Gauging Customer Satisfactionlevel
Gauging Customer Satisfactionlevel
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Abstract
Purpose – The paper focus on gauging the satisfaction level of customers on quality of
service offered in organized retail store with special reference to D-Mart in Raipur city.
Aim- In an economy, retail industry has emerged as an important service provider. Despite of
this fact, this industry is facing huge challenges due to globalization and increased
competition. Thus, to have a competitive advantage, it is important for a retail firm to
measure their customer’s satisfaction towards the range and variety of products and services
they offer in their store.
Introduction to SERVQUAL model- In current scenario, Customers are the backbone of any
organization. Thus, the topics like service, service quality, customer satisfaction are taken
into consideration. Service quality being an important factor for competitiveness is the extent
to which a delivered service meets the expectation of customers. This study is based on 5
dimensions of SERVQUAL model (Tangibility, Reliability, Responsiveness, Assurance and
Empathy).
Research Design- First, all the dimensions of model were collected through literature survey.
Then responses were collected from 250 customers visiting D-Mart store. Factor analysis was
done to identify specific factors of high significance. To prove Hypotheses, multiple
regression was done.
Outcome- The outcome of analysis shows a positive impact of service quality variables on
customer satisfaction. The result shows that variables Tangibility (p value=0.005), Reliability
(p=0.005, Responsiveness (p=0.005) and Empathy (p=0.005) are having a significant impact
on customer satisfaction whereas Assurance (p= 0.381) is not having a significant impact on
customer satisfaction.
Practical implications – Factors affecting service quality for organized retail store varies
across cultures. Therefore, a careful consideration of each & every factor is highly required.
The findings of the study can help the retail industry to be more competitive.
Keywords: Service, Service Quality, Customer Satisfaction, SERVQUAL Model
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1. Introduction
Indian retail has become one of the fastest growing industries with the arrival of a few new
players. India is the world's largest retail destination thanks to its contribution to the country's
GDP and job creation. (report 2021). Government of India has also taken initiatives to boost
retail industry like they had allowed 100 percent FDI in online retail of goods and services in
a bid to encourage Made in India products. It is also projected that by the year 2021,
traditional retail will hold 75%, organised retail store will reach 18% and e commerce retail
share will reach 7% of the total retail market. (report 2021). In 2013, the organised sector
constituted only 8% and remaining 92% was unorganised retail sector (Dua. and Verma,
2016).
Retail Industry in Chhattisgarh After its conception in the year 2000, Chhattisgarh state
have paved a big leap in overall development of the area. Over the years, an immense change
in the lifestyle and spending capacity of the people has changed. With the growth of market,
small departmental shops and stores came in single brand store like Ravi Bhawan,
Pantaloons, Big Bazar etc. With the emergence of mall culture, a revolution in organized
retail store was observed.
In the same lieu, D-Mart also entered the retail market in Chhattisgarh. It is considered to be
a comprehensive chain of supermarkets, offering a wide range of home and personal items
under one roof. The categories include Food, Toiletries, Cosmetics, Apparel, Kitchenware,
Household Appliances etc, all available at competitive prices (D-Mart 2002)
The founder of D- Mart was Radhakishan Damani in the year 2002 in Powai. Now D- Mart is
initiated in 176 locations throughout Maharashtra, Gujarat, Andhra Pradesh, Madhya
Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan. The
supermarket chain of D-Mart stores is owned and managed by Avenue Supermarts Ltd.
(ASL).
In recent times, as the service quality improves, the customer expectation and demand on
service has been increased. Thus, the research study focuses on the customer satisfaction
towards Service Quality in organized retail store with special reference to D- Mart in Capital
city of Chhattisgarh.
