m

Cfiapter-7
ConcCusion and
ImpCications
 CHAPTER-7
CONCLUSION AND IMPLICATIONS

The main objective of this study was to find out the relationship between
service quality and customer satisfaction. The research model proposed in the study
postulates that service quality dimensions influence the overall customer satisfaction
directly. The model also postulates that service quality has a positive relationship with
overall customer satisfaction and tested them through Correlation and Regression
analyses. It has been observed that this relationship is significantly moderated by
various demographic and situational factors. The gender, age and income of the
customers had varying moderating effects on the relationship between service quality
and customer satisfaction. The frequency of contact and years of relationship with the
bank also moderated customer satisfaction levels.

When the private and the public sector banks were compared with each other,
the results suggested that the private sector bank had more favourable ratings on
customers perception of service quality and satisfaction than in case with the services
from the public sector. Thus, this present research concluded that service quality is the
basic and also most important factor that influences the overall customer satisfaction.
This finding reinforces the need for banks managers to place an emphasis on the
underlying dimensions of service quality and should start with improving service
quality in order to raise overall customer satisfaction. It is thus apparent that managers
of the banks in both the sectors should periodically assess and monitor service quality
in their banks and recognize the importance of service quality and customer
satisfaction and of developing and maintaining enduring relationship with their
customers as crucial parameters leading to increased performance. A summary of the
findings of both the private and the public sectors banks and their comparison is
included in the next section.

243
7.1 HDFC BANK

There was a significant difference in the perception of service quality and its
dimensions for HDFC Bank customers for different categories of demographic and
situational factors:

The perception of male and female customers varied significantly for the
overall service quality and its dimensions- reliability, responsiveness,
assurance and empathy. It was found that the male customers had a more
positive perception of service quality as compared to the female counterparts.
The differences on the basis of age were significant for tangibility,
responsiveness and empathy. The high mean scores of the older age groups for
tangibility and empathy indicated that they had a more positive perception
about the banks visually appealing facilities and personal attention they got
from the staff.
Different income groups varied significantly for their perception of the
tangibility, reliability, responsiveness, assurance and empathy dimensions of
the service quality of the HDFC bank. It was observed that in the HDFC Bank
the higher income customers had a more positive perception regarding the
overall service quality as compared to the lower income groups.
There was a significant difference in the perception of married and unmarried
customers for overall service quality. The married customers had a more
positive perception of the overall service quality than their unmarried
counterparts
Based on frequency of visiting the bank; there was a significant difference for
the dimensions tangibility, reliability and responsiveness. It was observed that
monthly visitors had a more positive perception regarding the tangibility,
reliability and responsiveness of the bank as compared to the frequent visitors.
The perceptions on basis of years of relationship varied for the tangible
components, dependability on handling customer service problems and the
safety and security while transacting with the bank employees. It was observed
that the older customers had a more positive perception regarding the overall
service quality of the bank as compared to the new customers.

244
 When customer satisfaction was analysed it was observed that there was a
significant difference in the Customer satisfaction of HDFC bank customers on the
basis of gender, marital status, income and frequency of visiting the bank.
The male customers of the HDFC Bank were more delighted and pleased with
the bank as compared to the female customers.
The married customers were more pleased and satisfied as compared to the
unmarried customers
The higher income groups were more satisfied as compared to the lower
income customers.
When the satisfaction levels were analysed on the basis of frequency of
visiting the bank it was found that the most fi-equent visitors were least
satisfied as compared to the monthly and fortnightly visitors

When the relationship between service quality, its dimensions and customer
satisfaction for the entire group of HDFC bank customers was analysed it was
observed that the increase in overall service quality increased the satisfaction of the
customers. It was found that in HDFC Bank service quality contributed to customer
satisfaction by 70.6%. Assurance, tangibility, reliability and empathy were significant
contributors for customer satisfaction.

