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VSRD-IJBMR, Vol. 2 (8), 2012, 428-433

RESEARCH ARTICLE RESEARCH ARTICLE

Measuring Retail Service Quality at Discount Stores

1

Arun Kumar G.*, 2S.J. Manjunath and 3K.C. Shivashankar

ABSTRACT
It has been proved by the researchers that good quality service results in customer satisfaction and the customer remains loyal for the long period. In this study retail service quality dimensions are used to study the relationship between service quality and customer satisfaction at discount stores. The five dimensions namely personal interaction, physical appearance, problem solving, policy, and convenience were considered for the study. The data was collected through structured questionnaire from 200 samples in Mandya district of Karnataka by using five point likert scales. The factor analysis was used at the beginning to group the factors and later regression analysis was conducted. The study revealed that the entire dimensions which were taken for the study are positively related to customer satisfaction. Keywords : Retail Service Quality, Customer Satisfaction, Discount Store.

1. INTRODUCTION
Quality in a service is a measure of the extent to which a delivered service meets the customers expectations. It is determined by the customers perception and not by the perceptions of the providers of the service. Service quality is considered a critical determinant of competitiveness. Service quality can help to differentiate itself from other competitors and gain a competitive advantage. Superior service quality is a key to improved profitability. Services are an important segment of all economies and they become increasingly more a part of everyday life as economies develop. Consumer service is a key factor towards generating loyal retail customers, and ultimately, successful retail businesses. Defined as an activity that supplements or facilitates store sales consumer service includes such items as free parking, gift wrapping, environment and delivery. Additionally, sales personnel offer consumer service through their interactions and relationships with customers.

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Research Scholar, 2Associate Professor, 1,2MBA Department, B.N. Bahadur Institute of Management Studies, Mysore, Karnataka, INDIA. 3Assistant Professor, MBA Department, Tumkur University, Tumkur, Karnataka, INDIA. *Correspondence : arunbimsuom@gmail.com

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2. LITERATURE REVIEW
Service quality is defined as customers perception of how well a service meets or exceeds their expectations (Czepiel, 1990, p.14; Zeithaml et al., 1990, p.91). In today's competitive environment, organizations should earn the customer's trust by consistently meeting customer expectations. The gap between expectation and perception is the major determining factor in a customer's assessment of service quality. One of the most important customer service skills that companies should develop is the ability to understand and effectively respond to the customer's needs and concerns. In the retail context, perceptions of service encounters accumulate over time and a customers relationship with an organization are a continuation of exchanges or interactions both past and present (Czepiel, 1990). When customers evaluate retail service, they compare their perceptions of the service they receive with their expectations. Service quality in retailing is different from any other product/service environment (Finn and Lamb, 1991, p. 85; Gagliano and Hathcote, 1994, p. 67). In retail setting, especially retail stores where there is a mix of product and service, retailers are likely to have impact on service quality more than on product quality (Dabholkar et al., 1996). As retailers can create such effects, service quality plays a significant strategic role in creating quality perceptions (Duy Nhat, 2007, p. 15). Maintaining excellent service quality within the stores is no simple task as it requires continual measurement from time to time to monitor and identify areas of activity that may be responsible for the standards of service quality (Yesmine at al, 2003, p. 7). Barani Gempirical study examines the dimensions and their levels of service quality that have significant effect on customer satisfaction in organized retailing. However, by using Statistic software only four factors, namely, reliability, customer knowledge, credibility and tangible have significant effect on customer satisfaction that indicated to improve customer satisfaction. Johan Anselmsson suggested that Service has traditionally been a forceful competitive tool in grocery retailing. The overall aim of this study is to enhance the understanding of customer perceived service quality within grocery retailing. The result shows that the traditional grocery store performs better on all service attributes, specifically on assortment issues. Srinivas Durvasula examines the service quality perceptions of consumers towards retailers in Singapore. He first examined the dimensionality and reliability of this scale. Subsequently, analysis by various demographic groups revealed significant gaps in service quality; the gaps in quality were much higher for some service quality dimensions than for others. Services are increasingly becoming a larger portion of many organizations regionally, nationally, and globally and are considered as a tool for revenue streams. Todays knowledge intensive services businesses require reliable methods of measurement, assessment, and improvement (Spohrer & Maglio, 2008). Service quality is determined by calculating the difference between two scores where better service quality results in a smaller gap (Landrum, et al., 2008). Johnston, et al. (1997) did comprehensive empirical experiments on service quality dimensions offered by Parasuraman, et al. (1985 & 1988) in ten service organizations in England. At first, they presented a list of 12 factors, and then with more researches done, they offered a list of 18 factors Customer satisfaction is a key factor in formation of customers desires for future purchase. Furthermore, the satisfied customers will probably talk to others about their good experiences. This fact, especially in the Middle Eastern cultures, where the social life has been shaped in a way that social communication with other people enhances the society, is more important (Jamal & Naser, 2002). Although satisfaction has been defined as the difference between expectation and performance, but there are differences between quality and satisfaction. For example, Parasuraman et al. (1991) say that satisfaction is a decision made after experience while quality is not the same.

