TERM PAPER

RESEARCH METHODOLOGY

IMPACT OF SERVICE QUALITY ON CUSTOMERS IN GAINING

SATISFACTION IN INDIAN BANKING SEVICE

SUBMITTED TO:- MS KANIKA JHAMB

SUBMITTED BY:- RAMANDEEP SINGH
ROLL NO: RA17B2A31
REG NO:7450070084

TABLE OF CONTENTS

INTRODUCTION

OBJECTIVES

METHODOLOGY

LITERATURE REVIEW

LIMITATIONS OF RESEARCH

BIBLIOGRAPHY
Introduction

Survival in a highly competitive environment requires organizations to offer such products and
services as might yield highly satisfied and loyal customers. In order to gain excellent customer
support, an organization needs an effective internal system designed to serve the external
customers. Service quality has become the most dominant theme in services marketing research.
Service quality1 is determined by the differences between customer expectation of the service
and their perception of the service experience. We know that relationships are as old as mankind.
Keeping clients, developing relationships with them, is crucial to establish and maintaining
competitive advantage in the market. The Indian banking has seen momentous changes in the
post-independence era.As financial liberalization has led to intense competitive pressures and
retail banks are consequently directing their strategies towards increasing customer satisfaction
and loyalty through improved service quality.The growth of the service industries and the
competition between the private and public sector banks have resulted in an increased need for
service provider’s to identify the gaps in the market in order to improve service provisions to
retain customers. Banking institutions are acknowledging that unless customer needs are taken
into account in designing and delivering services, technical superiority will not bring success
(Zeithaml and Bitner 1996).New marketing concepts and strategies(Ennew et al., 1993), are
paying greater attention to identifying customer needs and expectations (Morgan, 1989), and
offering high service quality to customers. Public sector banks are facing increasingly more
competition, whereas private sector banks are trying to win customer loyalty, commitment and
trust by providing them better quality services. Service quality has become a competitive strategy
in the Indian banking sector. Thus, it is important to explore service quality and its effect. A
satisfied customer is likely to be a loyal customer who will give repeating business to the bank.
More importantly, the cost of retaining existing customers byimproving product and services is
perceived to be significantly lower than the cost of winning new customers. The importance of
the service quality and customer satisfaction is a route to competitive advantage and corporate
profitability in banking.

1
Objectives

There are following objectives-

 To explore, study, and analyze critically services being provided by the Banks to their
customers.

 To study customer perception in terms of assurance and reliability dimensions of service

quality across public and private sector banks.
 To study the relationship between Service Quality, Customer Satisfaction and Behavioral
responses in Indian banking Industry across Public and Private Sector Banks.

Methodology
To accomplish the research objectives, the data for this study was collected by doing secondary
analysis. The information used in the study was initially developed through interviews with bank
managers, public and private bank customers and public and private bank staff in the study areas.
These preliminary interviews helped to clarify issues and concepts to be covered, thus helping to
process the survey into an instrument that was applicable, relevant and comprehensible by
respondents. Primary data was then collected using this pre-tested survey instrument. To measure
the profitability of the different banks secondary data was collected from the published
information at Reserve Bank of India website. Data was collected by personally contacting the
respondents and explaining in detail about the survey. The respondents were asked to name the
bank they used most and assess the performance criteria’s on the basis of their expectations. The
survey instrument consisted of two major sections. Section I consisted of two sub-sections. Sub-
section one measured the customer’s expectations regarding service quality for the banking
sector and consisted of twenty items. The other sub-section measured the extent to which their
current bank was engaging in the stated practice (20 items). Section two consisted of seven
questions with an aim to capture the demographic profile of the respondents and consisted of two
questions regarding the name of the current bank and the sector to which the banks belonged.
Respondents will be students, faculty of LPU. Questionnaire will be given to them to fill and
proper time to read. Questionnaire will be shown on 2nd assignment with finding and results.
Literature Review
Article 1:- Service Quality Delivery and Its Impact on Customer Satisfaction in the
Banking Sector in Malaysia by Jayaraman Munusamy, Shankar Chelliah and Hor Wai Mun
According to this article In any business–to-customer (B2C) type of environment, satisfying a
customer is the ultimate goal and objective. More often than not, it can be quite an issue. This is
perhaps due to the fact that organizations sometimes do not really understand of what actually
goes on in a customer’s mind. As such, this predicament has provided as a challenging task to
most business conglomerates that places strong emphasis on customer relations. Although many
researches and studies were conducted on the actual working of the customer's mind, till today it
is a still a mystery. Therefore, this research focused on
the measurement of customer satisfaction through delivery of service quality in the banking
sector in Malaysia. A quantitative research was used to study the relationship between service
quality dimensions and customer satisfaction. Assurance has positive relationship but it has no
significant effect on customer satisfaction. Reliability has negative relationship but it has no
significant effect on customer satisfaction. Tangibles have positive relationship and have
significant impact on customer satisfaction. Empathy has positive relationship but it has no
significant effect on customer satisfaction. Responsiveness has positive relationship but no
significant impact on customer satisfaction. The study highlights implications for marketers in
banking industry for improvement in delivery of service quality.

