A Study on Service Quality in Retail Outlets

of Bhubaneswar
Arvind Tripathy*, B. B. Mishra**
*Assistant Professor, School of Management (KIIT University), Bhubaneswar, Odisha, India.
**Professor , Department of Business Administration, Utkal University, Bhubaneswar, Odisha, India.
Abstract The purpose of study is to assess the service quality by using SERVQUAL instrument in Bhubaneswar retail setting. A survey
was conducted at three selected major retail outlets in Bhubaneswar. Questions pertaining to all the dimensions of service quality identified
by Parasuraman, Zeithaml & Bitner were asked to the respondents. The study gave insights into the critical gaps that exist in the services
provided. Comparative study of the gap score of the retail outlets under study helped us to focus on the dimensions that required immediate
attention as they had strong impact on the business of the organized retail stores. The study clearly indicates the absence of basic service
delivery systems on part of the retail outlets. There is provision on all fronts by the retail to provide good services but gaps in meeting the
consumer expectations tell a different story. Few suggestions are recommended based on the study carried out to fine tune the processes which
will benefit the organized retailers to bridge the gaps in services. This study provides useful insights and guidance for managers to measure
and improve service quality.
Keywords

SERVQUAL, Dimensions of Service Quality- Tangibles, Responsiveness, Reliability, Assurance, Empathy, Retail FormatsHypermarkets and Malls.

Introduction
An organized retail store cannot achieve success without
delivering superior service quality. Customer perceived
service quality has been given increased attention in
recent years as it has contributed significantly to business
competitiveness. SERVQUAL, a model developed by
Parasuraman et al. (1988), is the most prominent and widely
used model for measuring service quality. In the SERVQUAL
scale, Parasuraman et al. (1988) identified five determinants
of tangibles, reliability, responsiveness, assurance
and empathy as part of the 22-item SERVQUAL scale
for measuring service quality. SERVQUAL was used in the
study because the objective was to map the perceptions and
expectations of consumers from Bhubaneswar was carried
out for assessing the quality of services being delivered in
the selected retail centers.

Retailing scenario in India

It is well known that the organized retail revolution started in
India in southern India. Today the phenomenon has caught
on and has assumed a pan-India magnitude. Especially the
entry of big players like Big Bazaar into tier C cities of India
like Bhubaneswar has given them the first mover advantage.
The phenomenal rise of ultra modern retail formats in such
cities has proliferated rapidly. Hence, a consumer based
study aimed to understand the factors which are responsible

to influence the store patronage and sought consumers

opinion on how are the service quality standards maintained
in these retail formats. Further, making tall claims of
consumer convenience in shopping for products getting
quality products or services at affordable prices.
The retail sector in India is the fastest growing sector in
the country. According to BMI India Retail Report for the
third-quarter of 2010, released in May 2010 forecasts that the
total retail sales will grow from US$ 353.0 billion in 2010
to US$ 543.2 billion by 2014. Strong underlying economic
growth, population expansion, the increasing wealth of
individuals and the rapid construction of organised retail
infrastructure are key factors behind the forecast growth.
As well as an expanding middle and upper class consumer
base, there will also be opportunities in Indias second and
third-tier cities. The greater availability of personal credit
and a growing vehicle population to improve mobility also
contribute to a trend towards annual retail sales growth of
11.4 per cent.
The growth in the overall retail market is driven largely
by the explosion in the organised retail market. Domestic
retailers continue to invest heavily in increasing their store
networks and improving in-store offerings, and the impact
they have on growth will be boosted by the arrival of
expansion-orientated multinationals.
Mass Grocery Retail (MGR) sales in India are forecast
to undergo enormous growth over the forecast period. BMI

A Study on Service Quality in Retail Outlets of Bhubaneswar 19

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 Indias dramatic, rapid shift from small
independent retailers to large, modern outlets.
According to a McKinsey report published in September
2008, called The Great Indian Bazaar: Organised Retail
Comes of Age in India, organised 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$ 450billion by 2015.