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3. OBJECTIVE OF THE STUDY

The objective of the study is to know the relationship between service quality dimensions and customer satisfaction in discount stores

4. HYPOTHESIS
H1-Physical aspect has significance positive impact on customer satisfaction H1-Policy has significance positive effect on customer satisfaction H1-Personal interaction has significant positive relation with customer satisfaction. H1-Problem solving has significant positive effect on customer satisfaction. H1-Convenience has positive link with customer satisfaction.

5. METHODOLOGY
The research was conducted at discount stores. The survey method was deployed to collect the information. The sample size was 200. All the questions were on a five point likert scale. The study depends mainly on the primary data collected through a well structured questionnaire to elicit the well-considered opinions of the respondents. A proportionate random sampling method was employed to elicit the necessary information from the consumers of discount stores. The primary data collected from the respondents has been analyzed with the help of SPSS. Factor analysis by principal component method was applied to identify the contributory factors that led to the shopping behavior of consumers in discount stores. Factor analysis was used to reduce the number of questions and then regression analysis was conducted to know which dimensions have positive relationship with customer satisfaction.

6. LIMITATION OF THE STUDY

The study is confined to Mandya district of Karnataka. The period of the study is limited from May to June 2012. The study can be extended for consumers across greater geographical area.

7. DATA ANALYSIS
A factor analysis was performed on the 17 items and then it was reduced to five dimensions. Dimension one was labeled as personal interaction which composed of behavior of employees instills confidence in customer, knowledge of employees, courteous with customer, individual attention, never busy to respond to customer request. The second dimension was policy the items included in it was safety in transaction, high quality merchandise, operating hours, accept major credit cards. The third dimension was physical appearance the factors were modern looking, parking facilities, and visually appealing physical facilities. The fourth dimension was problem solving the factors were handling customer complaint directly, show interest to solve problem, clean and attractive public areas followed by next dimension convenience the factors included were accessibility to public transport and easily for customers to find what they want. Multiple linear regression was conducted to know the impact of service quality on customer satisfaction it was observed that there is a strong relationship between service quality and customer satisfaction 81% (table 4)of the variance in the dependent variable in the customer satisfaction is explained the model is significant as the p value is less than .05(table5) The result shows

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that

all the dimensions such as personal interaction, physical appearance, problem solving, policy, and

convenience have the significance value less than .05 (p-.05). From the coefficient table it was revealed that personal interaction of discount stores (:.547 and significance p:.000).Hence there is a significance difference between personal interaction and customer satisfaction. In terms of policy the value is .664 and the p value is .000 it shows that policy also positively influence overall satisfaction of discount stores. The next dimensions were physical appearance with value was.2.03and the p value was .000 it shows that this factors also have positive influence and overall satisfaction. The next dimensions were problem solving and convenience value was.114, .170 and the p value was .000 it shows that these two factors also have positive influence and overall satisfaction. The results give a clear indication that all the null hypothesis ware rejected and all the dimensions had a significant effect on customer satisfaction. Table 1 : Communalities Behavior of employees instills confidence in customer Knowledge of employees Courteous with customer Individual attention Never busy to respond to customer request Safety in transaction High quality merchandise Operating hours Accept major credit cards Modern looking Parking facilities Visually appealing physical facilities Handling customer complaint directly Show interest to solve problem Clean and attractive public areas Accessibility to public transport Easily for customers to find what they want Initial 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction .818 .864 .942 .798 .951 .899 .960 .936 .954 .953 .973 .900 .979 .953 .846 .847 .883

Extraction Method : Principal Component Analysis Table 2 : Total Variance Explained Component 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Total 4.994 4.603 2.346 1.950 1.563 .909 .224 .153 .101 .064 .050 .017 .014 .007 .004 .001 Initial Eigen values % of Variance Cumulative % 29.375 29.375 27.077 56.451 13.798 70.249 11.469 81.718 9.192 90.911 5.345 96.256 1.320 97.576 .897 98.473 .595 99.068 .379 99.447 .296 99.742 .100 99.843 .081 99.924 .044 99.968 .025 99.992 .008 100.000 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 4.994 29.375 29.375 4.603 27.077 56.451 2.346 13.798 70.249 1.950 11.469 81.718 1.563 9.192 90.911