The female customers of the HDFC Bank were more satisfied with the service
quality of the bank as compared to the male customers. For the male
customers of HDFC Bank the confidence in ability & knowledge of the
employees of the Bank and the safety and security while transacting with bank
were the most important factors for satisfaction
The younger and the older age groups were comparatively more satisfied with
the services as compared to the middle aged people. For the middle age group
the relationship was significant for tangibility, assurance and empathy
It was observed that in the HDFC Bank, the lower income groups were
relatively more satisfied with the services of the bank as compared to the
higher income customers.
The relationship between the overall service quality and customer satisfaction
was significant for the various education groups. It was observed that in the
HDFC Bank, the graduate and below group was relatively more satisfied with
the services of the bank as compared to the post graduate and above group.

245
 The relationship between service quality and customer satisfaction was
significant for both married and unmarried customers of the HDFC Bank.
Overall the unmarried customers were more satisfied with the service quality
as compared to the married customers of the HDFC bank on all the
parameters.
For the frequent customers each of the service quality parameters satisfied
them to a greater extent as compared to the fortnightly and monthly visitors.
The fortnightly and the monthly visitors were more concerned about the
dependability, safety and security of their transactions.

Thus, we can conclude that in HDFC Bank, service quality played a very
important role in satisfying the customers. An increase in service quality increased the
satisfaction of the customers. Assurance, tangibility, reliability and empathy
significantly enhanced the satisfaction of the customers. Besides, the bank should also
focus on the gender, age, income, education, occupation and marital status of the
customers along with thefi"equencyof visiting the bank and the years of relationship
as they significantly moderated the relationship between service quality and customer
satisfaction.

246
7.2 THE STATE BANK OF INDIA

There was a significant difference in the perception of service quality and its
dimensions for SBI customers for different categories of demographic and situational
factors:

The perception of male and female customers varied significantly for the
overall service quality and its dimensions-responsiveness and assurance. It
was found. The perception of the female customers of SBI was more positive
for the overall service quality as compared to the male customers
Different age groups in the State Bank of India varied in their perception of
service quality for the responsiveness and empathy dimensions of service
quality. The older group had a more positive perception regarding the personal
attention they got from the bank as compared to the middle aged customers.
It was observed that different income groups varied significantly for their
perception of the tangibility, reliability and responsiveness dimensions of the
service quality of the State bank of India. It was observed that higher income
customers had a more positive perception of the overall service quality as
compared to the lower income groups.
Based on Occupation there was a significant difference in the perception of
overall service quality and its dimensions. The salaried and the students
groups more positive perception of the service quality as compared to the
business and the retired customers.
There was a significant difference in the perception of married and unmarried
customers for overall service quality and its dimensions: responsiveness and
assurance. The unmarried customers had a more positive perception of the
service quality as compared to the married counterparts.
Based on frequency of visiting the bank, there was a significant difference for
the overall service quality and its dimensions tangibility, reliability and
assurance for SBI customers. It was observed that the most frequent visitors
demanded more efficient services as compared to the monthly and fortnightly
customers.
It was observed that the new customers of SBI had a more positive perception
of reliability assurance and empathy as compared to the older customers who
expected the bank to be more sensitive towards their needs and requirements.

247
 When customer satisfaction was analysed it was observed that there was a
significant difference in the Customer satisfaction of the SBI customers on the basis
of gender, marital status, age, occupation and frequency of visiting the bank

The female customers of SBI were more delighted and pleased with the bank
as compared to the male customers. The unmarried customers were more
satisfied than the married ones.
The middle age group expected the bank to be more sensitive to their needs.
The students and the housewives were the most satisfied group as compared to
the business and the retired people.
When thefi-equencyof visiting the bank was analysed, it was observed that the
most frequent visitors were least satisfied as compared to the monthly and
fortnightly visitors.

When the relationship between service quality, its dimensions and customer
satisfaction for the entire group of the State Bank of India customers was analysed it
was observed that the increase in overall service quality increased the satisfaction of
the customers. It was found that in SBI service quality contributed to customer
satisfaction by 60%. Assurance, reliability, tangibility and empathy were significant
contributors for customer satisfaction.