1.1 Customer satisfaction
It is the key factor for successful business and should be treated as assets. The customers vary
in their needs, preferences, and buying behaviour. In today’s competitive trends, the
customers are having ample options available with them, and so customer retention has
become the major concern. The customers want quality not only in goods but also with the
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service attached with that product. In the service industry, a long-term relationship with
customers (Gronroos, 1994; Berry, 2002) is the key success factor that is enormously
increasing with the electronic channels. The proliferation of new channels and the high
demand for differentiated products has presented customers with a wide choice in terms of
which service to use in order to profitably interact with the retail outlet.
Various authors have contributed their work in this field. One such work done by Bienstock
et. al (1997) concludes three dimensions of physical distribution viz availability, efficiency
and order. In addition, among the different models for measuring service quality, there are
three that are commonly used by researchers. The first is the SERVQUAL model of
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Parasuraman et.al. (1988), the second is the SERVPERF of Cronin and Taylor (1992) and the
third is the retail service quality model of Dabholkar et.al (1996). Of these three scales,
SERVQUAL is the most widely used scale to measure service quality. This scale includes
both tangible and intangible dimensions. Though, due to varied culture and type of retail
structure, the components of service quality may be different.
For this study, we have adopted SERVQUAL Model given by Parasuraman et. al (1985) as
understanding and measuring the functions of service was the core of paper and thus
developing an instrument to measure service quality was of utmost requirement. The five
attributes of SERVQUAL model are viz.: Tangibility, Reliability, Responsiveness,
Assurance and Empathy. Though, in an earlier study, there were ten dimensions of Service
quality viz Reliability, Responsiveness, Competence, Access, Courtesy, Communication,
Credibility, Security, Tangibles and Understanding the consumer (Ravichandran, et.al. 2010).
But the five dimensions of SERVQUAL model by Parasuraman et.al are the most common
and popularly used by researchers.
2. Literature Review
2.1 Introduction to Customer Satisfaction:
Customer satisfaction is vital for every business. It is thus very important for every firm to
assess customer satisfaction so as to retain and sustain loyal customer. (Dr. Dipti Baghel
2019)
It is known that if a company provides a product or service according to the requirements of
their customers it will lead to customer satisfaction. As per Gerpott, Rams & Schindler 2001,
satisfaction level of a customer will depend on the quality of brand features that are offered
by a company. The reason why customer satisfaction directly affects company’s profit as
retaining a customer is much cheaper than any other strategies. The companies that retain
their loyal customers are doing great in profit maximization. It is evident that dissatisfied
customer decreases revenue 18 times what a satisfied customer contributes in the profit of a
company. Also, a satisfied customer spread positive word of mouth of the company to other
people.
Many authors have contributed their work in the field of customer satisfaction. Like As per
Rust and Zahorik (1993), customer satisfaction, customer relationship and service quality
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leads to profitability and market share of a company. Customer satisfaction leads to customer
loyalty which in turn leads to profitability. (Hallowell 1996) So as to achieve customer focus
and preference, leveraging the information of existing customer can help in getting deeper
insights into their relationship and their loyalty towards the company. This customer related
process may avoid error free services for their preferred customers. Cardozo (1965) says that
for customer satisfaction, marketing activity contributes with a product of purchase
repetition, acceptance of extension for the product line and a positive word-of-mouth
advertising.
As per Homburg and Giering (2001), the earlier definition of customer satisfaction is
“satisfaction as a post-choice evaluative judgment concerning a specific purchase decision”.
(Eugene W. Anderson 1994) on this issue argue that satisfaction should be viewed as an
assessment based on accumulated experience with a particular product or service rather than
a specific transactional encounter. In a study by TSE and Wilton (1988), satisfaction is a
universal psychological phenomenon, which explains the emotional state that occurs from an
evaluation of perceived gap between prior expectations and enacted performance of product
or service. In another study by Baghel. D, (2019), a significant impact of tangibility and
empathy was observed on customer satisfaction, thus summarizing that there is a positive
impact of service quality over customer satisfaction. Consumer satisfaction is a measure of
customer preferences against experiences regarding the real service experience. It is
determined by comparing expected service and perceived service (K. DOUGLAS
HOFFMAN 2010)
(Claes Fornell 1996), in CSI model defined Consumer satisfaction as a result of perceived
efficiency, perceived value, and customer preferences. (Faizan Mohsan 2011), analyse that
customer satisfaction is utmost important, but it does not guarantee repeat purchases.