Objectives of the study

Main objectives of this paper are:
To study the customers perceptions regarding standards
of quality maintained by the organized outlets.
To identify the gaps between expectations and
perceptions of customers regarding the quality of
services rendered at retail.
To compare the service gaps in selected outlets in
Bhubaneswar.

sions: tangibles, reliability, responsiveness, communication,

credibility, assurance, competence, courtesy, understanding/
knowing the customer, and access. A more detailed description
of those dimensions can be found in Zeithaml et al. (1990).
Afterwards, these dimensions were reduced to five, namely:
tangibles, reliability, responsiveness, assurance, empathy.
Using those 10 or 5 dimensions as the evaluation criteria,
the specification of service quality becomes the gap between
customers expectations and their perceptions (Parasuraman
et al, 1985). This performance-expectation model was also
adopted by other authors (e.g. Brown and Swartz, 1989).

Service Quality Measurement

Literature Review

It is difficult to measure service quality as compared to the

quality of a tangible good. The difficulty to measure is due
to fewer tangible cues available when consumers purchase
services (Parasuraman et al., 1985), fewer search properties,
but higher in experience and credence properties (Zeithaml,
1981 in Parasuraman 1985), as compared to goods. It also
requires higher consumer involvement in the consumption
process (Grnroos, 1984) as the consumption and production
of services cannot be separated unlike products. Services are
thus inseparable.

The emergence of service quality and its assessment has

attracted the attention of numerous researchers in the past
two decades or so. There are two main lines of thoughts
on measuring service quality (Kang and James, 2004): an
American and a European perspective. Brady and Cronin
(2001) suggest that the researchers generally adopt one of the
two conceptualizations in their work. The focus on functional
quality attributes is referred to as the American perspective
of service quality while the European perspective suggests
that service quality considers two more components.

Researchers implement the service quality construct

either as a gap between expectation of service and perceived
performance of service, or just perceived performance alone
(Hurley and Estalami, 1998). On the other hand, service
quality dimensions are seen as the criteria to assess service
quality (Parasuraman, Zeithaml, and Berry, 1985). Feinburg,
and de Ruyter (1995) supported this idea as they postulate
that the dimensions are instruments for measuring perceived
service quality. They also posit that consumer-perceived
service quality is usually seen as a multi-dimensional
construct.

The European perspective considers additional aspects

other than the process of service delivery. Grnroos (1984),
for instance, noted that the quality of a service as perceived
by customers consists of three dimensions: functional (the
process of service delivery to customers), technical (the
outcomes generated by the service to the customers), and
image (how the customers view the company). Considering
these dimensions, the quality of the service is dependent
upon two variables: the expected service and the perceived
service. More details of the previous argument are provided
by Grnroos (1984).
SERVQUAL instrument consists of a 22-item instrument
for assessing service quality based on customers perceptions,
which is, by his turn, the difference between the customers
perceived quality and his/her expectation. The perceived
quality is assessed based on service quality dimensions that
correspond to the criteria used by consumers when assessing
service quality. There are 10 potentially overlapping dimen-

The earliest research on service quality dimensions was

done by Grnroos (1984). He found that the perceived quality
of a service is affected by the experience that the consumer
went through for a service. Therefore, he encapsulated the
perceived quality of a given service as the outcome of an
evaluation process; a comparison between the consumer
expectations of the service with his perceptions of the service
he has received. He also pointed that expectation is influenced
by traditions, ideology, word-of-mouth communication, and
previous experience with the service and the consumers
perception of the service itself determines his perceived
service.
However, he did not discuss the relationship between
perception and expectation and how it influences service
quality. Grnroos (1984) found that service quality
comprises of three global dimensions. The first dimension is
the technical quality. This dimension refers to the outcome

20 International Journal of Marketing & Business CommunicationVolume 1 Issue 1 2012

or what is delivered or what the customer gets from the

service. For a retail store, technical quality may include the
range of products offered and the availability of parking
space. The next dimension is the functional quality which
refers to the manner in which the service is delivered or
how it is delivered. Customers of a retail store will measure
whether the sales people are friendly or whether products are
easily returnable. Finally, the last dimension is the corporate
image. The stores image is built by mainly both technical
and functional quality and to some extent other factors like
the traditional marketing activities.
The most popular service quality model in the 1990s
(Robinson, 1999) is the model by Parasuraman et al., (1985).
Their model supported Grnroos findings as the models are
based on these three underlying themes:
1. Service quality is more difficult for the consumer to
evaluate than goods quality;
2. Service quality perceptions result from a comparison
of consumer expectations with actual service
performance;
3. Quality expectations are not made solely on the
outcome of the service; they also involve evaluations
of the process of the service (Parasuraman et al.,
1985, p. 42)
Later in another research (Parasuraman et al., 1988),
they refined the dimensions as shown in Table 1 into only
five dimensions - tangibles, reliability, responsiveness,
assurance, and empathy.