The male customers of SBI were comparatively more satisfied with the service
quality as compared to the female customers. Dimension wise analysis
indicated that for the male customers, assurance, reliability and tangibility
were significant for satisfaction while for the female customers reliability was
the most significant factor contributing towards satisfaction.
There was a significant relationship between the overall service quality and
customer satisfaction for all age groups. The older age groups were
comparatively more satisfied than the younger groups.
It was observed that in the State bank of India the higher income groups were
more satisfied as compared to the lower income groups. The high income
group laid more emphasis on the dependability and the safety and security of
their transaction owing to the high value associated with it.
The relationship between the overall service quality and customer satisfaction
was significant for the salaried, business and the housewives. For the salaried

248
 customers assurance reliability and empathy were the most important factors
to increase their satisfaction. While for the business class and the housewives
the tangible components which included the modem equipments and visually
appealing facilities also contributed to their satisfaction
For the married customers the dependability and efficiency of the bank were
the most important factors contributing towards their satisfaction. For the
unmarried customers of the SBI, apart from assurance, the tangible
components were also significant for satisfaction.
The relationship between overall service quality and customer satisfaction
were significant for the weekly, fortnightly and monthly customers. For the
weekly visitors, tangibility, assurance and empathy were significant for
satisfaction. On the other side for the fortnightly and monthly customers
reliability was the most significant factor for satisfaction.
There was a significant and positive relationship between the overall service
quality and customer satisfaction for the customers with 2-5 years of
relationship and for the customers with greater than five years with the bank.
Reliability and assurance were the most important factors for the satisfaction
of the customers having old accounts with the bank.

Thus, we can conclude that in SBI, service quality played an important role in
satisfying the customers. An increase in service quality increased the satisfaction of
the customers. Assurance and reliability followed by tangibility and empathy
significantly enhanced the satisfaction of the customers. Demographic and situational
factors significantly moderated the relationship between service quality and customer
satisfaction.

249
7.3 THE COMPARISON OF PUBLIC AND PRIVATE SECTOR BANKS

Difference in the perceived service quality and dimensions and customer

satisfaction for the private and pubHc sector bank customers is summarized as under:

SERVPERP was used to measure service quaHty as a multi-dimensional

construct across five dimensions: tangibility, reliability, responsiveness assurance and
empathy (Cui,Lewis &Park, 2003). The findings on the basis of comparisons are
summarized below (vide table 5.81)

1. Tangibility: It includes the Bank's decor, ambience, physical facilities and

even the appearance of the bank staff. The customers can assess the premises
of the bank as indicator of service quality (Lai 2004). It was found that the
tangibility component of service quality was higher for the private sector
banks as compared to the public sector. The customers found the physical
appearance which includes up-to-date equipments, machines and personnel of
HDFC Bank to be of higher quality when compared with the State Bank of
India. Thus, the private sector bank customer was more satisfied with
tangibility aspect of the bank as compared to the public sector.
2. Reliability: It is the extent to which the service is delivered to the standards
expected and promised. In essence, it represents the customer getting what
they feel they have paid for. According to this study, there is a positive
relationship between reliability and customer satisfaction in the retail banking
sector. Zim et al. (2010) pointed out that reliability is one of the important
factors of customer satisfaction. The reliability of the banks which was
dependent on handling customers' service problems effectively and
maintaining error free records was found higher in the private sector. As per
the customers of the private sector, whenever they had a problem their bank
showed sincere and sympathetic interest in solving it as compared to the
public counterpart.
3. Responsiveness: It refers to the willingness and the ability of the service
provider to meet and adapt to customers' needs. It was found that the private
sector bank was perceived to be more prompt in its willingness and readiness
to respond to customers' requests. Responsiveness is the timely reaction
towards the customers' needs. Responses to our research suggest that
responsiveness has relationship but no significant effect on customer

250
 satisfaction. We can conclude that responsiveness is a need in providing
quality service, but not a must. Similar findings have been reported by Agbor
2011, Arora and Jain(2011), Lianxi and Zhou (2004); Gill, Flaschner and
Shachar (2006) Yavas et al (2004) and Kantsperger and Kunz (2010).
i. Assurance: Assurance is the degree of trust and confidence that the customer
feels its service provider is competent to supply the service. Mostly, this stems
from the degree of confidence that the customer has in the service provider's
staff. The customer will not be satisfied if he/she does not feel assured about
the competence of the service provider. Assurance shows a positive
correlation with customer satisfaction in the current study. The possible
explanation of this finding is that the bank can instil feelings of confidence in
its customers and the banks handle their customers in a professional and
competent way. As mentioned earlier in the literature review, Kumar et al.
(2010), and Lai (2004) also pointed out that assurance is one of the important
factors for customer satisfaction. Our study is line with this in which assurance
has been the most important dimension of service quality which effected
customer satisfaction to a great extent. The confidence in the ability and
knowledge of the employees of the bank and the safety and security of their
transactions led to customer satisfaction, thereby making assurance the
significant component of service quality. Again, the assurance of private
sector bank was more than the public bank leading to greater customer
satisfaction amongst the former.

