An evaluation of the quality of service within Barclays

AN EVALUATION OF THE QUALITY OF SERVICE WITHIN

BARCLAYS RETAIL BANKING MAURITIUS. by

KUMARAN LOGANATHAN PATHER

Student No. 802038668

Submitted in partial fulfilment of the requirements for the degree

MASTER in BUSINESS ADMINISTRATION (MBA)

in the

FACULTY OF ECONOMIC AND MANAGEMENT SCIENCES

at

UNIVERSITY OF JOHANNESBURG

SOUTH AFRICA

STUDY LEADER: DR T D JUWAHEER

October 2007

ii

ACKNOWLEDGEMENTS

It’s been a long and tough road to have come to this stage of final submission and I would like

to place on record my sincere appreciation and gratefulness to the following people for their

direct and indirect support:

• My family, my wife Anne, my daughter Themara, niece Hashendrie and my two sons

Kumesan and Rylan for their support and reason to having me pursue my studies.

• Nitin Ramphul for all his assistance and guidance, his analytical skills during the final stages

of the report.

• Dr Roubina Juwaheer, for her guidance, assistance and willingness to take on the role as my

supervisor that enabled completion of the dissertation.

• My mother Saras Pather, who had sacrificed a lot and worked hard to afford me an

education that today, is a foundation of my career.

• My study group that had supported and encouraged each other during some really difficult

times, Mike, Morgan, Peter and Kuben a formidable team.

iii

SUMMARY OF STUDY

Assessment of the service quality in the banking sector is necessary to obtain general

performance result for both bankers and customers. Barclays presence in Mauritius dates

back to 1919, and since that time the Bank has played a key role in the expansion of business

on the island. Barclays currently holds a sixteen percent market share with the two local

banks Mauritius Commercial Bank and State Bank Mauritius dominating their presence with

a forty percent and thirty percent market share respectively. Barclays Bank Sub Sahara Africa

has recently embarked on a major customer service revolution.

This study attempted to examine any significant gaps between actual methods used to

measure service quality within Barclays Bank Mauritius and empirically tested models in

service quality and suggest how service can be better measured at Barclays by measuring

service areas where significant gaps are identified between actual methods and empirically

tested models. Models have been developed to find measure and assess the determinants of

service quality. The works of Parasuraman et al. (1985, 1988, 1991, and 1994) led to the

development of a service quality model (SERVQUAL) which is the result of a comparison of

the expectations and perceptions of customers regarding a particular service and this model is

used in this study.

In view of improving customer service, Barclays Bank has been involved in a number of

customer service surveys. For the purpose of this study, the researcher has used the results of

existing surveys collected from 250 customers of Barclays in Mauritius. In addition, primary

data was randomly collected in Mauritius at the main branch which is located in Port-Louis

and a sample total sample size of 120 of which 60 were customers and 60 Barclay’s staff.

iv

Existing surveys shows that service is on the decline within Barclays Banks Mauritius. An

overall gap of -1.2, performance (P) is less than expectation (E), showed that customers are

dissatisfied with the overall level of service offered by Barclays Bank in Mauritius. An

overall service gap of -1.04, performance (P) is less than expectation (E), showed that staff

are dissatisfied with the overall level of service offered by Barclays Bank in Mauritius.

Four new service dimensions were extracted from the customer data and six new service

dimensions from the employee data which confirms that there is significant difference

between customer and staff service dimensions at Barclays Bank Mauritius.

Both the exiting surveys done by external researchers and the data in this study have the same

overall conclusion, that is, service quality at Barclays Bank Mauritius is on the decline.

Hence, no significant difference between theory and practice of customer service satisfaction

at Barclays Bank Mauritius.

A starting point to get service right within an organization has to start with the service

providers themselves, all too often organizations steam ahead with service initiatives and

campaigns but do not have the support and buy in of their staff. This study concludes that if

employees are not properly equipped and motivated, service quality is adversely affected.

Training is of prime importance to assist the company in increasing the level of service.

Areas of further research has been identified for other industries in the country, banks and

other institutions in the region and internationally.

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TABLE OF CONTENT

Acknowledgements..................................................................................................................... II

Summary of Study ..................................................................................................................... III

Table of Content ........................................................................................................................ V

List of Tables ............................................................................................................................ IX

List of Figures ............................................................................................................................ X

Dedication ................................................................................................................................ XI

CHAPTER 1 – INTRODUCTION .......................................................................................... 1

1.0 Introduction ................................................................................................................. 1

1.1 Barclays Mauritius ....................................................................................................... 3

1.2 Service Measurement in Barclays Bank Mauritius ..................................................... 3

1.2.1 Customer Service 5 Point Plan .................................................................................... 4

1.3 Statement of the Problem ............................................................................................ 6

1.3.1 Main Objectives ........................................................................................................... 6

1.3.2 Primary Data Analysis Objectives ............................................................................... 7

1.3.3 Hypotheses Development ............................................................................................ 7

1.4 Organization of the Study ............................................................................................ 8

CHAPTER 2 - REVIEW OF RELATED LITERATURE ................................................. 10

2.0 Introduction ............................................................................................................... 10

2.1 Retail Banking ........................................................................................................... 11

2.2 Quality in Retail Banking .......................................................................................... 13

2.3 Customer Expectations and Perceptions of Service Quality ..................................... 15

2.4 Relationship Between Service Quality and Satisfaction ........................................... 18

2.5 Models of Service Quality ......................................................................................... 20

2.6 Dimensions of Service Quality .................................................................................. 27

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2.8 Service Quality Measurement ................................................................................... 35

2.9 SERVQUAL Applications and Criticisms ................................................................ 42

2.9.1 Theoretical Criticisms................................................................................................ 42

2.9.2 Operational Criticisms ............................................................................................... 43

3.0 Chapter Summary ...................................................................................................... 44

CHAPTER 3 – RESEARCH METHODOLOGY ............................................................... 45

3.0 Introduction ............................................................................................................... 45

3.1.1 Methodology of Existing Surveys ............................................................................ 46

3.1.2 Survey Instrument .................................................................................................... 46

3.1.3 Sample ...................................................................................................................... 46

3.1.4 Quality controls ........................................................................................................ 47

3.2.1 Statement of the Problem ......................................................................................... 47

3.2.1.1 Main Objectives ......................................................................................................... 48

3.2.1.2 Primary Data Analysis Objectives ............................................................................. 48

3.2.1.3 Hypotheses Development .......................................................................................... 49

3.2.2 Population .................................................................................................................. 50

3.2.3 Sample ...................................................................................................................... 50

3.2.4 Research Design ....................................................................................................... 50

3.2.5 Data Collection ......................................................................................................... 50

3.2.6 Pilot Study ................................................................................................................ 51

3.2.7 The Instrumentation .................................................................................................. 51

3.2.7.1 Customer Questionnaire ........................................................................................... 51

3.2.7.2 Staff Questionnaire ................................................................................................... 53

3.2.8 Data Analysis ............................................................................................................ 53

3.2.9 Preparing the Research Report ................................................................................. 53

3.2.10 Limitations of The Survey ........................................................................................ 54

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3.2.11 Chapter Summary ..................................................................................................... 54

CHAPTER 4 – DATA ANALYSIS ....................................................................................... 55

4.0 Introduction ............................................................................................................... 55

4.1 Section A – Existing Data ......................................................................................... 55

4.1.1 Main Findings ........................................................................................................... 55

4.1.2 Overall Satisfaction .................................................................................................. 56

4.1.3 Advocacy .................................................................................................................. 57

4.1.4 Warmth ..................................................................................................................... 57

4.1.5 Value For Money ...................................................................................................... 58

4.1.6 Continue Using ......................................................................................................... 58

4.1.7 Product And Service Fees ........................................................................................ 59

4.1.8 Degree Of Improvement ........................................................................................... 60

4.2 Section B: Customer Service Evaluation Survey ..................................................... 61

4.2.1 B1 – Main Findings Of Customer Survey And Gap Analysis. ................................ 61

4.2.1.1 Demographic Profile Of Respondents ...................................................................... 61

4.2.1.2 Customers – Industry Expectations .......................................................................... 62

4.2.1.3 Customers – Barclays Performance .......................................................................... 63

4.2.2 B2 – Main Findings Of Staff Survey And Gap Analysis ......................................... 64

4.2.2.1 Staff– Industry Expectations .................................................................................... 65

4.2.2.2 Staff – Barclays Performance ................................................................................... 66

4.2.3 B3 – Hypotheses Testing .......................................................................................... 67

4.2.3.2 Gap Analysis – Staff Survey .................................................................................... 70

4.2.3.4 Customers Service Dimensions ................................................................................ 74

4.2.4 Staff Service Dimensions ......................................................................................... 78

CHAPTER 5 – Discussion & Recommendations .................................................................... 82

5.0 Introduction .................................................................................................................. 82

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5.1 Staff evaluation on perception of service .................................................................. 83

5.2 Staff Training & Career progression ......................................................................... 83

5.3 Actual Service Measurement Systems ...................................................................... 84

5.4 Interpretation of Data From Measurement Systems .................................................. 85

CHAPTER 6 – CONCLUSION AND AREA FOR FURTHER RESEARCH ................. 86

6.0 Introduction ............................................................................................................... 86

6.1 The Way Forward ...................................................................................................... 86

6.2 Limitations and future of the study ........................................................................... 86

References ................................................................................................................................. 88

Appendices .............................................................................................................................. 101

Appendix A – Survey Questionnaires ..................................................................................... 102

Appendix B: Cronbach’s Alpha Results ................................................................................. 110

Appendix C: Factor Analysis .................................................................................................. 118

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LIST OF TABLES

Table 1: Causes of Service Quality Gaps ................................................................................. 28

Table 2: Scoring and Evaluation of Service Quality ................................................................ 52

Table 3: The scale of means for expected and perceived service quality................................. 53

Table 4: Summary of Existing Measurements. ........................................................................ 55

Table 5: Demographic Profile of Customers Interviewed ........................................................ 61

Table 6: Mean Scores of Industry Expectations of Barclays Customers ................................. 62

Table 7: Mean Scores of Customer Performance at Barclays ................................................. 63

Table 8: Demographic Profile of Staff Interviewees ................................................................ 64

Table 9: Mean Score Staff– Industry Expectations .................................................................. 65

Table 10: Mean Score Staff – Barclays Performance............................................................... 66

Table 11: Cronbach’s Alpha – Customer Survey ..................................................................... 68

Table 12: Service Gap Customer Survey ................................................................................. 68

Table 13: Gap Analysis – Staff Survey .................................................................................... 70

Table 14: Service Gap Staff Survey ......................................................................................... 70

Table 15: Overall Gap Analysis ............................................................................................... 72

Table 16: Factor Schedule for Customer Service ..................................................................... 76

Table 17: Factor Schedule for Staff Service Gaps ................................................................... 79

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LIST OF FIGURES

Figure 1: Problem Model ............................................................................................................ 6

Figure 2: Service Quality Assessment Paradigm ..................................................................... 25

Figure 3: A Service Quality Model .......................................................................................... 35

Figure 4: Problem Model .......................................................................................................... 48

Figure 5: Overall Satisfaction ................................................................................................... 56

Figure 6: Advocacy .................................................................................................................. 57

Figure 7: Warmth ..................................................................................................................... 57

Figure 8: Value for Money ....................................................................................................... 58

Figure 7: Continue Using ......................................................................................................... 58

Figure 10: Product & Service Fees ........................................................................................... 59

Figure 11: Degree of Improvement ......................................................................................... 60

Figure 12: Service Gap Customer Survey ................................................................................ 69

Figure 13: Gap Analysis – Staff Survey ................................................................................... 71

Figure 14: Scree Plot Customer Gaps ...................................................................................... 75

Figure 15: Scree Plot Staff Gaps .............................................................................................. 78

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DEDICATION

This dissertation is dedicated to my parents, Mom Saras Pather and late Dad Mr Loga Pather,

who had sacrificed a lot to afford me an education that today is the foundation of my career.

They have taught me the values of respect and to be humble to embracing all people.

I also dedicate this dissertation to my late sister Ramani Pather and my late grandmother

Amra Pather.

1

CHAPTER 1 – INTRODUCTION

1.0 Introduction

In the modern competitive business world, quality is one of the most important instruments

for the success of a business. Both manufacturing and service rendering organizations are

very much concerned about quality of their product or service. Customers expect high quality

service for the money they pay.

In the modern business, service quality is very important and it is a key element for the

success and profitability of a business. Baron and Harris (2003) mentioned that quality is the

lifeblood that brings increased patronage, competitive advantage and long-term profitability

for service based companies. Most service industries are recognizing the importance of total

quality. One of the major ways a service firm can differentiate itself is by delivering

consistently higher quality than its competitors. Like the manufacturing industries most

service industries have now joined the total quality movement (Kotler and Armstrong, 1999).

The number of customers and their desire for quality service is increasing from time to time.

Lovelock (1991) mentioned that customers are the sole judges of service quality. Customers

assess the service by comparing the service they receive (perceptions) with the service they

desire (expectations). A company can achieve a strong reputation for quality service only

when it consistently meets customer service expectations. In addition, a bank may win

customers by delivering consistently higher quality service than its competitors. In other

words, service firms need to measure customer satisfaction. Without customers the service

firm has no reason to exist and cannot exist.

Customers always have expectations of the quality of service, and they also compare their

expectation with the service they perceived. If the perceived service falls below the expected

2

service, customers will lose interest in the provider. The gap between the perceived service

and the expected service always should be kept close. Therefore, the gap between expected

and perceived service is a measure of service quality. Allen and Candrashekar (March – April

2000) mentioned that the greater the gap between the perceptions and expectations, the

greater the dissatisfaction and the lower the quality rating of the service provider.

Assessment of the service quality in the banking sector is necessary to obtain general

performance result for both bankers and customers. It also will help commercial banks to

provide quality service to their customers. In addition, it will help them to have competitive

marketing strategy. The standard service quality dimensions must be followed to develop

proper market that supports obtaining the best possible match between the internal and

external environments of the bank, which will narrow or close the gap between expectation

and perception service.

It is clear that a service provider’s objective is to upgrade the quality of banking services and

gain customer satisfaction. At the same time customer’s expectation also will increase, hence

to remain competent in the market, commercial banks should assess their service quality level

from time to time. In other words, service quality assessment is not a one-time action; it is a

continual process in the banking sector and in the service industry as a whole.

The service industry plays a dominant role in the world economy in contributing to the growth

of GDP. Service quality is the key element for business growth. Thus, management reiterates

the importance of service quality in the service sector. Customers have their own

expectations, and they compare their expectations with the service they perceived. The gap

between customer expectations and perceived service should be narrowed or closed.

3

1.1 Barclays Mauritius

Barclays presence in Mauritius dates back to 1919, and since that time the Bank has played a

key role in the expansion of business on the island. Barclays operates a diversified portfolio of

banking operations covering Retail Banking, Business and Corporate Banking, International

Banking Services and Leasing. Over the past few years Barclays Mauritius has developed

considerably and acquired the businesses of BNPI Mauritius in 2002. Since the acquisition

Barclays have been focused on expanding the Retail banking footprint across the island.

Mauritius has a population of 1, 2 million of which 500 000 are economically active. Barclays

currently holds a sixteen percent market share with the two local banks Mauritius Commercial

Bank and State Bank Mauritius dominating their presence with a forty percent and thirty

percent market share respectively. Barclays Retail banking has twenty branches across the

island and a total of seventy thousand customers. Retail banking serves the personal market

and is categorized by three market segments with the following value propositions, Premier

Banking, Prestige Banking and Standard Banking.

1.2 Service Measurement in Barclays Bank Mauritius

Barclays Bank Sub Sahara Africa embarked on a major customer service revolution

(Barclays Sub Sahara Service Strategy Plan, 2006). The Service Revolution campaign was

introduced at the beginning of 2006 and was a complete end to end campaign to address all

areas of customer service. The key to managing customer satisfaction in Barclays was the

measurement systems and the effect interpretation on the feedback that the customers were

giving to the bank. The traditional measurement of service is most commonly done through

Customer satisfaction surveys, focus groups, customer complaint data, call centre statistics

and many other service dipsticks; however the corrective actions that are taken after the

findings are critical to improving service and differentiating the company from its

competitors.

