“A study on the relationship between service quality and

customer satisfaction of public and private sector banks in

Cochin.”
DISSERTATION WORK

Submitted to
RAJAGIRI BUSINESS SCHOOL
In partial fulfillment of the requirement for the award of

POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)

(2009-11)

BY
JOHN J.THAYIL
Reg. No: P09119

Rajagiri Business School

Rajagiri Center for Business Studies
Rajagiri Valley P.O
Cochin 862039

1
 DECLARATION

I hereby declare that the report titled “A study on factors influencing risk tolerance

of investors” is a bonafide record of the study done by me, as a part of my PGDM

program at Rajagiri Business School.

This study had been undertaken in partial fulfillment of the requirement of the

award of Post Graduate Diploma in Management (PGDM) by Rajagiri Business

School.

I also declare that this report has not been previously formed for the award of any

degree, diploma or other similar title of recognition of any other university/

institutions.

Date: Signature:

Place: Cochin John J.Thayil

2
 ACKNOWLEDGEMENT

The joy of Exploring! That is why i am drawn to research work

completion of this project. First of all I am grateful to the GOD and my

PARENTS who gave me courage and moral support during hard times

in the project development stages. Special thanks to Prof. Minimol (my

faculty guide), and other faculty members of Rajagiri Business School.

All these people motivated and directed me with their knowledge .

TABLE OF CONTENTS

Sl. No: Contents Page No:

Executive Summary 6
1 Introduction 8

3
 2 Review of Literature 12
3 Research Methodology 18
4 Data Analysis 22
5 Findings and Conclusions 36
7 Bibliography 38
8 Annexure 40

LIST OF TABLES

Tb. No: Contents Page No:

1 Regression analysis between customer satisfaction and tangibility 23

2 Between customer satisfaction and reliability 24

3 Between customer satisfaction and responsiveness 25

4 Between customer satisfaction and assurance 26

5 Between customer satisfaction and empathy 27

4
6 Between customer satisfaction and tangibility 28

7 Between customer satisfaction and reliability 29

8 Between customer satisfaction and responsiveness 30

9 Between customer satisfaction and assurance 31

10 Between customer satisfaction and empathy 32

11 Multiple Regression analysis between customer satisfaction and 33

the service quality of private sector banks

12 Multiple Regression analysis between customer satisfaction and 34

the service quality of public sector banks

13 Independent T Test 35

5
 The study examines the link between service quality dimensions and customer
satisfaction of public and private sector banks in Cochin. This study contributes to the
understanding of the relationship between different service quality dimensions with
respect to customer satisfaction. The study reported here was designed to aid in the
understanding of these relationships by assessing the link between the service quality
dimensions and knowledge sharing. The data was collected through a survey among the
customers of four public sector banks and four private sector banks; and analyzed
through regression analysis and the comparison among public and private sector banks
was done by sample T test. While all the five independent variables of service quality
were found to be significant for both private and public sector banks, when they were
analyzed using linear regression, but according to multiple regression only reliability,

6
assurance and empathy had significance. According to the Sample T Test there was no
particular significant difference in the satisfaction among the customers of both public
and private sector banks.

7
 In the early 1990s, the then Narsimha Rao government embarked on a policy
of liberalization, licensing a small number of private banks. These came to be known
as New Generation tech-savvy banks, and included Global Trust Bank (the first of such
new generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move,
along with the rapid growth in the economy of India, revitalized the banking sector in
India, which has seen rapid growth with strong contribution from all the three sectors of
banks, namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation
in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be

8
given voting rights which could exceed the present cap of 10%, at present it has gone up
to 74% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this
time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of
functioning. The new wave ushered in a modern outlook and tech-savvy methods of
working for traditional banks. All this led to the retail boom in India. People not just
demanded more from their banks but also received more.

Currently, banking in India is generally fairly mature in terms of supply, product

range and reach-even though reach in rural India still remains a challenge for the private
sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks
are considered to have clean, strong and transparent balance sheets relative to other banks
in comparable economies in its region. The Reserve Bank of India is an autonomous
body, with minimal pressure from the government. The stated policy of the Bank on the
Indian Rupee is to manage volatility but without any fixed exchange rate-and this has
mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-
especially in its services sector-the demand for banking services, especially retail
banking, mortgages and investment services are expected to be strong. One may also
expect M&A, takeovers, and asset sales.