5. Empathy. Service customers often have expectations with regard to the extent
to which the service provider appears to understand and be concerned about
their individual needs and wants. The more the service provider can see things
from the customer's point of view, the better. The core concept of empathy is
to understand the needs of customers and provide individual attention.
Employee and customer interactions are reflected through the empathy
dimensions. The bank customers are also looking for front line staff who are
capable of understanding their specific needs. The current study confirms thai
empathy has correlation with customer satisfaction. Ladhari (2009) also found
that empathy is a strong predictor of customer satisfaction. The customers ol
the private sector found their bank to be more caring, giving them individual

251
 attention and keeping their best interests at heart. After reliability and
tangibility, empathy was the next important dimension of service quality that
led to customer satisfaction. The customers of the public bank were not very
satisfied with the empathy of the bank employees and expected them to give
personal attention.

Service Quality and Customer Satisfaction: Overall, after discussing the

individual components of service quality, it was analysed that service quality
was highly co-related to customer satisfaction in each of the banks. The
analysis showed that the customers of the private sector were more satisfied
with the services of their bank as compared to the public sector. An increase in
service quality certainly enhanced the customer satisfaction levels. At the
same time both are significantly moderated by demographic and situational
factors discussed in the next section. Further, out of the five dimensions of
service quality, in the private bank assurance, tangibility and reliability were
the most important factors for customer satisfaction. In the public bank it was
assurance, reliability and then tangibility. Similar studies have been reported
by Saghier &Nathan(2013) who found that customer satisfaction is
significantly affected by assurance and reliability. Prabhakaran &Satya(2003)
argued in favour of service quality in banks. They also supported that the five
dimensions, namely tangibility reliability, responsiveness and assurance are
closely related to each other and overall service quality (Table 5.8.1). When
the individual importance of the dimensions of service quality was considered
it was observed that in both the public and the private banks. Reliability was
the most important factor of service quality. This result was consistent with
the studies of Yang et al(2004), Wang et al (2002) who found that reliability
was the key dimension followed by assurance and tangibility.

Supportive evidence is given by many recearchers; (Bedi, 2010; Kassim and

dullah, 2010; Kumar et al, 2010; Naeem and Saif 2009; Balaji, 2009; Lee and
/an, 2005; Athanassopoulos and Iliakopoulos, 2003; Parasuraman et al 1988,
>hammad and Alhamadani (201 l),Sulieman (2011) and Buttle (1996) ,Ragavan and
igeh (2012), Aggarwal J. (2012). Our research is in line with results of these studies
ich states that the overall service quality has a significant and positive relationship
h customer satisfaction in the banking sector and service quality dimensions are

252
the basic factors that affect the overall customer satisfaction. It is apparent that
focusing on delivering high quality services and improve service quality effectively is
critical for customer satisfaction. Further it was concluded that public sector banks
fall much below the perceptions of their customers on all dimensions of service
quality. Private Banks on the other hand are exceeding the perceptions of their
customers.

Supportive evidence was given by Mishra JK(2007), who showed that the
average scores were significantly lower in the public sector banks as compared to the
private banks. Similar findings were reported by Mengi(2009), stating that private
sector banks focus more on customer satisfaction. Further, Tiwari BK (2011),
analysed that the customers of the nationalised banks had not been given much
importance by the executives. On the other hand the customers of the private banks
had been offered these services right from the beginning. Thus, customers of private
banks are more satisfied. Similar findings by Farzad Asgarian(2009) indicated that
though the private banks came to existence in the last ten to fifteen years with the
objective to limit the government intervention in the banks, they have become more
popular to obtain customer satisfaction than public banks even after a short period of
existence.