4

1.2.1 Customer Service 5 Point Plan

The starting point to create the revolution was supported by the customer Service 5 point

plan, to transform the organization towards service excellence. The campaign was built

around 5 core service principles which are;

1. Make Customer Service a Key Business Focus Area.

2. Develop a Sustainable Service Culture.

3. Decide on Customer Service Measurements.

4. Use Technology to Improve Customer Service.

5. Build Customer Relationships.

The campaign was launched in all African countries with the key accountability of the

Service Manager and Functional Head of departments to drive the campaign. Service

measurement was critical hence the bank seen the roll out of the first steps towards

receiving instant feedback from the electronic customer feedback system. The benchmarks

were set for daily, weekly and monthly scores which communicated to the branches for

corrective action.

The electronic customer feedback system had tested the service levels in the following

areas:

1. Friendliness and Helpfulness

2. Waiting time

3. Query resolution

4. Advocacy

5. Overall Satisfaction

A considerable amount of investment had been placed into the Service revolution campaign,

and then followed by the electronic customer feedback system. What the bank took into

5

consideration was that the staff needed to buy into the Service vision hence training was

equally as important as the system and campaign.

All staff were requested to attend the “Lets Shine Today – Service Training Programme”.

The Service training was part of sustaining the service culture and coaches were nominated

in each country to conduct the training with accreditation for the programme.

The campaign had seen many months of focus, dedication towards achieving the best

service scores and monthly training schedules. The above campaign created a service hype

in Barclays Africa. As technology develops and new delivery channels are introduced,

customers, particularly those from the most profitable sectors, become more able and

willing to move from bank to bank. The biggest challenge to banks in a competitive

environment is how to increase income and market share whilst maintaining the existing

portfolio of customers.

Banking customers are increasingly becoming aware of the options that are open to them

when managing their finances. They expect swift and easy access to funds and services as

well as high levels of customer support and advice, whether in a branch, in a business centre

or even at one on one relationship banking. Regardless of the delivery channels, private,

personal or corporate customers demand seamless, secure and efficient banking experience

twenty-four hours. The main challenge for banks is to meet these ever increasing demands

and win new business using a combination of knowledge and technology, while retaining a

human touch.

6

1.3 Statement of the Problem

It is now more than a decade since the SERVQUAL instrument was first reported in the

literature (Parasuraman et al., 1988). Since that time the instrument has been widely used, but

it has also been widely criticised. Indeed, quite a debate has arisen over how best to measure

service quality and over the efficacy of SERVQUAL. It is apparent that there is little

consensus of opinion and much disagreement over a number of conceptual and operational

issues.

Figure 1: Problem Model

The problem definition of this project is:

To examine any significant gaps between actual methods used to measure service quality

within Barclays Bank Mauritius and empirically tested models in service quality.

1.3.1 Main Objectives

The main objective of the study is:

• To suggest how service can be better measured at Barclays by measuring service

areas where significant gaps are identified between actual methods and empirically

tested models.

TheoryService - Customer Satisfaction

Models(Servqual Model)

Survey Barclays Bank Mauritius1. Customer Perception of Service

2. Staff Perception of Service

GAP BETWEEN THEORY & PRACTICE

Examined any significant gaps between actual methods used to measure service quality within Barclays Bank Mauritius and empirically tested models in Service Quality.

7

1.3.2 Primary Data Analysis Objectives

• To measure customer satisfaction of service quality at Barclays Bank Mauritius

defined as the difference between expectations (measured by industry average) and

actual performance.

• To measure staff perception of customer satisfaction of service quality at Barclays

Bank Mauritius defined as the difference between expectations (measured by industry

average) and actual performance.

1.3.3 Hypotheses Development

Hypothesis 1

H10 There is no significant difference between customer expectation and performance of

customer service at Barclays Bank Mauritius.

H11 There is significant difference between customer expectation and performance of


Hypothesis 2

H20 There is no significant difference between staff expectation and performance of customer

service at Barclays Bank Mauritius.

H21 There is significant difference between staff expectation and performance of customer


8

Hypothesis 3

H30 There is no significant difference between customer and staff customer service

dimensions at Barclays Bank Mauritius.

H31 There is significant difference between customer and staff customer service


Hypothesis 4

H40 There is no significant difference between theory and practice of customer service

satisfaction at Barclays Bank Mauritius.

H41 There is significant difference between theory and practice of customer service


1.4 Organization of the Study

This study was organized into six chapters.

Chapter 1 contains background of the study, problem statement, purpose of the study,

significance of the study, hypotheses, limitations, delimitation, and definition of terms.

Chapter 2 is review of literature, other similar studies and ideas that apply to this study. It

provided for the development of the conceptual framework and an understanding of the

research in general. The topic of service quality is increasingly recognized as being one of the

key strategic values of organizations in both the manufacturing and service sectors (Lewis,

1991). A review of the relevant literature reveals that the principal focus of service quality

research has been twofold. First, the identification of service quality dimensions was of

9

primary interest to researchers (Parasuraman et al., 1985, 1991b). Second, the development of

measurement instruments of service quality was the focus of subsequent research efforts

(Parasuraman et al., 1988, 1991a, 1993; Cronin and Taylor, 1992, 1994; Asubonteng et al.,

1996; Buttle, 1996).

Chapter 3 is methodology, which includes type of research, population, sample procedure,

and research design. This chapter explains the plan that has been used to complete this

project.

Chapter 4 contains presentation of data and analysis of findings and hypotheses testing and

inferential analysis.

Chapter 5 consists of discussion and recommendations which related the literature review to

the main findings for the research coupled with the banking experience of the researcher to

propose new measures which is more likely to contribute to enhancing customer service

within Barclays Mauritius.

Chapter 6 provides a concluding note to this study and highlights areas for further study.

10

CHAPTER 2 - REVIEW OF RELATED LITERATURE

2.0 Introduction

This chapter presents the theoretical framework literature upon which the concept of the study

is based. Many authors have written about service marketing and quality services in the

context of retail banking. In this business era many service companies are recognizing the

importance of quality service. The major areas presented in this chapter are quality service

and gaps in service quality.

There is a growing importance of services in the world economy. Services contributed a total

of 66.3 percent of world gross domestic product (GDP) in the year 2000. Services are difficult

to manage due to certain inherited characteristics such as intangibility, heterogeneity,

inseparatibility and perishability. The complex nature of services, coupled with the growing

prominence of the services sector has also increased the need for better service quality.

Therefore, the topic of service quality is increasingly recognized as being one of the key

strategic values of organizations in both the manufacturing and service sectors (Lewis, 1991).

Service quality, allows the company to differentiate itself from its competitors by increasing

sales and market shares, it results in the satisfaction and retention of customers and

employees, thus reducing turnover rates, it leads to repeat purchase behaviour and brand

loyalty and furthermore, new customers are attracted through positive word-of-mouth, (Lewis,

1991; Newman, 2001; Caruana, 2002; Wang et al., 2003).

Banking and financial services are an important part of the services industry (Mishkin, 2001).

In line with the trend towards a more integrated global banking environment, many

regulatory, structural and technological changes have taken place within the world banking

industry (Angur et al., 1999). Banks are expanding across borders, offering a diverse portfolio

of competitive services and restructuring their services in order to make use of rapid

11

technology and to meet the changing needs of customers. The European Union has played an

important role in facilitating global banking. Financial services within the European Union

have been regulated and restructured in an effort to integrate the sector, by eliminating

impediments to cross border branching practices. Because of these measures, the nature of

banking services and customer relations are undergoing change. Banks in the USA are facing

increased competition from international banks as geographic boundaries are eliminated in

terms of banking markets. In addition to this, the banking sector in many developing countries

is undergoing change in order to keep up with world trends (Yavas et al., 1997). Delivering

quality service and products to the customer, is essential for success and survival in today's

global and highly competitive banking environment (Wang et al., 2003). Banking is a high

involvement industry. Customers whether at the retail or corporate level, have always been

important for banks. However, as electronic banking becomes more prevalent, customers still

tend to measure a bank's service quality in terms of the personal support they receive, rather

than the technical support.

2.1 Retail Banking

The notion of retail banking used in this study referred to banking services that were supplied

by banks to individual customers as defined by the Barclays Sub Sahara customer

segmentation model and product mix for the segments. It excluded all forms of business

banking and related financial products, and private banking. Retail banking financial products

has been broadly classified under the following headings: transaction and payment products,

such as cheque accounts and debit cards; investment products, such as savings accounts, fixed

deposits and call accounts; credit and borrowing products, such as credit cards, home loans,

overdrafts and personal loans; and financial planning products such as, retirement annuity

plans and insurance related services.

12

Retail banking is a mature industry and banks offer very similar products. According to Kotler

(2000), marketing strategies in the maturity stage include consideration of market

modification, product modification or changing the marketing mix. These strategies were

evident in retail banking. Banks tried to increase their number of customers by entering new

market segments. For example, they created alliances with retailers to provide banking

services in supermarkets. New cheque account or credit card products were examples of either

enhancement to existing products or changing the marketing mix.

Some confusion surrounded the notion of a “product” in financial services. Retail banks

referred to a cheque account or a credit card as a product. In reality it was a service that

facilitated the exchange of value between a seller and a buyer. Devlin and Ennew (1997)

distinguished between services features, e.g. a cheque account, and service support, such as a

bank teller or an Automatic Teller Machine (ATM).

Devlin and Ennew (1997) noted that, “the intangible nature of financial services makes it

difficult to envisage the use of specific services features as the basis for establishing a

competitive advantage. Services cannot be patented, so service features generally can be

copied with ease”. This led to the difficulty in trying to establish a lasting competitive

advantage using service features (Devlin and Ennew, 1997).

According to Reichheld and Sasser (1990) the cost of gaining a new customer was about five

times greater than the cost of retaining a current customer through the use of relationship

marketing. Newman and Cowling (1996) noted that, “for UK financial institutions, it is

estimated that an increase of 5 per cent in customer retention is potentially worth £100 million

a year. Realizations such as these have attracted in the mid-1990s the attention of directors of

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retail banks to measuring their service quality and customer satisfaction and initiating major

service quality change programmes”.

South Africa's big four banks lost 9 percent of their market share in three years due to the

steady erosion of profitable corporate and individual clients by international financial services

institutions and private banks. These institutions offered, among other things, a more

personalized service. Management of South African banks identified customer retention as a

central strategic issue (Planting, 1999).

2.2 Quality in Retail Banking

While a universally accepted definition of quality is still not available the majority of writers

on service quality support a customer centred definition (quoted in Le Blanc and Nguyen,

1988; Garvin, 1983; Gummesson, 1988; Kathawala and Elmuti, 1991; Lewis, 1989; Oakland,

1986) with the reservation that customer expectations are not necessarily consistent or

predictable (Haywood-Farmer, 1987; Peters, 1985). The definition produced by Howcroft

(1991) that service quality in banking implies consistently anticipating and satisfying the

needs and expectations of customers covers most of the issues raised. In particular, it is

customer centered, but in requiring the definition of needs it does not presume upon the

customers′ prior knowledge or technical competence, while in allowing for expectations it

implies that the service should take account of this prior knowledge and experience. It also

implies an awareness of the dynamic nature of customer expectations in requiring that these

be anticipated. In view of its comprehensive coverage it is the one favoured by the authors.

This, of course, implies that banks, in seeking to provide a high quality service, should

identify these needs and expectations and establish the way in which customers prioritize

them.


14

Over the last ten years or so, a great deal of research attention has been attracted to the field of

service quality (Avkiran, 1994; Crosby and Stephens, 1987; Cronin and Taylor, 1992;

Johnston, 1997; Lassar et al., 2000; Rust and Zahorik, 1993; Brady and Robertson, 2001;

Robledo, 2001; Silvestro et al., 1990; Yavas et al., 1997). Service quality is now considered a

critical success factor that affects an organization’s competitiveness. Furthermore, service

quality is considered an essential determinant that allows an organization to differentiate itself

from the competition and therefore gain a sustainable competitive advantage. Hence, service

quality is at the forefront of both the marketing literature in general, and the services

marketing literature in particular (Lassar et al., 2000).

A review of the relevant literature reveals that the principal focus of service quality research

has been twofold. First, the identification of service quality dimensions was of primary

interest to researchers (Parasuraman et al., 1985, 1991b). Second, the development of

measurement instruments of service quality was the focus of subsequent research efforts

(Parasuraman et al., 1988, 1991a, 1993; Cronin and Taylor, 1992, 1994; Asubonteng et al.,

1996; Buttle, 1996). Next, the agenda on service quality was very quickly enhanced by

examining its consequences, such as customer retention, attraction of new customers through

word of mouth advertising, increases in productivity, improvements in market share,

reduction in staff turnover and operating costs, improvements in employee morale, financial

performance and profitability (Julian and Ramaseshan, 1994; Lewis, 1989, 1993; Yavas et al.,

2001).

Yet, research focusing on customer-specific antecedents of service quality has received little

attention. A notable exception to this lack of research in this area is the work of Parasuraman

et al. (1988), who suggested that consumers follow several ways to arrive at their expectations

for service quality and whether these expectations are actually met or not (disconfirmation

15

paradigm). More specifically, consumers’ perceptions of service quality are influenced by

factors such as communications from salespeople and social referents, various types of

information collected, and the credence consumers develop towards a service organization

(Bowen, 2000; Kangis and Passa, 1997). However, the scarce research cited above is

normative in nature.

A parallel research stream that started developing in the beginning of the 1990s was that of

market orientation (MO) and customer orientation (CO) development, two closely related but

nonetheless distinct notions. Again, the primary interest for researchers was to develop

measures to gauge the companies’ degree of MO and/or CO adoption (Kohli and Jaworski,

1990; Narver and Slater, 1990). Researchers have also been interested in studying the effect

of the two notions on company performance (Kohli and Jaworski, 1990, 1992; Narver and

Slater, 1990; Slater and Narver, 1994, 2000; Greenlay, 1995). A major finding of this research

stream was that both have a positive impact on different aspects of a company’s financial

performance, including sales and market share as well as on its non-financial performance,

including delivered quality, particularly for the service sector (Caruana et al., 1999; Wood et

al., 2000). However, with the notable exception of the studies by Deshpandé et al. (1993) and

Webb et al. (2000), past research has almost exclusively considered market orientation as an

“employee-perceived” phenomenon and, consequently, studies pertaining to the company’s

orientation have generally been based on managers self-reports.

2.3 Customer Expectations and Perceptions of Service Quality

The criteria customers use to evaluate service quality are complex and difficult to determine

precisely and, consequently, the package of variables open to manipulation more difficult to

control. Customers do not evaluate a service solely on its outcome, they also consider the

16

process of service delivery (Zeithaml et al., 1990) and possibly also the context (Grönroos,

1990; Kotler, 1994; Palmer, 1994).

Services are intangible because they are performances and personal experiences rather than

objects. Services, especially those with high labor content like banking, are heterogeneous,

which means that their performance often varies from producer to producer, from customer to

customer, from context to context and thus from day to day. It is difficult to conceptualize

placing a service in a time capsule and testing and retesting it over time. Production in most

services is likely to be inseparable from consumption. For example, the quality of the

interactions that bank cashiers have with customers can rarely be standardized to ensure

uniformity (Kotler, 1994). Customers are observing and evaluating the production process as

they experience the service which they receive (Zeithaml, 1990). Service quality attributes

have been listed as search, experience and credence attributes (Berry et al., 1985). Search

attributes, which include the physical facilities, appearance of personnel, and the supplier’s

reputation, can be gleaned before consumption of the service. Other attributes may be

regarded as experience attributes because they can be established only on the basis of actual

experience with the service (e.g. accuracy of charges, responding quickly to an enquiry or

performing a service at the agreed time). Further attributes, such as the financial security of

investments, cannot be determined by the customer even after repeated use of the service or

without consulting an expert. It has been argued that, compared with products, services tend

to be more difficult to evaluate because they contain many experience and credence attributes

(Zeithaml, 1988) and because the actual service delivered varies more from customer to

customer. The body of knowledge for quality measurement and control procedures is both

larger and better established and thus possibly more easily implemented with measurable

outcomes in the tangible product than in the service context. Therefore, estimates of the

expected value of actual quality in the service context will need numerous observations to

17

establish parametric reference points and links with theory. It has also been observed that

most of the attributes of services cannot be measured, tested and verified in advance of a sale

with a view to assuring quality (Kotler, 1994).