Many scholars have established different variables that affect consumer loyalty (Claes
Fornell, 1996; Chwo-ming Joseph Yu, 2005). (Zeithaml et al., 2009). Consumer expectations,
perceived service level, product quality, perceived value, and price are some of the variables
that are commonly linked in many areas of customer satisfaction. As shown in figure -1
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CUSTOMER’S
EXPECTATION (CS1)
PERCEIVED SERVICE
QUALITY (CS2)
PRICE (CS5)
Parasuraman, Zeithaml, and Berry (1988) developed a tool called SERVQUAL that can
measure service quality based on the opinions of focus groups. According to this model, the
quality of the service is derived from the comparison between the customer's expectations
and the customer's perceptions of the actual performance of the service. Gap / Difference
Customer perception and expectations are called the service quality gap (Q = P-E), which is
often referred to as GAP5. Large gaps indicate poor quality of service and indicate that
service providers need to improve the services they provide. The study raised five aspects,
namely tangibility, reliability, security, responsiveness and empathy. They suggested that
the quality of service depends on the relationship between customer expectations and
customer perception, and it is appropriate to calculate service quality by subtracting
expected services from perceived services. After that, the scores of all items are averaged to
obtain an overall measure of service quality. (Brown, Churchill and Peter, 1992).
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According to Brady, Cronin and Brand (2002); Cronin and Taylor (1992) "Service Quality
Performance" uses five of the seven dimensions of SERVQUAL. Cronin and Taylor (1992)
call it a subset of SERVPERF tools. Compared with the gap-based SERVQUAL,
performance alone can provide better prediction validity.
Other studies have shown that individual performance has better reliability and validity than
different scores (Babakus and Boller 1992; Brady et al., 2002; Landrum and Prybutok 2004;
Landrum, Prybutok, Strutton and Zhang, 2008). Based on these findings, only the
performance score is used to analyze the five service quality dimensions of SERVQUAL.
The model has been tested and applied to various service industries, such as hospitals
(Babakus & Mangold, 1989) and banking (Lassar et al., 2000; Zhu et al., 2002). SERVQUAL
has also been expanded and applied to Internet retail (Trocchia and Janda, 2003; Long and
McMellon, 2004).
3. Research Methodology
This research has been conducted to determine the factors that attract customers in D-Mart
and also to determine the satisfaction level of customers in terms of the service quality
provided by the store. For this factor analysis followed by Regression Analysis of factors of
customer satisfaction is done using SPSS Version 21.0.
For this research study, both Descriptive as well as Exploratory research design has been
adopted. The sampling technique is non-probability convenience sampling for which 250
customers visiting D-Mart in Raipur city were provided with the questionnaire used as
primary data collection method. Also, secondary database was taken from published source
via books, magazines, journals etc. The analysis and testing of hypothesis are done through
factor analysis so as to statistically ascertain that whether the adopted list of all variables is
authentic or not. To check sampling adequacy, KMO measure was used. For testing
Hypothesis, Multiple Regression Analysis is done.
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Tangibility (T)
H1
Reliability (R )
H2
Service Quality
CUSTOMER
Responsiveness (RS) SATISFACTION
H3
(CS)
Assurance (A) H4
Empathy (E ) H5
RESEARCH INSTRUMENT
Variables Antecedents Items Scale Sources
T11 Physical facility
Tangibility T12 Appearance of personnel
(T1) T13 Equipment used to provide service
T14 Physical representation of the service
R21 Accuracy in billing
Reliability (R2) R22 Keeping records correctly (A.Parsuraman
R23 Performing the services at designated time 1988)
R24 Error free transactions
SERVICE RS31 Immediate mail of a transaction slip
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The Cronbach’s Alpha score for the instrument was obtained as .803, which is at the higher
side. This means that the data is authentic for further analysis.