Relationship between Service quality, its various dimensions and Customer

satisfaction of the Private and the public sector bank customers for different
categories of demographic and situational factors is summarized below:

1) Moderating effect of Gender on the relationship between Service quality,

its various dimensions and Customer satisfaction of the Private and the
public sector banks:
Gender of the customer played a crucial role in determining the overall
perception of service quality and the customer satisfaction. Overall in the private
sector male customers were more satisfied than the female population whereas for the
public sector the female customers were more satisfied than their male counterparts.
The inherent difference in the characteristics of male and female customers was
evident in the perception of different dimensions of service quality and customer
satisfaction as discussed below:
When Customer satisfaction levels were checked the scores indicated that in
both private sector and public sector males were more satisfied with the

253
physical appearance than the female customers. The female customers
expected better decor and physical facilities to increase their satisfaction
levels. Overall, the private sector male and female customers were more
satisfied with the tangibility of their bank when compared with their respective
counterparts in the public sector.
When individual banks were checked in both private sector and public sector,
females found their bank more dependable than the male customers. Thus to
increase the satisfaction of male customers, banks had to be more reliable in
performing their services. Overall, both male and female customers found
private sector banks more reliable in solving their problems sympathetically
and sincerely.
The HDFC male customers were highly satisfied with the ability and
knowledge of their bank employees and felt more safe and secure while
transacting with them as compared to the female customers. Similarly, in the
public sector, males were more satisfied with the assurance of the bank as
compared to the females. The lowest co-relation coefficients of the private
sector female customers indicated that they were not getting adequate support
from the bank staff
In the private sector the females were more satisfied with the personal
attention that they got from the bank staff Contrary to this the female
customers of SBI expected the bank to be more empathetic towards their needs
and requirements as compared to the male customers.
When the overall service quality was analysed with customer satisfaction, it
was observed that the private sector females had the highest scores. The
quality of services provided by HDFC Bank satisfied the female customers
more than the males. On the other had in SBI the females expected more from
the bank as compared to the male customers. In all the parameters of Service
quality the private sector male customers were more satisfied than the public
sector male customers. Similarly the private female customers were satisfied
with the service quality more than the female customers of the public sector.

254
 In line with the results of the study, supportive evidence was also given by
various researchers. Spathis et al (2004) analysed the effect of gender on customers'
perception of service quality dimensions. The results found that the male customers
had a more positive perception of service quality than females had. For men fast and
efficient services were considered important factors for satisfaction as compared to
female customers. Similar findings were reported by Paulins(2005) and Meng et al
(2009).

2. Moderating effect of Age on the relationship between Service quality, its

various dimensions and Customer satisfaction of the Private and the
public sector banks
Ages of the customers' were grouped into three categories. The young group
(Age<25 yrs), the middle age group (Age 25-40 yrs) and the older group (Age> 40).
The relationship between customer satisfaction levels for said age groups for various
dimensions of service quality for public and private banks is mentioned as under:
Correlation and regression analysis revealed the younger age group of both the
private and public sector banks were more satisfied with the tangibility aspect
of service quality. Then came the older group and finally the middle age group
was the least satisfied with the Bank's decor and physical facilities in both the
sectors.
In HDFC Bank the young group was most satisfied with its dependability and
effectiveness. It decreased a bit for the older people and then for the middle
age group. While for the public sector, the older people were the most satisfied
then came the middle age group and then the young group which was least
satisfied with the reliability of the bank.
In both private and the public sector the younger age groups were more
satisfied with ability and knowledge of the bank employees. The older and the
middle age groups were comparatively less satisfied with the assurance levels
in both the sectors and expected more support from their banks to do their
jobs.
When overall service quality was analysed for different age groups it was
found that in the private sector the young group was highly satisfied with the
services of their bank. The middle age group had higher expectations from the

255
 private sector. In the public banks the older people were the most satisfied
with their age old nationalised banks and its procedures as compared to the
younger groups.

The low satisfaction of the young people of the public banks could result from
the fact that they are more demanding as a result of their greater familiarity with the
technologies and higher tendency to complain than the old people. This result
supports the findings of Bryant et al., 1996, which reported that satisfaction increases
with age and major increase seen within the age of 55 and above; the younger age
groups are less satisfied than older age groups across all products and services
industries (VanAmburg, 2004); Venn and Fone (2005) reported that higher
satisfaction is significantly related with increasing age; and Turel and Serenko (2006),
in their study of mobile telecoms revealed that there is lower satisfaction level among
young adults.The effect of age on service quality and customer satisfaction was also
supported by Elanain (2003) who found that age was an important demographic factor
to understand the service quality perceptions of customers.

