PHD Thesis Softcopy 201002214

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MEASUREMENT OF SERVICE QUALITY,

CUSTOMER SATISFACTION, BEHAVIOURAL
INTENTION AMONG THE ORGANIZED RETAIL
STORES WITH REFERENCE TO SELECTED
CITIES OF TAMIL NADU
A THESIS
Submitted by
V.P.SRIRAM
(Reg. No. 201002214)
in partial fulfillment for the award of the degree

of
DOCTOR OF PHILOSOPHY
DEPARTMENT OF BUSINESS ADMINISTRATION

KALASALINGAM UNIVERSITY
(KALASALINGAM ACADEMY OF RESEARCH AND EDUCATION)
ANAND NAGAR, KRISHNANKOIL – 626 126
JULY 2014
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CERTIFICATE
This is to certify that all the corrections and suggestions pointed by the
Indian/Foreign Examiner(s) are incorporated in the Thesis titled
“MEASUREMENT OF SERVICE QUALITY, CUSTOMER
SATISFACTION, BEHAVIOURAL INTENTIONS AMONG THE
ORGANIZED RETAIL STORES WITH REFERENCE TO SELECTED
CITIES OF TAMIL NADU” submitted by Mr.V.P.SRIRAM.
Place: Anand Nagar SUPERVISOR

Date: Dr.S.Rajaram,
Associate Professor,
Department of Business Administration,
Kalasalingam University.
Tamil Nadu.India.
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KALASALINGAM UNIVERSITY
KRISHNANKOIL 626 190
BONAFIDE CERTIFICATE
Certified that the thesis titled “Measurement Of Service Quality, Customer

Satisfaction and Behavioural Intentions among the Organized Retail Stores
with reference to selected cities of Tamil Nadu,India” is the bonafide work of
Mr.V.P.SRIRAM, who carried out the research under my supervision. Certified
further, that to the best of my knowledge the work reported herein does not
form part of any other thesis or dissertation on the basis of which a degree or
award was conferred on an earlier occasion on this or any other scholar.
Signature of the Supervisor

Dr.S.RAJARAM,
Associate Professor,
Department of Business Administration,
Kalasalingam University.
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ABSTRACT
This research aims at measuring the service quality among the organized
retail stores in Chennai, Madurai and Coimbatore cities of Tamilnadu State and
identifying its relationship to customer satisfaction and behavioral intention.
The study was conducted among 900 organized retail stores customer by using
Retail Service Quality Scale (RSQS) instrument with 27 items. Behavioral
intention of the customers was measured by using the behavioral intention
battery. The researcher has used a seven point likert scaling to measure the
expected and perceived service quality (performance) and the behavioral
intention of the customers. The RSQS instrument is selected as the most
reliable device to measure the difference-score conceptualization. It is used to
evaluate service gaps between expectation and perception of service quality.
Modifications are made on the RSQS instrument to make it specific to the
Retail Sector.
The literature review was gathered enough from various sources and
reflecting both Indian and foreign context. A number of hypotheses were
proposed in the thesis and examined using Structural Equation Modeling. The
hypotheses were tested with the software AMOS 21 and SPSS 21 to fulfill the
research objectives. The data were examined using confirmatory factor analysis
to confirm RSQS instrument reliability and validity of the retail industry
performance and service quality dimensions. The resultant CFA model value
shows good psychometric properties.
This research is designed to address the literature gaps. Path analysis,
Multiple regression, correlation, Paired„t‟ test, Chi-square test, Oneway
ANOVA and descriptive statistics were applied to interpret the data. Structural
Equation Model (SEM) is applied to study the relationship and impact between
service quality, customer satisfaction and behavioural intention.
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The findings of the study revealed that the customer‟s perception

(performance) is lower than expectation of the service quality rendered by the
organized retail stores. Responsiveness and Assurance SQ dimensions were the
most important dimensions in service quality scored less SQ gap. The study
concluded that the individual service quality dimensions have a positive impact
on Overall Satisfaction and to the behavioural intention of the customers
towards the service provider. This research also identified the association
difference between demographic factors and satisfaction of the customers
towards the service provider. Both customer satisfaction and service quality
have a significant effect on influencing the behavioural intention. Few
recommendations for further research were also suggested.
Key Words: Retail Service Quality, Behavioral Intention, Customer

satisfaction, Customer‟s Expectation and Perceived Service Quality.
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ACKNOWLEDGEMENTS
My sincere thanks to our Chairman Kalvivallal

Mr.T.KALASALINGAM, Illayavallal Mr.K.SRIDHARAN Chancellor,
Dr.S.SARAVANA SHANKAR, Vice-Chancellor Kalasalingam University, for
providing opportunity to carry out the research work in our University.
Dr. S. RAJARAM, my mentor and supervisor have extended his

valuable guidance and motivation throughout this research, he is a big
inspiration to me. His approach and kindness has motivated me to execute this
research lively. It was possible to maintain quality throughout the research only
because of his freedom and trust.
I extend my thanks to Dr.M.JEYAKUMARAN, Professor, Department

of Business Administration, Kalasalingam University, who gave all moral
support behind the screen.
I dedicate all my work to my parents, wife and daughter. I express my

gratitude to the scarification, effort and pain they have taken in this regard.
I express my pleasure in thanking the students, friends, and my

colleagues for the support and valuable suggestions for the improvement of this
research. There are many others, who have helped me directly and indirectly to
complete this research. I thank them whole-heartedly.
V.P.SRIRAM
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TABLE OF CONTENTS
Abstract ii
Acknowledgement iv
Table of contents v
List of Tables xiii
List of Figures xix
List of Abbreviations xxi
Chapter I DESIGN OF THE STUDY Page. No

1.1 Introduction 1
1.2 Background of The Study 3
1.3 Problem Statement 8
1.4 Research Questions 13
1.5 Objectives of The Study 14
1.6 Justification of The Research Study 15
1.7 Research Gap 16
1.8 Purpose of The Study 17
1.9 Research Methodology 17
1.9.1 Sampling Techniques 18
1.9.2 Determination of Sample Size 18
1.9.3 Research Questionnaire 18
1.9.4 Data Analysis 20
1.10 Structural Content of The Thesis 20
1.11 Conclusion 22
Chapter II OVERVIEW OF INDIAN RETAIL SECTOR
2.1 Introduction 24
2.2 Indian Unorganized Retail Market 26
2.3 Indian Organized Retail Market 27
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2.4 Various Formats In Indian Organized Retail Sector 30

2.5 Conclusion 34
Chapter III REVIEW OF LITERATURE
3.1 Introduction 35
3.2 Overview of Service Quality 36
3.2.1 Service Quality- An Introduction 36
3.2.2 Perspectives on Service Quality 58
3.2.3 Determinants of Service Quality 62
3.2.4 How Service Quality Is Perceived 67
3.2.5 Expected Quality Vs. Experienced Quality 69
3.2.6 Total Perceived Quality 70
3.2.7 Managerial Process For Service Quality 70
3.2.8 Service Quality Measurement 72
3.2.8.1 SERVQUAL Scale 73
3.2.8.2 SERVPERF Scale 76
3.3 Retail Service Quality 78
3.3.1 Service Quality And Demographics 87
3.3.2 Importance of Retail Service Quality 91
The Gaps Model For Improving Retail Service
3.3.3 92
Quality
3.3.4 Measuring Retail Service Quality 94
3.3.4.1 Hierarchical Structure of Retail Service Quality 97
3.4 Customer Loyalty 104
Assessing The Relationship Between Service
3.4.1 122
Quality And Customer Loyalty
The Impact of Service Quality on Customer
3.4.2 138
Loyalty In Organized Retail Environment
Dimensions of Customer Loyalty on a Services
3.4.3 143
Environment
3.5 Behavioural-Intentions Battery 145
3.5.1 Loyal Customers - New Goal For The Retailers 147
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3.6 Frame of Reference 149

3.7 Development of Hypothesis 149
3.7.1 Hypothesis of The Study 150
3.8 Conclusion 153
CONCEPTUAL MODEL FOR MEASURING
Chapter IV
SERVICE QUALITY
4.1 Introduction 154
4.2 Conceptual Model For Measuring Service Quality 156
4.3 Justification for Proposed model 158
4.4 Proposed Research Model 159
4.5 Conclusion 159
Chapter V RESEARCH METHODOLOGY
5.2 Research Design 161
5.3 Area of Study 162
5.4 Sample Design 162
5.4.1 Sample Unit 163
5.4.2 Sampling Technique 163
5.4.3 Sample Size 163
5.5 Sources of Data Collection 164
5.6 Scale And Measurement 165
5.7 Demographic Profile of The Respondents 168
5.8 The Reliability And Validity of The Scale 187
5.8.1 Reliability of The Scale 187
5.8.2 Validity of The Scale 189
5.9 Tools Used For Data Analysis 205
5.9.1 Structural Equation Modeling (SEM) 205
5.9.2 Determination of Sample Size For Model Testing 209
5.10 Univariate And Multivariate Statistical Analysis 209
5.10.1 Analysis of Variance (ANOVA) 210
5.10.2 Multiple Regression Analysis 210
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5.10.3 Path Analysis 210

5.10.4 Paired Sample T-Test 211
5.11 Conclusion 211
Chapter VI DATA ANALYSIS AND INTERPRETATIONS
6.2 Service Quality Gap Analysis 214
Relative Importance of Service Quality
6.3 219
Dimensions on Overall Retail Service Quality
Effects of Demographic Variables On Different
6.4 223
Service Quality Dimensions
6.5 246
Dimensions on Customer Loyalty Dimensions
6.5.1 248
Dimensions on Word of Mouth Factors
6.5.2 251
Dimensions on Switch To Competitor Factors.
6.5.3 254
Dimensions on Willing To Pay More Factors
6.5.4 257
Dimensions on Shoppers Response Factors
Effects of Demographic Variables on Different
6.6 260
Customer Loyalty Dimensions
Relationship Between Perceived Service Quality
6.7 277
Dimensions
Relationship Between Customer Loyalty
6.8 279
Dimensions
6.9 281
Dimensions on Customer Satisfaction
Relative Importance of Customer Satisfaction
6.10 285
Factors on Customer Loyalty.
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Effects of Demographic Variables on Customer

6.11 289
Satisfaction Factors
Relative Importance of Factor Affects Purchase on
6.12 306
Customer Satisfaction
Relationship Between Purchasing Factors,
6.13 Customer Satisfaction, Expect & Perceived Service 310
Effects of Most Liked And Disliked Factors on
6.14 312
Purchase Attribute Factors
6.15 315
Factors Affecting Retail Purchase
Difference Between Perception And Expectation
6.16 320
Association Between Demographic Difference of
6.17 The Respondents And Most Liked And Disliked 322
Factors About Retail Shops
Level Of Service Quality, Customer Satisfaction
6.18 327
And Customer Loyalty
Association Between Perceived Level of Service
Quality, Customer Satisfaction And Customer
6.19 328
Loyalty Towards The Retail Stores And
Demographic Profiles
6.20 Structural Equation Modeling 335
Effects of Service Quality Dimensions on Overall
6.20.1 336
Effect of Service Quality Dimensions And Overall
6.21 341
Customer Satisfaction on Customer Loyalty
Effect of Customer Loyalty Dimensions On
6.22 346
Overall Customer Satisfaction
6.23 Customer Evaluation Model For Retail Stores 351
6.24 Conclusion 351
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Chapter VII DISCUSSION AND CONCLUSION

7.2 356
Dimensions
7.3 356
7.4 356
Dimensions on Customer Loyalty Dimensions
7.5 357
Customer Loyalty Dimensions
Relationship Between Perceived Service Quality
7.6 357
Dimensions, Customer Loyalty Dimensions
7.7 Dimensions on Customer Satisfaction And 358
Effects of Demographic Variables on Customer
7.8 358
Relative Importance of Factor Affects Purchase on
7.9 358
Relationship Between Purchasing Factors,
7.10 Customer Satisfaction, Expect & Perceived Service 359
7.11 359
Purchase Attribute Factors
7.12 359
Factors Affecting Retail Purchase
Difference Between Perception And Expectation
7.13 360
Association Between And Most Liked And
7.14 360
Disliked Factors About Retail Shops
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Level of Service Quality, Customer Satisfaction

7.15 361
And Customer Loyalty
Association Between Perceived Level of Service
7.16 Quality, Customer Satisfaction And Customer 361
Loyalty And Demographics
Effects of Service Quality Dimensions on Overall
7.17 362
Effect of Service Quality Dimensions And Overall
7.18 362
Customer Satisfaction On Customer Loyalty
Effect of Customer Loyalty Dimensions on Overall
7.19 363
7.21 Implications of the Study 364
7.21.1 Managerial Implication 364
7.21.2 Practical Implications of the Research 365
7.22 Contribution of the Study 366
7.22.1 Theoretical Contributions of the Research 368
7.22.1.1 Measurement of Retail Service Quality 368
7.22.1.2 Filling The Gap In The Knowledge 369
Utilization Of SEM For Key Constructs
7.22.1.3 369
Relationship Testing
7.22.1.4 Contribution To The Services Marketing Theory 370
7.22.1.5 Contribution To Management Practices 370
7.23 Recommendations 371
7.24 Limitations of the study 380
7.25 Direction for the future study 381
7.26 Conclusions 382
References 383
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Appendices
Determination of sample size by custom insight
Appendix I 417
sample size calculator
Questionnaire for Measuring the Service Quality,
Appendix II 418
Customer Satisfaction and Behaviour Intention
LIST OF PUBLICATIONS 424
CURRICULUM VITAE 425

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LIST OF TABLES
Table No. Particulars Page No.

3.1 Five Major Factors Determining Service Quality 66
3.2 Dimensions of Service Quality 75
3.3 Classification of Retail Service Quality 95
3.4 Behavioural Intentions Battery 146
5.1 Type of the Retail Stores 168
5.2 Location of the Retail Stores 169
5.3 Gender Wise Classification among the respondents 170
5.4 Age Wise Classification among the respondents 171
5.5 Marital Status of the respondents 172
5.6 Educational Qualifications of the respondents 173
5.7 Occupational Wise Classification among the respondents 174
5.8 Family Monthly income Wise Classification among the 175
respondents
5.9 Family Size Classification among the respondents 176
5.10 Family Type Classification among the respondents 177
5.11 Preferred Purchasing Mode among the respondents 178
5.12 Shopping Frequency among the respondents 179
5.13 Amount spent in a month for shopping among the 180
respondents
5.14 Factor Influencing to Purchase the Product in this Retail 181
Store
5.15 Preferred Mode of Payment among the respondents 182
5.16 Most Liked Factor of the Retail store among the 183
respondents
5.17 Most Disliked Factor of the Retail store among the 185
respondents
5.18 Estimation of Cronbach‟s coefficient alpha and CFA 190
loadings for purchase intentions of retail stores
5.19 Reliability item statistics for purchase intention scales 191
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loadings for perception service quality dimensions of
retail stores
5.21 Reliability item statistics for perception service quality 195
dimension
loadings for expected service quality dimensions of retail
stores
5.23 Reliability item statistics for expected service quality 199
dimension
loadings for customer loyalty dimensions of retail stores
5.25 Reliability item statistics for customer loyalty dimensions 203
5.26 Model fit statistics 204
6.2.1 Service Quality Gap Analysis 215
6.2.2 Calculation of Un-Weighted Score 216
6.2.3 Rating of Preference on the Service Quality Dimensions 217
6.2.4 Calculation of Weighted Score 217
6.3 Relative Importance of Service Quality Dimensions on 219
Overall Retail Service Quality
6.4 Effects of Demographic Variables on Different Service 223
Quality Dimensions
6.4.1 Effects of store type on service quality dimensions 225
6.4.2 Effects of location of the store on service quality 226
dimensions
6.4.3 Effects of gender on service quality dimensions 227
6.4.4 Effects of age on service quality dimensions 228
6.4.5 Effects of marital status on service quality dimensions 230
6.4.6 Effects of educational qualification on service quality 232
dimensions
6.4.7 Effects of occupation on service quality dimensions 234
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6.4.8 Effects of family income on service quality dimensions 236

6.4.9 Effects of family size on service quality dimensions 237
6.4.10 Effects of family type on service quality dimensions 238
6.4.11 Effects of most preferred purchase mode on service 239
quality dimensions
6.4.12 Effects of frequency of shopping on service quality 240
dimensions
6.4.13 Effects of amounts spent in a month for shopping on 242
service quality dimensions
6.4.14 Effects of influencing factor on service quality 244
dimensions
6.4.15 Effects of preferred payment modes on service quality 245
dimensions
6.5.1 Relative Importance of Service Quality Dimensions on 248
Word of Mouth Factors
Switch to Competitor Factors
Willing to Pay More Factors.
Shoppers Response Factors
6.6 Effects of Demographic Variables on Different Customer 260
Loyalty Dimensions
6.6.1 Effects of store type on customer loyalty dimensions 262
6.6.2 Effects of location of the store on customer loyalty 263
dimensions
6.6.3 Effects of gender on customer loyalty dimensions 264
6.6.4 Effects of age on customer loyalty dimensions 265
6.6.5 Effects of marital status on customer loyalty dimensions 266
6.6.6 Effects of Educational Qualification on customer loyalty 267
dimensions
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6.6.7 Effects of occupation on customer loyalty dimensions 268

6.6.8 Effects of family income on customer loyalty dimensions 269
6.6.9 Effects of family size on customer loyalty dimensions 270
6.6.10 Effects of family type on customer loyalty dimensions 271
6.6.11 Effects of preferred purchase mode on customer loyalty 272
dimensions
6.6.12 Effects of frequency of shopping on customer loyalty 273
dimensions
6.6.13 Effects of amount spent in a month for shopping on 274
customer loyalty dimensions
6.6.14 Effects of influencing factors on customer loyalty 275
dimensions
6.6.15 Effects of preferred payment mode on customer loyalty 276
dimensions
6.7 Relationship Between Perceived Service Quality 277
Dimensions
6.8 Relationship Between Customer Loyalty Dimensions 279
6.9 Relative Importance of Service Quality Dimensions on 281
6.10 Relative Importance of Customer Satisfaction Factors on 285
Customer Loyalty
6.11 Effects of Demographic Variables on Customer 289
6.11.1 Effects of store type on customer satisfaction factors 291
6.11.2 Effects of location of the store on customer satisfaction 292
factors
6.11.3 Effects of gender difference on customer satisfaction 293
factors
6.11.4 Effects of age difference on customer satisfaction factors 294
6.11.5 Effects of marital status difference on customer 295
satisfaction factors
xvii
6.11.6 Effects of Qualification difference on customer 296

6.11.7 Effects of occupational difference on customer 297
6.11.8 Effects of family income difference on customer 298
6.11.9 Effects of family size difference on customer satisfaction 299
factors
6.11.10 Effects of family type difference on customer satisfaction 300
factors
6.11.11 Effects of preferred purchase mode on customer 301
6.11.12 Effects of frequency of purchase on customer satisfaction 302
factors
6.11.13 Effects of amounts spent in a month for shopping on 303
customer satisfaction factors
6.11.14 Effects of influencing factor on customer satisfaction 304
factors
6.11.15 Effects of preferred mode of payment on customer 305
6.12 Relative Importance of Factor Affects Purchase on 306
6.13 Relationship Between Purchasing Factors, Customer 311
Satisfaction, Expect & Perceived Service Quality And
Customer Loyalty
6.14.1 Effects of most liked factors on purchase attribute factors 312
6.14.2 Effects of most disliked factors on purchase attribute 313
factors
6.15.1 Effects of most liked factors on factors affecting retail 316
purchase
xviii
6.15.2 Effects of most disliked factors on factors affecting retail 318

purchase
6.16 Difference Between Perception And Expectation Service 320
Quality Dimensions
6.17.1 Association between demographic difference of the 323
respondents and most liked factors about retail shops.
6.17.2 Association between demographic difference of the 325
respondents and most disliked factors about retail shops.
6.18.1 Level of Perceived service quality, Customer satisfaction 327
and customer loyalty towards the retail shopping
6.19.1 Association between perceived level of service quality 329
towards the retail stores and demographic profiles
6.19.2 Association between customer satisfaction towards the 331
retail stores and demographic profiles
6.19.3 Association between customer loyalty towards the retail 333
stores and demographic profiles
6.20.1 Effects of Service Quality Dimensions on Overall 336
6.21 Effect of Service Quality Dimensions And Overall 341
6.22 Effect of Customer Loyalty Dimensions on Overall 346
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LIST OF FIGURES
Figure. Title Page No.

No.
3.1 Hierarchical Structure of Retail Service Quality 98
3.2 The Relationship between Service Quality Dimensions, 130
Satisfaction
3.3 The Relationship between Service Quality Dimension, 135
Perceived Service Quality, Emotional Satisfaction and
Behavioural Intentions
4.1 Conceptual Model for Measuring Service Quality 156
4.2 Proposed Customer Evaluation Model for Retail Stores 159
5.1 Measurement model of factors affecting purchase intention 189
5.2 Measurement model for perceived service quality dimensions 192
5.3 Measurement model for expected service quality dimensions 196
5.4 Measurement model for customer loyalty dimensions 200

6.1 Effects of service quality dimensions on overall customer 336
satisfaction
6.4 Effect of service quality dimensions and overall customer 342
satisfaction on customer loyalty
6.7 Effect of customer loyalty dimensions on overall customer 347
satisfaction
6. 10 Customer Evaluation Model for Retail Stores 351
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ABBREVIATIONS
1. SQ – Service Quality
2. Overall SAT – Overall Satisfaction
3. BI – Behavioral Intention
4. CFA – Confirmatory Factor Analysis
5. SEM – Structural Equation Model
6. SPSS – Statistical Packages for Social Sciences
7. AMOS – Analysis of Moment Structure
8. RATER – Reliability, Assurance, Tangible, Empathy
and Responsiveness
9. WOM – Word of Mouth
10. P mean – Perception Mean
11. E mean – Expectation Mean
12. ASCI – American Customer Satisfaction Index
13. GFI – Goodness of Fit Index
14. AGFI – Adjusted Goodness of Fit Index
15. KMO – Kaiser Meyer Olkin
16. C.R – Critical Ratio
17. S.E – Standard Error
18. C.S – Convergence Statistics
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CHAPTER I
DESIGN OF THE STUDY
The first section of this chapter mainly focuses on the Service quality and
its importance in the Indian Organized Retail Sector. Further, in this chapter
also discusses about the research problem, followed by its objectives, then
discusses about the research questions, methodologies, purpose of the study
with proper justification followed by it and Finally, a disposition of the thesis
can be found in order to give a clear view towards the organization of the
thesis.
1.1 INTRODUCTION
Every Industrial Era has had its own philosophies about how to find a
competitive edge over competitors. Essentially, this race has been about
creating value in ways that competitors have yet to utilize. In the 18th and 19th
centuries, value was added to raw materials through manufacturing and by the
beginning of the 20th century, we saw the emergence of industrial revolution
and mass-production (Vargo and Lusch 2004). Marketing, then, was a field
concerned mostly with the distribution. Only in the 1950s, marketing started to
become known as it is today, understanding and fulfilling the needs of
consumers (Wilkie and Moore 2003).
What has changed radically since the 1950s, however, is how we
understand the needs of a consumer and the nature of the products. Until the
1970s, the predominant business thinking was that people make their purchase
decisions purely based on the tangible product (Kotler 1973-74). This was
largely in line with the prevailing view of consumers in economics, homo
2
economicus, stating that consumers act rationally and maximize their utility in
relation to their income (Campus, Antonietta 1987). This assumption has been
key to modeling the world with mathematical methods. Psychologists and
marketers, however, have long seen that this assumption doesn‟t always hold
true in real decision-making situations, because homo economicus neglects the
existence of human emotions in decision making (Anttila, Mai 1990).
In 1973, Kotler was the first to suggest that buyers, in fact, respond to the
total product rather than just the tangible product. Hence, services, warranties,
packaging, advertising, financing, pleasantries, images and other features that
accompany the product also affect consumer decision-making. This was also
the first scientific article stating that store atmosphere has an effect on
consumer behavior (Kotler 1973-74). Kotler‟s view was fundamentally
different to what we had been taught, since the born of economics as a
discipline: exchange is about trading things to other things (Smith, Adam
1776). This view, by large, neglects the possibility that services or experiences
could be something people are willing to pay for (Lusch et al. 2007). The
increased understanding of consumer value has slowly also raised questions
about the validity of the rational economic theory. At the same time as
behavioral economics has slowly picked up in popularity in economics,
Service-Dominant logic has changed the way what we considered a product in
marketing.
While research and understanding about customer value perceptions and
retail environments has increased, standing out from the crowd with traditional
tools of marketing, such as pricing, marketing communications and
distribution has become more and more difficult (Solomon et al. 2002). As a
result, retail design and the service level of the staff have become increasingly
important sources of competitive advantage. The importance of these two
factors is especially critical in service settings, where the actual product cannot
3
be assessed based on physical qualities. Therefore, the store where the service
is sold at can be said to be the packaging of the product (Zeithaml et al. 2006).
In Multi-branded retail settings, store environment's impact the perceived
quality and value of products sold in the store (Baker et al. 2002). Even more,
consumers‟ beliefs about the physical attractiveness of a store has a higher
correlation with patronage intentions than does merchandise quality, general
price level, selection, and six other store or product beliefs (Darden et al.
1983). Thus, if retail design is one of the key competitive factors in the
modern era, as (Solomon et al. 2002) suggest, it is necessary to understand
where customer value in store environments stems from. This study will
provide an overview of the theoretical discussion around the topic and finally
examine the phenomenon empirically.
1.2 BACKGROUND OF THE STUDY
This research is mainly designed to investigate the relationship between

service quality, demographic characteristics, and customer loyalty and
repurchase intentions in organized retail. This research complements and adds
value to previous research by expanding the study of service quality on
customer behavioral intentions in various retail store formats, a sector that has
been under-researched in India. The present work will unearth the superior
performance of the most important retail service quality dimension, its
important relationship with customer satisfaction and behavioral intention
towards loyalty, which will add value to previous research carried out in this
research area in India.
Service quality is “A Global Judgment, or Attitude, relating to the

superiority of the service” (Parasuraman, Zeithaml and Berry, 1988). Service
quality is receiving a great deal of attention to practitioners, managers and
4
researchers over the past few decades, due to its strong impact on business
performance, lower costs, customer satisfaction, customer loyalty and
profitability. All mentioned subjects were studied by Cronin and Taylor in
1992; Chang and Chen in 1998; Lasser et al. in 1995. There has been a
continued research on the definition, modeling, measurement, data collection
procedure, data analysis etc., Issues of service quality, leading to the
development of sound base for the researchers (Seth and Deshmukh, 2005).
All these researches have brought service quality topic to another level
by exploring more possibilities to measure, analyze and conclude about
service quality as a significant issue to study. The important issues of service
quality performance were discovered in order to investigate the methods for
the service quality improvement.
The retail environment is changing very rapidly in our days. It is
characterized by intensifying competition from both domestic and foreign
companies, a spate of mergers and acquisitions, and more sophisticated and
demanding customers who have greater expectations related to their
consumption experiences (Dabholkar, 2001). According to Berry, a basic
retailing strategy for creating competitive advantage is the delivery of high
service quality (Reichhel 2003).
Thus, Service Quality is perceived as a tool to increase value for the
consumer; as a means of positioning in a competitive environment (Mehta,
Lalwani and Han, 2000) and to ensure consumer satisfaction (Sivadas and
Baker-Prewitt, 2000), retention and patronage (Yavas, Bilgin and Shemwell,
1997). Vargo and Lusch (2004) Define service as “the application of
specialized competences (knowledge and skills), through deeds, processes, and
performances for the benefit of another entity or the entity itself. There are
some differences between service quality, and the store service quality for the
definition of the retail service quality. A retail store experience involves more
5
than a non-retail service experience in terms of customers, negotiating with

several store personnel along the way, finding the products they want to buy,
and returning the products, which all influence the service quality based on
customers' evaluations. Thus, although measures of service quality for pure
service environments and for retail environments are likely to share some
common dimensions, measures of retail service quality must capture additional
dimensions (Dabholkar and Thorpe Joseph, 2001).
Furthermore, as a means of positioning in a competitive environment to
ensure consumer satisfaction, retention and patronage, the service quality is
being increasingly perceived as an important element to increase value for the
consumer. Delivering superior service and ensuring higher customer
satisfaction have become strategic necessities for companies to survive in a
competitive business environment (Reichheld, 2003). By satisfying customers
through high quality service, business firms not only retain their current
customers, but also increase their market share (Finn and Lamb, 1991).
Thus, the practice of excellent service quality has been proven to lead
to increased customer satisfaction (Sivadas and Baker-Prewitt) and
significantly indicate the effectiveness of the retailers‟ performance. As
service quality can be the cornerstone of retail success, retailers need to
constantly evaluate their service quality through the use of a reliable
measuring instrument.
By referring to Sivadas and Backer-Prewitt (2000) the excellent service
quality can be reach by high employee‟s performance in the store because the
service-oriented employees are able to deliver high retail service quality to the
customers and let them occurrence favorable service experiences. Owing to
the service-oriented employees in the store are able to deliver the high retail
service quality to the customers and let them feel favorable service
experiences, excellent service quality can be reached by high employee‟s
6
performance. So service-oriented employees contribute a lot to the overall

service quality of the store in terms of having a much clearer understanding of
retail service quality and knowing how to add value to the customers. In this
way, retail employees should understand the customers‟ service experience,
deliver a clear and consistent message to customers about quality and
implement them at ground level.
The personal interaction between employees and customers is strongly
emphasized concerning the increased awareness of the significance of trying to
satisfy customers and their needs (Bettencourt and Gwinner 2001) and thereby
achieving high service quality. Additionally, retail employees should take part
in the evaluating and measuring the different retail service quality‟s
dimensions which influence on the excellent customers‟ experience, and how
the experience is linked to customers‟ value perceptions of the company‟s
service offerings (Sandstrom, Edvardson et al., 2008). Hence it is really
important to deal with the service-oriented employees in order to have the best
implementation of service quality.
Providing an excellent service quality in the store service-orientated
employees create a significant value for the customers and thus service quality
directly leads to higher satisfaction amongst the customers. Many companies
fail to meet customer expectations with respect to creating customer value
(van Riel and Lievens, 2004), probably because managers are not completely
sure of what brings value to the customer, or how it is created.
Retail employees should perform processes and exchange skills and
services in which value is co-created with the customer (Prahalad and
Ramaswamy, 2004). At this time companies are searching for new and better
ways to create value and differentiate their service offerings in order to attract
and keep customers, as well as make a profit. That‟s why researchers and
managers thrive in learning details about components of service quality (Seth
7
and Deshmukh, 2004) and prove the importance of service quality and its
dimensions in determining overall service quality, as perceived by customers.
By addressing this issue, firms can gain an understanding of the areas they
should concentrate on when seeking to improve their overall service quality
provisions (Oliva, Oliver and MacMillan, 1992). Thus, service quality issue is
a relevant topic to study.
According to Seth and Deshmukh (2005) conceptual models in service
quality enable management to identify quality problems and thus help in
planning for the launch of a quality improvement program thereby improving
the efficiency, profitability and overall performance of the store.
In conclusion, the integral involvement of the consumer within the
service process suggests that we need to increase customer perceived value by
developing close and trusting relationships with customers, and such
relationships are logically fostered by a market orientation.
The consumer plays an active role in the service experience and they
interact with personnel, the service script and supporting tangibles. The
consequent transparency of the service encounter enables an impression to be
formed of the firm‟s commitment to deliver excellent service and in this way
increasing value for the customers. In the same time the interaction which
appears with service personnel enables improved market sensing by a
company, a capability of a market oriented company. This is especially the
case in the context of the services industries where a high degree of
intangibility may confound the relationship (Sin and Tse, 2002), and
intermediate variables such as service quality are also likely to significantly
impact firm performance (Chang and Chen, 1998).
It is observed that the service quality outcome and measurement can
also be changed with respect to factors like time, new technology, type of
service, competitive environment, etc. (Seth and Deshmukh, 2005). Thus, the
8
measurement tools are also should be adjusted in evaluating the perception of

the service quality by customers. These demands for a continued effort to
learn, validate and modify the existing concepts of service quality were
interested to trace the development of the models in the literature. In the
previous researches different measurement tools were explained and applied to
measure the service quality, however the most modern and appropriate Retail
Service Quality Scale (RSQS) was not experimented much at the Indian
organized retail stores.
Considering the importance of the evaluation of the different
dimensions of retail service quality and measurement of those dimensions in
order to deliver high value to the consumer, it was deemed necessary to
conduct further research to gain an understanding the overall perception of
retail service quality of customers. Moreover, it was concluded from a review
of the previous studies that there was lack of studies on retail service quality
according to different dimensions at retail stores by applying the
measurements of the Retail Service Quality Scale (RSQS) conducted and
executed.
1.3 PROBLEM STATEMENT
Service quality is a critical component of customer perceptions about

the service. Customers perceive services in terms of its quality and how
satisfied they are overall with their experiences (Zeithaml et al., 2000). Thus,
satisfying customer needs through excellent service quality provided by
customer-oriented salespeople will increase the likelihood of customers
returning to shop and eventually recommending the stores to others, thus
allowing the retailer to compete effectively in the marketplace (Yesmine et al.,
2003).
9
Additionally, a number of correlated factors, including the scope of

services and contraceptives available to clients, the way in which individuals
are treated by providers, the promotion of individual choice, the quality of the
information provided to the clients and quality of the counselling skills, the
accessibility and continuity of services, and the technical competence of
providers are also a form of service quality.
Parasuraman et al. (1985) also found that the customer‟s perception of
service quality depends upon the size and direction of the gap between the
service the customer expects to receive and what he or she perceive to have
been received.
According to gap model service quality is defined as the gap between
customers‟ expectation of service and their perception of the service
experience. A service quality gap exists when there is a shortfall in which the
service provider would like to close (Lewis et al., 1994).
That‟s why the challenge which the retail service providers face is to
build and retain a good relationship with the customers by providing to them
as excellent service is possible and make customers satisfied and sequentially,
step by step, obtains customer loyalty, through great retail service delivering.
The established logic is that a market orientation provides the basis for
devising a strategy that creates value for customers, and that such a strategy
provides the foundation for a sustainable competitive advantage that
contributes to financial performance (For example, see the hypotheses related
to business performance developed by Jaworski and Kohli, 1993).
However, this line of reasoning does not in itself explain why a firm
can realize value for its shareholders by pursuing a strategy of creating
customer value. Nor is an explanation readily apparent in the market
orientation literature. Kohli and Jaworski (1990, 1993), for example, found
10
that an emphasis on profitability was “conspicuously absent” as a component

of a customer value-based business strategy.
Chang and Chen (1998) make an important contribution to identifying
the steps that fall between a market-oriented business culture and performance
outcomes. These authors developed a conceptual model that postulates both a
direct effect for market orientation on business performance, and an indirect
effect through helping to improve service quality (Chang and Chen, 1998).
The model is tested with a sample of retail stockbrokers in Taiwan. The results
support the hypothesis that a market orientation can assist firms to achieve a
higher quality level, and that quality has a positive relationship to profitability.
Quality is found to explain more of the variation in profitability than market
orientation. The model including service quality (and a number of covariates)
explains 38 percent of the variation in profitability between firms, and the
addition of market orientation to the model only increases this to 45 percent.
Chang and Chen (1998) conclude that there are other potential intermediate
variables unaccounted for, the pure direct effect of market orientation on
profitability may be even smaller.
This illustrates the importance of the identification of intermediate
variables. That‟s why it has crucial for managers of the retail business
constantly improved, service quality within the stores. All necessary
dimensions of retail environment should be evaluated and analyzed in order to
become aware of the overall performance of the retail service quality in a store
and conclude some issues for its improvement.
Building upon and synthesizing previous work, Brady and Cronin
(2001) advanced the hierarchical conceptualization of service quality. Here,
service quality is a multilevel construct consisting of sub-dimensions. The
interaction quality dimension, in turn, is comprised of attitude, behavior, and
expertise of the service provider. The physical environment quality dimension
11
is comprised of ambient conditions, design, and social factors of the service

facilities. The outcome quality dimension is comprised of waiting time,
tangibles, and valence. There are numerous instruments measuring sub -
dimensions of service quality. However, some of them are not applicable to
the measurement exactly the retail environment and attributes. One of the most
popular measure instruments of the retail store coming from the SERVQUAL
model developed by Parasuraman et al. in 1988.
Despite the fact that SERVQUAL has been empirically tested in
various studies involving “pure” service settings, it has not been proven to be
successfully applied in a retail setting (Dabholkar at al., 1996; Mehta et al.,
2000) and also, more specifically, in apparel specialty stores. The reason why
it is not so effective with retail stores is because retail stores are also
dependent on suppliers for goods that they sell and an essential part of
customer satisfaction comes from the quality of goods sold by the stores. So,
later on the need for a measurement instrument that can accurately assess
service quality in a retail environment was answered by Dabholkar et al.
(1996) who developed and empirically validated a scale to measure retail
service quality distinctively.
Dabholkar‟s research about the retail service quality resulted in the
development of the Retail Service Quality Model (RSQS). According to the
scale, reveals how well the respondents‟ ratings of each of the five RSQS
factors - physical aspects, reliability, personal interaction, problem solving and
policy - explain customers‟ judgments of overall service quality.
There are also evidences shows that consumers in some cases tend to
not be satisfied with the service quality because of some particular reasons that
could be because of the quality of goods or after sales service or ease of
transaction. The measurement tool such as RSQS allows retailers to determine
service areas that are not causing to customer satisfaction and as a result not
12
building consumer loyalty. And one way to do this is to test the RSQS model
in practice. Therefore, by applying the Retail Service Quality Scale the “dark
points of the service” can be investigated for the managers what means that
this particular model also identifies the causes that are beyond process
management and a diagnostic tool that allow retailers to determine service to
identify and find solutions and areas that are weak and in need of attention for
the future improvements (Dabholkar and Thorpe Joseph, 2005). Therefore,
well awareness and analysis of the consumer‟s perceptions about service
quality lead to delivering great service to the customers in the stores and
therefore it is a significant topic to study.
Based on the literature review and to meet the objectives of this study the
key research questions which should be answered are:
 Which are the key factors influencing the customer‟s perception of

the retail service quality in organized formats?
 Is there any association between service quality dimensions and
demographic profile of the respondents in organized retail stores?
 Is there an association between service quality dimensions and
customer loyalty in organized retail stores?
 Which is the decisive service quality factors influencing the
customer‟s repeated patronage?
The relationship between service quality dimensions, demographic

information, and customer loyalty and repurchase intentions is in line with
previous research as evident in the literature review chapter.
13
1.4 RESEARCH QUESTIONS

This research work tries to fulfill its core purpose and mainly
identifies service quality dimensions importance in the Indian Organized
Retail Sector. The antecedents of behavioral intention of customers,
commencing with the service sector's performance, which includes factors that
influence loyalty both directly and indirectly, have been investigated. In
particular, the impact of service quality and customers‟ satisfaction are
investigated to identify their effect on future behavioral intentions. This
research includes the identification of the aspects of the experience of the
customers to find the importance in the Indian Organized Retail Sector in
order to evaluate their performance.
This research addresses the following questions:
 How to identify the impact of demographic variables on the service quality
measurement of RSQS dimensions in the Indian Organized Retail Sector?
 How the impacts of preconception on the service quality dimensions
towards the overall evaluation of the service in the Indian Organized Retail
Sector are determined?
 How the service gaps are determined among the perception and expectation
level of customers in the Indian Organized Retail Sector?
 What is the relationship in the customer evaluation of overall service
quality and discrepancies in customer service quality perception?
 Which service quality dimension is the best predictor of overall service
quality in the Indian Organized Retail Sector?
 How to identify the relative importance of service quality dimensions in
the Indian Organized Retail Sector?
 How the impact of behavioral intention towards the service quality
dimensions and customer satisfaction (SAT) in the Indian Organized Retail
Sector are determined?
14
 How a structural model is designed to link preconception, service quality,

overall satisfaction and behavioral intention of the Indian Organized Retail
Sector under the study?
The impacts of preconception on service quality and customers‟

satisfaction are also incorporated to identify their effect on future behavioral
intention among the customers of the Indian Organized Retail sector. When all
the proposed research questions are explained, the study will conclude by
answering the purpose. The research questions are systematically answered
throughout the study and finally summed up to answer the purpose. The
specific hypotheses designed for each of these research questions are set in
Chapter IV and empirically tested in the Chapter V and VI.
1.5 OBJECTIVES OF THE STUDY
In the business world, it is possible to understand an organization‟s success

or failure through an analysis of the economics of its offering compared to
those of its competitors. For an organization in which services are
incorporated, understanding the nature of the service encounter may yield
equally actionable insights. With this in mind, this research is designed to
investigate the relationship between service quality, demographic
characteristics and customer loyalty in organized retail. The objectives of the
study are:
 To analyze the demographic profile of the customer among the

Organized Retail Stores in Tamil Nadu.
 To Identify and determine the service quality gap between the
Excepted Service and Perceived Service among the Organized Retail
Stores
15
 To determine the relative importance of Service Quality Dimensions

(SQD) over Customer Satisfaction from the customer point of view.
 To identify the impact of SQD on overall Satisfaction and
behavioral intention of customers among the organized retail stores.
 To find out the relationship between the service quality, customer
satisfaction and customer retention among the organized retail
stores.
1.6 JUSTIFICATION OF THE RESEARCH STUDY
This study is justified by considering its significance, the extent to

which it is a researchable topic, and the feasibility of the study. This study has
the potential to contribute to the body of knowledge about service quality that
leads to understand the need for customer retention. All the five dimensions of
service quality like tangibility, reliability, responsiveness, assurance and
empathy are important for service providers. In contrast, as far as
preconception is concerned, the interest lies in less objective beliefs. These
beliefs are related not so much to the preconception of a person as to
prejudices and stereotypes that a person associates with the service category.
The sooner the service providers are able to improve their service quality, the
more they are able to help customers to receive what they want (Cook,
Macaulay & Coldicott, 2004). It is rational to focus on examining the
relationship between preconception about the service quality and service
quality dimensions as a potentially important dimension of customer retention.
Customers‟ retention is the most common marketing strategy that companies
attempt to implement in their businesses. It is less expensive to retain existing
customers than to obtain new customers (Reichheld & Saccer, 1990).
Researchers suggest that customer retention is a focus on the behavioral
16
intention to repeat purchase behavior (Hennig – Thurau & Klee, 1997). It

improves service quality and customer relationship (Hanson et al., 1996). No
research explicitly explored the relationship among preconception about the
service, service quality and customer retention. Exploring the relationship
among preconception, service quality and customer retention adds to the
knowledge base.
1.7 RESEARCH GAP
Numerous studies have discussed clearly the relationship between
service quality, customer satisfaction and loyalty, for customer retention
(Johnson & Gustafsson, 2000). But no study is found to have examined the
relationship between each service quality dimension and the Behavioral
Intention (BI). The linkages of each dimension within the two instruments
have not been explored yet.
In order to provide superior service quality, the service providers need
to investigate the level of customers‟ perception and expectations towards their
service quality. One of the characteristics of service is their intangibility.
(Zeithamal, Parasuraman & Berry, 1985). The products are not seen by the
customer before purchase. Pre-decisional evaluation therefore depends on
other factors, such as the prestige of the company, recalled attributes of the
product, or prior overall judgment (Lynch, Marmorstein&Weigold1998). The
customer, faced by a dearth of processing resources, is likely to base a
decision on an more effective process than on cognitions (Shiv & Fedorikhin,
1999). This study also focuses on the effects of customer preconception about
the service; customer perception and expectations to service quality and the
overall evaluation of the service. This research work endeavors to fill the
research gap in the service quality literature. It explores the dimensions of
customer perceived service quality in the context of the Indian retail industry.
17
This study is feasible because it can be implemented in a reasonable amount of

time. The concepts in the theoretical framework are measured very accurately.
1.8 PURPOSE OF THE STUDY
In the present day of retailing, service quality has become the basic tool
for retailers to create competitive advantage and to enhance the shopping
experience. The quality of services significantly affects customer satisfaction,
company revenues, cross selling and also repeat purchase behavior (Berry,
1986; Hummel and Savit, 1988; Reichheld and Sasser, 1990). The fast pace of
the Indian retail industry presents many companies with a host of daily
challenges. In today‟s competitive environment and with the growing
importance of services, delivering high quality services has become the basic
retailing strategy. The studies present the impact of service quality on retail
customer satisfaction that leads to customer loyalty intentions and also identify
the critical factors of service quality from the customer‟s perspective.
1.9 RESEARCH METHODOLOGY
The research starts with an extensive review of literature. On the basis
of the knowledge acquired, it sets hypotheses about the constructs and
relationships under examination. Finally, through fieldwork, it seeks an
evidence to confirm or disconfirm the hypotheses. Being quantitative, this
research; (a) generates hypotheses (b) develops instruments and methods for
measurement, (c) evaluates the results. To collect appropriate empirical data, it
employs a survey strategy. Structured questionnaires are designed and used to
collect the data. Further, this research examines the applicability of the RSQS
(Retail Service Quality Scale), a revised SERVQUAL instrument for the
Retail sector. It explores the relationships among preconception about the
service, service quality, customer satisfaction and behavioral intention.
18
1.9.1 SAMPLING TECHNIQUES
Sampling techniques are methods used to select a sample from the

population by reducing it to a more manageable size (Saunders, Lewis &
Thornhill, 2007). According to de Leeuw, Hox and Dillman (2008) these
sampling techniques are used when inferences are made about the target
population. In the present study, Simple Random Sampling was used for the
selection of hypermarkets, super markets and departmental stores whereas
Judgmental Sampling was used for the selection of respondents from
hypermarkets, super markets and departmental stores. Utmost care has been
taken to take respondents from various demographic characteristics.
1.9.2 DETERMINATION OF SAMPLE SIZE

As per the revised customer insight online sample size calculator,
sample size is calculated for the research. Sample size distribution tolerance
error generally lies between 3 to 6%. In this research work, the sample size
distribution tolerance error of 4% is considered with 95% confidence interval.
Based on the response rate calculation, sample size of 900 is determined for
the organized retail sector. Totally 950 questionnaires are distributed for
collecting the primary data from the customers of various Hypermarkets,
Supermarkets and Departmental Stores.
1.9.3 RESEARCH QUESTIONNAIRE
In this research study, a structured questionnaire was focused on

measuring service quality, demographic characteristics, customer satisfaction,
purchase intentions and behavioral intentions. The questionnaire used in the
present study consisted of five sections A, B, C, D and E. Section A dealt with
background information of the participants. Section B and C consisted of
factors affecting purchasing in retail stores and customer satisfaction factors.
19
Section D consists of 27 items that used to measuring service quality and

Section E includes 13 items used to measuring the customer loyalty
respectively.
The researcher used a 7 point scale for the study, instead of a 5 point Likert
scale because 7 point scale increases the rate of accuracy and quality of the
responses (Prayag, 2007; Buttle, 1996). Thus, all statements employed a
seven-point scale because it would give a better normal spread of observations.
To measure customer loyalty, the instrument must consider behavioral,
attitudinal and cognitive aspects of behavioral intentions. That‟s why Zeithaml
et al. (1996) behavioral intention battery was used. Each of the 13 items was
accompanied by a seven-point scale ranging from 1 (not at all likely) to 7
(extremely likely). The wording of the BIB items was adapted to the retail
service setting. Validated Service Quality Scale developed by Dabholkar et al.
(1996) was employed to measure perceived service quality. The items of
RSQS were evaluated on a seven-point scale ranging from 1 (strongly
disagree) to 7 (strongly agree) (Dabholkar, Thorpe, and Rentz, 1996). The
diagrammatic rating scale used in the questionnaire is as follows:
Small adaptations to the RSQS instrument were made. Review of literature

(empirical research Kaul, 2007) along with opinion of store managers (SIS)
and independent experts (consultants, Indian Retail) highlighted that two items
of RSQS were not relevant in Indian retail appertained to “store‟s own credit
cards” seems premature in the Indian retail environment where credit cards
have only recently started getting widespread acceptance and very few retail
stores have their own credit cards. That is why out of the 27 statements of
RSQS one was not included in the questionnaire because of its inapplicability
in the Indian organized retail (Kaul, 2007).
20
1.9.4 ANALYSIS OF DATA

The analysis is undertaken with a view to give a clear cut idea of the
customers in the organized retail sector. Various tables, diagrams are
incorporated to make it more useful and easy to understand. The Software
Analysis of Moment Structure (AMOS 21) and Statistical Package for Social
Sciences (SPSS 21) are used for analysis and interpretation of primary data.
The statistical tools like a reliability test for the content and construct validity
of the questionnaire, correlation, multiple regressions, one way ANOVA, Chi-
square and paired t-test is used to analyze the primary data. SEM is
constructed to identify the relative importance among the preconception about
the service, RSQS dimensions, customer satisfaction (SAT) and behavioral
intention (BI).
1.10 STRUCTURAL CONTENT OF THE THESIS
This Thesis consists of seven chapters. The following describes briefly about
each chapter.
Chapter One: Presents the researcher‟s main focus on service quality,

delivery over the retail stores among the organized retail sector, which in turn
leads to customer satisfaction and customer loyalty. Further the chapter
commences with background knowledge, and also illustrates the major
objectives of the study, problem statement, the need for the study, as well as
the significance of the study. This study is unique in many ways because it is
conducted in the retail sector, which is considered as the potential goldmine of
Indian economy. The main aim of this research is to analyze the impact of
retail service quality on customer loyalty and behavioral intentions.
21
Chapter Two: Presents the introduction about the Indian retail sector, its
present status, and its future prospects, Status of Organized and Unorganized
Retail Market in India. Further, the discussion was followed by SWOT
Analysis of Indian retail sector, finally it discusses on the role of FDI in Indian
Retail Sector.
Chapter Three: Presents the literature review of service quality, retail service
quality, customer loyalty was also presented. The next part of the literature
review presents the association between service quality and demographic
characteristics. It was followed by the detailed discussion on the assessing the
relationship between service quality and customer loyalty. After reviewing the
customer loyalty, the relationships between service quality dimensions and
customer loyalty in different sectors with special emphasis on retail
environment was discussed.
Chapter Four: Presents the conceptual and theoretical framework of the

research study, where it focuses on introductory part the service quality
conceptualization and measurement of service quality. This discussion is
followed by the review of retail service quality and the need to differentiate it
from pure services. Then RSQS is the most dominant scale for measuring
retail service quality; that‟s why most of the researchers employed it.
However, it was found that the scale is more appropriate if it is modified for
different countries; therefore, the need for modifying the scale. Then it
discusses about the proposed model of the research study. Finally, the main
and sub-hypothesis was developed based on the main objectives of the
research study.
Chapter Five: Discusses the underpinning methodology of this study,

beginning with a presentation of the research design, followed by area of
22
study, sample design, sources of data and scale and measurement. The main
method for data collection was using the structured questionnaire. The
questionnaire was comprised of three parts: Demographic information,
Customer Shopping Experience, Retail Service Quality, Scale and Customer
Loyalty Intentions questionnaires were included in the research study. Further,
this chapter discusses about the reliability and validity of the scale used for the
research study. Meanwhile, this chapter illustrates the demographic profile of
the respondents with respect to the retail settings.
Chapter Six: Discusses the findings of the research study. This data analysis
is followed by relative importance of service quality dimensions. Further, the
association between service quality and demographics was then investigated.
Thereafter, multiple regression analysis was used whereupon the relationships
between service quality dimensions and customer loyalty intentions were
demonstrated.
Chapter Seven: Discusses in detail about the conclusions drawn from the
findings of the research study. Furthermore, the suggestions and contributions
of the study are presented, followed by limitations and future research
directions.
1.11 CHAPTER CONCLUSION

This chapter provides a broad overview of the structure and direction of
the thesis. The thesis addresses gaps that exist within the literature of the
expectations and consumption of a quality product in the organized retail
sectors. The research will benefit the service industry by proving the
importance of customers‟ attachment to the aspects of service industries
performance and gaps. This research provides evidence and knowledge that
contribute towards closing important literature gaps. It also explores the
23
decision making process of retail managers in their effort to survive

intensifying competition by achieving higher customer satisfaction. The
purpose of the study is related to the organized retail stores (Hypermarket,
Supermarket and Departmental Stores) situated in major cities in Tamil Nadu
State. The study is justified because it is significant, researchable, and feasible.
The rationale for the present research and the research methodology are
summarized.
24
CHAPTER II
OVERVIEW OF INDIAN RETAIL SECTOR
This Chapter gives a complete overview and a clear introduction about

the Indian retail sector, its present status, and its future prospects, Status of
Organized and Unorganized Retail Market in India. Further, the discussion
was followed by SWOT Analysis of Indian retail sector, finally it discusses on
the role of Foreign Direct Investment in the emerging competitive Indian
Retail Sector.
2.1 INTRODUCTION
Retailing is the largest private sector industry in the world economy

with the global industry size exceeding $6.6 trillion and a latest survey has
projected India as the top destination for retail investors. India is currently the
twelfth largest consumer market in the world. A McKinsey report, “The rise of
Indian Consumer Market”, estimates that the Indian consumer market is likely
to grow four times by 2025. A good talent pool, unlimited opportunities, huge
markets and availability of quality raw materials at cheaper costs is expected
to make India overtake the world‟s best retail economies by 2042, according to
industry players.
There are exciting times for Indian Retail. Markets in Asian giants like
China are getting saturated, the AT Kearney‟s 2007 Global Retail
Development Index (GRDI), for the third consecutive year placed India the top
retail investment destination among the 30 emerging markets across the world.
Commercial real estate services company, CB Richard Ellis‟ findings state that
India‟s retail market has moved up to the 39th most preferred retail destination
in the world in 2009, up from 44 last year. The recent growth spurt was
25
achieved primarily through a surge in productivity and is sustainable.