Article 2:- Internal market orientation in Indian banking: an empirical analysis:-by

Gurjeet Kaur, R.D. Sharma and Nitasha Seli
This paper aims to examine the level of internal market orientation (IMO) in Indian
banking as seen from the perspective of internal customers and suppliers, particularly with regard
to the three components of market orientation: intelligence generation, intelligence
dissemination, and responsiveness.The study is based on primary research conducted with data
gathered from 611 internal customers and 37 internal suppliers of an Indian private sector bank.
The results indicate that all the three components of market orientation mentioned above
determine the IMO level. Furthermore, the continuous emphasis on IMO by internal suppliers
results in organizational commitment and job satisfaction among internal customers.
Research limitations/implications – The study is limited to the three main dimensions of IMO:
intelligence generation, intelligence dissemination, and responsiveness.

Article 3:- Impact of Service Quality on Customer Loyalty, Commitment and Trust in the
Indian Banking Sector by Gurjeet Kaur, R.D. Sharma and Nitasha Seli
In the present Indian banking scenario, service quality is an indispensable competitive strategy
to retain customer base. Banks are trying to win customer satisfaction and
loyalty by providing better quality services. This study examines the relationship of service
quality with customer loyalty, commitment and trust from the customer’s perspective in the
Indian banking sector. Data was collected from 300 customers of public and private sector banks
using structured interview schedules. The results show that dimensions of service quality such as
assurance-empathy, reliability and tangibles significantly predict customer trust and
commitment. The results also indicate that service quality is positively associated with customer
loyalty. Private bank customers are more committed and loyal as they receive better quality of
service. The study implies that public sector banks should also come forward and try their best to
provide better quality service to win back their customers’ loyalty and commitment.
Article 4:- Internal market orientation in Indian banking: an empirical analysis:- This
paper aims to examine the level of internal market orientation (IMO) in Indian banking as seen
from the perspective of internal customers and suppliers, particularly with regard to the three
components of market orientation: intelligence generation, intelligence dissemination, and
responsiveness. The study is based on primary research conducted with data gathered from 611
internal customers and 37 internal suppliers of an Indian private sector bank.
The results indicate that all the three components of market orientation mentioned above
determine the IMO level. Furthermore, the continuous emphasis on IMO by internal suppliers
results in organizational commitment and job satisfaction among internal customers.

Article 5:- Voyage of marketing thought from a barter system to a customer centric one