Consumers form expectations that lead to anticipations and predictions about the service

quality and so influence the evaluation of the service when it is received. “If you expect little

or nothing…then the simple fact of being listened to can produce rapturous satisfaction”

(Gaster, 1995). Memories of past service experiences can shape expectations because

distinctiveness and intensity of the information can make some material more easily recalled.

Expectations are also influenced by previous successful and unsuccessful services received

(Rust and Oliver, 1994).

There are several ways which may be followed by consumers to arrive at their expectations

for service quality, some cognitively complex, some rather simple. Each of these perceived

expectations is influenced by the consumers’ own experiences and beliefs and by their ability

and motivation to use various types of information. It has been argued that services based on

credence may be viewed as riskier, because they are more difficult to evaluate and have an

important effect on perception of what the consequences of a failure might be (Ostrom and

Iacobucci, 1995). Thus consumer expectations for service quality can be quite different from

what suppliers believe they are or should be (Rust and Oliver, 1994).

As with work in the customer satisfaction area, researchers (e.g. Berry et al., 1985;

Parasuraman et al., 1994) argue that perceptions of quality are based on both the customer’s

expectations and the actual service delivered. Expectation can be influenced by prior exposure

to the service, word of mouth and market information such as advertising and price.

18

Perception of the actual service delivered could be composed of a number of objective factors

for each service quality attribute (e.g accuracy of accounts), as shown earlier.

Several studies suggest that assessments of quality and value by the customer are mainly a

function of disconfirmation of doubt which may arise from differences between anticipation

and perceived performance levels. Berry et al. (1985) and Parasuraman et al. (1994) suggest

that it is possible to measure overall service quality on five underlying dimensions: tangibles,

reliability, responsiveness, assurance and empathy. Their research instrument, SERVQUAL,

was developed, inter alia, for this purpose (Zeithaml, 1988). Some consumers are searching

for information and others are following market signals; marketing can therefore play an

important role in conveying information through advertising and price (Rust and Oliver,

1994).

2.4 Relationship Between Service Quality and Satisfaction

The subject of continued (and considerable) debate in the marketing literature, the distinction

and association between service quality and customer satisfaction remains at the forefront of

many academic- and practitioner-oriented research endeavors (e.g. Anderson and Fornell,

1994; Brown and Swartz, 1989; Spreng and Mackoy, 1996). Many studies of consumer

satisfaction have been conducted in service settings (e.g. Fornell, 1992), and, generally,

researchers agree that the two constructs are conceptually distinct (Bitner, 1990; Boulding et

al., 1993). Although an extensive review of this disputation is neither the aim nor the

intention of the current research, we do wish to establish a basis for the present contention that

service quality influences, among other things, levels of customer satisfaction (Oliver, 1993).

That is, we maintain the position that service quality – as determined by its various

components – is a partial determinant of satisfaction (Parasuraman et al., 1985, 1988).

19

There exist numerous empirical works to support the quality/satisfaction causal order. Cronin

and Taylor (1992) tested, among other things, the causal relationship between service quality

and customer satisfaction. In their article, Cronin and Taylor note that marketing researchers

are not in agreement in terms of the causal order of these constructs, and suggest that

empirical justification is necessary to determine the true nature of this relationship. The

authors report ultimately that, according to their analyses, perceived service quality leads to

satisfaction (as opposed to the reverse).

In a more recent study also addressing the relationship between service quality and

satisfaction, Spreng and Mackoy (1996) tested a model developed by Oliver (1993). Oliver’s

model integrates the two constructs, and suggests, among other things, that perceived service

quality is an antecedent to satisfaction. Spreng and Mackoy’s results indicate that, as

predicted, service quality leads to satisfaction. Although the direction of the

quality/satisfaction relationship (i.e. quality leads to satisfaction) is fairly well understood for

services, the question of whether or not (and how) this relationship varies depending on

particular settings and/or situations is not.

Customer satisfaction is important aspect for service organizations and is highly related with

service quality (Bolton and Drew, 1991; Cronin and Taylor, 1994; Spreng and MacKoy,

1996). As service quality improves, the probability of customer satisfaction increases.

Increased customer satisfaction leads to behavioral outcomes such as commitment, intent to

stay (customer retention), creation of a mutually rewarding relationship (bond) between the

service provider and the user, increased customer tolerance for service failures and positive

word-of-mouth advertising about the organization (Reichheld, 1996; Heskett et al., 1997,

Goode and Moutinho, 1995; Newman, 2001).

20

Service quality has been linked with customer satisfaction within the banking industry

(Avkiran, 1994; Le Blanc and Nguyen, 1988). Banks now know that delivering quality

service to customers is essential for success and survival in today's global and competitive

banking environment (Wang et al., 2003).

Most of the studies to date, have concentrated on service quality in US and European banking

industries. While some more recent studies, have started to look at service quality in

developing countries (Yavas et al., 1997; Angur et al., 1999; Sureshchandar et al., 2003). This

study is unique in that it looks at the banking sector in African countries.

2.5 Models of Service Quality

Models have been developed to find measure and assess the determinants of service quality.

The works of Parasuraman et al. (1985, 1988, 1991, and 1994) led to the development of a

service quality model (SERVQUAL) which is the result of a comparison of the expectations

and perceptions of customers regarding a particular service. Since Parasuraman et al. (1988)

introduced the SERVQUAL instrument, many researchers have used, extended and developed

this 22-item scale to study service quality in different sectors of the services industry

(Avkiran, 1994; Babakus and Boller, 1992; Buttle, 1996; Cronin and Taylor, 1994; Fick and

Ritchie, 1991; Newman, 2001; Smith, 1995).

In studies within the banking industry, Avkiran (1994) found a 17-item, four-factor scale that

measures customer service quality in branches of an Australian commercial bank. Newman

and Cowling (1996) studied service quality in the retail banking sector of the UK by

comparing two British clearing banks. They concluded that banks have a greater strategic

interest in service quality, partly because of the link between quality, productivity and

profitability and partly due to a drive to reduce costs within the sector. Caruana (2002)

21

evaluated service loyalty over 1,000 retail banking customers in Malta. Results showed that

customer satisfaction played a mediating role in the effect of service quality on service

loyalty. Zhu et al. (2002) explored the impact of information technology (IT) on service

quality in a large consumer bank. Their results showed that IT based services have a direct

impact on the SERVQUAL dimensions and an indirect impact on customers' perceived

service quality and customer satisfaction. Lewis (1991) evaluated student's assessment of

banks and building societies with respect to overall satisfaction. Goode and Moutinho (1995)

analyzed the effects of free banking (ATM services) on overall satisfaction of students and

normal bank customers.

Research using SERVQUAL has also been conducted in the banking industry of developing

countries. Wang et al. (2003) evaluated the antecedents of service quality and product quality,

and their influences on bank reputation in the banking industry of China, using a structural

equations model. They concluded that both service quality and product quality had a

significant influence on bank reputation. Angur et al. (1999) examined the alternative

measures of service quality in the banking industry in India. In this study, the researchers

found that the SERVQUAL instrument was of a four dimensional structure and that from a

practical point of view, the SERVQUAL instrument was more helpful in addressing service

deficiencies than the other scale it was compared with. Sureshchandar et al. (2003) looked at

service quality in public, private and foreign banks in India. Yavas et al. (1997) investigated

the relationship between service quality, customer satisfaction, complaint behavior and

commitment in the banking industry of Turkey. They found that customer contact personnel

played a vital role in the delivery of high quality service.

In addition to the banking sector, SERVQUAL has been applied to other sectors in different

countries such as higher education institutions, airport services, tourism sector services,

22

accounting firms, medical services (Buttle, 1996, p. 8; Fick and Ritchie, 1991; Lam et al.,

1997; Lim and Tang, 2000; Oldfield and Baron, 2000).

Service quality is an attitude formed by a long term overall evaluation of a firm’s performance

(Hoffman and Bateson, 1997). According to Lovelock (1991) when expectation matches with

perceived service, the firm is providing quality service. Customers judge the service quality.

Therefore, a service firm should meet or exceed customer’s expectation in its service

perception.

“One plausible explanation is that satisfaction assists consumers in revising

service quality perceptions. The logic for this position consist of the

following: (1) Consumer perceptions of the service quality of a firm with

which he or she has no prior experience is based on the consumer’s

expectations; (2) subsequent encounters with the firm lead the consumer

through the disconfirmation process and revise perceptions of service

quality; (3) each additional encounter with the firm further revises or

reinforces service quality perceptions; and (4) revised service quality

perceptions modify future consumer purchase intentions reward the firm.”

(Hoffman and Bateson, 1997).

Service is an important part of life. Services permeate every aspect of our lives. We all

consume services as part of our daily life. We are not simply service consumer or customers,

but we also provide service. In one way or another we involve in service activities.

Academicians acknowledge the importance of service, hence services marketing developed

academically because it filled a need in marketing practice (Baron and Harris, 2003).

23

In the University of Texas A&M Parasuraman, Zeithaml and Berry, (1985) have done a

research on service quality by the group offering retail banking, credit cards, and securities

brokerage services. They identified ten dimensions of service quality:

• Reliability: Consistency of performance and dependability. The firm honors its promise

and performs the service right the first time.

• Responsiveness: Willingness or readiness to provide service; timeliness of service.

• Competence: Possession of the required skills and knowledge to perform the service.

• Access: Approachability and ease of contact.

• Courtesy: Politeness and respect, consideration for the consumer’s property; clean and

neat appearance of public contact personnel.

• Communication: Keeping customers informed in a language they can understand;

listening to customers; educating customers.

• Credibility: Trustworthiness, believability; having the customer’s best interest at heart.

• Security: Freedom from danger, risk, or doubt.

• Understanding: Making an effort to understand the customer’s needs; learning the

specific requirements; providing individualized attention; recognizing the regular

customer.

• Tangibles: The physical evidence of the service; physical facilities, appearance of

personnel; tools or equipment used to provide the service; other customers in the service

facility.

Gronroos (1990), generalizes these service quality dimensions into two main categories,

namely, technical quality, and functional quality. Both dimensions are important to the

customer. Technical quality refers to the relatively quantifiable aspects of the service that is

what is being done. Functional quality refers to how the technical quality is being delivered

to customers.

24

In addition, Drewes (1991) presents four conclusions from the study of Parasuraman and

associates in Texas A&M University: First, consumer perceptions of service quality result

from comparing expectations prior to receiving the service and actual experiences with the

service. Service quality is judged on the basis of whether or not it met expectations. Second,

quality evaluation drive from the service process as well as the service outcome. The manner

in which the service is performed can be crucial component of the service from the

consumer’s point of view. Third, service quality is of two types. There is the quality level at

which the regular service is delivered, such as the bank teller’s typical handling of a

transaction and there is quality level at which exceptions or problems are handled. Fourth,

when a problem occurs, the low contact service firm becomes a high contact service firm.

Parasuraman, Zeithaml and Berry (1985) repeatedly reiterate that the only criteria that count

in evaluating service quality are those defined by the customer. Therefore, in their research

they identified ten criteria that customers use to judge the quality of the service that they

receive. After further research into the measurement of service quality, Parasuraman and the

associates reached into conclusion that the ten determinants could be summarized into five

dimensions of quality, namely:

• Reliability

• Responsiveness

• Assurance

• Empathy

• Tangibles.

Reliability, responsiveness and tangibles remain unchanged. Courtesy, credibility and

security are together understood assurance. Access, communication and understanding

customer are put as empathy (Barron and Harris, 2003).

25

Kotler (2000) also calls these quality dimensions (reliability, responsiveness, assurance,

empathy, and tangibles) as determinants of service quality. By many authors and researchers

these principal service quality dimensions are mentioned and also be taken as services quality

determinants. This clarifies that customer is the sole judge of the service quality.

The area of service quality very open for research. Many researches have been done in

different service industries. Adyas (1994) studied the quality service of selected Commercial

Banks through the service marketing practices using the descriptive analytical research

design. His areas of concern were Products/Services, price, promotions, place,

participant/personnel, physical evidence and process. The findings revealed that in terms of

products/services all banks agreed that they provide prompt attention and high degree of

courtesy. In addition to the findings the researcher indicated the majority of the banks’ clients

agreed that credit facilities are available. Below is the diagram that presents the paradigm as

extracted from the theoretical framework;

Figure 2: Service Quality Assessment Paradigm

Independent Variables Dependent Variable

Source: Literature Review

• Reliability • Responsiveness • Assurance • Empathy • Tangibles • Security

Expected Service

Perceived Service

Service

Quality

26

The area of service quality very open for research. Many researches have been done in

different service industries. Dasmansyah Adyas (1994) studied the quality service of selected

Commercial Banks through the service marketing practices using the descriptive analytical

research design. His areas of concern were Products/Services, price, promotions, place,

participant/personnel, physical evidence and process. The findings revealed that in terms of

products/services all banks agreed that they provide prompt attention and high degree of

courtesy. In addition to the findings the researcher indicated the majority of the banks’ clients

agreed that credit facilities are available.

With regards to price his findings reveals that the respondents could not decide whether the

low interests on loans are available. They were also undecided whether the banks service

charges are nominal, or interest rates for the saving deposit are higher than other banks.

Finally the respondents argued that banks rendered good place for transaction; service quality

through promotion practices; met the actual physical evidence; agreed that employees are

helpful and trustworthy and the banks provide good services in terms of personnel or

participant and agreed that the process of quality services met their expectations.

An assessment of the service quality provided to students by selected Philippine business

schools was carried out by Padilla (1998). In the assessment, service quality was measured on

the basis of the gap between the expected and perceived service. The research design used in

the study was a combination of the descriptive and experimental designs. The data-gathering

instrument was a self-constructed survey questionnaire which was administered in 20 private

universities where 952 service customers and 120 service providers participated. The data

obtained were analyzed with the use of factor analysis, multiple linear regression analysis,

ANOVA, and t-test. Using tangibles, competence, attitude, content, delivery, and reliability

as educational service quality dimensions, the findings revealed that: 1) the perception scores

27

were lesser than the expectation scores; 2) the service customers and the providers had similar

expectations but differ in: a) mean responses with respect to their perceptions of the serfvice

quality dimensions, b) perceived service quality and c) service quality dimensions as

independent variables and service quality as dependent variable in terms of expectations and

perceptions; and 3) the demographic variables had statistically significant potential effect on:

a) age as to the respondents’ perceptions of attitude: b) gender as to the respondents’

perceptions of tangibles, competence and content, and c) educational level on the service

customers’ perceptions of attitude, delivery, and reliability.

Based on the findings of this study, it can be concluded that: 1) the respondents considered as

“unacceptable” the service quality provided to students by private business schools in the

Philippines, 2) there exist a gap between the service customers and the service providers in

terms of the factors that influenced much their perceptions of educational service quality, and

3) with respect to demographic variables: a) age affects positively the perceptions on attitude,

b) female respondents perceived tangibles, competence, and content at a higher level than

their male counterparts, and c) graduate students perceived attitude, delivery, and reliability

better than those of the college students.

2.6 Dimensions of Service Quality

Dimensions of service quality studied by different scholars and they gave similar

characteristics to them. Hoffman and Bateson (1997) have put the characteristics of the

dimensions as follows: excellent companies will have modern looking equipment, the

physical facilities at excellent companies will be visually appealing, employees of excellent

companies will be neat in appearance, and materials associated with the service will be

visually appealing in an excellent company as tangibles. Skinner (1990) in general form put

tangibles as physical evidence of the service.