In recent years critics have charged that the non-government owned banks
are too aggressive in their loan recovery efforts in connection with housing, vehicle and
personal loans. There are press reports that the banks' loan recovery efforts have driven
defaulting borrowers to suicide. This has paved way for many studies in the overall
quality and the customer satisfaction gained by the customers from the changes that has
taken place in the functioning of banks. Abundant research has been carried out on
service quality and customer satisfaction. It is increasingly important for managers to
understand this relationship clearly and thus efficiently exploit two distinct constructs
into their strategies to acquire a competitive edge in today’s ever challenging market

9
environment. The difference between the two constructs has been described as: ‘Service
quality is a form of attitude and long-run overall evaluation, whereas satisfaction is a
transaction-specific measure.’ (Bolton & Drew, 1991; Parasuraman, 1990).

According to Cronin & Taylor (1992) and Lassar et al. (2000), service quality is
an ‘antecedent of satisfaction but not equivalent’. Although the relationship between two
has been tested, the complexity of the relationship still remains in the forefront of
marketing and quality management contexts. Unlike the quality of goods, which may be
tangible and measured objectively by using indicators such as performance, features,
reliability etc, service quality, however, is not tangible and is thus defined in terms of
‘attitude’, ‘interaction’, and ‘perception’. Thus, service quality is judged by what a
customer perceives rather than what a provider offers.

A superior service quality can be a very beneficial strategy used for long-term
business success (Cronin & Taylor, 1992; Brown & Swartz, 1989; Rudie & Wansley,
1985). The Service Quality Instrument (SERVQUAL), developed by Parasuraman et al.
(1990) is based upon empirical findings that define service quality as composed of five
dimensions, which include ‘tangibles’, ‘responsiveness’, ‘assurance’, ‘reliability’ and
‘empathy’. Its purpose was to measure the discrepancy between customers’ expectation
and perception in service quality so that a firm can utilize it. Despite some criticisms of
Carman (1990), Oliva et al. (1992), Rust et al. (1994), the validity of SERVQUAL was
carried out and applied to several industries (Jiang, 2000; Pill, 1997). Multiple items are
often used to measure customer satisfaction (Oliver & Swan, 1989; Patterson & Spreng,
1997).

In recent years, a new attempt has brought the measurement of customer scale
(Fornell et al., 1996). The American Customer Satisfaction Index (ACSI) and the
Swedish Customer Satisfaction Barometer (SCSB) are the main streams of this new type
of performance measure (ASQC, 1995; Fornell et al., 1996). While traditional measures
tend to focus on quality indicators (for example, productivity), ACSI scores are used to

10
reflect the quality of output; as experienced by the customer. The three dimensions,
namely ‘perceived quality’, ‘customer expectations’ and ‘perceived value’ serve as
antecedents of ACSI so as to measure firms’ current performance of their products or
services evaluated by customers. ACSI also encompasses two consequences, namely
‘customer complaints’ and ‘customer loyalty’ since ACSI measures not only current
performances of firms but their future performances as well. The result is a latent variable
score or index that is general enough to be comparable across firms, industries, sectors
and nations.

11
SERVICE QUALITY

The actual quality of service is difficult to define and measure (Gavin 1983;
Parasuraman et al. 1988; Brown and Swartz 1989). However, researchers have reached a
consensus that service quality should be defined and measured from the customer’s
perspective. The most widely accepted definition of perceived service quality is that it
represents the discrepancy between customers’ expectations and their perceptions of the
service performance (Lewis and Booms 1983; Grönroos 1984; Parasuraman et al. 1988).