With regard to pre-analysis testing for the suitability of the entire sample for factor analysis,
KMO measure of sampling adequacy was found to be .727 and the Bartlett's test of sphericity
3667.608, significant at p < 0.000. Thus, it indicated that the sample was suitable for factor
analytic procedures. The degree of freedom was found to be 325.
Table -4 depicts the value of R and adjusted R value. Regression statistics in table 4 shows
that correlation value R is 0. 900, which depicts that there is good relationship between
Service Quality and Customer Satisfaction. The value of R Square is 0.811 i.e. the model
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explains 81% of variables the value of Durbin Watson test (1.377) depicts that the model is
good as the value is near to 2.
Table 5: ANOVA
Model Sum of Squares df Mean F Sig.
Square
Regression 32.949 5 6.590 208.726 .000b
Residual 7.704 244 .032
Total 40.653 249
a. Dependent Variable: CS
b. Predictors: (Constant), E, RS, T, A, R
Table -5 reveals that Service Quality has a significant impact on Customer Satisfaction as F
(calculated value) (208.726) which are greater than F (table value) (2.184), moreover, the p
value (significant value) is 0.000 which is less than 0.05 significance level. Therefore,
research hypothesis is accepted.
Table 6: Coefficients
Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta
(Constant) .649 .322 2.015 .045
T .129 .029 .130 4.517 .000
R .775 .042 .824 18.416 .000
RS -.164 .054 -.085 -3.007 .003
A .035 .040 .037 .877 .381
E .091 .044 .063 2.052 .041
a. Dependent Variable: CS
Table -6 depicts that the beta coefficients for significant antecedent of Service Quality i.e.
Tangibility (T), Reliability (R), Responsiveness (RS) and Empathy (E) are 0.000, 0.000,
0.003 and 0.041 respectively. It depicts that if Tangibility of brand is increased by 0.129
units, the customer satisfaction will be increased by 1 unit, if Reliability of brand is increased
by 0.775 units, the customer satisfaction will be increased by 1 unit, if Responsiveness of
brand is increased by -0.164 units, the customer satisfaction will be increased by 1 unit and if
Empathy increased by 0.091 units, the customer satisfaction will be increased by 1 unit.
5. Results and Discussion
The study was conducted to examine the impact of service quality on customer satisfaction in
D- Mart in Raipur City. The study examined the impact of each antecedent of service quality
on customer satisfaction through SERVQUAL model of Parasuraman et. al, (1988). The
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result showed a positive impact of service quality on Customer Satisfaction. This study
shows a significant impact of Tangibility (p= 0.005), Reliability (p= 0.005),
Responsiveness (p= 0.005), and Empathy (p=0.005) on customer satisfaction. The
antecedent Assurance (0.381) is found to have an insignificant impact on customer
satisfaction from the analysis. Hence, Hypotheses H1 (Tangibility), H2 (Reliability), H3
(Responsiveness) and H5 (Empathy) are accepted while H4 (Assurance) is rejected.
6. Conclusion
Consumer loyalty assumes a pivotal part in the accomplishment of any association. Through
the review, it has been discovered that Customer fulfillment depends on different components
like client's assumption, seen administration quality, item quality, seen worth, and cost. This
paper targets investigating the effect of administration nature of D-Mart on consumer loyalty.
It was tracked down that four factors of administration quality viz; Tangibility, Reliability,
Responsiveness and Empathy significantly affects consumer loyalty in D-Mart. The store
needs to zero in on accessibility of administrations in setting of general setting of the store.
They need to focus more towards the client's interest, their assumption towards simple
openness of administrations, less holding up an ideal opportunity to get the administrations,
Convenient long stretches of tasks just as Convenient area for administration office.
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