28

Boone and Kurtz (2000) in their study express reliability as consistency and dependability of

the service provider’s performance. Hoffman and Bateson (1997) presents reliability

expectations are that excellent companies promise to do something by a certain time, they will

do so. When customers have a problem, excellent companies will show a sincere interest in

solving it. Excellent companies will perform the service right first time. Excellent companies

will insist on error free records.

Table 1: Causes of Service Quality Gaps

Service Quality Gap Possible cause of the Gap

Gap 1: the gap between

customer’s expectations and

management perception of

customer’s expectations

• Lack of marketing research (inaccurate

information, inadequate use of the findings)

• Poor upward communication from contact

personnel

• Too many management or organizational layers

Gap 2: the gap between

management perception of

customer’s expectations and

service quality specifications

• Lack of clarity of goal setting, inadequate task

standardizations

• Lack of management commitment

• Poor management of planning and planning

procedures

Gap 3: the gap between service

quality specifications and actual

service delivery

• Rigid or complicated specifications

• Poor internal marketing

• Employee role ambiguity and or conflict

• Break down in technology or systems support

29

Table 1: Causes of Service Quality Gaps (Cont’d)


Czinkota and Dickson (2000) mentioned that responsiveness reflects the firm’s commitment

to provide services in a timely manner. In addition Hoffman and Bateson (1997) emphasized

responsiveness expectations are that employees of excellent companies will tell customers

exactly when services will be performed. Employees of excellent companies will give prompt

service to customers. Employees of excellent companies will always be willing to help

customers. Employees of excellent companies will never be too busy to respond to customer

requests.

Hoffman and Bateson (1997) explained assurance expectations are that the behaviour of

employees of excellent companies will instill confidence in customers; customers of excellent

companies will feel safe in their transactions. Employees of excellent companies will

consistently courteous with customers. Employees of excellent companies will have the

knowledge to answer customer questions. Czinkota and Dickson (2000) emphasizes

assurance of service quality addresses the competence of the firm, the courtesy extended to its

customers. It reflects politeness and friendliness.

Boone and Kurtz (2000) mentioned empathy results from the service provider’s efforts to

understand customer’s needs and then individualize service delivery. In addition Hoffman

Gap 4: the gap between service

delivery and external

communications to the customer

• Propensity to over-promise and exaggerate

• Marketing communication not integrated between

operations and the advertising, sales and human

resource functions

• Differences in procedures across the

organization.

30

and Bateson (1997) further explained empathy expectations are that excellent companies will

give customers individual attention. Excellent companies will have operating hours

convenient to all their customers. Excellent companies will have employees who give

customers personal attention. Excellent companies will have the customer’s best interest at

heart, and the employees of excellent companies will understand the specific needs of their

customers.

Czinkota and Dickson (2000) characterized security dimension reflects financial risks issues,

confidentiality issues, and physical danger. Skinner (1990) explained security as freedom

from danger, risk, or doubt.

In the empathy to customers, Korczynski (2001) strongly emphasized that recruitment criteria

had moved towards prioritizing of customer service experience and evidence of customer

focus and empathy. One of the key aims for management was that workers should feel

empathy for customers and act out of that empathy. One of the aims for management was that

workers should feel empathy for customers and act out of that empathy. The other point in

recruitment is that if customer empathy was carried through in practice in their interactions

with customers as expected by the management.

With the use of modern technology the service providing company should exceed its

customers expectations. Jewel bank in Zimbabwe introduced a new ATM card known as Visa

Horizon, to promote convenience, increase safety, save time and offer value for money to

their clients. The bank is a customer driven bank. The customer’s needs are their first

priority. It is the bank’s ability to research and analyze where and how it should operate in

the industry that enabled it to realize the impact that is being caused by the opening up of the

full banking spectrum to everyone capable.

31

It is not easy to measure service quality because of its characteristics. Padilla (1998)

explained that interest in the measurement of service quality is thus understandably high, and

the delivery of higher levels of service quality is the strategy beginning considered as a key to

service provider’s efforts to position themselves more effectively in the market place.

However, the problem inherent in the implementation of such a strategy had been greatly

identified by several researchers. Service quality is an elusive and abstract construct that is

difficulty to define and measure.

Customers have different needs and are, therefore, attracted to different offers. Payne (1993)

has given explanation on positioning and service. Positioning offers the opportunity to

differentiate any service. This will create an image of service in the mind of the customers

that influence the purchase decisions. Every service offered has the potential to be perceived

as different by a customer.

Service by its nature has many characteristics that make it different from product. In the late

eighties William (1998) stated the general service characteristics, people: service require

people; technology: it can be high technology or low technology service require technology;

personal interaction; there is always personal interaction in rendering service it can be

physical, mental or emotional; time involvement: the time duration and the frequency of the

service; location: service needs location either customer’s site or service provider’s site;

supervision: service needs strong supervision for better quality; training: this is very important

since employees have direct contact with customers training is necessary.

Lovelock (1991) developed an interesting classification framework, which yields valuable

strategic marketing insights in response to five crucial questions. These questions are: what is

32

the nature of the service act? What style of relationship does this service organization have

with its customers? How much room is there for customization and judgment? What is the

nature of supply and demand for the service? How is the service delivered?

Lovelock (1991) classified service according to the nature of the service, the style of

relationship between the service organization and its customers, the degree to which the

service can be tailored to meet specific needs and the degree of judgment required by staff

who come into contact with customer, understand demand patterns over time knowing why

and when peaks occur and take steps to work out with alternative strategies, and finally the

method by which the service is delivered to customers.

There is a difference between the services and goods in many dimensions. McLaughlin

(1986) explains for many observers, the key difference between services and goods have been

that services cannot be inventoried. While this is not a sufficient description, it is a very

important attribute from the consumer’s point of view. Goods typically are produced at a

central location and put into a finished goods inventory and later shipped to a distribution

point for sale to a retailer or the final consumer. The consumer never sees the inside o f the

factory or the wholesale distribution center. Services, on the other hand, typically are

produced at the consumption point.

2.7 Gaps of Service Quality in the Banking Sector

When there is gap between consumer expectations and perception, it is a shortfall of service

quality. Boone and Kurtz (2000) clearly put gap separate expected service quality from

perceived service quality. The can indicate favorable or unfavorable differences. When the

perceived greater than the expected service it indicate favorable gap. Whereas the actual

service less than the expected service it indicate unfavorable gap.

33

There are common gaps between consumer expectations and perception. Hoffman and

Bateson (1997) name these gaps as follows:

Gap 1: The Knowledge gap, or the difference between what consumers expect of a service

and what management perceives the consumers to expect.

Gap 2: The Standards gap, which is the difference between what management, perceives

consumers to expect and the quality specifications set for service deliver.

Gap 3: The Delivery gap, that is the difference between the quality specifications set for

service delivery and the actual quality of service delivery.

Gap 4: The communications gap, which is the difference between the actual qualities of

service delivered and the quality of service described in the firm’s external communication.

The five gaps when translated into the banking industry context (Kotler, 2000) are as follows:

Gap 1: The gap between bank customer expectations and bank administrator’s perceptions of

those expectations.

Gap 2: The gap between the bank administrator’s perceptions of the customer expectations

and their translation of these expectations of bank employees.

Gap 3: The gap between banks policies, procedures, and other performance specifications

and the actual delivery or implementations of services by the bank employees.

Gap 4: The gap between actual service delivery and the bank’s external communications

(promotions) about its services.

Gap 5: The gap between bank customers expected and perceived experience at the bank.

This gap is a function of the other four.

34

Baron and Harris (2003) rejoined with Parasuraman and associates identified the causes of the

perceived service quality gap. This is the gap between consumer expectations and

perceptions. The potential causes of this gap are:

• Service providers need to ensure that management appreciates exactly what service

attributes are valued by their customers and in what order.

• Even if management fully appreciates the attributes valued by customers, they are often

unwilling, unable or simply do not care enough to put resources into solving the

problem.

• Even if quality standards are correctly set in accordance with an accurate reading of

customer expectations, service quality could still be substandard because of deficiencies

that relate to the attitude and manner of contact employees.

• Organizations promise that they will deliver one level or type of service but in reality

deliver something different.

Beside, the potential causes of consumer expectations and perceptions gap Parasuraman and

associates identified four key factors that influence a customer’s expectations. 1) Word of

mouth communications: means information gathered from other sources in oral

communication. 2) Personal needs and preferences: individuals choice in the deliverance of

the service. 3) Past experiences: there is some thing that you have used to the service in the

past visitation of that company. 4) External communications: information from different

media about the service (Baron and Harris 2003).

35

Figure 3: A Service Quality Model

WORD OF MOUTH COMMUNICATION PAST

EXPERIENCES

EXTERNAL COMMUNICATIONS TO

CONSUMERS

EXPECTED SERVICE

PERCEIVED SERVICE

SERVICE DELIVERY

TRANSLATION OF PERCEPTINS INTO SERVICE QUALITY SPECIFICATIONS

MANAGEMENT PERCEPTIONS OF

CONSUMER EXPECTATION

PERSONAL NEEDS


Managers should ask who is the customer? And what is value to the customer? These two

questions will lead management to customer satisfaction. Drucker (1995) clearly explained

the idea of valuing your customer and knowing your customer. Customers determine the

business because they are willing to pay for the service, they convert economic resources into

wealth. The customer is the foundation of a business and keeps it in existence. Customers are

not valuing only price, they also see the quality of service offered to them. Therefore, today’s

management has a challenge of maintaining of high quality service.

2.8 Service Quality Measurement

36

Using the earlier ten quality service dimensions (reliability, access, security, credibility,

understanding the customer, responsiveness, competence, courtesy, tangibles and

communication), Baron and Harris (2003) in 1988, Parasuraman and associates

published a multiple-item scale for measuring consumer perceptions service quality, known as

SERVQUAL. In 1991, Parasuraman and associates again revised their multiple term scale

based on the five quality service dimensions (reliability, responsiveness, assurance, empathy,

and tangibles). SERVQUAL became a major research instrument used by many others. It can

be used to assess the quality perceptions of the customers, that is, different departments and

employees may want to know about the quality of service that they provide to others in the

organization. SERVQUAL is a useful starting point. It is not the final answer for assessing

and improving service quality. Business Horizons (March – April 2000), suggest that if

company employees may be dissatisfied with the service, the company can use SERVQUAL

to assess the quality. It is also mentioned that SERVQUAL is available in several formats

that companies can choose the one that is most useful to them.

SERVQUAL has its own usage and method of assessing the service quality. According to

Hoffman and Bateson (1997) have stated:

“The SERVQUAL instrument consists of two sections: a 22-item section that records

customer expectations of excellent firms in the specific service industry, and a second 22

item section that measures consumer perceptions of a particular company in that service

industry (i.e., the firm being evaluated). Results from the two sections are then compared

to arrive at gap scores for each of the five dimensions. The larger the gap, the farther

consumer perceptions are from expectations, and he lowers the service quality evaluation.

Customer expectations are measured on a 7-point scale with the anchor labels of ‘not at all

essential’ and ‘absolutely essential’. Similarly, customer perceptions are measured on

another 7-point scale with anchor labels of ‘strongly agree’ and ‘strongly disagree’.

37

Hence, SERVQUAL is a 44-itemscale that measures customer expectations and perceptions

regarding five service quality dimensions”.

There were a number of challenges to Parasuraman and associates conclusions. Padilla

(1998) mentioned in his study that Cronin and Taylor criticized on several grounds. Firstly

there is very little evidence to support that the expectations performance gap is the basis for

measuring service quality. They found that a body literature is supporting superiority of

simple performance measures of service quality. Secondly, there has been little research on

the effect of service quality, consumer satisfaction, and purchasing intentions relating in little

evidence of the causal links among three. Thirdly, they questioned the conclusion that service

quality can be measured by customer satisfaction. Perceived service quality is a kind of

attitude, a long running overall evaluation, while satisfaction is a transaction specific measure.

They stressed the importance of experience based rather than expectation based norms for

comparing against performance in measuring service quality.

There are also some other criticisms on SERVQUAL instrument. Hoffman and Bateson

(1997) put clearly some of the criticisms. The major criticisms of the instrument involve the

length of the questionnaire. Both expectation and perception items of SERVQUAL results in

a 44-item survey instrument. This brought an argument that the 44-items are highly repetitive

and unnecessarily increase the questionnaire’s length. Another criticism is the validity of the

five dimensions of service quality reliability, responsiveness, assurance empathy, and

tangibles. The argument is that dimensions do not holdup under statistical scrutiny.

Therefore, opponents of the instrument question the validity of the specific dimensions in the

measurement instrument. Lastly, research of the predictive power of SERVQUAL has

indicated that the performance (perceptions) section alone of the instrument scale is a better

predictor of purchase intentions than the combined expectations minus perception instrument.

38

Therefore, the opponents of the instrument conclude that satisfaction has a more significant

effect on purchase intentions than does service quality.

There are many researches that are done to find out the relation between service quality and

profits. Parasuraman, et al. (1996) have researched on behavioral consequences of service

quality and explain the link between service qualities. The link between service quality and

profits is neither straightforward nor simple. Service quality is one of many variables

including pricing, advertising, efficiency, and image that simultaneously influence profits.

Seminal studies using the PIMS (Profit Impact of Market Strategy) showed that there are

significant associations among service quality, marketing variables, and profitability.

Findings from these studies show that companies offering superior service achieve higher

than normal market share growth, the mechanisms by which service quality influences profits

include increased market share and premium prices.

Customers judge the service quality using expectation and the service perceived. When the

service perceived meet their expectation, they will be satisfied and this shows the quality of

the service. Baron and Harris (2003), write that customers make judgments about the quality

of the service delivery process, as well as on the final outcome. The topic customer

satisfaction and quality service attracted both academicians and practitioners who believe it

will have integral part in the organization’s long-term strategy.

Management innovation is always trying to come up with many programs that improve the

quality of goods and services. Manley (2001) explained the program that was used to

improve service quality in the modern business world. Total quality management is one of

the programs that are currently used as to control quality and to increase customer

satisfaction. Using programs like total quality management, customer satisfaction is

39

becoming part of management strategies to influence professionals and employees in service

sector. Such plans were designed to improve quality and customer satisfaction. In addition,

total quality management programs emphasized performance improvement as a function of

customer satisfaction.

According to Schoell, Dessler, and Reinecke (1993) total quality management has some

challenges in the service sector. Most service firms rely heavily on frontline employees.

These employees have direct contact with customers, therefore it is difficult to control each

and every employee when he/she meets customers.

Most companies believe that quality is not only for product but also very important for service

as well. Big service companies like Bank of America are doing more researches toward

getting creative ideas to increase customer satisfaction and grow revenue. To facilitate this

research and other service related techniques to strengthen the banks relationship with

branches and customers, it has established research and development department. (Harvard

Business Review, 2003).

Hayes and Dredge (1998) mentioned that an internal customer is anyone in the organization

who receives your work. Subordinates supply information to bosses, bosses also supply work

and information to their subordinates, therefore, these two groups are customers for each other

in a given service organization. The study of Cotter (1993) examined the concept of internal

customers in which employees of an organization are viewed as customers requesting services

from other divisions. Employee satisfaction affects customers satisfaction and it has an

impact on the company’s image. Kotler (2000) explains that management regularly audits

employee job satisfaction. Karl Albrecht observed that unhappy employees could be

40

“terrorists”. This shows that for service quality the internal customers also must be happy and

contribute toward the satisfaction of the external customers.

Customers vary in their purchasing character. Most customers cannot explain why they buy

the service. McDonald and Payne (1996) categorize customers according to their response.

Customers buy service for benefit, this is to acquiring benefit out of the service, or as a

respond for various types of promotional activities or because they are loyal to that particular

service.

Stoner, Freeman and Gilbert (2000) identified that what customers expectations and wanted

became a prerequisite of effective quality assurance as customer satisfaction became the

cornerstone of business. They have reached to this conclusion based on Banc One bank

experiment. In 1985 the bank began a formal quality improvement effort in its customer

service and processing areas. The bank was targeting both internal and external customers.