There has been a debate regarding the inclusion of expectations in the

measurement of service quality (Teas 1993, 1994; Cronin and Taylor 1994; Parasuraman
et al. 1994). While Cronin and Taylor (1994) claimed that the perceived performance
12
measure possesses a high predictive ability, Parasuraman et al. (1994) assert that the
expectation measures can assist management in identifying those areas which require
immediate attention. However, Parasuraman et al. (1994) concur that if the primary
purpose of measuring perceived service quality is to explain the variance on some
dependent construct, then a performance-based measure is appropriate. There is a
growing acceptance among researchers that service quality can be tied to perceptions of
service performance (Grönroos 1993; Dabholkar 1993)

Service Quality can be defined as the result of the comparison that customers
make between their expectations about a service and their perception of the way the
service has been performed (Lewis and booms, 1983; Lehtinen and Lehtinen, 1982;
Gronroos, 1984; Parasuraman et al., 1985, 1988, 1994) Service quality is the customer’s
overall impression with regard of the superiority on excellence of the service encounter.
The Quality of Service can be defined in terms of the SERVQUAL instrument that
represents one of the most widely used operarationalisations of service quality. The
methodology is originally based around 5 key dimensions:

Service quality is determined by the interaction of all those factors that affect the
process of making products/services available to customers. Multiple-attribute models
have been widely adopted to measure service quality ever since. Many replication
researches refined SERVQUAL and reapplied it in a variety of settings. Gradually,
research has further developed service quality measurement with refinements suitable for
particular circumstances. Disagreements between these studies have focused on two
major issues, (1) Lack of consensus as to how many dimensions of service quality and (2)
Causal linkage between satisfaction and quality (Asubonteng et al., 1996). Services are
heterogeneous: their performance often varies from producer to producer, from customer
to customer, and from day to day. Li et al. (2002) argue that the number of service quality
dimensions is contextual, and might be a function of the particular service industry. Some
dimensions that are highly correlated may collapse into one distinct dimension, while one
dimension may divide into two distinct dimensions in the specific domain of the study.

13
Several of the expressed attributes of service quality involved ideal points that varied
among customers. For example, responsiveness via e-mails, personalization, and
information and graphics are attributes on which desires vary across customers (Zeithaml
et al., 2002). Therefore, the service quality skeleton,

DIMENSIONS OF SERVICE QUALITY

RELIABILITY: According to Philip Kotler (1999); Bitner, M.J, and Zeithaml, V.A
(2003) the ability to perform the promised service dependably and
accurately is the reliability. Gilbert A Churchill, Jr & J. Paul Peter
(1999) added that the customers want performance to be consistent
and dependable.

RESPONSIVENESS: According to Philip Kotler (1999); Bitner, M.J, and Zeithaml, V.A
(2003) responsiveness is the willingness to help customers and
provide prompt services. Gilbert A Churchill, Jr & J. Paul Peter
(1999) added that the customers must see service provider as ready
and willing to perform.

TANGIBLES: According to Philip Kotler (1999); Bitner, M.J, and Zeithaml, V.A
(2003) the appearance of physical facilities, equipment, personnel
and communication equipment of the organization is the tangibles.
Gilbert A Churchill, Jr & J. Paul Peter (1999) added that the
customers look for quality in the facilities, equipment and
communication materials used to provide the service.

EMPATHY: According to Philip Kotler (1999); Bitner, M.J, and Zeithaml, V.A
(2003) empathy means the provision of caring individualized
attention to the customer.

14
ASSURANCE: According to Philip Kotler (1999); Bitner, M.J, and Zeithaml, V.A
(2003) assurance means knowledge and courtesy of the employees
and their ability to convey trust and confidence.

CUSTOMER SATISFACTION

The concept of customer satisfaction has drawn the interest of academics and
practitioners for more than three decades in the light of the fact that Customer
Satisfaction, Service Quality and Perceived Value 899 customers are the primary source
of most firms’ revenue. Customer satisfaction is a necessary precondition for customer
loyalty, which is in turn a key driver of profit growth and performance (Reichheld 1993;
Heskett et al. 1997). Churchill and Surprenant (1982) define customer satisfaction as an
outcome of purchase and use resulting from the buyers’ comparison of the rewards and
costs of the purchase in relation to the anticipated consequences. It has also been viewed
as an emotional state that occurs in response to the evaluation of a service (Westbrook
1981). The former conceptualization recognizes that satisfaction is determined by a
cognitive process of comparing what customers receive (rewards) against what they give
up to acquire the service (costs) whereas the latter views satisfaction as an emotional
feeling resulting from an evaluative process. Consistent with this view, customer
satisfaction is defined as an emotional response that results from a cognitive process of
evaluating the service received against the costs of obtaining the service (Woodruff et al.
1991; Rust and Oliver 1994).