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17

-1.405E-16

-8.267E-16

100.000

Extraction Method : Principal Component Analysis Table 3 : Component Matrix DIMENSIONS PERSONAL INTERACTION ( 1 TO 5) FACTORS Behavior of employees instills confidence in customer Knowledge of employees Courteous with customer Individual attention Never busy to respond to customer request Safety in transaction High quality merchandise Operating hours Accept major credit cards Modern looking Parking facilities Visually appealing physical facilities Handling customer complaint directly Show interest to solve problem Clean and attractive public areas Accessibility to public transport Easily for customers to find what they want FACTOR LOADING .638 .817 .877 -.726 -.702 -.712 .833 .676 -.546 .693 .911 735 -.591 .683 -.698 .582 -.601

POLICY (6 TO 9)

PHYSICAL APPEARANCE (10 TO 12) PROBLEM SOLVING (13 TO 15) CONVENIENCE (16 & 17)

Extraction Method : Principal Component Analysis

8. REGRESSION
Table 4 : Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .907a .823 .819 .87897 a. Predictors: (Constant), Personal Interaction, Physical Appearance, Problem Solving, Policy and Convenience Table 5 : ANOVA Model Sum of Squares df Mean Square F Sig. Regression 699.273 5 139.855 181.022 .000a Residual 149.882 194 .773 Total 849.155 199 a. Predictors: (Constant), b. Dependent Variable: Customer Satisfaction Table 6 : Regression Coefficients Model (Constant) Personal interaction Policy Physical appearance Problem solving Convenience Unstandardized Coefficients B Std. Error 37.435 .062 1.130 .062 1.373 .062 -.418 .062 .235 .062 .352 .062 Standardized Coefficients Beta t Sig. 602.309 .000 .547 18.128 .000 .664 22.030 .000 -.203 -6.713 .000 .114 3.773 .000 .170 5.647 .000

Dependent Variable: Customer Satisfaction

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9. FUTURE SCOPE
This study can be used to for further research in organized retailing in various geographical areas. The study is based on the service quality for future research the various other dimensions can be included along with it. This data can be used for increasing the market share in various discount stores. Only few studies have been done in service quality at discount stores.

10. CONCLUSION
The growth of the retail sector is tremendous from the past few years with the increasing number of competitors it has become critical to determine the customer satisfaction. Service quality hs become the basic marketing tool to create competitive advantage. This study has demonstrated the measurement of service quality in discount stores and the result concluded that all the dimensions are positively related to customer satisfaction.

11. REFERENCES
[1] Arbuckle, J.L. & Wothke, W. (1995). AMOS 4.0: users guide. United States of America: Smallwaters Corporation. [2] Berry, L.L. (1986). Retail businesses are service businesses, Journal of Retailing, Vol. 62, No.1, Spring, 36. [3] Brown, T.J., Churchill, G.A. & Peter, J.P. (1993). Improving the measurement of service quality. Journal of Retailing, Vol. [4] 69, No. 1, Spring, 127-139. [5] Carman, J.M. (1990). Consumer perceptions of service quality: an assessment of the SERVQUAL dimensions. Journal of Retailing, Vol. 66, No. 1, Spring, 33-55. [6] Christo, B. & Terblanche, N.S. (1997). Measuring retail service quality: a replication study. South African Journal of Business Management, Vol. 28, Issue 4, 123- 128. [7] Cronin, J.J. & Taylor, S.A. (1992). Measuring service quality: a reexamination and extension. Journal of Marketing, Vol. 56, July, 55-68. [8] Dabholkar, P.A., Thorpe, D.I. & Rentz, J.O. (1996). A measure of service quality for retail stores: scale development and validation. Journal of the Academy of Marketing Science, Vol. 24, No.1, 3-16. [9] Hummel, J.W. & Savitt, R. (1988). Integrated customer service and retail strategy. International Journal of Retailing, Vol. 3, No. 2, 5-21. [10] Kim, S. & Stoel, L. (2004). Dimensional hierarchy of retail website quality. Information and Management, Vol. 41, 619-633. [11] Malhotra, N.K. (1993). Marketing Research: An Applied Orientation. Englewood Cliffs: Prentice-Hall. [12] Parasuraman, A., Zeithaml, V.A. & Berry, L.L. (1985). A conceptual model of service quality and its implication for future research. Journal of Marketing, Vol. 49, Fall, 41-50. [13] Parasuraman, A., Zeithaml, V.A. & Berry, L.L. (1991). Refinement and reassessment of the SERVQUAL scale. Journal of Retailing, Vol. 67, No. 4, Winter, 420-450.

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