Similarly, the study undertaken by ICRIER estimates that the total retail
business in India will grow at 13 per cent annually from US$ 322 billion in
2006-07 to US$ 590 billion in 2011-12.
The Indian retail industry is the fifth largest in the world. With
continued economic expansion and retail growth, India is set to become a US$
450 billion retail market by 2015, comparable in size to Italy (US$ 462 billion)
and much larger than Brazil (US$ 258 billion) today. The present value of the
Indian retail market is estimated by the India Retail Report to be around Rs.
12, 00,000 crores ($270 billion) and the annual growth rate is 5.7 percent.
Furthermore around 15 million retail outlets help India win the crown of
having the highest retail outlet density in the world.
The retail sector is the largest source of employment after agriculture,

and has deep penetration into rural India. It is also believed that 21 million
people are employed in the retail sector, which is 7 per cent of the total
national workforce, whereas the global average is around 10-12 per cent. It is
estimated that an additional eight million jobs will be generated through direct
and indirect employment related to the retail sector.
The retail sector is a sunrise industry in India and the prospect for
growth is simply huge. The India Retail Industry is gradually inching its way
towards becoming the next boom industry. India has the highest number of
retail outlets in the world at over 15 million retail outlets, and the average size
of one store is 50-100 square feet. It also has the highest number of outlets
(11,903) per million inhabitants. The per capita retail space in India is among
the lowest in the world, though the per capita retail store is the highest. The
majority of these stores are located in rural areas. The BMI India Retail Report
26
for the third-quarter of 2010, forecasts that the total retail sales will grow to
US$ 543.2 billion in 2014 from US$ 353 billion in 2010. Mass grocery retail
(MGR) sales in India are forecast to undergo enormous growth over the
forecast period. BMI further predicts that sales through MGR outlets will
increase by 154 per cent to reach US$ 15.29 billion by 2014. This is a
consequence of India‟s dramatic, rapid shift from small independent retailers
to large, modern outlets.
2.2 INDIAN UNORGANISED RETAIL MARKET
According to the National Accounts Statistics of India the „unorganized

sector‟ includes units whose activity is not regulated by any statute or legal
provision and/or those, which do not maintain regular accounts. Thus,
unorganized retailing refers to the traditional formats of low-cost retailing, for
example, the local kiranashops, owner managed general stores, paan/beedi
shops, convenience stores, hand cart and pavement vendors, etc. Unorganized
retailing is characterized as unstructured and high degree of fragmentation
with street markets constitutes form peddlers, vegetable vendors,
neighbourhood stores and consumer durable stores to manufacturer owned
retail outlets.
Unorganized retail sector covers all those forms of trade, which sell an
assortment of products and services ranging from fruits and vegetables to shoe
repair. These products and services may be sold or offered out of a fixed or a
mobile location and the number of people employed could range between 10-
20 people. Thus the neighbourhood baniya, the paanwala, the cobbler, the
vegetable, fruit vendor, etc. Would be termed as the unorganized sector.
Traditionally, three factors have plagued the Indian retail industry:
27
Unorganized: India is known as a nation of shopkeepers where the vast

majority of the retail stores is small “father and son” outlets. Traditionally it is
a family‟s livelihood, with their shop in the front and the house at the back,
while they run the retail business.
Fragmented: India has some 15 million retail outlets, however a disturbing

point is that 96 per cent of them are smaller than 500 square feet in area. This
means that India per capita retailing space is about 2 square feet (compared to
16 square feet in the United States). India‟s per capita retailing space is thus
the lowest in the world.
Rural bias: Nearly two thirds of the stores are located in rural areas. The rural
retail industry has typically two forms: “Haats” and “Melas”. Haats are the
weekly markets: serve groups of 10- 50 villages and sell day-to-day
necessities. Melas are larger in size and more sophisticated in terms of the
goods sold (like TVs).
The unorganized retail sector is expected to grow at approximately 10 per cent

per annum with sales rising from US$ 309 billion in 2006-07 to US$ 496
billion in 2011-12. It is a low cost structure, mostly owner-operated, has a
negligible real estate and labour costs and little or no taxes to pay. According
to a survey by AT Kearney, an overwhelming proportion of the Rs. 4, 00,000
crore retail markets are UNORGANISED. Consumer familiarity that runs
from generation to generation is one big advantage of the traditional retailing
sector.
2.3 INDIAN ORGANISED RETAIL MARKET
Organized retailing refers to trading activities undertaken by licensed

retailers, that is, those who register for sales tax, income tax, etc. These
28
include the corporate-backed hypermarkets and retail chains, and also the
privately owned large retail businesses. In other words, it is a network of
similarly branded stores with an element of self-service.
Organized retail in India today holds only a fraction of the market share
potential in India. In 2001, organized retail trade in India was worth Rs
11,228.7 billion. It has risen from 0 to 6 percent in a very short period, mainly
on volumes and not a value-driven growth. The organized retail sector is
catching up very fast and by the year 2013, it is expected to grow at a CAGR
of 40 per cent.
Associated Chambers Of Commerce and Industry (ASSOCHAM)

reported that the organized retail sector is recording phenomenal growth and
will completely revolutionize retailing over next 3-4 years. As per estimates
made by ASSOCHAM, the organized retail in urban market is expected to
grow at the rate of 50 percent to reach a value of 30 percent of the total retail
market in India.
According to McKinsey and Company report titled „The Great Indian

Bazaar: Organized Retail Comes of Age in India‟, organized retail in India is
expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per
cent of the total retail market and reach US$ 450 billion by 2015. Furthermore,
according to a report titled „India Organized Retail Market 2010‟, published by
Knight Frank India in May 2010, around 55 million square feet (sq ft) of retail
space will be ready in Mumbai, national capital region (NCR), Bengaluru,
Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the
organized retail real estate, the stock will grow from the existing 41 million sq
ft to 95 million sq ft.
29
The share of organized retail in developed countries is much higher

than developing countries like India. Among the BRIC countries only in India
the share of organized retail is low. The share of the other BRIC countries is
Brazil (36 per cent), Russia (33 per cent), and China (20 per cent). In 2008, the
share of organized retail in the US was around 85 per cent, in Japan it was 66
per cent, and in the UK it was 80 per cent, while in developing countries like
China and Russia it was 20 per cent and 33 per cent respectively. It is seen that
the organized sector in India is still has a long way to go because the
unorganized retail still continues to dominate the retail market.
The growth in retail sector is assured and inevitable. In this sense the
retail industry does indeed spread its benefit to all. India is perhaps the last
„virgin‟ BRIC (Brazil, Russia, India, China) market for organizing retailers.
The game here has just begun. By 2015, around 65 million households will
patronize organized retail, amounting to over 300 million shoppers, almost
equivalent to the population of the US today.
The Organized Retail Penetration (ORP) is the highest in footwear with

22 per cent, followed by clothing with 12 per cent. Though food and grocery
account for the largest share of retail spend by the consumer at about 76 per
cent, only 1 per cent of this market is in the organized sector. However, it has
been estimated that this segment would multiply five times taking the share of
the organized market to 30 percent in the coming years. The food and grocery
constitute the highest retail volume and this share has shown a tremendous
growth over the years. According to NSSO 60th round, 54 per cent of the rural
and 42 per cent of urban expenditure was on food. The second largest share is
commanded by the apparels. Clothing and textile are the largest organized
market and is dominated by retailers like Pantaloon, Westside, Globus,
30
Koutons. This owes to the increasing disposable incomes and changing

lifestyles.
Industry trends for retail sector indicate that organized retailing has
major impact on controlling inflation because large organized retailers are able
to buy directly from producers at most competitive prices. World Bank
attributes the opening of the retail sector to FDI to be beneficial for India in
terms of price and availability of products as it would give a boost to food
products, textiles and garments, leather products, etc., To benefit from large-
scale procurement by international chains; in turn, creating job opportunities at
various levels.
2.4 VARIOUS FORMATS IN INDIAN ORGANISED RETAIL SECTOR
Formats new to the Indian marketplace have emerged rapidly over the
past five years. The impact of the alterations in the format of the retail sector
changed the lifestyle of the Indian consumers drastically. The evident increase
in consumerist activity is colossal which has already chipped out a money
making recess for the retail sector of Indian economy. These modern retail
formats are encouraging development of well-established and efficient supply
chains in each segment ensuring efficient movement of goods from farms to
the kitchens, which will result in huge savings for the farmers as well as for
the nation.
The Indian retail industry is categorized into different retail formats on

the basis of the retail operation. The formats are basically defined on the basis
of the size of the outlet, the pricing strategy followed, the type of merchandise
sold, and also the location.
31
Shopping Malls: the biggest form of retail in India, malls offers customers a
mix of all types of products and services including entertainment and food
under a single roof. Malls are located mainly in metro cities, in proximity to
urban outskirts and ranges from 60,000 sq ft to 7, 00,000 sq ft and above. They
lend an ideal shopping experience with an amalgamation of product, service
and entertainment, all under a common roof. Examples include Ambience
Mall, Ansal Plaza, and Shipra Mall etc.
Convenience Stores: are located in residential areas with slightly higher price
goods due to the convenience offered. The stores are basically small in size
(500-3,000 square feet), which allows quick shopping and fast checkouts.
They stock a limited range of high-turnover convenience products and are
usually open for extended periods during the day, seven days a week.
Convenience stores offer easy purchase, experience through easily accessible
store locations. Subhiksha and Reliance Fresh are some major players in this
format.
E-Trailers: are retailers providing online buying and selling of products and
services. E- Tailing is slowly making its presence felt in India.
Discount Stores: as the name suggests, discount stores or factory outlets, offer
discounts on the MRP through selling in bulk reaching economies of scale or
excess stock left over at the season. The focus of these stores is to offer
merchandise at a price that is lower than the market price, and to gain profit
from volumes. These stores keep merchandise, mainly on the basis of its
saleability. Usually these are no-frill stores with simple surroundings and less
service. The product category can range from a variety of perishable/ non
perishable goods.
32
Vending: it is a relatively new entry, in the retail sector. Here beverages,

snacks and other small items can be bought via vending machine.
Specialty Stores: are retail chains dealing with specific categories and provide
a deep assortment. These stores usually „specialize‟ in one line/category of
merchandise. As these stores are concerned with only one type of
merchandise, they are able to offer a wider range of products at a lower price.
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG‟s, Music World and the Times Group‟s music chain Planet
M, are focusing on specific market segments and have established themselves
strongly in their sectors.
Department Stores: are general retail Merchandisers offering quality

products and services. Departmental Stores are expected to take over the
apparel business from exclusive brand showrooms. These stores are typically
lifestyle stores where most of the merchandise constitutes apparels and
products other than food and grocery. These stores offer high quality service to
consumers. These stores stock lesser merchandise than other formats since the
merchandise is stored in a presentable manner. Among these, the biggest
success is K Raheja‟s Shoppers Stop, which started in Mumbai and now has
more than seven larger stores (over 30,000 sq. ft) across India and even has its
own in store brand for clothes called Stop!
Hypermarkets: big-box formats with an average size that ranges between

60,000-120,000 square feet, and they stock multiple lines of products such as
food and grocery, general merchandise, sports goods, and apparels. These are
located in or near residential high streets. Hypermarkets are mammoth outlets
that are fewer in number, but cater to a larger area (3-5 kilometers). Hypercity,
33
Big Bazaar, RPG Spencer‟s and Shoprite Hyper are some major players in this
format.
Supermarkets: The average size of supermarkets range from 10,000-30,000

square feet. They are a smaller version of hypermarkets that holds multiple
lines of merchandise, but is limited in number when compared with
supermarkets. Supermarkets are spread across the city, are greater in number,
but cater to a smaller area (1-2 kilometer). Food world, Food Bazaar and
Spinach are some major players in this format.
MBO’s (Multi Brand Outlets): offer several brands across a single product
category. These usually do well in busy market places and Metros. They are
also known as category killers as they focus on specific categories, such as
electronics and sporting goods. Ezone, which specializes in electronics, and
Staples, which specializes in office stationery, are examples of category
killers.
Cash-And-Carry Outlets: cash-and-carry outlet is strictly not a retail format,

but considering the business dynamics it follows it can qualify for a retail
format. In a retail business usually a consumer has to purchase one or more
products, but under this format, the consumers have to buy a minimum volume
of products or value specified by the cash-and-carry retailer. In this format the
buyers are basically small retailers or catering service providers who purchase
in bulk quantities. This stores‟ size ranges from 1, 00,000 square feet to 3,
00,000 square feet. At present, Metro is a major player that falls under this
format. Wal-Mart‟s alliance with Bharti and Tesco‟s with Trent will also come
under the cash-and-carry format.
34
2.5 CONCLUSION
This Chapter concludes with a brief overview of the Indian retail

industry, where the retail industry plays a major role in the development of
Indian Economy. During the last few years, the Indian retail market has seen
considerable growth in the organized segment. Major domestic players have
entered the retail arena and have ambitious plans to expand in the future years
across verticals, formats, and cities which have been clearly depicted in this
chapter earlier. High Competition in the Indian retail sector was a major threat
among the other retailers, because they need to provide excellent product and
service delivery in order gain a competitive advantage with higher levels of
customer satisfaction, then only they could be able to withstand in this Indian
Retail Sector with a Unique Competitive Advantage. Hence, this chapter gave
a predominant view of the Indian Retail Sector and its emerging challenges
and opportunities in a strategic way.
35
CHAPTER III
REVIEW OF LITERATURE
This chapter discusses the literature on service quality (the dimensions

and the approach in measuring service quality), service quality dimensions in
a retail environment, customer loyalty, assessing the relationship between
service quality and customer loyalty, the impact of service quality on customer
loyalty in organized retail environment and hypothesis development. This
chapter begins with an exploration of the concepts related to service quality.
3.1 INTRODUCTION
According to Parasuraman, Zeithaml and Berry (1988) service quality

means the customer‟s overall judgment of the excellence of the service or the
difference between one‟s expectation and the actual service performed. This is
followed by a discussion on the retail service quality. Berry (1986) opined that
providing service quality in retail was a basic strategy that leads to differential
advantage over competitors. This is followed by a brief exploration of
demographics and its relationship with service quality dimensions. A
discussion on the customer loyalty concept and the definition of customer
loyalty is presented.
Every organization is running behind the loyal customers because of

the enormous benefits offered by them. This special category of customers
allows for a continuous stream of profit, reduces marketing and operating
costs, increase referral, and was immune to competitors‟ promotion efforts
(Reicheld and Sasser, 1990). A more in depth discussion is presented by the
association between service quality and customer loyalty which is the focus of
this research. This is followed by a discussion on the impact of retail service
36
quality on customer loyalty in retail environment. It is vital to review all the

relevant literatures in order to understand the whole concept of service quality
and customer loyalty in various sectors. It founded a strong basis for the
development of the research framework and instrument.
Based on the review of literature, four hypotheses were developed. The

first hypothesis were regarding an association between service quality
dimensions and overall service quality. The second hypothesis tests the link
between identified service quality dimensions and demographic characteristics
of the customers. The third hypothesis identified the relationship between
service quality and customer loyalty intentions. In the last, an affiliation
between retail service quality dimensions and repurchase intentions is
hypothesized.
3.2 OVERVIEW OF SERVICE QUALITY
3.2.1 SERVICE QUALITY- AN INTRODUCTION
With the liberalization and internationalization in service sector, service

quality has become an important means of differentiation and the path to
achieve business success. Such differences based on service quality can be a
key source of competitiveness for many service providers and hence have
implications for leadership in such organizations.
Service Quality is a blend of two words: service and quality. Services

are behavioral rather than physical entities, and have been described as deeds,
performances or effort, acts or performances, activities or processes. In other
words, the service is an activity or series of activities of more or less intangible
nature that normally, not necessarily take place in interactions between the
customer and service employees and /or physical resources or goods and/or
37
systems of the service providers, which are provided as solutions to customer

problems (Gronroos 1984). Services are intangible because they cannot be
grasped mentally. The abstract nature of services causes problems for both
providers and consumers. It is difficult for service providers to differentiate
their offerings from those of competitors, while it is equally difficult for
consumers to evaluate a service before it is acquired and consumed.
Quality has been defined differently by different authors. Quality is in

the eye of the customers. It can be seen and can be measured. The quality‟s
gurus, experts and researchers have given various definitions on quality in
particular areas i.e. manufacturing of products and services. Some prominent
definitions include conformance to requirements (Crosby, 1979), fitness for
use (Juran and Gryna, 1988), conformance to specification (Gilmore, 1974),
meeting and/or exceeding customer‟s expectation (Parasuraman et al., 1985),
one that satisfies the customer, performance over expectation (Besterfield,
1999), zero defect (Crosby, 1979) or products‟ or services‟ ability to perform
to its intended function without harmful effect. Quality may be viewed as a
property of products or services, or processes producing these products or
services.
As per the Japanese production philosophy, quality implies „zero

defects‟ in the firm‟s offerings. Quality is a dynamic state associated with,
products, services, people, processes, and environments that meets or exceeds
customer expectation (Geotsch and Davis, 2003). In other words, the quality of
a product or service is a customer‟s perception of the degree to which the
product or service meets his or her expectations.
Lehtinen and Lehtinen (1982) defined service quality in terms of

physical quality, interactive quality and corporate (image) quality. They also
38
suggested that when compared with the other two quality dimensions,
corporate quality tended to be more stable over time.Thereafter, in 1983
Grönroos elaborated service quality as both technical and functional, the first
signifies what the customer gets and the latter how the customer receives the
service. When a customer assessed service quality, the company‟s profile or
image acts a “filter”. If a company had a positive image, it is easier to
overlook smaller mistakes in its service delivery; to regard them as temporary
disturbances.
Lehtinen (1983) explained service quality in terms of “process quality”

and “output quality”. Process quality is judged by a customer during a service,
whereas output quality is judged by a customer after a service has been
performed.
Berry, Parasuraman and Zeithaml (1985) were among the best-known

researchers on service quality. They have studied customer-perceived quality
in four service categories: banks, stockbrokers, credit card companies, and
companies selling household machinery. They described service quality by
means of ten factors: dependability, willingness, competence, availability,
courtesy, communication, trustworthiness, assurance, empathy and tangibility.
In a later study, the authors reduced the ten factors to five claiming that
these were valid in general terms (Parasuraman et al., 1985):
 Tangibility;
 Dependability;
 Willingness, Readiness;
 Assurance;
 Empathy, Insight.
39
According to the developers of SERVQUAL, service quality is derived

from a comparison between customer expectations and customer perceptions
of actual service performance. The difference between perceptions and
expectations results in the service quality gap (Q = P-E), also known as GAP 5
(Parasuraman et al., 1985; 1988). A wide gap would represent the poor service
quality and shows that the service provider needs to improve on the service
offered to its customers.
Parasuraman et al. (1988) defined service quality as a consumer attitude

reflecting the perceived overall superiority and excellence in the process and
outcome of a service provider. They identified a set of 22 variables/items
tapping five different dimensions of service quality construct. Since they
operational Zed service quality as being a gap between the customer‟s
expectations and perceptions of performance on these variables, their service
quality measurement scale is comprised of a total of 44 items (22 for
expectations and 22 for perceptions). The SERVQUAL scale was designed to
uncover broad areas of good or bad service quality and can be used to show
service quality trends over time, especially when used with other service
quality techniques. The SERVQUAL scale is based on a difference score
between customer expectations of service and their perceptions after receiving
the service.
Bakakus and Boller (1992) elicited that although SERVQUAL had been
applied in the study of different types of service industries, there were certain
limitations and criticisms. Some of the widespread concerns were the 5
dimensional configuration of the scale, the appropriateness of operationalizing
service quality as the expectations-performances gap score, and the scale‟s
applicability to a retail setting.
40
With an argument that Parasuraman et al. (1985) gap theory of service

quality was supported by little empirical or theoretical evidence, Cronin and
Taylor (1992) developed a “performance-based” service quality measurement
scale called SERVPERF. The major difference between these two scales is
that SERVQUAL operational service quality by comparing the perceptions of
the service received with expectations, while SERVPERF maintained only the
perceptions of service quality. The SERVPERF scale consists of 22 perception
items excluding any consideration of expectations. According to Cronin and
Taylor (1992), their unweighted performance-based SERVPERF scale was a
better method of measuring service quality. This scale‟s reliability ranged
between .884 and .964, depending on industry type, and exhibited both
convergent and discriminant validity.
York (1993) investigated the effects of consumer evaluation of quality,

satisfaction, and value on service patronage. His findings did not confirm the
five dimensions of service quality/performance hypothesized; however, three
dimensional structures were in conformance with the following dimensions:
tangible operations, tangible communication and reliability/empathy. The
dimensions of service quality were found to have a positive impact on overall
quality, satisfaction and value with the exception of tangible communications
which did not display a significant effect. Overall quality, satisfaction and
value were in turn found to influence service patronage.
Zeithaml et al. (1993) proposed that three levels of expectations can be

defined against which quality was assessed: the desired level of service -
reflecting what the customer wants; the adequate service level - defined as the
standard that customers were willing to accept; and the predicted service level-
which they believe is most likely to actually occur.
41
On the basis of ten year study of service quality in America Berry et al.
(1994) concluded that service quality has many facets. The ten lessons learned
from their study were as follows:
 Listening - Businesses must listen to their customers.

 Reliability - Businesses must perform the promised service dependably
and accurately.
 Basic Service - Customers want the basics, the fundamentals, and
performance; not promises. They do not expect “fanciness,” and they
are not unreasonable in their expectations.
 Service Design - Customers expect a system or systems that provide
good, reliable customer service.
 Recovery - Businesses must handle problems quickly, efficiently, and
fairly.
 Surprising Customers - Businesses should surprise customers with
uncommon swiftness, grace, courtesy, competence, commitment, and
understanding.
 Fair Play - Customers expect companies to treat them fairly and
become resentful and mistrustful when they perceive otherwise.
 Teamwork - Various systems within a company must work as an
overall team in providing quality service to customers.
 Employee Research - Businesses should gather information from
employees concerning the level of service quality provided to
customers, things that hinder the provision of quality service, and
potential problems in providing quality service.
 Servant Leadership - Top management should lead by serving those
who provide direct service to customers and by providing what is
needed for quality service.
42
Deyong (1994) developed a methodology to identify conceptual linkages

between customer satisfaction dimensions and process performance metrics.
Their methodologies indicated a link between the customer satisfaction
dimensions and process performance metrics. It also identified a relationship
between the dimensions of quality proposed by Garvin and service quality
dimensions proposed by Parasuraman, Zeithaml and Berry.
Giblon (1994) examined the relationship between service quality and

supplier marketplace performance and between a market orientation and
supplier marketplace performance. Results showed that improving customer
satisfaction improves supplier marketplace performance. Increasing customer
satisfaction increases customer commitment to the supplier. There was a
positive relationship between supplier quality and customer satisfaction with
the supplier: raising supplier quality raises customer satisfaction with the
supplier. Finally, there was a positive relationship found between customer
satisfaction with the distributor and with the supplier: customer satisfaction
with the distributor was found to be increasing customer satisfaction with the
suppliers.
A more recent conceptualization of the service quality dimensions was

proposed by Rust and Oliver (1994). They proposed a three-component model
in which the overall perception of service quality is based on a customer‟s
evaluation of three dimensions of the service encounter:
 The customer-employee interaction (i.e. Functional or process quality),

 The service environment, and
 The outcome (i.e. Technical quality).
43
Burch et al. (1995) examined the applicability of the service quality

measurement scale (SERVPERF) to the rental industry. The SERVPERF scale
was found to explain a great deal of the variation in service quality. While
satisfaction seems to have a significant positive effect on purchase intention,
service quality does not seem to have a similar effect. Indeed, satisfaction
seems to be more closely tied to purchase intentions than service quality.
The research findings of Edvardsson (1996) concluded that unlike

manufacturing, the service experience involves the customer as co-producer.
He explained that how customers access service quality and the factors they
perceive as contributing to quality. He puts forward 13 propositions on service
quality as guides to new service development.
Johnston (1997) forwarded a framework which will assess the impact of

any service quality initiative. He categorized quality factors in terms of their
relative importance and their effect on satisfaction and dissatisfaction. He
suggested that certain actions, such as increasing the speed of processing
information and customers, we‟re likely to have an important effect in terms of
delighting customers; however, other activities, such as improving the
reliability of equipment, will lessen dissatisfaction rather than delight
customers. He further suggested that it was more important to ensure that
dissatisfies were dealt with before the satisfiers. Moreover, there were two
areas where banks could achieve a distinct advantage: genuine commitment
and attentiveness of front-line staff.
Oh (1997) compared the three models: Expectancy disconfirmation model

(EDM), SERVQUAL (Parasuraman, Zeithaml and Berry, 1988) and
SERVPERF (Cronin and Taylor 1992) to identify the most reliable customer
satisfaction (CS) and service quality (SQ) measurement model for the lodging
44
industry. EDM appeared to be the most appropriate basis for measuring CS

and SQ in the lodging industry. The supplementary data also revealed that the
subjective disconfirmation method of EDM is more valid than the objective
disconfirmation method of SERVQUAL.
Rushchano (1997) investigated the relationship between US and THAI

corporate consumers‟ perceptions of telephone service quality and satisfaction
with telephone service. Results of the study indicated that perceived telephone
service quality in terms of reliability of service, responsiveness of service
provider, competence of service provider, accessibility of service provider,
courtesy of service employee and technological aspects were differently
related to US and THAI corporate consumers satisfaction in terms of
availability of service, punctuality of service installation, problem elimination,
punctuality of repair service, accessibility of public telephone and price and
value.
Chaoprasert (1998) demonstrated a model of service quality improvement,

from personnel counter services to electronic services. He highlighted that
banking practitioners should focus on a differentiated strategy, known as
service quality improvement, to strengthen their core competitive edge, and
urgently make a decision to focus on either the area of personnel counter
services or electronic services or both, to be able to allocate limited resources
to serve that decision. This strategy to focus on either personnel counters
services or electronic services or both, will be successful if there is
commitment from bank management and involvement from all employees to
develop an exact understanding of the customers‟ needs.
O‟Neill et al. (1998) argued that an individual‟s perception may not be

stable over time and that suppliers should be particularly interested in
45
consumers‟ perceptions at the time that the next repurchase decision was
made. A model of the time elapsed effects of service quality perception was
also presented.
Rhoades et al. (1998) examined the service quality of 26 US airlines for

the period 1987-1996 using data from the Department of Transportation‟s Air
Travel Consumer Report. The results indicated that there had been
improvement in the service quality of the industry overall. Further, there were
significant differences between the service quality of major and regional
airlines. Regional airlines performed much worse on all measures of service
quality.
Ruyter et al. (1998) identified three dimensions of service loyalty:

preference loyalty, price indifference loyalty and dissatisfaction response.
Moreover, a positive relationship was found between perceived service quality
and preference loyalty and price indifference loyalty. No significant
relationship between perceived service quality and dissatisfaction response
was found. They also investigated the influence of industry type on the
perceived service quality - service loyalty relationship. It was found that the
influence of service quality on preference loyalty generally varies per industry
and that findings from one industry cannot be generalized to other industries.
Burke (1999) examined relationships between levels of job-related

managerial feedback, developmental climate, cultural values, job satisfaction
and service quality and products provided to clients. LISREL analysis
indicated that levels of both partner and manager feedback had direct effects
on perceived quality of services and products provided by the firm through
both developmental climate and cultural values. The Presence of a
developmental climate had direct effects on cultural values, job satisfaction
46
and quality of products and services.
Grossman (1999) examined the impact of feedback and follow-up on the

consumer‟s perception of service quality. The relationship for the satisfaction
level of the account representative and the company overall were also
explored. Results indicated that the key drivers of satisfaction for the account
representative and the company closely reflect the dimension defined by
SERVQUAL model. There was a strong positive relationship between the
satisfaction ratings for the account representative and for the company overall.
Groth and Dye (1999) focused their research on the perceived value of a
service by a customer, the perceived quality and value of a service and the role
of expectations, shortfalls, and bonuses in the valuation process. The proposed
model yields a value vector that summarizes the perceived value of a service
and service quality to a customer.
Mei et al. (1999) examined the dimensions of service quality in the

hospitality industry by extending the SERVQUAL scale to include eight new
items that specifically pertain to the hospitality industry, subsequently referred
to as HOLSERV. They found that service quality is represented by three
dimensions in the hospitality industry, relating employees (behavior and
appearance), tangibles and reliability. However, the best predictor of overall
service quality is the dimension referred to as “employees”.
Peters (1999) discussed service quality and total quality management as a

business strategy designed to add value to customers. He discussed the roots of
quality assurance and total quality management, business process re-
engineering and supply chain management, and argued for a “moments of
truth” analysis approach to deliver service quality.
47
Watson (1999) determined the relationship between product quality,

service quality, image of the firm and customer satisfaction in a commodity
industry. Product quality and certain items of service quality and image of the
firm were found to be significant predictors of customer‟s satisfaction. In the
area of service quality it was found that people intensive areas were
significant, while process related service areas were not significant. More
items in the area of image, or reputation of the firm were found to be
significant predictors than in the area of service quality.
Bahia and Nantel (2000) developed a reliable and valid scale for the
measurement of the perceived service quality of bank services. The proposed
scale is called Banking Service Quality (BSQ) and comprises 31 items which
span dimensions: effectiveness and assurance; access; price; tangibles;
services portfolio and reliability.
Hays (2000) proposed a theoretical framework that related service

guarantees to perceived service quality, customer satisfaction, customer
loyalty and business performance via the intervening constructs of employee
motivation/vision, learning through service failure, defensive marketing /
service recovery and offensive marketing. The results of the study showed that
both employee motivation/vision and learning through service failure
positively influenced perceived service quality. However, employee
motivation/vision mediated the relationship between learning through service
failure positively influenced perceived service quality. Further, service
guarantees positively impacted both employee motivation/vision and
perceived service quality but no effect was found on learning through service
failure.
48
Kerlin (2000) used the SERVQUAL survey instrument to assess student

satisfaction with service quality. Student expectations and perceptions of
service quality in registration, financial aid, counseling, career center and
library services were probed. It was found that students placed less emphasis
on the tangible aspects of service quality, such as appearance of facilities and
brochures and more emphasis on aspects that provide them with reliable
services and demonstrate attention to their personal needs.
Kim (2000) worked on four dimensions of Grove‟s scale (customer focus,

prior customer relationship, organizational support and service under pressure)
and five dimensions of DINESERV (tangibles, reliability, responsiveness,
assurance and empathy). He concluded that service orientation had a direct
effect on service quality but impacted customer satisfaction indirectly via
service quality.
Tsikriktsis (2000) empirically investigated dimensions of service quality,

customer satisfaction and technical quality, in 10 major airlines of US
domestic airline industry. The data included objective measures of technical
quality (late arrivals, lost baggage and denial boarding), customer
dissatisfaction (complains), efficiency (capacity utilization of seats and fleet
and cost/unit) and profitability (operating margin). He found that efficiency
explained more variation in profitability than does service quality, while the
relationship between service quality and profitability depends on a company‟s
operating model.
Choi (2001) investigated the influence of overall service quality on

customer satisfaction and member‟s repurchase intentions at fitness clubs in
Seoul, South Korea. He also examined the influence of customer satisfaction
on the level of their repurchase intentions. The questionnaire consisted of four
49
sections: service quality scale, customer satisfaction scale, customer

repurchase intentions scale and demographic information. He found that the
perceived service quality factor was the most influential predictor of Customer
Satisfaction and their repurchase intention. The variance of the level of overall
Customer Satisfaction was explained by the following predictors in order of
higher to lower: Perceived Service Quality, Contact with physical
environment, Interpersonal Interaction and Program. Also the variance of the
level of repurchase intentions was predicted by the following factors in order
of higher to lower: Perceived Service Quality and Interpersonal Interaction.
Jasfar (2001) determined whether customer trust, consumer commitment

and customer satisfaction mediate service quality antecedents to consumer
behavioral intentions in auto service centers. Finding indicated that customer
trust, consumer commitment and customer satisfaction were the key mediating
variables of the relationship between service quality antecedents and consumer
behavioral intention expressly focused from consumer perspective on business
to consumer relationship.
Siu and Cheung (2001) expressed their concern over the length of the
SERVQUAL questionnaire. Respondents may end up either bored or confused
having to answer a 22 expectations item and 22 perceptions item scale, and
this can certainly affect the quality of data obtained.
Caruana (2002) examined the concept of service loyalty and proceeds to

distinguish between service quality and customer satisfaction. A model that
links service quality to service loyalty via customer satisfaction was proposed.
Results indicated that customer satisfaction does play a mediating role in the
effect of service quality on service loyalty.
50
Gans (2002) developed a model of customer choice in response to random

variation in quality. The choice model yields closed-form expressions which
reflect the effect of competing suppliers‟ service quality on the long-run
fraction of purchases a customer makes at the various competitors. He then
used the expressions as the basis of simple normative models for suppliers
seeking to maximize their long-run average profits.
Martinez (2002) examined the hypothesized relationship between

Organizational Citizenship Behavior (performance that supports the social and
psychological environment in which job-specific tasks function) at the group
level and two important organizational outcomes: service quality and customer
satisfaction. Results showed that at group level Organizational Citizenship
Behavior leads to better perceptions of service quality. However,
Organizational Citizenship Behavior relationship with customers‟ satisfaction
results was generally not significant.
Wong and Sohal (2002) elaborated the relationship between service quality
and overall relationship quality at two retail levels i.e. company and employee
level. They concluded that empathy was the most significant contributor to
relationship quality at both the retail levels.
Kang and James (2004) empirically examined the European perspective

(i.e. Gronroos‟ model) that service quality consists of three dimensions:
technical, functional and image, and that image functions as a filter in service
quality perception. The results from a cell phone service sample revealed that
Gronroos‟ model was a more appropriate representation of service quality than
the American perspective with its limited concentration on the dimension of
functional quality.
51
Long and McMellon (2004) developed a multidimensional measure of

perceived online service quality, which was based on consumers‟ comments
about their experiences with online retailers. These comments were organized
and compared to the SERVQUAL scale. While reflective of the SERVQUAL
dimensions, the new measure became less reliant on interpersonal interactions
and more technologically relevant. A new dimension was also emerged that
reflects consumers‟ concerns for the geographic distance and facelessness of
their experience.
Svensson (2004 a) presented a customized construct of sequential service

quality and highlighted the importance of time, context, and performance
threshold in service-encounter chains. Furthermore, he presented a generic
five-phase performance process, and a customized six-dimensional construct
of sequential service quality.
Svensson (2004 b) examined the construct of interactive service quality in

service encounters. Interactive service quality requires the simultaneous
consideration of the service provider‟s perspective and the service receiver‟s
perspective. The study was conducted in the Swedish automotive industry and
focused on the issues of interactive service quality between a vehicle
manufacturer and a selection of its most important suppliers. The major
contributions of the research provide an on-the-spot account of interactive
service quality.
Chow and Luk (2005) developed a technique that considers competition

using the Analytic Hierarchy Process (AHP) framework to measure service
quality. The AHP-SQ approach assists management to devise and maintain a
relevant, competitive plan for ongoing improvements in service quality.
Specifically, such analysis enables the following questions to be addressed:
52
“How does the firm perform in terms of service quality in relation to its
competitors?”; “Given the firm‟s resources, which service initiatives will
enhance its service competitiveness?”; “Which service areas require
immediate improvement?”; “How should the firm‟s service improvement be
prioritized?”, and “What opportunities exist for service improvement in
relation to the competition?
Edvardsson (2005) highlighted that service quality was perceived and

determined by the customer on the basis of co-production, delivery and
consumption experiences. He opined that favorable and unfavorable customer
experiences seem to be more and more important in forming service quality
perceptions. Further, he described that there were two categories of service
quality clues: clues of experience related to functionality and clues of
experience related to emotions. Positive and negative emotions seem to be
more and more important in forming service quality perceptions, and negative
emotions had a stronger effect on perceived service quality than positive
emotions.
Gupta et al. (2005) developed a conceptual model that was used in

understanding the relationships between sustaining structures that support the
total quality service (TQS) philosophy and customer satisfaction. They
develop three constructs: leadership, organizational culture and employee
commitment, which were very important in achieving total quality service
objectives. The proposed model links these three constructs with business
processes and total quality service.
Jabnoun and Khalifa (2005) proposed to develop a measure of service

quality in the UAE and then tested this measure in UAE conventional and
Islamic banks. Four dimensions of service quality were identified: personal
53
skills, reliability, values, and image and all four dimensions were significant in
determining service quality in conventional banks. Values and image were
however the most important of these dimensions. On the other hand, only
personal skill and values were significant in determining service quality in
Islamic banks.
Kang (2006) empirically examined the conceptualization of service quality

(both technical and functional). A two-component model yields better fit than
a model concentrating on functional quality alone (such as SERVQUAL).
Miguel et al. (2006) measured internal service quality by applying a

service quality measuring instrument usually used for assessing external
service quality. They found that the assessment was feasible and effective to
capture the characteristics of internal customer service by using a set of well
known quality dimensions that varied across the studied manufacturing cells.
Voon (2006) showed that the service-driven market orientation

(SERVMO) that consists of six components (customer orientation, competitor
orientation, inter-functional orientation, performance orientation, long-term
orientation, and employee orientation) had a significantly strong and positive
relationship with service quality.
Chowdhary and Prakash (2007) investigated whether any generalization in

importance of service quality dimensions was possible or not. They found that
generalization of quality dimensions was not possible among all types of
services taken together.
Enquist et al. (2007) presented a model for values-based sustainable

service business grounded in the concept of values-based service quality. They
distinguished four dimensions of values-based service quality and these
54
dimensions were – “technical”, “functional”, “experiential”, and “HRM and

corporate climate”.
Lee (2007) compared two leading measurement instruments of service

quality (i.e., SERVQUAL and SERVPERF) in a cross-cultural setting.
Psychometric properties of each scale were compared in three countries of
distinctive characteristics: developed, industrialized, and developing. They
concluded that the SERVPERF scale has slightly better reliability while the
SERVQUAL scale has an edge in validity, implying the necessity of including
cultural diversities of expectations in the measurement of service quality for
cross-cultural studies.
In 2007, Solvang discovered that the effect of service quality on

satisfaction was more profound in the furniture branch than in the grocery
branch of the four retail stores selected. On the other hand, customer loyalty
seems to be more important in affecting repurchase decisions in the grocery
branch.
Vanniarajan and Anbazhagan (2007) highlighted that financial services

were inherently intangible and high on experience and credence qualities. In
order to promote them effectively, a service provider must first identify the
dimensions used by consumer to evaluate the service quality of banks prior to
becoming a customer. They identified four dimensions – reliability,
responsiveness, assurance and tangibles – which form the domain of
customer‟s evaluation of service quality in the financial services industry. The
results indicated that the customer‟s perception on the service quality factors
in private sector banks was higher than the public sector and co-operative
banks.
55
Ladhari (2008) identified the key conceptual and empirical issues that
should be considered in the development of alternative industry-specific
measurement scales of service quality (other than SERVQUAL). They found
deficiencies in some of the alternative service-quality measures; however, the
identified deficiencies do not invalidate the essential usefulness of the scales.
Pollack (2008) revealed that satisfiers exhibit initially no relationship with

satisfaction, but after the acceptable level of service quality (i.e. inflection
point) had been reached, become positively related. Dissatisfiers followed
initially a positive relationship path with satisfaction but after the inflection
point exhibit no relationship, or at best a significantly weakened one, with
satisfaction. The relationship patterns were found to be service attribute as
well as service type dependent.
Seth et al. (2008) measured customer perceived service quality

incorporating both service delivery as well as technical quality aspects. The
validated instrument comprised of dimensions including reliability,
responsiveness, assurance, empathy, tangibles, convenience, and customer
perceived network quality. The study indicated that among the various
dimensions, „responsiveness‟ was the best predictor, followed by reliability,
customer perceived network quality, assurance, convenience, empathy, and
tangibles.
Aykac et al. (2009) employed six dimensions of service quality scale that
was developed by Carman (2000) and Kara et al. (2005) to better understand
the factors underlying healthcare customers‟ perceptions of service quality.
The dimensions investigated were: tangibility, reliability, responsiveness,
assurance, courtesy and empathy. Through a 5 point Likert-type scale, they
compared healthcare customers‟ expectations of a perfect service provider
56
with the practices of Marmara University Hospital to determine if there were

any gaps. Further they analyzed the quality of the Marmara University
Hospital‟s healthcare services and its impact on customer satisfaction and
customer loyalty through a regression analysis.
Hossain and Leo (2009) exhibited that customers‟ perceptions vary

according to the nature of service. In the banking industry they found that
customers‟ perception was highest in the tangibles area such as infrastructure
facilities of the bank, followed by the empathy area such as timing of the bank
and returns on deposit. On the other hand, the lowest perception was in the
competence area, such as the method of imposing service charges followed by
reliability, such as customers‟ guidance. Because of the wide variation of
responses, the banks need to consider the weak areas in order to meet customer
requirement.
Hoang et al. (2010) proposed a conceptual framework of the influence of

service culture on customer service quality via the mediation of employee
attitudes. They also conceptualized the role of potential moderators such as
cultural differences, personal relationships towards service employee attitudes
and customer service quality. Jain et al. (2010) concluded that service quality
in higher education comprises of twelve factors such as visual appeal,
outcome, campus, reputation, input quality (students), industry interaction,
support facilities, input quality (faculty), inter personal relationships,
curriculum, academic facilities and processes.
Korda and Snoj (2010) attempted to validate the perceived retail banking
service scale in the case of a small transitional economy of Europe. Their
analysis showed that the perceived value variable had a potential to be
mediating variable between perceived quality and customer satisfaction
57
relationship in retail banking settings.
Malik and Danish (2010) analyzed the impact of different quality services
on student satisfaction in higher educational institutes of a big division of
Punjab province of Pakistan. They found that students are overall satisfied
with services of tangibility, assurance, reliability and empathy but not much
satisfied with parking facilities, computer labs, cafeteria services, complaint
handling system.
Ravichandran, et al. (2010) examined the influence of perceived service

quality on customer satisfaction in private retail banking services. They
concluded that increase in service quality of the banks increases customer
satisfaction which ultimately retains valued customers. Shahin and Samea
(2010) has critically reviewed and developed the model of service quality gaps
in order to make it more comprehensive. The developed model has been
verified using a survey on 16 experts. Compared to the traditional models, the
proposed model involves five additional components and eight additional
gaps. The five new components included in the developed model were ideal
standards; translation of strategy and policy into service quality specifications;
service quality strategy and policy; employee perceptions of customer
perceptions; and management perceptions of customer perceptions. Also, the
eight new additional service quality gaps were as follows:
 Gap 2: Management perception versus service quality strategy and

policy;
 Gap 3: Service quality strategy and policy versus service specifications;
 Gap 4: service specifications versus ideal standards;
 Gap 5: service specifications external communication;
 Gap 11: Customers‟ perceptions versus management perceptions;
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 Gap 12: The discrepancy between management perceptions and service

quality strategy;
 Gap 13: Customers‟ perceptions versus employee perceptions; and
 Gap 14: The discrepancy between employee‟s perceptions and
management perceptions of customer
Singh and Khanduja (2010) applied SERVQUAL methodology to identify

the gap between customer expectations and perceptions of the actual service
received taking higher education as a service industry. They outlined the major
gaps of expectations and perceptions of the faculty of higher education and
therefore presented a framework for prioritizing critical factors to close the
gap.
Tan et al. (2010) used SERVQUAL model to evaluate the link between
service quality dimensions and knowledge sharing. They found that assurance
and the reliability dimensions of service quality were the two most important
dimensions and had significant positive relationship with knowledge sharing.
3.2.2 PERSPECTIVES ON SERVICE QUALITY
The word quality means different things to people. David Garvin identifies
five perspectives on quality.
 The Transcendent View: Transcendent means something that is

intuitively understood but nearly impossible to communicate such as
beauty or love. It is synonymous with innate excellence a mark of
uncompromising standards and high achievement. It argues that people
learn to recognize quality only through the experience gained from
repeated exposure.
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 The Product-Based Approach: Product-based means the quality in the

components and attributes of a product. It sees quality as a precise and
measurable variable. It argues that differences in quality reflect the
differences in the amount of an ingredient or attribute possessed by the
product.
 User Based Definition: User-based means the customer satisfaction of the
product.
 The Manufacturing Based Approach: Manufacturing-based means the
product conformations to design specification or conformance to
requirement. It is supply based and is concerned primarily with engineering
and manufacturing practices.
 Value Based Definition: It defines quality in terms of value and price. In
other words, value-based means better value for the price of the product.
Consumers perceive the quality of a service by experiencing the

consumption process and by comparing the experience with their expectations.
Thus, service quality is the extent to which a service meets customers‟ needs
or expectations and it involves a comparison of customer expectations with
customer perceptions of actual service performance. The will-o‟- the-wisp
nature of service quality is nicely captured by Tan (1986), who describes it as
being like beauty in the eye of the beholder; in other words, it has different
meaning for different people.
Gronroos (1984) has defined service quality as “the outcome of an

evaluation process, where the customers compare their expectations with the
service they have received”. Service quality is an abstract concept, difficult to
define and measure (Parasuraman, Zeithaml and Berry, 1985, 1988).
Parasuraman et al. (1985) define service quality as consumers‟ comparisons
60
between service expectations and service performance. In other words, service

quality is “the degree and direction of the discrepancy between consumer‟s
perceptions and expectations in terms of different but relatively important
dimensions of the service quality, which can affect their future purchasing
behavior”.
Arnauld et al. (2002) defined service quality with reference to a product

or service as “the consumer‟s evaluative judgments about an entity‟s overall
excellence or superiority in providing desired benefits”. Service quality is
perceived as a tool for increasing value for the consumer; as a means of
positioning in a competitive environment (Mehta, Lalwani and Han, 2000) and
for ensuring consumer satisfaction (Sivadas and Baker-Prewitt, 2000),
retention, and patronage (Yavas, Bilgin and Shemwell, 1997). As a gap or
difference between customer „expectations‟ and „perceptions‟, service quality
is viewed as lying along a continuum ranging from „ideal quality‟ to „totally
unacceptable quality,‟ with some points along the continuum representing
satisfactory quality. Parasuraman, Zeithaml and Berry (1988) held that when
perceived or experienced service is less than expected service, it implies less
than satisfactory service quality. But, when perceived service is less than
expected service, the obvious inference is that service quality is more than
satisfactory.
Service quality is one of the most influencing factors in a consumer‟s

purchase decision process. According to Buzell and Gale (1987) empirical
research clearly shows the positive relationship between service quality and
organizational performance. Using a large database with thousands of strategic
business units, research shows that the most critical factor affecting a business
unit‟s performance is the service quality of its products and services as
perceived by the market relative to the perception about its competitors.
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From the previous definitions of service quality it is apparent that they

include the perception and expectations of services. Perception of service is
the customer‟s opinion of the service or product (Foster, 2004) or the general
judgment of a service which is affected by many factors such as the education
level, background and others (O„Neill and Palmer, 2003). The perception
could be a one time or single perception of the company, such as an
experience buying a product at a specific time, or an overall perception of the
company based on many experiences with the organization. The perception of
service quality is not constant which means that it changes for many reasons
such as time, culture, consumer taste and promotional activities of the
company (Zeithaml, Bitner and Gremler, 2009).
According to Zeithaml, Bitner and Gremler (2009) customer

expectations are beliefs about service delivery that serve as standards or
reference points against which performance is judged. Another definition of
expectations is based on consumption-norms, values, wishes and needs which
depend on the individual (Kasper, Helsdingen and Gabbott, 2006). Therefore,
expectations are different from one consumer to another since it depends on
the individual which causes satisfaction levels to change from person to person
(Kasper, Helsdingen and Gabbott, 2006). Moreover, expectations are usually
formed from previous experiences and it is that level of service the customer
expects from the service provider. It is important for organizations to
understand the different levels of customer expectations because serving
customers at a level that exceeds these expectations will lead to customer
satisfaction (Dutta and Dutta, 2009).
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According to Zeithaml, Bitner and Gremler (2009) there are two

different levels of expectations:
 Desired Service
 Adequate Service
Desired service is the level of service the customer anticipates to

receive from the service provider. At the adequate service level, the customer
anticipates a minimal standard of service from the service provider; this is the
minimal level of the acceptable performance the customer will tolerate. The
difference between the desired level and the adequate level is called the
tolerance zone or the zone of acceptability as stated by Kasper, Helsdingen
and Gabbott (2006). The zone of tolerance changes over time, from service to
service and from customer to customer (Kasper, Helsdingen and Gabbott,
2006).
According to Zeithaml, Bitner and Gremler (2009) the zone of

tolerance is the extent to which customers recognize and are willing to accept
variations in services. If the service level goes below the adequate service
level, this usually causes customers to become irritated and dissatisfied.
However, if the service level is above the desired level, it usually makes
customers happy and satisfied with the service (Wilson et al., 2008).
3.2.3 DETERMINANTS OF SERVICE QUALITY
The determinants of service quality are not universal but are service
specific. Alfrecht and Zemke (1985) identified four factors that influence the
perceived service quality. They are:
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 Care and Concern: How devoted employees and operational systems

of a service are in solving the problems of customers.
 Spontaneity: How employees demonstrate willingness and readiness to
serve. Problem Solving: The expertise and skill of contract employees
in performing services.
 Recovery: The special efforts of the service provider in handling a
situation when something goes wrong or something unexpected
happens.
A Comprehensive Study was carried out by Parasuraman, Zeithaml and

Berry (1985) identifies the determinants of perceived service quality. They
have identified the following ten determinants of service quality:
 Reliability involves consistency of performance and dependability. The

important measures of reliability are:
1. Performance of the initial service

2. Accuracy in billing
3. Keeping records correctly
4. Performing the service punctually
 Responsiveness concerns the willingness or readiness of employees to

provide service. The measures include:
1. Timeliness of service
2. Mailing transaction slips immediately
3. Efficient customer support
4. Giving prompt service
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 Competence means possession of the required skills and knowledge.