Customer Satisfaction is an output resulting from the customer’s pre-purchase

comparison of expected performance with perceived actual performance and incurred
cost (Churchill and Surprenant, 1982). Customer satisfaction is the degree of overall
pleasure or contentment felt by the customer, resulting from the ability of the service to
fulfill the customer’s desires, expectations and needs in relation to the service. Customer
satisfaction, commonly abbreviated CS, is a business term which is used to capture the

15
idea of measuring how satisfied an enterprise's customers are with the organization's
efforts in a marketplace. It is seen as a key business performance indicator and is part of
the four perspectives of a Balanced Scorecard. Every organization has customers of some
kind. The organization provides products (goods and/or services) of some kind to its
customers through the mechanism of a marketplace.

The concept of customer satisfaction has drawn the interest of academics and
practitioners for more than three decades in the light of the fact that Customer
Satisfaction, Service Quality and Perceived Value customers are the primary source of
most firms’ revenue. Customer satisfaction is a necessary precondition for customer
loyalty, which is in turn a key driver of profit growth and performance (Reichheld 1993;
Heskett et al. 1997). Churchill and Surprenant (1982) define customer satisfaction as an
outcome of purchase and use resulting from the buyers’ comparison of the rewards and
costs of the purchase in relation to the anticipated consequences. It has also been viewed
as an emotional state that occurs in response to the evaluation of a service (Westbrook
1981). The former conceptualization recognizes that satisfaction is determined by a
cognitive process of comparing what customers receive (rewards) against what they give
up to acquire the service (costs) whereas the latter views satisfaction as an emotional
feeling resulting from an evaluative process. Consistent with this view, customer
satisfaction is defined as an emotional response that results from a cognitive process of
evaluating the service received against the costs of obtaining the service (Woodruff et al.
1991; Rust and Oliver 1994).

Because satisfaction is basically a psychological state, care should be taken in the

effort of quantitative measurement, although a large quantity of research in this area has
recently been developed. Work done by Berry, Brodeur between 1990 and 1998[3]
defined ten 'Quality Values' which influence satisfaction behavior, further expanded by
Berry in 2002 and known as the ten domains of satisfaction. These ten domains of
satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access,
Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment

16
to the Customer and Innovation. These factors are emphasized for continuous
improvement and organizational change measurement and are most often utilized to
develop the architecture for satisfaction measurement as an integrated model. Work done
by Parasuraman, Zeithaml and Berry between 1985 and 1988 provides the basis for the
measurement of customer satisfaction with a service by using the gap between the
customer's expectation of performance and their perceived experience of performance.
This provides the measurer with a satisfaction "gap" which is objective and quantitative
in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation"
theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two
different measures (perception and expectation of performance) into a single
measurement of performance according to expectation. According to Garbrand, customer
satisfaction equals perception of performance divided by expectation of performance. The
usual measures of customer satisfaction involve a survey [4] with a set of statements
using a Likert Technique or scale. The customer is asked to evaluate each statement and
in term of their perception and expectation of the performance of the organisation being
measured.

17
Objectives:
General-
1. To find out the relationship between service quality and customer satisfaction
with regard to public and private sector banks.
Specific-
2. To study the influence of reliability on the customer satisfaction
3. To study the influence of responsiveness on the customer satisfaction.
4. To study the influence of assurance on the customer satisfaction.
5. To study the influence of empathy on the customer satisfaction.
6. To study the influence of tangibility on the customer satisfaction.

Hypothesis:
H 1. Tangibility is positively related to customer satisfaction.
18
 H 2. Reliability is positively related to customer satisfaction.
H 3. Responsiveness is positively related to customer satisfaction.
H 4. Assurance is positively related to customer satisfaction.
H 5. Empathy is positively related to customer satisfaction.
H 6. There exists a positive relationship between service quality and customer
satisfaction.