Bhubaneswar situated at different prominent locations of the

city of Bhubaneswar. SERVQUAL questionnaire was used
to study the service quality. The responses to 22 statements
of expectations and perceptions in SERVQUAL were used
for analyzing the Service Gaps which existed between
services expected by customers and services delivered to the
customers.
The three stores are among the most visible and well
established stores in the city of Bhubaneswar. Most of them
have opened in the last 4-5 years. Each of these stores has
distinct location advantage and trading areas do not overlap.
Stores are situated near main roads and highways. Thus
there is no problem of attracting customer traffic, which has
resulted in these stores achieving significant footfalls every
day.
Table 5.1a Profile of Respondents
No.

Store Number

Respondents

Percentage %

All Stores

394

100

S1

152

39

S2

114

29

S3

128

32

Table 5.1b Profile of Respondents

Sl.
Dimension Group
No.
1

Age

Table 1 SERVQUALs Five Dimensions

Dimensions

Definitions

Tangibles

The appearance of physical facilities, equipment,

appearance of personnel, and communication
materials.

Reliability

The ability to perform the promised service dependably and accurately.

Responsiveness

The willingness to help customers and provide

prompt service.

Assurance

The knowledge and courtesy of employees and

their ability to inspire trust and confidence.

Empathy

The caring, individualized attention the firm provides to its customers

Source: Parasuraman, Zeithaml & Berry, 1988, p. 23. and Parasuraman, Berry,
and Zeithaml, 1991, p. 41.

Methodology
The sample was drawn from a population of active retail
shoppers. Nearly 400 customers were approached during
one week so as to get better representation of the shopping
population visiting three organized retail outlets in

Gender

Education

Category

Frequency

Percentage %

Below 20
yrs.

34

20-30yrs.

225

57

30-40 yrs. 3

86

22

40-60 yrs. 4

49

12

Male

245

62

Female

149

38

Up-to
HSC

17

Graduate

168

43

Post
Graduate

110

28

Professional
Programs

79

20

Others

20

In this study, gender-wise distribution was slightly in

favor of 62% male respondents. But female respondents
participation was appreciable especially when females
generally avoid being a part of survey. The age-wise mix
indicates a fairly young group participation spreading
from 20 years to 40 years which formed the bulk of the
respondents at 79%. This is significant as most of products
or merchandize available in the organized retail outlets are

A Study on Service Quality in Retail Outlets of Bhubaneswar 21

planned in keeping with the target groups which are mostly

drawn from these age groups. Most of the respondents
were educated which further reinforces this study and
help in meeting the objectives stated. The spread in terms
of education background shows an appreciable number of
graduates, post graduates and graduates from professional
programs in a decreasing order as evident from the above
table 5.1b.

Data Analysis and interpretation

Reliability Analysis
In order to assess the five service quality dimensions, all
scores pertaining to expectations and perceptions of the
customer were analyzed for reliability. All scores were
analyzed together for all stores undertaken for the study as
well as separately for all the three individual stores. The
Cronbach alpha scores for all the dimensions are shown
below in table 6.1.
Table 6.1 Reliability Analysis of Factors for All Stores
Expectations