The measures include:
1. Knowledge and skills of the contact employees

2. Knowledge and skills of the operational support personnel
3. Research capability of the organization
 Access involves approachability and ease of contact. The accessibility

of a service is determined mostly by the following:
1. Easily accessible by telephone

2. Waiting time for service is not long
3. Convenient hours of operation
4. Convenient location of service facility
 Courtesy involves politeness, respect, consideration and friendliness of

contact personnel. The organization should provide:
1. Consideration for the consumer‟s property

2. Clean and neat appearance of public contact personnel
 Communication means keeping customers informed in a language they

can understand and listening to them. The important criteria are:
1. Explaining the service itself

2. Explaining how much the service will cost
3. Explaining the trade-offs between service and cost
4. Assuring the consumers that the problem will be handled
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 Credibility involves trustworthiness, believability, honesty and having

the customer‟s best interest at heart. The indicators are:
1. Company name
2. Company reputation
3. Personal characteristics of the contact personnel
4. The degree of hard sell involved in interactions
 Security is freedom from danger, risk or doubt. It includes:
1. Physical safety
2. Financial security
3. Confidentiality
 Understanding/knowing the customer involves making the effort to

understand the customer‟s needs. It includes:
1. Learning the customer‟s specific requirements

2. Providing individual attention
3. Recognizing the regular customers
 Tangibles include physical evidence of the service. They are:
1. Physical facilities
2. Appearance of the personnel
3. Tools or equipment used to provide the service
4. Physical representation of the service
5. Other customers in the service facility
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The researchers later in 1998 condensed the list of ten determinants to

give in order to avoid repetitiveness and provide universal applicability. The
five new quality determinant factors are:
Dimension Description
The appearance of physical facilities, equipment,
Tangibility
appearance of personnel and communication materials.
The ability to perform the promised service dependably
Reliability
and accurately.
The willingness to help customers and provide prompt
Responsiveness
service.
The knowledge and courtesy of employees and their ability
Assurance
to inspire trust and confidence.
The caring, individualized attention the firm provides to its
Empathy
customers.
Table.No.3.1 Five Major Factors Determining Service Quality
Gronroos (1990) developed six criteria of good perceived service

quality based upon a solid body of empirical and conceptual research. The six
criteria are:
 Professionalism and skills: Customers realize that the service

provider, its employees, operational systems, and physical resources
have the knowledge and skills required to solve their problems in a
professional way (outcome-related criteria).
 Attitude and behavior: Customers feel that the service employees
(contact persons) are concerned about them and are interested in
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solving their problems, in a friendly and spontaneous way (process-

related criteria).
 Accessibility and flexibility: Customers feel that the service provider,
its locations, operating hours, employees and operational systems are
designed and operated in such a way that it is easy to access the service
and that the service providers are prepared to adjust to the demands and
wishes of the customer in a flexible way (process-related criteria).
 Reliability and trustworthiness: Customers know that whatever takes
place or has been agreed upon, they can rely on the service provider, its
employees and systems, to keep promises and perform with the best
interest of the customers at heart (process-related criteria).
 Recovery: Customers realize that whenever something goes wrong or
something unpredictable happens, the service provider will immediately
and actively take action to control the situation and find a new,
acceptable solution (process-related criteria).
 Reputation and credibility: Customers believe that the operations of
the service provider can be trusted and give adequate value for money,
and that they stand for good performance and values that can be shared
by customers and the service provider (image-related criteria).
3.2.4 HOW SERVICE QUALITY IS PERCEIVED
When service organizations understand how services are evaluated by

consumers in terms of quality, it is possible to design strategies to manage
these evaluations and influence them in a desired direction. In a service
encounter, buyer-seller interactions take place in large number. Each
interaction will obviously have a critical impact on customers‟ quality
perceptions. Thus, a methodology is necessary to understand how customers
68
perceive quality. Gronroos has identified two dimensions of service quality in

relation to quality perception by customers. These are technical quality and
functional quality.
 Technical Quality: What is offered to the customer from the

organization and what customers receive in their interactions with the
service firm is called the technical product. The quality in designing the
basic service package is reflected in the technical quality of a service.
In other words, it speaks of the technical quality of blueprinting and its
execution. Technical quality moulds the first impression of customers.
 Functional Quality: Technical quality contributed only to a part of the
total quality experienced by the customer. Customers are also
influenced by how they receive the service and how they experience the
service process in which they also played a part. Research studies
indicate that customers will be influenced mostly by the way technical
quality is transferred to them. The way service processes are handled in
a service encounter is called functional quality.
 Image: Most of the consumers will evaluate a firm by taking into
consideration its resources, history and ways of operating service
activities. Therefore, a firm‟s image in the corporate as well as at the
local level is of utmost importance in quality perception. If an
organization enjoys a favorable image, customers probably might
forgive the occasional minor mistake of the organization. However, if
the mistakes are repetitive, there is a danger of spoiling the market
image. Customers use a firm‟s image as a filter or a net while
perceiving quality.
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3.2.5 EXPECTED QUALITY vs. EXPERIENCED QUALITY
Every consumer makes an assessment of quality based upon the expectations

that he or she has developed a service offering. Generally, consumers get
influenced by four important factors while forming expectations. They are as
follows:
 Market communication: Service firms communicate, through direct

and indirect channels, to the target market relating to the features and
specialties of the BSP. This is the promise the service providers makes
with the customer. Market communication is the authentic source of
information with an identified sponsor and, therefore, plays a vital sold
in the form of consumer expectation.
 Image: The image of a service firm at the corporate level as well as the
local level influences the expectations of the customers. It pervades
various dimensions. An image of proven skills, consistency,
innovativeness, case and concern, empathy, handling problems, aptly,
performance and so on are some of the identities companies develop
over a period of time. These identities mould consumer expectations.
 Word-of-mouth communication: This is an informal communication
channel. Word-of- mouth communication is considered to be the more
powerful, particularly in the case of services. As services are intangible
and variable, comparison of alternatives and trials are not possible.
Consumers often feel less confident about taking a purchase decision,
they look for advice and information support from the service provider.
They also look for advice and information support from others, whom
they consider as having more knowledge and experience in that
particular service, and who will give a frank opinion about the service.
70
 Customer needs: Besides the three factors mentioned above, the need
intensity of consumers influences the expectations. A relaxed consumer
may expect quality of a high level compared to a customer who is hard
pressed for time.
3.2.6 TOTAL PERCEIVED QUALITY
The Total Perceived Quality (TPQ) of customers can be calculated by

comparing expected quality with experienced quality. If the two are the same,
the consumer feels satisfied with the service. If the expected quality is more
than the experienced quality, the consumer is dissatisfied. If the experienced
quality is more than the expected quality, the consumer is highly satisfied. The
degree of dissatisfaction can be assessed by ascertaining the extent of
deviation (negative) between the expected quality and the experienced quality.
Similarly, the degree of satisfaction can be ascertained by measuring the
deviation (positive) between the two factors. To know the level of satisfaction
of the customer, it is necessary for service companies to study and measure
expected quality and experienced quality.
3.2.7 MANAGERIAL PROCESS FOR SERVICE QUALITY
Service firms should develop quality focussed managerial processes to

ensure continuous quality performance as desired by the customers. In order to
achieve the quality objectives, an integrated and coordinated work of three
participant groups is necessary. The groups that influence the service quality
are:
 The management of the service organization

 The employees
 The customers
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The traditional demand analysis and quality control, measurement are the
first step in the quality management process. A study of demand patterns of
the service at various levels of quality and market responses are studied in
detail. Such study develops a basic understanding of desired quality of the
customers. The second major source is the employees‟ perception of desired
quality and performance. Employees involved in the process will be in a better
position to collect and interpret feedback from the customers. This group, with
its knowledge of the company‟s vision, policies, procedures, competencies and
limitations and comparative knowledge of competitive offers, is an invaluable
resource to the company in developing quality specifications.
Management, therefore, has to conduct an internal analysis of employee

perceptions of desired quality and performance. The information input from
the two processes will help the management to develop their own perceptions
relating to desired service quality by the market. After a thorough analysis of
various factors, the management can finally arrive at decisions on service
quality specifications. The quality specifications, thus decided by the
management will be communicated to employees through internal marketing
and to consumers through external marketing. The internal marketing efforts
result in employee perceptions of desired service quality. The decisions of the
top management also influence the willingness and the ability of the
employees to perform the service.
External marketing which aims at communicating with the target market

develops quality expectations in them. Customers with quality expectations
will interact with employees of the service firm. The employees have to
understand the specific problems of customers on the spot and decide the
service package to be executed in consultation with customers. Besides, an
employee has to ascertain his or her ability and willingness and the customer‟s
72
ability and willingness to participate in the service production and

consumption process. By taking all these considerations, the employee
concerned decides the service to be offered and executes it. Customers who
experience service quality will evaluate quality by comparing experienced
quality with expected quality and come to a conclusion on the perceived
service quality.
3.2.8 SERVICE QUALITY MEASUREMENT
Service organizations understandably are under the constant pressure of

outperforming their competitors in determining the antecedents, determinants,
and consequences of service quality. Such practical importance of service
quality makes the measurement of service quality and its subsequent
management utmost important. But it is difficult to measure service quality as
compared to good‟s quality because of the unique characteristics of service:
intangibility, heterogeneity, inseparability and perishability. In other words,
the difficulty to measure service quality is due to fewer tangible cues available
when consumers purchase services (Parasuraman‟s et al., 1985). It also
requires higher consumer involvement in the consumption process (Gronroos,
1984).
A researcher operationalises the service quality construct either as a gap

between expectation of service and perceived performance of service, or just
perceived performance alone. On the other hand, service quality dimensions
are seen as the criteria to assess service quality (Parasuraman‟s et al., 1985).
They also posit that consumer-perceived service quality is usually seen as
multidimensional construct. The most widely used service quality
measurements tools include SERVQUAL (Parasuraman, Zeithaml and Berry,
1988) and SERVPERF (Cronin and Taylor, 1992). According to a popular
73
Web search engine (i.e., Google Scholar), SERVQUAL has been cited by
more than 3,000 papers and SERVPERF more than 400, as of May 2007.
3.2.8.1 SERVQUAL SCALE

The SERVQUAL scale constitutes an important landmark in the service
quality literature and has been extensively applied in different service settings.
The foundation for the SERVQUAL scale is the gap model proposed by
Parasuraman, Zeithaml and Berry (1988, 1985). With roots in disconfirmation
paradigm, the gap model maintains that satisfaction is related to the size and
direction of disconfirmation of a person‟s experience vis- à-vis his/her initial
expectations (Parasuraman, Zeithaml and Berry, 1985; Churchill and
Surprenant, 1982). Parasuraman, Zeithaml and Berry (1988, 1985) posited and
operationalized service quality as a difference between consumer expectations
of „what they want‟ and their perceptions of „what they get‟ (Cui, Lewis and
Park, 2003). Based on this conceptualization and operationalization, they
proposed a service quality measurement scale called „SERVQUAL‟.
The SERVQUAL instrument developed by Parasuraman et al. (1988)

originally consisted of 97 items and ten dimensions, it was then refined and
reduced to 22 items that measure five dimensions (Akbaba, 2006). Thus,
SERVQUAL scale measures service quality based on the difference between
expectations and performance perceptions of customers using twenty-two
items and five-dimensional structures. According to the developers of
SERVQUAL, the difference between perceptions and expectations results in
the service quality gap (Q = P-E), also known as GAP 5 (Parasuraman et al.,
1988; 1985). Since they operationalized service quality as being a gap between
customer‟s expectations and perceptions of performance on these variables,
their service quality measurement scale is comprised of a total of 44 items (22
for expectations and 22 for perceptions). Customers‟ responses to their
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expectations and perceptions are obtained on a 7-point Likert scale and are
compared to arrive at (P-E) gap scores. A wide gap would represent poor
service quality and shows that the service provider needs to improve on the
service offered to its customers. Parasuraman, Zeithaml and Berry (1988)
posited that while a negative discrepancy between perceptions and
expectations - a „performance-gap‟ as they call it - causes dissatisfaction, a
positive discrepancy leads to consumer delight.
According to the SERVQUAL conceptualization, service quality can be

assessed by five dimensions: tangibles, reliability, responsiveness, assurance,
and empathy (Parasuraman et al., 1988). The tangibles dimension in
SERVQUAL, measured by 4 items, deals with the appearance of physical
facilities, equipment, personnel and communication materials. Reliability,
measured by 5 items, refers to the ability to perform the promised service
dependably and accurately. Responsiveness, measured by 4 items, measures
the willingness to help customers and to provide prompt service. Assurance,
measured by 4 items, deals with the knowledge, courtesy of employees and
their ability to inspire trust and confidence. Finally, the empathy dimension of
SERVQUAL, containing 5 items, refers to the provision of caring,
individualized attention to customers. Parasuraman et al. (1988) contended
that the final 22-item scale and its five dimensions have sound and stable
psychometric properties. The importance of Parasuraman, Zeithaml and
Berry‟s (1988) scale is evident by its application in a number of empirical
studies across varied service settings (Witkowski and Wolfinbarger, 2002;
Kassim and Bojei, 2002; Carman, 1990). Despite its extensive application, the
SERVQUAL scale has been criticized on various conceptual and operational
grounds. Some major objections against the scale relate to use of (P-E) gap
scores, length of the questionnaire, predictive power of the instrument, and
75
validity of the five-dimension structure (Dabholkar, Shepherd and Thorpe,

2000; Babakus and Boller, 1992; Cronin and Taylor, 1992). Some of the
widespread concerns are the 5 dimension configuration of the scale, the
appropriateness of operationalizing service quality as the expectations-
performances gap score, and the scale‟s applicability to a retail setting
(Bakakus and Boller, 1992).
DIMENSIONS ITEM DESCRIPTION

Modern equipment
Visually appealing facilities
TANGIBLES Employees who have a neat, professional appearance
Visually appealing materials associated with the
service
Providing services as promised
Dependability on handling customers‟ service
problems
RELIABILITY
Performing services correctly the first time
Providing services at the promised time
Maintaining error-free records
Informing Customers about when services will be
performed
RESPONSIVENESS Prompt service to customers
Willingness to help customers
Readiness to respond to customers‟ requests
Employees who instill confidence in customers
Making customers feel safe in their transactions
ASSURANCE Employees who are consistently courteous
Employees have the knowledge to answer customer
questions
Giving customers individual attention
Employees who deal with customers in a caring
fashion
EMPATHY
Having the customer‟s best interest at heart
Employee understands customer needs and serves
accordingly.
Table.No.3.2 Dimensions of Service Quality
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As discussed earlier, SERVQUAL is used to measure service quality as

a multi-dimensional construct across five dimensions: tangibility, reliability,
responsiveness, assurance and empathy. Above shows the items under each
dimension in the SERVQUAL scale.
3.2.8.2 SERVPERF SCALE
Cronin and Taylor (1992) questioned the conceptual basis of the

SERVQUAL scale and found it confusing with service satisfaction. Basing the
scale on an earlier work by Bolton and Drew (1991), they noted that a
customer‟s perception of service quality is based on his “preconceived”
attitude about the service. Indeed, Bolton and Drew (1991) noted that a
consumer‟s current attitude is based on their residual attitude from a previous
period about the service quality and their satisfaction or dissatisfaction with
the service. As consumers experience a service, their attitudes about the
service quality may be revised, thereby causing a change in future attitudes.
Cronin and Taylor (1992) noted that a customers‟ perception of service

quality can be best measured by his/her “perceived” attitude about the service
being rendered. They, therefore, opined that expectation (E) component of
SERVQUAL be discarded and instead performance (P) component alone be
used. They proposed what is referred to as the „SERVPERF‟ scale. In the
SERVPERF scale, service quality is operationalized through performance only
scores based on the same twenty-two items and five-dimensional structure of
SERVQUAL. Besides theoretical arguments, Cronin and Taylor (1992)
provided empirical evidence across four industries (namely banks, pest
control, dry cleaning, and fast food) to corroborate the superiority of their
„performance-only‟ instrument over disconfirmation- based SERVQUAL
scale.
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Being a variant of the SERVQUAL scale and containing perceived

performance component alone, „performance only‟ scale is comprised of only
22 items. A higher perceived performance implies higher service quality.
According to Cronin and Taylor (1992), their unweighted performance-based
SERVPERF scale was a better method of measuring service quality. This
scale's reliability ranged between .884 and .964, depending on industry type,
and exhibited both convergent and discriminant validity.
Methodologically, the SERVPERF scale represents marked

improvement over the SERVQUAL scale. Not only is the scale more efficient
in reducing the number of items to be measured by 50 per cent, it has also
been empirically found superior to the SERVQUAL scale for being able to
explain greater variance in the overall service quality measured through the
use of single-item scale.
The SERVPERF scale has been applied in many empirical studies on

service quality. Published research adopting SERVPERF are found across
many consumer, business, and non-profit service industries including retail,
bank, airline, higher education, neighborhood shopping center, dental office,
air cargo, hotels, public transportations, business to business repair, tourism.
The investigations on SERVPERF applications have also been intense but not
as much as SERVQUAL.
SERVPERF scale is also not free from criticisms. Parasuraman et al.

(1994) argue that Cronin and Taylor's (1992) analysis does not take into
account, the “possible intercorrelations among the five latent constructs”.
Further, they assert that Cronin and Taylor (1992) cite studies that focus on the
formation of attitudes and not the attitude level, (which is what SERVQUAL
attempt to measure).Numerous studies have been undertaken to assess the
78
superiority of two scales, but consensus continues to elude as to which one is a

better scale. However, the continued use of and reference to SERVQUAL in
marketing literature suggest that “consensus has not yet been reached relative
to the superiority of performance-only measures of service quality” (Brady et
al., 2002).
3.3. RETAIL SERVICE QUALITY
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. As retailers can create such effects, service quality plays a
significant strategic role in creating quality perceptions. Retail offerings are a
mix of merchandise and service, and the experience of customers in retail
stores thus involves such activities as negotiating their way through the store,
finding the merchandise, interacting with a variety of store personnel, and
returning unsatisfactory merchandise-all of which have a direct influence on
the customers‟ evaluations of service quality.
There‟s little doubt that the retail industry is evolving into an

exceedingly competitive scene, with retail players fighting for a share in the
customers‟ minds and hearts. In light of this, service quality has long been
accepted as the most basic marketing tool for retailers to differentiate their
retail offers, create competitive advantage and to enhance the customers‟
shopping experience (Christo and Terblanche, 1997). In the era of
globalization, small retailers cannot compete with the retail giants only on
price, the winning strategy will be superior service quality. Nevertheless,
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.
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Although measures of service quality in pure service environments and

retail environments are likely to share some common dimensions, it has been
argued that measures of retail service quality must take additional dimensions
into consideration. Retailers today must differentiate themselves by meeting
the needs of their customers better than their competitors. There is general
agreement that a basic retailing strategy for creating competitive advantage is
the delivery of high service quality (Reichheld and Sasser, 1990; Berry, 1986).
In the retail context, perceptions of service encounters accumulate over

time and a customer‟s relationship with an organization are a continuation of
exchanges or interactions both past and present. When customers evaluate
retail service, they compare their perceptions of the service they receive with
their expectations. Customers are satisfied when the perceived service meets
or exceeds their expectations. They‟re dissatisfied when they feel the retail
service falls below their expectations (Levy and Weitz, 2005) and there is
strong evidence that many department stores fall to offer desired services
(Dotson and Patton, 1992).
Service quality in retail has been considered as a critical aspect to

achieve differential advantage. Studies elicit that service is an important
criterion for store patronage in specialty stores.
In 1984, Lumpkin and McConkey highlighted that for the shoppers of

specialty “store personnel” was more important determinant of patronage than
the shoppers of departmental store or discount store.Even though service
quality leads to competitive advantage but surveys had confirmed that retail
stores provides an inadequate level of customer service. A 1987 Washington
Post survey found that nearly half of all shoppers in the Washington area
thought that store service was mediocre and declining. Shoppers, who were
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surveyed in a national poll, had similar thoughts about the causes of poor
service. Among these were long waits for service, impolite sales clerks,
unavailability of advertised goods, and sales clerks who had little or no
product knowledge (Mayer and Morin, 1987).
In apparel specialty store very little research had taken place regarding
service quality expectations. Keeping this fact in mind Finn and Lamb (1991)
undertake a study in apparel where they categorized the stores into four
generalized groups including those similar to: Kmart; J.C. Penny; Dillards; and
Saks. The purpose of their study was not to differentiate among these store
types but to evaluate the SERVQUAL scale in a retail setting.
Austin (1992) opined that retailers traditionally think of customer

service in terms of store hours, gift wrapping, and credit options, but
consumers typically viewed customer service in relative terms based on their
expectations and experiences. Customer service satisfaction depends on how
well the received services match their expectations.Moreover, the study
undertaken by Berman and Evans (1992) highlighted that not only service
quality, there were also other factors which influenced the store patronage
namely: merchandise, price, location, and advertising.
Gagliano and Hathcote (1994) highlighted that service quality in “pure”

service settings and retail settings differ in the sense that quality was seen from
the perspective of not only services but goods as well. Measuring service
quality, therefore, can be rather complicated and difficult especially in apparel
specialty retailing where it combines the selling of goods and services to the
customers as well as the customers‟ expectations of knowledgeable, helpful
staff to assist them during their shopping experience.
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Dabholkar et al. (1996) highlighted that current measures of service

quality do not adequately capture customers‟ perceptions of service quality for
retail stores. 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. Using both quantitative and qualitative research
methods, Dabholkar et al. (1996) developed the retail service quality scale
(RSQS), a multi-item scale measuring five dimensions of retail service quality
and detecting changes required in the services provided. RSQS consist of five
dimensions-physical aspects, reliability, personal interaction, problem solving
and policy.
Boshoff and Terblanche (1997), in a replication of the Dabholkar,

Thorpe, and Rentz (1996) study, reported highly encouraging results for the
RSQS applicability in the context of department stores, specialty stores, and
hypermarkets in South Africa.
Christo and Terblanche (1997) elicited that service quality was the most
basic marketing tool for retailers to differentiate their retail offers, create
competitive advantage and to enhance the customers‟ shopping experience.
Marshall et al. (1999) investigated differences in retail shopping

experiences of African- American and White residents of a middle-size city in
the southern United States. With the SERVPERF items, they reported racial
differences in retail clothing shopping experiences of African- American and
White residents.
In 2000, Fogarty et al. measured service quality with SERVPERF in

four small retail businesses within provincial cities in South East Queensland.
They employed four different datasets, of a shortened 15-item version of the
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SERVPERF scale to be called SERVPERF-M. Exploratory and confirmatory

factor analytic techniques were used to explore the dimensionality of the scale.
They suggested that the five factors can be treated as five different stages of
service quality, rather than as five qualitatively different dimensions.
Mehta et al. (2000) explored the usefulness of SERVPERF and a retail

service quality scale in measuring the service quality of different product-
service retail environments. Specifically, they investigated the relative
performance of two scales measuring the service quality of retailers where
goods purchase was the primary focus, against another where both goods and
services were equally important. Results showed that the scale was superior
within the context of a “more goods and less services” environment, i.e. a
supermarket, while SERVPERF was better for a retailing context where the
service element becomes more important, i.e. an electronic goods retailer.
With a validated Retail Service Quality Scale Siu and Cheung (2001)
studied the service quality delivery of a department store chain and its impact
on consumption behavior. The findings showed that the impact of physical
appearance and policy were salient on the overall perceived service quality
and the future shopping behavior respectively. Among the six service
dimensions, the physical appearance and policy had the greatest impact on the
overall service quality and on future consumption respectively.
Vazquez et al. (2001) attempted to extend the conceptualization and

measurement of service quality in the retail environment. The review of the
retail and service quality literatures and the findings from a qualitative study
conducted by the authors revealed that service quality in retail companies
adopting the commercial format of supermarkets had a four factor structure
(physical aspects, reliability, personal interaction and policies).
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Kim and Jin (2002) found that U.S and Korean consumers perceived
service quality of discount stores differently. They concluded that in a discount
store customers appeared to view the store‟s problem solving ability as an
indicator of its ability to give customers personal attention, and confidence
about the products they were purchasing.
Abu (2004) advocated that there was a need to look into service quality
dimensions for each country, as each country is believed to have its own
unique set of quality dimensions. He identified the service quality dimensions
critical to urban grocery shoppers for small, medium, and large-sized grocery
stores. He identified that the inter-personal relationship and problem solving
dimensions contribute significantly to the overall service quality measure of a
small-sized grocery store, the physical aspects and inter-personal relationship
medium-sized grocery store, and the physical aspects, reliability, and policy
large-sized grocery retailer.
Choi et al. (2004) highlighted that how web retail service quality has
different effects on perceived product quality, value, and willingness to buy
according to product categories. They presented a research model on the basis
of service quality, product categories on the web, and marketing theories for
consumers purchase behavior. They concluded that functional web retail
service quality had a direct effect on willingness to buy and technical web
retail service quality influences consumer perceptions of product quality and
value.
Jain and Gupta (2004) assessed the diagnostic power of the two service
quality scales: SERVQUAL and SERVPERF. In fast food restaurants of Delhi,
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they found the SERVPERF scale more appropriate in explaining convergent

and discriminant validity of service quality construct. However, the scale was
found deficient in its diagnostic power. It was the SERVQUAL scale which
outperforms the SERVPERF scale by virtue of possessing higher diagnostic
power to pinpoint areas for managerial interventions in the event of service
quality shortfalls.
Leen et al. (2004) aimed at validating the retail service quality (RSQS)
instrument developed by Dabholkar et al. (1996) in the Malaysian business
setting, specifically in the context of apparel specialty stores. Findings
obtained from the confirmatory factor analysis and reliability tests indicated
that all the five dimensions of physical aspects, reliability, personal
interaction, problem-solving and policy were highly suited for measuring retail
service quality in clothing stores, also proving that the instrument was
applicable in the Malaysian culture. Through the correlation analysis, it was
shown that retail service quality is furthermore associated with future
consumption behaviour in terms of the customers‟ intention to visit, purchase
and recommend the stores to others.
Raven and Welsh (2004) examined retail service in Kuwait and

Lebanon regions with long histories of trade. Further, they examined customer
and salespeople perceptions of service encounters in these countries in light of
their culture, religion, and nationalities. They found indeed differences
between expectations of quality of service encounters and national cultures.
Kuwaiti national customers were more similar in their expectations of service
quality to Lebanese customers. Customers from India/Sri Lanka/Bangladesh
had higher expectations than Kuwaiti customers for tangibility, reliability, and
assurance, but no differences were found in responsiveness or empathy.
85
Munoz et al. (2005) examined small/medium enterprises (SMEs)

management and employee perceptions on a number of service quality
dimensions. They suggested that managers and employees in the Philippines
behaved in similar ways to those in Western countries, but there were
differences, probably related to cultural characteristics. Further, they
highlighted that shopping experience influences service quality expectations
and perceptions in the Philippines. Shoppers with more experience tend to
expect higher service quality and perceived than they got it. He advocated that
training can influence the customer orientation of sales people in improving
responsiveness, reliability, and empathy, among other service dimensions
when coupled with good management techniques.
McKenzie (2006) examined how the Estonian consumers interpret and

perceive retail service quality. They found retail service quality was a relevant
construct for examination in Estonia. There is an expectation by consumers to
exert their own sense of shopping capabilities. There is an expectation that
selling staff need to be authoritative, and to show consideration to the
consumer through acts of politeness and courtesy. Also there is an expectation
that policies exist to make things right when a problem occurs.
In Vietnam, Nguyen (2006) found that retail service quality composed

of five dimensions: goods assortment, personnel, appearance, physical aspects
and safety. He recommended that SERVQUAL and RSQS could be applied in
Vietnam provided that they were adjusted to the specific context of study.
Parikh (2006) empirically assessed the gap between the customer‟s

expectations and their perceptions about the service quality of retail stores in
India. Statistical analysis showed that although the instrument was found to be
quite reliable, the gap scores did not merge into five dimensions of service
86
quality as proposed by the scale developers; rather, the gap scores roughly
merged into nine dimensions. RSQS may not be applicable to the retail sector
in India without further restructuring.
Kaul (2007) opined that service quality measures developed

internationally were often accepted as adequate in India. She evaluated the
Retail Service Quality Scale (RSQS) developed in the U.S. and considered
valid across a variety of formats and cultural contexts. She concluded that the
RSQS can be used to assess overall service quality levels and for tracking
overall improvements over a period of time. However, the different
dimensions of service quality were not clearly identifiable. Confirmatory
factor analysis of the component structures using AMOS 4.0 indicated that the
RSQS dimensions was not valid in India.
Nhat and Hau (2007) measured the retail service quality in Vietnamese
supermarkets and considered the impact of retail service quality on customer‟s
overall evaluation of retail service quality. Service Personnel was the key
factor impacting customer‟s perception of service quality in supermarkets. By
improving the performance of employees, supermarkets can increase
customer‟s satisfaction.
Chavadi and Kokatnur (2008) evaluated the most influencing factors

and identified the service gap between the actual perception and expectation of
fast food services. They found that product was the most important factor
influencing customer perception followed by service, convenience and value
pricing. Regarding SERVQUAL they explored that the highest gap exists for
assurance and empathy.
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Das et al. (2008) studied whether RSQS model was fit for measuring
retail service quality in Kazakhstan or not. They collected the data from the
departmental stores, discount stores and supermarkets. Confirmatory factor
analysis indicated a good fit of the RSQS dimensions and the items in
Kazakhstan.
Ravichandran et al. (2008) identified the critical quality dimension of

Chennai City food and grocery shoppers based on the Retail Service Quality
Scale proposed by Dabholkar et al. (1996). As far as validation of the
instrument was concerned, they found that four factors were enough to
evaluate the service quality under 27 items of the food retailers in Chennai.
Torlak et al. (2010) observed that to meet the requirement of consumers

in a retail context, retailers must emphasize the importance of product quality
and service quality. They employed RSQS in grocery store of Turkey. They
employed exploratory factor analysis and found four dimensions namely
personal interaction, reliability, physical aspects and policy.
Hayworth, C., Hobson, R., and Mia, Z. (2012) study reveals that two
constructs, namely Physical Aspects and Personal Interaction, had a direct
relationship with Customer Satisfaction. Customer satisfaction was also
confirmed to be positively linked to store loyalty.
3.3.1 SERVICE QUALITY AND DEMOGRAPHICS
Demographic information such as age, gender and education level need

to be examined when measuring service quality in retailing; in order to
discover the relationship between demographic information and dimensions
(Siu and Cheung, 2001).
88
Demographic information allows researchers to obtain characteristics

of their sample therefore making the classification of the data more
meaningful (Elanain, 2003). Research suggests that demographics do have an
effect on some service quality dimensions such as the reliability dimension
(Paulins, 2005).
According to Ganesan-Lim, Russell-Bennett and Dagger (2008) it is

important to understand the relationship between the customer‟s perception of
service quality and demographic information such as age, gender, education
level and income level. This information is useful for ensuring there are
suitable products available for the target market. They hypothesized that
service quality dimensions were different depending on the age, gender and
income level of customers; however only age was found to have a relationship
with service quality dimensions.
The Demographic Information is discussed below:
Homburg and Giering (2001) found a relationship between age and service
quality dimensions. There were also age differences in some of the retail
dimension in study in Hong Kong (Siu and Cheung, 2001). Other studies
found that there were differences in shopping behavior when it involves age
(Nadiri and Tumer, 2009; Foucault and Scheufele, 2002). Age was a crucial
factor for retail organizations. This was even more evident when the product
range is associated with the age of the consumer. Furthermore, one of the
problems facing retailers these days is coping with an aging population which
means retailers must adapt to the changes in the age of their consumers
(Varley and Rafiq, 2004). Usually people in the same age group display
similar shopping behavior and this information is important to retailers to
understand more about their market (Ogden and Ogden, 2005). Retailers must
89
consider age differences when studying consumption behavior because there

were differences in product choices depending on the age of the consumer
(Rocha, Hammond and Hawkins, 2005). In a retailing study by Ganesan-Lim,
Russell-Bennett and Dagger (2008) age had a big influence on the perception
of service quality.
There were gender differences in the physical appearance and personal

interaction dimension in a retail study in Hong Kong (Siu and Cheung, 2001).
Other studies confirmed that there were differences in shopping behavior when
it involves gender (Foucault and Scheufele, 2002). There is little attention
given to gender based research concerned with perceived service quality
(Snipes, Thomson and Oswald, 2006). On the other side, Yaghi (2010) and
Ganesan-Lim, Russell-Bennet and Dagger (2008) found no differences in the
perception of service quality based on gender.
According to Ogden and Ogden (2005) the most important

demographic information is „marital status‟ because it shows if customers
were buying for themselves, for a spouse, or a family with children. Nadiri and
Tumer (2009) found significant differences between marital status and the
dimensions namely: Physical Aspects (0.017) and Reliability (0.001).
According to Kaushik (2009) occupation/profession had a big influence

on the satisfaction via service quality. Three factors namely: tangibility,
customization and comfort differed significantly on the basis of profession
whereas empathy, in-flight services and reliability had no influence of
profession in aviation sector.
Income has a relationship with purchasing decisions, thus high income

customers gather information prior to buying a product and this may have an
90
influence on satisfaction (Homburg and Giering, 2001). Also, there were

income level differences in the physical appearance and promises dimension in
a retail study in Hong Kong (Siu and Cheung, 2001). Knowing customers‟
income is another important factor that needs to be considered because
customers that have different levels of income might prefer to buy different
products or services (Ogden and Ogden, 2005).
According to Meng et al. (2009) consumers shop at different stores

based on their income level which indicates that there might be differences in
the perception of service quality based on income level. Customers with high
income might favour retailers with high levels of service quality while
customers with low incomes might be more tolerant to lower levels of service
quality (Sum and Hui, 2009).
There were residential status differences in the customization and

reliability dimension in Indian domestic aviation sector (Kaushik, 2009).
Respondents from rural background gave more importance to customization
whereas respondents from urban background gave more importance to
reliability. Education level is important demographic information because as
customers become more educated they demand different products and
different levels of service (Kent and Omar, 2003). Kotler and Armstrong
(2010) suggest there has been an increase in educated people in the United
States and this leads to an increase in the demand for quality products. On the
other side of the coin, Yaghi (2010) noticed no significant association
regarding education across service quality dimensions.
According to Meng et al. (2009) customers with different demographic

characteristics shop at different outlets/stores which further indicate that they
have different perceptions of service quality. Frequency of visits could be a
91
predictor of desires, intentions and behaviors (Perugini and Bagozzi, 2001).

According to Shankar, Amy and Rangaswamy (2003) there are opinions that
suggest a positive or negative relationship between frequency of visits and
satisfaction. The argument that suggests a positive relationship between
frequency of visits and satisfaction is that the more the customer visits the
service provider the more they are satisfied with the service. Whereas the
argument that suggests a negative relationship between frequency of visits and
satisfaction is that the more the customer visits the service provider the higher
the customer‟s expectations become. According to Raajpoot (2004) the more
frequent the visits of the customers to the service provider the more the
customer places importance on the service quality dimensions.
From the above discussion it is clear that age, gender, marital status,
occupation, income, residential status, education level, type of outlet,
frequency of visiting could have an effect on service quality dimensions.
Various studies found that there are differences in shopping behavior when it
involves age and gender; however education level and income are more
important indicators of shopping behaviour (Foucault and Scheufele, 2002). A
study on Islamic banks in the UAE found that there are differences in the
perception of service quality based on age, education level and the number of
years the customer has been dealing with the bank (Al-Tamimi and Al-Amiri,
2003).
3.3.2 THE IMPORTANCE OF RETAIL SERVICE QUALITY
Researchers have found that one of the most important factors that
affect the consumer‟s choice of store is service quality (Swoboda et al., 2007)
for this reason it is important to understand retail service quality. According to
Zeithaml, Bitner and Gremler (2009) “In cases in which customer service or
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services are offered in combination with a physical product, service quality

may also be very critical in determining customer satisfaction”. Therefore, it is
important to maintain high standards when interacting with customers and
delivering the service-product to customers (Varley and Rafiq, 2004).
Some researchers see retail service quality as being the same as service
quality and others make a distinction between the two (Gaur and Agrawal,
2006) as retail shops offer both a service and a product (Siu and Cheung,
2001). The best way to describe a retail business is to think of it as a
continuum with products or tangible goods at one end and services or
intangible goods at the other end (Varley and Rafiq, 2004). Service quality is
important in every aspect of the business and it helps in creating a positive
image for the retailer‟s brand (Swoboda et al., 2007). Therefore, customer
service must be the focus of a successful retail business that has loyal
customers (Paulins, 2005). The „GAP‟ model of service quality which was
developed by Parasuraman, Zeithaml and Berry helps in identifying whether
the customer is satisfied or dissatisfied with the retailers service.
3.3.3 THE GAPS MODEL FOR IMPROVING RETAIL SERVICE

QUALITY
The GAPS Model indicates what retailers need to do to provide high-

quality customer service. When customers‟ expectations are greater than their
perceptions of the delivered service, they are dissatisfied and feel the quality
of the retailer‟s service is poor. Thus, for improving customers‟ satisfaction
with their services, retailers‟ needs to reduce the service gap.
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There are four factors which affect the service gap:
 Knowledge Gap: The difference between customers‟ expectations and

the retailer‟s perception of customer expectations. Most organizations
would happily believe that they know what the consumers want, but
they may be mistaken. For example, for customers‟ at a supermarket
price may be the most important factor, others may prefer quality, while
yet another segment may prefer speedy checkouts.
 Standards Gap: The difference between the retailers‟ perceptions of
customers‟ expectations and the customer service standards it sets.
Service standards need to be based on the customers‟ expectations. The
management of the organizations needs to be committed towards
providing high standards of service. For example, Dominos Pizza has
set a standard of delivering pizzas in 30 minutes. In case the pizza
delivery is late, a part of the amount is refunded to the customer.
 Delivery Gap: The difference between the retailer‟s service standards
and the actual services provided to customers‟. The level of service
provided would vary from employee and by the same employee, over
the period of time. Clarity of the role of the employee and adequate
training would enable an employee to serve the customer in an efficient
manner.
 Communication Gap: The difference between the actual service
provided to customers‟ and the service promised in the retailer‟s
promotional program. If advertising or sales promotions promise one
kind of service and the customer receives a different kind of service, the
communication gap increases.
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Just 16 percent of traditional, retail store shoppers are extremely satisfied

with their most recent customer service experience, whereas online shoppers
are nearly three times as likely to be extremely satisfied with their online
customer service experience. Thus, the retailer‟s objective is to reduce the
service gap by reducing each of the four gaps. And the key to improve service
quality is to (1) understand the level of service customers expect, (2) set
standards for providing customer service, (3) implement programs for
delivering service that meets the standards, and (4) undertake communication
programs to inform customers accurately about the service offered by the
retailer.
3.3.4 MEASURING RETAIL SERVICE QUALITY
One of the early classifications of retailing is provided by Gagliano and

Hathcote (1994) who classified retailing into two categories:
 Store service
 Sales service
Store service includes returns and exchange, availability and variety of the
merchandise, quality and reliability of service and after sales services. Sales
service includes attitude and knowledge of salesmen, timely service and
attention to customers. This classification makes it easier for the managers to
focus on the area of service that necessitates improvement (Gagliano and
Hathcote, 1994).
Another classification that has been more popular is the classification of

Dabholkar, Thorpe and Rentz (1996) who argue that retail service quality has
five dimensions: physical aspects, reliability, personal interaction, problem
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solving and policy. There have been other classifications of retail service
quality which are summarized in below table:
AUTHOR RETAIL COMPONENTS

1. Upscale: high/low quality of merchandise,
prestigious store, appealing physical facilities,
high/low price
Teas 2. Merchandise: selection and sales and promotions
3. Transaction Effectiveness: checkout lines, prompt
(1994)
service and personal attention
4. Responsiveness: employees willing to help, easy to
get questions answered and problem solving
1. Employee Services: pleased with the services and

friendly employees
Chowdhury,
2. Product Quality: high quality products and branded
Reardon and
products
Srivastava
3. Atmosphere: appearance of the store
(1998) 4. Convenience: ease of getting into the store 5. Prices:
the prices at the store are fair
1. Quality such as friendliness of cashiers, speed of

Gomez, checkout and cleanliness of parking lot
McLaughlin 2. Customer service such as variety and quality of
and Wittink products and availability of products
(2004) 3. Value such as value for money and prices.
Morschett, 1. Quality of performance such as quality and store

Swoboda and design
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Foscht (2005) 2. Scope of offers such as variety of products and one

stop shopping
3. Price level such as prices of products
Table.No.3.3Classification of Retail Service Quality
The Above table shows the various classifications of retail service

quality and the next section discusses the most popular method of measuring
retail service quality. The review of various service quality model revealed
that the service quality outcome and measurement is dependent on type of
service setting, situation, time, need etc factors (Seth et al., 2005).
Undoubtedly, service quality in retailing is different from any other
product/service environment. Measuring service quality, therefore, can be
rather complicated and difficult in retailing where it combines the selling of
goods and services to the customers as well as the customers‟ expectations of
knowledgeable, helpful staff to assist them during their shopping experience.
That‟s why the most famous and well discussed service quality model in the
1990‟s- SERVQUAL - by Parasuraman‟s et al. (1985) failed to be fully
adopted and validated in a retail setting (Dabholkar et al., 1996).
Due to the failure of SERVQUAL to be fully adapted and validated in a

retail store setting that offers a mixture of services and merchandise,
Dabholkar et al. (1996) developed the Retail Service Quality Scale (RSQS)
taking into account retailing-related dimensions. They proposed that retail
service quality has a hierarchical factor structure. While consumers think of
retail service quality at three levels- a dimensional level, an overall level, and a
sub dimensional level, Dabholkar, Thorpe and Rentz (1996) proposed five
dimensions- physical aspects, reliability, personal interaction, problem
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solving, and policy. They also gave sub- dimensions of each dimension to
combine related attributes into sub-groups
Dabholkar et al. (1996) used only performance-based measures instead

of the gap between perceptions and expectations because evidence exists that
perception measures have a stronger predictive power than the gap score
(Cronin and Taylor, 1992). To formulate the scale Dabholkar et al. (1996)
conducted qualitative research using three different methodologies -
phenomenological interviews, exploratory depth interviews, and tracking the
customer through the store. And finally, DTR‟s proposed a measure of retail
service quality which is a 28-item scale, consisting of 17 items from
SERVQUAL and 11 items developed from their literature review and
qualitative research. Five items from SERQVUAL were deemed inappropriate
and dropped. The scale has high construct reliability and validity in measuring
service quality of retail stores.
3.3.4.1 HIERARCHICAL STRUCTURE OF RETAIL SERVICE

QUALITY
The Below model shows the five dimensions of retail service quality and the
six sub-Dimensions which are: „Physical Aspects‟ with two sub-dimensions
Appearance and Convenience, „Reliability‟ with two sub-dimensions,
Promises and Doing-it-Right; „Personal Interaction‟ with two sub-dimensions
Inspiring Confidence and Courteousness/Helpfulness, „Problem Solving‟, and
„Policy‟ . The RSQS scale used a 5 point rating scale by using 1 = strongly
disagree and 5 = to strongly agree.
The RSQS is a five dimensional structure of which three dimensions

comprise of two sub dimensions each. Below is an explanation of the
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dimensions followed by Table 9 that illustrates the dimensions and sub-

dimensions of the RSQS.
FIG.NO 3.1 HIERARCHICAL STRUCTURE OF RETAIL SERVICE

QUALITY
DIMENSION -1: PHYSICAL ASPECTS:
Service is said to be distinguished from goods due to its Intangibility.

The tangibility aspects of a service have a significant effect on perceived
service quality. The tangibility importance varies according to types of service.
For a retail store, the tangibility aspect will be critical as the retailers offer a
mix of merchandise and service quality. Physical aspects of retailer include
equipment and fixtures, physical facilities, convenience of physical facilities
and layouts. The importance of physical environment in a service setting is
due to its ability to influence consumer attitudes, behaviour intention and
behaviour. As customers are involved in the production and consumption
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process of a service conducted within a physical environment, the physical

environment will have a deep impact on customers‟ perception of service
experiences. Bitner (1992) also noted that physical environment is often used
as cues of a firm‟s competences and quality by consumers before a purchase.
Specifically, proper layout in a store will reduce shopper‟s search time,

colour combine with lighting were suggested to “affect consumers‟ cognitive
representation and affective reaction”, and a light and pleasing scent affects
shoppers‟ perceptions of a shopping environment in which the latter will have
a significant effect on shoppers‟ mood. Researchers have given several names
with different interpretations to the “physical” elements of service quality
measure. Dabholkar et al. (1996) used the term “physical aspects” to refer to
the physical appearance of store and layout convenience. Parasuraman et al.
(1988) called it as “tangibles” adding appearances of staff besides physical
facilities and equipment. The appearance of staff was also acknowledged as
part of tangibles by several researchers.
This dimension has broader meaning than does the SERVQUAL‟s

tangible dimension. In addition to the appearance of the facilities, it also takes
into account the convenience offered the customer by the layout of physical
facilities. The higher customers appreciate on the physical aspects, the higher
the overall evaluation of retail service quality is. Therefore the sub-dimensions
of this dimension are appearance and convenience.
DIMENSION -2: RELIABILITY:
The second dimension is reliability. Customers view reliability as a

combination of keeping promises. Dabholkar, Thorpe and Rentz (1996)
pointed out that keeping promises and doing it right, were important sub
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dimensions which were identified during their interviews. The reliability

dimension comprise of “promises” and “doing it right” sub-dimensions
(Dabholkar et al., 1996). Besides fulfilling promise and performing the right
service as part of relithe “doing it right” sub-dimension. The higher customers
appreciate on reliability, the higher the overall evaluation of retail service
quality is. According to a survey by PricewaterhouseCoopers, consumers in
Asia demand superb quality, especially the availability of merchandise in
stores, much more than the Western customers.
This dimension is similar to the reliability dimension of the

SERVQUAL the difference being that problem solving is part of reliability in
the SERVQUAL scale and in the RSQS it is a separate dimension. Another
difference between the reliability dimension in the SERVQUAL and the RSQS
is that the availability of products is part of the reliability dimension in the
RSQS but not in the SERVQUAL ability, the researchers added the
availability of merchandise as part of the “doing it right” sub-dimension. The
higher customers appreciate on reliability, the higher the overall evaluation of
retail service quality is. According to a survey by PricewaterhouseCoopers,
consumers in Asia demand superb quality, especially the availability of
merchandise in stores, much more than the Western customers. This
dimension is similar to the reliability dimension of the SERVQUAL the
difference being that problem solving is part of reliability in the SERVQUAL
scale and in the RSQS it is a separate dimension. Another difference between
the reliability dimension in the SERVQUAL and the RSQS is that the
availability of products is part of the reliability dimension in the RSQS but not
in the SERVQUAL.
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DIMENSION -3: INTER-PERSONAL RELATIONSHIP:
The interaction among store personnel and store customers are

important as customers are more loyal to a store if the store is seen as warm,
friendly, and impulsive. Odekerken-Schröder et al. (2001) in their research
emphasized the importance of inter-personal relationship which refers to “the
opportunity for customers to affiliate with other individuals during the retail
encounter”. They elaborated the interaction as both the customer-to-customer
and customer-to-service provider social interaction. This dimension is a
combination of the „responsiveness‟ and „assurance‟ dimension of
SERVQUAL and includes the employee‟s helpfulness and the ability to instil
trust (Kim and Jin, 2002). The higher customers appreciate personal
interaction, the higher the overall evaluation of retail service quality is. This
dimension was suggested as a separate dimension because interviews revealed
the importance of feeling confident, feeling comfortable when shopping at the
store and the help customers receive from employees of the store (Dabholkar,
Thorpe and Rentz, 1996).
Dabholkar et al. (1996) put forward that the personal interaction has
two sub-dimensions namely inspiring confidence of customers by store
personnel and courteousness/helpfulness of store personnel. These sub-
dimensions are very closely related and capture how the customer is treated by
the employee. Inspiring confidence of customers includes error-free sales
transactions and record, the ability to answer customers‟ questions, the
behaviour of employees in this store instils confidence in customers, and
customers feel safe in their transactions with this store.
Incorporated in the courteousness/helpfulness factor are employees

provide prompt service to customers, employees tell customers exactly when
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services will be performed, customers are given individual attention,

employees are consistently courteous with customers, and employees treat
customers courteously on the telephone. Darian et al. (2001) also pointed on
the importance of sales personnel‟s knowledge who is aware of new products,
technical developments, prices, and other variations of store offerings, who is
responsive but provides only information required, and who is not talking
down to a customer.
DIMENSION -4: PROBLEM SOLVING:
Dabholkar et al. (1996) proposed a new dimension “problem solving”

which was not addressed in SERVQUAL. The fourth dimension addresses the
issues of handling of goods returned, exchanges as well as complaints. The
problem solving dimension of retailers includes: willingness of retailers to
handle returns and exchanges, sincere interest in solving the problem and
handling customer complaints directly and immediately. Service recovery is
recognized as a critical part of good services. Dabholkar et al. (1996)
highlighted the need to have problem solving as a dimension by itself because
of the importance of “service recovery” in providing good service. Customers
were quite sensitive to how service providers attend to problems and
complaints. The ease of returning and exchanging merchandise is very
important to retail customers. The higher customers appreciate problem
solving, the higher overall evaluation of retail service quality is. This
dimension does not have any sub-dimension.
DIMENSION -5: POLICY:
The fifth proposed dimension- policy- captures aspects of services

quality that are directly influenced by store policy. For example, when
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customers evaluate a store on the basis of convenient hours, it is viewed as

whether the store‟s policy is responsive to customers‟ needs. The higher
customers appreciate policy, the higher the overall evaluation of retail service
quality is.
Dabholkar et al. (1996) elaborated store policy to include high quality

merchandise, parking facilities, convenient operating hours, acceptance of
major credit cards, and store‟s own credit card. An important criterion on
which customers evaluate stores is the credit and charge account policies of
the store. Customers also appear to value parking availability for retail
shopping. Mehta et al. (2000) seemed in agreement with Dabholkar et al.
(1996) that the service quality measurement of the retail stores should include
the measure of service quality and product quality as retail stores offer a mix
of services and products. This is also a new dimension, which is not similar to
any of the SERVQUAL dimensions; it has no sub-dimensions. This dimension
was added based on literature reviews and the interviews (Dabholkar, Thorpe
and Rentz 1996).The customers evaluate the retail services based on the
abovementioned service quality dimensions. The service quality of the retail
sector depends upon the differences between the expectations of the customer
and the perception on receiving the service.
The RSQS dimensions have similarities with retail components discussed

earlier and presented in Table.No.4.2, which exhibits the retail components
suggested by Teas (1994), Chowdhury, Reardon and Srivastava (1998),
Gomez, McLaughlin and Wittink (2004) and Morschett, Swoboda and Foscht
(2005). Below are the similarities between the RSQS dimensions and the retail
components:
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 The retail components in Teas (1994) study are similar to the RSQS
dimensions. An example of this is the quality of merchandise; this is
similar to a question on the RSQS scale which asks if this store offers high
quality merchandise. The second component is selection and sales
promotion; this is similar to a question on the RSQS which asks if
materials associated with the store are appealing. The third component
which is the prompt services, and the last component which is
responsiveness, are also similar to questions under the personal interaction
dimension on the RSQS scale.
 Chowdhury, Reardon and Srivastava (1998) conducted a study consisting
of five components. A close look at these components shows that all of the
components, with the exception of price, are part of the RSQS scale.
 The study by Gomez, McLaughlin and Wittink (2004) consists of three
components. The first two components are similar to questions on the
RSQS. The third component which is value for money is not part of the
RSQS scale.
 The study by Morschett, Swoboda and Foscht (2005) consists of three
components of which the first two are similar to questions on the RSQS
scale. The third component is price and is not part of the RSQS scale. Price
has been mentioned in three out of the four studies mentioned above;
however price is not measured in the RSQS, which is consistent with other
studies that did not consider price as part of service quality (Wong and
Sohal, 2002).
3.4 CUSTOMER LOYALTY
Customer loyalty is defined as repeated purchasing and referring a

company to other customers (Heskett et al., 1997), generating positive and
105
measurable financial results (Duffy, 2003). Pearson (1996) has defined

customer loyalty as the mindset of the customers who hold favorable attitudes
toward a company, commit to repurchase the company‟s product/service, and
recommend the product/service to others. In other words, customer loyalty is
the degree to which a customer exhibit repeat purchasing behaviour from a
service provider possesses a positive attitudinal disposition toward the
provider, and considers using only this provider when a need for this service
exists.
Loyalty is developed over a period of time from a consistent record of

meeting, and sometimes even exceeding customer expectations (Teich, 1997).
Improvements in retention and increase in the share of the company are the
obvious economic benefits of customer loyalty. Customer loyalty is an
indispensable performance measurement tool for profit as well as non-profit
organizations to sustain competitive advantage (Kotler, 1998) and to enhance
business/service performance measures. Therefore, loyalty is essential for the
organization because it is cheaper to retain its old customers than to find new
customers; in addition to this customer retention is linked to the company‟s
profit. Customer loyalty (or the absence of it) is exhibited both through
customer behaviour and also through attitude.
Singh and Sirdeshmukh (2000) suggested the customer loyalty as “the

market place currency of the twenty-first century”. Customer loyalty is
concerned with the likelihood of customer returning, making business
referrals, providing strong word-of-mouth references and publicity (Bowen
and Shoemaker, 1998). Loyal customers are less likely to switch to a
competitor due to price inducement, and these customers make more
purchases compared to less loyal customers (Baldinger and Rubinson, 1996).
However, customers who are retained may not always be satisfied and
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satisfied customers may not always be retained. Customers may be loyal due
to high switching barriers or the lack of real alternatives, customers may also
be loyal because they are satisfied, thus wanting to continue with the
relationship.
People become loyal customers in stages, according to Griffin (1995)

and Vavra (1995). In the first stage, the prospective customer becomes a
suspect, who may be anyone that might buy the product or service. In the
second stage, a prospect must have a need for the product or service. In the
third stage, the customer is a disqualified prospect as the company has
discovered that the customer does not need the product or does not have the
ability to buy the product. First-time customers are those who have bought
once and repeat customers have bought twice or more. A client purchases
regularly and retailer has ongoing relationship with this customer. The
customer as advocate is the last stage. An advocate purchases regularly as a
client, but additionally encourages others to buy from the company. An
inactive customer has bought from the company, but has not purchased from
the company for a period that is longer than the normal purchase cycle
(Griffin, 1995).
Jacoby and Chestnut (1978) have explored the psychological meaning

of loyalty in an effort to distinguish it from behavioral (i.e., repeat purchase)
definitions. Their analysis concludes that consistent purchasing as an indicator
of loyalty could be invalid because of happenstance buying or a preference for
convenience and that inconsistent purchasing could mask loyalty if consumers
were multi-brand loyal. More specifically, all three decision- making phases
must point to a focal brand preference if true brand loyalty exists. Thus, (1) the
brand attribute ratings (beliefs) must be preferable to competitive offerings, (2)
this “information” must coincide with an affective preference (attitude) for the
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brand, and (3) the consumer must have a higher intention (conation) to buy the
brand compared with that for alternatives.
In marketing literature, the word loyalty is used in at least three different

senses:
 As Transactional Retention: Customers or employees are retained to act

repeatedly in favor of the company‟s interests in exchange for something
attractive. This, for example, is what happens when newspapers include
collectible items so that buyers will not cease to purchase the same
newspaper, or when businesses or commercial chains offer certain
advantages to customers who make repeat purchases in the same
establishment or chain. Managers and employees are also retained by the
firm by means of economic compensation or other personal or family
perks.
 As Sentimental Attraction: This is present when someone more or less
habitually chooses a certain product or brand because he likes it, or
because it inspires a feeling of confidence: the man, for instance, who
always buys the same newspaper because he enjoys it, has grown
accustomed to it, or because its editorial line appeals to him. This kind of
“loyalty” is also generated when one works for a company that he finds
comfortable, or trustworthy. This feeling may arise in very different ways.
One of these is “falling in love” with a business. When one notices how it
takes a genuine interest in intelligently meeting a customer‟s or employee‟s
needs. This leads a person to believe that he can place his trust in it.
 As Willingness To Commit Oneself: This is the case when a person
understands that he ought to dedicate his activity perseveringly to a person,
cause, or institution that he considers valuable and to which he has made
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some sort of commitment. In contrast to transactional retention, which

corresponds to an instrumental, calculating, self-interested rationality,
loyalty understood as willingness to commit is based on a deliberately
created bond that obliges the person to maintain this commitment. Such
loyalty is considered intrinsically valuable. This understanding of loyalty is
also distinct from a mere sentimental attraction or reflexive habit, which
occurs without reflection or responsible decision.
Jacoby and Kyner (1973) defined customer loyalty as a biased (i.e. non-
random), behavioural response (i.e. purchase), expressed over time, by some
decision making unit, with respect to one or more alternative brands out of a
set of such brands, and was a function of psychological processes.
Nordstrom and Swan (1976) discovered that the change in ownership

resulted in altered patterns of customer loyalty. Alteration of any market
variable is likely to upset the probability of continued loyalty. Dealer
ownership was shown to be a significant influence on customer loyalty. In
particular, a change in ownership had an impact on brand and source
selections. A change in the marketing structure variable, ownership had a
significant effect on behavioural patterns of customers. This effect was
reflected in a shifting of loyalty patterns among members of the experimental
group.
In 1978, Jacoby and Chestnut explored the psychological meaning of

loyalty in an effort to distinguish it from behavioral (i.e., repeat purchase)
definitions. Their analysis concluded that consistent purchasing as an indicator
of loyalty could be invalid because of happenstance buying or a preference for
convenience and that inconsistent purchasing could mask loyalty if consumers
were multi-brand loyal. Therefore, the authors summarized that it would be
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unwise to infer loyalty or disloyalty solely from repetitive purchase patterns

without further analysis.
Dick and Basu (1994) discovered that loyal customers were less
motivated to search for alternatives, were more resistant to counter-persuasion
from other brands, and were more likely to pass along positive word-of-mouth
communication about the service to other consumers. Further, they
demonstrated that loyalty was more prevalent among service customers than
among customers of tangible products. In the services context, intangible
attributes such as reliability and confidence played a major role in building or
maintaining loyalty.
Ellis (1995) examined customer‟s motivation for long term

relationships, the nature of these relationships and their outcomes like
customer satisfaction, customer loyalty, word of mouth and purchases. He
made this study on the relationship marketing in a retail clothing/accessories
setting. Results indicated that the personal needs variables were useful in
classifying customers and in determining the types of relationships certain
customers likely to have, in comparison to other types of customers.
Reichheld (1996) opined that some customers were inherently more

loyal than others. He introduced a loyalty coefficient which helps in
understanding customers‟ predispositions to being loyal. He also revealed that
one of the salient benefits of customer loyalty, especially for service
organizations, is word of mouth (WOM) communication. Loyal customers
often generate new business via WOM recommendations to prospective and
other existing customers of the firm.
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Carbone (1997) wonders whether loyalty was a subversive doctrine

and, after various reflections, responded affirmatively. In his own words:
“loyalty is a vicious hoax we perpetrate on ourselves, revealed when the other
guy inevitably trades loyalty for self-interest”. Loyalty in the business world
was generally understood in three ways: i) transactional retention, ii)
sentimental attraction, and iii) willingness to commit oneself. In the third type,
the commitment to adhere to a person, cause, or institution may contribute to
human flourishing and therefore generate the human virtue of loyalty.
Kandampully (1997) suggested that there was no disagreement that

customer loyalty is the goal, but claims that this presupposes the establishment
of trust and a long-term relationship, and that the only way to gain this trust
and long-term relationship is by first offering it. Organizations will thus need
to commit themselves to their customers – a commitment to offer loyalty of
service.
Andreassen and Lindestad (1998) revealed that in the package tour

industry which is a complex service industry, corporate image rather than
customer satisfaction was the main predictor of customer loyalty. This finding
challenges the disconfirmation of expectations paradigm, which predicts
customer satisfaction as the primary route to customer loyalty.
Bowden (1998) described that how Nortel Wireless Networks initially

recognized the need to enhance the existing emphasis on purely customer
satisfaction to that of an evolving focuses on customer loyalty. He also
highlighted the rationale behind the evolution from a customer satisfaction
strategy to that of a customer value management methodology leading towards
increased customer loyalty.
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Gabbott and Hogg‟s (1998) review of loyalty suggested that bonding

arrangements between the parties in the relationship can act as a form of
“glue” and they proposed six forms of bonding which act in concert: goal
compatibility, trust, satisfaction, investment, social and structural ties.
In 1998 Mittal and Lassar concluded that in service industry the

relationship between satisfaction and loyalty was asymmetrical: while
dissatisfaction nearly guarantees switching, satisfaction does not ensure
customer loyalty. Even more importantly, the drivers of “loyalty beyond
satisfaction” were different from what drives dissatisfaction versus
satisfaction. The potency of technical quality (“the quality of the work
performed”) and functional quality (“the quality of the service”) in delivering
satisfaction and loyalty differed. And it varied between a low contact and a
high contact service. For a low contact service (e.g. car repair), technical
quality was needed to first obtain satisfaction, and then functional quality was
needed to drive loyalty beyond satisfaction. The converse was the case for a
high contact (e.g. health care) service.
Soderlund (1998) supported a positive association between customer

satisfaction and customer loyalty, but he also noted that increasing satisfaction
does not produce an equal increase in loyalty for all customers.
Andreassen (1999) proposed and tested a theoretical model focusing

negative effect, satisfaction with complaint resolution, and corporate image as
antecedents to customer loyalty. He found that satisfaction with complaint
resolution had a positive impact on customer loyalty. Complaint resolution is
thus an important element of the company‟s customer retention strategy.
Second, negative affect caused by the initial service failure had a negative
impact on satisfaction with complaint resolution and customer loyalty. Finally,
112
corporate image had a positive impact on customer loyalty.
Ehrenberg and Scriven (1999) exhibited that few consumers were