DEFINITIONS

SERVICE QUALITY

Theoretical Definition

Service Quality can be defined as the result of the comparison that customers make
between their expectations about a service and their perception of the way the service has been
performed (Lewis and booms, 1983; Lehtinen and Lehtinen, 1982; Gronroos, 1984; Parasuraman
et al., 1985, 1988, 1994).

Operational Definition

Service quality is the customer’s overall impression with regard of the superiority on
excellence of the service encounter. The Quality of Service can be defined as, "The.
SERVQUAL instrument that represents one of the most widely used operarationalisations of
service quality. The methodology is originally based around 5 key dimensions:

1. Tangibles: Appearance of physical facilities, equipment, personnel, and communication

materials.

2. Reliability: Ability to perform the promised service dependably and accurately.

3. Responsiveness: Willingness to help customers and provide prompt service.

4. Assurance: Knowledge and courtesy of employees and their ability to convey trust and
confidence.

5. Empathy: The firm provides care and individualized attention to its customers.

19
CUSTOMER SATISFACTION

Theoretical Definition

Customer Satisfaction is an output resulting from the customer’s pre-purchase

comparison of expected performance with perceived actual performance and incurred cost
(Churchill and Surprenant, 1982).

Operational Definition

Customer satisfaction is the degree of overall pleasure or contentment felt by the

customer, resulting from the ability of the service to fulfill the customer’s desires, expectations
and needs in relation to the service. Customer satisfaction, commonly abbreviated CS, is a
business term which is used to capture the idea of measuring how satisfied an enterprise's
customers are with the organization's efforts in a marketplace. It is seen as a key business
performance indicator and is part of the four perspectives of a Balanced Scorecard. Every
organization has customers of some kind. The organization provides products (goods and/or
services) of some kind to its customers through the mechanism of a marketplace.

Scope of the study:

Time : March 2011
Place : Cochin
Source of Data : Primary Data

Research Design: Descriptive

Sampling Design:

The research is designed as a survey which is based on four public and four private
sector banks in the city of Cochin. The population therefore is limited to the customer of
these eight banks and convenience sampling is done for the data collection. The sample

20
consisted of 200 customers of the banks. The main tool for data collection is the
questionnaire.

 Sampling Unit Customer of the selected banks in Cochin

 Sampling Size 200 customers
 Sampling Technique Convenience sampling.

21
 PRIVATE SECTOR BANKS

Regression Analysis

Table 1: Between customer satisfaction and tangibility

Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .609a .370 .365 .60682

a. Predictors: (Constant), Tangibility

22
 From the above table, R Square is .370 which indicates that the independent
variable tangibility explains 37% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 1.286 .293 4.383 .000

Tangibility .675 .081 .609 8.295 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence tangibility
is significant with customer satisfaction. Regression equation is
Y = a + bX
Where: Y is the dependent variable customer satisfaction.
X is the independent variable tangibility.

Y = 1.286 + .675X

Hence H1 is proved.

Table 2: Between customer satisfaction and reliability

Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .794a .631 .628 .46294

a. Predictors: (Constant), Reliability

From the above table, R Square is .631 which indicates that the independent
variable reliability explains 63% of the variation in dependent variable customer
satisfaction.

23
 Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .925 .198 4.658 .000

Reliability .768 .054 .794 14.203 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
reliability is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable reliability.

Y = .925 + .768X

Hence H2 is proved.

Table 3: Between customer satisfaction and responsiveness

Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .766a .587 .583 .48984

a. Predictors: (Constant), Responsiveness

24
 From the above table, R Square is .587 which indicates that the independent
variable responsiveness explains 58.7% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 1.100 .204 5.388 .000

Responsiveness .734 .057 .766 12.945 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
responsiveness is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable responsiveness.

Y = 1.100 + .734X

Hence H3 is proved.

Table 4: Between customer satisfaction and assurance

Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .645a .416 .411 .58256

a. Predictors: (Constant), Assurance

25
 From the above table, R Square is .416 which indicates that the independent
variable assurance explains 41.6% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 1.851 .207 8.965 .000

Assurance .535 .058 .645 9.160 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
assurance is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable assurance.

Y = 1.851 + .535X

Hence H4 is proved.