Perceptions

Dimensions

Cronbach
Alpha

Dimensions

Cronbach
Alpha

Tangibles

0.727

Tangibles

0.838

Reliability

0.801

Reliability

0.782

Responsiveness

0.775

Responsiveness

0.717

Assurance

0.820

Assurance

0.723

Empathy

0.828

Empathy

0.711

All

0.7902

All

0.7542

Reliability Analysis of factors for Store 1

Expectations

Perceptions

Cronbach
Alpha

Dimensions

Cronbach
Alpha

Tangibles

0.724

Tangibles

0.702

Reliability

0.841

Reliability

0.765

Responsiveness

0.803

Responsiveness

0.740

Assurance

0.850

Assurance

0.721

Empathy

0.846

Empathy

0.706

All

0.8128

All

0.7268

Dimensions

Reliability Analysis of factors for Store 3

Expectations
Cronbach
Dimensions
Alpha
Tangibles
0.752
Reliability
0.880
Responsiveness 0.895
Assurance
0.787
Empathy
0.787
All

Perceptions
Cronbach
Dimensions
Alpha
Tangibles
0.897
Reliability
0.724
Responsiveness 0.781
Assurance
0.871
Empathy
0.887
All

It is observed that reliability analysis (Table 6.1) for

expectations and perceptions scores for all the dimensions
for all stores as well as the individual stores are found to
be above the lowest limit 0.7 (Nunally-1978). Hence, these
values are reliable and can be used for further gap analysis.

Interpretations from gaps analysis

The gap scores from the five dimensions were calculated and
it was found to be significant. The gaps across all the stores
put together as well as individually for all stores. As it is
evident from the tables 6.3 to 6.5, all stores show a clear gap
between the customer perceptions and the service delivery
expected by them from the organized retail stores.
Among all the stores, store 1 was found to have the least
gaps than other two stores taken for the study. However, the
gaps for tangibles and empathy aspects of service quality
were found to be higher. The t-values of the P-E are quite
suggestive of the significance of these dimensions over
others. Store 3 values in table 6.5 reveals a wider gap in the
reliability dimension and then other dimensions of tangibles
and empathy as mentioned earlier account for major gaps.
The same is also clearly depicted in the graph 6.1
where the line diagrams of all the stores are shown for the
gaps scores for all the five dimensions of service quality as
identified using SERVQUAL questionnaire.
Figure 6.1 Mapping the gaps in customer expectations and
perceptions on the basis of the five dimensions
across the stores.

Reliability Analysis of factors for Store 2

Expectations

Perceptions

Dimensions

Cronbach
Alpha

Dimensions

Cronbach
Alpha

Tangibles

0.707

Tangibles

0.704

Reliability

0.836

Reliability

0.769

Responsiveness

0.801

Responsiveness

0.716

Assurance

0.837

Assurance

0.866

Empathy

0.847

Empathy

0.772

All

All

22 International Journal of Marketing & Business CommunicationVolume 1 Issue 1 2012

Table 6.2 Comparison of Perception and Expectation Gap for All Stores
Perception

Expectation

Factor

Mean (X)

Std. Dev (s)

Mean (X)

Std. Dev (s)

Gap (P-E)

T Value

Significance

Tangibles

4.66

1.14

5.72

0.98

1.07

17.126

0.000

Reliability

4.48

1.04

5.52

1.15

1.03

15.963

0.000

Responsiveness

4.51

1.06

5.40

1.23

0.89

12.287

0.000

Assurance

4.58

1.22

5.46

1.21

0.88

12.603

0.000

Empathy

4.46

1.13

5.49

1.12

1.04

15.851

0.000

Table 6.3 Comparison of Perception and Expectation Gap for Store 1.

Perception

Expectation

Factor

Mean (X)

Std. Dev (s)

Mean (X)

Std. Dev (s)

Gap (P-E)

T Value

Significance

Tangibles

4.73

1.04

5.61

1.03

0.88

9.403

0.000

Reliability

4.56

1.04

5.42

1.21

0.86

8.319

0.000

Responsiveness

4.54

1.08

5.42

1.23

0.88

8.151

0.000

Assurance

4.56

1.11

5.38

1.23

0.82

7.882

0.000

Empathy

4.53

0.99

5.44

1.17

0.92

9.055

0.000

Table 6.4 Comparison of Perception and Expectation Gap for Store 2.