“monogamous” i.e. 100 percent loyal or “promiscuous” i.e. no loyalty to any
brand. Rather most people were “polygamous” i.e. loyal to a portfolio of
brands in a particular category. From this perspective, loyalty was defined as
an ongoing propensity to buy the brand, usually as one of several.
Grayson and Ambler (1999) ascertained that loyal customers were more
likely to expand their relationship within the product range and so the rewards
from this group were long term and cumulative.
Gremler and Brown (1999) concluded that the influence of loyal

customers can reach far beyond their proximate impact on the company. This
impact was analogous to the ripple caused by a pebble tossed into a still pond.
They introduced the loyalty ripple effect construct and defined it as the
influence; both direct and indirect, customers had on a firm through (1)
generating interest in the firm by encouraging new customer patronage or (2)
other actions or behaviours that create value for the organization. That is, in
addition to their revenue stream, they suggested that loyal customers may
engage in several behaviors, including word-of-mouth communication that add
value to or reduce costs for the firm.
Oliver (1999) revealed that satisfaction was a necessary step in loyalty

formation but becomes less significant as loyalty begins to set through other
mechanisms. Further, customer loyalty cannot be achieved or pursued as a
reasonable goal by many providers because of the nature of the product
category or consumer disinterest. For some firms, satisfaction was the only
feasible goal for which they should strive; thus, satisfaction remains a worthy
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pursuit among the consumer marketing community.
Rowley and Dawes (1999) reviewed the theoretical work on customer

loyalty and identified that loyalty has both attitudinal and behavioral elements.
Categories of loyal proposed by Dick and Basu were defined by the
relationship between attitudinal and behavioral aspects of loyalty. Antecedents
to loyalty include cognitive, affective and cognitive factors. The outcomes of
any program to manage loyalty needs to be evaluated and measured. The
measurement of loyalty poses some interesting challenges in terms of the
definitions of the attitudes and behaviors that it might be appropriate to
measure.
According to Shoemaker and Lewis (1999) loyal customers enact as

information channels, informally linking networks of friends, relatives and
other potential customers to the organization.
Alonso (2000) tested a model of customer loyalty which compromised

of two facets: the firm and the consumer. The firm was the entity that starts the
process with the production of a consumer value package that includes a
product or service and a strategy to deliver it into the consumer‟s hand. The
results suggested that consumer trust and commitment had a key-mediating
role in the process of building loyalty. The buying process with trust and
commitment will be able to generate loyalty involving repeated purchases in a
long term relationship between the firm and its consumers.
Stevens (2000) found that the relationship between competition and

customer loyalty becomes more intense as the level of competition rises,
especially in the services sector where there is a wide range of choices and
rapidly emerging innovative products and services.
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Young (2000) pointed that while customer satisfaction was clearly an

important part of a company‟s financial performance, satisfaction was not the
sole determinant of profitability. Most companies had learned that it was far
more profitable to keep customers than attracting new customers and more
specifically the right type of customers to maintain. He further elaborated a
customer loyalty index which composed of four factors: use again, recommend
to others, exceeding expectations and satisfaction.
Boenitz (2001) postulated that most of the company‟s financial systems

do not capture the value of a customer loyalty, focusing instead on current
period costs and revenues while ignoring expected customer cash flows. By
understanding the economies of defections, managers often came to realize
that product and service quality improvements was not costs, but investments
in customer retention. Improving customer satisfaction yields to customer
retention, market share and profitability.
Mattila (2001) examined the impact of relationship type on customers‟

behavioral intentions in a context of service failures. Overall, the results from
the two scenario-based experiments indicated that building a true service
relationship with the customer might be a critical factor in ensuring customer
loyalty with a failed recovery attempt. Moreover, he suggested that bonding
the customer to the company might reduce customer resistance to premium
prices.
Straughan and Albers-Millers (2001) explored that cultural

individualism was negatively correlated with customer loyalty to domestic
retailers, uncertainty avoidance was positively related to customer loyalty to
domestic retailers, the ratio of foreign imports to GDP was negatively
correlated to customer loyalty to domestic retailers, and men exhibited greater
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loyalty to domestic retailers than women do.
Widzer (2001) measured the aspects of customer loyalty and customer

satisfaction that were most likely to impact retention rates of business travelers
among their choice of traveler providers. He discussed the importance of an
organizational culture that promotes loyalty and satisfaction, the effect of
customer loyalty and satisfaction on the internal dynamics of an organization,
the difference and similarities between customer loyalty and satisfaction. He
found airfare as the most important attribute impacting retention rates.
Chiou et al. (2002) proposed a cognitive-affective-conative baseline

model. Perceived service quality (both tangible company-related and
employee-related factors) was modeled antecedent to satisfaction and trust,
which in turn were antecedents to customer loyalty responses (word of mouth
and traditional loyalty). These relationships were then hypothesized to be
moderated by high versus low knowledge, a moderation based on central
versus peripheral processing. The results showed that employee service quality
had a greater impact than company service quality on trust and satisfaction in
both knowledge groups.
Froehle (2002) studied the impact of computer mediated

communication technologies on customer‟s perception which in turn could
improve customer satisfaction and engender customer loyalty. They developed
a model that posited how several service process design parameters associated
with computer mediated communication influenced the customer‟s beliefs and
attitudes towards: (a) the contact episode specifically, and (b) the service
provider generally. The findings indicated that personalization and
synchronicity significantly impact customer intentions regarding both loyalty
and the propensity to use the communication medium for future contacts with
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the firm. Technologies that allowed for increased levels of personalization in

the customer service process were found to have the greatest impact on
customer satisfaction.
Heskett (2002) concluded that an important antecedent of customer

loyalty was customer satisfaction. Research suggested that while customer
satisfaction and loyalty provide a foundation for high levels of customer
lifetime value, he supported a range of customer behaviors with widely
varying values, characterized by mere loyalty, commitment, apostle-like
behavior, and ownership.
Fullerton (2003) investigated the roles played by different forms of

commitment in the relationship between customers and their service provider.
It was found that when customer commitment was based on shared values and
identification, it had a uniformly positive impact on customer loyalty. When
customer commitment was based on switching costs and dependence, it had
mixed effects on customer loyalty. In addition, it was found that there were
significant interactions between these two forms of commitment on customer
loyalty.
Uncles et al. (2003) revealed that loyalty in competitive repeat-

purchase markets was shaped more by the passive acceptance of brands than
by strongly held attitudes about them. They reviewed three perspectives on
loyalty and relate these to a framework for understanding customer loyalty that
encompasses customer brand commitment, customer brand acceptance and
customer brand buying.
Beerli et al. (2004) proposed that satisfaction together with personal

switching costs were antecedents leading directly to customer loyalty, with the
117
former exerting the greatest influence and perceived quality were a

consequence of satisfaction. They also showed that the degree of elaboration
in the bank selection process does not have a moderating influence on the
causal relationship between satisfaction/switching costs and customer loyalty.
Morais et al. (2004) tested a conceptual framework of the development

of loyalty that was grounded in resource theory, reciprocity, and customer
equity. The results indicated that if customers perceived that a provider was
making an investment in them, they in turn made a similar investment in the
provider, and those investments led to loyalty. The findings revealed that
investments of love, status, and information were more closely associated with
customer loyalty than investments of money. These findings supported the
proposed theoretical model and helped in explaining how well-designed
loyalty programs may lead to increased psychological attachment.
Carpenter and Fairhurst (2005) supported for significant, positive

relationships between utilitarian and hedonic shopping benefits, customer
satisfaction, customer loyalty and word of mouth communication in retail
apparel branded context.
Rowley (2005) found that all loyal customers were not at the same
ladder, they were standing at different ladder of customer loyalty and to retain
those differentiated strategies had to be adopted.
Rundle-Thiele (2005) highlighted that there were different ways in

which customers can be loyal and attitudinal loyalty was the most important
dimension for marketers to monitor. Further, the dimensions of loyalty may
include propensity to be loyal, behavioral intentions, complaining behavior,
resistance to competing offers, attitudinal loyalty and behavioral loyalty.
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Ball et al. (2006) showed that the effect of service personalization on

customer loyalty exists, but the effect was not all direct. Personalization works
through improving service satisfaction and trust. Personalization and improved
communication act together in such a way that they account for the variance in
customer loyalty that would be otherwise explained by corporate image.
Leverin and Liljander (2006) investigated the relationship marketing

(RM) strategy of a retail bank. They found no significant differences between
the segments on customers‟ evaluations of the service relationship or their
loyalty toward the bank. Furthermore, regression analysis revealed that in the
profitable segment, relationship satisfaction was a weak determinant of
customer loyalty.
Turner and Wilson (2006) identified the impact of the Tesco Club card
on customer loyalty. A positive moderate relationship was found between the
owning of a Club card and loyalty to store. They also found that there was a
positive moderate relationship between the Club card returns and customer
loyalty.
Zineldin (2006) examined and developed a better understanding of

triangular relationship between quality, customer relationship management
(CRM) and customer loyalty (CL) which might lead to companies‟
competitiveness (CC). Changes in quality over time within various segments
or related to specific products or categories of products/services can be used as
an indicator of the level of customer loyalty. By linking infrastructure,
interaction and atmosphere indicators to the quality of object and processes,
researchers and managers can document which changes in CRM strategy
improve the overall satisfaction and loyalty, hence the ultimate outcomes.
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Jones and Farquhar (2007) examined minor service failures in UK

banking and considered the impact that satisfaction with service recovery had
on customer intentions to continue their custom and make recommendations.
A few customers who complained about minor service failures reported that
they were very satisfied with the service recovery. Weak service recovery
influenced customer intentions about continued custom and recommendation.
Minor failures in account management and bank charges were shown to have a
marked effect on intended loyalty behaviors.
Keiningham et al. (2007) examined different customer satisfaction and loyalty

metrics (satisfaction, expectations, value, etc.) and tested their relationships to
customer retention, recommendation as well as share of wallet. The data were
collected from US customers of three industries: mass merchant retail, retail
banking and ISPs. The results indicated that recommendation intention alone
was not an indicator of performed better in prediction of customer
recommendations and retention.
Kaushik (2007) studied the influence of various factors on customer

loyalty. The main hypothesis of his study insisted that the list of most
important factors affecting loyalty was dependent on the level of loyalty of
costumers. LOGIT method was used for testing the hypotheses on the sample
of survey data about 1000 private customers of the biggest telecommunication
company in Estonia. The results revealed that four analyzed factors affecting
customer loyalty: satisfaction, trustworthiness, image and importance of
relationship were playing different role on the different levels of customer
loyalty.
Brunner et al. (2008) discovered that for new customers satisfaction

was crucial whereas image plays a much smaller role in terms of customer
120
loyalty. For experienced customers, however, the importance of satisfaction

decreases whereas the impact of image increases.
Ganguli and Kumar (2008) explored the drivers of customer

satisfaction and loyalty among retail store customers. They found that neither
customer satisfaction nor loyalty was affected by parking. Satisfaction and
loyalty was mostly influenced by pricing features, which established the fact
that India is still a highly price conscious market. The next best driver of
satisfaction and loyalty was store ambience emphasizing the fact that in case
of a supermarket, retail shopping customers preferred to shop in an
environment which is cool and calm, and they can spend their time in a
leisurely manner choosing assorted products in an easy manner.
Han and Back (2008) investigated the relationship between image

congruence and consumption emotions and the possible influence of this
relationship on customer loyalty in the lodging industry. The results showed
that their model, which linked image congruence, consumption emotions, and
customer loyalty, was generally supported, whereas the linkage between social
image congruence and consumption emotions was not significant.
McMullan and Gilmore (2008) highlighted the importance of

identifying, understanding and managing mediating effects, in the context of
loyalty development. They emphasized the importance of a differentiated
approach to develop and manage customer loyalty by appropriately rewarding
customers at different levels.
Raimondo et al. (2008) investigated the influences of relational equity

on attitudinal loyalty and behavioral loyalty. Moreover, they tested the
hypothesis that relationship age moderates the impact of relational equity on
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loyalty, adopting a cross-sectional design and data from a sample of Italian

customers of mobile phone services (N = 461). Relational equity was
recognized as a significant determinant of customer loyalty over and above
satisfaction and its influence increases along with relationship age.
Xiaofei et al. (2008) defined the relationship among Guanxi

investment, affective commitment and customer loyalty. They proposed a
customer win-back model and found that Guanxi investment strategy had
significant effects on customer‟s loyalty.
According to Davis-Sramek et al. (2009) affective commitment (affective

commitment is the relationship with the service provider based on the
customer positive experience of the service provider) was directly related to
loyalty whereas continuance commitment (continuance commitment is a
relationship with the service provider because the customer might not have
other alternatives or be at an economic disadvantage if he or she switches from
the current service provider) was not.
Han and Ryu (2009) examined the relationships among three

components of the physical environment (i.e., décor and artifacts, spatial
layout, and ambient conditions), price perception, customer satisfaction, and
customer loyalty in the restaurant industry. The three factors of the physical
environment strongly influenced how customers perceived price, and this price
perception, in turn, enhanced customer satisfaction level and directly/indirectly
influenced customer loyalty. Decor and artifacts were the most significant
predictors of price perception among the three components of the physical
environment. Furthermore, both price perception and customer satisfaction
played significant partial/complete mediating roles in the proposed model.
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Anuwichanont and Rajabhat (2010) examined the impact of the

multidimensional conceptualization of commitment (informational
complexity, position involvement and volitional choice) on loyalty in the
airline context. The results supported the three dimensions of commitment as
the determinants of loyalty. But no support was found for the hypothesized
relationships between informational complexity and attitudinal loyalty and
between volitional choice and attitudinal loyalty.
Yeng, L. C., Kamariah, N., and Mat, N. (2013) study determine the
antecedents of customer loyalty from both attitudinal perspective (cognitive
loyalty, affective loyalty, and cognitive loyalty) and behavioral perspective
(action loyalty). The findings disclose that the antecedents of cognitive loyalty
are the components of store image, namely, service quality, product quality,
store atmosphere, and promotion activity. The antecedents for affective loyalty
are customer satisfaction, loyalty program, and retailer brand equity, while the
antecedent for cognitive loyalty is customer commitment. Likewise, the
antecedents for action loyalty are cognitive loyalty, customer commitment,
and customer satisfaction. The study identifies three strategic tools that
dominate attitudinal aspects, namely, store image, loyalty program, and
retailer brand equity. Thus, these strategic tools provide retailers with a
direction in strategy formulation, which allows them to capitalize customer
loyalty as a means of gaining competitive advantage.
3.4.1 ASSESSING THE RELATIONSHIP BETWEEN SERVICE

QUALITY AND CUSTOMER LOYALTY
Various researchers had empirically examined the relationship between

overall service quality and individual service loyalty dimensions. In regards to
customer loyalty, Parasuraman et al. (1988) argued that reliability was the
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most important dimension whereas the tangibles dimension was considered as

the least critical service quality aspect by service customers.
DuWors and Haines (1990) found that the level of loyalty can change
over time. Or, quite simply, many companies can overcome the limiting
characteristics of their service industry and build loyalty through superior
quality and outstanding customer service. Moreover, a positive relationship
was observed between service quality and the intention to remain loyal even in
case of price increment (Zeithaml et al., 1990). Cronin and Taylor (1992)
noticed that service quality did not appear to have a significant (positive)
effect on intentions to purchase again.
In 1993, Boulding et al. found a positive relationship between service

quality and repurchase intentions and willingness to recommend. Ghobadian et
al. (1993) ascertained that a high level of service quality was anticipated to
lead to customer satisfaction and eventually to better customer loyalty and
higher profits.
Ostrowski et al. (1993) examined issues related to service quality and

customer loyalty in the commercial airline industry. The results of an
empirical study, using data collected on two air carriers, indicated that current
levels of perceived service quality were below potential; hence customer
loyalty to airlines was low. A significant relationship was found to exist
between service quality (carrier image) and retained preference, a measure of
customer loyalty.
Storbacka et al. (1994) posited that service quality leads to relationship

strengths, which in turn leads to customer loyalty in the form of repeat
purchase behavior. Iacobucci and Grayson (1995) highlighted that service
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quality and customer satisfaction was important means of creating competitive

advantages and customer loyalty. Service quality is one of the ways to achieve
customer loyalty.
Johnson et al. (1995) highlighted that there were several reasons for
using measures of service quality to understand customer loyalty. The first
reason for using and measuring quality to explain loyalty is that quality ratings
tell us the state of the service provider‟s resources and actions. Measuring
quality tells us what aspects of service was below par and need improvement.
Secondly, satisfaction is a rating of customer‟s experience with the service
outcome, whereas quality is a judgment made about a firm‟s resources and
skills. Unsatisfactory personal outcomes may be due to factors related to the
customer‟s specific characteristics, and the customer may still rate the firm
high or low on quality.
Rapp (1995) opined that customer satisfaction was achieved by a

company‟s overall performance. The performance dimensions could be
distinct as product quality, service quality, reputation quality, relationship
quality and price elements. He studied the development of a customer
satisfaction model (PROSAT) taking German car market in the customer
segment of executives. Results of the study indicated that the performance
dimensions contribute to different levels of customer satisfaction. Service
quality leads to customer satisfaction and the result was a high correlation with
customer loyalty. This loyalty leads to repurchase intention and the positive
word-of-mouth communication.
Sasser and colleagues (1995) reported a strong relationship between the

level of quality offered by a supplier and the resulting loyalty displayed by
customers. Leading service organizations strived to maintain a superior quality
125
of service in an effort to gain customer loyalty (Zeithaml et al., 1996)

therefore, a service organization‟s long-term survival in a market was
essentially determined by its ability to expound and retain a large and loyal
customer base.
Andreassen and Lindestad (1997) discussed and tested corporate image

and customer satisfaction as two routes to customer loyalty. Based on data
from 600 individual customers of package tour industry, they proposed a
conceptual model using structural equation modeling. They found that
perceived quality had positive effects on value and customer satisfaction for
the industry consolidated. Value had only significant impact on customer
satisfaction for customers with a low degree of service expertise. Corporate
image was positively correlated with perceived quality, customer satisfaction,
and customer loyalty. Furthermore, they discovered that for complex services,
corporate image and customer satisfaction was not two separate routes to
customer loyalty. Corporate image impacts customer loyalty directly whereas
customer satisfaction does not.
Maloles (1997) found that both service quality and customer

satisfaction influenced customer loyalty intentions directly. Service quality
also affected customer loyalty intentions through overall satisfaction. The
results of the research also showed that both, firm/service characteristics and
equity, influence perceptions of service quality and overall satisfaction.
Bloemer et al. (1998) investigated how image, perceived service quality

and satisfaction determined customer loyalty in a retail bank setting at the
global construct level, as well as the level of construct dimensions. At the
global level the results of a large-scale empirical study revealed that image
was indirectly related to bank loyalty via perceived quality. In turn, service
126
quality was both directly and indirectly related to bank loyalty via satisfaction.
The latter had a direct effect on bank loyalty. At the level of the dimensions
underlying aforementioned constructs, it becomes clear that reliability (a
quality dimension) and position in the market (an image dimension) were
relatively important drivers of retail bank customer loyalty.
Bloemer et al. (1999) focused on the refinement of a scale for

measuring service loyalty dimensions and the relationships between
dimensions of service quality and service loyalty dimensions. The results of an
empirical study of a large sample of customers from four different service
industries suggested that four dimensions of service loyalty can be identified:
purchase intentions, word-of-mouth communication; price sensitivity; and
complaining behavior. Further analysis yields an intricate pattern of service
quality-service loyalty relationships at the level of the individual dimensions
with notable differences across industries.
Yang (2001) assessed the customer loyalty by embracing e-service

quality dimensions along with perceived product/service value, as the
determinants of customer loyalty and found five e-service quality dimensions:
care/help, reliability, ease of use, security and product/service portfolio. While
perceived product/service had no significant influence on overall service
quality assessment, it does considerably impact on the assessment of customer
satisfaction and customer loyalty.
Zins (2001) investigated the antecedents of future customer loyalty in

the commercial airline industry by applying structural models under four
prototypical past loyalty conditions. He found that corporate image of the
service provider along with service quality and customer satisfaction, were
powerful and illustrative components for explaining future customer loyalty.
127
Dean (2002) found that both service quality and perceived customer
orientation of call centers affect customer loyalty to the providing
organization, and perceptions of quality partially mediated the customer
orientation to loyalty relationships.Lee-Kelley et al. (2002) explored the
concept of employing service quality in a non-service industry to raise
switching barriers and to create customer longevity. A survey of the UK steel
industry revealed that the higher the level of perceived service quality, the
higher the expressed intended customer loyalty.
Kandampully and Suhartanto (2003) revealed that the quality of service

was more significant than price in segregating a service firm from its
competitors and in fostering customer loyalty.
Lee et al. (2003) found that traditional brick-and-mortar companies

were embracing the use of modern technologies to enhance the service quality
they offered and to gain customer loyalty. They found that technology affects
the ability of hotels to support employees, enhance the quality of service,
improve efficiencies, and gain competitive advantage which leads to customer
loyalty.
Wong and Sohal (2003 a) measured the impact of service quality

dimensions on customer loyalty, on two levels of retail relationships: person-
to-person (salesperson level) and person-to-firm (store level). They revealed
that service quality was positively associated with customer loyalty, and that
the relationship between the two was stronger at the company level, rather
than at the interpersonal level. Specifically, among the dimensions of service
quality, the most significant predictor of customer loyalty at a company level
was tangibles, while the most significant predictor of customer loyalty at an
interpersonal level was empathy.
128
Ribbink et al. (2004) empirically investigated the roles of service

quality, satisfaction and trust in an e-commerce context. In the study, e-trust
was found to directly affect loyalty. The e-service quality dimension of
assurance, i.e. trusting the merchant, influences loyalty via e-trust and e-
satisfaction. Other e-quality dimensions, such as ease of use, responsiveness,
and customization influence e-loyalty mainly indirectly, via satisfaction.
Bell et al. (2005) investigated the effects of customer investment

expertise and perceived switching costs on the relationships between technical
and functional service quality and customer loyalty. Technical service quality
was hypothesized to be a more important determinant of customer loyalty than
functional service quality as expertise increases. Both technical and functional
service quality was hypothesized to have a reduced relationship with customer
loyalty as perceived switching costs increase. Three-way interactions between
the main effects of service quality, customer expertise, and perceived
switching costs yields additional insight into the change in relative importance
of technical and functional service quality in customers‟ decision to be loyal.
Arasli, Mehtap-Smadi and Katircioglu (2005) found a positive

relationship between four service quality dimensions in Greek banks and
overall satisfaction and subsequently, a link between satisfaction and loyalty.
Fig. No. 3.1 above summarizes the relationship between service quality
dimensions, overall satisfaction and loyalty.
Lei and Mac (2005) investigated the relationship between service quality and
customer loyalty in the context of Macau, a small city in South China. Based
on an empirical study of 387 valid responses, they concluded that tangibles,
assurance, empathy and responsiveness were important determinants of
customer loyalty in the transport service sector. Besides improving service
129
quality, the public bus service providers should also consider offering
differentiated service as they found that frequency of usage of bus services
does moderate the relationship between service quality and customer loyalty.
According to Akbaba (2006) service quality was an antecedent of

customer loyalty which leads to new customers, increases the company‟s
performance which reduces costs and raises the organization‟s positive image.
Leung (2006) investigated the service quality of the six network

operators in Hong Kong and explored the determinants of service quality in
the industry. He identified six dimensions of service quality of the mobile
network services industry in Hong Kong, which were Empathy,
Responsiveness, Network Quality, Reliability, Assurance, and Tangibles. All
service quality dimensions identified were positively related to the overall
perceived service quality. Further, both service quality and customer
satisfaction were found to be linked to behavioral intentions such as continue
to use the service, increase usage rate, refer the services to friends, and pay
premium price for the services.
Olorunniwo et al. (2006) investigated that whether the typology to

which a service belongs explain the nature of the service quality (SQ)
construct and its relationship to customer satisfaction (SAT) and behavioural
intentions (BI) in service factory or not. They found that tangibles, recovery,
responsiveness, and knowledge were the dominant dimensions of SQ construct
in the service factory. Further they highlighted that, although the direct effect
of SQ on BI was significant, the indirect effect (with SAT playing a mediating
role) was a stronger driver for BI in the context of the service factory
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TANGIBILITY
RELIABILITY
OVERALL RECOMMANDING
CUSTOMER BANK TO OTHERS
ASSURANCE SATISFACTION
EMPATHY
Source: Arasli, Mehtap-Smadi and Katircioglu (2005, p.51)
Fig.No.3.2: The Relationship between Service Quality Dimensions,

Satisfaction
Chen et al. (2007) explored the relationship between hot springs hotels‟
service quality, customer satisfaction, customer loyalty and lifestyle. The
outcome of their research indicated that hot springs hotel operators need to
enhance customer satisfaction in order to improve customer loyalty directly or
enhance service quality in order to improve customer loyalty indirectly to
enhance profitability and sustain operations. Because customers of different
lifestyles differ in every dimension, hot springs hotel operators can segment
the market via lifestyle variables and undertake different strategies in response
to the service quality and customer satisfaction factors valued by the target
market segment in order to attain the goal of enhancing customer loyalty and
corporate profitability.
Huang et al. (2007) highlighted that both psychological and economical

factors influence customers‟ loyalty to ASPs (application service providers),
yet affective commitment was more important than continuous commitment.
131
Paying more attention to psychological considerations may be good in B2B

relationships. Value-added service and service quality deepen affective
commitment which in turn promotes loyalty. Increasing investment size and
reducing attractiveness of alternatives enhance continuous commitment.
Kandampully and Hu (2007) revealed that corporate image was

influenced both by service quality and customer satisfaction, which in turn
influences customer loyalty. Thus, the key to customer loyalty appeared to be
the fostering of a favorable image of the hotel firm created by improving
service quality and satisfying customers.
Rauyruen et al. (2007) presented a picture of how relationship quality

influenced customer loyalty or loyalty in the business-to-business context.
Building on prior research, they proposed relationship quality as a higher
construct comprising trust, commitment, satisfaction and service quality.
These dimensions of relationship quality can reasonably explain the influence
of relationship quality on customer loyalty. They concluded that to maintain
customer loyalty to the supplier, a supplier need to enhance all four aspects of
relationship quality which were trust, commitment, satisfaction and service
quality. Satisfaction appears to be a crucial factor in maintaining purchase
intentions whereas service quality strongly enhances both purchase intentions
and attitudinal loyalty.
Su et al. (2007) explored issue about convenience stores which offered

delivery on demand service. With survey and statistic techniques, they found
three dimensions of service quality of E-commerce: conveniently, information
quality, and instant; and two dimensions of service quality of delivery on
demand service: just-in-time delivery and quality of pick-up contribute
significantly. They also concluded a positive relationship between total
132
satisfaction on E-commerce and delivery on demand service. With the factor

of satisfaction as a mediator, the influence of service quality on loyalty was
also positive.
Sousa (2007) exhibited the relationship between quality and loyalty in

multi-channel e-service settings. In this connection, he empirically tested the
quality-loyalty relationship in a multi-channel e-service; and examined
whether a customer‟s degree of focus on the internet (DFI) channel moderates
this relationship or not. He employed structural equation modeling, and found
a strong and significant link between e-service (web site) quality and loyalty
intentions.
Bastos and Gallego (2008) developed a model to demonstrate that

loyalty was a consequence of service quality and customer satisfaction. A
specific scale had been developed and applied to a survey at a two level of
Portuguese pharmacies: rural (with no competition) and urban pharmacies
(with some competition). Using a structural equation modeling methodology
they demonstrated that the more competition (urban pharmacies) less loyalty,
the more dependent with the service (high consume in product pharmacies) the
more loyal.
Akbar and Parvez (2009) proposed a conceptual framework to

investigate the effects of customers‟ perceived service quality, trust, and
customer satisfaction on customer loyalty. They exhibited that trust and
customer satisfaction was significantly and positively related to customer
loyalty. Customer satisfaction was found to be an important mediator between
perceived service quality and customer loyalty.
133
Clemes et al. (2009) developed a hierarchical model to examine the

interrelationships between behavioral intentions, service quality, customer
satisfaction, perceived value and image in the Taiwan hotel sector. They
identified the dimensions of service quality through the literature review and
focus group discussions. Statistical analyses showed that perceived value had
the most influential moderating effect on the relationship between service
quality and customer satisfaction. Further, they demonstrated that service
quality had a direct impact on customer perceptions of value and customer
satisfaction. Customer satisfaction and image directly influenced behavioral
intentions.
Hazra and Srivastava (2009) examined the relationship of service

quality with customer loyalty, commitment and trust from the customer‟s
perspective in the Indian banking sector. The results showed that dimensions
of service quality such as assurance-empathy, reliability and tangibles
significantly predict customer commitment and trust. They revealed that
service quality was positively associated with customer loyalty.
Ladhari (2009) found a direct relationship between perceived service

quality and behavioral intention and a direct relationship between satisfaction
and behavioral intention. Furthermore, he suggested that behavioral intention
could be viewed as a multidimensional construct which consists of
recommendation, loyalty and willingness to pay more. According to Ladhari
(2009) recommendation means customers talking positive about the service
provider, loyalty means repeat purchase and willingness to pay more means
that the customer is willing to pay more money for service provided by the
service provider. The relationship between service quality, satisfaction and
behavioral intentions are illustrated in Fig.No.3.2 below.
134
Lenka et al. (2009) examined whether service quality of Indian

commercial banks increases customer satisfaction that fosters customer
loyalty. Analysis showed that better human, technical and tangible aspects of
service quality of the bank branches increase customer satisfaction. Human
aspects of service quality were found to influence customer satisfaction more
than the technical and tangible aspects. Increase in service quality of the banks
can satisfy and retain customers. In the Indian banking sector, human aspects
were more important than technical and tangible aspects of service quality that
influences customer satisfaction and enhances customer loyalty.
Qin and Prybutok (2009) explored the relationship among service

quality, food quality, perceived value, customer satisfaction and behavioral
intentions in Fast-Food Restaurants (FFRs). Structural equation modeling was
employed to estimate the relationship among service quality, customer
satisfaction, and behavioral intentions. They highlighted that the dimensions
namely tangibles, reliability/responsiveness, recovery, assurance, and empathy
were significant for the customers. Service quality and food quality were two
main determinants of customer satisfaction. The insignificance of perceived
value was potentially due to the homogeneous nature of the construct within
the FFR group rather than the importance of the perceived value construct
within food service.
Saha and Theingi (2009) demonstrated the order of importance of the

dimensions of service quality namely flight schedules; flight attendants;
tangibles; and ground staff. Passenger satisfaction with these service quality
dimensions was found to be very important in explaining behavioural
intentions. Satisfied passengers were mostly influenced by the schedule. Such
customers engaged in positive word-of- mouth communication and had high
repurchase intentions. Dissatisfied passengers preferred to change airlines,
135
rather than providing feedback to them.
Tangibles Emotional
Intelligence
Recommendation
Reliability
Perceived Behavioural Loyalty

Responsivenes Service Quality Intention
s
Confidence
Willingness to
Pay
Communicatio
n
Source: Ladhari,(2009b, p.321)
Fig.No.3.3: The Relationship between Service Quality Dimension,

Perceived
Service Quality, Emotional Satisfaction and Behavioural Intentions
Serenko and Stach (2009) investigated the impact of expectation

disconfirmation on user loyalty and recommendation behavior with respect to
online travel and tourism services. For this, the Expectation Disconfirmation
Theory was employed as a lens of analysis, and the critical incident technique
was applied to survey 94 Expedia users. They observed a lack of clear link
between the type (i.e., positive or negative) of expectation disconfirmation and
loyalty / service recommendation. Consistent with prior research, it was
136
concluded that the relationship between customer experience, satisfaction,

loyalty and word-of-mouth was very complicated.
Bilal (2010) attempted to find the factors of customer loyalty and their
relationships in banking industry of Pakistan. He reported that perceived
quality, satisfaction, trust, switching cost and commitment were the factors
influencing the loyalty of the customers and also, these factors influence each
other.
Kheng et al. (2010) employed SERVQUAL (Parasuraman et al., 1988)

with five dimensions to evaluate the impact of service quality on customer
loyalty among bank customers in Penang, Malaysia with customer satisfaction
mediating these variables. They found that improvement in service quality can
enhance customer loyalty. Service quality dimensions playing a significant
role in formation of customer loyalty were reliability, empathy, and assurance.
Maiyaki and Mokhtar (2010) investigated the influence of perceived

service quality, perceived value, corporate image and switching cost on the
consumer behavioral intention (customer loyalty) in the context of commercial
banks in Nigeria. They concluded that service quality had a significant
influence on the consumers‟ behavioral intention in the Nigerian commercial
banks. Further, they exhibited that corporate image played a significant role in
the formation of customer behavioral intention of Nigerian commercial banks.
Siddiqi (2010) focussed on the interrelationships between service

quality attributes, customer satisfaction and customer loyalty in the retail
banking sector in Bangladesh. He ascertained that all the service quality
attributes were positively related to customer satisfaction and customer
satisfaction was positively related to customer loyalty in the retail banking
137
settings in Bangladesh. Empathy demonstrated the highest positive correlation

with customer satisfaction and tangibility showed the least positive correlation
with customer satisfaction.
Abu Ali and Howaidee (2012) conducted a study to investigate the

causal relationships among the components of tourism product and overall
tourist satisfaction in Jerash, Jordan. The study supported that destination
facilities and accessibility and attraction directly influenced tourist
satisfaction, it was also confirmed that there is a significant impact of the
service quality on tourist satisfaction Jerash as one of the major tourism
destinations in Jordan. While Abu Alroub et al. (2012) investigated the impact
of service quality on customer satisfaction in the tourist restaurants in Amman,
Jordan. Their study clarified that there is a significant relationship between
service quality and customer satisfaction in tourist restaurants.
Muchtar Rizka and Astuti Widji (2013) result show that customer
relationship marketing does play a mediating role in the effect of service
quality on customer loyalty. The findings provide usable model for assurance
item to enhance service quality that contribute to high customer relationship
marketing and loyalty.
Poku, K., Zakari, M., and Soali, A. (2013) reveals that customer
satisfaction is not based solely on the rankings/classification of the hotels but
on service quality that gives value for money which in turn produces customer
loyalty. Miklin Hotel produced most satisfied and loyal customers, followed
by Golden Tulip Hotel and then Lizzie‟s Hotel contrary to the classification
order. In addition to “responsiveness” service quality variable for Miklin,
“empathy” and “assurance” variables made significant impact on customer
loyalty for guests from Miklin and Golden Tulip hotels, while “reliability”
138
accounts for the loyalty of guests from Lizzie‟s Hotel. This confirms the direct
relationship between customer satisfaction and loyalty. “Tangibility” does not
play any significant role in developing customer loyalty for all the hotels
because the guests were least satisfied with it and are likely to take it for
granted in their quest for change. The study recommends that hotel
classification should not be based mainly on the tangible factors alone but
rather on comprehensive service that provide value for money and impact on
customer loyalty.
Al-ababneh, Mukhles (2013) findings confirmed that service quality

directly impacted tourist satisfaction throughout destination facilities,
destination accessibility and destination attraction. As a result, this study
argued that there is a significant impact of the service quality on tourist
satisfaction, and therefore service quality plays an important role in tourism by
increasing the level of tourist satisfaction. Osman and Sentosa (2013) studied
the impact of service quality on customer satisfaction in Malaysian rural
tourism; they found that service quality has significant impact and positive
relationship with customer satisfaction and loyalty.
3.4.2 THE IMPACT OF SERVICE QUALITY ON CUSTOMER

LOYALTY IN ORGANISED RETAIL ENVIRONMENT
Nowadays, in a severe competitive environment, the most central key to

sustainable competitive advantage is to provide the best possible service
quality which will result in improved customer satisfaction (Sureshchandar et
al., 2002). This will result in advanced customer loyalty and retention which
will lead to more successful and more profitable organization (Johnson and
Gustafsson, 2000). Jacoby and Chestnus (1978) said that “The success of a
brand in the long term is not based on the number of consumers that buy it, but
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on the number of consumers who become regular buyers of the brand”. This
statement can link to the importance of developing consumer loyalty to retail
store. As Samli (1989) stated that consumer loyalty can serve as a distinctive
advantage for organizations in a highly competitive industry such as retailing.
Maintaining service quality allows retailers to obtain more new

customers while building and cultivating their existing customer relationships.
It can be said that by differentiating through quality customer service, retailers
are able to meet the needs of their customers better than the competitors.
Little empirical research has focused explicitly on the relationship

between service quality perceptions and customer loyalty (behavioural
intentions). And empirical research supports that service quality is a
significant predictor of behavioural intentions, e.g. repeat purchase, likelihood
of recommending, switching and/or complaining (Dabholkar et al., 1996;
Bitner, 1990; Woodside et al., 1989). Parasuraman, Berry, and Zeithaml
(1991, 1988) found a positive and significant relationship between customers‟
perceptions of service quality and their willingness to recommend the
company. Boulding et al. (1993) found a positive correlation between service
quality and repurchase intentions and willingness to recommend.
Taylor and Baker (1994) using a three-item purchase scale, obtain

significant effects for service quality, satisfaction and an interaction term on
purchase intention. On the other side, Cronin and Taylor (1992) didn‟t find a
significant effect of service quality in purchase intentions. With regards to the
response to a negative service experience, majority of the customers simply
remain inactive and do not undertake any action (Day, 1984).
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Wong and Sohal (2003b) examined the relationship between the

dimensions of service quality and customer loyalty in a retail chain
departmental store setting in Victoria. The results showed that service quality
was positively associated with customer loyalty and the most significant
predictor of customer loyalty in the retail district was empathy, while the most
predictor of customer loyalty in the country retail district was tangibility.
Wong and Sohal (2006) investigated consumer perceptions of their

shopping experience in a retail environment. They found that service quality
related factors such as being consistently courteous to customers, instilling
confidence in customers, knowledge to answer customers‟ enquires, and
ability to handle customer complaints assist in the establishment of higher
levels of trust. They empirically tested the effect of service quality, trust, and
commitment on relationship strength. Further, they proposed a model of
relationship strength which explored the impact of relationship strength on
attitudinal outcomes such as perceived relationship quality and behavioral
outcomes such as customer loyalty.
Suwannapirom and Lertputtarak (2008) investigated the relationship

between service quality, customer satisfaction, customer loyalty and word of
mouth communication in a convenience store. They found that service quality
had a positive relationship with customer satisfaction, customer loyalty and
word of mouth communication. They also demonstrated that each element of
service quality has a different relationship with customer satisfaction,
customer loyalty and word of mouth communication. Therefore, good service
quality ensures satisfaction and attempt to establish loyalty tendencies in
customers‟ which results in the development of customer advocacy and finally
leads to positive word of mouth communication.
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Molina et al. (2009) investigated the effects of consumer service on

loyalty in retail establishments. They empirically examined the relationship
between waiting time, product quality, store atmosphere and loyalty. With
empirical support, they suggested that consumer service through three
dimensions influences loyalty. Further, they suggested that consumer service
in retail establishments can be viewed as a threshold factor in order to
maintain satisfied and loyal customers.
Nadiri and Tumer (2009) applied the RSQS among 648 customers of a
large chain of retail stores in Northern Cyprus. They confirmed the
applicability of the original five dimensions of the RSQS in the setting of
Northern Cyprus. Retail service quality was shown to be positively related to
behavioral intentions (intention to repurchase and intention to recommend).
Multi-regression analyses revealed that the dimensions of physical aspects,
problem solving and reliability had the greatest impact on customers‟
behavioral intentions.
Naik et al. (2010) ascertained whether the typology to which service

belongs explain the relationship between Service Quality (SQ), Behavioral
Intentions (BI) and Customer Satisfaction (SAT) in a retail store. They found
that the dominant dimensions of service quality were tangibility, recovery,
responsiveness, and knowledge. The results established the direct influence of
SQ on Behavioral intentions, and the mediating role of SAT on influencing
Behavioral Intentions. They ascertained that SAT was a strong driver of
Behavioral Intentions in the context of retail sector in India.
Danesh, S. N., Nasab, S. A., and Ling, K. C. (2012), performed a

descriptive research study with the objective to evaluate relationship of
customer satisfaction over customer retention, customer trust over customer
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retention and switching barriers over customer retention as well as the

correlation between satisfaction and trust. This research study was carried out
among the Malaysian hypermarkets especially in Kuala Lumpur City. The
Researcher used structured questionnaire as the research instrument and
collected over 150 samples across various customers of the Malaysian
hypermarkets. Finally the outcome and end results of the research confirmed
that there is a positive relationship among switching barrier, trust, customer
satisfaction with overall retention of the customers.
A.R. Azhar, M. Z. Mohd Salehuddin, Mohd Faeez B. Saiful Bakhtiar

and Mohd Syaquif Yasin B. Kamaruddin (2012), performed a quantitative
research on customers' satisfaction with fresh food attributes in hypermarkets.
The Researcher used a self reported questionnaire and collected over 387
samples by adopting convenience sampling method. The Results reveals that
the majority respondents are highly satisfied with the quality of the products
offered overall and very few of the respondents are satisfied with the
availability and price of fresh foods in the hypermarket. Finally the researcher
comes to a conclusion that it is very difficult to understand the importance of
fresh food attributes and also its impacts with overall customer's satisfaction.
R. P. C. S. Rajaram and V. P. Sriram (2014), findings of the research

study reveal a significant positive effect on service quality of the hyper
markets to customer behavioral intention. Service quality highly influences
customer behavioral intention and purchase preference. When a customer
chooses a hyper market that provides highest service quality that meets
customer's expectations, then they used to choose a same hyper market again
and again. Customer satisfaction is the strong predictors of the behavioral
intention. Satisfaction of the customers is more important for all hyper
markets, because it is usually believed to be significant predictor of increased
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sales, willing to pay more and loyalty. It is found that effect on customer
satisfaction to behavioral intention is positive and significant. The present
study findings are evidenced that customer satisfaction is more likely to reach
a high level of significance as perceived service quality of the retail stores and
satisfaction have a significant and positive effect on behavioral intentions of
the customers towards the hyper markets.
3.4.3 DIMENSIONS OF CUSTOMER LOYALTY IN A SERVICES

ENVIRONMENT
In a service environment, customer loyalty is defined as an observed

behaviour (Liljander and Strandvik, 1995). Ultimately it is actual behaviour
that drives a service organization‟s performance. Therefore, operationalization
of customer loyalty in service settings is a composite index of behavioural,
attitudinal and cognitive aspects. With regards to behavioural intentions in a
services setting, Zeithaml et al. (1996) proposed a comprehensive, multi-
dimensional framework of customer behavioural intentions in services. This
framework was initially comprised of the following four main dimensions:
 Word-of-mouth Communication
 Purchase Intention
 Price Sensitivity and
 Complaining Behaviour.
Arndt (1967) defined word of mouth as the informal conversation by

which opinions on products and brands are developed, expressed, and spread.
Word-of-mouth is a flow of information about products, services, or
companies from one customer to another. As such, word-of-mouth represents a
trusted external source of information by which customers can evaluate a
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product or service. Loyal customer are those who not only gladly use the
services but they are so pleased with them that they tell other people about
them (Gould, 1995). Research has shown that word of mouth communication
is a part of that which shapes consumer attitudes and behavioural tendencies
(Mangold, Miller, and Brockway, 1999). Besides the meaning of external
recommendation, the term of “word-of-mouth” also includes the meaning of
internal communications with service staff. So it is believed that loyal
customers are likely to give positive feedback to the service company
(Soderlund, 1998). Service quality affects an organization‟s ability to
influence word of mouth. Research indicates that twice as many people hear
about a bad experience, as about a good experience. Also, people tend to pay
more attention to bad word of mouth. Negative word of mouth has twice the
negative impact as positive word of mouth has positive impact. One out of 50
customers hearing negative word of mouth will not buy, while one out of 100
customers hearing positive word of mouth will buy (Evalue, 2003).
Customer loyalty is basically the extent of repeat purchase intention

from the same service provider with affective commitment (Shemwell et al.,
1998; Soderlund, 1998). Loyalty can be only attained when the customer
expressed high repeat patronage as well as strong positive preference on an
entity (Dick and Basu, 1994). In fact, consistent repeat purchase is one kind of
“loyalty-prone” behaviour (Cunningham, 1956) by showing continuance
commitment (Shemwell et al., 1998) on an entity.
Undoubtedly, loyal customers willing to pay the premium even the price is
increased because the perceived risk is very high, so they instead to pay the
higher price for avoiding the risk of any change (Yoon and Kim, 2000; de
Ruyter et al., 1999). Generally, the developed long term relationship of
customer loyalty makes loyal customers more price tolerant, since loyalty
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discourages customers to have price comparison with others and to shopping

around (de Ruyter et al., 1999). By delighting customers on the key
determinants of price sensitiveness, service providers can even charge a higher
price than other competitors, because loyal customers value maintaining the
relationship. In addition, the initial costs of attracting and establishing these
customers have already been absorbed and, due to experience curve effects,
they often can be served more efficiently (Reichheld and Sasser, 1990).When
a problem occurs, service providers can retain the loyalty of customers only if
they tell service providers about the problem. Unfortunately, many customers
never contact the organization when they need assistance or have a problem,
thereby depriving it of a chance to retain their loyalty. On average across all
industries, around 50% of all consumers and 25% of all business customers
with problems never complain to anyone (Evalue, 2003).
3.5 BEHAVIOURAL-INTENTIONS BATTERY
Zeithaml, Berry and Parasuraman (1996) proposed a comprehensive,

multi-dimensional framework of customer behavioural and attitudinal
intentions for use within a service industry. The framework (presented in
below table) incorporates 13-items across five-dimensions: loyalty to company
(loyalty) propensity to switch (switch), willingness to pay more (pay more),
external responses to a problem (external responses), and internal responses to
a problem (internal responses).
Bloemer, de Ruyter and Wetzels (1999) raised a number of conceptual

and empirical criticisms of the Behavioural-Intentions Battery. Their
conceptual criticism focused on inter dimensional overlap (i.e., various
expressions of customer complaining behaviour or response to a
dissatisfactory service encounter are distributed over two factors, “ external
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response to a problem” and “internal response to a problem”; pricing related

loyalty intentions are placed on two factors, “propensity to switch” and
“willingness to pay more”. Empirically, they claimed that the use of single-
item measure, “Internal response to a problem should be avoided. Further they
argued that the five factor solution did not appear to provide an unambiguous
and consistent factor pattern and that this impacts the reliability of the
measure.
DIMENSION ITEM DESCRIPTION

Say positive things about XYZ to other people
Recommend XYZ to someone who seeks your advice.
Encourage friends and relatives to do business with
LOYALTY
XYZ.
Consider XYZ your first choice to buy services.
Do more business with XYZ in the next few years.
Do less business with XYZ in the next few years.
SWITCHING
Take some of your business to a competitor that offers
BARRIERS
better prices.
Continue to do business with XYZ if its prices increase
WILLING TO somewhat.
PAY MORE Pay a higher price than competitors charge for the
benefits you Currently receive from XYZ.
Switch to a competitor if you experience a problem with
XYZ‟s service
Complain to other customers if you experience a
EXTERNAL
problem with XYZ‟s service.
RESPONSES
Complain to external agencies, such as consumer
organizations, if you experience a problem with XYZ‟s
service.
INTERNAL Complain to XYZ‟s employees if you experience a
RESPONSE problem with XYZ‟s service.
Table.No.3.4 Behavioural Intentions Battery

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On the basis of analysis across four service industries: Entertainment,

Fast Food, Supermarkets And Health Care, they concluded that service loyalty
is a multi-dimensional construct consisting of the following four dimensions:
Word-of-mouth, Purchase intentions, Price sensitivity, and Complaining
behaviour (refer to Figure , for allocation of variables, presented in below table
to factors identified by Bloemer, de Ruyter and Wetzels, 1999).
3.5.1 LOYAL CUSTOMERS - NEW GOAL FOR THE RETAILERS
Loyalty is a commitment that a customer is prepared to make to

strengthen a relationship with a retailer and a brand. Levy and Weitz (2009)
agree that customer loyalty means dedication from the customer to buy
products or services from the same retailer. Customer retail loyalty is the
attitudinal and behavioural preference for the retailer when compared with
available competitive alternatives. Attitudinal loyalty is the bond the customer
has with the retailer or brand and the preference for that certain brand while
behavioural loyalty is purchase and repeated behaviour (Terblanche and
Boshoff, 2010).
Terblanche and Boshoff (2006) suggest that customers are unlikely to

have absolute loyalty to one retailer and the best that retailers can do is to
increase the level of customer loyalty. There has been more research
conducted into brand loyalty than there has into retail loyalty. Brand loyalty is
the preference of a particular brand over another brand whereas retail loyalty is
loyalty to a particular store regardless of the brands they carry (Wallace, Giese
and Johnson, 2004).
Loyal customers are a key to any retail business. At the same, they are
the least understood people. Sales figures tell nothing about them. As a result,
148
the potential is lost which could have been provided by them as a result of
better targeting. It is argued that the total store environment and offerings
should be built around those customers. An environment needs to be
maintained and the store staff should be trained to spot the loyal customers and
get aligned to their needs.
The real problems facing stores is to increase their sales and market
share in view of ever growing competition. Loyal customers are the insurance
which a store always needs. It is extremely important for them to know,
recognize and reward those who shop their often. In this context it should not
be forgotten that any customer has a potential to be a loyal customer, so new
visitors should be treated with full energy, but the fact remains that store
should be loyal customer centric.
A good way to measure loyal customers and their contribution is to

measure the following: Number of buying trips per year and the total amount
spend. It would be useful to segment the customers based on this and the
movement every year to gauge the effectiveness of campaign. Basically the
following questions should shape a retailers‟ offer: Which customers matter
most, what do they buy, how do they buy and why do they buy.
In short customer orientation is now become increasing difficult

criterion for the success of a store. Instead of asking „how much we sold last
week‟, the question should be „who bought what we were selling last week‟.
Similarly all promotion campaigns should engage the best customers in the
short term and long term. Pricing decisions should be based on the price
sensitive customers and the items on which they are most prices sensitive.
Competition should be defined not by gaining new customers but by gaining a
greater share of the existing customers. Of course, among the loyal customers
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too, it is the best customers- customers who buy the most – to whom most of
the organizational resources should be devoted. According to a study, in Home
Depot, 2 per cent of the shoppers drive around 30 per cent of the sales. It is the
best customers which matter the most and for which the retailers should orient
themselves.
3.6 FRAME OF REFERENCE
This research topic explains the key factors, variables and relationships among
theories or models and provides a theoretical overview. The conceptualization
helps the researcher to answer the study‟s research questions. In the earlier
stages of this chapter various definitions for service quality, customer
satisfaction and behavioral intention of the customers were discussed.
Moreover the linkages between the dimensions of the service quality and
customer satisfaction were also discussed. There were only few researches
studying the relationship between the service quality dimensions, the service
quality dimension leading to customer satisfaction and behavioral intention are
also studied.
3.7 DEVELOPMENT OF HYPOTHESES
With a structured questionnaire the association between the service

quality dimensions and overall service quality, demographic information and
customer loyalty in Indian organized retail was investigated. The affinity
between the service quality dimensions and customer‟s repurchase intentions
was investigated too. The association between service quality dimensions and
overall service quality, demographic information and customer loyalty
intentions has been previously researched in various studies. Also, service
150
quality dimensions were found to be positively correlated with customer‟s

repurchase intention.
3.7.1 HYPOTHESIS OF THE STUDY
H01: There is no significant impact of service quality dimensions on overall

retail service quality.
H02: There is no significant relationship between demographic profile of the

respondents and retail service quality dimensions.
H03: There is no significant impact of retail service quality dimensions on

customer loyalty dimensions.