After four years it has achieved its targeted goal. Manley (2001) explained the programs that

were used to improve service quality in the modern business world. In general all programs

will lead to one goal that is meeting the customers’ expectation in the service industry.

The assumption of managers toward customer expectations has began changed from time to

time. Vandermerwe (1993) emphasized that the fundamental assumptions that corporations

make about their customers are changing in the 1990’s. Mangers have learned from the

industrial era, that long-term corporate success is linked to a firm’s ability to meet its

customer’s expectations and needs. Those companies that are and will be most successful

have started to look at the customer’s entire experience, from the pre to post purchase stage.

They have been working to satisfy and retain existing customers through providing them with

the products and services that they desire.

41

The practitioner perspective is concentrating on the survey collected from customers.

Companies spend a lot of money in collecting survey. Most companies, however, would look

for benefits associated with increased profits. There is an assumption that increased customer

satisfaction will result in increased profit. In the customer perspective, different customers

will give different answer for satisfaction. Research by Parker and Mathews (2001) was

conducted to answer what do customers understand by the term satisfaction? Pleasure 14

percent, an evaluation against what was expected 13 percent, contentment 13 percent, making

the right purchase decision 13 percent, a feeling about the consumption experience 11 percent,

needs being fulfilled 11 percent, delight 9 percent, relief 7 percent, being suitably rewarded

for efforts 5 percent, comparing the situation with those of other people 4 percent.

Customer’s expectation can be seen in three perspectives, the academic perspective,

practitioner perspective, and the customer perspective. In academic perspective expectations

and satisfaction depends not on the absolute levels of performance on various attributes, but

rather on how the actual performance compares with expected performance. Satisfaction may

be regarded as 1) an emotion, an effective response to a specific service experience 2) a

fulfillment the achievement of relevant goals 3) a state level of reinforcement or arousal.

The service industries are very important for economic development. Kotler and Armstrong

(2001) mentioned that services are growing even faster in the world economy, making up a

quarter of the value of all international trade. In fact, a variety of service industries from

banking, insurance, and communications to transportation, travel, and entertainment now

account for well over 60 percent of the economy in developed countries around the world.

Hoffman and Bateson (1997) explained that developed countries have services that account

for more than 50 percent of their Gross Domestic Products (GDP). In the United States the

42

contribution to GDP has increased because of the service sectors. Service and service related

industries clearly dominate the world economy and will continue to do so in the future.

2.9 SERVQUAL Applications and Criticisms

Although many studies have used the SERVQUAL model as a framework in measuring

service quality, there has also been theoretical and operational criticisms directed towards this

model in the service marketing literature. These criticisms have mainly revolved around the

interpretation and implementation of the instrument (Buttle, 1996; Babakas and Boller, 1992;

Lam et al., 1997; Smith, 1995; Newman, 2001). A major problem with the SERVQUAL

instrument is related to its dimensional structure. A number of researchers have reported

different dimensions for expectations, perceptions and gap scores. Thus, the universality of

SERVQUAL's five dimensions has been questioned (Buttle, 1996; Carman, 1990; Cronin and

Taylor, 1994). Shortcomings concerning convergent and discriminant validity have also been

noted (Buttle, 1996). Nevertheless, despite the criticism, SERVQUAL has been widely used

in various contexts throughout other studies. The SERVQUAL instrument has been widely

used because it “provides a basic skeleton... which can be adapted or supplemented to fit the

characteristics or specific research needs of a particular organization…” (Parasuraman et al.,

1988). Yet, despite the concerns over the validity of the instrument, Buttle (1996) argues that

it is still a useful tool for the measurement of service quality.

According to Buttle (1994), notwithstanding its growing popularity and widespread

application, SERVQUAL has been subjected to a number of theoretical and operational

criticisms which are detailed below.

2.9.1 Theoretical Criticisms

43

• Paradigmatic objections: SERVQUAL is based on a disconfirmation paradigm rather

than an attitudinal paradigm; and SERVQUAL fails to draw on established economic,

statistical and psychological theory.

• Gaps model: there is little evidence that customers assess service quality in terms of P –

E gaps.

• Process orientation: SERVQUAL focuses on the process of service delivery, not the

outcomes of the service encounter.

• Dimensionality: SERVQUAL’s five dimensions are not universals; the number of

dimensions comprising SQ is contextualized; items do not always load on to the factors

which one would a priori expect; and there is a high degree of intercorrelation between

the five RATER dimensions.

2.9.2 Operational Criticisms

• Expectations: the term expectation is polysemic; consumers use standards other than

expectations to evaluate SQ; and SERVQUAL fails to measure absolute SQ

expectations.

• Item composition: four or five items can not capture the variability within each SQ

dimension.

• Moments of truth (MOT): customers’ assessments of SQ may vary from MOT to MOT.

• Polarity: the reversed polarity of items in the scale causes respondent error.

• Scale points: the seven-point Likert scale is flawed.

• Two administrations: two administrations of the instrument causes boredom and

confusion.

• Variance extracted: the over SERVQUAL score accounts for a disappointing proportion

of item variances.

44

Teas (see Buttle 1996) highlighted then important issue of the possible interpretations of what

constitutes an ‘expectation’. Buttle states that he found these explanations "somewhat vague"

and believes that respondents may be using any one of six interpretations:

• Service attribute importance. Customers may respond by rating the expectations

statements according to the importance of each.

• Forecasted performance. Customers may respond by using the scale to predict the

performance they would expect.

• Ideal performance. The optimal performance; what performance "can be".

• Deserved performance. The performance level customers, in the light of their

investments, feel performance should be.

• Equitable performance. The level of performance customers feel they ought to receive

given a perceived set of costs.

• Minimum tolerable performance. What performance "must be".

These critiques provoke very real doubt about SERVQUAL’s validity, as there are a number

of ways in which to interpret the term ‘expectation’. However, there is also the very important

point that there is no other complete and validated tool to measure service quality. Despite

these various theoretical and operational critiques of its validity, SERVQUAL is in Buttle’s

words ‘moving rapidly towards institutionalised status.’ While these critiques are reasonable

and well-worded, SERVQUAL remains as one of few complete tools to assess service quality.

3.0 Chapter Summary

This chapter has presented the literature review in respect to retail banking, service quality

measurements and service quality measurement in the banking sector. The next chapter

explains the methodology that was used to implement this research.

45

CHAPTER 3 – RESEARCH METHODOLOGY

3.0 Introduction

This chapter presents the methods that were employed in this research that includes analysis

of Existing Data within Barclays Bank Mauritius, customer satisfaction surveys and primary

Data Collection in Mauritius. This chapter is divided into two sections, each section

explaining the plan used to collect data on customer service satisfaction from Barclays Bank

Mauritius customers.

SECTION A

3.1 Existing Data within Barclays, customer satisfaction surveys.

How to excel in a globally dynamic and changing environment is the challenge facing all

organisations. Barclays need to measure and understand its client’s needs and how they

interact with the bank and its various delivery channels. The information that is generated

from such statistics needs to be used to gain key insights and understanding of those

customer expectations. In Africa generally it is difficult to collate data for the simple reason,

most of the services or operations are run manually. This limitation has as a result affected

quality of primary research regarding client information that will determine bank

differentiation.

In view of improving customer service, Barclays Bank has been involved in a number of

customer service surveys. For the purpose of this study, the researcher has used the results of

surveys from collected for Barclays in Mauritius. The overall aim of the survey, conducted in

1st quarter 2007, was to provide frequent measurement and reporting on branch network

service delivery with regards to the experiences of retail clients when interacting with

Barclays and the various competitors to Barclays in each country.

46

The specific objectives were as follows:

• Measure the level of service and satisfaction with Barclays and major competitors

among Retail customers biannually.

• Identify critical aspects of the service delivery process.

• Segment Barclays customers through loyalty modelling conducted annually and

understand the impacts on loyalty.

• Pinpoint areas for improvement.

• Benchmark the results against the previous reading’s data to identify trends and gain

competitor insights.

• Provide a client satisfaction measure that is comparable with other studies over time and

delivers workable results.

3.1.1 Methodology of Existing Surveys

Face-to-face interviews conducted from mid January to end February 2007. Telephonic top-

up interviews were conducted if necessary to complete sample. Also, respondents intercepted

in banking halls, or as they leave the premises, after a transaction has been conducted.

3.1.2 Survey Instrument

A structured questionnaire was used for this study. The average time taken to fill 1

questionnaire was 22 minutes.

3.1.3 Sample

The sample for the existing survey is 250 customers collected randomly from existing

Barclays customers.

47

3.1.4 Quality controls

The following quality control measures were used to ensure consistency in the data:

1. Meetings held with Barclay’s representatives prior to fieldwork commencing.

2. Face-to-face interviewer briefings and screenings done in Barclay’s representatives

encouraged to meet fieldworkers.

3. Pilot interviews conducted in presence of, and checked by a research company.

4. Four random questionnaires per country sent to a research company in South Africa to

check that questions were answered correctly and whether data input was correct.

5. Test data files sent to South Africa after first few interviews for centralised checking

of data input.

6. Twenty percent telephonic back checks conducted in every country.

7. Coding centralised in South Africa

SECTION B

3.2 Primary Data Collection In Mauritius

Primary data was randomly collected in Mauritius in the main branch which is located in Port-

Louis from Customers and Barclays Staff. The research problem, population, treatment of

sample, data collection and treatment, and statistical analysis tools is presented thereafter.

3.2.1 Statement of the Problem

The problem definition of this project is:

To examine any significant gaps between actual methods used to measure service quality

within Barclays Bank Mauritius and empirically tested models in service quality.

48

Figure 4: Problem Model

3.2.1.1 Main Objectives

The main objective of the study is:

• To suggest how can service be better measured at Barclays by measuring service

areas where significant gaps are identified between actual methods and empirically

tested models.

3.2.1.2 Primary Data Analysis Objectives

• To measure customer satisfaction of service quality at Barclays Bank Mauritius

defined as the difference between expectations (measured by industry average) and

actual performance.

• To measure staff perception customer satisfaction of service quality at Barclays Bank

Mauritius defined as the difference between expectations (measured by industry

average) and actual performance.

TheoryService - Customer Satisfaction

Models(Servqual Model)

Survey Barclays Bank Mauritius1. Customer Perception of Service

2. Staff Perception of Service

GAP BETWEEN THEORY & PRACTICE

Examined any significant gaps between actual methods used to measure service quality within Barclays Bank Mauritius and empirically tested models in Service Quality.

49

3.2.1.3 Hypotheses Development

Hypothesis 1





Hypothesis 2





Hypothesis 3





Hypothesis 4





50

3.2.2 Population

Customers and staff of Barclays Port-Louis branch are the population of this study. It was

this group that completed the questionnaire.

3.2.3 Sample

Random sampling was used in this study. Respondents of this research consisted of two

groups: service customers (bank customers), and service providers (bank employees and

administrators). Questionnaires were distributed to 120 respondents, 60 customers and 60

staff of the main branch of Barclays Bank Mauritius, located at Sir William Newton Street,

Port Louis.

3.2.4 Research Design

Quantitative descriptive research method was used in this study. Reliability, responsiveness,

assurance, empathy, security and tangibles are the independent variables while service quality

is the dependent variable.

3.2.5 Data Collection

Data was collected using face-to-fact interviews with customer and staff of Barclays Bank

Mauritius. Assurance of confidentiality was given to both customers and staff. The following

ethical considerations were observed in the data collection:

• Procedures were followed, and proper consent was confirmed with the bank.

• The respondents took part on voluntary basis.

• The respondents were not required to write their names.

• The respondents were given sufficient period of time to respond to the questionnaire (on

average 15 minutes per questionnaire).

51

3.2.6 Pilot Study

A pilot study of 20 questionnaire, 10 customers and 10 staff was conducted. In the pilot

study, the validity, and reliability of the questionnaire was tested. From the result, few

adjustments were made to the questionnaires.

3.2.7 The Instrumentation

The mode of data collection was two questionnaires (Appendix A). The questionnaires were

distributed and collected personally by the researcher to assure compliance to guidelines and

to secure confidentiality. It was personally formulated to measure service quality and it

consists of three sections: (a) demographic section, (b) expectations measure section, and (c)

perception measure section.

The demographic section of the questionnaire requested information from the respondents

about their age, gender, marital status, educational level, and position in the bank for service

providers. Each item contained a box or a blank space where the respondents ticked or filled

in their answers.

3.2.7.1 Customer Questionnaire

The expectation section served to record respondent’s service expectations from banks. It

consists of 22 items statements of the six dimensions: reliability, responsiveness, assurance,

empathy, security and tangibles. The statements were intended to determine the extent to

which the respondents think banks (industry average) should possess the features described in

each statement. This section used a 5-point scale ranging from strongly agree to strongly

disagree (strongly agree, agree, undecided, disagree, and strongly disagree).

52

The perception section served to record respondents’ service perceptions for the services

provided by Barclays Bank. It consists of 22 items statements, of the six dimensions:

reliability, responsiveness, assurance, empathy, and tangibles and each statement had a

counterpart in the expectation section. The statements showed the extent to which they

perceived Barclays Bank has the feature described in each statement. This section is similarly

rated through a 5-point scale ranging from strongly agree to strongly disagree (strongly agree,

agree, undecided, disagree, and strongly disagree).

A score for the quality of service was calculated by computing the differences between the

ratings that the respondents assigned to paired perception and expectation statements,

(perception minus expectation). This score was referred to as the GAP between the expected

service (ES) and the perceived service (PS). This gap is a measure of service quality.

Table 2: Scoring and Evaluation of Service Quality

Score Score Description Verbal Interpretation

Above 0 to 4 ES<PS = Expectations exceeded Excellent Quality

0 ES=PS = Expectation met Satisfactory Quality

Below 0 to -4 ES>PS= Expectations are not met Below satisfactory level

The means of customers expectation and perception; and service providers expectations and

perceptions were scaled. Below is the scoring and evaluation table:

53

Table 3: The scale of means for expected and perceived service quality

Scale Responses Mean Interval Verbal Interpretation

5 Strongly Agree 4.21 – 5.00 Very high

4 Agree 3.41 – 4.20 High

3 Undecided 2.61 – 3.40 Neutral

2 Disagree 1.81 – 2.60 Low

1 Strongly Disagree 1.00 – 1.80 Very low

3.2.7.2 Staff Questionnaire

The same principle was used to design the staff questionnaire.

3.2.8 Data Analysis

The data collected was described using a precise method of data description. The data was

analyzed using statistical tools. Waters (1995) confirm that there are several measures for the

location of data, and mean and standard deviation are part of these statistics techniques. The

mean was used as a measure of central tendency. It was used to measure the average point of

each variable in both expectations and perception of customers and service providers. The

standard deviation was used as a measure of variability. A computer program Statistical

Package for Social Scientist (SPSS) accomplished the work of tallying the raw data.

3.2.9 Preparing the Research Report

As a final step, a report was written, using the results from the survey as support evidence to

illustrate the main findings of the research project and to interpret the information gathered.

54

3.2.10 Limitations of The Survey

The study is cross-sectional in nature. While causality may in fact exist, the cross-sectional

nature of the study makes it difficult to infer this from a single study. Also the measures used,

while validated measures, were self-report measures. Supporting these self-report measures

with observational or behavioral measures would strengthen the findings.

3.2.11 Chapter Summary

This chapter has analysed the research methodology used for existing data and data collected

from Barclays Bank Mauritius Port Louis Branch. The next chapter reviews the main

findings.

55

CHAPTER 4 – DATA ANALYSIS

4.0 Introduction

This chapter presents empirical findings of this study. The chapter is divided into two main

sections. Section A reports the findings in respect to level of service as measured by exiting

surveys within Barclays. The performance of Barclays is measured quarterly and compared

to that of Barclays Indian Ocean (BIO) region and Barclays Sub Saharan Africa (BSSA),

which comprises of Mauritius and Seychelles.

Section B presents the findings from the survey which was conducted at the main branched of

Barclays Banks Plc in Mauritius, namely the Port Louis branch. This branch has the highest

number of customers per day and the highest volume of transaction per day.