Perception

Expectation

Factor

Mean (X)

Std. Dev (s)

Mean (X)

Std. Dev (s)

Gap (P-E)

T Value

Significance

Tangibles

4.81

0.95

6.01

0.77

1.19

12.301

0.000

Reliability

4.63

0.99

5.46

1.15

0.83

7.565

0.000

Responsiveness

4.74

1.42

5.49

1.16

0.75

5.66

0.000

Assurance

4.71

1.22

5.46

1.23

0.76

5.585

0.000

Empathy

4.51

1.06

5.54

1.10

1.03

9.399

0.000

Table 6.5 Comparison of Perception and Expectation Gap for Store 3.

Perception

Expectation

Std. Dev (s)

Mean (X)

Std. Dev (s)

Gap (P-E)

T Value

Significance

4.43

1.36

5.67

1.06

1.24

9.389

0.000

Reliability

4.27

1.05

5.68

1.09

1.41

12.205

0.000

Responsiveness

4.26

1.16

5.29

1.29

1.03

7.382

0.000

Factor

Mean (X)

Tangibles

Assurance

4.49

1.34

5.56

1.18

1.06

8.329

0.000

Empathy

4.32

1.33

5.49

1.09

1.17

9.212

0.000

The line graph of store1 shows a very consistent pattern

and gaps scores have been maintained under -1. The other
stores 2 & 3 bar graphs indicate major inconsistency in the
gaps scores across all the five dimensions. One can safely
conclude that gaps occurring in store 3 need to be plugged
on a critical basis compared to other stores.

Hypothesis
(Null hypothesis) H0: There is no gap between customer
expectations and perceptions on services delivered in retail
outlets under study.

(Alternate hypothesis) Ha: There is a perceptible gap

between consumer expectations and perceptions with respect
to services delivered in retail outlets under study.
The negative gap scores signify that the perceptions
of respondents regarding the services delivered is less than
expectations. The alternate hypothesis Ha is accepted that the
gap between perceptions and expectations of the consumers
regarding the services is significant and requires remedial
action. The null hypothesis H0 that the gap between customer
expectations and perceptions (P-E) does not exist and is thus
rejected.

A Study on Service Quality in Retail Outlets of Bhubaneswar 23

The negative values of gap are indicative of the fact

dimensions like tangibles and empathy require major
attention. Factors like reliability and responsiveness also
feature on the priority list. It is very clear from the table that
respondents felt such retail outlets have to focus more the
service standards of staff members and the infrastructure
should be in sync with what has been communicated to
them by the these retailers mega promotional campaigns
in mass media as well as those within the stores (in-store
promotions).

brand pull of the retail outlet. The three outlets taken for the
study are very strong on all these parameters. Major service
gaps were noticed. These gaps predominantly related to the
behavioral aspects of the staff members. The only solution
to this is to recruit staff members from the local area as they
can easily handle the customer to their desired satisfaction
levels. Secondly give training to them on new avenues to
improve response times and giving customized solutions to
the customers. Tangible aspects though important are given
a lower priority than other dimensions of service quality.

Recommendation

References

One common aspect which required attention from the

retailers perspective was the empathy dimension. This has
direct connection with person who are directly involved in
delivering services to the customers. Certain days of the year
like the Republic Day, Independence Day, Festivals both
national and local are heavily promoted for grand sale. These
are the days when these dimensions like empathy, reliability,
responsiveness are put to maximum test. Usually the service
gaps widen, this can be inferred easily as we tried to collect
data during republic day it was just not possible due to heavy
crowd and none of the respondents were ready to answer our
questionnaire.