respondents and customer loyalty dimensions.
H05: There is no significant relationship exist among perceived service quality

dimensions.
H06: There is no significant relationship exist among customer loyalty

dimensions.
H07: There is no significant impact of retail service quality dimensions on

H08: There is no significant impact of customer satisfaction factors on

customer loyalty.

respondents and customer satisfaction factors.
151
H10: There is no significant impact of factors affecting purchase on customer

satisfaction.
H11: There is no significant relationship between purchasing factors, customer

satisfaction, expects and perceived service quality and customer loyalty
H12: There is no significant relationship between most liked and disliked

factors and purchase attribute factors.

factors and factors affecting retail purchase.
H14: There is no significant difference between perception and expectation

service quality dimensions.
H15: There is no association between demographics and most liked and

disliked factors about retail shops.
H16: There is no association between perceived level of service quality,

customer satisfaction and customer loyalty towards the retail stores and
demographic profiles.
H17: There is no impact among the Overall service quality of the retail stores
on overall satisfaction of the customers.
H18: Individual service quality dimension have no impact on overall customer

satisfaction of the retail customers that leads to overall behavioural loyalty.
H18a: Physical aspects dimension have no impact on overall customer

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H18b: Reliability dimension have no impact on overall customer satisfaction of

the retail customers that leads to overall behavioural loyalty.
H18c: Personal interaction dimension have no impact on overall customer

H18d: Problem solving dimension have no impact on overall customer

satisfaction of the retail customers that leads to overall behavioural loyalty..
H18e: Policy dimension have no impact on overall customer satisfaction of the

retail customers that leads to overall behavioural loyalty.
H19: There is no effect on overall customer satisfaction of the customers

towards the individual dimensions of behavioural loyalty.
H19a: There is no effect on overall customer satisfaction of the customers

towards the word of mouth dimension of behavioural loyalty.
H19b: There is no effect on overall customer satisfaction of the customers

towards the switch to competitor dimension of behavioural loyalty.
H19c: There is no effect on overall customer satisfaction of the customers

towards the willingness to pay more dimension of behavioural loyalty.
H19d: There is no effect on overall customer satisfaction of the customers

towards the internal and external response dimension of behavioural loyalty.
H20: There is no impact of purchase intention on perception of retail service

quality leads to positive or negative effect on loyalty which act as mediating
variable of customer satisfaction.
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3.8 CONCLUSION
This Chapter concludes with an in-depth analysis on the previous

researches done in the retail sector area, especially on customer satisfaction,
customer relationship management, assessment of service quality and
assessing their behaviour intention across various contexts. Based on the
literature reviews collected, the researcher identified the research gap that
there are very few researches been carried out on the relationship between
service quality and customer satisfaction and their customer loyalty
behavioural intentions in retail sector. Especially in India, there were only
limited researches been done. Hence, this chapter is highly useful for the
researcher in order to identify those various research gaps and resolve it in the
present study.
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CHAPTER IV
CONCEPTUAL MODEL OF SERVICE QUALITY
This Chapter presents the conceptual and theoretical framework of the

research study, where it focuses on introductory part the service quality
conceptualization and measurement of service quality. This discussion is
followed by the review of retail service quality and the need to differentiate it
from pure services. Then RSQS is the most dominant scale for measuring
retail service quality; that’s why most of the researchers employed it.
However, it was found that the scale is more appropriate if it is modified for
different countries; therefore, the need for modifying the scale. Then it
discusses about the proposed model of the research study. Finally, the main
and sub-hypothesis was developed based on the main objectives of the
research study.
4.1 INTRODUCTION
The Theoretical and Conceptual Framework is based on the findings

presented in the literature reviewed. The model provides the framework for the
research design and data analysis. The following theories and theoretical
frameworks serve as a foundation for the proposed model and the discussion
highlights the relationship and the influence of these theoretical concepts in
relation to the development of the model.
Some researchers, such as Johnson and Gustafsson (2000), avoid

addressing the difference between service quality and satisfaction and use
both terms interchangeably in practice and theory. By contrast, other
researchers, such as Berry, Parasuraman and Zeithaml (1988), Parasuraman,
Zeithaml and Berry (1986, 1994), Rust, Zahorik and Keiningham (1995),
155
argue that, while service quality and customer satisfaction are related, they
are two distinct constructs. Service quality is a global judgment or
attitude relating to the superiority or excellence of the service, whereas
satisfaction is related to a specific transaction. This implies that satisfaction is
less enduring and more situation oriented (Bolton and Drew 1991;
Parasuraman et al. 1986) suggest that service quality is a consumer's
judgment about the service itself (in other words, it is descriptive and
based on fact), whereas satisfaction is more of a judgment of how the service
affects the consumer emotionally (in other words, it is more evaluative and it
is based on emotion).
Both service quality and customer satisfaction are usually measured by

means of the gap approach, that is, the difference between perceptions
and expectations (Rust et al. 1995). The difference between service quality
and customer satisfaction arises mainly because of different definitions of
expectations. In the service quality literature, expectations are regarded as the
desires or “wants” of consumers, in other words, what customers feel a service
provider should offer them, rather than what a service provider would offer
(Parasuraman et al. 1986). By contrast, customer satisfaction is believed to
result from a comparison between what did happen in a service experience on
the one hand and what customers believed (predicted) would happen on the
other (Bitner 1990; Gilbert, Churchill & Surprenant 1982; Parasuraman et al.
1986; Schneider and White 2004). Since a consumer's expectation in a
satisfaction context represents a prediction, it is expressed by a mean
expectation value, with a degree of uncertainty surrounding the mean, because
the consumer is unsure about what to expect. By contrast, since a consumer's
expectation in a service quality context represents what he or she desires, that
expectation can be regarded as a distinct value with little or no uncertainty
156
surrounding it (Parasuraman et al. 1986).
It was originally believed that the two constructs were related, in that
incidents of satisfaction decay over time into an overall consumer attitude or
judgment of perceptions of service quality (Biter 1990; Parasuraman et al.
1986). Further research altered the original beliefs about customer
satisfaction. It was found that it might be more correct to regard service
quality as an antecedent of customer satisfaction (Dabholkar et al. 2000;
Olivier 1993; Parasuraman et al. 1994; Spreng and Mackoy 1996).
Spreng and Mackoy (1996) modified a model originally developed by

Olivier (1993) because they found empirical evidence that illustrates that
service quality is an antecedent of customer satisfaction. Behavioural
intentions in the marketing literature relate predominantly to purchase
intentions, particularly to customer loyalty and the intention to repurchase in
relation to optimizing sales, as well as the net profit of the organisation.
4.2 CONCEPTUAL MODEL FOR MEASURING SERVICE QUALITY
Source: Parasuraman, Berry and Zeithaml, (1985, p.44)
Fig.No.4.1 Conceptual Model for Measuring Service Quality

157
 Consumer Expectation-Management Perception Gap (Gap 1):

There is a difference between the customer expectation and the way the
managers perceive this expectation. Management does not always have
a clear understanding of the customer‟s expectation of service and they
are unaware of the important service aspects customers look for when
being served. Therefore, there are many reasons for the management‟s
lack of understanding of customer‟s expectations such as the lack of
communication between them or the unwillingness of the management
to tackle the customer‟s problems.
 Management Perception-Service Quality Specification (Gap 2):
This gap is the difference between customer‟s expectations and the
standards that are established by the organisation which might not be
enough to meet the customer‟s expectations of the service. Gap 2 is the
second milestone the companies should cross with excellence in
performance. Service design and performance standards are
prerequisites for that. Translation of the service quality specifications is
really a complex job the service providers have to handle.
 Service Quality Specifications-Service Delivery Gap (Gap 3): This
gap is the difference between the service quality standards and the
delivery itself, which can result in services being inadequate because
they are dependent on employees who may be poorly trained. To ensure
that the delivery matches or exceeds these standards, employees must
be properly trained and the systems in place need to accommodate the
delivery of the standards.
 Service Delivery-External Communications Gap (Gap 4): This gap
is the difference between what the service provider promises and the
actual service received by the customer. External factors such as
advertising may increase the customer‟s expectation of the service
158
delivery, therefore it is important not to promise what cannot be

delivered as this will lead to customer frustration. It is important for the
service provider to manage the expectations of the customers by clearly
communicating the services that the company provides without any
ambiguity.
 Expected Service-Perceived Service Gap (Gap 5): The difference
between the services the customers expect and the service they
perceive. Customers have expectations that are based on past
experiences and these expectations are what customers think the service
should be. On the other hand, the customer perception is the subjective
evaluation of the actual service at the time of the service. Customer
satisfaction is imperative for the competitiveness of the organisation,
therefore it is important to understand the customers in order to deliver
a quality service.
4.3 JUSTIFICATION FOR PROPOSED MODEL
The path diagram of research model is designed for impact of purchase

intentions and expected rating of service quality dimensions and perception
ratings of service quality dimensions on Overall customer satisfaction leads to
Behavioural Intention which further leads to Customer retention in a retail
stores.
The research reported makes a number of contributions to advance knowledge

from both an industry perspective and theoretical perspective. The research
integrates the service quality of Retail stores context and a number of five
individual service quality dimensions relationships between overall service
quality, customer satisfaction and behavioural intention, as well as providing a
new research in the Indian context. The research contained in this chapter
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provides valuable new insights into the relationship between service quality,
customer satisfaction and behavioural intention for retail stores sector.
4.4 PROPOSED RESEARCH MODELS
Customer Evaluation Model for Retail Sector
Purchase
Intention
(Belief)
Perceived Behavioural
Customer
Service Intention
Satisfaction
Quality -RSQ
Expected
Service Quality
RSQ
Fig.No.4.2 Proposed Customer Evaluation Model for Retail Stores
4.5 CONCLUSION
This Chapter explains research topics key factors, variables and relationships
among the theories or models and provides a theoretical or conceptual
overview. The conceptualization helps the researcher to focus and formulate
the research questions accordingly. In the earlier stages of this chapter various
definitions for service quality, customer satisfaction and behavioral intention
of the customers were discussed. Moreover the linkages between the
dimensions of the service quality and customer satisfaction were also
discussed. There were only few researches studying the relationship between
the service quality dimensions, the service quality dimension leading to
customer satisfaction and behavioral intention are also studied.
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CHAPTER V
RESEARCH METHODOLOGY
This Chapter discusses the underpinning methodology of this study,

beginning with a presentation of the research design, followed by area of
study, sample design, sources of data and scale and measurement. The
primary method for data collection was using the structured questionnaire.
The questionnaire was made up of three parts: Demographic data, Customer
Shopping Experience, Retail Service Quality, Scale and Customer Loyalty
Intentions questionnaires were included in the research field. Further, this
chapter discusses about the reliability and validity of the scale used for the
research study. Meanwhile, this chapter illustrates the demographic profile of
the respondents with respect to the retail settings.
5.1 INTRODUCTION
The Research methodology is the systematic method/process dealing with

identifying the problem, collecting facts or data, analyzing these data and
reaching at a certain conclusion either in the form of solutions towards the
problem concerned or certain generalization for some theoretical formulation.
Moreover, research methodology describes the methods employed to gather
the data and analyzed it by accompanying the research design, sampling
technique, measurement and instrumentation, data collection, conceptual
framework and information analysis. It also comprised of a number of
alternative approaches and interrelated and frequently overlapping procedures
and practices. Since there are many aspects of research methodology, the line
of action has to be chosen from a variety of alternatives. The choice of suitable
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method can be arrived at through assessment of the objectives and comparison

of various alternatives.
In this chapter the philosophical stance of the researcher is explored

which will clarify the reasons for the choice of methodology used in this
research. Therefore, the main purpose of this chapter is to present the research
methodology and methods used in this study in order to answer the research
questions and to achieve the research objectives.
The chapter begins with the elements of the research process which
include research design, area of study and sample design. Subsequently, the
chapter explains the sources of data and the research instrument. The steps
involved were elaborated in detail and had been carried out systematically in
order to achieve a high degree of reliability and validity.
5.2 RESEARCH DESIGN
Research Design is a master plan specifying the methods and

procedures guiding the researcher to collect their data and analysis of their
research. The most common research designs that the researchers always uses
is exploratory, descriptive and causal. In the present study, exploratory and
descriptive study is used as a purpose of the study to obtain and analyze the
data.
Exploratory Study is important for obtaining a good grasp of the

phenomena of interest and for advancing knowledge through good theory
building and hypothesis testing. In this study, the exploratory research includes
literature reviews in order to gain more detailed information about the research
problems and issues related to the shoppers‟ perception of service quality in
organized retail. Descriptive research is typically more formal and structured
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than Exploratory research (Malhotra, 2005). It is based on large, representative

samples and the data obtained are subjected to quantitative analysis. The
findings from this research are used as input into managerial decision making.
In this study, descriptive study is undertaken in order to ascertain and describe
the characteristics of the variables of the customers‟ perceptions about the
service quality provided by organized retailers, leading to customer loyalty.
Thus, the present study is Exploratory-cum-Descriptive in nature as it
endeavors to assess the relationship between service quality and customer
loyalty in the formation of customers‟ repurchases intention.
5.3 AREA OF STUDY
The sample was selected from three different metropolitan cities like
Chennai, Madurai and Coimbatore in Tamilnadu.
5.4 SAMPLE DESIGN
The population comprised retail shoppers as defined in similar studies

(Kaul, 2007; Boshoff and Terblanche, 1997; Dabholkar, Thorpe, and Rentz,
1996). But, in most of the research studies, it became almost impossible to
examine the entire universe; the only alternative thus is to resort to sampling.
The present study is also of the same nature.
A sample is taken from the target population being researched. A sample is

a part of the population, which is studied in order to make inferences about the
whole population. If the sample is adequate it will have the same
characteristics of the population (Zikmund, 2003) and the findings are usually
used to make conclusions about the population. Thus a good sample is a
miniature version of the population and good sample design involves the
following:
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 Sample Unit 
 Sample Techniques 
 Sampling Size 
5.4.1 Sample Unit
Since the objective of the present study is to analyze the factors of

service quality that lead to customer satisfaction and customer loyalty in
purview of Indian organized retail stores; hypermarkets, super markets and
departmental stores are taken as the sample unit.
5.4.2 Sampling Technique
Sampling Techniques are methods used to select a sample from the

population by reducing it to a more manageable size (Saunders, Lewis and
Thornhill, 2007). According to de Leeuw, Hox and Dillman (2008) these
sampling techniques are used when inferences are made about the target
population. In the present study, Simple Random Sampling was used for the
selection of hypermarkets, super markets and departmental stores whereas
Judgmental Sampling was used for the selection of respondents from
hypermarkets, super markets and departmental stores. Utmost care has been
taken to take respondents from various demographic characteristics.
5.4.3 Sample Size
To ensure required sample size and to allow for the possibility of

spoiled questionnaires, trained research assistants targeted 950 retail shoppers
(hyper markets, super markets and departmental stores). On the basis of
Simple Random Sampling 90 retail shops (Hypermarkets, Supermarkets and
Departmental Stores) were selected and out of each shop-in-shop respondents
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were approached on the basis of Judgmental Sampling. Thus the total number
of respondents came out in 950. Out of the 950 respondents, 900
questionnaires were received at a response rate of 94.88 per cent. On further
filtering, 900 responses were found to be completely filled, which is more than
response rate is higher than the response rate of the acceptable limits to ensure
the validity of the data (Miller, 1991).
5.5 SOURCES OF DATA COLLECTION
Data sources are classified as being either primary sources or secondary

sources. A source is primary if the data collector is the one using the data for
analysis. A source is secondary if one organization or individual has compiled
the data to be used by another organization or individual. Both primary and
secondary data have been collected in this research. Secondary data have been
collected from published thesis works, unpublished thesis works, websites and
research articles from journals. On the other side the primary data were
collected by means of a structured, comprehensive questionnaire that was
developed by the researcher based on the literature review on the relevant
topics.
The questionnaires were distributed to retailers of hypermarkets, super

markets and departmental stores in selected retail stores during December
2012-October 2013. The research assistants explained the voluntary nature of
the survey to the shoppers, assured them of the anonymity of their responses,
and told them to feel free to opt out at any time. They provided each
respondent with a copy of the questionnaire, explained how the questionnaire
was to be filled out and collected the completed questionnaires. The
questionnaire was administered prior, during and after the respondents
shopping at the shopping stores. Like shoppers were given a questionnaire
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while they waited in a queue to pay for their goods. Some of them filled the
questionnaire while they were having refreshments after they had finished
their shopping. This allowed for sufficient time to fill up the questionnaire
without interfering with their shopping. Data collection is most meaningful
when the responses are taken from customers in the store after the shopping is
completed (Boshoff and Terblanche, 1997; Dabholkar, Thorpe and Rentz,
1996). Asking shoppers to complete a questionnaire in the shop provides them
with a chance to pay attention to the dimensions while answering the
questionnaire; this also eliminates problems with customers trying to recall the
shopping experience (Burns and Bush, 2010). In addition, attempts were made
to collect data at different days and at different times of the day, i.e. Morning,
Afternoon and Evening.
5.6 SCALE AND MEASUREMENT
The Questionnaire is a collection of written queries, which is arranged

putting all the essential variables for the research and can be completed by the
respondents in presence, in absence, directly or indirectly. The questions in a
questionnaire are the key to the survey research. Therefore, they must be
developed with caution and be vital to the survey. Also, the questionnaire has
to keep short or otherwise it would frighten the respondents. Hague et al.
(2004) give a number of guidelines regarding a good questionnaire:
 Ensure questions are without bias

 Make the questions as simple as possible
 Make the questions very specific
 Avoid jargon or shorthand
 Steer clear of sophisticated or uncommon words
 Avoid questions with a negative with them
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 Use response band

 Ensure that the fixed responses do not overlap
 Allow for “others” in fixed response questions
It is bad to use open-ended questions in self-completion surveys because

the answers would be inadequate and be very typical (Hague et al., 2004).
Usually, close-ended questions are using numbers, yes/no, or multiple choices
(Brace, 2004). One main advantage of using close-ended questions in a
questionnaire is that they are pre-coded. This kind of questions suits self-
completion questionnaires because they save the respondent‟s time writing in
the answers (Hague et al., 2004). Also, as there is a set of answers known
beforehand, the researcher can save a lot of time in data entry and analysis at
the later stage (Brace, 2004). Therefore, all the questions in the questionnaire
of this study are close-ended questions, in which the respondents are asked to
choose between a numbers of alternative answers.
In this study, the structured questionnaire was focused on measuring

service quality, demographic characteristics, customer satisfaction, purchase
intentions and behavioral intentions. The questionnaire used in the present
study consisted of five sections A, B, C, D and E. Section A dealt with
background information of the participants. Section B and C consisted of
factors affecting purchasing in retail stores and customer satisfaction factors.
Section D consists of 27 items that used to measuring service quality and
Section E includes 13 items used to measuring the customer loyalty
respectively.
The researcher used a 7 point scale for the study, instead of a 5 point Likert
scale because 7 point scale increases the rate of accuracy and quality of the
responses (Prayag, 2007; Buttle, 1996). Thus, all statements employed a
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seven-point scale because it would give a better normal spread of observations.

To measure customer loyalty, the instrument must consider behavioral,
attitudinal and cognitive aspects of behavioral intentions. That‟s why Zeithaml
et al. (1996) behavioral intention battery was used. Each of the 13 items was
accompanied by a seven-point scale ranging from 1 (= not at all likely) to 7 (=
extremely likely). The wording of the BIB items was adapted to the retail
service setting. Similar constructs to measure behavioral intentions was also
found in some previous literature (Lei and Mac, 2005; Bloemer et al., 1996).
The validated Retail Service Quality Scale developed by Dabholkar et al.
(1996) was employed to measure perceived service quality. The items of
RSQS were evaluated on a five-point scale ranging from 1 (= strongly
disagree) to 5 (= strongly agree) (Dabholkar, Thorpe, and Rentz, 1996). The
diagrammatic rating scale used in the questionnaire is as follows:
Small adaptations to the RSQS instrument were made. Review of literature

(empirical research Kaul, 2007) along with opinion of store managers (SIS)
and independent experts (consultants, Indian Retail) highlighted that two items
of RSQS were not relevant in Indian retail appertained to “store‟s own credit
cards” seems premature in the Indian retail environment where credit cards
have only recently started getting widespread acceptance and very few retail
stores have their own credit cards. That is why out of the 27 statements of
RSQS one was not included in the questionnaire because of its inapplicability
in the Indian organized retail (Kaul, 2007). Finally, the questionnaire included
27 statements on the retail service quality and one statement on the overall
perception of service quality. The overall perception of service quality was
assessed using a single item, “Overall the quality of the service in the retail
outlet is excellent” measured on a seven-point scale.
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5.7 DEMOGRAPHIC PROFILE OF THE RESPONDENTS
5.7.1 Type of the Retail Stores
Type of Retail store No.of.Respondents Percentage (%)

Hyper Market 300 33.33
Super Market 300 33.33
Departmental store 300 33.33
Total 900 100.00
Table 5.1 Type of the Retail Stores
Inference
From the above table 5.1 related to the Type of the Retail Stores, it is inferred
that 33.3% of the samples for the research study was taken from the various
Hypermarkets, and then 33.3% of the samples for the research study was taken
from the various supermarkets and the remaining 33.3% of the samples for the
research study was taken from the various Departmental Stores.
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5.7.2 Location of the Retail Stores
Location Of The Retail Store No.of.Respondents Percentage (%)

Chennai 300 33.33
Coimbatore 300 33.33
Madurai 300 33.33
Total 900 100.00
Table 5.2 Location of the Retail Stores
Inference
From the above table 5.2 related to the Location of the Retail Stores, it is
inferred that 33.3% of the samples for the research study was taken from
Chennai City, and then 33.3% of the samples for the research study was taken
from Coimbatore City and the remaining 33.3% of the samples for the
research study was taken from Madurai City.
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5.7.3 Gender Wise Classification among the respondents
Gender No.of.Respondents Percentage (%)

Male 408 45.33
Female 492 54.67
Total 900 100.00
Table 5.3 Gender Wise Classification among the respondents
Inference
From the above table 5.3 related to the Gender Wise Classification among the
respondents, Majority 54.67% of the respondents belongs to the Female
Gender classification and remaining 45.33% of the respondents belongs to the
Male Gender classification.
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5.7.4 Age Wise Classification among the respondents
Age Classifications No.of.Respondents Percentage (%)

Less than 20 years 40 4.44
Between 21 to 30 years 285 31.67
Greater than 50 years 61 6.78
Total 900 100.00
Table 5.4 Age Wise Classification among the respondents
Inference
From the above table 5.4 related to the Age Wise Classification among the
respondents, Majority 41.78% of the respondents belongs to the Age Category
of Between 31yrs to 40yrs, 31.67% of the respondents belongs to the Age
Category of Between 21yrs to 30yrs, 15.33% of the respondents belongs to the
Age Category of Between 41yrs to 50yrs, 6.78% of the respondents belongs to
the Age Category of Greater than 50yrs and the remaining 4.44% of the
respondents belongs to the Age Category of less than 20yrs.
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5.7.5 Marital Status of the respondents
Marital Status No.of.Respondents Percentage (%)

Married 667 74.11
Unmarried 222 24.67
Separated 3 0.33
Divorced 3 0.33
Widow 5 0.56
Total 900 100.00
Table 5.5 Marital Status of the respondents
Inference
From the above table 5.5 related to the Marital Status of the respondents,
Majority 74.11% of the respondents marital status are found to be married,
24.67% of the respondents marital status are found to be unmarried, 0.56% of
the respondents marital status are found to be Widows, 0.33% of the
respondents marital status are found to be separated and remaining 0.33% of
the respondents marital status are found to be divorced.
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5.7.6 Educational Qualifications of the respondents
Educational Qualifications No.of.Respondents Percentage (%)

SSLC/HSC 151 16.78
Undergraduate 370 41.11
Postgraduate 312 34.67
Diploma 61 6.78
Others 6 0.67
Total 900 100.00
Table 5.6 Educational Qualifications of the respondents
Inference
From the above table 5.6 related to the Educational Qualifications of the
respondents, Majority 41.11% of the respondents Educational Qualification
are Undergraduates, 34.67% of the respondents Educational Qualification are
Postgraduates, 16.78% of the respondents Educational Qualification are SSLC
or HSC, 6.78% of the respondents Educational Qualification are Diploma
Holders and remaining 0.67% of the respondents belongs to other Educational
Qualification Category.
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5.7.7 Occupational Wise Classification among the respondents
Occupation No.of.Respondents Percentage (%)

Business 190 21.11
Professionals 193 21.44
Students 140 15.56
Housewife 298 33.11
Clerk 39 4.33
Police/Army 19 2.11
Retired 14 1.56
Unemployed 7 0.78
Total 900 100.00
Table 5.7 Occupational Wise Classification among the respondents
Inference
From the above table 5.7 related to the Educational Qualifications of the
respondents, Majority 33.11% of the respondents are Housewife, 21.44% of
the respondents are Professionals, 21.11% of the respondents are businessman,
15.56% of the respondents are students and 4.33% of the respondents are
Clerk, 2.11% of the respondents are Police and Army, 1.56% of the
respondents are retired persons, 0.78% of the respondents are unemployed.
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5.7.8 Family Monthly income Wise Classification among the respondents
Family Income No.of.Respondents Percentage (%)

Less than Rs.15000 92 10.22
Between Rs.15001 to Rs.30000 478 53.11
Between Rs.30001 to Rs.45000 176 19.56
Between Rs.45001 to Rs.60000 147 16.33
Greater than Rs.60000 7 0.78
Total 900 100.00
Table 5.8 Family Monthly income Wise Classification among the

respondents
Inference
From the above table 5.8 related to the Family Income Wise Classification
among the respondents, Majority 53.11% of the respondents belongs to the
Family Income Category ranges Between Rs.15001 to Rs.30000, 19.56% of
the respondents belongs to the Family Income Category ranges Between
Rs.30001 to Rs.45000, 16.33% of the respondents belongs to the Family
Income Category ranges Between Rs.45001 to Rs.60000, 10.22% of the
respondents belongs to the Family Income Category of Less than Rs.15000,
0.78% of the respondents belongs to the Family Income Category of greater
than Rs.60000.
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5.7.9 Family Size Classification among the respondents
Family Size No.of.Respondents Percentage (%)

Less than 3 members 310 34.44
Between 4-6 members 520 57.78
Greater than 11 members 4 0.44
Total 900 100.00
Table 5.9 Family Size Classification among the respondents
Inference
From the above table 5.9 related to the Family Size Wise Classification among
the respondents, Majority 57.78% of the respondents Family size ranges
Between 4 to 6 Members, 34.44% of the respondents Family size of less than 3
Members, 5.11% of the of the respondents Family size ranges Between 7 to 9
Members, 2.22% of the respondents Family size ranges Between 9 to 11
Members, 0.44% of the respondents Family size of greater than 11members.
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5.7.10 Family Type Classification among the respondents
Family Type No.of.Respondents Percentage (%)

Nuclear Family 723 80.33
Joint Family 101 11.22
Single 76 8.44
Total 900 100.00
Table 5.10 Family Type Classification among the respondents
Inference
From the above table 5.10 related to the Family Type Wise Classification
among the respondents, Majority 80.33% of the respondents belongs to the
Nuclear Family Category, 11.22% of the respondents belongs to the Joint
Family Category and the remaining 8.44% of the respondents are living alone
as Single.
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5.7.11 Preferred Purchasing Mode among the respondents
Preferred Purchasing Mode No.of.Respondents Percentage (%)

Online Purchase 3 0.33
Personal visit 889 98.78
Telephonic order 4 0.44
Sending Representatives 3 0.33
Others 1 0.11
Total 900 100.00
Table 5.11 Preferred Purchasing Mode among the respondents
Inference
From the above table 5.11 related to the Preferred Purchasing Mode among the
respondents, Majority 98.78% of the respondents prefers to personally visit the
retail store for purchasing products, 0.44% of the respondents prefers to
purchase the products through telephonic order, 0.33% of the respondents
prefers to purchase the products through online, 0.33% of the respondents
prefers to purchase the products by sending representatives to the retail stores
and remaining 0.11% of the respondents prefers other mode of shopping.
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5.7.12 Shopping Frequency among the respondents
Frequency of Shopping No.of.Respondents Percentage (%)

Occasionally 19 2.11
Once in a day 49 5.44
Once in 3 days 202 22.44
Once in a week 353 39.22
At least once in a month 277 30.78
Total 900 100.00
Table 5.12 Shopping Frequency among the respondents
Inference
From the above table 5.12 related to the Shopping Frequency among the
respondents, Majority 39.22% of the respondents have shopped once in a week
in the retail store, 30.78% of the respondents have shopped at least once in a
month in the retail store, 22.44% of the respondents have shopped once in 3
days in the retail store, 5.44% of the respondents have shopped once in a day,
2.11% of the respondents have shopped occasionally in the retail store.
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5.7.13 Amount spent in a month for shopping among the respondents
Amount spent in
No.of.Respondents Percentage (%)
a month for shopping
Less than Rs.5000 444 49.33
Between Rs.5001 to Rs.10000 405 45.00
Between Rs.10001 to Rs.15000 36 4.00
Between Rs.15001 to Rs.20000 8 0.89
More than Rs.20000 7 0.78
Total 900 100.00
Table 5.13 Amount spent in a month for shopping among the respondents
Inference
From the above table 5.13 related to the Amount spent in a month for
shopping among the respondents, Majority 49.33% of the respondents spent
less than Rs.5000 for shopping in a month, 45.00% of the respondents spent
amount ranges between Rs. 50001 to Rs.10000 for shopping in a month, 4% of
the respondents spent amount ranges between Rs. 10001 to Rs.15000 for
shopping in a month, 0.89% of the respondents spent amount ranges between
Rs. 15001 to Rs.20000 for shopping in a month, 0.78% of the respondents
spent amount more than Rs.20000 for shopping in a month
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5.7.14 Factor Influencing to Purchase the Product in this Retail Store
Influencing factor No.of.Respondents Percentage (%)

Advertisements 309 34.33
Friends and Relatives 364 40.44
Family Members 201 22.33
Colleagues 22 2.44
Other sources 4 0.44
Total 900 100.00
Table 5.14 Factor Influencing to Purchase the Product in this Retail Store
Inference
From the above table 5.14 related to the Factor Influencing to Purchase the
Product in this Retail Store, Majority 40.44% of the respondents are
influenced by Friends and relatives for purchasing products in their retail store,
34.33% of the respondents are influenced by Advertisements for purchasing
products in their retail store, 22.33% of the respondents are influenced by
Family Members for purchasing products in their retail store, 2.44% of the
respondents are influenced by colleagues for purchasing products in their retail
store and remaining 0.44% of the respondents are influenced by other sources
for purchasing products in their retail store.
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Table 5.7.15 Preferred Mode of Payment among the respondents
Preferred Mode of Payment No.of.Respondents Percentage (%)

On Cash 723 80.33
Debit Card 122 13.56
Credit card 55 6.11
Total 900 100.00
Table 5.15 Preferred Mode of Payment among the respondents
Inference
From the above table 5.15 related to the Preferred Mode of Payment among
the respondents, Majority 80.44% of the respondents preferred to pay by cash
for the products purchased from their retail store, 13.56% of the respondents
preferred to pay through their Debit Cards for their Product Purchases and
remaining 6.11% of the Preferred to pay through their Credit Cards for their
Product Purchase.
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5.7.16 Most Liked Factor of the Retail store among the respondents
Most liked Percentage

No.of.Respondents
Factor of the Retail store (%)
Pricing of the product 198 22.00
Availability of variety of brands 389 43.22
On-time service delivery 27 3.00
Visually appealing Environment 54 6.00
Brand image 60 6.67
Sales promotions/Discounts 12 1.33
Customer service 35 3.89
convenient parking space 7 0.78
Quality of the product and service 118 13.11
Total 900 100.00
Table 5.16 Most Liked Factor of the Retail store among the respondents
Inference
From the above table 5.16 related to the Most liked Factor of the Retail store
among the respondents,43.22% of the respondents most liked factor of the
retail are the availability of the various branded products, 22% of the
respondents most liked factor of the retail are the Pricing of the Product,
13.11% of the respondents most liked factor of the retail are the Quality of the
Product and services offered, 6.67% of the respondents most liked factor of the
retail are the brand image,
Then 6.0% of the respondents most liked factor of the retail are the
Visually Appealing Environment, 3.89% of the respondents most liked factor
of the retail are the customer service, 3.0% of the respondents most liked
factor of the retail are the on-time service Delivery, 1.33% of the respondents
most liked factor of the retail are the sales promotion and discounts, 0.78% of
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the respondents most liked factor of the retail are the availability of the
convenient parking spaces.
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5.7.17 Most Disliked Factor of the Retail store among the respondents
Most disliked Percentage

No.of.Respondents
Factor of the Retail store (%)
Pricing of the product 11 1.22
Non Availability of branded Products 8 0.89
Delivery of Product and Services 60 6.67
Non Attractive Environment 44 4.89
Sales promotions/Discounts 204 22.67
Customer service 157 17.44
Continent parking space 280 31.11
Quality of the product and service 9 1.00
Others 1 0.11
None of the Above 126 14.00
Total 900 100.00
Table 5.17 Most Disliked Factor of the Retail store among the respondents
Inference
From the above table 5.17 related to the Most Disliked Factor of the Retail
store among the respondents, Majority 31.11% of the respondents most
disliked factor of the retail are the Continent parking space, 22.67% of the
respondents most disliked factor of the retail are the Sales promotions and
Discounts, 17.44% of the respondents most disliked factor of the retail are the
customer service, 14.00% of the respondents most disliked factor of the retail
are found to be none, 6.67% of the respondents most disliked factor of the
retail are the delivery of product and services, 4.89% of the respondents most
disliked factor of the retail are the non attractive environment, 1.22% of the
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respondents most disliked factor of the retail are the pricing of the product,
1.00% of the respondents most disliked factor of the retail are the Quality of
the product and service, 0.89% of the respondents most disliked factor of the
retail are the Non Availability of branded Products, 0.11% of the respondents
most disliked factor of the retail are the various other factors.
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5.8 THE RELIABILITY AND VALIDITY OF THE SCALE
Reliability and validity of the scale are important for obtaining

meaningful results. Validity and reliability are the tools used to evaluate the
characteristics of a good measurement and these tools involved a measurement
of accuracy and applicability (Malhotra, 2004; Cooper and Schindler, 2001).
The main concern for performing validity and reliability is to develop a
measurement that reflects a true score of the variables being measured
(Churchill and Iacobucci, 2002).
5.8.1 Reliability of the Scale
A test must be reliable, that is, it must have the ability to consistently
yield the same results when repeated measurements are taken of the same
individuals under the same conditions (Hair, 2006). In other words, reliability
is an indication of how consistent the findings are based on the method of data
collection and analysis (Saunders, Lewis and Thornhill, 2007). Furthermore,
reliability is more important when the questionnaire is a Likert-type because
there are many variables testing the concept.
In the words of Freeman (1965) “The term reliability has two closely
related but somewhat different connotations in psychological testing. First, it
refers to the extent to which a test is internally consistent, that is, consistency
of results obtained throughout the test when administered once. In other
words, how accurate is the test measuring a particular item? Second, reliability
refers to the extent to which a measuring device yields consistent results upon
testing and retesting. That is, how dependable is it for predictive purposes?”
Usually, the Cronbach‟s alpha is used to measure the reliability of the

instrument (Pallant, 2007; Green et al., 2000; Hair et al., 1998). Cronbach‟s
188
alpha estimate tells us how highly the items in the questionnaire are
interrelated. Unlike the split-half reliability method, however, this estimate
does not have to be corrected for length. Cronbach‟s Coefficient Alpha which
is derived from the assumption that if all the items are drawn from the domain
of a single construct, responses to the items composing the measurement
model should be highly correlated (Hatcher, 1994).
Calculation of Cronbach‟s estimate is usually done with the help of a

statistical package designed to calculate this reliability estimate. Cronbach‟s
(1951) estimate of reliability is calculated using the variance of individual
items and co-variances between the items. This estimate, however, can also be
calculated using the correlations between the items. Given those items within a
questionnaire use the same scale, both approaches give similar estimates, but
the latter approach is easier to understand.
The Cronbach alpha coefficient ranges from 0 to 1 with a minimum of

0.6 while other studies suggest that anything above 0.7 suggest high levels of
internal reliability (Hair et al., 1998). Nunnally (1978) suggested that an alpha
value of 0.7 is acceptable. Many studies have used reliability to test their
modified service quality scale that ranged from 0.6 to 0.96 (Chowdhary and
Prakash, 2007; Caro and Garcia, 2007; Akbaba, 2006; Jabnoun and Khalifa,
2005; Sureshchandar, Rajendran and Anantharaman, 2002; Dabholkar, Thorpe
and Rentz, 1996; Malhotra, 1993). For the purpose of this research the
researcher had used Cronbach alpha coefficient (Cronbach, 1951), the most
common method for testing reliability, and 0.6 will be used as the minimal
accepted level. Using SPSS version 21.0, an internal consistency analysis was
performed to assess the reliability aspect of the instrument.
189
5.8.2 Validity of the scale
The test, as a data collection tool, must produce information that is not only
relevant, but free from systematic errors; that is, it must produce valid
information. In general a test is valid if it measures what it claims to measure.
A test, however, does not possess universal and eternal validity. It may be
valid for use in one situation, but invalid if used in another. Cronbach (1964)
states that a test which helps in making one decision in a particular research
situation may have no value at all for another. According to Zikmund and
Babin (2010) validity is the accuracy of a measure or the extent to which a
score truthfully represents a concept. In other words, Validity is concerned
with the test being capable of testing what it was designed for, which is not as
simple as it seems (Hair, 2006).
Figure 5.1: Measurement model of factors affecting purchase intention

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5.8.1 Estimation of Cronbach’s coefficient alpha and CFA loadings for

purchase intentions of retail stores
Cronbach's Cronbach's
CFA
Items Alpha if Alpha
Loadings
Item Deleted Value
Pricing of various branded
0.670 0.893
Products
Availability of Various
0.746 0.888
branded Products
Purchase
Quality of Various branded
0.763 0.887 Intentions
Products
Overall Sales Promotional
0.738 0.890 0.902
Activities
Overall After Sales Services 0.775 0.886
Arrangement of the Products 0.779 0.886
Waiting time for billing 0.798 0.886
Table 5.18 Estimation of Cronbach’s coefficient alpha and CFA loadings

for purchase intentions of retail stores
Inference
Above table illustrates the Cronbach Alpha-value if an item is to be

deleted. It presents the mean for the 7 items of purchase intention of
instrument, consisting of the seven point scale. As can be seen in the reliability
item statistics (Cronbach Alpha = 0.902) all the 7 items seems to be
reasonably well to the scale‟s reliability. A deletion of any item doesn‟t reflect
much on the Cronbach‟s alpha value (reliability). It ranges from 0.886 to
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0.893. The CFA loadings are indicated in the above table and also suggest that
all the items taken for scale construction qualify to develop the scale. This is
due to the fact the CFA loadings are greater than 0.50 for all the items.
Table 5.8.2: Reliability item statistics for purchase intention scales
Purchase intention scales Mean

Item Means 6.372
Item Variances 0.409
Inter-Item Covariance 0.233
Inter-Item Correlations 0.569
Table 5.19: Reliability item statistics for purchase intention scales
As per the Hair et al (1998) suggests, the Inter- item correlation should exceed
0.30 for the data to be reliable. The item statistics present the current study
statistics, where Inter-item correlation is 0.463 for purchase intention scale.
192
Figure 5.2: Measurement model for perceived service quality dimensions

193

perception service quality dimensions of retail stores
Cronbach's Alpha if Cronbach's Alpha

Items CFA Loadings
Item Deleted Value
PPA1 0.926 0.957
PPA2 0.896 0.957
Physical aspects
PPA3 0.944 0.955
PPA4 0.877 0.960
0.965
PPA5 0.919 0.957
PPA6 0.868 0.960
PRE1 0.914 0.947
PRE2 0.892 0.952 Reliability
PRE3 0.915 0.948
PRE4 0.905 0.950 0.959
PRE5 0.904 0.948

PPI1 0.905 0.971
PPI2 0.874 0.972
PPI3 0.918 0.970
PPI4 0.902 0.971 Personal interactions
PPI5 0.913 0.971
PPI6 0.872 0.972 0.974
PPI7 0.903 0.971

PPI8 0.908 0.971
PPI9 0.894 0.972
PPS1 0.947 0.901 Problem solving
PPS2 0.883 0.939
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PPS3 0.928 0.906 0.942

PP1 0.912 0.937
Policy
PP2 0.871 0.941
PP3 0.932 0.931
0.950
PP4 0.908 0.931

for perception service quality dimensions of retail stores
Above table illustrates the Cronbach Alpha-value if an item is to be deleted. It

presents the mean for the 27 items of perception service quality dimension of
0.972. This establishes the reliability of all the items included under perception
service quality dimension. Furthermore, the estimate value of cronbach‟s alpha
in respects of all variables exceeds the “alpha if item deleted” value and hence,
no item needs to be dropped from the study. The CFA loadings are indicated
in the above table and also suggest that all the items taken for scale
construction qualify to develop the scale. This is due to the fact the CFA
loadings are greater than 0.50 for all the items.
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5.8.4 Reliability item statistics for perception service quality dimension
Perception service quality dimension Mean

Item Means 5.926
Table 5.21: Reliability item statistics for perception service quality

dimension
Inter- item correlation should exceed 0.30 for the data to be reliable. The item
statistics present the current study statistic, where Inter-item correlation is
0.677 for perceived service quality dimensions.
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Figure 5.3: Measurement model for expected service quality dimensions

197

expected service quality dimensions of retail stores
Cronbach's Alpha if Item Cronbach's

Items CFA Loadings
Deleted Alpha Value
EPA1 0.778 0.893
EPA2 0.812 0.887 Physical
EPA3 0.834 0.886 appearance
EPA4 0.700 0.901
EPA5 0.858 0.885 0.908
EPA6 0.750 0.891

ERE1 0.860 0.887
ERE2 0.786 0.897 Reliability
ERE3 0.829 0.888
ERE4 0.803 0.891 0.910
ERE5 0.829 0.888

EPI1 0.816 0.929
EPI2 0.776 0.929
EPI3 0.817 0.928
Personal
EPI4 0.795 0.929
interactions
EPI5 0.861 0.925
EPI6 0.686 0.934
0.937
EPI7 0.795 0.929
EPI8 0.782 0.930
EPI9 0.770 0.930
EPS1 0.860 0.782 Problem solving
EPS2 0.759 0.845
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EPS3 0.848 0.785 0.860

EP1 0.783 0.850
Policy
EP2 0.794 0.863
EP3 0.787 0.847
0.885
EP4 0.844 0.847

for expected service quality dimensions of retail stores

presents the mean for the 27 items of the expected service quality dimension
of instrument, consisting of the seven point scale. As can be seen in the
reliability item statistics (Cronbach Alpha = 0.953) all the 27 items seems to
be reasonably well to the scale‟s reliability. A deletion of any item doesn‟t
reflect much on the Cronbach‟s alpha value (reliability). It ranges from 0.782
to 0.934. This establishes the reliability of all the items included under
expected service quality dimension. Furthermore, the estimate value of
cronbach‟s alpha in respect of all variables exceeds the “alpha if item deleted”
value and hence, no item needs to be dropped from the study. The CFA
loadings are indicated in the above table and also suggest that all the items
taken for scale construction qualify to develop the scale. This is due to the fact
the CFA loadings are greater than 0.50 for all the items.
199
5.8.6 Reliability item statistics for expected service quality dimension
Expected service quality dimension Mean

Item Means 6.258
Table 5.23: Reliability item statistics for expected service quality

dimension
0.428 for expected service quality dimensions.
200
Figure 5.4: Measurement model for customer loyalty dimensions

201

customer loyalty dimensions of retail stores
Items Cronbach's Alpha Cronbach's Alpha

CFA Loadings
if Item Deleted Value
WOM1 0.809 0.906
WOM2 0.843 0.899 Word of mouth
WOM3 0.870 0.897
WOM4 0.821 0.908 0.921
WOM5 0.832 0.905

SC1 1.356 0.605 Switch to competitor
SC2 0.555 0.625 and Willingness to pay
WPM1 0.911 0.498 more
WPM2 0.999 0.467 0.626
RES1 0.995 0.994 Internal and External
RES2 0.992 0.994 response
RES3 0.991 0.994
RES4 0.990 0.996 0.996

for customer loyalty dimensions of retail stores

presents the mean for the 13 items of the customer loyalty dimension of
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0.996. This establishes the reliability of all the items included under customer
loyalty dimension. Furthermore, the estimate value of cronbach‟s alpha in
respect of all variables exceeds the “alpha if item deleted” value and hence, no
item needs to be dropped from the study. The CFA loadings are indicated in
the above table and also suggest that all the items taken for scale construction
qualify to develop the scale. This is due to the fact the CFA loadings are
greater than 0.50 for all the items.
203
5.8.8 Reliability item statistics for customer loyalty dimensions
Customer loyalty dimensions Mean

Item Means 5.468
Table 5.25: Reliability item statistics for customer loyalty dimensions
0.381 for customer loyalty dimensions.
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5.8.9 Model fit statistics
Purchase Perceived Expected Customer Fit

Goodness of Fit Statistics
intention SQ SQ loyalty values
Chi Square Value (CMIN) 8.124 1382.700 1053.167 264.651
Degree of Freedom (Df) 4 308 309 55 ≥0
Chi Square / Df (CMIN/Df) 2.031 4.489 3.408 4.812 2 to 5
Goodness of Fit Index (GFI) 0.978 0.890 0.918 0.958 > 0.9
Root Mean Square Error of
0.079 0.062 0.052 0.065 < 0.08
Approximation (RMSER)
Adjusted Good of Fit Index
0.923 0.865 0.900 0.930 > 0.9
(AGFI)
Comparative Fit Index (CFI) 0.967 0.967 0.957 0.990 > 0.9
Normed Fit Index (NFI) 0.976 0.958 0.940 0.987 > 0.9
Table 5.26: Model fit statistics
To analysis the validity CFA approach (AMOS 21) has been used. The SEM
approach allows concurrent estimations of multiple regression analysis in one
single framework. Browne and Cudeck (1993) study indicate the model fit can
be checked by RMSEA which is less than 0.08 has a good fit and less than
0.05 has a closer fit. Chin and Todd (1995) study proposed that for goodness
of model fit GFI (Goodness of Fit Index) and NFI (Normed Fit Index) should
be above 0.9 and AGFI (Adjusted goodness-of-fit Index) should be above 0.8.
Bentler (1990) study suggests for good model fit CFI (Comparative Fit Index)
should be greater than 0.9. The goodness of final model fit has been shown in
the above table.
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5.9 TOOLS USED FOR DATA ANALYSIS
In this study, the main objective is to assess relationships among certain

variables and to test specific hypotheses regarding the nature of the
relationships. The analysis is undertaken with a view to give a clear cut
idea from the primary data collection. Various tables, diagrams and charts are
incorporated to make it more useful and easy to understand. The software
packages employed for the study are AMOS 21.0 and SPSS 21.0 for
Windows. AMOS is a structural equation modeling software package and is
used to undertake confirmatory factor analysis. It is also used to test the
structural equation model that links loyalty to its antecedents.
The packages have been used to perform a number of statistical

techniques to analyze the data collected in the phase of the study. The same
packages are utilized for appropriately screening the data before the
application of each technique. The results of various analyses are depicted in
figures and tables as evidenced in subsequent chapters. The techniques that are
used in the phases of the study are explained in the consequent paragraphs.
5.9.1 Structural Equation Modeling (SEM)
SEM, also known as latent variable analysis (Baumgartner and