Purpose Gurjeet Kaur and R.D. Sharma

Marketing thought originating from the era of the barter system, gradually evolved into
production and sales orientations, with greater emphasis on the process, quality, and selling of
products. Thereafter, customer satisfaction as an essential component of the strategic decision
process occupies a significant position among various marketing activities. This paper aims to
address the inadequate research inputs on determining the time-specific evolutionary relevance
of marketing thought divulging into the essential components of each marketing concept,
especially those with customer satisfaction as a dimension in the measurement construct.
A detailed, conceptually integrated analysis of various marketing philosophies is offered to
facilitate business executives in examining the philosophy followed by their companies and how
to move vertically in pursuance of improved business performance. In comparison to the Indian
market, which is fast becoming an attraction for the developed nations as an investment hub, it is
the observed and experienced that public sector corporations are still at the production
orientation stage, whereas private companies are predominantly using the sales-oriented
approach. The present status of customer orientation, market orientation and relationship
marketing culture in India, is quite distinct from the status in the West as indicated by literature
published in the developed countries. Banking, insurance, tourism, and hospitals still need to
ensure minimum customer-oriented services, which are not performed impressively in India.
Article6:- Customer expactations and perception accross the Indian banking industry and
the resultant financial implicatio by Kirti Dutta Anil Dutta The purpose of this paper is to
study the expectations and perceptions of the consumers across the three banking sectors in
India. It further delineates the factors affecting the quality perception of the customers in the
banking sector and tries to corroborate this perception with the financial performance of the
Banks. The paper presents the primary data of 263 respondents across the three banking sectors.
To explore the customers’ perception of service quality factor analysis is done and factors
affecting the Indian customers are highlighted. A study of the financial performance of the banks
is also done to see if the perception of service quality has a consequence on the banks bottom
line. It was found that in the banking sector it is the foreign banks which are perceived to be
offering better quality of services followed by the private and then public banks. It was also
found that these perceptions are reflected in the financial performance of the banks also. With the
increasing competition amongst banks, the findings can act as a strategic tool to achieve
competitive advantage and customer satisfaction. It is also an eyeopener for the banks to see the
gap between customer expectation and perception regarding the quality of services rendered
which should further act as a motivator to enhance reputation and gain customer loyalty. This
will in turn give them the elusive competitive edge they are looking for.
Article 7:- Service Quality: Insights From The Indian Banking Scenario:- Koushiki
Choudhury
The Indian banking industry is going through turbulent times. With the lowering of entry barriers
and blurring of product lines of banks and non-banks since the financial sector reforms, banks
are functioning increasingly under competitive pressures. Hence, it is imperative that banks
maintain a loyal customer base. In order to achieve this and improve their market and profit
positions, many retail banks are directing their strategies towards increasing customer
satisfaction and loyalty through improved service quality. Moreover, with the advent of
international banking, the trend towards larger bank holding companies, and innovations in the
marketplace, customers have greater and greater difficulty in distinguishing and selecting one
institution from another. Therefore the current problem for the banking industry in India is to
determine the dimensions of customer-perceived service quality. This is because if service
quality dimensions can be identified, service managers should be able to improve the delivery of
customer perceived quality during the service process and have greater control over the overall
outcome. The objective of the study was to explore the dimensions of customer perceived service
quality in the context of the Indian retail banking industry. A set of service quality parameters,
drawn from customers’ perceptions about service quality as well as the bank marketing and
service quality literature, were drawn up. These parameters have been used in the context of four
of the largest banks in India to identify the underlying dimensions of service quality, using factor
analysis.The study suggests that customers distinguish four dimensions of service quality in the
case of the retail banking industry in India, namely, attitude, competence, tangibles and
convenience. Identifying the underlying dimensions of
the service quality construct in the Indian retail banking industry is the first step in the definition
and hence provision of quality service. This article has drawn upon the findings of the service
quality dimensions to contend the initiatives that banks’ managers can take to enhance
employees’ skills and attitudes and instill a customer-service culture.
Article 8:- An integrated framework for service quality, customer satisfaction andbehavrial
responsible in Indian banking industry by Monica bedi
This study attempts to investigate the relationship between service quality, overall customer
satisfaction and behavioral intentions across public and private banks in India. The findings
indicated that service quality is a significant determinant of customer satisfaction in Indian
banking industry irrespective of public and private sector banks. However, different dimensions
of service quality were found to be statistically significant across public and private banks.
Customer satisfaction was found to be strongly associated with propensity to recommend. The
study will help banks to redefine their corporate image to one that is customer-focused and
driven by service quality.

LIMITATIONS OF THE STUDY

• The internet information can be irrelevant.

• Lack of availability of full information.

BIBLIOGRAPHY & REFERENCE.

1. www.google.co.in
2. www.proquest.com
3. www.emnrald.com