Bign, E., Moliner, M.A. and Snchez, J. Perceived quality

and satisfaction in multiservice organizations: the case of
Spanish public services. Journal of Services Marketing,
Vol. 17, No. 4, pp. 420-442, 2003.
Bolton, R. D. and Drew, J.H., A multistage model of customers assessment of service quality and value. Journal
of Consumer Research, Vol. 17, No. 4, pp. 375-84, 1991.
Brown, S.W. and Swartz, T.A., A gap analysis of professional service quality. Journal of Marketing, Vol. 53, No.
2, p. 92-98, 1989.
Brady, M.K. and Croning, J.J. Some new thoughts on conceptualizing perceived service quality: a hierarquical approach. Journal of Marketing, Vol. 65, No. 1, pp. 34-49,
2001.
Brown, T.J., Churchill, G.A. and Peter, J.P. Research note:
improving the measurement of service quality. Journal
of Retailing, Vol. 69, No. 1, pp. 126-139, 1993.
Baker, J. (1986) in Koernig, S. K. (2003), E-Scapes: The
electronic physical environment and service tangibility.
Psychology & Marketing, 20 (2), February, 151-167.
Berry, L. L. (1986). Retail businesses are services businesses. Journal of Retailing, 62 (1), Spring, 3-6.
Bitner, M. J. (1992), Servicescapes: The impact of physical
surroundings on customers and employees. Journal of
Marketing, 56, April), 57-71.
Brady, M. K., and Cronin Jr., J.J. (2001a). Customer orientation: effects on customer service perceptions and outcome behaviours. Journal of Service Research, 3 (3),
February, 241-251.
Chebat, J-C, and Michon, R. (2003) Impact of ambient
odors on mall shoppers emotions, cognition, and spending: a test of competitive causal theories. Journal of
Business Research, 56, pp. 529-539.
Clarke, I. (2000). Retail power, competition, and local
consumer choice in the UK grocery sector. European
Journal of Marketing, 34 (8), 975-1002.
Dabholkar, P. A., Thorpe, D. I., and Rentz, J.O. (1996).
A measure of service quality for retail stores: scale de-

Recommendation on such instances is to conduct

periodic drills with the internal employees in real time
shopping when customers walk in and services are rendered.
Through such real time situations only the staff members
can improve their co-ordination and ensure speedy service
delivery. In case of any gap that creeps in, the employees
must be empowered to take decisions on-the-spot to address
the customer complaint thus ensuring service recovery. Soft
skill training and exercises like common etiquettes and yoga
or meditation during work also can help them to focus.

Limitations of the study

1. As the study is geographically restricted to
Bhubaneswar, the findings cannot be generalized to
other markets.
2. The factor analysis used in this case is an exploratory
one.
3. The respondents bias towards particular stores due to
patronage influences or store location cannot be ruled
out.
4. Sample size of 394 is good but may not be sufficient to
infer for a larger market like Bhubaneswar.

Conclusion
Every retail outlet has significant advantages with respect to
other outlets in terms of location, potential of the trading area,

24 International Journal of Marketing & Business CommunicationVolume 1 Issue 1 2012

velopment and validation. Journal of the Academy of

Marketing Science, 24 (1), 3-16.
Ghobadian, A., Speller, S. & Jones, M. (1994). Service
quality: concepts and models. International Journal of
Quality & Reliability Management, 11 (9), 43-66.
Grnroos, C. (1984). A service quality model and its marketing implications. Journal of the Academy of Marketing
Science, 24 (1), Winter, 36 44.
Harris, K., Baron, S. & Ratcliffe, J. (1995). Customers
oral participants in a service setting. Journal of
ServicesMarketing, 9 (4), 64-76.
Hoffman, K.D. & Bateson, J.E. (2001). Essentials of
Service Marketing: Concepts, Strategies, and Cases
(p.324). (2nd. Ed.). Australia: South Western Thompson
Learning.
Hurley, R. F. & Estelami, H. (1998). Alternative indexes
for monitoring customer perceptions of service quality: a
comparative evaluation in a retail context. Journal of the

Academy of Marketing Science, 26(3), 209 221.

Imrie, B. C., Cadogan, J. W. & McNaughton, R. (2002). The
service quality construct on a global stage. Managing
Service Quality, 12 (1), 10-18.
Koernig, S. K. (2003). E-Scapes: The electronic physical environment and service tangibility. Psychology
&Marketing, 20 (2), February, 151-167.
Mehta, S. C., Lalwani, A.K. & Soon Li Han (2000). Service
quality in retailing: relative efficiency of alternative measurement scales for different product-service environments. International Journal of Retail & Distribution
Management, 28 (2), 62-72.
Parasuraman, A., Zeithaml, V. A., & Berry, L.L. (1988).
SERVQUAL: a multiple-item scale for measuring
consumer perceptions of service quality. Journal of
Retailing, 64 (1), Spring, 12-40.
Parasuraman, A., Zeithaml, V. A., and Berry, L.L. (1985).
A conceptual model of service quality and its implications for future research. Journal of Marketing, 49, Fall,
41-50.