Homburg 1996; Hair et al., 1998), is a developer of multiple regression
analysis to combine a series of multiple regression equations within one
structural model (Hair et al., 1998). The approach simultaneously runs several
multiple regression equations, and is used in this research to combine the
relationships investigated into one broad model. That model integrates the
relationships in the pathway from service performance to behavioral loyalty.
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SEM is a confirmatory approach and is used to test theory rather than to

develop a theory (Byrne, 2001; Tabachnick and Fidell, 2001). SEM has a
number of benefits over multiple regressions. It possesses interdependence and
allows a dependent variable in one multiple regression to become an
independent variable in a subsequent equation (Hair et al., 1998). It also
allows independent variables to act simultaneously on more than one
dependent variable. It identifies both direct and indirect effects on a dependent
variable (Hair et al., 1998). In addition the approach enables the inclusion of
latent variables within the model. Latent variables are hypothesized, but
unobserved variables (Byrne, 2001; Hair et al. 1998; Tabachnick and Fidell,
2001). An additional strength of SEM is the treatment of error variance. In
most data, there are elements of errors incorporated into the data. SEM
includes estimation of error variance in contrast to other multivariate
approaches that ignore errors (Byrne 2001, Hair et al., 1998).
Although SEM provides a number of advantages over other statistical

approaches, there are limitations associated with its use. While using SEM it is
important, to ensure that the model is correctly specified as SEM is vulnerable
to specification error. A predictor variable is omitted from the model thus
distorting results for the included variables (Hair et al., 1998). A number of
indicators are used to assess the validity of a hypothesized model. It is the fit
between the sample and the estimated population covariance matrices (Hair et
al., 1998; Tabachnick and Fidell, 2001).
Although the chi-square (X2) is accepted as the conventional overall

test of fit, a number of alternative fit indices have been developed. It
overcomes the concerns with the chi-square statistics, which mainly associated
with issues of sample size (Hu and Bentler, 1995). Whilst the model fit is
important, the issue of over fitting the model is also of consequence. It is
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necessary to balance the model fit with parsimony (Hair et al., 1998). The fit
indicators are grouped into categories of absolute fit indices; incremental or
comparative fit indices and parsimonious fit indices (Byrne, 2001; Hair et al.,
1998).
The absolute fit indices include chi-square (X2); goodness of fit index
(GFI); adjusted goodness of fit index (AGFI); root mean square residual
(RMR) and the root mean square error of approximation (RMSEA). The
incremental fit measures include the Normed fit index (NFI) and the
comparative fit index (CFI). The chi-square (X2) statistics is recognized as the
conventional overall test of fit (Hu and Bentler, 1995). However, research has
shown that the chi-square statistic is not entirely reliable as an indicator of
good model fit. It rejects an acceptable hypothesized model (Byrne, 2001; Hu
and Bentler, 1995). In particular the chi-square statistic is sensitive to sample
size. Large samples often result in high values of chi-square indicating a poor
fit, whereas alternative measures suggest an acceptable fit. In this research the
chi-square statistic is reported as accepted as a fundamental measure of fit (Hu
and Bentler, 1995).
Absolute fit indices, such as the goodness of fit index (GFI) effectively
compare the hypothesized model with the null model. They measure the
relative level of variance and covariance (Byrne, 2001). Hu and Bentler (1995)
say that the GFI performs better than the other absolute fit indices. Although
theoretically a negative result is possible, the hypothesized model is a worse fit
than the null model. Results for the GFI are normally in the range from zero to
one with higher values indicating a better fit (Byrne, 2001). A GFI of above
0.90 is generally accepted as indicative of a good fit (Hair et al., 1998; Hu and
Bentler, 1995).
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The adjusted goodness of fit index (AGFI) is similar to the GFI but
addresses the issue of parsimony by adjusting the degrees of freedom. The
result with GFI normally ranges between zero and one with higher values
indicating a better fit (Byrne, 2001). The results with GFI values above 0.90
are acceptable (Hair et al., 1998).
The root mean square error of approximation (RMSEA) is recognized as “one

of the most informative criteria in covariance structure modeling” (Byrne,
2001 Pg 84). The RMSEA reports the discrepancy or misfit in the fit of the
model to the population covariance matrix. It is adjusted for the degrees of
freedom (Byrne, 2001). RMSEA is affected by sample size. There is a
tendency to reject acceptable models when the sample size is small (Byrne,
2001). Values range from zero to one and lower values indicate better fits.
Values between 0.05 and 0.08 are seen as representing well fitted models.
Values between 0.08 and 0.10 represent mediocre fits and above 0.10 is a poor
fit (Byrne, 2001; Hair et al., 1998). Although a lower value indicates a better
fit, a result of zero will indicate a perfect fit. This is optimistic (Byrne, 2001).
In contrast to the absolute fit indices the incremental or comparative

indices of fit compare the hypothesized model with a baseline model, normally
the null model (Byrne, 2001; Hair et al., 1998). The comparative fit index
(CFI) is developed by Bentler (1990) to reflect the criticisms associated with
the NFI. As with the NFI the result for the CFI range from zero to one with
larger results indicating better fit. A result of above 0.90 is indicative of a good
fit (Byrne, 2001).
The Normed chi-square statistic is proposed by Joreskog (Hair et al., 1998) to

overcome some of the concerns over the chi-square statistic. The statistic
provides a range of acceptable results. It indicates models whether it is above
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or under fit. An over fitted model is typically represented by a value less than
one, whilst a model that is not reflective of the data is represented by a value
above 3 (Hair et al., 1998). A more liberal limit of five is suggested as
appropriate. In this research, SEM applications are used as a confirmatory
technique to validate the proposed research model for the service industry.
5.9.2 Determination of Sample Size for Model Testing
Bollen (1989) recommends 3 to 5 participants per estimated parameter,

whereas Bentler (1990) recommend 5 to 10 participants per estimated
parameter. It is observed that there is a limited consensus in determining the
sample size for adequate power. The research indicates that some goodness-of-
fit indices perform adequately with sample sizes as small as 100 participants.
In general, statistical indices perform adequately and yield meaningful and
interpretable values. These values are attained when the sample size is 200 or
more participants. Sample size is an important consideration in SEM analyses,
including (a) low power to detect significant path coefficients and variances,
and (b) instability in the covariance matrix, leading to attenuation of fit
indices. Totally 900 Retail Store customers are selected as samples for
conducting the research.
5.10 Univariate and Multivariate Statistical Analyses
In order to test hypotheses through data analysis, several Univariate and

multivariate statistical techniques are employed. These techniques include
Analysis of Variance (ANOVA), Reliability and Validity Analysis, Multiple
regression analysis, Path analysis, Independent Paired t-test and Paired Sample
t-test. They are elaborated in the following paragraphs.
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5.10.1 Analysis of Variance
Analysis of variance is a technique often used to test statistical

significance and differences by means for groups or variables. The null
hypothesis means that no difference exists between the means while the
alternative hypothesis is that the means are different from each other.
5.10.2 Multiple Regression Analysis
Multiple regression analysis is a statistical technique that allows the

researcher to assess the relationship between one dependent variable and
several independent variables (Tabachnick and Fidel, 2001). It provides
information about the model as a whole, and the relative contribution of each
of the independent variable that makes up the model. In this study, multiple
regression analysis is used to examine how well the dimensions of service
quality can predict customers‟ satisfaction.
510.3 Path Analysis
Path analysis is employed for studying the relationships between the

dimensions of quality, overall satisfaction and the dimensions of loyalty. Path
analysis is a statistical technique, within the family of Structural Equation
Modeling techniques. In models an explanatory relationship exists between the
variables. It is usually employed when the models under examination do not
contain latent variables. The advantage of path analysis over regression is that,
it concurrently performs multiple regression analyses. By the same time, it
produces an overall assessment of the fit of the model that is usually based on
a single chi square statistic (Singh and Wilkes, 1996). In addition, several
goodness of fit indexes is available to judge the fit better.
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5.10.4 Paired Sample t-Test
Paired-sample t-test is used when data from the same sample are
collected either under two different conditions or using the measurement of
two different variables (Pallant, 2001). Paired sample t-test is employed to
examine the relative importance of service quality dimensions by establishing
differences in the expectation and perception scores.
5.11 CONCLUSION
This Research methodology chapter provides a description of the

procedures employed to assess the constructs using the collected primary data.
The sectors selected for the work are the organized retail stores of the major
cities like Chennai, Madurai and Coimbatore of Tamilnadu in India. The
revised SERVQUAL instrument is chosen as the most reliable device to
quantify the difference-score conceptualization. It evaluates gaps between
expectation and perception in service quality. Adjustments are made on the
SERVQUAL instrument to make it specific to Retail sectors and such tool has
been renamed as Retail Service Quality Scale (RSQS). The research questions
are contained in separate divisions to hold additional information such as
preconception about the service; behavioral intention of the customer;
satisfaction level of the customers etc., which the researcher has specified to
hold valuable data.
The research sample consists of 900 customers from various organized

retail stores and those samples are chosen on the basis of their status and
customers randomly selected. Structured questionnaires are developed and are
tested in focus group sessions, and the appropriate modifications are produced.
The questionnaire asks the respondents to supply answers to Preconception
212
about services, twenty-seven questions regarding their expectation of service

quality along with twenty-seven questions on their perception of the service
providers. Additionally, there are questions calling for assignment of values
related to the five pertinent factors, along with questions related to gender,
age, income, occupation. Hence this chapter concludes that it has a description
of the proposed research design, the sampling plan and setting,
instrumentation, data collection processes and methods of information
analysis.
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CHAPTER VI
DATA ANALYSIS AND INTERPRETATIONS
This Chapter discusses about the findings of the research study. This
data analysis is followed by finding the relative importance of service quality
dimensions. Further, the association between service quality and
demographics was then investigated. Thereafter, multiple regression analysis
was used whereupon to find the relationships between service quality
dimensions and customer loyalty intentions were also clearly demonstrated
with proper illustrations.
6.1 INTRODUCTION
After the data were collected, the researcher proceeded to the data
processing and data analysis stage. Data processing concerns activities and
technologies which prepare the collected data for analysis data checking,
entry, coding, and editing (Gromme, 1998). Data analysis comes after the data
have been collected to make sense of the study and reach certain findings
(Yaghi, 2010). Data analysis concerns activities and technologies which
provide statistical insight in the collected data weighting, tabulations, and
response analysis (Gromme, 1998). Data were analyzed in order to draw the
conclusion from the collected data.
This chapter examines the results of the study and presents the different
techniques used for data analysis by the researcher in this study. In the present
study, responses from respondents were collected, coded and tabulated in
SPSS 21. Data collected were analyzed through a series of validated tools and
procedures. In some cases simple statistics like average, percentage, weighted
average and mean score were calculated. Advanced tools like Analysis of
214
Variance, Correlation and Multiple-Regression were also used. Simple

descriptive statistics were used to summarize the respondents‟ characteristics,
their frequency of visiting retail stores, and their ratings of service quality and
behavioral intentions. Reliability and validity of the scale were checked.
Multiple regressions were applied to assess the relationship between service
quality dimensions and overall service quality. One way ANOVA tests (testing
the difference between the mean of two or more independent variables) were
employed to examine if the service quality dimensions means varied among
respondents with different demographic characteristics. Last but not least,
multiple regressions were applied to demonstrate the relationship of the
service quality dimensions with customer loyalty. Throughout the analysis
process, significance tests were used to decide whether to accept or reject the
hypotheses concerning the sample data that have been collected (Harris, 1998).
The confidence level was taken as 95% (or 5% level of significance).
6.2 SERVICE QUALITY GAP ANALYSIS

Service quality Expected Mean Perceived
Gap (P-E)
dimensions (P) Mean (E)
Physical Aspects 1 6.45 6.12 -0.33
Average Gap Score -0.33
Reliability 1 6.32 6.04 -0.28
Reliability 2 6.22 5.93 -0.30
Reliability 3 6.27 6.01 -0.26
215
Reliability 4 6.20 5.90 -0.30

Reliability 5 6.27 5.99 -0.28
Personal Interaction 1 6.31 6.02 -0.29
Problem solving 1 6.47 6.02 -0.45
Policy 1 6.23 5.82 -0.41
Policy 2 6.15 5.74 -0.41
Policy 3 6.20 5.76 -0.43
Policy 4 6.08 5.74 -0.34
Table 6.2.1: Service Quality Gap Analysis
The Above table shows the mean average gap score for five service quality
dimensions.
216
Categories Gap Scores

Average Gap Score for Physical aspects -0.4
Average Gap Score for Reliability -0.44
Average Gap Score for Personal interactions -0.29
Average Gap Score for Problem Solving -0.29
Average Gap Score for Policy -0.33
Un-weighted Score -0.35
Table 6.2.2: Calculation of Un-Weighted Score
Assigning Weights
This step is the extension of the SERVQUAL score and is only required
if weighted score is calculated. Putting weights against each of the dimensions
is critical and tactful because the amount of weight represents the relative
importance of the dimensions of the customer. The questionnaire has a
separate page asking each respondent to put relative weight against each
dimension. The points against each of the dimensions are totaled and averaged
to normalize it. Total 100 points have been allocated for; five dimensions as
stated below preferences are calculated considering respondents‟ viewpoint on
it:
217
Dimensions Points
Retail store appearance and store layout (Physical aspects) 27
Retailers keep their promises and do the right things (Reliability) 22
Retail store personnel are courteous, helpful, and inspire
20
confidence in customers (Personal interaction)
Retail store personnel are capable to handle returns and
exchanges, customers‟ Problems and complaints (Problem 17
Solving)
Retail store‟s policy on merchandise quality, parking, operation
14
hours, and credit cards (Policy)
Total 100
Table 6.2.3: Rating of Preference on the Service Quality Dimensions
Finally, the score should be analyzed to find out the weak areas where
more attention is required. The gap score indicates the extent of gap in service
quality. The larger the gap score is, the more is the dissatisfaction.
Dimensions Un-Weighted Score Weights Weighted Score

Physical aspects -0.4 0.27 -0.108
Reliability -0.44 0.22 -0.097
Personal interactions -0.29 0.2 -0.058
Problem Solving -0.29 0.17 -0.049
Policy -0.33 0.14 -0.046
Table 6.2.4: Calculation of Weighted Score

218
Inference:
The above table shows that the Service Gap Score Analysis for the
retail shops in Chennai, Madurai and Coimbatore. It shows that lowest service
gap has occurred in “policy” and “problem solving” dimension and little high
service gap has occurred in the “personal interaction” and “reliability”
dimension. “Physical aspect” dimension is has occurred very high service gap
compared to other dimensions. The lower order dimensions should be paid
more concentration and the retails should see that the customer‟s expectations
are met for all dimensions.
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6.3 RELATIVE IMPORTANCE OF SERVICE QUALITY

DIMENSIONS ON OVERALL RETAIL SERVICE QUALITY
Testing of Hypothesis 1
H01: There is no positive impact of service quality dimensions on overall retail

service quality.
HA: There is positive impact of service quality dimensions on overall retail

service quality.
Regression analysis is used for service quality studies that involve the
attitudes and perceptions of consumers or the decisions that consumers make
about products (Hair et al., 1995). The dimension with the largest coefficient
represents the most important dimension in terms of its influence on overall
quality perceptions. The next largest coefficient represents the second most
influential dimension and so forth.
R R Square Adjusted R Square Std. Error of the Estimate

0.822 0.676 0.675 0.582
Table 6.3.1: Summary Table
The adjusted R square value was 0.676 which means that retail service
quality dimensions account for 68 percent of the variance in “Overall Retail
Service Quality”. It means that 32 percent of Overall Retail Service Quality
was explained by something other than the service quality dimensions.
220
Model Sum of Squares df Mean Square F P value

Regression 633.084 5 126.617
Residual 302.795 894 0.339 373.835 0.000**
Total 935.879 899
** Significant at 5 level
Table 6.3.2: Model fit table (ANOVA)
Summary of Regression Analysis treating service quality dimensions

as predictors and overall perception of service quality as criterion variable
was shown below table. It was observed that the overall regression model
was significant (F=373.835, p<0.00). It is parallel to the findings of Leung
(2006) that the relationship between service quality and overall service
quality was significant and strong. In terms of the relationship between
individual dimensions and overall service quality rating, the adjusted R
square = 0.676 was statistically significant. It was suggested that the retail
service quality dimensions explained 68 per cent of the variance in the
customers‟ overall rating.
221
Unstandardized Standardized
Coefficients Coefficients
Model t value p value
Std.
B Beta
Error
(Constant) 0.353 0.143 2.478 0.013**
Physical Aspects 0.018 0.008 0.096 2.412 0.016**
Reliability 0.022 0.009 0.098 2.480 0.013**
Personal Interaction 0.011 0.006 0.086 1.985 0.047**
Problem Solving -0.005 0.013 -0.013 -0.368 0.713
Policy 0.163 0.007 0.639 24.433 0.000**
** Significant at 5 per cent level
Table 6.3.3 regression analysis results for service quality dimensions
All dimensions physical aspects, Reliability, personal interaction and policy

was statistically significant (p < 0.01). Physical aspects, Reliability, personal
interaction and policy dimensions remained in the equation explaining overall
service quality. The higher the beta co-efficient, more is the contribution of
factors in explaining overall service quality. As shown in the Table 6.3.3, the
overall perceived service quality was influenced by all the eight dimensions
with “Policy and Reliability dimensions” as the most important dimension,
beta coefficient = 0.163 and 0.022.
Above table depict that the customers tend to make service quality judgments
based on these four dimensions in order of importance as revealed in the
regression equation. „Policy and reliability‟ had achieved the strongest
222
association with the overall perception of service quality. Among all the
variables in the regression, „Personal interaction‟ appeared to have least
association (with beta coefficient = 0.011) with overall service quality. This
shows that the customers perceive “personal interaction” i.e. employees in the
outlet have the knowledge to answer customer‟s questions and employees
behavior in the outlets instills confidence in customers as the least important
for influencing their service quality perceptions.
The results of above table can be summarized as regression equation given

below:
Overall service quality as perceived by customers= 0.353 + 0.018(Physical

aspects) + 0.022(Reliability) + 0.011(Personal interaction) + 0.163(Policy)
Hence null hypothesis is rejected, it concludes that there is positive impact of

service quality dimensions on overall retail service quality.
223
6.4 EFFECTS OF DEMOGRAPHIC VARIABLES ON DIFFERENT

SERVICE QUALITY DIMENSIONS
H02: There is no significant relationship between demographic difference of

the respondents and retail service quality dimensions.
HA: There is significant relationship between demographic difference of the

In non-professional service like retailing, there is a need to examine the

demographic characteristics of customers when evaluating service quality
(Webster 1989). Therefore, the demographic data were adopted to examine
their association with various retail service quality dimensions. In this study,
Analysis of Variance had been used to determine whether these factors were
influenced by the demographics. Significance value less than 0.05 indicate
existence of some relationship between the independent variable (demographic
characteristic) and dependent variables (dimensions of service quality).
Sub Hypothesis
H2a: There is no significant relationship between type of retail store of the

H2b: There is no significant relationship between location of the retail store of

H2c: There is no significant relationship between gender of the respondents and

retail service quality dimensions.
224
H2d: There is no significant relationship between age of the respondents and

H2e: There is no significant relationship between marital status of the

H2f: There is no significant relationship between educational qualifications of

H2g: There is no significant relationship between occupation of the respondents

and retail service quality dimensions.
H2h: There is no significant relationship between family income of the

225
6.4.1: Effects of store type on service quality dimensions

Service quality dimension F P value

Physical Aspects 53.54 0.000**
Reliability 48.56 0.000**
Personal Interaction 51.31 0.000**
Problem Solving 55.63 0.000**
Policy 23.45 0.000**
Table 6.4.1: Effects of store type on service quality dimensions
Inference:
Above table shows that p value is less than 0.05 for all service quality
dimensions, hence null hypothesis is rejected. It concludes that store type had
significantly influence over all service quality dimensions like physical
aspects, reliability, personal interaction, and problem solving and policy
dimensions.
Post hoc analysis shows that hyper markets differed significantly on the basis
of all service quality dimensions aspects from super market and departmental
stores, super market differed significantly on departmental stores.
226
6.4.2 Effects of location of the store on service quality dimensions
H2b: There is no significant relationship between location of the store and retail

Policy 145.8 0.000**
Table 6.4.2 Effects of location of the store on service quality dimensions
Inference:
dimensions, hence null hypothesis is rejected. It concludes that location of the
store had significantly influence over all service quality dimensions like
physical aspects, reliability, personal interaction, and problem solving and
policy dimensions.
Post hoc analysis shows that location of retail stores in Chennai differed
significantly on the basis of all service quality dimensions from location of
retail stores in Madurai and Coimbatore.
227
6.4.3 Effects of gender on service quality dimensions
H2c: There is no significant relationship between Gender and retail service

quality dimensions.

Physical Aspects 3.129 0.077
Policy 6.782 0.009**
Table 6.4.3: Effects of gender on service quality dimensions
Inference:
Above table shows that p value is less than 0.05 for service quality dimensions
like reliability, personal interaction, and problem solving and policy
dimensions, hence null hypothesis is rejected. It concludes that gender had
significantly influence over service quality dimensions like reliability,
personal interaction, and problem solving and policy dimensions. It indicates
that physical aspects do not differ significantly based on gender difference.
Based on the mean value, females differed significantly on the basis of
reliability, personal interaction, and problem solving and policy service quality
dimensions from males.
228
6.4.4 Effects of age on service quality dimensions
H2d: There is no significant relationship between age and retail service quality
dimensions.

Policy 16.239 0.000**
Table 6.4.4 Effects of age on service quality dimensions
Inference:
dimensions like physical aspects, reliability, personal interaction, and problem
solving and policy dimensions, hence null hypothesis is rejected. It concludes
that age had significantly influence over all service quality dimensions like
physical aspects, reliability, personal interaction, and problem solving and
policy dimensions.
Post hoc analysis shows that age group between 41-50 years old differed
significantly on the basis of all physical aspects dimensions from age group
between 21-30 years, 31-40 years and above 50 years. Age group between 31-
40 years old differed significantly on the basis of all physical aspects
dimensions from age group between less than 20 years, 41-50 years.Age group
between 41-50 years old differed significantly on the basis of all reliability
dimensions from age group between 21-30 years and 31-40 years. Age group
229
between 31-40 years old differed significantly on the basis of all personal
interaction dimensions from all other age groups. Age group between 41-50
years old differed significantly on the basis of all problem solving dimensions
from age group between 21-30 years, 31-40 years and greater than 50 years
and age group between 31-40 years old differed significantly on age group less
than 20 years and between 21-30 years.
230
6.4.5 Effects of marital status on service quality dimensions
H2e: There is no significant relationship between marital status and retail


Personal Interaction 2.278 0.059
Problem Solving 1.604 0.171
Policy 3.069 0.016**
Table 6.4.5 Effects of marital status on service quality dimensions
Inference:
like physical aspects, reliability and policy dimensions, hence null hypothesis
is rejected. It concludes that marital status had significantly influence over
service quality dimensions like physical aspects, reliability and policy
dimensions.Post hoc analysis shows that widow group differed significantly on
the basis of all physical aspects dimensions from married and unmarried
group. Widow group differed significantly on the basis of all reliability
dimensions from married, unmarried and divorced group. Widow group
differed significantly on the basis of all personal interaction dimensions from
married, unmarried and separated group. Widow group differed significantly
on the basis of all problem solving dimensions from married and unmarried
group. Widow group differed significantly on the basis of all policy
dimensions from married, unmarried and separated group.
231
6.4.6 Effects of educational qualification on service quality dimensions
H2f: There is no significant relationship between educational qualification and


Policy 3.212 0.012**
Table 6.4.6 Effects of educational qualification on service quality
dimensions
Inference:
like reliability, personal interaction and policy dimensions, hence null
hypothesis is rejected. It concludes that educational qualification had
significantly influence over service quality dimensions like reliability,
personal interaction and policy dimensions. Respondents were found to be
differing significantly on the basis of reliability, personal interaction and
policy dimensions.
Post hoc analysis shows that diploma group differed significantly on the basis
of all reliability dimensions from SSLC/HSC, UG and PG group. UG group
differed significantly on the basis of all personal interaction dimensions from
PG and diploma group and PG group differed from diploma group, Diploma
group differed from UG group on the basis of personal interaction dimensions.
232
HSC/SSLC group differed significantly on the basis of all policy dimensions

from UG and Diploma group differed significantly on UG and PG educational
group.
233
6.4.7 Effects of occupation on service quality dimensions
H2g: There is no significant relationship between occupations and retail service

quality dimensions.

Reliability 1.915 0.064
Policy 3.401 0.001**
Table 6.4.7 Effects of occupation on service quality dimensions
Inference:
like personal interaction, problem solving and policy dimensions whereas
other service quality dimensions had no influence of occupation, hence null
hypothesis is rejected. It concludes that occupations had significantly influence
over service quality dimensions like personal interaction, problem solving and
policy dimensions. For example, business class represents an affluent society.
They preferred customized services like abundant parking space, outlet
accepting all credit cards etc. where importance was given to their individual
needs. That‟s why they differed from service quality perception of other
categories of occupations.
Post hoc analysis shows that professional group differed significantly on the
basis of all reliability dimensions from business, students and clerk; clerk
occupational group differed from police occupation. Business occupation
234
group differed significantly on the basis of all personal interaction dimensions

from professionals and police/army group and clerk group differed from
students group, clerk group differed from students, house wives and
police/army group.
Business group differed from clerk and police/army group on the basis of
personal interaction dimensions, clerk group differed from professional, house
wives and police/army group. Business group differed from housewives, clerk
and professional group on the basis of problem solving dimensions; clerk
group differed from students, house wives and retired, business, professional
group. Clerk group differed significantly on the basis of all policy dimensions
from business, professional, student, police/army, house wives and retired
occupation group.
235
6.4.8 Effects of family income on service quality dimensions
H2h: There is no significant relationship between family income and retail


Policy 8.838 0.000**
Table 6.4.8 Effects of family income on service quality dimensions
Inference:
dimensions like personal interaction, problem solving and policy dimensions,
it exhibited that all the dimensions differed significantly on the basis of family
income i.e. respondents from all levels of income perceived the retail service
quality dimensions are different. Hence null hypothesis is rejected. It
concludes that family income had significantly influence over all service
quality dimensions.
Post hoc analysis shows that between Rs.45001-Rs.60000 income group

differed significantly on the basis of all service quality dimensions from
Between Rs.15001-30000, Between Rs.30001-45000, greater than Rs.60000;
Greater than Rs.60000 income group differed from all other income groups.
236
6.4.9 Effects of family size on service quality dimensions
H2i: There is no significant relationship between family size and retail service
quality dimensions.

Policy 1.519 0.194
Table 6.4.9 Effects of family size on service quality dimensions
Inference:
Above table shows that p value is greater than 0.05 for all service quality
dimensions it exhibited that none of the dimensions differed significantly on
the basis of family size i.e. respondents from all different size of family
perceived the retail service quality dimensions as same. Hence null hypothesis
is accepted. It concludes that family size don‟t have any significantly influence
over all service quality dimensions.
237
6.4.10 Effects of family type on service quality dimensions
H2j: There is no significant relationship between family type and retail service
quality dimensions.

Policy 0.909 0.403
Table 6.4.10 Effects of family type on service quality dimensions
Inference:
the basis of family type i.e. respondents from all different type of family (joint
and nuclear) perceived the retail service quality dimensions as same. Hence
null hypothesis is accepted. It concludes that family type don‟t have any
significantly influence over all service quality dimensions.
238
6.4.11 Effects of most preferred purchase mode on service quality

dimensions
H2k: There is no significant relationship between most preferred purchase

mode and retail service quality dimensions.

Policy 0.394 0.813
Table 6.4.11 Effects of most preferred purchase mode on service quality

dimensions
Inference:
the basis of most preferred purchase mode i.e. respondents from most
preferred purchase modes perceived the retail service quality dimensions as
same. Hence null hypothesis is accepted. It concludes that most preferred
purchase mode don‟t have any significantly influence over all service quality
dimensions.
239
6.4.12: Effects of frequency of shopping on service quality dimensions
H2l: There is no significant relationship between frequency of shopping and


Policy 7.647 0.000**
Table 6.4.12: Effects of frequency of shopping on service quality
dimensions
Inference:
dimensions like Physical aspects, reliability, personal interaction, problem
solving and policy dimensions, hence null hypothesis is rejected. It concludes
that frequency of shopping had significantly influence over service quality all
dimensions like personal interaction, problem solving and policy dimensions.
For example, Weekly visitors were the regular footfalls at hyper market in
comparison to monthly and quarterly visitors. On a weekly basis they (weekly
visitors) visit the hyper market and whenever an over- promise is committed
they can wait for its fulfillment. For example, hyper market employees
promises the customers (weekly visitors) that particular product will be
available in 1st week of January, but due to unforeseen circumstances the
desired product was not delivered on promised date but will be delivered on
240
3rd week of January. This over-promise will not impact the perception of
weekly visitors as it will impact the monthly and quarterly visitor‟s perception.
It is because weekly visitors often visit the outlet, they can collect the desire
product in their next visit but the same does not hold good for monthly and
quarterly visitors. They prefer that whenever the hyper market promises to do
repairs, and alterations by a certain times, it will do so and the hyper market
provides the services at the time it promises to do so.
Post hoc analysis shows that respondents who made purchase at least once in a
month group differed significantly on the basis of all physical aspects and
personal interaction dimensions from once in three days and once in a week
purchase group. Respondents who made purchase at least once in a month
group differed significantly on the basis of all reliability dimensions from once
in three days purchase group. Respondents who made purchase at least once in
a three days group differed significantly on the basis of all policy dimensions
from occasionally, once in a week and at least once in a month purchase
group.
241
6.4.13 Effects of amounts spent in a month for shopping on service quality

dimensions
H2m: There is no significant relationship between amounts spent in a month for

shopping and retail service quality dimensions.

Policy 6.462 0.000**
Table 6.4.13 Effects of amounts spent in a month for shopping on service

quality dimensions
Inference:
like personal interaction and policy dimensions, it exhibited that all other
dimensions are not significantly differ on the basis of amounts spent in a
month for shopping i.e. respondents from different buying power perceived the
retail service quality dimensions are different. Hence null hypothesis is
rejected. It concludes that amounts spent in a month for shopping had
significantly influence over service quality dimensions like personal
interaction and policy dimensions.
Post hoc analysis shows that respondents who spent amount for shopping
between Rs.10001-15000 group differed significantly on the basis of all
242
physical aspects and reliability dimensions from between Rs.5001-10000

group. Respondents who spent amount purchase between Rs.5001-10000
group differed significantly on the basis of all personal interaction and policy
dimensions from less than Rs.5000 and between Rs.15001-20000 group.
Respondents who made purchase at least once in a three days group differed
significantly on the basis of all policy dimensions from occasionally, once in a
week and at least once in a month purchase group.
243
6.4.14 Effects of influencing factor on service quality dimensions
H2n: There is no significant relationship between influencing factor and retail


Policy 2.321 0.045**
Table 6.4.14 Effects of influencing factor on service quality dimensions
Inference:
dimensions, it exhibited that all other dimensions are significantly differ on the
basis of influencing factors i.e. respondents from different influencing factors
like family, friends, advertisements and other sources are perceived difference
in the retail service quality dimensions. Hence null hypothesis is rejected. It
concludes that influencing factors had significantly influence over all service
quality dimensions.
Post hoc analysis shows that other source of influencing factors differed
significantly on the basis of all service quality dimensions from influencing
factors like advertisement, friends & family, family members and colleagues.
244
6.4.15 Effects of preferred payment modes on service quality dimensions
H2o: There is no significant relationship between preferred payment modes and


Policy 40.064 0.000**
Table 6.4.15 Effects of preferred payment modes on service quality
dimensions
Inference:
dimensions, it exhibited that all other dimensions are significantly differ on the
basis of preferred payment modes i.e. respondents from different payment
modes like credit, debit cards, on cash and other retail card usage are
perceived difference in the retail service quality dimensions. Hence null
hypothesis is rejected. It concludes that influencing factors had significantly
influence over all service quality dimensions.
Post hoc analysis shows that credit card payment mode differed significantly
on the basis of all service quality dimensions from payment modes like on
cash and debit card.
245

DIMENSIONS ON CUSTOMER LOYALTY DIMENSIONS
Testing of hypothesis 3
H03: There is no significant relation between retail service quality dimensions

and customer loyalty dimensions.
HA: There is significant relation between retail service quality dimensions and
Baumann et al. (2007) demonstrated that customer loyalty is measured by the

willingness to recommend, short term and long term intentions to stay with the
same company. According to Reichheld (2003) the question: “How likely is it
that you would recommend company X to a friend or colleague” is the most
effective question in measuring loyalty, and is based on a survey involving
4,000 consumers across a variety of industries. Similarly, Koskela (2002) puts
forward that customers who heard of word-of mouth recommendations need
less selling time, have greater loyalty potential, and are ready to buy.
According to a study for the US Office of Consumer Affairs, a satisfied
customer tells five people about their experience and an unsatisfied person
tells eleven people about his experience (Heskett et al., 1997).
Sub Hypothesis
H3a: There is no significant relation between retail service quality dimensions

and word of mouth.
H3b: There is no significant relation between retail service quality dimensions

and switch to competitor.
246
H3c: There is no significant relation between retail service quality dimensions

and willing to pay more.
H3d: There is no significant relation between retail service quality dimensions

and response of the respondents.
247
6.5.1 RELATIVE IMPORTANCE OF SERVICE QUALITY

DIMENSIONS ON WORD OF MOUTH FACTORS
H3a: There is no significant relation between retail service quality dimensions

and word of mouth.

0.218 0.047 0.042 3.286
Table 6.5.1.1 Summary Table
In terms of the relationship between individual service quality dimensions and

word of mouth, the adjusted R square = 0.042 was statistically significant. It
was observed that the retail service quality dimensions explained 4.2 per cent
of the variance for the criterion measure. It entailed that 95.8 percent of word
of mouth was explained by something other than service quality.
Sum of Mean
Model 1 df F P value
Squares Square
Regression 480.466 5 96.093
Residual 9655.183 894 10.800 8.898 0.000**
Total 10135.649 899
Table 6.5.1.2 Model fit table (ANOVA)
Summary of Regression Analysis treating service quality dimensions as

predictors and word of mouth factors as criterion variable was shown below
table. It was observed that the overall regression model was significant
(F=8.898, p<0.00).
248
Model1 t value p value
Std.
B Beta
Error
(Constant) 26.106 0.805 32.441 0.000
Physical Aspects -0.050 0.043 -0.081 -1.175 0.240
Reliability 0.172 0.051 0.229 3.366 0.001**
Personal Interaction 0.016 0.032 0.037 0.497 0.619
Problem Solving -0.055 0.072 -0.047 -0.769 0.442
Policy 0.066 0.038 0.079 1.751 0.080
Table 6.5.1.3 regression analysis results for service quality dimensions
and customer loyalty factors
Word of mouth factors was primarily determined in a positive manner by

reliability (beta=0.229) service quality dimension. Reliability dimension was a
key factor in determining customer preference and recommendations to others.
The findings showed that reliability dimension was statistically significant in
explaining the variance of intention to recommend the retailer to others.
Remaining four dimensions namely physical aspects, personal interaction,
problem solving and policy did not contribute significantly towards explaining
the dependant variable.
249
These dimensions were not important constituents in development of

“intention to recommend” the retails to other prospective shoppers. Thus, these
dimensions were not retained in the regression.
Word of mouth = 26.106 + 0.172 (Reliability)
Hence null hypothesis is rejected; it concludes that there is significant relation

between the service quality dimensions and word of mouth factors.
250

DIMENSIONS ON SWITCH TO COMPETITOR FACTORS.
H3b: There is no significant relation between retail service quality dimensions

and switch to competitor.
The customer‟s every purchase has an effect on the customer relationship and
customer loyalty (Koskela, 2002). Customer loyalty is basically the extent of
repeat purchase intention from the same service provider with affective
commitment (Shemwell et al., 1998; Soderlund, 1998). Additionally, Howat,
Crilley & McGrath (2008) put forward that repeat purchase or frequency of
visits is an act of behavioural loyalty. Dick and Basu (1994) argue that loyalty
is determined by the strength of the relationship between relative attitude and
repeat patronage.

0.191 0.036 0.031 2.50111

switching to competitor, the adjusted R square = 0.031 was statistically
significant. It was observed that the retail service quality dimensions explained
3 per cent of the variance for the criterion measure. It entailed that 97 percent
of switching to competitor was explained by something other than service
quality.
251
Mean
Model 1 Sum of Squares df F P value
Square
Regression 210.830 5 42.166
Residual 5592.480 894 6.256 6.741 0.000**
Total 5803.310 899

predictors and switching to competitor factors as criterion variable was shown
below table. It was observed that the overall regression model was significant
(F=6.741, p<0.00).
Model1 Coefficients Coefficients t value p value
B Std. Error Beta
(Constant) 11.096 0.612 18.117 0.000
Physical Aspects -0.051 0.033 -0.108 -1.562 0.119
Reliability 0.094 0.039 0.165 2.415 0.016**
Personal Interaction -0.020 0.024 -0.061 -0.813 0.416
Problem Solving 0.115 0.055 0.130 2.114 0.035**
Policy -0.148 0.029 -0.233 -5.155 0.000**
and switching to competitor factors
Customer loyalty factors was primarily determined in a positive manner by

reliability (beta=0.165) and problem solving (beta=0.130) service quality
dimension. Policy (beta=-0.233) service quality dimension was a key factor in
252
determining customer preference and recommendations to others. The findings

showed that reliability, problem solving and policy dimension was statistically
significant in explaining the variance of switching to competitors. Remaining
dimensions namely physical aspects and personal interaction did not
contribute significantly towards explaining the dependant variable. These
dimensions were not important constituents in development of “switching to
competitors” the retails to other prospective shoppers. Thus, these dimensions
were not retained in the regression.
Switching to competitors = 11.096 + 0.094 (Reliability) + 0.115 (Problem

solving) – 0.148 (Policy)

between the service quality dimensions and switching to competitor factors.
253

DIMENSIONS ON WILLING TO PAY MORE FACTORS.
H3c: There is no significant relation between retail service quality dimensions

and willing to pay more.
Loyal customers are willing to pay higher costs for a set of products or
services (Gee et al., 2008). In other words, the developed long term
relationship of customer loyalty makes loyal customers more prices tolerant,
since loyalty discourages customers to have price comparison with others and
to shopping around (de Ruyter et al., 1999). Loyal customers are less likely to
switch to a competitor due to price inducement, and these customers make
more purchases compared to less loyal customers (Baldinger and Rubinson,
1996).

0.684 0.468 0.465 2.282
The adjusted R square value was 0.465 which means that 47 percent of the
variance in “willingness to pay more” can be explained by four mentioned
antecedents. It conveyed that 53 percent of willingness to pay more was
explained by something other than the service quality dimensions.
254
Model 1 Sum of Squares df Mean Square F P value

Regression 4088.504 5.000 817.701
Residual 4654.456 894.000 5.206 157.059 0.000**
Total 8742.960 899.000
The association between individual dimensions of retail service quality and
price sensitivity was statistically significant (F=157.059, p<0.00). The
resultant output had an adjusted R square of 0.465, ensuring that the
willingness to pay more model was significant.
B Std. Error Beta
(Constant) -5.219 0.559 -9.341 0.000
Reliability 0.118 0.036 0.168 3.305 0.001**
Problem Solving -0.013 0.050 -0.012 -0.266 0.790
Policy 0.219 0.026 0.282 8.396 0.000**
and willingness to pay more factors
According to above table, Physical aspects (beta = 0.105), Reliability (beta

=0.168) Policy (beta =0.282) and Personal interaction (beta = 0.233)
significantly contribute (p < 0.05) to explain the shoppers willingness to pay
more. Policy and personal interaction dimensions are contributing more on
explaining the shopper‟s willingness to pay more. Out of five service quality
255
dimensions above mentioned four dimensions were retained in the regression

analysis. This implicated that “Problem solving dimension” did not contribute
significantly towards the explanation of the variance. Respondents‟ were not
considered them as important determinants while forming their willingness to
pay more.
Willingness to pay more = -5.219 + 0.061 (Physical aspects) + 0.118

(Reliability) + 0.092 (Personal interaction) + 0.219 (Policy)

between the service quality dimensions and willingness to pay more factors.
256

DIMENSIONS ON SHOPPERS RESPONSE FACTORS.
H3d: There is no significant relation between retail service quality dimensions

and response of the respondents.
According to Singh (1988), dissatisfaction leads to consumer-complaining

behavior that is manifested in voice responses (such as seeking redress from
the seller), private responses (negative word-of-mouth communication), or
third-party responses (taking legal action). Andreassen (1999) advocated that
the negative affect caused by negative disconfirmation of expectations from
the initial service encounter may have a negative impact on the customer
loyalty.

0.662 0.438 0.435 4.717
The identified combination of variables were explaining maximum amount of

variance in the criterion, as measured by the adjusted coefficient of
determination (R square). The adjusted R square = 0.435 which meant that the
five dimensions of service quality explained only 44 per cent of the variation
in response (Internal and external response).
In other words, service quality was not the only weapon in determining
response of customers. Response of the shoppers requires additional
dimensions like the subjective probability that complaining will be successful,
the attitude towards the act of complaining, the perceived cost of complaining
(Day, 1984; Nantel, 1985) and incidental nature of service problems which
257
may require incident-based measurement such as the Critical Incident

Technique (Bloemer et. al., 1999).
Model 1 Sum of Squares df Mean Square F P value

Regression 15527.940 5.000 3105.588
Residual 19887.589 894.000 22.246 139.604 0.000**
Total 35415.529 899.000
The association between individual dimensions of retail service quality and

price sensitivity was statistically significant (F=139.604, p<0.00). The
resultant output had an adjusted R square of 0.435, ensuring that the response
of the respondents‟ model was significant.
Std.
B Beta
Error
(Constant) -9.664 1.155 -8.368 0.000
Reliability 0.223 0.073 0.159 3.034 0.002**
Problem Solving 0.006 0.103 0.003 0.058 0.954
Policy 0.427 0.054 0.272 7.909 0.000**
and response of the respondents factors
258
According to above table, Physical aspects (beta = 0.119), Reliability (beta

=0.159) Policy (beta =0.272) and Personal interaction (beta = 0.201)
significantly contribute (p < 0.05) to explain the shoppers response. Policy and
personal interaction dimensions are contributing more on explaining the
shopper‟s response. These aspects can really increase perceived service quality
and diminish the response of shoppers. It can be elaborated as follows: Retail
is the industry with has relatively high service encounter density. It can be
characterized as “relationship-intensive” (Keaveney, 1995). Therefore, most of
the shoppers are relatively dependent on this type of service and it seems
important that retail outlets deliver on promises regarding its core services, i.e.
promises about delivery. If the “Policy and personal interaction” are kept then
only external and internal response to problem will diminish.
Out of five services quality dimensions above mentioned four dimensions

were retained in the regression analysis. This implicated that “Problem solving
dimension” did not contribute significantly towards the explanation of the
variance.
Shoppers response = -9.664 + 0.138 (Physical aspects) + 0.223 (Reliability)

+ 0.159 (Personal interaction) + 0.427 (Policy)

between the service quality dimensions and response of the respondents.
259

CUSTOMER LOYALTY DIMENSIONS

the respondents and customer loyalty dimensions.

The demographic data were adopted to examine their association with various
retail customer loyalty dimensions. In this study, Analysis of Variance had
been used to determine whether these factors were influenced by the
demographics. Significance value less than 0.05 indicate existence of some
relationship between the independent variable (demographic characteristic)
and dependent variables (dimensions of customer loyalty).
Sub Hypothesis




260




H4i: There is no significant relationship between family size of the respondents

H4j: There is no significant relationship between family type of the respondents

H4k: There is no significant relationship between preferred purchasing mode


H4m: There is no significant relationship between amount spent in a month for

shopping and customer loyalty dimensions.
H4n: There is no significant relationship between influencing factor of the

H4o: There is no significant relationship between preferred mode of payment

for shopping and customer loyalty dimensions.
261
6.6.1 Effects of store type on customer loyalty dimensions
H4a: There is no significant relationship between store type and customer

loyalty dimensions.
Customer loyalty dimension F P value

Word of mouth 1.182 0.307
Switching to competitors 3.934 0.020**
Willingness to pay more 8.493 0.000**
Response 7.354 0.001**
Table 6.6.1 Effects of store type on customer loyalty dimensions
Inference:
Above table shows that p value is less than 0.05 for customer loyalty
dimensions like switching to competitors, willingness to pay more and
response of the a respondent, hence null hypothesis is rejected. It concludes
that store types had significantly influence over customer loyalty dimensions
like switching to competitors, willingness to pay more and response of the
respondents dimensions. Respondents were found to be differing significantly
on the basis of word of mouth dimensions.
262
6.6.2 Effects of location of the store on customer loyalty dimensions
H4b: There is no significant relationship between location of the store and


Word of mouth 34.925 0.000**
Response 117.121 0.000**
Table 6.6.2: Effects of location of the store on customer loyalty dimensions
Inference:
Above table shows that p value is less than 0.05 for all customer loyalty
dimensions like word of mouth, switching to competitors, willingness to pay
more and response of the respondents, hence null hypothesis is rejected. It
concludes that location of the store had significantly influence over all
customer loyalty dimensions like word of mouth, switching to competitors,
willingness to pay more and response of the respondents‟ dimensions.
263
6.6.3 Effects of gender on customer loyalty dimensions
H4c: There is no significant relationship between gender and customer loyalty

dimensions.

Word of mouth 4.167 0.042**
Switching to competitors 3.284 0.070
Willingness to pay more 0.464 0.496
Response 0.666 0.415
Table 6.6.3 Effects of gender on customer loyalty dimensions
Inference:
dimensions like word of mouth, hence null hypothesis is rejected. It concludes
that gender difference of the respondents had significantly influence over
customer loyalty dimension like word of mouth dimensions. Respondents were
found to be differing significantly on the basis of switching to competitors,
willingness to pay more and response of the respondents.
By comparing the mean scores it was revealed that the female shoppers gave
far more importance to word of mouth dimension than their male counterparts.
Females are a little bit impatient because of their nature. That is why females
give more importance to word of mouth in the retails.
264
6.6.4 Effects of age on customer loyalty dimensions
H4d: There is no significant relationship between age and customer loyalty

dimensions.

Response 16.393 0.000**
Table 6.6.4 Effects of age on customer loyalty dimensions
Inference:
dimensions like switching to competitors, willingness to pay more and
response of the respondents, hence null hypothesis is rejected. It concludes
that age difference of the respondents had significantly influence over
customer loyalty dimensions like switching to competitors, willingness to pay
more and response of the respondents‟ dimensions. Respondents were found to
be differing significantly on the basis of word of mouth dimensions.
265
Table 6.6.5: Effects of marital status on customer loyalty dimensions
H4e: There is no significant relationship between marital status and customer

loyalty dimensions.

Table 6.6.5 Effects of marital status on customer loyalty dimensions
Inference:
dimensions like word of mouth and switching to competitors, hence null
hypothesis is rejected.
It concludes that marital difference of the respondents had significantly

influence over customer loyalty dimensions like word of mouth and switching
to competitors dimensions. Respondents were found to be differing
significantly on the basis of word of willingness to pay more and response of
the respondents.
266
6.6.6 Effects of educational qualification on customer loyalty dimensions
H4f: There is no significant relationship between educational qualification and


Response 6.540 0.000**
Table 6.6.6 Effects of educational qualification on customer loyalty
dimensions
Inference:
concludes that educational qualification of the respondents had significantly
influence over all customer loyalty dimensions like word of mouth, switching
to competitors, willingness to pay more and response dimensions.
267
6.6.7 Effects of occupation on customer loyalty dimensions
H4g: There is no significant relationship between occupation and customer

loyalty dimensions.

Response 2.817 0.007**
Table 6.6.7 Effects of occupation on customer loyalty dimensions
Inference:
concludes that occupation of the respondents had significantly influence over
all customer loyalty dimensions like word of mouth, switching to competitors,
willingness to pay more and response dimensions.
268
6.6.8 Effects of family income on customer loyalty dimensions
H4h: There is no significant relationship between family income and customer

loyalty dimensions.

Word of mouth 13.036 0.000**
Response 10.061 0.000**
Table 6.6.8 Effects of family income on customer loyalty dimensions
Inference:
dimensions like word of mouth, switching to competitors and response of the
respondents, hence null hypothesis is rejected. It concludes that family income
of the respondents had significantly influence over customer loyalty
dimensions like word of mouth, switching to competitors and response
dimensions. Respondents were found to be differing significantly on the basis
of willingness to pay more dimensions.
269
6.6.9 Effects of family size on customer loyalty dimensions
H4i: There is no significant relationship between family size and customer

loyalty dimensions.

Table 6.6.9: Effects of family size on customer loyalty dimensions
Inference:
dimensions like word of mouth and switching to competitors, hence null
hypothesis is rejected. It concludes that family size of the respondents had
significantly influence over customer loyalty dimensions like word of mouth
and switching to competitors. Respondents were found to be differing
significantly on the basis of willingness to pay more and response dimensions.
270
6.6.10 Effects of family type on customer loyalty dimensions
H4j: There is no significant relationship between family type and customer

loyalty dimensions.

Table 6.6.10 Effects of family type on customer loyalty dimensions
Inference:
dimensions like switching to competitors, hence null hypothesis is rejected. It
concludes that family size of the respondents had significantly influence over
customer loyalty dimensions like switching to competitors. Respondents were
found to be differing significantly on the basis of word of mouth, willingness
to pay more and response dimensions.
271
6.6.11 Effects of preferred purchase mode on customer loyalty dimensions
H4k: There is no significant relationship between preferred purchase mode and


Table 6.6.11 Effects of preferred purchase mode on customer loyalty
dimensions
Inference:
dimensions like word of mouth, hence null hypothesis is rejected. It concludes
that preferred purchase mode of the respondents had significantly influence
over customer loyalty dimensions like word of mouth. Respondents were
found to be differing significantly on the basis of switching to competitor,
willingness to pay more and response dimensions.
272
6.6.12 Effects of frequency of shopping on customer loyalty dimensions


Response 9.008 0.000**
Table 6.6.12 Effects of frequency of shopping on customer loyalty
dimensions
Inference:
dimensions like word of mouth, switching to competitor, willingness to pay
more and response dimensions; hence null hypothesis is rejected. It concludes
that frequency of purchase pattern of the respondents had significantly
influence over all customer loyalty dimensions like word of mouth, switching
to competitor, willingness to pay more and response dimensions.
273
6.6.13 Effects of amount spent in a month for shopping on customer

loyalty dimensions

shopping and customer loyalty dimensions.

Response 9.264 0.000**
Table 6.6.13 Effects of amount spent in a month for shopping on customer
loyalty dimensions
Inference:
dimensions like willingness to pay more and response dimensions; hence null
hypothesis is rejected. It concludes that amount spent in a month for shopping
of the respondents had significantly influence over all customer loyalty
dimensions like word of mouth, switching to competitor, willingness to pay
more and response dimensions. Respondents were found to be differing
significantly on the basis of word of mouth, switching to competitor
dimensions.
274
6.6.14 Effects of influencing factors on customer loyalty dimensions
H4n: There is no significant relationship between influencing factors and


Table 6.6.14: Effects of influencing factors on customer loyalty

dimensions
Inference:
Above table shows that p value is greater than 0.05 for all customer loyalty
dimensions; hence null hypothesis is accepted. It concludes that influencing
factors don‟t had significantly influence over all customer loyalty dimensions
like word of mouth, switching to competitor, willingness to pay more and
response dimensions. Respondents were found to be differing significantly on
the basis of word of mouth, switching to competitor dimensions, willingness to
pay more and response dimensions.
275
6.6.15 Effects of preferred payment mode on customer loyalty dimensions
H4o: There is no significant relationship between preferred payment mode and


Response 25.220 0.000**
Table 6.6.15 Effects of preferred payment mode on customer loyalty
dimensions
Inference:
dimensions like word of mouth, switching to competitor dimensions,
willingness to pay more and response dimensions; hence null hypothesis is
rejected. It concludes that preferred payment mode had significantly influence
over all customer loyalty dimensions like word of mouth, switching to
competitor, willingness to pay more and response dimensions.
276
6.7 RELATIONSHIP BETWEEN PERCEIVED SERVICE QUALITY

DIMENSIONS
H05: There is no significant relationship among perceived service quality

dimensions.
HA: There is significant relationship among perceived service quality

dimensions.
6.7.1 Inter relationship among perceived service quality dimensions
H05: There is no significant relationship among perceived service quality

dimensions.
Perceived service quality dimensions 1 2 3 4 5

Physical Aspects 1 0.828** 0.842** 0.779** 0.580**
Reliability 1 0.850** 0.742** 0.591**
Personal Interaction 1 0.797** 0.619**
Problem Solving 1 0.667**
Policy 1
Table 6.7.1 Inter relationship among perceived service quality dimensions
Above table shows the inter correlation between the perceived service quality
dimensions. Correlation coefficient between physical aspects and reliability
dimension is 0.828, it means that physical aspects having 83 per cent positive
effect on reliability dimension. Correlation coefficient between physical
aspects and personal interaction dimension is 0.842, it means that physical
277
aspects having 84 per cent positive effect on personal interaction dimension.

Correlation coefficient between physical aspects and problem solving
dimension is 0.779, it means that physical aspects having 78 per cent positive
effect on problem solving dimension. Correlation coefficient between physical
aspects and reliability dimension is 0.580, it means that physical aspects
having 58 per cent positive effect on policy dimension.
Correlation coefficient between reliability and personal interaction dimension

is 0.850; it means that reliability having 85 per cent positive effect on personal
interaction dimension. Correlation coefficient between reliability and problem
solving dimension is 0.742; it means that reliability having 74 per cent positive
effect on problem solving dimension. Correlation coefficient between
reliability and policy dimension is 0.591; it means that reliability having 59
per cent positive effect on policy dimension.
Correlation coefficient between personal interaction and problem solving

dimension is 0.797; it means that personal interaction having 80 per cent
positive effect on problem solving dimension. Correlation coefficient between
personal interaction and policy dimension is 0.619; it means that personal
interaction having 62 per cent positive effect on policy dimension. Correlation
coefficient between problem solving and policy dimension is 0.667; it means
that problem solving having 68 per cent positive effect on policy dimension.
278
6.8 RELATIONSHIP BETWEEN CUSTOMER LOYALTY

DIMENSIONS
H06: There is no significant relationship among customer loyalty dimensions.
HA: There is significant relationship among customer loyalty dimensions.
6.8.1 Interrelationship among customer loyalty dimensions
H06: There is no significant relationship among customer loyalty dimensions.
Customer loyalty dimensions 1 2 3 4

Word of mouth 1 -.039 .322** .277**
Switch to competitor 1 .024 .035
Willing to Pay more 1 .972**
Responses 1
Table 6.8.1: Interrelationship among customer loyalty dimensions
Inference:
Above table shows the inter correlation between the customer loyalty
dimensions. Correlation coefficient between word of mouth and switching to
competitor dimension is -0.039, it means that word of mouth and switching to
competitor dimensions don‟t have any relationship. Correlation coefficient
between word of mouth and willingness to pay more dimensions is 0.322, it
means that word of mouth having 32 per cent positive effect on willingness to
pay more and correlation coefficient between word of mouth and response of
279
the customers‟ dimension 0.277, and it means that word of mouth having 28
per cent effect on response dimensions.
Correlation coefficient between switching to competitor and willingness to pay

more and response dimension is 0.024, 0.035, it means that switching to
competitor don‟t have relation with willingness to pay more and response
dimension.
Correlation coefficient between willingness to pay more and response

dimension is 0.972; it shows that willingness to pay more having 97 per cent
effect on response dimensions.
280

DIMENSIONS ON CUSTOMER SATISFACTION
H07: There is no significant relation between retail service quality dimensions

and customer satisfaction.
HA: There is significant relation between retail service quality dimensions and
Satisfying customers is one of the main objectives of every business.

Businesses recognize that keeping current customers is more profitable than
having to win new ones to replace those lost. Management and marketing
theorists underscore the importance of customer satisfaction for a business‟s
success (McColl-Kennedy & Schneider, 2000; Reichheld & Sasser, 1990).
Accordingly, the prestigious Malcolm Baldrige National Quality Award
recognizes the role of customer satisfaction as the central component of the
award process (Dutka, 1993).
Services and products are the two major orientations of business. Products –
also referred to as goods, are the physical output of a business. These are
tangible objects that exist in time and space. These are first created, then
inventoried and sold. It is after purchase that these are actually consumed
(Sureshchander, Rajendran, & Kamalanabhan, 2001; Berry, 1980).The concept
of customer satisfaction is composed of several components from distinct
sources (McColl-Kennedy & Schneider, 2006). Customer satisfaction begins
with clear, operational definitions from both the customer and the
organization. Understanding the motivations, expectations, and desires of both
281
gives a foundation in how to best serve the customer. It may even provide
information on making improvements in the nature of business.
This is the heart of research into customer satisfaction (Naylor & Greco,
2002). The importance of clearly defining the key concepts and elements of
satisfaction provide a template by which information can be gathered about
what is, and what is not, working. This includes both the hard measures –
those that are more tangible and observable (i.e., number of complaints,
average waits time, product returns, etc) and the soft measures – those less
tangible aspects (i.e., friendliness, helpfulness, politeness, etc) (Hayes, 1998).
These definitions often start with the most vague and general, and become
more to the highly specified and precise examples. The bottom line is that in
order to know about customer satisfaction, one needs to know what to look for
(Mitchell, 1999). The organization needs to seek this information from both
within and without.