Table 5: Between customer satisfaction and empathy

26
 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .735a .541 .537 .51646

a. Predictors: (Constant), Empathy

From the above table, R Square is .541 which indicates that the independent
variable empathy explains 54.1% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 1.169 .218 5.361 .000

Empathy .728 .062 .735 11.786 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
empathy is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable empathy.

Y = 1.169 + .728X

Hence H5 is proved.

PUBLIC SECTOR BANKS

Regression Analysis
27
Table 6: Between customer satisfaction and tangibility

Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .688a .473 .468 .62290

a. Predictors: (Constant), Tangibility

From the above table, R Square is .473 which indicates that the independent
variable tangibility explains 47.3% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .689 .307 2.244 .027

Tangibility .832 .081 .688 10.286 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
tangibility is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable tangibility.

Y = .689 + .832X

Hence H1 is proved.

Table 7: Between customer satisfaction and reliability

28
 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .817a .668 .665 .49426

a. Predictors: (Constant), Reliability

From the above table, R Square is .668 which indicates that the independent
variable reliability explains 66.8% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .689 .206 3.337 .001

Reliability .828 .054 .817 15.409 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
reliability is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable reliability.

Y = .689 + .828X

Hence H2 is proved.

Table 8: Between customer satisfaction and responsiveness

29
 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .767a .588 .584 .55070

a. Predictors: (Constant), Responsiveness

From the above table, R Square is .588 which indicates that the independent
variable responsiveness explains 58.8% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .946 .225 4.200 .000

Responsiveness .793 .061 .767 12.974 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
responsiveness is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable responsiveness.
Y = .946 + .793X

Hence H3 is proved.

Table 9: Between customer satisfaction and assurance

30
 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .599a .359 .354 .68661

a. Predictors: (Constant), Assurance

From the above table, R Square is .359 which indicates that the independent
variable assurance explains 35.9% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 2.100 .217 9.661 .000

Assurance .492 .061 .599 8.136 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence
assurance is significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable assurance.
Y = 2.100 + .492X

Hence H4 is proved.

Table 10: Between customer satisfaction and empathy

31
 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .808a .653 .650 .50561

a. Predictors: (Constant), Empathy

From the above table, R Square is .653 which indicates that the independent
variable empathy explains 65.3% of the variation in dependent variable customer
satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .783 .207 3.772 .000

Empathy .831 .056 .808 14.889 .000

a. Dependent Variable: Customer_Satisfaction

From the above table we see that the significance level is less than 0.05, hence empathy is
significant with customer satisfaction. Regression equation is

Y = a + bX

Where: Y is the dependent variable customer satisfaction.

X is the independent variable empathy.
Y = .783+ .831X

Hence H5 is proved.
Table 11: Multiple Regression analysis between customer satisfaction and the
service quality of private sector banks

32
 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .855a .731 .719 .40340

From the above table, Adjusted R Square is .719 which indicates that the
independent variables empathy, assurance, tangibility, reliability and responsiveness
explain 71.9% of the variation in dependent variable customer satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .338 .211 1.603 .112

Tangibility .076 .076 .069 .997 .321

Reliability .350 .086 .362 4.062 .000

Responsiveness .133 .094 .138 1.409 .162

Assurance .141 .057 .170 2.477 .003

Empathy .252 .080 .254 3.142 .002

From the above table we see that the significance level is less than 0.05, hence
empathy, reliability and assurance is significant with customer satisfaction. Regression
equation is:
Y = a+b1X1 + b2X2 + b3X3 + b4X4 + b5X5

Where: Y is the dependent variable customer satisfaction.

X is the independent variable empathy, assurance, tangibility, reliability and
responsiveness

Y = .338 + .076X1 + .350X2 + .133X3 + .141X4 + .252X5

Table 12: Multiple Regression analysis between customer satisfaction and the
service quality of public sector banks

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 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .891a .794 .785 .39640

a. Predictors: (Constant), Empathy, Assurance, Tangibility, Reliability,

Responsiveness
From the above table, Adjusted R Square is .785 which indicates that the
independent variables empathy, assurance, tangibility, reliability and responsiveness
explain 78.5% of the variation in dependent variable customer satisfaction.

Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .041 .204 .201 .841

Tangibility .065 .079 .054 .819 .414

Reliability .513 .087 .506 5.864 .000

Responsiveness .067 .148 .065 .453 .651

Assurance .095 .081 .115 1.173 .024

Empathy .462 .075 .449 6.155 .000

From the above table we see that the significance level is less than 0.05, hence
empathy and reliability is significant with customer satisfaction. Regression equation is:
Y = a+b1X1 + b2X2 + b3X3 + b4X4 + b5X5

Where: Y is the dependent variable customer satisfaction.

X is the independent variable empathy, assurance, tangibility, reliability and
responsiveness

Y = .041 + .065X1 + .513X2 + .067X3 + .095X4 + .462X5

Table 13: Independent T Test

Group Statistics

34
 type N Mean Std. Deviation Std. Error Mean

Tangibility private 119 3.5395 .68621 .06290

public 120 3.7300 .70563 .06442

Reliability private 120 3.5875 .78500 .07166

public 120 3.7500 .84329 .07698

Responsiveness private 120 3.5139 .79200 .07230

public 120 3.5896 .82554 .07536

Assurance private 120 3.4139 .91363 .08340

public 120 3.4389 1.03981 .09492

Empathy private 120 3.4472 .76635 .06996

public 120 3.6250 .83074 .07584

Levene's Test for

Equality of Variances t-test for Equality of Means

95% Confidence Interval

of the Difference

Sig. (2- Mean Std. Error

F Sig. t df tailed) Difference Difference Lower Upper

Tangibility .025 .874 -2.116 237 .035 -.19050 .09005 -.36790 -.01311

-2.116 236.910 .035 -.19050 .09004 -.36788 -.01313

Reliability .493 .483 -1.545 238 .124 -.16250 .10517 -.36969 .04469

-1.545 236.789 .124 -.16250 .10517 -.36969 .04469

Responsiveness .332 .565 -.725 238 .469 -.07569 .10443 -.28143 .13004

-.725 237.592 .469 -.07569 .10443 -.28143 .13004

Assurance 2.102 .148 -.198 238 .843 -.02500 .12636 -.27392 .22392

-.198 234.125 .843 -.02500 .12636 -.27394 .22394

Empathy .155 .695 -1.723 238 .086 -.17778 .10318 -.38103 .02548

-1.723 236.468 .086 -.17778 .10318 -.38104 .02548

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 From the above regression tables it is clear that all the independent variables
empathy, assurance, tangibility, reliability and responsiveness have a positive
relationship with customer satisfaction, when measured individually for both
private and public sector banks.

36
 From table 11 which shows the multiple regressions between the independent
variables empathy, assurance, tangibility, reliability and responsiveness and the
dependent variable customer satisfaction; in private sector banks reliability,
assurance and empathy had high significance with customer satisfaction.

 From table 12 which shows the multiple regressions between the independent
variables empathy, assurance, tangibility, reliability and responsiveness and the
dependent variable customer satisfaction; in public sector banks reliability,
assurance and empathy had high significance with customer satisfaction.

 Also from table 12 we can observe that Adjusted R Square is 78.5% in Public
Sector Banks and 71.9% in Private Sector Banks. Hence we see that in case of
Public Sector Banks, independent variables reliability, assurance and empathy
explains the dependent variable customer satisfaction.

 There for from the study it can be concluded that on the basis of Parasuraman’s
model for service quality, Public Sector Banks have more satisfied customers than
the Private Sector Banks.

 From table 13 it was found that there exists no significant difference between the
operation of public sector banks and private sector banks.

37
 Cronbach L J (1951), “Coefficient Alpha and the Internal Structure of Tests”,
Psychometrika, Vol. 16, No. 3, pp. 297-334.

38
 Cronin J J and Taylor S A (1992), “Measuring Service Quality: A Reexamination
of Extension”, Journal of Marketing, Vol. 56, No. 3, pp. 55-68.