4.1 Section A – Existing Data

4.1.1 Main Findings

Table 4: Summary of Existing Measurements. Q1 2007 Q3 2006 Variance: Q3

2006 to Q1 2007

Overall Satisfaction 43% 52% -9% Advocacy 80% 79% 1% Warmth 83% 85% -2% Trustworthiness 86% 84% 2% Magic Moments 15% 31% - 16% Miserable Moments 16% 17% -1% Cause to Complain 14% 15% -1% Complaints Resolution 43% 30% 13% Retention 84% 85% -1% Degree of improvement 67% 76% -9% Future consideration 54% 45% 9% Community Care 77% 80% -3%

n=250 As it can be observed in Table 3 above, out of the 12 criteria used to measure the level of

service quality for Barclays Mauritius, 7 are negative when compared to previous quarter

56

survey. It has to be noted that Miserable Moments and Cause to Complain, although being

negative are in favor of service. This shows that the level of service is on the decrease.

4.1.2 Overall Satisfaction

Overall, how satisfied are you with the quality of service provided by Barclays?

Figure 5: Overall Satisfaction

60.5

51.7

42.847.0

41.3

0

20

40

60

80

100

Mauritius Q1 2006 Mauritius Q3 2006 Mauritius Q1 2007 BIO Q1 2007 BSSA Q1 2007

%

n=250

As it can be observed from Figure 5 above, overall satisfaction levels have declined

drastically over the past three years and Mauritius scores are below the BIO and the BSSA

scores.

57

4.1.3 Advocacy

I would recommend Barclays to family, friends and work colleagues.

Figure 6: Advocacy

82.0 79.3 79.6 82.4 81.7

0

20

40

60

80

100

Mauritius Q1 2006 Mauritius Q3 2006 Mauritius Q1 2007 BIO Q1 2007 BSSA Q1 2007

%

n=250

Referring to Figure 6, recommendation scores remain relatively stable despite declining

satisfaction measures.

4.1.4 Warmth

How warm or cold do you feel about your relationship with Barclays?

Figure 7: Warmth

87.1 85.0 82.7 83.6

0

20

40

60

80

100

Mauritius Q1 2006 Mauritius Q3 2006 Mauritius Q1 2007 BIO Q1 2007

%

n=250

The Warmth measure for Mauritius is comparable to BIO levels, despite the decline seen over

time.

58

4.1.5 Value for Money

How would you rate the overall value for money at Barclays? Figure 8: Value for Money

76.5 78.872.5 74.8

0

20

40

60

80

100


%

n=250

In 2007 there has been a drop in this measure. Lower service and satisfaction levels, coupled

with perceived high fees resulted in fewer customers feeling that they get value for their

money. To improve this either service levels need to increase (most viable) or fees need to be

reduced or both.

4.1.6 Continue Using

I intend to continue using Barclays. Figure 9: Continue Using

88.0 85.2 83.7 85.9

0

20

40

60

80

100


%

n=250

59

A slight decline over time is noted, but customer retention remains relatively stable despite

sliding customer service – possibly linked to the poor quality of service and products on offer

by Barclays’ competitors.

4.1.7 Product and Service Fees

Compared to other banks, how would you rate the product and service fees charged by

Barclays?

Figure 10: Product & Service Fees

33.5 33.748.8

38.0

58.0 51.7

41.653.2

8.5 14.7 9.2 8.6

0

20

40

60

80

100


%

Higher than other banks Same as other banks Lower than other banks

n=250

Most clients believe that Barclays Mauritius’ product and service fees are higher than other

banks’. This measure has increased over time and is also much higher than BIO levels.

60

4.1.8 Degree of Improvement

Would you say that the overall service performance of Barclays is….. Figure 11: Degree of Improvement

47.537.7 33.6

46.2

30.5

31.7 33.6

29.3

15.019.7 26.5

19.85.0

3.64.63.5

1.21.71.31.54.72.0

0

20

40

60

80

100


%

Much better Slightly better Staying the same Slightly worse Much worse Don't Know

n=250

There is an increase in the amount of customers who feel Barclays’ overall service

performance is becoming worse.

61

4.2 Section B: Customer Service Evaluation Survey

This section of the analysis presents the findings from two surveys. This section is

subdivided into the following subsections:

B1 – Main Findings of Customer Survey.

B2 – Main Findings of Staff Survey.

B3 – Hypotheses Testing

4.2.1 B1 – Main Findings of Customer Survey and Gap Analysis.

4.2.1.1 Demographic Profile of Respondents

The following tables summarise the profile of the respondents of the customer surveys.

Table 5: Demographic Profile of Customers Interviewed Age Percentage Marital Status Percentage Below 20 0.0 Single 69.4 21 – 30 74.5 Married 26.5 31 – 40 17.6 Widow/Widower 4.1 41 – 50 7.8 Divorced 0.0 51 – 60 0.0 Total 100.0 More than 60 0.0 n= 49 Total 100.0

n= 51 Gender Percentage Educational Level Percentage Male 42.9 Diploma 66.0 Female 57.1 Bachelor Degree 25.5 Total 100.0 Master's Degree 8.5

n= 49 Doctorate degree 0.0 Others 0.0

Total 100 n= 47

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4.2.1.2 Customers – Industry Expectations

Table 6: Mean Scores of Industry Expectations of Barclays Customers Mean Score Std Dev TANGIBLES 1. A bank should have adequate banking equipment and facilities 4.78 0.58 2. It is expected that the bank should have up to date equipment and technology 4.87 0.39 3. Banking facilities and services should be made available to customers. 4.70 0.79 4. The appearance of the physical facilities and structure should provide a visually appealing environment. 4.62 0.80 RELIABILITY 5. A bank should expected to handle complaints or solve problems to the satisfaction of customers. 4.72 0.52 6. A bank should perform the service right always 4.67 0.73 7. A bank should keep the records and accounts of customers correctly and accurately. 4.92 0.38 RESPONSIVENESS 8. A bank’s employees expected to give prompt service to customers. 4.88 0.32 9. Bank’s employees expected always be willing to help customers. 4.88 0.32 10. Employees of a bank will tell customers exactly when services will be performed. 4.40 0.56 11. Employees of a bank will never be too busy to respond to customer’s requests. 4.27 0.82 ASSURANCE 12. Employees of a bank will create a safe environment to customers. 4.55 0.53 13. Employees of bank convey trust and confidence in customers. 4.53 0.72 14 Employees of a bank are consistently courteous with customers 4.53 0.72 15. Employees of a bank should have the knowledge and skills to answer customer’s questions. 4.80 0.44 EMPATHY 16. A bank employees are expected to give customers individual attention. 4.27 0.82 17. Banks are expected to have operating hours convenient to all their customers. 4.55 0.53 18. A bank employees and administrators should know customer’s best interest. 4.53 0.72 SECURITY 19. A bank should be secure. Eg. Security guard, safe ATM location. 4.87 0.39 20. A bank employees instills confidence in customers. 4.53 0.79 21. Customers should feel safe during transactions in the bank. 4.75 0.51 22. The bank environment should give confidence to customers. 4.68 0.54

n=60

Referring to Table 6, on a 5 point Likert scale, customers agree with all the 22 statements

provided which represent the industry average, that is, the level of service required in the

Mauritian Banking Sector.

63

4.2.1.3 Customers – Barclays Performance

Table 7: Mean Scores of Customer Performance at Barclays Mean

Score Std Dev

TANGIBLES 1. My bank has adequate banking equipment. 2.70 1.21 2. My bank has up to date equipment and technology 2.52 1.20 3. Banking facilities and services are made available to customers. 3.17 1.22 4. The appearance of the physical facilities and structures provide a visually appealing environment. 3.33 1.17 RELIABILITY 5. My bank handles complaints, or solves problems to the satisfaction of customers 3.47 1.02 6. My bank performs the service right always 3.15 1.26 7. My bank keeps the records and accounts of customers correctly and accurately. 3.27 1.18 RESPONSIVENESS 8. My bank employees give prompt service to customers. 3.60 0.98 9. My bank employees are always willing to help customers 3.63 0.84 10. Employees of my bank will tell customers exactly when services will be performed. 3.35 1.07 11. Employees of my bank are never too busy to respond to customer’s requests. 3.20 1.18 ASSURANCE 12. My bank employees will create a safe environment to customers. 3.68 1.10 13. My bank employees convey trust and confidence in customers. 3.83 1.03 14. Employees of my bank are consistently courteous with customers. 3.77 0.93 15. Employees of my bank have the knowledge and skills to answer customer’s questions. 3.45 1.08 EMPATHY 16. My bank employees give customers individual attention. 3.65 1.05 17. My bank has convenient operation hours to all our customers. 3.63 1.19 18. My bank employees and administrators know our customer’s best interest. 3.63 0.97 SECURITY 19. My bank is secured. E.g. Security guard, ATM location, etc. 3.70 1.15 20. My bank employees instills confidence in customers. 3.85 1.07 21. Customers feel safe during transaction in my bank. 3.65 1.10 22. My bank environment gives confidence to customers. 3.65 1.09

n=60

As it can be observed from Table 7 above, the mean score of most of statements out of the 22

statements measuring actual performance of Barclays Bank Mauritius are between 3.33 and

64

3.85, implying that customers are either undecided or just agree with the performance of the

bank.

4.2.2 B2 – Main Findings of Staff Survey and Gap Analysis

Table 8: Demographic Profile of Staff Interviewees Age Percentage Marital Status Percentage Below 20 0.0 Single 33.3 21 – 30 66.7 Married 58.3 31 – 40 25.0 Widow/Widower 0.0 41 – 50 0.0 Divorced 8.3 51 – 60 8.3 Total 100.0 More than 60 0.0 n= 48 Total 100.0

n= 51 Gender Percentage Educational Level Percentage Male 41.7 Diploma 66.7 Female 46.7 Bachelor Degree 25.0 Total 100.0 Master's Degree 8.3

n= 48 Doctorate degree 0.0 Others 0.0

Total 100 n= 48

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4.2.2.1 Staff– Industry Expectations

Table 9: Mean Score Staff– Industry Expectations

Mean Score Std Dev TANGIBLES 1. A bank should have adequate banking equipment and facilities 4.93 0.25 2. It is expected that the bank should have up to date equipment and technology 4.80 0.40 3. Banking facilities and services should be made available to customers. 4.80 0.55 4. The appearance of the physical facilities and structure should provide a visually appealing environment. 4.87 0.34 RELIABILITY 5. A bank should expected to handle complaints or solve problems to the satisfaction of customers. 4.60 0.72 6. A bank should perform the service right always 4.20 1.12 7. A bank should keep the records and accounts of customers correctly and accurately. 4.67 0.88 RESPONSIVENESS 8. A bank’s employees expected to give prompt service to customers. 4.80 0.40 9. Bank’s employees expected always be willing to help customers. 4.53 0.72 10. Employees of a bank will tell customers exactly when services will be performed. 4.13 0.72 11. Employees of a bank will never be too busy to respond to customer’s requests. 4.00 0.97 ASSURANCE 12. Employees of a bank will create a safe environment to customers. 4.40 0.62 13. Employees of bank convey trust and confidence in customers. 4.67 0.48 14 Employees of a bank are consistently courteous with customers 3.87 1.10 15. Employees of a bank should have the knowledge and skills to answer customer’s questions. 4.47 1.10 EMPATHY 16. A bank employees are expected to give customers individual attention. 4.47 0.50 17. Banks are expected to have operating hours convenient to all their customers. 3.80 1.29 18. A bank employees and administrators should know customer’s best interest. 4.20 1.05 SECURITY 19. A bank should be secure. Eg. Security guard, safe ATM location. 4.67 0.88 20. A bank employees instills confidence in customers. 4.80 0.40 21. Customers should feel safe during transactions in the bank. 4.53 0.72 22. The bank environment should give confidence to customers. 4.13 0.72

n=60 As it can be observed from Table 9, on a 5 point Liket scale, staff agree with all the 22

statements provided which represent the industry average, that is, the level of service required

in the Mauritian Banking Sector.

66

4.2.2.2 Staff – Barclays Performance

Table 10: Mean Score Staff – Barclays Performance

Mean Score Std Dev

TANGIBLES 1. My bank has adequate banking equipment. 3.02 1.23 2. My bank has up to date equipment and technology 2.20 0.92 3. banking facilities and services are made available to customers. 3.47 0.96 4. The appearance of the physical facilities and structures provide a visually appealing environment. 3.40 1.21 RELIABILITY 5. My bank handles complaints, or solves problems to the satisfaction of customers. 3.47 0.81 6. My bank performs the service right always 3.13 0.89 7. My bank keeps the records and accounts of customers correctly and accurately. 3.07 1.30 RESPONSIVENESS 8. My bank employees give prompt service to customers. 3.53 0.81 9. My bank employees are always willing to help customers 4.20 0.66 10. Employees of my bank will tell customers exactly when services will be performed. 3.07 0.78 11. Employees of my bank are never too busy to respond to customer’s requests. 2.87 0.96 ASSURANCE 12. My bank employees will create a safe environment to customers. 3.60 0.98 13. My bank employees convey trust and confidence in customers. 3.63 0.84 14. Employees of my bank are consistently courteous with customers. 3.35 1.07 15. Employees of my bank have the knowledge and skills to answer customer’s questions. 3.60 0.98 EMPATHY 16. My bank employees give customers individual attention. 3.80 1.12 17. My bank has convenient operation hours to all our customers. 3.73 1.13 18. My bank employees and administrators know our customer’s best interest. 3.47 1.16 SECURITY 19. My bank is secured. E.g. Security guard, ATM location, etc. 3.47 1.32 20. My bank employees instills confidence in customers. 3.73 0.94 21. Staff feel safe during transaction in my bank. 3.73 0.86 22. My bank environment gives confidence to Staff. 3.53 1.16

n=60

As it can be observed from Table 10 above, the mean score of most of statements out of the

22 statements measuring perception of staff in respect to the actual performance of Barclays

Bank Mauritius are between 3.02 and 3.73, implying that staff are either undecided or just

agree with the performance of the bank.

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4.2.3 B3 – Hypotheses Testing

Hypothesis 1





4.2.3.1 Gap Analysis – Customer Survey

When there is gap between consumer expectations and perception, it is a shortfall of service

quality. Boone and Kurtz (2000) clearly put gap separate expected service quality from

perceived service quality. The can indicate favorable or unfavorable differences. When the

perceived greater than the expected service it indicate favorable gap. Whereas the actual

service less than the expected service it indicate unfavorable gap. In order to measure the gap

as per the service dimensions defined in the questionnaire, Cronbach’s Alpha test of

Reliability was used to test the internal consistency of the variables in measuring each

construct.

The reliability of the statements representing each construct has been calculated prior

grouping of the statememts. Reliability refers to consistency and implies that the

questionnaire should have the same effect when given to different respondents under similar

conditions. In research literature, the Cronbach’s alpha is often reported as an indication of

reliability. According to Ghauri et al (1995), the Cronbach’s α can be conceived as a measure

of the intercorrelations between the various constructs used to measure a variable. Ghauri et

al (1995) claim that the assumption is that the various indicators should correlate positively

but not perfectly.

68

An alpha or more than 0.6 is normally considered to be acceptable. Refer to Appendix B for

Cronbach’s Alpha SPSS results.

Table 11: Cronbach’s Alpha – Customer Survey Customer Survey Industry Barclays Tangible 0.9 0.9 Reliability 0.7 0.9 Responsiveness 0.6 0.9 Assurance 0.8 0.9 Empathy 0.7 0.9 Security 0.8 0.9

n=60 Table 12: Service Gap Customer Survey EXPECTATION PERFORMANCE GAP Tangibles 4.74 2.93 -1.81 Reliability 4.77 3.29 -1.47 Responsiveness 4.61 3.45 -1.16 Assurance 4.60 3.68 -0.92 Empathy 4.45 3.64 -0.81 Security 4.71 3.71 -1.00 Overall Score 4.65 3.45 -1.20

n=60 As it can be observed from Table 12 above, H10 there is no significant difference between

customer expectation and performance of customer service at Barclays Bank Mauritius is

rejecrted, and H11 is accepted, that is, there is significant difference between customer

expectation and performance of customer service at Barclays Bank Mauritius. The overall

gap is -1.2, performance (P) is less than expectation (E), which implies that customers are

dissatisfied with the overall level of service offered by Barclays Bank in Mauritius.