0.817 0.668 0.666 1.011
Table 6.9.1 Summary Table

customer satisfaction, the adjusted R square = 0.666 was statistically
significant. It was observed that the retail service quality dimensions explained
67 per cent of the variance for the criterion measure. It entailed that 33 percent
of customer satisfaction was explained by something other than service
quality.
282
Sum of Mean
Model 1 df F P value
Squares Square
Regression 1835.054 5.000 367.011
Residual 913.835 894.000 1.022 359.045 0.000**
Total 2748.889 899.000

predictors and customer satisfaction factors as criterion variable was shown
below table. It was observed that the overall regression model was significant
(F=359.045, p<0.00).
Std.
B Beta
Error
(Constant) 1.695 0.248 6.847 0.000
Reliability 0.023 0.016 0.058 1.452 0.147
Problem Solving -0.022 0.022 -0.036 -1.009 0.313
Policy 0.006 0.012 0.013 0.503 0.615
Table 6.9.3 regression analysis results for service quality dimensions and
Customer satisfaction factors was primarily determined in a positive manner

by physical aspects (beta=0.423) and personal interaction (beta=0.397) service
283
quality dimension. The findings showed that physical aspects and personal
interaction dimensions were statistically significant in explaining the variance
of retail customer satisfaction. Remaining four dimensions namely reliability,
problem solving and policy did not contribute significantly towards explaining
the dependant variable. These dimensions were not important constituents in
development of “customer satisfaction” the retails to other prospective
shoppers. Thus, these dimensions were not retained in the regression.
Customer satisfaction = 1.695 + 0.137 (Physical aspects) + 0.087 (Personal

interaction)

between the service quality dimensions and customer satisfaction factors.
284
6.10 RELATIVE IMPORTANCE OF CUSTOMER SATISFACTION

FACTORS ON CUSTOMER LOYALTY.
H08: There is no significant relation between customer satisfaction factors and

customer loyalty.
HA: There is significant relation between customer satisfaction factors and

customer loyalty.
Retail customer loyalty provides the foundation of a company‟s sustained

competitive edge, and is a crucial component of a company‟s growth and
performance (Lee and Cunningham, 2001; Reichheld, 1996). Researchers
suggest that Retail customer loyalty is a key variable in explaining customer
retention (Pritchard and Howard, 1997) and is determined by a combination of
repeat purchase level and a general level of attachment (Bodet, 2008 & Dick
and Basu, 1994). The latter relates to an individual customer‟s attitude towards
a product, service or organization (Hallowell, 1996). Other researchers suggest
that Retail customer loyalty is a behavioral construct. This includes customer
retention, repeat purchases and positive word of mouth (Hallowell, 1996; Liu
and Wu, 2007). As these differences are rather slight, Retail customer loyalty
and retention will be considered synonymous in the context of this study.
Whilst there is considerable evidence that customer satisfaction is correlated

with loyalty, most scholars are of the view that not all satisfied customers will
be loyal; neither will all customers abandon a retail chain due to dissatisfaction
with a particular store (Vazquez-Carrasco and Foxall, 2006; Ellram et al,
1999). Shankar et al (2003) suggest that if customers have a negative
experience and become dissatisfied with a service provider, they might gain a
285
higher level of satisfaction by switching to a new provider. However, in this

instance, the customer risks incurring losses in the form of loyalty benefits,
such as emotional investment and the benefits lost from a rewards program. In
addition, he/she may face a potentially unfamiliar service encounter with the
new company. These factors therefore act as a deterrent.
Yang and Zhu (2006) expand on the relationship between satisfaction and
loyalty. The authors argue that the relationship is influenced by the
competitive environment of the market. In markets where the competition is
not intense, customers are likely to remain loyal despite their levels of
satisfaction. On the contrary, in markets where competition is intense, a slight
drop in satisfaction will cause a considerable drop in loyalty. This ultimately
results in the customer switching Retail customers or even retail chains
(Gomez et al, 2004)
286

0.474 0.224 0.223 9.823
In terms of the relationship between individual customer satisfaction and

customer loyalty, the adjusted R square = 0.223 was statistically significant. It
was observed that the retail customer satisfaction explained 22 per cent of the
variance for the criterion measure. It entailed that 78 percent of customer
loyalty in retail shop was explained by something other than customer
satisfaction.
Model 1 Sum of Squares Df Mean Square F P value

Regression 25049.590 2.000 12524.795
Residual 86559.488 897.000 96.499 129.792 0.000**
Total 111609.079 899.000
Summary of Regression Analysis treating customer satisfaction as predictors

and customer loyalty factors as criterion variable was shown below table. It
was observed that the overall regression model was significant (F=129.792,
p<0.00).
287
B Std. Error Beta
(Constant) 36.022 2.214 16.267 0.000
Product 2.367 0.388 0.212 6.101 0.000**
Service 3.630 0.388 0.325 9.355 0.000**
Table 6.10.3 regression analysis results for service quality dimensions and
Customer loyalty factors was primarily determined in a positive manner by

service satisfaction (beta=0.325) and product satisfaction (beta=0.212) factors.
The findings showed that service and product satisfaction were statistically
significant in explaining the variance of retail customer loyalty.
Customer satisfaction = 1.695 + 0.137 (Product satisfaction) + 0.087

(Service satisfaction)

between the customer satisfaction and customer loyalty.
288
6.11 EFFECTS OF DEMOGRAPHIC VARIABLES ON CUSTOMER

SATISFACTION FACTORS

the respondents and customer satisfaction factors

respondents and customer satisfaction factors
The demographic data were adopted to examine their association with various
retail customer satisfaction factors. In this study, Analysis of Variance had
been used to determine whether these factors were influenced by the
demographics. Significance value less than 0.05 indicate existence of some
relationship between the independent variable (demographic characteristic)
and dependent variables (dimensions of customer satisfaction).
Sub Hypothesis


the respondents and customer satisfaction factors.

customer satisfaction factors.

289


the respondents and customer satisfaction factors.

and customer satisfaction factors.

H9i: There is no significant relationship between family size of the respondents

H9j: There is no significant relationship between family type of the respondents

H9k: There is no significant relationship between preferred purchasing mode



shopping and customer satisfaction factors.
H9n: There is no significant relationship between influencing factor of the

290
6.11.1 Effects of store type on customer satisfaction factors
H9a: There is no significant relationship between store type and customer

satisfaction factors.
Customer satisfaction factors F P value

Product satisfaction 27.090 0.000**
Service satisfaction 32.703 0.000**
Table 6.11.1 Effects of store type on customer satisfaction factors
Inference:
Above table shows that p value is less than 0.05 for all customer satisfaction
factors like product satisfaction and service satisfaction; hence null hypothesis
is rejected. It concludes that store type had significantly influence over all
customer satisfaction factors like product satisfaction and service satisfaction.
Post hoc analysis shows that level of customer satisfaction may differ
according to the each types of retail outlet.
291
6.11.2: Effects of location of the store on customer satisfaction factors
H9b: There is no significant relationship between location of the store and


Table 6.11.2 Effects of location of the store on customer satisfaction
factors
Inference:
is rejected. It concludes that store location had significantly influence over all
For the present study three different locations like Chennai, Coimbatore and
Madurai are taken. Post hoc test result shows that each location has different
product qualities and service. So level of customer satisfaction may differ
according to the location of retail outlet.
292
6.11.3 Effects of gender difference on customer satisfaction factors
H9c: There is no significant relationship between gender difference and


Product satisfaction 3.003 0.083
Service satisfaction 3.601 0.058
Table 6.11.3 Effects of gender difference on customer satisfaction factors
Inference:
Above table shows that p value is greater than 0.05 for all customer
satisfaction factors like product satisfaction and service satisfaction; hence null
hypothesis is accepted. It concludes that gender difference had no significantly
influence over all customer satisfaction factors like product satisfaction and
service satisfaction. Both male and female customer expects same level of
293
6.11.4 Effects of age difference on customer satisfaction factors
H4d: There is no significant relationship between age difference and customer

satisfaction factors.

Table 6.11.4 Effects of age difference on customer satisfaction factors
Inference:
is rejected. It concludes that age difference had significantly influence over all
Post hoc analysis shows that age group between 41-50 years old differs with
between 21-30 years and 31-40 years age group with respect to customer
satisfaction.
294
6.11.5 Effects of marital status difference on customer satisfaction factors
H9e: There is no significant relationship between marital status difference and


Table 6.11.5 Effects of marital status difference on customer satisfaction
factors
Inference:
is rejected. It concludes that marital status difference had significantly
service satisfaction. Post hoc analysis shows that married and unmarried group
differs with between widow and divorced group with respect to customer
satisfaction.
295
6.11.6 Effects of Qualification difference on customer satisfaction factors
H9f: There is no significant relationship between Qualification difference and


Table 6.11.6 Effects of Qualification difference on customer satisfaction

factors
Inference:
hypothesis is accepted. It concludes that qualification difference had no
significantly influence over all customer satisfaction factors like product
satisfaction and service satisfaction. Different education qualification group
respondents also expect same level of customer satisfaction from the retail
shops.
296
6.11.7 Effects of occupational difference on customer satisfaction factors
H9g: There is no significant relationship between occupational difference and


Table 6.11.7 Effects of occupational difference on customer satisfaction
factors
Inference:
Above table shows that p value is less than 0.05 for customer satisfaction
factor like service satisfaction; hence null hypothesis is rejected. It concludes
that occupation difference had significantly influence over customer
satisfaction factor like service satisfaction. Post hoc test shows that there is
difference exists between unemployed respondents and occupation groups like
business, professionals, students, housewife and retired personals on service
297
6.11.8 Effects of family income difference on customer satisfaction factors
H9h: There is no significant relationship between family income difference and


Table 6.11.8 Effects of family income difference on customer satisfaction
factors
Inference:
is rejected. It concludes that family income difference had significantly
service satisfaction. Post hoc analysis shows that greater than Rs.60000
income groups differ significantly with other income group respect to
298
6.11.9 Effects of family size difference on customer satisfaction factors
H9i: There is no significant relationship between family size difference and


Table 6.11.9 Effects of family size difference on customer satisfaction

factors
Inference:
hypothesis is accepted. It concludes that family size difference had no
satisfaction and service satisfaction. Different family sizes of the respondents
also expect same level of customer satisfaction from the retail shops. There is
no difference on their customer satisfaction level.
299
6.11.10 Effects of family type difference on customer satisfaction factors
H9j: There is no significant relationship between family type difference and


Table 6.11.10 Effects of family type difference on customer satisfaction

factors
Inference:
hypothesis is accepted. It concludes that family type difference had no
satisfaction and service satisfaction. Different family types of the respondents
also expect same level of customer satisfaction from the retail shops. There is
no difference on their customer satisfaction level.
300
6.11.11 Effects of preferred purchase mode on customer satisfaction

factors
H9k: There is no significant relationship between preferred purchase mode and


Table 6.11.11 Effects of preferred purchase mode on customer satisfaction

factors
Inference:
hypothesis is accepted. It concludes that preferred purchase mode had no
satisfaction and service satisfaction. Preferred purchase modes of the
respondents also expect same level of customer satisfaction from the retail
shops.
301
6.11.12 Effects of frequency of purchase on customer satisfaction factors
H9l: There is no significant relationship between frequency of purchase and


Table 6.11.12 Effects of frequency of purchase on customer satisfaction

factors
Inference:
hypothesis is accepted. It concludes that frequency of purchase had no
satisfaction and service satisfaction. Frequency of purchase of the respondents
also expects same level of customer satisfaction from the retail shops.
302
6.11.13 Effects of amounts spent in a month for shopping on customer

H9m: There is no significant relationship between amounts spent in a month for

shopping and customer satisfaction factors.

Table 6.11.13 Effects of amounts spent in a month for shopping on
Inference:
factor like product satisfaction; hence null hypothesis is rejected. It concludes
that amounts spent in a month for shopping had significantly influence over
customer satisfaction factor like product satisfaction. Post hoc test shows that
between Rs.5001-10000 amounts spent in a month for shopping group differ
significantly with less than Rs.5000 and between Rs.10001-15000 amounts
spent in a month for shopping groups on customer satisfaction.
303
6.11.14 Effects of influencing factor on customer satisfaction factors
H9n: There is no significant relationship between influencing factor and


Table 6.11.14 Effects of influencing factor on customer satisfaction factors
Inference:
factor like service satisfaction; hence null hypothesis is rejected. It concludes
that amounts spent in a month for shopping had significantly influence over
customer satisfaction factor like service satisfaction. Post hoc test shows that
other influencing factors like store sales person differ significantly on
remaining influencing factors like advertisement, family, friends, colleagues
and relatives on service satisfaction.
304
6.11.15 Effects of preferred mode of payment on customer satisfaction

factors
H9o: There is no significant relationship between preferred mode of payment


Table 6.11.15 Effects of preferred mode of payment on customer
Inference:
is rejected. It concludes that preferred mode of payment had significantly
service satisfaction. Post hoc analysis shows that credit card payment mode
differ significantly on cash and debit card payment modes with respect to
305
6.12 RELATIVE IMPORTANCE OF FACTOR AFFECTS PURCHASE

ON CUSTOMER SATISFACTION
H10: There is no significant relation between factors affecting purchase and

HA: There is significant relation between factors affecting purchase and

Purchase or behavioral intention is used to demonstrate intention of buyers to

buy goods or services (J. S. Armstrong, V. G. Morwitz, and V. Kumar, 2000).
Consumer‟s decision is based on a complex set of factors such as quality,
value, and satisfaction, which can directly influence behavioral intention (J. J.
Joseph Cronin, M. K. Brandy, and G. T. M. Hult, 2000). Intentions have
normally been accepted as the cognitive component of an attitude and it is
usually assumed that this cognitive component is associated with the attitude‟s
affective component (M. Fishbein and I. Ajzen, 1975). Purchase intention is
more suitable for short time measurement than for long time measurement (V.
G. Morwitz, J. H. Steckel, and A. Gupta, 2007). Purchase intention indicates
the customer‟s intention to repurchase, intention of cross buying-purchase
another product from the same company, and Intention can be used to describe
customer‟s satisfaction (H. J. R. Juhl, K. Kristensen, and P. Stergaard, 2002).
306

0.445 0.198 0.192 1.572
In terms of the relationship between individual factor affects purchase and

customer satisfaction, the adjusted R square = 0.192 was statistically
significant. It was observed that the factor affects purchase explained 19 per
cent of the variance for the criterion measure. It entailed that 81 percent of
customer satisfaction was explained by something other than factor affects
purchase.
Mean
Model 1 Sum of Squares df F P value
Square
Regression 543.847 7.000 77.692
Residual 2205.042 892.000 2.472 31.429 0.000**
Total 2748.889 899.000
Table 6.12.2 Model fit table (ANOVA)
Summary of Regression Analysis treating factor affects purchase as predictors

and customer satisfaction factors as criterion variable was shown below table.
It was observed that the overall regression model was significant (F=31.429,
p<0.00).
307
B Std. Error Beta
(Constant) 2.566 0.668 3.842 0.000
Pricing of various
0.789 0.117 0.279 6.718 0.000**
branded Products
Availability of
Various branded 0.252 0.118 0.094 2.126 0.034**
Products
Quality of Various
0.083 0.119 0.030 0.696 0.487
branded Products
Overall Sales
Promotional 0.061 0.118 0.022 0.515 0.606
Activities
Overall After Sales
0.237 0.119 0.088 1.988 0.047**
Services
Arrangement of the
0.275 0.122 0.100 2.249 0.025**
Products
Waiting time for
-0.270 0.120 -0.101 -2.256 0.024**
billing
Table 6.12.3 regression analysis results for factor affects purchase and
Customer satisfaction factors was primarily determined in a positive manner

by pricing of various branded products (beta=0.279) factor affects purchase.
The findings showed that overall after sales services, arrangement of the
products, waiting time for billing and availability of various branded products
308
were also statistically significant in explaining the variance of retail customer

satisfaction. Remaining three factors namely overall sales promotional
activities and quality of various branded products did not contribute
significantly towards explaining the dependant variable. These dimensions
were not important constituents in development of “customer satisfaction” the
retails to other prospective shoppers. Thus, these dimensions were not retained
in the regression.
Customer satisfaction = 2.566 + 0.789 (Pricing of various branded

Products) + 0.252 (availability of various branded products) + 0.237
(Overall After Sales Services) + 0.275 (Arrangement of the Products) -
0.270 (Waiting time for billing)

between the factors affect purchase and customer satisfaction factors.
309
6.13 RELATIONSHIP BETWEEN PURCHASING FACTORS,

CUSTOMER SATISFACTION, EXPECT & PERCEIVED SERVICE
H11: There is no significant relationship between purchasing factors, customer

satisfaction, expects & perceived service quality and customer loyalty
HA: There is significant relationship between purchasing factors, customer

satisfaction, expects & perceived service quality and customer loyalty
Correlation 1 2 3 4 5
Purchase intension factors 1 0.942** 0.953** 0.779** 0.560**
Expected service quality 1 0.999** 0.784** 0.598**
Perceived service quality 1 0.788** 0.597**
Customer satisfaction 1 0.571**
Customer loyalty 1
Table 6.13.1 Inter correlation between purchasing factors, customer
satisfaction, expect & perceived service quality and customer loyalty.
Above table indicates that purchase intension factors have significant and
positive relation with expected service quality (Correlation coefficient
r=0.942, p<0.00), perceived service quality (Correlation coefficient r=0.953,
p<0.00), customer satisfaction (Correlation coefficient r=0.779, p<0.00) and
customer loyalty factors (Correlation coefficient r=0.560, p<0.00).
Expected service quality have significant and positive relation with perceived
service quality (Correlation coefficient r=0.999, p<0.00), customer satisfaction
310
(Correlation coefficient r=0.784, p<0.00) and customer loyalty factors

(Correlation coefficient r=0.598, p<0.00).
Perceived service quality have significant and positive relation with customer
satisfaction (Correlation coefficient r=0.788, p<0.00) and customer loyalty
factors (Correlation coefficient r=0.597, p<0.00). Customer satisfaction have
significant and positive relation with customer loyalty factors (Correlation
coefficient r=0.471, p<0.00).
311
6.14 EFFECTS OF MOST LIKED AND DISLIKED FACTORS ON

PURCHASE ATTRIBUTE FACTORS

factors and purchase attribute factors
HA: There is significant relationship between most liked and disliked factors
and purchase attribute factors
Most liked and disliked factors associated with retail purchase were adopted to
examine their association with various retail purchase attribute factors. In this
study, Analysis of Variance had been used to determine whether these factors
were influenced by the liked and disliked factors. Significance value less than
0.05 indicate existence of some relationship between the independent variable
(liked and disliked factors) and dependent variables (purchase attribute
factors).
Sub Hypothesis
H12a: There is no significant relationship between most liked factors and

customer purchase attribute factors.
H12b: There is no significant relationship between most disliked factors and

312
6.14.1 Effects of most liked factors on purchase attribute factors

Purchase attribute factors F P value

Good place for Entertainment 2.955 0.003**
Family Shopping 2.946 0.003**
Value for Money 1.698 0.095
Emergency and Safety Measures 3.353 0.001**
Table 6.14.1 Effects of most liked factors on purchase attribute factors
Above table shows that p value is less than 0.05 for purchase attribute factors
like good place of entertainment, family shopping and emergency and safety
measures; hence null hypothesis is rejected. It concludes that most liked
factors had significantly influence over purchase attribute factors like good
place of entertainment, family shopping and emergency and safety measures.
313
6.14.2 Effects of most disliked factors on purchase attribute factors

Purchase attribute factors F P value

Good place for Entertainment 0.923 0.504
Family Shopping 2.035 0.033**
Value for Money 0.876 0.546
Emergency and Safety Measures 1.194 0.295
Table 6.14.2 Effects of most disliked factors on purchase attribute factors
Inference:
Above table shows that p value is less than 0.05 for purchase attribute factors
like family shopping; hence null hypothesis is rejected. It concludes that most
disliked factors had significantly influence over purchase attribute factors like
family shopping.
314

FACTORS AFFECTING RETAIL PURCHASE

factors and factors affecting retail purchase
HA: There is significant relationship between most liked and disliked factors
and factors affecting retail purchase
Most liked and disliked factors associated with retail purchase were adopted to
examine their association with various retail purchase attribute factors. In this
study, Analysis of Variance had been used to determine whether these factors
were influenced by the liked and disliked factors. Significance value less than
0.05 indicate existence of some relationship between the independent variable
(liked and disliked factors) and dependent variables (factors affecting retail
purchase).
Sub Hypothesis

factors affecting retail purchase.

315
6.15.1 Effects of most liked factors on factors affecting retail purchase

Factors affecting retail purchase. F P value

Pricing of various branded Products 2.254 0.022**
Availability of Various branded
4.333 0.000**
Products
Quality of Various branded Products 2.050 0.038**
Overall Sales Promotional Activities 2.889 0.004**
Overall After Sales Services 2.577 0.009**
Arrangement of the Products 3.525 0.001**
Waiting time for billing 2.792 0.005**
Table 6.15.1 Effects of most liked factors on factors affecting retail
purchase
Inference:
Above table shows that p value is less than 0.05 for factors affecting retail
purchase like pricing of various branded products, availability of various
branded products, quality of various branded products, overall sales
promotional activities, overall after sales services, arrangement of the products
and waiting time for billing; hence null hypothesis is rejected. It concludes that
most liked factors had significantly influence over factors affecting retail
and waiting time for billing. Post hoc analysis shows that sales promotion and
316
discount liking factors differ significantly with other liked factors with
reference to factors affecting retail purchase.
317
6.15.2: Effects of most disliked factors on factors affecting retail purchase

Factors affecting retail purchase. F P value

Pricing of various branded Products 5.535 0.000**
Availability of Various branded
6.474 0.000**
Products
Quality of Various branded Products 5.727 0.000**
Overall Sales Promotional Activities 6.073 0.000**
Overall After Sales Services 4.283 0.000**
Arrangement of the Products 6.981 0.000**
Waiting time for billing 6.908 0.000**
Table 6.15.2 Effects of most disliked factors on factors affecting retail
purchase
Inference:
Above table shows that p value is less than 0.05 for factors affecting retail
and waiting time for billing; hence null hypothesis is rejected. It concludes that
most disliked factors had significantly influence over factors affecting retail
318

and waiting time for billing.
319
6.16 DIFFERENCE BETWEEN PERCEPTION AND EXPECTATION

H14: There is no significant difference between perception and expectation

HA: There is significant difference between perception and expectation service

quality dimensions.
Paired Differences
Pair statements t value p value
Mean SD
Perception & Expectation
Pair 1 rating for physical aspects -1.988 3.766 -15.836 0.000**
dimensions
Pair 2 rating for reliability -1.430 3.058 -14.029 0.000**
dimensions
Pair 3 rating for personal -2.609 5.379 -14.550 0.000**
interaction dimensions
Pair 4 rating for problem solving -1.328 2.469 -16.130 0.000**
dimensions
Pair 5 Perception & Expectation -1.599 2.895 -16.571 0.000**
rating for policy dimensions
Table 6.16.1 Difference between perception and expectation service

quality dimensions
320
Inference:
Above table 6.16.1 shows the gap between the perception and expectation
service ratings. Expectation ratings are significantly lesser than perception
ratings of service quality for all pairs. Since p value is less than 0.05 for all
service quality pair, hence null hypothesis is rejected. It can be conclude that
there is a significant difference between all perception and expectation service
quality dimensions.
321
6.17 ASSOCIATION BETWEEN DEMOGRAPHIC DIFFERENCE OF

THE RESPONDENTS AND MOST LIKED AND DISLIKED FACTORS
ABOUT RETAIL SHOPS
H15: There is no association between demographics and most liked and
disliked factors about retail shops.
HA: There is association between demographics and most liked and disliked
factors about retail shops.
This part of analysis is used to find the associations between demographic

details of the respondents and most liked and disliked factors of retail stores.
Chi square analysis used to find the associations between the variables.
Significance value less than 0.05 indicate existence of some association
between both variables.
Sub Hypothesis
H15a: There is no association between demographics and most liked factors

about retail shops.
H15b: There is no association between demographics and most disliked factors
about retail shops.
322
6.17.1 Association between demographic difference of the respondents

and most liked factors about retail shops.
H15a: There is no association between demographics and most liked factors
about retail shops.
Chi square
Demographic profile p value Result
Value
Type of Retail store 41.715 0.000** Association
Location of the retail store 104.24 0.000** Association
Gender 13.056 0.110 No Association
Age 74.52 0.000** Association
Marital Status 64.086 0.001** Association
Educational Qualifications 121.936 0.000** Association
Occupation 120.012 0.000** Association
Family Income 96.894 0.000** Association
Family Size 93.331 0.000** Association
Family Type 74.155 0.000** Association
Preferred Purchasing Mode 15.949 0.992 No Association
Frequency of Shopping 171.141 0.000** Association
Amount spent in a month
84.183 0.000** Association
for shopping
Influencing factor 229.595 0.000** Association
Preferred Mode of Payment 75.539 0.000** Association
Table 6.17.1 Association between demographic difference of the

respondents and most liked factors about retail shops.
323
Inference:
Above table indicates that significance of chi square value is less than 0.05 for
the demographic variables like type of retail store, location of the retail store,
age, marital status, educational qualifications, occupation, family income,
family size, family type, frequency of shopping, amount spent in a month for
shopping, influencing factor and preferred mode of payment. Hence null
hypothesis is rejected. It concludes that demographic variables like type of
retail store, location of the retail store, age, marital status, educational
qualifications, occupation, family income, family size, family type, frequency
of shopping, amount spent in a month for shopping, influencing factor and
preferred mode of payment have association between most liked factors about
the retail shops.
Since significance of chi square value is greater than 0.05 for the demographic
variables like gender and preferred purchasing mode. So there is no
association between gender and preferred purchasing mode with most liked
factors about the retail shops.
324
6.17.2 Association between demographic difference of the respondents

and most disliked factors about retail shops.
H15b: There is no association between demographics and most disliked factors
about retail shops.
Chi square
Demographic profile p value Result
Value
Gender 20.067 0.018** Association
Marital Status 36.635 0.439 No Association
Educational Qualifications 74.767 0.000** Association
Family Type 25.363 0.115 No Association
Preferred Purchasing Mode 60.429 0.007** Association
Amount spent in a month for
74.674 0.000** Association
shopping
Table 6.17.2 Association between demographic difference of the

respondents and most disliked factors about retail shops.
325
Inference:
Above table indicates that significance of chi square value is less than 0.05 for
the demographic variables like type of retail store, location of the retail store,
age, gender, educational qualifications, occupation, family income, family
size, preferred purchase mode, frequency of shopping, amount spent in a
month for shopping, influencing factor and preferred mode of payment. Hence
null hypothesis is rejected. It concludes that demographic variables like type of
retail store, location of the retail store, age, gender, educational qualifications,
occupation, family income, family size, preferred purchase mode, frequency of
shopping, amount spent in a month for shopping, influencing factor and
preferred mode of payment have association between most disliked factors
about the retail shops.
variables like marital status and family type. So there is no association
between marital status and family type with most disliked factors about the
retail shops.
326
6.18 LEVEL OF SERVICE QUALITY, CUSTOMER SATISFACTION

AND CUSTOMER LOYALTY
6.18.1 Level of Perceived service quality, Customer satisfaction and

customer loyalty towards the retail shopping
Service quality Customer satisfaction Customer loyalty

Levels
Frequency Percent Frequency Percent Frequency Percent
Low 231 25.7 292 32.4 236 26.2
Medium 430 47.8 295 32.8 426 47.3
High 239 26.6 313 34.8 238 26.4
Total 900 100.0 900 100.0 900 100.0
Table 6.18.1 Level of Perceived service quality, Customer satisfaction and

customer loyalty towards the retail shopping
Above table indicate the different levels of service quality, customer

satisfaction and customer loyalty. 25.7 per cent of the respondent‟s opinion
about service quality in retail stores is low, 47.8 per cent of the respondent‟s
opinion about service quality in retail stores is medium and 26.6 per cent of
the respondent‟s opinion about service quality in retail stores is high.
Out of 900 respondents, 32.4 per cent respondents have low level satisfaction
with retail stores product and service, 32.8 per cent respondents have medium
level satisfaction with retail stores product and service and 34.8 per cent
respondents have high level satisfaction with retail stores product and service.
26.3 per cent respondent‟s customer loyalty toward retail stores is low, 47.3
per cent respondent‟s customer loyalty toward retail stores is medium and 26.4
per cent respondent‟s customer loyalty toward retail stores is high.
327
6.19 ASSOCIATION BETWEEN PERCEIVED LEVEL OF SERVICE

QUALITY, CUSTOMER SATISFACTION AND CUSTOMER
LOYALTY TOWARDS THE RETAIL STORES AND DEMOGRAPHIC
PROFILES
H16: There is no association between perceived level of service quality,
customer satisfaction and customer loyalty towards the retail stores and
demographic profiles
HA: There is association between perceived level of service quality, customer
satisfaction and customer loyalty towards the retail stores and demographic
profiles
This part of analysis is used to find the associations between demographic

details of the respondents and perceived level of service quality, customer
satisfaction and customer loyalty towards the retail stores. Chi square analysis
used to find the associations between the variables. Significance value less
than 0.05 indicate existence of some association between both variables.
Sub Hypothesis
H16a: There is no association between perceived level of service quality
H16b: There is no association between customer satisfaction towards the retail
H16c: There is no association between customer loyalty towards the retail
328
6.19.1 Association between perceived level of service quality towards the

retail stores and demographic profiles
H16a: There is no association between perceived level of service quality
Chi square
Demographic profiles p value Result
Value
Gender 7.037 0.030** Association
Educational Qualifications 13.207 0.105 No Association

Amount spent in a month for Association
24.252 0.002**
shopping
Table 6.19.1 Association between perceived level of service quality

329
Inference:
Above table 6.19.1 indicates that significance of chi square value is less than
0.05 for the demographic variables like type of retail store, location of the
retail store, age, gender, occupation, family income, family size, frequency of
shopping, amount spent in a month for shopping, influencing factor and
preferred mode of payment. Hence null hypothesis is rejected. It concludes
that demographic variables like type of retail store, location of the retail store,
age, gender, occupation, family income, family size, frequency of shopping,
amount spent in a month for shopping, influencing factor and preferred mode
of payment have association between levels of perceived service quality
towards the retail shops.
variables like marital status, educational qualifications, preferred purchasing
mode and family type. So there is no association between marital status,
educational qualifications, preferred purchasing mode and family type with
level of perceived service quality towards the retail shops.
330
6.19.2 Association between customer satisfaction towards the retail stores

and demographic profiles
H16b: There is no association between customer satisfaction towards the retail
Chi square
Demographic profiles p value Result
Value
Educational Qualifications 6.518 0.589 No Association
Family Type 11.289 0.024** Association

Amount spent in a month for 20.470 0.009** Association
shopping
Influencing factor 9.625 0.292 No Association
Table 6.19.2 Association between customer satisfaction towards the retail

331
Inference:
retail store, age, occupation, family income, family size, family type,
frequency of shopping, amount spent in a month for shopping and preferred
mode of payment. Hence null hypothesis is rejected. It concludes that
demographic variables like type of retail store, location of the retail store, age,
occupation, family income, and family size, and family type, frequency of
shopping, amount spent in a month for shopping and preferred mode of
payment have association between levels of customer satisfaction towards the
retail shops.
variables like gender, marital status, educational qualifications, preferred
purchasing mode and influencing factor. So there is no association between
gender, marital status, educational qualifications, preferred purchasing mode
and influencing factor with level of customer satisfaction towards the retail
shops.
332
6.19.3 Association between customer loyalty towards the retail stores and
demographic profiles
H16c: There is no association between customer loyalty towards the retail
Demographic profiles Chi square Value p value Result

Location of the retail 209.132 0.000** Association
store

Educational 27.289 0.001** Association
Qualifications
Occupation 21.220 0.096 No Association

Preferred Purchasing 8.583 0.379 No Association
Mode
Amount spent in a month 77.077 0.000** Association
for shopping
Influencing factor 4.266 0.832 No Association
Preferred Mode of 45.185 0.000** Association
Payment
Table 6.19.3: Association between customer loyalty towards the retail
333
Inference:
retail store, age, educational qualification, family income, family size,
frequency of shopping, amount spent in a month for shopping and preferred
mode of payment. Hence null hypothesis is rejected. It concludes that
demographic variables like type of retail store, location of the retail store, age,
educational qualification, and family income, and family size, frequency of
shopping, amount spent in a month for shopping and preferred mode of
payment have association between levels of customer loyalty towards the retail
shops.
variables like gender, marital status, occupation, family type, preferred
purchasing mode and influencing factor. So there is no association between
gender, marital status, occupation, family type, preferred purchasing mode and
influencing factor with level of customer loyalty towards the retail shops.
334
6.20 STRUCTURAL EQUATION MODELING
Structural equation modeling (SEM) is a tool for analyzing multivariate data

that has been long known in marketing to be especially appropriate for theory
testing (e.g., Bagozzi, 1980). Structural equation models go beyond ordinary
regression models to incorporate multiple independent and dependent
variables as well as hypothetical latent constructs that clusters of observed
variables might represent. They also provide a way to test the specified set of
relationships among observed and latent variables as a whole, and allow theory
testing even when experiments are not possible. As a result, these methods
have become ubiquitous in all the social and behavioral sciences (e.g.,
MacCallum & Austin, 2000).
335
6.20.1 EFFECTS OF SERVICE QUALITY DIMENSIONS ON

OVERALL CUSTOMER SATISFACTION
H17: There is no impact among the Overall service quality of the retail
stores on overall satisfaction of the customers.
Figure No. 6.1 Effects of service quality dimensions on overall customer

satisfaction
To analysis the relationship between these factors SEM approach (AMOS 21)
has been used. SEM approach allows concurrent estimations of multiple
regression analysis in one single frame work. Browne & Cudeck (1993) study
indicates the model fit can be checked by RMSEA which is less than 0.08 has
a good fit and less than 0.05 has a closer fit. Chin and Todd (1995) study
proposed that for goodness of model fit GFI (Goodness of Fit Index) and NFI
(Normed Fit Index) should be above 0.9 and AGFI (Adjusted good-of-fit
Index) should be above 0.8. Bentler (1990) study suggest for good model fit
CFI (Comparative Fit Index) should be greater than 0.9. The goodness of final
336
model fit has been shown in table 1. As per the various model fit statistics
indicates that model was good fit.
Goodness of Fit Statistics Value Good fit value

Chi Square Value (CMIN) 10.151
Degree of Freedom (Df) 6 ≥0
Chi Square / Df (CMIN/Df) 1.692 2 to 5
Goodness of Fit Index (GFI) 0.996 > 0.9
Root Mean Square Error of Approximation (RMSER) 0.028 < 0.08
Adjusted Good of Fit Index (AGFI) 0.987 > 0.9
Comparative Fit Index (CFI) 0.996 > 0.9
Normed Fit Index (NFI) 0.998 > 0.9
Table 6.20.1 Model fit statistics
β
P H0
Structural Path S.E. C.R.
value Result
Estimate
Physical Aspects <-- Overall service 0.943 0.137 37.095 0.00** Rejected
quality
Reliability <-- Overall service 0.884 0.121 21.38 0.00** Rejected
quality
Personal <-- Overall service 0.959 0.078 30.363 0.00** Rejected
quality
Interaction
Problem Solving <-- Overall service 0.828 0.198 38.371 0.00** Rejected
quality
Policy <-- Overall service 0.648 0.117 33.634 0.00** Rejected
quality
Overall customer <-- Overall service 0.822 0.048 30.017 0.00**
quality
satisfaction
** denotes Significance at 1 per cent level.
Table 6.20.2 Effects of service quality dimensions on overall customer
satisfaction
337
The significance test is the critical ratio (CR), which represents the parameter
estimate divided by its standard error. The parameter estimate is significant at
p≤0.01 and value of C.R is > 2.58. Six significant structural paths among the
exogenous and endogenous latent variables are found to be significant. The
probability of getting a critical ratio as large as 38.37 and 37.095 are having an
absolute value which is less than 0.001.
In other words, the regression weight for problem solving and physical aspects
dimension is having high regression weight than other service quality
dimensions. The policy and personal interactions dimension are also a
significant variable which having an impact on Overall service quality leads to
positive effect on Overall satisfaction, which is significantly different from
zero at the 0.001 level (two-tailed). The critical ratio index can be used as a
guide for eliminating the existing paths. In this model all the structural path are
accepted because CR values are greater than 2.58.
This regression weight represents the degree of association between the

constructs and the manifesting variables. For example, if Overall service
quality increased by 1 standard deviation, the standard deviation of individual
service quality dimensions like physical aspects, reliability, personal
interactions, problem solving and policy would have increased by
0.94,0.88,0.96,0.83 and 0.65 (Standardized estimates) respectively. These
results are salient in identifying the customer satisfaction elements that can
improve the customer satisfaction retail shoppers.
338
Bayesian Analysis for effects of service quality dimensions on overall

customer satisfaction
For access Convergence, with a large dataset, the posterior mean will tend to
be close to the maximum likelihood estimate. AMOS provides several
diagnostics that help to check convergence. Notice the value 1.0020 on the
toolbar of the Bayesian SEM window. Each time the screen refreshes, AMOS
updates the C.S. for each parameter in the summary table. The C.S. value on
the toolbar is the largest of the individual C.S. values. AMOS displays an
“unhappy face” (Figure No. 6.2), when the overall C.S. is not small enough.
Figure No.6. 2: Before Bayesian Analysis

339
Reflecting the satisfactory convergence, AMOS now displays “a happy face”

(YELLOW) given in the Figure No. 6.3. Gelman et al. (2004) suggest that for
many analyses, values of 1.0019 or smaller are sufficient and it is
conservative. Judging that the MCMC chain has converged by this criterion
does not mean that the summary table will stop changing. As the overall
convergence statistic (C.S.), C.S. value on the toolbar approaches 1.000.
However, there is more precision to be gained by taking additional samples, it
might stop as well. The Posterior dialog box now displays a frequency
polygon of the distribution of the samples.
Figure No. 6.3: After Bayesian Analysis

340
6.21 EFFECT OF SERVICE QUALITY DIMENSIONS AND OVERALL

CUSTOMER SATISFACTION ON CUSTOMER LOYALTY
H18: Individual service quality dimension have no impact on overall customer

H18a: Physical aspects dimension have no impact on overall customer

H18b: Reliability dimension have no impact on overall customer satisfaction of

the retail customers that leads to overall behavioural loyalty.
H18c: Personal interaction dimension have no impact on overall customer

H18d: Problem solving dimension have no impact on overall customer

satisfaction of the retail customers that leads to overall behavioural loyalty..
H18e: Policy dimension have no impact on overall customer satisfaction of the

retail customers that leads to overall behavioural loyalty.
341
Figure No.6.4: Effect of service quality dimensions and overall customer

Values for
Goodness of Fit Statistics Value
good fit
As per the various model fit statistics indicates that model was good fit.
342
Structural Path β S.E. C.R. P H0

Estimate Results
Overall customer <--- Reliability 0.096 0.014 2.617 0.009** Rejected
satisfaction
Overall customer <--- Problem -0.017 0.02 -0.531 0.596 Accepted
satisfaction solving
Overall customer <--- Personal 0.345 0.009 8.603 0.000** Rejected
satisfaction interactions
Overall customer <--- Policy 0.013 0.012 0.484 0.628 Accepted
satisfaction
Overall customer <--- Physical 0.424 0.013 10.463 0.000** Rejected
satisfaction appearance
Overall customer <--- Overall 0.736 0.247 18.955 0.000** Rejected
loyalty customer
satisfaction
Table 6.21.2 Effect of service quality dimensions and overall customer
The regression weight for physical appearance dimension is having high

impact on the overall SAT of retail customers. It is highly significant which is
different from zero at the 0.001 level (two-tailed). The overall satisfaction has
positive effect leads to customer loyalty of customers in the retail stores. This
regression weight represents the degree of association between the constructs
and the manifesting variables. For example, if individual service quality
dimensions like physical aspects, reliability, personal interactions, problem
solving and policy increased by 1 standard deviation, the Overall satisfaction
would have increased by 0.42, 0.10, 0.35, -0.02 and 0.01 respectively. These
results are salient in identifying the service quality and customer satisfaction
elements that can improve the retail customer loyalty.
343
Bayesian Analysis for effect of service quality dimensions and overall

customer satisfaction on customer loyalty
With a large dataset, the posterior mean will tend to be close to the maximum
likelihood estimate. AMOS provides several diagnostics that help to check
convergence. The value obtained is 1.0182 is obtained on the toolbar of the
Bayesian SEM window and AMOS displays an “unhappy face” Figure No.
6.5, when the overall C.S. is not small enough. Reflecting the satisfactory
convergence, AMOS now displays a “happy face” (YELLOW) which is
displayed in the Figure No. 6.6. As the overall C.S. value on the toolbar
approaches 1.000, however, there is more to be gained by taking additional
samples, so it might stop as well. The posterior dialog box now displays a
frequency polygon of the distribution of the service quality dimensions and
customer satisfaction leads to Overall customer loyalty across the samples in
retail stores.
344
Figure No. 6.5: Before Bayesian Analysis

345
6.22 EFFECT OF CUSTOMER LOYALTY DIMENSIONS ON

H19: There is no effect on overall customer satisfaction of the customers

towards the individual dimensions of behavioural loyalty.
H19a: There is no effect on overall customer satisfaction of the customers

towards the word of mouth dimension of behavioural loyalty.
H19b: There is no effect on overall customer satisfaction of the customers

towards the switch to competitor dimension of behavioural loyalty.
H19c: There is no effect on overall customer satisfaction of the customers

towards the willingness to pay more dimension of behavioural loyalty.
H19d: There is no effect on overall customer satisfaction of the customers

towards the internal and external response dimension of behavioural loyalty.
346
Figure No. 6.7 Effect of customer loyalty dimensions on overall customer

satisfaction
Values for
Goodness of Fit Statistics Value
good fit
347
Structural Path β S.E. C.R. P H0 Result

Estimate
<--- Overall
Word of mouth Customer 0.175 0.063 5.331 0.000** Rejected
satisfaction
Switch to <--- Overall
Customer -0.054 0.048 -1.625 0.104 Accepted
competitor
satisfaction
Willingness to <--- Overall
Customer 0.520 0.051 18.237 0.000** Rejected
pay more
satisfaction
<--- Overall
Response Customer 0.505 0.103 17.564 0.000** Rejected
satisfaction
Table 6.22.2 Effect of customer loyalty dimensions on overall customer
satisfaction
The regression weight for willingness to pay more dimensions is having high
regression weight than other customer loyalty Dimension. The Response and
word of mouth are also a significant variable which having an impact on
Overall satisfaction, which is significantly different from zero at the 0.001
level (two-tailed). The critical ratio index can be used as a guide for
eliminating the existing paths. In this model three the structural paths are
accepted because CR values are greater than 2.58.

constructs and the manifesting variables. For example, if overall satisfaction
increased by 1 standard deviation, the standard deviation of individual
customer loyalty Dimensions like word of mouth, Switching to Competitors,
Willingness to pay more and response would have increased by 0.175, -0.054,
0.520 and 0.505 respectively. These results are salient in identifying the
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customer satisfaction elements that can improve the bank customer

satisfaction.
Bayesian Analysis for effect of customer loyalty dimensions on overall

customer satisfaction
For accessing convergence, with a large dataset, the posterior mean will tend
to be close to the maximum likelihood estimate. AMOS provides several
diagnostics that help to check convergence. Notice the value 1.0234 (Figure
No. 1) on the toolbar of the Bayesian SEM window. Each time the screen
refreshes, AMOS updates the C.S. for each parameter in the summary table.
The C.S. value on the toolbar is the largest of the individual C.S. values.
AMOS displays an “unhappy face” (Figure No. 6.8), when the overall C.S. is
not small enough

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Reflecting the satisfactory convergence, AMOS now displays “a happy face”

(YELLOW) given in the Figure No.6.9. Gelman et al. (2004) suggest that for
many analyses, values of 1.0014 or smaller are sufficient and it is
conservative. Judging that the MCMC chain has converged by this criterion
does not mean that the summary table will stop changing. As the overall
convergence statistic (C.S.), C.S. value on the toolbar approaches 1.000.
However, there is more precision to be gained by taking additional samples, it
might stop as well. The Posterior dialog box now displays a frequency
polygon of the distribution of the samples.
Figure No.6. 9: After Bayesian Analysis

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6.23. CUSTOMER EVALUATION MODEL FOR RETAIL STORES
H20: There is no impact of purchase intention on perception of retail service

quality leads to positive or negative effect on loyalty which act as mediating
variable of customer satisfaction.
Figure No.6. 10: Customer evaluation model for retail stores
Goodness of Fit Statistics Value Values for

good fit
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Structural Path β S.E. C.R. P H0 result

Estimate
Purchase 0.000*
Perception <-- 0.106 0.006 109.742 Rejected
intention *
0.000*
Perception <-- Expectation 0.900 0.001 933.605 Rejected
*
Customer 0.000*
<-- Perception 2.568 0.024 5.283 Rejected
satisfaction *
Customer 0.000*
<-- Expectation -1.778 0.013 -3.663 Rejected
satisfaction *
Customer 0.000*
Loyalty <-- 0.747 0.248 19.229 Rejected
satisfaction *
Table 6.23.2 Customer evaluation model for retail stores
Five significant structural paths among the exogenous and endogenous latent
variables are found to be significant. Perception rating on overall satisfaction
has positive effect leads to increase customer loyalty in the retail stores.
Expectation ratings on overall satisfaction have negative effects leads to
reduce the level of loyalty in the retail stores. The purchase intention,
perception and expectation ratings of Service Quality constructs are having
high impact on overall service evaluation.
Bayesian Analysis for estimation Customer evaluation model for retail

stores
With a large dataset, the posterior mean will tend to be close to the maximum
likelihood estimate. AMOS provides several diagnostics that help to check
convergence. The value obtained is 1.0092 on the toolbar of the Bayesian
SEM window and AMOS displays an “unhappy face”, when the overall C.S. is
not small enough.
352
Reflecting the satisfactory convergence, AMOS now displays a “happy face”

(YELLOW) which is displayed in the Figure No. 6.12. As the overall C.S.
value on the toolbar approaches 1.0013, however, there is more to be gained
by taking additional samples, so it might stop as well. The posterior dialog box
now displays a frequency polygon of the distribution of the Impact of
Perception and expectation ratings of service quality on Overall satisfaction
leads to Customer loyalty across the samples in retail stores.
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6.24 CONCLUSION
This chapter concludes with the various findings related to the hypothesis
framed for the research study. For proving the hypothesis the researcher has
used various statistical tools such as path analysis using AMOS 21, multiple
regression, correlation, ANOVA, independent sample T test, paired T test and
chi square test. In addition, a thorough explanation and interpretation of the
study‟s hypothesis results and how they relate to previous research findings in
the Service quality literature are also given.
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CHAPTER VII
DISCUSSION AND CONCLUSION
This chapter provides an overview of the general findings and

conclusions of the study in relation to its objectives, hypotheses and research
problems. Proposed recommendations are considered by various retail stores
in order to improve the quality of their services by knowing the weak factors.
7.0 INTRODUCTION
The chapter concludes by highlighting theoretical and methodological

contributions and practical implications based on the developed SEM, thus
closing the service quality gap on Customer Expectation and Perception.
Further, it discusses the limitations of the study and provides suggestions for
further researches that contribute to the literature on Service Quality in Retail
Sectors.
7.1 SERVICE QUALITY GAP ANALYSIS
Service Gap Score Analysis for the retail shops, shows that, the lowest
service gap has occurred in “policy” and “problem solving” dimension and the
little high service gap has occurred in the “personal interaction” and
“reliability” dimension. “Physical aspect” dimension is has occurred very high
service gap compared to other dimensions. The lower order dimensions should
be paid more concentration and the retails should see that the customer‟s
expectations are met for all dimensions.
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DIMENSIONS
Retail service quality dimensions account for 68 percent of the variance

in Overall Retail Service Quality and Policy and reliability had achieved the
strongest association with the overall perception of service quality.

Type of retail store, location of the retail store, gender, age, marital
status, educational qualifications, occupation, family income, and frequency of
shopping, the amount spent in a month for shopping, influencing factors and
preferred mode of payment have significant difference with service quality
dimensions.

DIMENSIONS ON CUSTOMER LOYALTY DIMENSIONS
It was observed that the retail service quality dimensions explained 4.2
per cent of the variance for the criterion measure and reliability dimension was
statistically significant in explaining the variance of intention to recommend
the retailer to others.
The retail service quality dimensions explained 3 per cent of the

variance in the criterion measure and service quality dimensions like reliability
problem solving and policy dimension was statistically significant in
explaining the variance of switching to competitors.
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The retail service quality dimensions explained 47 percent of the

variance in willingness to pay more and policy and personal interaction
dimensions are contributing more on explaining the shoppers‟ willingness to
pay more.
Five dimensions of service quality explained only 44 percent of the variation

in response (Internal and external response) and the Policy and personal
interaction dimensions are contributing more on explaining the shopper‟s
response.

CUSTOMER LOYALTY DIMENSIONS
Type of retail store, location of the retail store, gender, age, marital
status, educational qualifications, occupation, family income, family size,
family type, preferred purchasing mode, frequency of shopping, the amount
spent in a month for shopping and preferred mode of payment factors have a
significant difference in customer loyalty dimensions.
7.6 RELATIONSHIP BETWEEN PERCEIVED SERVICE QUALITY

DIMENSIONS, CUSTOMER LOYALTY DIMENSIONS
Opinion about perceived service quality dimensions like physical

aspects, reliability, personal interaction, problem solving and policy have a
positive and high level significant relationship with other dimensions. Opinion
about customer loyalty dimensions like word of mouth, switching to a
competitor, willingness to pay more and internal, external response of the
respondents also have a positive and high level significant relationships with
other customer loyalty dimensions.
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DIMENSIONS ON CUSTOMER SATISFACTION AND CUSTOMER
SATISFACTION ON CUSTOMER LOYALTY
The retail service quality dimensions explained 67 per cent of the

variance for the criterion measure. It entailed that 33 percent of customer
satisfaction was explained by something other than service quality and
physical aspects and personal interaction dimensions were statistically
significant in explaining the variance of retail customer satisfaction.
Customer satisfaction explained 22 per cent of the variance for the

criterion measure. It entailed that 78 percent of customer loyalty in retail shop
was explained by something other than customer satisfaction and service
satisfaction, product satisfaction were statistically significant in explaining the
variance of retailer customer loyalty.
7.8 EFFECTS OF DEMOGRAPHIC VARIABLES ON CUSTOMER

SATISFACTION FACTORS
Type of retail store, location of the retail store, age, marital status,
occupation, family income, and amount spent in a month for shopping,
influencing factors and preferred mode of payment factors have a significant
difference in product and service satisfaction offered by the retail stores.
7.9 RELATIVE IMPORTANCE OF FACTOR AFFECTS PURCHASE

ON CUSTOMER SATISFACTION
Factor affects purchase explained 19 per cent of the variance for the
criterion measure. It entailed that 81 percent of customer satisfaction was
explained by something other than factor affects purchase and overall after
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sales services, arrangement of the products, waiting time for billing and
availability of various branded products were also statistically significant in
explaining the variance of retail customer satisfaction.
7.10 RELATIONSHIP BETWEEN PURCHASING FACTORS,

CUSTOMER SATISFACTION, EXPECT & PERCEIVED SERVICE
Correlation analysis between purchasing factors, customer satisfaction,

expects & perceived service quality and customer loyalty shows that higher
levels of positive and significant relation exist between above mentioned
factors.

PURCHASE ATTRIBUTE FACTORS
Most liked factors had significantly influence over purchase attribute

factors like a good place of entertainment, family shopping and emergency and
safety measures and most disliked factors had significantly influence over
purchase attribute factors like family shopping.

