service Quality (FSQ) is concerned with how the service is delivered to the customer and how the customer experiences the service. Functional quality is concerned with the customer's subjective assessment of how they were served. There are 7 factors to assess functional quality:
Accessibility;
Behavior;
Service attitude (Attitude);
Internal relationship between employees;
Business organization (Appearance);
Customer contact;
Service-mindedness
Corporate image is the third factor of service quality, which is the overall perception of the service provider by the customer. Grönroos argues that if the image of the company is good in the minds of the customer, when problems arise in the service delivery process, the customer may ignore it. If those problems continue to occur, the image will eventually deteriorate. If the image of the company is bad, then the quality problems that arise are more likely to be perceived as worse than they actually are.
1.3.2 SERVQUAL service quality model (Parasuraman, Zeithaml and Bitner, 1985, 1988) and BANKSERV model (Avkiran, 1994)
The authors of the SERVQUAL model believe that service quality depends on customers' perceptions of that service. The SERVQUAL model evaluates service quality through a comparison between expectations and perceptions. At the same time, Parasuraman, Zeithaml and Bitner (1988) proposed 5 factors including 22 scales to measure service quality: tangibles, reliability, responsiveness, assurance and empathy:
Tangibles:
Reliability:
Responsiveness:
Assurance:
Empathy:
From the SERVQUAL model, Avkiran (1994) developed the BANKSERV model specifically for the Australian banking industry. This is a model designed to allow customers to reflect their expectations and perceptions in the same statement. BANKSERV "avoids the potential psychological problems of the SERVQUAL model" (Avkiran, 1999). The BANKSERV model has 4 factors consisting of 17 scales
To measure service quality, factors include employee behavior, reliability, customer advice, and service accessibility.
1.3.3 SERVPERF service quality model (Cronin and Taylor, 1992)
Based on the SERVQUAL model, Cronin and Taylor (1992) developed the SERVPERF model to measure service quality based on performance evaluation rather than through a comparison between expected value and perceived value as in the SERVQUAL model. Cronin and Taylor provided empirical evidence on four specific industries: banks, pest control, dry cleaning, and fast food.
1.3.4 SYSTRA-SQ service quality model (Aldlaigan and Buttle, 2002)
Aldlaigan and Buttle (2002) developed a new scale SYSTRA_SQ (SYStem and TRAnsaction) for retail banking service quality based on Grönroos's technical quality/functional quality (TSQ and FSQ) model.
The SYSTRA_SQ model first distinguishes between the level of service organization and the transaction level. That is, the variables in the first factor describe the characteristics of the service system. This shows that this is not a product or service of any employee or a group of employees, but a product or service of the entire bank. At the same time, this model also combines the attributes of both functional quality and technical quality in the factors.
The SYSTRA_SQ model has 4 factors including 21 variables to measure retail banking service quality. The four factors are respectively:
Factor 1 is service system quality (SSQ): this is the most influential factor among the four factors. Service system quality is a combination of factors related to functional quality and technical quality at the organizational level. Functional quality attributes include listening to customers, ease of access, speed of response and organizational presence. Technical organizational attributes include quality of advice, flexibility of solutions, etc.
service solutions, delivering on commitments, empowering employees and keeping customers informed.
Factor 2 is behavioral service quality (behavioural system quality - BSQ): this factor represents the assessment of how employees perform the service. It is built from FSQ (Functional SQ) including: politeness, courtesy, friendliness and helpfulness of bank employees and attitude of bank employees.
Factor 3 is machine service quality (MSQ): this factor focuses on the quality of machinery and equipment. It shows the reliability of machinery and equipment when customers use it.
Factor 4 is service transactional accuracy (STA): this technical quality factor focuses on the accuracy of employees and systems when performing services such as errors in transactions and mistakes of employees when providing services to customers.
The SYSTRA_SQ model measures two aspects of service quality: the quality of the service organization system and the quality of the performed transaction. The SYSTRA-SQ model links with Grönroos' service quality model by combining technical and functional attributes into one factor, service system quality (SSQ) at the organization level, while distinguishing between FSQ and TSQ at the transaction level.
1.3.5 The relationship between service quality and customer satisfaction
Cronin and Taylor (1992) presented research on the relationship between service quality and satisfaction. Although Cronin and Taylor hypothesized that satisfaction was an antecedent of service quality, empirical analysis showed otherwise. Cronin and Taylor directly assessed the service quality-satisfaction relationship across four industries: banking, pest control, dry cleaning, and fast food. For each of the four service types they investigated, Cronin and Taylor's results supported Woodside et al.'s (1989) conclusion that service quality is an antecedent of service quality.
causal relationship to consumer satisfaction. In addition, Ruyter et al. (1997) studied on health care services to determine the relationship between service quality and customer satisfaction, the results showed that service quality is the antecedent of customer satisfaction.
In the banking sector, Sureshchandar et al. (2002) studied the relationship between service quality and customer satisfaction of different banks in India. The important factors used were: core service or service product, human factor in service delivery, systematicity in service delivery, tangibles of service, social responsibility. The results of the analysis showed that there is a relationship between high service quality and customer satisfaction.
Mohammad and Alhamadani (2011) conducted a study on the perceptions of service quality and customer satisfaction in commercial banks in Jordan. The study tested the level of service quality and its impact on customer satisfaction according to the five factors of the SERVQUAL model. The results showed that the five factors of service quality have a significant impact on customer satisfaction.
From the above studies, it can be concluded that service quality and customer satisfaction have a positive relationship, in which service quality is both an antecedent and an important factor affecting customer satisfaction.
1.3.6 Understanding price and its impact on customer satisfaction
According to Kotler and Armstrong (2010) price is the amount of money paid for a product or service, or the sum of the values that customers give in exchange for the benefits of obtaining or using the product or service. Meanwhile, Stanton, Michael and Bruce (1994) define price as the amount of money or goods required to obtain the combination of a good and its accompanying services.
Several studies have shown that authors tend to support the view that price is appropriate in relation to customer satisfaction (Hermann et al.
et al., 2007; Kukar-Kinney, Xia, and Monroe, 2007; Martin-Consuegra, Molina, and Esteban, 2007).
Price appropriateness refers to the consumer's assessment of whether the seller's price is reasonable, acceptable or justifiable (Xia et al., 2004; Kukar-Kinney, Xia and Monroe, 2007). Price appropriateness is a very important issue leading to satisfaction. Reasonable price level helps develop customer satisfaction and loyalty. Research shows that the customer's decision to accept a particular price has a direct and indirect influence on satisfaction and loyalty (Martin-Consuegra, Molina and Esteban, 2007).
1.4 Proposed research model and hypotheses of the topic
1.4.1 Research model
To measure service quality, most previous studies often use Parasuraman's SERVQUAL model and Grönroos's technical quality/functional quality model. These are widely used models in assessing service quality, including in the banking service sector. The research results of these models are not wrong, but with SYSTRA-SQ, the measurement results will be more appropriate because this is a scale specifically for retail banking service quality. On the other hand, due to the nature of credit card use, which is often through the bank's payment system, online payment system, and customers rarely go to the bank to make transactions at the counter, the FSQ/TSQ model and the SYSTRA-SQ model are suitable.
Therefore, the author chooses the FSQ/TSQ model and the SYSTRA-SQ model combined with some other studies as the basis for proposing a thesis research model. The proposed research model will include 6 factors affecting customer satisfaction: factors related to service quality (quality of service system, quality of service behavior, quality of equipment, accurate transactions, bank image) and price factors.