 Cronin J J and Taylor S A (1994), “SERVPERF vs. SERVQUAL: Reconciling

Performance-Based and Perception-Minus-Expectations Measurement of
Service Quality”, Journal of Marketing, Vol. 58, No. 1, pp. 125-131

 Customer satisfaction measurement with neural network (Yao-Hung Hsieh a, Chiuhsiang

Joe Lin b,and James C. Chen c, Department of Industrial Engineering, Chung Yuan
Christian University, Taiwan, ROC)

 Deshpande Priya (2006), “Service Quality Perspectives and Satisfaction in Health

Care Systems—A Study of Select Hospitals in Hyderabad”, Indian Journal of
Marketing, Vol. 36, No. 4, pp. 3-7.

 Jain S K and Gupta Garima (2004), “Measuring Service Quality: SERVQUAL vs.
SERVPERF Scales”, Vikalpa, Vol. 29, No. 2, pp. 25-37.

 Kaul Subhashini (2005), “Measuring Retail Service Quality: Examining

Applicability of International Research Perspectives in India”, Working Paper
No. 2005-10-02, October, Indian Institute of Management, Ahmedabad.

 Measuring Service Quality In Singapore Retail Banking: A Gap Analysis And

Segmentation Approach (Wayne Kawn,Singapore Institute of Labour Studies, Tan
Jing Hee,Singapore Institute Of Management)

 Parasuraman A, Zeithamal V A and Berry L L (1985), “A Conceptual Model of

Service Quality and Its Implications for Future Research”, Journal of Marketing,
Vol. 9, Fall, pp. 41-50.

 Parasuraman A, Zeithamal V A and Berry L L (1988), “SERVQUAL: A Multiple-

Item Scale for Measuring Consumer Perceptions of Service Quality”, Journal of
Retailing, Vol. 64, No. 1, pp. 12-40.

39
 QUESTIONNAIRE
Customer Satisfaction Survey

40
 I John Thayil, currently pursuing my PGDM (Post Graduate Diploma In Management)in
Rajagiri Business School, is doing the dissertation on the topic “A study on the relationship
between service quality and customer satisfaction of public and private sector banks in Cochin”.
I kindly request you to fill this questionnaire for my dissertation. This information will
exclusively be used for research purpose and in no case will be disclosed to anybody.

A. General Information
Bank Type: Private Public
Type of Account: Savings Salary
Gender: Male Female
Marital Status: Married Unmarried
Age: 20-30 30-40 40-50
Qualification Graduate Post Graduate
Income (Monthly) Dependent Below 15,000 15,000- 30,000 30,000 – 45,000
Profession: Student Employee Businessman Housewife

B. Please tick () 5, 4, 3, 2, 1 against the appropriate box where, 5 = highly satisfied; 4 =
satisfied; 3 = neither satisfied/nor dissatisfied; 2 = dissatisfied; 1 = highly dissatisfied.
S. No. Questions 1 2 3 4 5
1 Tangibility
Are you satisfied with the premises of the bank?
Is it visually appealing?
2 Are you satisfied with the technological up-to-date equipments of
the bank?
3 Are you satisfied with the way employees dress?
4 Are you satisfied with the pamphlets distributed by the bank? Are
they clear and give complete information?
5 Are you satisfied with the bank statement? Is it visually clear?
6 Reliability
Are you satisfied with the services provided by the bank as
promised?
7 Are you satisfied by the service of handling customer’s service
problems?
8 Are you satisfied with the way bank informs about the time when
service will be performed?
9 Are you satisfied with the record maintaining procedure of your
account?
10 Responsiveness
Are you satisfied with the promptness in providing service to you?
11 Are you satisfied with the willingness of employees to help

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 customers?
12 Are you satisfied with the bank service of sending timely bank
statement?
13 Assurance
Are you satisfied with the way employees behave with you?
14 Are you satisfied with the employee’s eagerness of instilling
confidence in customers?
15 Are you satisfied by the employee’s behavior of showing
consistently courteousness towards you?
16 Empathy
Are you satisfied by banks service of providing customers best
interest at heart?
17 Are you satisfied by the bank service of providing the product that
best suits you?
18 Are you satisfied by the overall service quality of your bank?
19 Customer Satisfaction
I am satisfied with the products provided by this bank
20 I am satisfied with the services provided by this bank.
21 When I consider my experience at this bank, I am satisfied
22 Overall, this bank is a good company.

Thank You.

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