69

Figure 12: Service Gap Customer Survey

Measuring Customer Service Gaps

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

TANGIBLES

RELIABILITY

RESPONSIVENESS

ASSURANCE

EMPATHY

SECURITY

OVERALL SCORE

Mea

n Sc

ore

EXPECTATION PERFORMANCE GAP

n=60

As it can be observed from Table 12 and Figure 12, Barclays Bank Mauritius customers are

dissatisfied with service measures for all of the 6 dimensions presented to them in the survey.

The level of dissatisfaction ranges from -0.8 to -1.9 on a scale of -1 to -5 representing level of

dissatisfaction. The dimensions with which customers are more dissatisfied are

TANGIBILITY with a score of -1.9 follows closely by RELIABILITY with a score of -1.5.

70

Hypothesis 2





4.2.3.2 Gap Analysis – Staff Survey

Table 13: Gap Analysis – Staff Survey Staff Survey Industry Barclays Tangible 0.6 0.9 Reliability 0.7 0.7 Responsiveness 0.7 0.7 Assurance 0.7 0.9 Empathy 0.7 0.8 Security 0.7 0.7

n=60 The reliability test of the staff gaps can be observed in Table 13 above.

Table 14: Service Gap Staff Survey EXPECTATION PERFORMANCE GAP Tangibles 4.85 3.02 -1.83 Reliability 4.49 3.22 -1.27 Responsiveness 4.37 3.42 -0.95 Assurance 4.35 3.55 -0.80 Empathy 4.16 3.67 -0.49 Security 4.53 3.62 -0.92 Overall Score 4.46 3.41 -1.04

n=60

As it can be observed from Table 12 above, H20, there is no significant difference between

staff expectation and performance of customer service at Barclays Bank Mauritius is rejected

and H11 is accepted, that is, there is significant difference between staff expectation and

performance of customer service at Barclays Bank Mauritius. The overall gap is -1.04,

71

performance (P) is less than expectation (E), which implies that staff are dissatisfied with the

overall level of service offered by Barclays Bank in Mauritius.

Figure 13: Gap Analysis – Staff Survey

Measuring Staff Service Gaps

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

TANGIBLES

RELIABILITY

RESPONSIVENESS

ASSURANCE

EMPATHY

SECURITY

OVERALL SCORE

Mea

n Sc

ore

EXPECTATION PERFORMANCE GAP

n=60

Referring to Table 14 and Figure 13, Barclays Bank Mauritius staff are dissatisfied with

service measures for all of the 6 dimensions presented to them in the survey. The level of

dissatisfaction ranges from -0.4 to -1.8 on a scale of -1 to -5 representing level of

dissatisfaction. The dimensions with which customers are more dissatisfied are

TANGIBILITY with a score of -2.0 follows closely by RELIABILITY with a score of -1.3.

The overall mean score -1.04 confirms that Perception (P) of service quality at Barclays are

lower than the Expectation (E).

72

Table 15: Overall Gap Analysis Customers

Gap Staff Gap

Difference

TANGIBLES 1. Adequate banking equipment. -2.08 -1.92 -0.17 2. Up to date equipment and technology -2.35 -2.60 0.25 3. Banking facilities and services are made available to customers. -1.53 -1.33 -0.20 4. The appearance of the physical facilities and structures provide a visually appealing environment. -1.28 -1.47 0.18 Mean -1.81 -1.83 0.02 RELIABILITY 5. Bank handles complaints, or solves problems to the satisfaction of customers. -1.25 -1.13 -0.12 6. Bank performs the service right always -1.52 -1.07 -0.45 7. Bank keeps the records and accounts of customers correctly and accurately. -1.65 -1.60 -0.05 Mean -1.47 -1.27 -0.20 RESPONSIVENESS 8. Bank employees give prompt service to customers. -1.28 -1.27 -0.02 9. Bank employees are always willing to help customers -1.25 -0.33 -0.92 10. Employees of the bank will tell customers exactly when services will be performed. -1.05 -1.07 0.02 11. Employees of the bank are never too busy to respond to customer’s requests. -1.07 -1.13 0.07 Mean -1.16 -0.95 -0.21 ASSURANCE 12. Bank employees will create a safe environment to customers. -0.87 -0.80 -0.07 13. Bank employees convey trust and confidence in customers. -0.70 -1.03 0.33 14. Employees of the bank are consistently courteous with customers. -0.77 -0.52 -0.25 15. Employees of the bank have the knowledge and skills to answer customer’s questions. -1.35 -0.87 -0.48 Mean -0.92 -0.81 -0.12 EMPATHY 16. Bank employees give customers individual attention. -0.62 -0.67 0.05 17. Bank has convenient operation hours to all our customers. -0.92 -0.07 -0.85 18. Bank employees and administrators know our customer’s best interest. -0.90 -0.73 -0.17 Mean -0.81 -0.49 -0.32 SECURITY 19. The bank is secured. E.g. Security guard, ATM location, etc. -1.17 -1.20 0.03 20. Bank employees instill confidence in customers. -0.68 -1.07 0.38 21. Customers feel safe during transaction in the bank. -1.10 -0.80 -0.30 22. The bank environment gives confidence to customers. -1.03 -0.60 -0.43 Mean -1.00 -0.92 -0.08

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In addition, referring to Table 15 above, an analysis was done to compare the gap of

customer’s dissatisfaction and staff dissatisfaction with service. The main findings are as

follows:

TANGIBLES, the mean difference is 0.02, implying that staff are more dissatisfied with

tangibles than customers.

RELIABILITY, the mean difference is -0.20, which means that customers are more dissatisfied with

reliability statements than staff.

RESPONSIVENESS, the mean difference is -0.21, which means that customers are more dissatisfied

with responsiveness statements than staff..

ASSURANCE, the mean difference is -1.2, which means that customers are more dissatisfied with

responsiveness statements than staff.

EMPATHY, the mean difference is -3.2, which means that customers are more dissatisfied with


SECURITY, the mean difference is -0.08, which means that customers are more dissatisfied with


74

4.2.3.3 Factor Analysis -Identification of Barclays Service Dimensions

Hypothesis 3





To test hypothesis 3, further study was carried out with the gaps from the customer survey

using the Principal Component Factor Analysis with Varimax rotation in order to explore the

different dimensions of the data in a more objective manner.

Factor analysis attempts to identify underlying variables, or factors, that explain the pattern of

correlations within a set of observed variables. Factor analysis is often used in data reduction

to identify a small number of factors that explain most of the variance observed in a much

larger number of manifest variables.

4.2.3.4 Customers Service Dimensions

Four factors were extracted with the eigen value greater than one, accounting for 80.72% of

the total variance in the data.

75

Figure 14: Scree Plot Customer Gaps

22212019181716151413121110987654321

Component Number

14

12

10

8

6

4

2

0

Eige

nval

ue

Scree Plot

Only the 4 factor loadings, greater than 0.40 or more and explaining the greatest the factor as

compared to other factors were included. According to the Varimax matrix, the 22 statements

were retained by the 4 factors. Table 14 on the following page illustrates the related factor

matrix with the factor loadings.

Further, the 4 factor extracted can be explained by the following new service quality

dimensions in regards to customer perspective.

76

Table 16: Factor Schedule for Customer Service Loading Eigenvalue

s Percentage

of explained variance

New Dimension C1 – Employees Attitude, Opening Hours and Record Accuracy 12.515 56.9%

7. Bank keeps the records and accounts of customers correctly and accurately. 0.61

11. Employees of the bank are never too busy to respond to customer’s requests. 0.66

12. Bank employees will create a safe environment to customers. 0.72

13. Bank employees convey trust and confidence in customers. 0.78

14. Employees of the bank are consistently courteous with customers. 0.82

16. Bank employees give customers individual attention. 0.87

17. Bank has convenient operation hours to all our customers. 0.70

18. Bank employees and administrators know our customer’s best interest. 0.84

20. Bank employees instill confidence in customers. 0.58 New Dimension C2 – Tangibles and Service Consistency 2.79 12.7%

1. Adequate banking equipment. 0.87 2. Up to date equipment and technology 0.85 3. Banking facilities and services are made available to customers. 0.89

4. The appearance of the physical facilities and structures provide a visually appealing environment. 0.85

5. Bank handles complaints, or solves problems to the satisfaction of customers. 0.65

6. Bank performs the service right always 0.66 New Dimension C3 – Prompt Service, Knowledge and Skills 1.28 5.82%

8. Bank employees give prompt service to customers. 0.71 9. Bank employees are always willing to help customers 0.80

10. Employees of the bank will tell customers exactly when services will be performed. 0.74

15. Employees of the bank have the knowledge and skills to answer customer’s questions. 0.57

8. Bank employees give prompt service to customers. 0.71 New Dimension C4 – Safety 1.17 5.32% 19. The bank is secured. E.g. Security guard, ATM location, etc. 0.63

20. Bank employees instill confidence in customers. 0.44 21. Customers feel safe during transaction in the bank. 0.81 22. The bank environment gives confidence to customers. 0.74

Total Variance Explained 80.72%

77

Dimension C1, Employees Attitude, Opening Hours and Record Accuracy, which is

explained by 56.9% variance in the data, highlights that customers require bank employees to

have a service culture and that the processes of the bank should be reliable in respect to

keeping accurate records. The factor also includes convenient opening hours as criteria.

Dimension C2, Tangibles and Service Consistency, which is explained by 12.7% variance

in the data, highlights the tangibles of the bank, namely, banking equipment, technology, physical

facilities and services. The factor also includes service consistency as criteria.

Dimension C3, Prompt Service, Knowledge and Skills, which is explained by 5.82%

variance in the data, stresses on the promptness of customers in assisting customers and the

knowledge and skills of the staff.

78

4.2.4 Staff Service Dimensions

Six factors were extracted with the eigen value greater than one, accounting for 86.48% of the

total variance in the data.

Figure 15: Scree Plot Staff Gaps

22212019181716151413121110987654321

Component Number

8

6

4

2

0

Eige

nval

ue

Scree Plot

Only the 6 factor loadings, greater than 0.40 or more and explaining the greatest the factor as

compared to other factors were included. According to the Varimax matrix, the 22 statements

were retained by the 6 factors. Table 21 on the following page illustrates the related factor

matrix with the factor loadings.

79

Table 17: Factor Schedule for Staff Service Gaps

Loadings Eigenvalues Percentage of

explained variance

New Dimension S1 – Equipment & Safety 8.6 39.15% 1. Adequate banking equipment. 0.86 2. Up to date equipment and technology. 0.78 4. The appearance of the physical facilities and structures provide a visually appealing environment. 0.82

12. Bank employees will create a safe environment to customers. 0.61

21. Customers feel safe during transaction in the bank. 0.65 New Dimension S2 – Facilities & Services, Staff Knowledge and Consideration 3.0 13.8%

3. Banking facilities and services are made available to customers. 0.45

10. Employees of the bank will tell customers exactly when services will be performed. 0.83

15. Employees of the bank have the knowledge and skills to answer customer’s questions. 0.88

16. Bank employees give customers individual attention. 0.56

17. Bank has convenient operation hours to all our customers. 0.64

18. Bank employees and administrators know our customer’s best interest. 0.68

22. The bank environment gives confidence to customers. 0.65

New Dimension S3 – Complaints Handling & Prompt Service 2.5 11.7%

5. Bank handles complaints, or solves problems to the satisfaction of customers. 0.64

8. Bank employees give prompt service to customers. 0.86 9. Bank employees are always willing to help customers 0.85 New Dimension S4 – Consistently Courteous and Safety 1.9 8.45%

14. Employees of the bank are consistently courteous with customers. 0.88

19. The bank is secured. E.g. Security guard, ATM location, etc. 0.87

New Dimension S5 – Helpful and Confidence 1.6 7.34% 11. Employees of the bank are never too busy to respond to customer’s requests. 0.52

13. Bank employees convey trust and confidence in customers. 0.66

20. Bank employees instill confidence in customers. 0.88 New Dimension S6 – Facilities & Records 1.3 6.02% 3. Banking facilities and services are made available to customers. 0.65

6. Bank performs the service right always 0.86 7. Bank keeps the records and accounts of customers correctly and accurately. 0.55

Total Variance Explained 86.48%

80

Dimension S1, Equipment & Safety, which is explained by 39.15% variance in the data,

highlights that staff require adequate banking equipment, technology, physical facilities and a

safe environment.

Dimension S2, Facilities & Services, Staff Knowledge and Consideration, which is

explained by 13.8% variance in the data, highlights that staff of the bank expect banking

facilities and services are made available to customers and they have the knowledge and skills

to answer customer’s questions. It also pinpoints that banks must have convenient operation

hours to all our customers.

Dimension S3, Complaints Handling & Prompt Service, which is explained by 11.7%

variance in the data, stress on complaints and prompt service.

Dimension S4, Consistently Courteous and Safety which is explained by 8.5% variance in

the data, focus on courtesy and security,

Dimension S5, Helpful and Confidence, which is explained by 7.3% variance in the data,

highlights the importance that staff must convey trust and confidence in customers.

Dimension S6, Facilities & Records, which is explained by 6.0% variance in the data is in

regards to the Bank keeping the records and accounts of customers correctly and accurately,

and performs the service right always.

81

Hence in respect to Hypothesis 3, H30 there is no significant difference between customer

and staff customer service dimensions at Barclays Bank Mauritius is rejected and H31 is

accrepted, that is, there is significant difference between customer and staff customer service

dimensions at Barclays Bank Mauritius. This explained by the fact that different number of

service quality dimensions has been extracted for each sample, customers 4 and staff 6, and

the statements load in the factors differently.

Hypothesis 4





Both the exiting surveys done by external researchers and the data in this study have the same

overall conclusion, that is, service quality at Barclays Bank Mauritius is on the decline.

Referring to Figure 5 on page 56, as per the external survey overall satisfaction levels have

declined drastically over the past three years and Mauritius scores are below the BIO and the

BSSA scores. From the analysis of data collected from this survey, both the overall service

quality gaps for customers and staff is negative.

Hence, the H40 hypothesis is accepted, that is, there is no significant difference between

theory and practice of customer service satisfaction at Barclays Bank Mauritius and the H41

hypothesis is rejected, that is, there is significant difference between theory and practice of

customer service satisfaction at Barclays Bank Mauritius.

82

CHAPTER 5 – DISCUSSION & RECOMMENDATIONS

5.0 Introduction

The researcher through the results of the study has found that there are gaps in most areas

between service perception both from the customer and the service provider’s end. The key

areas that indicate the significant gaps are in Tangibles, which show staff are more dissatisfied

than customers, the areas of dissatisfaction are systems and equipment related. They believe

that the technology to enhance the service experience is outdated and the physical appearance

of the bank is not appealing enough to attract and retain customers. The mean difference for

Tangibles is 0.02

The mean difference for is -0.25 which means that customers are more dissatisfied with

reliability statements than staff. Customers negative views in this category indicates that their

queries are not acted upon within a reasonable time and feel that the bank does not provide

consistent service. Another key area in this category is the record keeping and accuracy of

information provided was not to their satisfaction.

Customers also feel strongly dissatisfied around prompt and willing service; the scoring has

been low in areas that are related to staff responding to customer requests with correct details

of their transaction. The mean difference in Responsiveness was -0.21

Customers also felt more dissatisfied than staff around the confidentiality of their requests,

they believe that staff is not courteous enough and the environment in which they conclude

their transactions are not safe and secure. The mean difference for assurance is -1.2 which

reflect a strong negative sentiment.

83

The final area of the survey covered Empathy and customers once more reflected more

dissatisfaction than staff, and indicated that they do not receive individual attention and the

banking hours are not convenient with their interest in mind.