FACTORS AFFECTING RETAIL PURCHASE
Most liked factors had significantly influence over factors affecting

retail purchase like pricing of various branded products, availability of various
branded products, the quality of various branded products, overall sales
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and waiting time for billing. Post hoc analysis shows that sales promotion and
discount liking factors differ significantly with other liked factors with
reference to factors affecting retail purchase and most disliked factors had
significantly influence over factors affecting retail purchase like pricing of
various branded products, availability of various branded products, quality of
various branded products, overall sales promotional activities, overall after
sales services, arrangement of the products and waiting time for billing.
7.13 DIFFERENCE BETWEEN PERCEPTION AND EXPECTATION

Paired T test between opinion about perceived and expected service

quality dimensions shows that there is a significant difference between all
perception and expectation service quality dimensions.
7.14 ASSOCIATION BETWEEN AND MOST LIKED AND DISLIKED

FACTORS ABOUT RETAIL SHOPS
Demographic variables like type of retail store, location of the retail

store, age, marital status, educational qualifications, occupation, family
income, family size, family type, frequency of shopping, amount spent in a
month for shopping, influencing factor and preferred mode of payment have
association between most liked factors about the retail shops and demographic
variables like type of retail store, location of the retail store, age, gender,
educational qualifications, occupation, family income, family size, preferred
purchase mode, frequency of shopping, amount spent in a month for shopping,
influencing factor and preferred mode of payment have association between
most disliked factors about the retail shops.
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7.15 LEVEL OF SERVICE QUALITY, CUSTOMER SATISFACTION

AND CUSTOMER LOYALTY
25.7 per cent of the respondent‟s opinion about service quality in retail
stores is low, 47.8 percent of the respondent‟s opinion about service quality in
retail stores is medium and 26.6 percent of the respondent‟s opinion about
service quality in retail stores is high. 32.4 per cent respondents have low level
satisfaction with retail stores product and service, 32.8 per cent respondents
have medium level satisfaction with retail stores product and service and 34.8
per cent respondents have high level satisfaction with retail stores product and
service. 26.3 percent respondent‟s customer loyalty toward retail stores is low,
47.3 percent respondent‟s customer loyalty toward retail stores is medium and
26.4 percent respondent‟s customer loyalty toward retail stores is high.
7.16 ASSOCIATION BETWEEN PERCEIVED LEVEL OF SERVICE

QUALITY, CUSTOMER SATISFACTION AND CUSTOMER
LOYALTY AND DEMOGRAPHICS

store, age, gender, occupation, family income, family size, frequency of
shopping, the amount spent in a month for shopping, influencing factors and
preferred mode of payment have an association between levels of perceived
service quality towards the retail shops.

store, age, occupation, family income, and family size, and family type,
frequency of shopping, the amount spent in a month for shopping and
preferred mode of payment have an association between levels of customer
satisfaction towards the retail shops.
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store, age, educational qualification, family income, and family size, frequency
of shopping, the amount spent in a month for shopping and preferred mode of
payment have an association between levels of customer loyalty towards the
retail shops.
7.17 EFFECTS OF SERVICE QUALITY DIMENSIONS ON OVERALL

CUSTOMER SATISFACTION
Regression weight for problem solving and physical aspects dimension

is having high regression weight than other service quality dimensions. The
policy and personal interactions dimension are also a significant variable
which having an impact on Overall service quality leads to positive effect on
level

constructs and the manifesting variables. For example, if Overall service
quality, increased by 1 standard deviation, the standard deviation of individual
service quality dimensions like physical aspects, reliability, personal
interactions, problem solving and policy would have increased by
0.94,0.88,0.96,0.83 and 0.65 (Standardized estimates) respectively. These
results are salient in identifying the customer satisfaction elements that can
improve the customer satisfaction retail shoppers.
7.18 EFFECT OF SERVICE QUALITY DIMENSIONS AND OVERALL

CUSTOMER SATISFACTION ON CUSTOMER LOYALTY
The regression weight for physical appearance dimension is having a

high impact on the overall SAT of retail customers. It is highly significant
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which is different from zero at the 0.001 level (two-tailed). The overall
satisfaction has positive effect leads to customer loyalty of customers in the
retail stores. This regression weight represents the degree of association
between the constructs and the manifesting variables. For example, if
individual service quality dimensions like physical aspects, reliability,
personal interactions, problem solving and policy increased by 1 standard
deviation, the Overall satisfaction would have increased by 0.42, 0.10, 0.35, -
0.02 and 0.01 respectively. These results are salient in identifying the service
quality and customer satisfaction elements that can improve the retail customer
loyalty.
7.19 EFFECT OF CUSTOMER LOYALTY DIMENSIONS ON

The regression weight for willingness to pay more dimensions is having

high regression weight than other customer loyalty Dimension. The Response
and word of mouth are also a significant variable which having an impact on
level.

constructs and the manifesting variables. For example, if overall satisfaction
increased by 1 standard deviation, the standard deviation of individual
customer loyalty Dimensions like word of mouth, Switching to Competitors,
Willingness to pay more and response would have increased by 0.175, -0.054,
0.520 and 0.505 respectively. These results are salient in identifying the
customer satisfaction elements that can improve the retail customer
satisfaction.
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7.20 CUSTOMER EVALUATION MODEL FOR RETAIL STORES
Perception rating for overall satisfaction has positive effect leads to

increase customer loyalty in the retail stores. Expectation ratings of overall
satisfaction have negative effects leads to reduce the level of loyalty in the
retail stores. The purchase intention, perception and expectation ratings of
Service Quality constructs are having high impact on overall service
evaluation.
7.21. IMPLICATIONS OF THE STUDY
7.21.1 MANAGERIAL IMPLICATION
According to the results obtained from the Structural Equation Modeling,

Service Quality influences the satisfaction level of the retail store customers.
This indicates that the ability to provide high quality service is the key to
achieving better customer satisfaction. Furthermore, satisfaction and
behavioral intentions are also strongly influenced by service quality. This
implies that Service quality is important to predict customer satisfaction and
behavioral intentions. Despite the existence of significant direct relationships,
this thesis also finds the important role of service quality and customer
satisfaction as mediating variables.
From the managerial perspective, the findings indicate that the efficacy
of the quality policies of service industries will vary considerably as a function
of customer‟s needs which affect perceptions about different facets of the
quality of the service. It would be essential for companies to keep the
expectation of the customers in mind as a criterion to segment markets. It is
understood that the satisfied customers will behave in a positive manner. This
study proves if the customer‟s expectations of service quality are offered they
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will be satisfied and they will exhibit their positive behavior. It is apparent
from the present study that managers and decision makers in the retail stores
can seek and improve the elements of service quality that make the most
significant contributions to customer satisfaction. In making such an
assessment, managers should examine customers' responses to the five
dimensions of service quality used in this study. From a managerial point of
view, it can be concluded that service quality is indeed an important
antecedent to customer satisfaction. It should be noted that the high relative
weights of the different service dimensions do not mean that customers are
satisfied – on the contrary, it could be argued that there is still room for
improvements in that area to further improve the perceived service quality.
The importance of the findings of managerial decision-making processes is
evident. Managers seeking to improve their customers‟ satisfaction levels, in
their effort to increase loyalty, retention rates and to attract new customers,
may benefit from information about the effect of individual dimensions of
service quality on customer satisfaction. From these conclusions, Managers
should focus on high quality services, and improve service quality
effectiveness.
7.21.2 PRACTICAL IMPLICATIONS OF THE RESEARCH
This research builds on existing literature that provides an

understanding of service quality measurement. The present study takes this
work forward by considering how the service providers perceive their
customers‟ expectations of service delivery. While most of the studies deal
with various aspects of the relationship between customer expectations and
customer perceptions of service quality, the unit delivering the service quality
has been uniquely ignored to this point.
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Unlike other studies there are useful means provided for the evaluation
of how the services industry entity is delivering all-important services which
perceives the expectations of the consumer. The value of determining the
importance of a perceptions and customer expectations is readily apparent
when the existing literature points to many examples of customers leaving
organizations. Because they do not deliver the expected level of service
quality. Certainly, there are some difficulties in influencing customer behavior
as well as understanding what the customer absolutely expects. While not
implying that service providers should be “mind readers”.
This present study provides a method to evaluate the benefits that might be
obtained by them that seek to understand their customers‟ expectations. It is
evident that service quality determined in this study is the most important
factor in the selection of the retail store. This should provide an impetus for
the service industry to evaluate seriously the need to make an effort to provide
the highest level of service quality to obtain and retain customers.
7.22 CONTRIBUTION OF THE STUDY
The study contributes to the effective managerial decisions to be made by the

Indian retailers, when they have to decide on the service quality factors which
can delight the customers and subsequently affecting their loyalty. For the
study, retailers can use the perception items to pinpoint which service areas are
very important for customer‟s and need special attention. This study is also
unique because it resulted in dimensions that are specific to the retail industry
in India. The findings showed that the original five dimensions of RSQS do
not factor out and RSQS in India is not in harmony with the previous
researchers Boshoff and Terblanche, 1997 and Dabholkar, Thorpe and Rentz,
1996. The results of the study found the overall service quality to be positively
366
associated with service quality dimensions. The study also highlighted the
relative importance of service quality attributes and revealed that not all the
dimensions contribute equally to the customers‟ perceptions of service quality
in Indian retail context. It is the “Convenience” at patronizing, which makes a
difference to customers.
This was followed by a difference between the RSQS dimensions and

demographic information. This study is one of the few studies that investigated
service quality at the dimension level and its association with demographic
characteristics such as age, gender, marital status, occupation, monthly
income, residential status, highest qualification, type of store visited, reason of
visiting stores and frequency of visiting stores. There were no differences
regarding the demographic information, namely, “Monthly Income”,
“Residential Status”, “Type of store” and “Reason of Visiting Store” in this
study.
In terms of the association between customer loyalty and service quality, it

was found that the dimension of “physical aspects” and “Policy” were
relatively influential in affecting customers‟ positive recommendation and
future consumption behavior respectively. Moreover, superior performance on
the service quality dimension i.e. “Convenience” and “Promises” will be
helpful in making customers‟ loyal under increased or decreased pricing.
Consumer behaviors‟ signaling complaints to employees and other agencies
can be controlled by fulfilling the “Promises” and inculcating “Confidence” in
the customers. Retailers can use these relationships as significant reference
points while developing their strategies to retain customers‟.
This study contributes to the body of knowledge regarding customer‟s

repurchase intentions. Analysis of data found that customer‟s behavioural
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intentions was positively associated with service quality dimensions. A retailer

can use these service results to develop improvement strategies or to make
necessary adjustments to existing strategy to increase customer‟s repatronage.
Using information, retailers can formulate customized policies and redesign its
physical store in order to increase footfalls. Retailers can help their employees
to improve their performance in service situation. Retailers can guide
salespersons on an individual basis and also use information from the scale to
modify their employee training methods so that sales personnel offer better
customer service.
7.22.1THEORETICAL CONTRIBUTIONS OF THE RESEARCH
Guided by the research objectives, an examination of the three four key

constructs of interest has contributed to the theory as follows:
7.22.1.1 MEASUREMENT OF RETAIL SERVICE QUALITY
The main objective of this research study is to measure the service

quality offered among the organized retail stores (Hypermarket, Supermarket,
Departmental Stores) in the major cities of Tamilnadu. This research attempts
to delete two items in the existing RSQS model as we discussed earlier in the
research methodology. Normally, the customers have greater expectations and
are satisfied if they provide all those expected facilities. This study has proven
evidence that this Retail Service Quality Scale is highly reliable and suitable to
those of Indian Conditions with respect to the organized retail formats
selected. There is a growing body of research pointing to the fact that service
quality has a greater impact on satisfaction among the customers and these
both (service quality and customer satisfaction) have an impact on positive or
negative behavioral intentions.
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7.22.1.2 FILLING THE GAP IN THE KNOWLEDGE
The relationships between service quality and customer satisfaction

have been widely discussed in the literature. However, there were very few
empirical researches as a lack of studies that incorporated Service, quality,
customer satisfaction and behavioral intention in the retail sector that too in
south India. Previous studies have mostly investigated the direct (bivariate)
relationships or indirect relationships involving three constructs. The
importance of this study is to find the linkage between Service Quality
→Customer Satisfaction→ Behavioral Intention. The simultaneous
investigation of the relationships among all the constructs would provide a
more accurate and comprehensive picture of the nature of the relationships. In
addition to measuring service quality this thesis contributes to the theory in a
way that service quality is measured using multidimensional measurement and
the impact of service quality on customer satisfaction. Moreover, this study
gives room for studying the impact on behavioral intention too. The utilization
of the multidimensional construct helps the researchers to explain the complex
nature of many marketing constructs. By involving multidimensional
conceptualizations of service quality and customer satisfaction, this thesis
provides an extension of the earlier studies targeting to study the measurement
of service quality and customer satisfaction. In short, the proposed model
provides a comprehensive picture of the relationships among the key
constructs (Service, quality, Customer satisfaction and Behavioral Intention).
7.22.1.3 UTILIZATION OF SEM FOR KEY CONSTRUCTS

RELATIONSHIP TESTING
This research utilized the Structural Equation Modeling (SEM) Method

and AMOS software in data analysis. This study contributes by expanding the
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use of SEM in analyzing empirical data in the service quality discipline, that is
to say, not in the use of SEM per se, but rather in the rigorous testing of
relationships between key constructs. This study is one of the few recent
studies that have attempted to explain the relationships between Service,
quality, Customer Satisfaction and Behavioral Intention to retain the
customers.
7.22.1.4 CONTRIBUTION TO THE SERVICES MARKETING

THEORY
The findings of the current research with providing additional support

for the use of service industry research model to explain the process of the
customer‟s evaluation of the offering in a service setting. There are many
contributions to the knowledge base within the services marketing context.
These include the demonstration that service quality is a higher order construct
and the examination of the relationships among service quality, customer
satisfaction and behavioral intention with a retail stores service context. This
section continues by addressing each of the contributions. As a whole the
research contributes to marketing theory to extend the existing
conceptualizations of service quality. The findings of the current research
should be seen in the light of contributions towards the development of a
comprehensive model. It explains the development of richer and more
complete conceptualizations of the constructs of service quality.
7.22.1.5 CONTRIBUTION TO MANAGEMENT PRACTICES
The research highlights the role of customers‟ perceptions in shaping

the overall evaluation of the service offered. Another major contribution of the
research model is that, it can be used as a guideline to identify the factors
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which are significant in shaping the customers‟ perceptions of the service

offering. The factors Service, quality, Satisfaction and Behavioral intentions
can be then profitably used to develop different strategies. The research model
provides assistance to the practitioners in monitoring their service delivery
systems through customer feedbacks, to evaluate the value provided to their
patrons in terms of the benefits. The research also contributes in developing,
testing and validating measures of the constructs like Service, quality,
Satisfaction and Behavioral intention. This can be used for the purpose of
collecting feedbacks from the customers to monitor and improve the service to
enhance the retail stores performance.
7.23 RECOMMENDATIONS
Due to the exponential development of the sector, it becomes extremely

vital to understand the consumer perceptions and delivery of services in the
areas of physical appearance, Reliability, Personal Interaction, Problem
solving and Policy. As these are prime service dimensions for any retail store,
they generate interest in knowing the perception of consumers after the
delivery of service. The present study will facilitate the stores in understanding
the service quality factors, ultimately the way to customer loyalty.
Sureshchander et al. (2001) aroused the question of whether service

quality scales such as the SERVQUAL and SERVPERF address the „critical
aspects of customer perceived service quality‟ in India (Kaul, 2005). The
present study lends further credence to their argument as a different
component structure of RSQS emerges in the Indian retail environment. The
haziness of dimensions will disappoint Indian retailers seeking greater
visibility in identifying areas for service improvement. Due to this vagueness
of dimensions, retailers and researchers applying internationally developed
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multi-dimensional RSQS to the Indian environment are advised to pay special

attention to scale adaptation to ensure that the scale has reliable diagnostic
ability.
If consumers‟ perceptions of store service quality do not differ from

one culture to another, there would be no need for global retailers to modify
their service-related strategies when crossing national boundaries. But cultural
differences do exists, thus global retailers need to be responsive while
developing customer service. The scales that are developed for a specific
country or context might not be suitable for another country or context because
of the unique and different economic and socio-cultures (Kumar, Kee &
Nanshor, 2009). According to Tsoukatos & Rand (2007) culture has an
influence on the service quality dimensions and the way customers view these
service quality dimensions. An instrument that is applied in the West will not
fit Asian markets without modifications (Cui, Lewis & Park, 2003). In this
regard, a great need is felt especially for global retailers targeting India to
carefully re-think before exercising their existing perspectives on service
quality gained in other countries to Indian consumers. A thoughtful customer
research should be conducted to advance an understanding of local customers‟
behaviour and their shopping experience.
Retailers who carry out periodic inspections can use the validated and
reliable “Retail Service Quality Scale” to benchmark their current levels of
retail service quality. By specifying the weight for each of the eight factors of
service quality, existing organized retailers and new/ potential entrants can
propose appropriate action plans. Retailers are suggested to analyze data at
different levels (i.e. Overall level and dimension level) to identify priority
areas of service improvement.
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Thus, the retailers will be able to channelize its resources in the

direction of strengthening the most important dimension (Seth et al.,
2008).Further, the employees should be so trained that they perform the right
service in the first encounter, leaving the customer fully satisfied. By making
shopping a convenient exercise, retailers would be able to transform shopping
into shoppertainment i.e. shopping + entertainment.
Retailers wishing to enhance their perceived service quality are needed to

assure that:
 Physical facilities are clean, tidy, modern-looking and attractive.

 Store layout is architecture in a convenient manner that enables the
customers to find what they need and to move around with ease.
 Services are delivered reliably by fulfilling all promises made to
customers.
 Doing things right the first time without mistakes and having the
merchandise available when the customers want it.
 Store employees instill confidence in the customers at all times during
their personal interaction with the customers.
 Store salespeople are courteous, helpful, and knowledgeable with the
ability to give prompt service to customers (Leen et al., 2004).
 Prompt and professional problem-solving methods, including a proper
system of returns and exchanges (Christo & Terblanche, 1997).
 Their store policy is responsive to customer needs such as trading high
quality merchandise, having convenient operating hours, ample parking
spaces, and credit payment options (Leen et al., 2004).
Paulins (2005) opined that demographics do have an effect on some

service quality dimensions such as the reliability dimension. As one size does
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not fit all, similarly one strategy will not work with different demographics.
Thus, retailers are recommended to priorities on different service quality
attributes to capture customers with different demographics.
A suggestion to management is to take into consideration the

problems/complaints of “35-45” years‟ old customers with priority. For
fulfilling this, retailers can train store employees to solve problems
immediately and to show customers that they are trying their level best to
solve problems.
Females are hard core shoppers. Retailers should look at increasing the
product range in the store. Moreover, retailers can develop its store employees
to insist on error-free sales transactions and records, especially when the
customer is a female.
Retailers should consider the fact that married people have to maintain
a professional - personal life balance. So, whenever married consumers
encounter a problem, store employees should sincerely put efforts to sort it
out. Looking at this individual dimension, it is suggested that the contact
employees should resolve the customer‟s complaints timely and that the
customer‟s queries are taken seriously. To achieve this, retailers can
incorporate a training program for the employees. Such measures could
include the way employees solve problems, the way employees interact with
customers and pay attention to customers‟ needs.
As businessmen belong to the elite group, retailers can formulate

customized policies to delight this group. During weekends and peak hour
shop-in-shop runs out of parking space, this inconveniences the customers and
forces them to buy goods from elsewhere. So retailers can redevelop its store
374
policies where a different parking space can be allocated to a business group.

Retailers can also modify their operating hours according to their demand.
Analysis of data showed that government sector employees gave higher

importance to “Problem Solving” dimension than other category people.
Retailers targeting government employees are advised to exhibit earliness in
sorting out the complaints/problems of this group. Retailers must ensure that
high quality goods, private labels and designer outfits will be delivered to
government employees. Retailers should invest in empowering the contact
employees and providing them with adequate resources so that they can take
prompt actions to customer queries. For this, they need to ensure that the
employees are able to make important decisions regarding customer‟s
requirements at their level, thereby providing adequate solution to the
problems.
Postgraduates seem to rank the “Problem Solving” dimension higher

than the graduates and undergraduates. A suggestion to management is to take
into consideration the suggestion of the postgraduate customer when they try
to enhance the problem solving capabilities of store employees.
Further, retailers must look at the job description of the customer

service and merchandising clerk to make sure that the employees are aware
that problem solving is part of their job description. One of the items of the job
descriptions of the customer service and merchandising clerk is to greet the
customers. The management must look at this item to see if this was covered
during orientation and if there are systems in place that reward or penalize the
employee for doing a good or bad job in this area. Another item on the list for
the job description for the customer service and merchandising clerk is finding
the correct answers for customers. It needs to be clear to the employees that
375
there are steps that need to be followed when looking for the answer (Yaghi,
2010).
Monthly and quarterly visiting customers gave a good deal of business

to retailers. As these customers are the regular footfalls, retailers should not
delay in delivering products at the promised time. They must not over-promise
or report unrealistic times for delivery of promised products. This can be
performed by setting realistic goals, having proper systems for ordering in
place and giving ample time for product delivery.
The identification of customer loyalty as a multi-dimensional construct

may help the retailer in an accurate assessment of customer loyalty (Bloemer
et al., 1999) because changes in level of customer loyalty signal changes in the
value of customer assets. To attain customer loyalty, first of all retailers should
satisfy the customers with their service quality attributes. Making an
investment in retail service quality to satisfy customers is worth. Based on this
improvement, retailers‟ efforts should be concentrated on customers that rank
lowest in satisfaction surveys (Heskett et al., 1997 and Jones and Sasser,
1995).
Retailers should concentrate on their strengths rather than weaknesses,

which is the most effective way of developing customer loyalty. Retailers
should emphasize the differences that are; considered important by customers,
distinct from competitors and superior in terms of delivering the overall
benefit (Armstrong & Kotler, 2000) - in this case – in terms of service quality.
Successful companies have initiated the transition to customer-loyalty by
revamping their core process, changing the measurement and reward system,
and exercising selectivity with customers. In order to establish one-on-one
rapport with customers and assure customers that there is someone who knows
376
and cares about them; retailers can establish a single point of contact in which
an account specialist handles all the concerns of a particular customer
(Wiersema, 1998).
When customers experienced high levels of service quality then only

they will engage in favorable customer loyalty intentions like intentions to
revisit and repurchase from the same store, spreading positive word-of-mouth
communication, and willing to pay more. Thus, retailers need to delight the
shoppers with a high level of service quality. With the tailor-made offerings to
fit customer demands, retailers can be rest assured of influencing customers to
positive word-of-mouth communication and thereby impacting Customer
Loyalty. Fulfilling customer demands can be expensive, but the retailer should
look at the lifetime value of the customer.
In order to raise positive word of mouth communication, the retailer

should (1) provide appealing, eye-catchy, and smashing physical layout; (2)
modern-looking equipment and fixtures/racks; (3) consistently courteous with
customers; (4) provide high quality at convenient hours; (5) provide
readymade packed products available when customers need; (6) employees
should be neat and well-dressed in good looking uniform; (7) increase
willingness to handle returns and exchanges goods; (8) customer service and
merchandising clerk should quietly listens to the complaints of shoppers and
show sincere efforts in figuring out their problems; (9) retain successful
employees and minimize staff turnover; (10) employees paying proper
attention to customers‟ needs and (11) trained employees to inculcate
confidence in the customers.
According to the study, the researcher recommend retailers to improve

their service performance in order to enhance customer‟s repatronage
377
intentions by (1) customized policies like abundant parking, convenience

operating hours and transacting all major credit cards (2) increase ability of
employees to handle customers‟ complaints and problems; (3) employees
should be neat and well-dress in good looking uniform; (4) offer branded,
private labels and designer outfits; (5) charismatic shop layout, with nifty
physical facilities; (6) customer service and merchandising clerk who must
ensure that the display of the merchandise in the shop is attractive; (7)
insisting on error-free transactions; (8) delegate authority to empower staff
members to handle customers‟ problems and complaints promptly (9) train its
store employees to give individualized attention to each customer and not treat
them by the dozen, despite the fact that the service is subject to high degrees of
standardization; (10) attractive display of the merchandise in the shop; (11)
ensuring that the employees are aware that problem solving is part of their job
description and (12) handiness of goods when customers want them.
In order to grasp premium price from the loyal customer, the researcher
recommends retailers to improve their retail service quality by (1) designing
the shop layout in a manner where it is easy for customers to move around and
find what they need; (2) accomplishes the right service in the first time; (3)
fascinating and commodious physical facilities; (4) not to over-promise or
report unrealistic times for delivery of goods; (5) improve knowledge and
ability of employees; (6) empowering employees to handle customer
complaints directly and immediately; (7) volitionally handling returns and
exchange goods; (8) enhancing ability of employees to solve problems; (9)
reacting favorably to customer‟s requests; (10) personalized policies like
convenient operating hours and ample parking; (11) individual attention to
every individual (12) consistently courteous with customers.
378
In order to minimize redressed complaining behaviour of customer‟s,

the researcher proposed that the retailers should ameliorate their service
quality by (1) keeping its commitment; (2) engrain confidence in customers;
(3) enhancing and developing employees knowledge to answer customer‟s
query; (4) extending operating hours with plentiful parking facility; (5)
volitionally accepting returns and exchanges; (6) assuring safety in their
transactions; (7) visually attractive and appealing tangibles; (8) availability of
branded, private labels and designer outfits; (9) courtesy and prompt service to
customers and (10) arranging ongoing training programs for staff members
regarding customer relations.
Retailers can enhance the sales services by providing continuous

personal empowerment programs on interpersonal communication skills and
product knowledge. Staff empowerment will enable staff in the retail business
to be more responsive to the needs of their customers (Siu and Cheung, 2001).
Retailers can also use surveys eliciting behavioural intentions as an

early warning system to identify customers in danger of defection and to take
timely corrective action (Zeithaml et al., 1996). It has long been speculated
that many service customers exhibit “spurious loyalty”- absence of alternatives
make them remain loyal to companies even though they are dissatisfied with
the company. In a number of small cities, RMG customers exhibited spurious
loyalty due to non-availability of branded products and organized players.
The complaints and negative experiences of the shoppers should be

sought out on a priority basis. The more effective the complain handling, the
more loyal/attached the customer will be. So, from time to time retailer must
check the Contact Handling Effectiveness. Below mentioned are the key
points through which the “Contact Handling Effectiveness” of the store
379
employees can be measured by the retailer: This information can be used to set
customer-driven service standards for contact handling. In many industries, a
complaining customer whose problem is solved becomes more loyal than a
customer with no problem. This is because until the customer has a problem,
“service” and “quality” are merely advertising slogans. Once the customer
encounters a problem and the organization acts to resolve it, the customer
thinks, “Wow! They really do have great service” (Evalue, 2003).
The retail service quality measurement needs to be conducted regularly

to measure the extent of service enhancement in order to establish customer
loyalty intentions. Retailers should learn that service quality is a necessary
condition rather than a sufficient condition for a successful long-term
relationship, especially when the Indian retail is getting highly competitive and
organized. Although service quality is an effective antecedent to customer
loyalty, retailers cannot make differentiation and keep competitive only by
providing good service. Retailers should look for other determinants for a
successful long-term relationship like focusing on their core competencies and
strengths.
7.24 LIMITATIONS OF THE STUDY
The sample for the present study comprised of 900 shoppers of the
organized Retail Stores. This sample is only a very small proportion of the
entire population of retail shoppers in the country. Therefore, research studies
with much larger sample size would be required to ensure appropriate
generalization of the findings of the study. The study was limited to individual
shopping behavior. India being a collectivistic country, most of the shopping
happens in a family set up. Consideration of family shopping behavior might
have revealed interesting findings too.
380
The construct of shopping orientations was measured through an

instrument developed by a researcher in other country. Though the instrument
shows scientific reliability and validity, yet this is the first study of its kind
with this combination, which it has been adapted in India and more studies are
required before it is established as an acceptable tool for exploring Shopping
orientations.
The present study has relied largely on quantitative methodology of
data collection and is therefore restrictive. Therefore, more of qualitative
methodology of data collection should be undertaken in future to provide
wider perspective to the present study. For instance, the research design can
employ case study methodology or content analysis to provide a holistic
picture to the given subject.
7.25 DIRECTIONS FOR FUTURE RESEARCH
The proposed model developed in this study is limited to include

perceived service quality and repurchase intentions as the latent constructs. In
order to focus on the interrelationships among them, the effects of other
important marketing variables or situational factors are omitted. Therefore,
inclusion of other situational factors or marketing variables into the proposed
model may provide further insights of the relationships among perceived
service quality and repurchase intentions. For example, further study can focus
on the new perspectives of service loyalty in answering the proposed questions
like 1) how can the level of repurchase intentions be affected by situational
factors? Or 2) how can the level of repurchase intentions be affected by the
quality of relationship with the contacted service staff?
381
7.26 CONCLUSION
This chapter has presented a review of the stages of the research;

conclusions on the overall model findings; the contributions for marketing
theory and implications for practice and limitations. It offers suggestions for
future research. This thesis investigates on identifying the dimensions of
service quality in retailing and its impact on customer loyalty. Using a well-
structured questionnaire data were collected from 900 shoppers of shop-in-
shop. Questionnaire consisted of 27 statements (RSQS) measures the service
offerings of retail stores, 13 statements (BIB) were used to analyze customer
behavioral intentions, 7 purchase intentions and 2 customer satisfaction used.
The customers in the Chennai, Madurai and Coimbatore cities have

been focused throughout this study. Madurai and Coimbatore cities are the
most important cities next to Chennai. People in the Chennai, Madurai and
Coimbatore cities hold the better conditions in terms of demographic factors as
income, social status, and life pattern etc. Before we come to the general
conclusion in the Indian context, studies among retail service quality should be
taken in the various service industries, cities and districts. Further, the concept
like retail service quality should be connected with customer loyalty, customer
retention and brand equity get, the more insights into the marketing practices
of the retail supermarkets. Additionally, we have suggested to the future
researchers or scholars to carry the research on the factor analysis in order to
find out the applicability of RSQS across various retail formats and industries
in the Indian perspective.
This research builds on the previous findings on the relationships of

service quality with customer satisfaction and behavioral intention of
customers. It has examined these relationships under a new perspective that
382
associates the importance of service quality dimensions. Further, this study

associates the importance of service quality dimensions with the strength of
their relationships with customer satisfaction. A wide variety of industries will
be benefited by replications of this study. The conclusions from this study are
valuable on a number of accounts.
383
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APPENDIX -I
SURVEY RANDOM SAMPLE CALCULATER - SCREENSHOT

418
APPENDIX- II
RESEARCH QUESTIONNAIRE
Dear Customer,
This is a Academic Questionnaire titled “Measurement of Service Quality, Customer Satisfaction

and Behavioural Intention Among The Organized Retail Stores With Reference To Selected
Cities Of Tamil Nadu, India”. Your personal details and identifications are not revealed in this
research. You have been randomly selected to participate in this survey; please do not mention your
address in the questionnaire. I also express my hearty thanks for spending your valuable time in
answering this questionnaire.
Type of the Retail Store : □Hyper Market □Super Market □Departmental

Stores
Location of the Retail Store : □Chennai □Coimbatore □Madurai

Section A: Demographic Profile
1. Gender: □ (1) Male □ (2) Female
2. Age Group:
□ (1) Less than 20yrs □ (2) Between 21 yrs to 30 yrs □ (3) Between 31 yrs to 40 yrs
□ (4) Between 41rs to 50 yrs □ (5) Greater than 50 yrs.
3. Marital Status:
□ (1) Married □ (2) Unmarried □ (3) Separated □ (4) Divorced □ (5) Widow
4. Educational Qualification:
□ (1) SSLC/HSC □ (2) Undergraduate □ (3) Postgraduate □ (4) Diploma □ (5) Others
If (5) Others, Please Specify ___________________________.
5. Occupation:
□ (1) Business □ (2) Professional □ (3) Student □ (4) Housewife □ (5) Clerk
□ (6) Police/Army □ (7) Academicians □ (8) Retired □ (9)Unemployed □ (10) Other
If (10) Others, Please Specify ___________________________.
6. Monthly Family Income:
□(1)Less than Rs.15,000 □ (2) Rs.15,001 to Rs.30,000 □(3) Rs.30,001 to Rs.45,000
□ (4) Rs.45, 001 to Rs.60, 000 □ (5) Greater than Rs.60, 000
7. Family Size:
□ (1) Less than 3 Members □ (2) Between 4 to 6 Members □ (3) Between 7 to 9 Members
□ (4) Between 9 to 11 Members □ (5) Greater than 11 Members
8. Family Type:
□ (1) Nuclear Family □ (2) Joint Family □ (3) Single
419
Section B: Customer’s Shopping Experience

1. In General, What is your preferred mode of shopping the Retail Products?
□ (1) Online-Purchase □ (2) By Person visit the Retail Store
□ (3) By Telephonic Order □ (4) By Sending Representatives to the Retail Stores
□ (5) Others (If Others, Please Specify_________________________________________)
2. How often do you visit this Retail Store for Shopping?
□ (1) Occasionally □ (2) Once in a Day □ (3) Once in 3 days □ (4) Once in a Week
□ (5) Atleast Once in a Month
3. How much do you spend in a month for purchasing products in the XYZ Retail Store?
□ (1) Less than Rs.5000 □ (2) Between Rs.5001 to Rs.10000
□ (3) Between Rs. 10001 to Rs.15000 □ (4) Between Rs. 15001 to Rs.20000
□ (5) More than Rs. 20000
4. Which of the following influence you to purchase products in this Retail Store?
□ (1) Advertisement □ (2) Friends & Relatives □ (3) Family Members
□ (4) Colleagues □ (5) Other Sources
(If Others, Please Specify_________________________________________)
5. Please mention your preferred Mode of Payment?
□ (1) On Cash □ (2) Debit Card □ (3) Credit Card □ (4) Own Retail Card □ (5) Others
(If Others, Please Specify_________________________________________)
6. Kindly state your opinion about the following factors of the XYZ Retail Store?
Excellent------------------------------------------------------------------ worst
7 6 5 4 3 2 1
Factors (7) (6) (5) (4) (3) (2) (1)

a. Pricing of various branded Products 7 6 5 4 3 2 1
b. Availability of Various branded Products 7 6 5 4 3 2 1
c. Quality of Various branded Products 7 6 5 4 3 2 1
d. Overall Sales Promotional Activities 7 6 5 4 3 2 1
e. Overall After Sales Services 7 6 5 4 3 2 1
f. Arrangement of the Products 7 6 5 4 3 2 1
g. Waiting time for billing 7 6 5 4 3 2 1
420
7. Which of the following factors do you like most in the XYZ Retail Store?
□ (1) Pricing of the Product □ (2) Availability of Variety of Branded Products
□ (3) On-time Service Delivery □ (4) Total Environment Visually Appealing,
attractive
□ (5) Brand Image of this retail Store □ (6) Continuous Sales Promotional
Offers/Discounts
□ (7) Better Customer Service □ (8) Availability of Convenient Parking Space
□ (9) Quality of Products and Services □ (10) Others
If Others, Please Specify_______________________________________________
8. Which of the following factors do you dislike most in the XYZ Retail Store?
□ (1) Pricing of the Product □ (2) Non Availability of Branded Products
□ (3) Delivery of Products/Services □ (4) Non- attractive Environment
□ (5) Sales Promotional Offers/Discounts □ (6) Customer Service
□ (7) Contingent Parking Space □ (8) Quality of Products and Services
□ (9) Others □ (10) None of the Above
If Others, Please Specify_______________________________________________
9. Kindly state your opinion for the following attributes of this XYZ Retail Store?
Factors E. Agree S. Agree Agree Moderate Disagree S. Disagree E. Disagree
(7) (6) (5) (4) (3) (2) (1)
a. Good place for Entertainment 7 6 5 4 3 2 1
b. Family Shopping 7 6 5 4 3 2 1
c. Value for Money 7 6 5 4 3 2 1
d. Emergency &Safety Measures 7 6 5 4 3 2 1
10. What is your opinion towards the overall satisfaction of Products and Services offered by
this XYZ Retail Store?
Offerings E. Satisfied H. Satisfied Satisfied Moderate Dissatisfied H. Dissatisfied E. Dissatisfied

(7) (6) (5) (4) (3) (2) (1)
a. Product 7 6 5 4 3 2 1
b. Services 7 6 5 4 3 2 1
421
Section C: Service Quality

Based on your Recent Shopping Experience, Please give your general opinion regarding the
services following XYZ Retail Store,
This survey deals with your opinion about the XYZ Retail Store. Please show the extent to
which you think this XYZ retail store should posses the following features. What we are
interested in here is a number that best shows your expected and perceived services about
this XYZ retail store.
Note* Please tick (√ )
Extremely Agree ------------------------------------------------------------------ Extremely Disagree
7 6 5 4 3 2 1
(Before Shopping) Perceived (P)

Statements Expected (E) (After Shopping)
7 6 5 4 3 2 1 7 6 5 4 3 2 1
Physical Aspects
01. This XYZ Retail Store has a modern-looking equipments and 7 6 5 4 3 2 1 7 6 5 4 3 2 1
fixtures
02. The Physical facilities at this XYZ retail store are visually
7 6 5 4 3 2 1 7 6 5 4 3 2 1
attractive
03. Materials associated with this XYZ retail store’s service (
such as Shopping bags, Carry bags, etc.,) are visually 7 6 5 4 3 2 1 7 6 5 4 3 2 1
appealing
04. This XYZ Retail Store has clean, attractive, and convenient
7 6 5 4 3 2 1 7 6 5 4 3 2 1
physical Facilities (restrooms, fitting rooms)
05. The layout of this XYZ retail store makes it easy for
7 6 5 4 3 2 1 7 6 5 4 3 2 1
customers to find What they need
06. The Store layout in this XYZ retail store makes it easy for
7 6 5 4 3 2 1 7 6 5 4 3 2 1
customers to Move around in this store
Reliability
07. When this XYZ retail store promise to do something ( such 7 6 5 4 3 2 1 7 6 5 4 3 2 1
as repair,Alterations) by a certain time, It will to do so.
08. This XYZ Retail Store provides its services at the time it
7 6 5 4 3 2 1 7 6 5 4 3 2 1
promises to do so
09. This XYZ Retail Store performs the service right at the first
7 6 5 4 3 2 1 7 6 5 4 3 2 1
time
10. This XYZ Retail Store has merchandise available when the
7 6 5 4 3 2 1 7 6 5 4 3 2 1
customers want it
11. This XYZ Retail Store insists on error – free sales
7 6 5 4 3 2 1 7 6 5 4 3 2 1
transactions (relating to Billings, returns, etc)
Personal Interaction
12. The employee in this XYZ retail store has enough knowledge 7 6 5 4 3 2 1 7 6 5 4 3 2 1
to answer the Customers questions
13. The behavior of employees in this XYZ retail store instills 7 6 5 4 3 2 1 7 6 5 4 3 2 1
422
confidence in Customers mind

14. Customers feel safe in their transactions with this XYZ retail
7 6 5 4 3 2 1 7 6 5 4 3 2 1
store
15. Employees in this XYZ retail store give prompt service to
7 6 5 4 3 2 1 7 6 5 4 3 2 1
customers
16. Employees in this XYZ retail store tell customers exactly
7 6 5 4 3 2 1 7 6 5 4 3 2 1
when services will Be performed
17. Employees in this XYZ retail store are never too busy to 7 6 5 4 3 2 1 7 6 5 4 3 2 1
respond to Customers’ Requests
18. This XYZ Retail Store gives customers individual attention 7 6 5 4 3 2 1 7 6 5 4 3 2 1
19. Employees in this XYZ retail store are consistently courteous
7 6 5 4 3 2 1 7 6 5 4 3 2 1
with customers
20. Employees in this XYZ retail store treat customers
7 6 5 4 3 2 1 7 6 5 4 3 2 1
courteously on the Telephone
Problem Solving
21. The XYZ retail store is willing to handle returns and 7 6 5 4 3 2 1 7 6 5 4 3 2 1
exchanges
22. When a customer has a problem, this XYZ retail store shows
7 6 5 4 3 2 1 7 6 5 4 3 2 1
a sincere Interest in solving it
23. The employees of this XYZ retail store are able to handle
7 6 5 4 3 2 1 7 6 5 4 3 2 1
customer Complaints directly and immediately
Policy
7 6 5 4 3 2 1 7 6 5 4 3 2 1
24. This XYZ Retail Store offers high quality merchandise
25. This XYZ Retail Store provides plenty of convenient parking
7 6 5 4 3 2 1 7 6 5 4 3 2 1
for customers
26. This XYZ Retail Store operating hours convenient for all their
7 6 5 4 3 2 1 7 6 5 4 3 2 1
customers
27. This XYZ Retail Store accepts all major credit cards 7 6 5 4 3 2 1 7 6 5 4 3 2 1
Section D:Behavioral Intention

Please mention your behavioral intention towards the service provider. Note* Please tick(√ )
7 for Extremely Likely, 6 for Highly Likely, 5 Likely, 4 No Idea, 3 Not Likely, 2 Highly Not
Likely and
1 Extremely Not Likely.
Statements E. L<--------------E. NL
7 6 5 4 3 2 1
Loyalty
7 6 5 4 3 2 1
01. Say Positive things about this XYZ retail store to other people
02. Recommend this XYZ retail store to someone who seeks your advice 7 6 5 4 3 2 1
03. Encourage Friends and Relatives to do business with this XYZ retail store 7 6 5 4 3 2 1
04. Consider this XYZ retail store as your first choice to buy services 7 6 5 4 3 2 1
05. Do More Business with this XYZ retail store in the next few years 7 6 5 4 3 2 1
Switch to competitor 7 6 5 4 3 2 1
423
06. Do Less Business with this XYZ retail store in the next few years
07. Take some of your business to a competitor that offers better prices 7 6 5 4 3 2 1
Willing to Paymore
08. Continue to do business with this XYZ retail store even if it prices 7 6 5 4 3 2 1
increases somewhat
09. Pay a higher price than competitors charge for the benefits you currently
7 6 5 4 3 2 1
receive from this retail store
External Responses
10. Switch to a competitor if you experience a problem with this XYZ Retail 7 6 5 4 3 2 1
Store’s Service
11. Complain to other customers if you experience a problem with this XYZ
7 6 5 4 3 2 1
Retail Store’s Service
12. Complain to other external agencies, such as consumer organizations, if
you experience a problem 7 6 5 4 3 2 1
With this XYZ Retail Store’s Service
Internal Responses
13. Complain to Retail Store’s Employee, if you experience a problem with 7 6 5 4 3 2 1
XYZ Retail Store’s Service
Servqual Importance Weights:

From the below five listed features pertaining to services offered by the service provided. 100
points for five features according to how important it is to you. Make sure the points add up to
100.
Sl.No Dimensions Particulars Points
1 Physical Aspects Retail store appearance and store layout
2 Reliability Retailers keep their promises and do the right things
Personal Retail store personnel are courteous, helpful, and inspire confidence
3 in customers
Interaction
4 Problem Solving Retail store personnel are capable to handle returns and exchanges,
customers’ Problems and complaints
5 Policy Retail store’s policy on merchandise quality, parking, operation
hours, and credit cards
Total 100
Thank You
424
LIST OF PUBLICATIONS
 Dr.R.P.C.S.Rajaram, V.P.Sriram (2014), “Measuring Retail Service Quality:

A Study on Indian Departmental Stores”, Indian Journal of Business
Management and Economic Research, Vol.No.5 Issue.No.2, Jan-Feb 2014,
ISSN: 2229-6247. Internationally indexed in: EBSCO Publishing, U.S.A.,
Google Scholar.
 Dr.R.P.C.S.Rajaram, V.P.Sriram (2013), “Impact On Factors Determining
Purchase Behavioural Pattern and Their Relationship over Customer
Satisfaction among the South Indian Hypermarkets”, International Journal‟s
Research Journal of Economics and Business Studies, Singapore, Vol.No.3
Issue.No.1, November 2013, ISSN 2251 1555.Internationally indexed in:
Ulrich’s Periodicals Directory, ProQuest, U.S.A.,
 V.P.Sriram (2012), “Changing Consumer Preferences towards Organized
Retail Stores with special reference to Big Bazaar”, International Journal‟s
Research Journal of Economics and Business Studies, Singapore, Vol.No.1
Issue.No.11, September 2012, ISSN 2251 1555.Internationally indexed in:
Ulrich’s Periodicals Directory, ProQuest, U.S.A.,
 Dr.R.P.C.S.Rajaram, V.P.Sriram (2011), “Growing Customer Expectation and
Emerging Customer Relationship Management (r-CRM)”, International
Journal of Multidisciplinary Research, Vol.No.1 Issue.No.2, July 2011, ISSN
2231 6949. Internationally indexed in: Ulrich’s Periodicals Directory
425
CURICULUM VITAE
V.P.SRIRAM
No.47/128, Weaver’s Colony,
Srivilliputhur – 626 125
Tel: +91 4563 266165
Mobile: 8903969690
e-mail: v.p.sriram@klu.ac.in
Career Objective:
To become a Contributing Professional in an organization for its Success and also by applying
the best business practices through innovative solutions and constantly updating my skills and
ability.
Academic Qualifications:
Degree /
Degree / Qualification Year of Completion
Qualification
Arulmigu Kalasalingam College of Engineering,
M.B.A (HR & MKG) Krishnankoil. 2006
Anna University.
S.N.R Sons College of Arts and Science, Coimbatore.
B.Sc.Electronics 2004
Bharathiar University.
National Institute of Export and Import Management,
D.S.E.I.M 2001
Chennai.
International Certification
Year of
Certification Institution
Completion
International Certification on
SAP Business One 2005 Aldea InfoTech Private Limited, Chennai
2008
Solution Consultant, SAP AG, (Authorized for SAP B1 Training Centre)
Germany
Experience Summary:
 Working as an Assistant Professor, Department of Business Administration,
Kalasalingam University since January 2010
 Overall 8 yrs of Industry and Teaching Experience of which over 1.5 years of domain
experience in Finance & Accounts with Implementation experience in SAP Business
One Software and 4 yrs of Teaching Experience.Completed Two Successful SAP
Business one Implementation and Experienced in handling major financial processes
through SAP Business One Implementation.
426
Period
Designation Name of Employer
From To
Assistant Professor Kalasalingam University, Krishnankoil Jan 2010 Till Date
Sr.SAP Functional Consultant SAP Smiths Pvt. Ltd, Bangalore Aug 2009 Dec 2009
SAP Functional Consultant Prodigy Infomatics Pvt. Ltd, Mumbai Jan 2008 Jun 2009
Tech.Support Executive Sutherland Global Services Pvt.Ltd Aug 2007 Dec 2007
Jr.Sales Team Manager Bajaj Allianz Life Insurance Co.Ltd Jun 2006 Jun 2007
Research Journal Publication Details:

Article Published in Internationally Indexed Journals with Impact Factor:
1. Dr.R.P.C.S.Rajaram, V.P.Sriram (2014), “Measuring Retail Service Quality: A Study

on Indian Departmental Stores”, Indian Journal of Business Management and
Economic Research, Vol.No.5 Issue.No.2, Jan-Feb 2014, ISSN: 2229-6247.
Internationally indexed in: EBSCO Publishing, U.S.A., Google Scholar.
2. Dr.R.P.C.S.Rajaram, V.P.Sriram (2014),“ A SEM Approach towards the Measurement

of Service Quality, Customer Satisfaction and Behavioural Intention among the
Customers of Hypermarkets in Southern TamilNadu”, Indian Streams Research
Journal, Vol.No.4 Issue.No.1, Febraruary 2014, ISSN 2230 7850. Internationally
indexed in: EBSCO Publishing,U.S.A.,Google Scholar.,
3. V.P.Sriram (2013), “Impact On Factors Determining Purchase Behavioural Pattern

and Their Relationship over Customer Satisfaction among the South Indian
Hypermarkets”, International Journal’s Research Journal of Economics and
Business Studies,Singapore, Vol.No.3 Issue.No.1, November 2013, ISSN 2251
1555.Internationally indexed in: Ulrich’s Periodicals Directory, ProQuest,U.S.A.,
4. V.P.Sriram and K. Sankar Ganesh (2012),“ An Empirical Study of Service Quality in

Meenakshi Mission Hospital and Research Center, Madurai”, Indian Streams
Research Journal, Vol.No.2 Issue.No.11, December 2012, ISSN 2230 7850.
Internationally indexed in: EBSCO Publishing,U.S.A.,Google Scholar.,
5. Dr.R.P.C.S.Rajaram, V.P.Sriram and Mr.Shenbaga Suriyan (2012),“Building and

Testing Model in Measurement of Internal Service Quality in TANCEM – A Gap
Analysis Approach”, International Journal of Research in Commerce, IT and
Management, Vol.No.2 Issue.No.10, October 2012, ISSN 2231 5756.Internationally
indexed in: Ulrich’s Periodicals Directory, ProQuest,U.S.A., EBSCO Publishing,U.S.A.,
6. V.P.Sriram (2012), “Changing Consumer Preferences Towards Organized Retail

Stores with special reference to Big Bazaar”, International Journal’s Research
Journal of Economics and Business Studies,Singapore, Vol.No.1 Issue.No.11,
427
September 2012, ISSN 2251 1555.Internationally indexed in: Ulrich’s Periodicals

Directory, ProQuest,U.S.A.,
7. V.P.Sriram (2012), “Emerging HRM Practices in Indian Retail Industry”, Social

Sciences International Journal of Business and Management Research, Vol.No.2
Issue.No.5, September 2012, ISSN 2231 4970.Internationally indexed in: Ulrich’s
Periodicals Directory, ProQuest,U.S.A.,
8. V.P.Sriram (2012), “Emerging Supply Chain and Future of Logistics Management in

Indian Retail Industry”, International Journal of Marketing, Financial Services and
Management Research, Vol.No.1 Issue.No.5, April-June 2012, ISSN 2277
3622.Internationally indexed in: Bibliothekssystem University of Hamburg, WU-SU-AB-
CO.
9. V.P.Sriram (2012), “Customer Relationship Management Practices of Popular

Vehicles and Services Limited in Chennai City”, Social Sciences International
Journal of Business and Management Research, Vol.No.2 Issue.No.2, March 2012,
ISSN 2231 4970.Internationally indexed in: Ulrich’s Periodicals Directory,
ProQuest,U.S.A.,
10. Dr.R.P.C.S.Rajaram, V.P.Sriram and K. Dhanalakshmi (2012), “Problems faced by the

customer on Rail Freight Traffic in Salem Division”, Zenith – International Journal of
Multidisciplinary Research, Vol.No.2 Issue.No.3, March 2012, ISSN 2231 5780.
Internationally indexed in: Ulrich’s Periodicals Directory, ProQuest,U.S.A.,
11. Dr.R.P.C.S.Rajaram, V.P.Sriram (2011), “Growing Customer Expectation and

Emerging Customer Relationship Management (r-CRM)”, International Journal of
Multidisciplinary Research, Vol.No.1 Issue.No.2, July 2011, ISSN 2231 6949.
Internationally indexed in: Ulrich’s Periodicals Directory
Article Published at National Journals:
1. V.P.Sriram and K. Dhanalakshmi (2011), “A Descriptive Research on Quality of Work

life among the employees of Ramco Cements”, College Sadhana – a Journal for
Bloomers of Research, Vol.No.4 Issue.No.1, August 2011, ISSN. No: 0974 6838
2. Dr.R.P.C.S.Rajaram, K. Sankar Ganesh and V.P.Sriram (2011), “Measurement of

Retail Banking Service Quality with special reference to State Bank of India -
Srivilliputhur”, Research Line – Indian Journal of Management Research, June
2011, Vol. 4, Issue.No.1C, pp.189-199, ISSN. No: 0975 8941.
3. K.Sankar Ganesh and V.P.Sriram (2010), “Measurement of Retail Banking Service

Quality with special reference to State Bank of India – Virudhunagar”, Research
Line – Indian Journal of Management Research, December 2010, Vol. 3, Issue.No.1,
pp.63-71, ISSN.No: 0975 8941
428
4. P.Kameshwara Rao, K.Sankar Ganesh and V.P.Sriram (2010), “The Impact of HRM
Practices on Performance of Employees – A Case study of Samsung Electronics”,
College Sadhana – a Journal for Bloomers of Research, Vol.No.3 Issue.No.1, August
2010, ISSN.No: 0974 6838
Paper Presentations and Publications at International /National Conferences:
1. V.P.Sriram and P.Vishnu Kumar (2012), “Women Entrepreneurs: A Promising face in

Indian Businesses”, National Conference on Changing Trends in Management:
Challenges and Opportunities, Alagappa University, 09th March 2012.
2. V.P.Sriram (2010), “Emerging Trends in Retail Marketing”, National Conference on

Changing Trends in Management: Challenges and Opportunities, Dhanalakshmi
Srinivasan College, 09th October 2010.
3. P.Kameshwara Rao, V.P.Sriram and W.E.Kingsly (2010), “Competitive Advantages

Through HRM Practices in Retailing”, International Conference on Management
Practices for Sustainable Growth, Annamalai University, 28th – 30th July 2010.
4. W.E.Kingsly, V.P.Sriram and K.Saravanan (2010), “Emerging Investors provoking

Insurance Industry”, International Conference on Globalization and Consumer
Protection, Kalasalingam University, Vol.No.1 Issue.No.2, 27th -28th January 2010.
Personal Details:
Gender : Male
Father Name : P V Perunal
Lamguages Known : Tamil, English

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1

MEASUREMENT OF SERVICE QUALITY,

in partial fulfillment for the award of the degree

DEPARTMENT OF BUSINESS ADMINISTRATION

Place: Anand Nagar SUPERVISOR

Certified that the thesis titled “Measurement Of Service Quality, Customer

Signature of the Supervisor

The findings of the study revealed that the customer‟s perception

Key Words: Retail Service Quality, Behavioral Intention, Customer

My sincere thanks to our Chairman Kalvivallal

Dr. S. RAJARAM, my mentor and supervisor have extended his

I extend my thanks to Dr.M.JEYAKUMARAN, Professor, Department

I dedicate all my work to my parents, wife and daughter. I express my

I express my pleasure in thanking the students, friends, and my

Chapter I DESIGN OF THE STUDY Page. No

2.4 Various Formats In Indian Organized Retail Sector 30

3.6 Frame of Reference 149

5.10.3 Path Analysis 210

Effects of Demographic Variables on Customer

Chapter VII DISCUSSION AND CONCLUSION

Level of Service Quality, Customer Satisfaction

LIST OF PUBLICATIONS 424

CURRICULUM VITAE 425

Table No. Particulars Page No.

5.20 Estimation of Cronbach‟s coefficient alpha and CFA 194

6.4.8 Effects of family income on service quality dimensions 236

6.6.7 Effects of occupation on customer loyalty dimensions 268

6.11.6 Effects of Qualification difference on customer 296

6.15.2 Effects of most disliked factors on factors affecting retail 318

Figure. Title Page No.

5.2 Measurement model for perceived service quality dimensions 192

5.3 Measurement model for expected service quality dimensions 196

5.4 Measurement model for customer loyalty dimensions 200

DESIGN OF THE STUDY

1.2 BACKGROUND OF THE STUDY

This research is mainly designed to investigate the relationship between

Service quality is “A Global Judgment, or Attitude, relating to the

than a non-retail service experience in terms of customers, negotiating with

performance. So service-oriented employees contribute a lot to the overall

measurement tools are also should be adjusted in evaluating the perception of

1.3 PROBLEM STATEMENT

Service quality is a critical component of customer perceptions about

Additionally, a number of correlated factors, including the scope of

that an emphasis on profitability was “conspicuously absent” as a component

is comprised of ambient conditions, design, and social factors of the service

 Which are the key factors influencing the customer‟s perception of

The relationship between service quality dimensions, demographic

1.4 RESEARCH QUESTIONS

 How a structural model is designed to link preconception, service quality,

The impacts of preconception on service quality and customers‟

1.5 OBJECTIVES OF THE STUDY

In the business world, it is possible to understand an organization‟s success

 To analyze the demographic profile of the customer among the

 To determine the relative importance of Service Quality Dimensions

1.6 JUSTIFICATION OF THE RESEARCH STUDY

This study is justified by considering its significance, the extent to

intention to repeat purchase behavior (Hennig – Thurau & Klee, 1997). It

This study is feasible because it can be implemented in a reasonable amount of

1.9.1 SAMPLING TECHNIQUES

Sampling techniques are methods used to select a sample from the

1.9.2 DETERMINATION OF SAMPLE SIZE

In this research study, a structured questionnaire was focused on

Section D consists of 27 items that used to measuring service quality and