5.1 Staff evaluation on perception of service

A starting point to get service right within an organization has to start with the service

providers themselves, all too often organizations steam ahead with service initiatives and

campaigns but do not have the support and buy in of their staff. Barclays had fallen victim to

the same as we seen the hasty roll out of the Service Revolution Campaign but the staff were

not consulted in the process on their views and perception of customer service. In general,

staff consultation and getting their buy in plays a vital role in launching new initiatives and

placing the customer at the centre of the business.

As per the feedback in the second set of questionnaires it has been evident that staff has a very

different view on how they are serving customers and the tools that are required to provide

effective customer service. Staff had pointed out that both the environment and systems of

which they work off need to be conducive to the customers in order to get their satisfaction

and delight.

5.2 Staff Training & Career progression

Achieving goals of becoming the best customer services provider requires retaining and

attracting high quality employees who will deliver great customer service. More important

before employees could take advantage of any opportunities posed to them, they need to be

banking experts. Banking expertise would also allow staff to provide great customer service.

Staff training with clear career progression retains and motivates them to strive and go the

extra mile. Barclays has launched an on-line University for all staff however the channel has

84

not been effectively used to date and have a small enrollment of employees. Its imperative

with the high turnover of frontline staff any new employee joining should be adequately

trained and skilled to a level that they will be able to meet the customers service expectation.

Employees should also be shown and given growth opportunities that would give them access

to a wider range of careers and will also allow the company to recruit and retain quality

people, including making temporary staff permanent.

5.3 Actual Service Measurement Systems

If it is believed that customer satisfaction drives business results and that customer

satisfaction is driven by process efficiency, supported by quality and effort of the employees,

then the measurement system must indicate the above. The organization needs to understand

which customers its services through which channel and are they satisfied with use of that

channel. The sample size and frequency is also critical, customer satisfaction surveys such as

interaction with customer service, a re-purchase or product upgrade may be important to get

the true pulse of the customer base. Small sample sizes and frequent surveying can paint a

misleading picture if not analyzed appropriately. Many organizations get their measures and

applications wrong in four areas;

• The measurement is used for wrong reasons

• The measures are not appropriate to the organizations culture.

• The objects of measures, employees, do not properly relate to the measures.

• Applying unique measures to the customer service centre in isolation from the rest of

the organization.

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5.4 Interpretation of Data From Measurement Systems

Measuring customer satisfaction is an important first step and most companies already have

some sort of measurement system in place. However taking a periodic look at how the system

evolved and how the data is being used internally is critical. The key to managing customer

satisfaction successfully is gathering accurate and timely information from the right

customers, and using the information in a systematic way to drive product, sales, development

and enhance the end to end support process. The bank requires to introduce a management

information team that can clearly evaluate the service feedback scores with corrective

actioning and service improvement plans were required. The team also needs to ensure that

the positive feedback is analyzed and communicated to both staff and customers for

sustainability.

86

CHAPTER 6 – CONCLUSION AND AREA FOR FURTHER RESEARCH

6.0 Introduction

This chapter presents the conclusion of this study and suggests areas for further research.

6.1 The Way Forward

Barclays Bank Mauritius has experienced exponential growth over the last five years. The

bank has been recruiting many new staff and acquiring many new customers at the expense of

its direct competitors which are the Mauritius Commercial Bank and the State Bank of

Mauritius.

The bank has invested in many measures to ensure the right level of customer service and this

survey confirms that the result that the bank has from its ongoing survey is correct and

confirms that there is no significant difference between the results obtained using theoretical

models and the one that the bank is currently using. That is both results conclude that service

is on the decline within Barclays Bank Mauritius. Hence, the bank must take corrective

measures to increase customer service is on the decline at the Bank.

This study has also highlighted the perception and expectation of staff on service quality.

Without proper training and drive, the employees of the bank will not be in a position to

ensure consistent service delivery to both internal and external clients. Barclays Bank has

created Barclay University, which is a online University for its staff to grow. Such initiatives

should be encouraged and staff motivated to study further and contribute to enhance service

levels within bank.

6.2 Limitations and future of the study

There were some limitations faced in this study. The first limitation concerns the national

context of the study which put constraints on the ability to generalise for other companies and

87

national-cultural contexts. To this end, replication of the study is necessary before it can be

generalised.

At the national level, this type of study could be replicated in other service sectors in both

areas of the island, such as travel, higher education, tourism, and health. At regional level,

this study could also be replication in other Barclays Bank in the Indian Ocean and the Sub

Saharan African region.

This study could be extended by looking at the relationship between SERVQUAL, customer

satisfaction and the other behavioral outcomes. As a final alternative, future research efforts at

a national scale could be directed at front-line bank employees and how they can enhance

service delivery. At an international level, the study can be implemented in the banking

sectors of other small island economies.

Future researchers may also wish to examine their impact controlling for the (possible)

moderating effect that the consumer’s experience may have on the influence both factors have

on perceived quality.

Finally, future research efforts could concentrate in building a broader conceptual model of

factors that influence service quality, by including other variables, such as company

incentives and communication programs in general, the front-line personnel’s conduct during

the encounter and the interaction of the user with the technology employed during the

provision of the service.

88

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APPENDICES

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Appendix A – Survey Questionnaires

Customer Survey Questionnaires

I. PART ONE Kindly fill in the blanks after the items which best describe yourself, or place a check mark ( ) for each questions accordingly. 1. Your age: [ ] below 20 [ ] 21 - 30 [ ] 31 - 40 [ ] 41 - 50 [ ] 51 - 60 [ ] 61 and over. 2. Sex: [ ] Male [ ] Female. 3. Marital Status: [ ] Single [ ] Married [ ] widow/widower [ ] Divorced 4. Educational Level: [ ] Diploma [ ] Bachelor degree [ ] Master’s degree

[ ] Doctorate degree Others (please specify) _____________________ II. PART TWO This survey deals with your opinions of services provided by commercial banks in Mauritius. Please show the extent to which you think banks should possess the features described in each statement. Rate using scale described on top of the questions and place a check mark ( ) on the space provided. There are no right or wrong answers, all we are interested in is a number that is best shows your expectations about banks.

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TANGIBLES 1. A bank should have adequate banking equipment and facilities

2. It is expected that the bank should have up to date equipment and technology

3. Banking facilities and services should be made available to customers. 4. The appearance of the physical facilities and structure should provide a

visually appealing environment. RELIABILITY

5. A bank should expected to handle complaints or solve problems to the satisfaction of customers.

6. A bank should perform the service right always 7. A bank should keep the records and accounts of customers correctly

and accurately.

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RESPONSIVENESS 8. A bank’s employees expected to give prompt service to customers.

9. Bank’s employees expected always be willing to help customers. 10. Employees of a bank will tell customers exactly when services will be

performed. 11. Employees of a bank will never be too busy to respond to customer’s

requests. ASSURANCE

12. Employees of a bank will create a safe environment to customers. 13. Employees of bank convey trust and confidence in customers. 14 Employees of a bank are consistently courteous with customers 15. Employees of a bank should have the knowledge and skills to answer

customer’s questions. EMPATHY

16. A bank employees are expected to give customers individual attention.

17. Banks are expected to have operating hours convenient to all their customers.

18. A bank employees and administrators should know customer’s best interest.

SECURITY 19. A bank should be secure. Eg. Security guard, safe ATM location.

20. A bank employees instills confidence in customers. 21. Customers should feel safe during transactions in the bank. 22. The bank environment should give confidence to customers.

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III. PART THREE The following set of statements relate to your feelings about Barclays Bank. Please show the extent to which your bank has the features described in each statement. Rate using the scale described on top of the question, and place a check mark ( ) on the space provided. There are no right or wrong answers, all we are interested in is a number that is best shows your perceptions about your bank.

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TANGIBLES 1. My bank has adequate banking equipment.

2. My bank has up to date equipment and technology 3. banking facilities and services are made available to customers. 4. The appearance of the physical facilities and structures provide a


5. My bank handles complaints, or solves problems to the satisfaction of customers.

6. My bank performs the service right always 7. My bank keeps the records and accounts of customers correctly and

accurately. RESPONSIVENESS

8. My bank employees give prompt service to customers. 9. My bank employees are always willing to help customers 10. Employees of my bank will tell customers exactly when services will

be performed. 11. Employees of my bank are never too busy to respond to customer’s

requests. ASSURANCE

12. My bank employees will create a safe environment to customers. 13. My bank employees convey trust and confidence in customers. 14. Employees of my bank are consistently courteous with customers. 15. Employees of my bank have the knowledge and skills to answer


16. My bank employees give customers individual attention. 17. My bank has convenient operation hours to all our customers. 18. My bank employees and administrators know our customer’s best

interest.

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EMPATHY 16. My bank employees give customers individual attention.

17. My bank has convenient operation hours to all our customers. 18. My bank employees and administrators know our customer’s best

interest. SECURITY

19. My bank is secured. E.g. Security guard, ATM location, etc. 20. My bank employees instills confidence in customers. 21. Customers feel safe during transaction in my bank. 22. My bank environment gives confidence to customers.

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STAFF QUESTIONNAIRE I. PART ONE Kindly fill in the blanks after the items which best describe yourself, or place a check mark ( ) for each questions accordingly. 1. Your age: [ ] below 20 [ ] 21 - 30 [ ] 31 - 40 [ ] 41 - 50 [ ] 51 - 60 [ ] 61 and over. 2. Sex: [ ] Male [ ] Female. 3. Civil Status: [ ] Single [ ] Married [ ] widow/widower [ ] Divorced 4. Educational Level: [ ] Diploma [ ] Bachelor degree [ ] Master’s degree

[ ] Doctorate degree Others (please specify) _____________________ 5. Your present position in the bank ______________________ II. PART TWO This survey deals with your opinions of services provided by commercial banks in Mauritius. Please show the extent to which you think banks should possess the features described in each statement. Rate using scale described on top of the questions and place a check mark ( ) on the space provided. There are no right or wrong answers, all we are interested in is a number that is best shows your expectations about banks.

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TANGIBLES 1. A bank should have adequate banking equipment and facilities

2. It is expected that the bank should have up to date equipment and technology

3. Banking facilities and services should be made available to customers. 4. The appearance of the physical facilities and structure should provide a


5. A bank should expected to handle complaints or solve problems to the satisfaction of customers.

6. A bank should perform the service right always 7. A bank should keep the records and accounts of customers correctly

and accurately.

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RESPONSIVENESS 8. A bank’s employees expected to give prompt service to customers.

9. Bank’s employees expected always be willing to help customers. 10. Employees of a bank will tell customers exactly when services will be

performed. 11. Employees of a bank will never be too busy to respond to customer’s

requests. ASSURANCE

12. Employees of a bank will create a safe environment to customers. 13. Employees of bank convey trust and confidence in customers. 14 Employees of a bank are consistently courteous with customers 15. Employees of a bank should have the knowledge and skills to answer


16. A bank employees are expected to give customers individual attention.

17. Banks are expected to have operating hours convenient to all their customers.

18. A bank employees and administrators should know customer’s best interest.

SECURITY 19. A bank should be secure. Eg. Security guard, safe ATM location.

20. A bank employees instills confidence in customers. 21. Customers should feel safe during transactions in the bank. 22. The bank environment should give confidence to customers.

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III. PART THREE The following set of statements relate to your feelings about your bank. Please show the extent to which your bank has the features described in each statement. Rate using the scale described on top of the question, and place a check mark ( ) on the space provided. There are no right or wrong answers, all we are interested in is a number that is best shows your perceptions about your bank.

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TANGIBLES 1. My bank has adequate banking equipment.

2. My bank has up to date equipment and technology 3. banking facilities and services are made available to customers. 4. The appearance of the physical facilities and structures provide a

visually appealing environment. RELIABILTIY

5. My bank handles complaints, or solves problems to the satisfaction of customers.

6. My bank performs the service right always 7. My bank keeps the records and accounts of customers correctly and

accurately. RESPONSIVENESS

8. My bank employees give prompt service to customers. 9. My bank employees are always willing to help customers 10. Employees of my bank will tell customers exactly when services will

be performed. 11. Employees of my bank are never too busy to respond to customer’s

requests. ASSURANCE

12. My bank employees will create a safe environment to customers. 13. My bank employees convey trust and confidence in customers. 14. Employees of my bank are consistently courteous with customers. 15. Employees of my bank have the knowledge and skills to answer

customer’s questions.

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EMPATHY 16. My bank employees give customers individual attention.

17. My bank has convenient operation hours to all our customers. 18. My bank employees and administrators know our customer’s best

interest. SECURITY

19. My bank is secured. E.g. Security guard, ATM location, etc. 20. My bank employees instills confidence in customers. 21. Customers feel safe during transaction in my bank. 22. My bank environment gives confidence to customers.

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Appendix B: Cronbach’s Alpha Results

Customer - Industry Tangibles ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .8805

Customer - Industry Relibility ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .6955

Customer - Industry Responsiveness ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .6031

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Customer - Industry Assurance ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .7669

Customer - Industry Empathy ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .7075

Customer - Industry Security ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .7745

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Customer - Barclays Tangibles ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .8775

Customer - Barclays Relibaility ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .8339

Customer - Barclays Responsiveness ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .8659

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Customer - Barclays Security ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .8883

Customer - Barclays Empathy ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .8962

Customer - Barclays Security ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .8945

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Staff - Industry Tangibles ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .6162

Staff - Industry Reliability ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .7193

Staff - Industry Responsiveness ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .6870

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Staff - Industry Assurance ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .7141

Staff - Industry Empathy ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .7208

Staff - Industry Security ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .7410

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Staff - Barclays Tangibles ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .8624 Staff - Barclays Reliability ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .6844 Staff - Barclays Responsiveness ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .7125

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Staff - Barclays Assurance ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .9103 Staff - Barclays Empathy ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 3 Alpha = .7867 Staff - Barclays Security ****** Method 1 (space saver) will be used for this analysis ****** R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients N of Cases = 60.0 N of Items = 4 Alpha = .7473

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Appendix C: Factor Analysis

Customer Factor Analysis

Total Variance Explained

12.515 56.887 56.887 12.515 56.887 56.887 6.612 30.053 30.0532.794 12.702 69.589 2.794 12.702 69.589 4.928 22.402 52.4551.280 5.817 75.406 1.280 5.817 75.406 3.529 16.041 68.4961.170 5.317 80.722 1.170 5.317 80.722 2.690 12.226 80.722

.797 3.623 84.345

.526 2.392 86.737

.497 2.258 88.995

.453 2.057 91.052

.378 1.717 92.769

.285 1.297 94.066

.275 1.248 95.314

.230 1.044 96.358

.182 .829 97.187

.142 .647 97.834

.101 .458 98.292

.094 .429 98.721

.080 .362 99.083

.071 .323 99.406

.046 .208 99.615

.036 .162 99.777

.029 .133 99.910

.020 .090 100.000

Component12345678910111213141516171819202122

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Extraction Method: Principal Component Analysis.

Staff Factor Analysis

Total Variance Explained

8.613 39.152 39.152 8.613 39.152 39.152 3.917 17.807 17.8073.032 13.782 52.934 3.032 13.782 52.934 3.891 17.686 35.4922.582 11.736 64.671 2.582 11.736 64.671 3.442 15.648 51.1401.859 8.450 73.121 1.859 8.450 73.121 2.832 12.875 64.0151.614 7.337 80.458 1.614 7.337 80.458 2.538 11.535 75.5501.325 6.023 86.481 1.325 6.023 86.481 2.405 10.931 86.481

.876 3.983 90.464

.625 2.840 93.303

.412 1.872 95.175

.393 1.786 96.961

.279 1.267 98.228

.204 .927 99.155

.116 .527 99.682

.060 .272 99.954

.010 .046 100.0004.04E-016 1.83E-015 100.0002.09E-016 9.50E-016 100.0006.62E-017 3.01E-016 100.000-5.9E-017 -2.67E-016 100.000-4.2E-016 -1.91E-015 100.000-4.8E-016 -2.18E-015 100.000-5.5E-016 -2.49E-015 100.000

Component12345678910111213141516171819202122

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Extraction Method: Principal Component Analysis.

Documents

An evaluation of the quality of service within Barclays