3. Moderating effect of Income on the relationship between Service quality,

its various dimensions and Customer satisfaction of the Private and the
public sector banks

Annual household income plays is an important role in determining the service

quality perceptions of the bank customers and thereby affecting their satisfaction
levels. For this purpose the income levels were clubbed into three categories : a) The
lower income group (Income upto 5 lacs p.a). (b) The middle income group (Income
5-15 lacs p.a) and (c) The higher income group (Income>15 lacs p.a). The relationship
between customer satisfaction levels for said income groups for various dimensions of
service quality for public and private banks are mentioned as under:

The correlation and regression analyses indicated that in the private sector
bank as the income increased the customers satisfaction due to tangibility of
the bank decreased. On the other hand the high income group of public sector
was more satisfied with the tangibility and believed that their banks physical
facilities matched with the type of services provided by it. The lower and
middle income group of SBI wanted their Bank's decor and physical facilities
to be more appealing.

256
The analyses indicated that for the private bank as the income increased the
satisfaction due to reliability decreased. The higher income groups of HDFC
expected the bank to be more efficient while interacting with them. In the
public sector the trend was exactly the opposite as the higher income groups
were the most satisfied with the dependability and reliability of their bank.
It was observed that in both private and the public sector as the income
increased the satisfaction due to responsiveness decreased. The highest income
groups had very high expectations from their banks and any delay in the
response to their queries and requests annoyed them to a great extent.
It was observed that the high income groups of both the sectors had fiill
confidence in the knowledge and ability of the bank employees. They were
satisfied with the safety and security of their transactions. In the public sector
the trend decreased from the middle to the lower income group. While in the
private bank the lower income groups were more satisfied with the banks
assurance than the middle income groups.

A per the analyses, in the private sector as the income increased the customers
found the bank to be less empathetic. Thus the higher income groups of HDFC
demanded more personal attention from their bank. While in the public sector,
the customers of higher income groups were relatively satisfied with
procedures and the individual attention they got from their bank and the trend
fell towards the lower income groups.
It was observed that in the private sector, the lower income groups were
relatively more satisfied with the services of the bank as compared to the
higher income customers. The same was supported Sum & Hui, (2009) who
found that customers with high income might favour retailers with high levels
of service quality while customers with low incomes might be more tolerant to
lower levels of service quality. In the public sector the situation was in the
reverse order. Here the lower income customers were not very satisfied with
the services of their public bank and expected more effective services.

257
Moderating Effect of Education on the relationship between Service
quality, its various dimensions and Customer satisfaction of the Private
and the public sector banks:
The analyses found that in the private sector graduates and below were more
satisfied with the tangibles of the bank as compared to the Post Graduates and
above customers. Thus the educated customers of the private sector demanded
enhanced physical facilities, equipment and machines to increase their
satisfaction levels. The situation was reverse in the public sector where the
graduates and below were lesser satisfied with the tangibility of their bank.
It was observed that in both the sectors graduates and below found their banks
more reliable and dependable as compared to the higher educated group. The
analyses showed that the Post Graduate and above groups expected their banks
to be more effective and efficient so as to influence their satisfaction levels.
When the assurance of the bank was considered, in both the sectors the
graduates and below were more satisfied as compared to the higher educated
customers. The graduates of the private sector had higher level of confidence
in the ability and knowledge of their bank employees as compared to the other
sector.

In the private sector the lower educated group was more satisfied with the
personal attention they got from their bank as compared to Post graduates and
above. Whereas in the public sector the graduates and below expected their
bank to be more empathetic towards their needs and requirements.
Overall the graduates and below of the private sector were highly satisfied
with the services of their bank as compared to the higher educated group. This
may be due to the fact that with the increase in knowledge the expectations
also increases, hence these customers demand more from the bank to get
satisfied (Ganesan-Lim, Russelt Bennelt & Dagger, 2008).In the public sector
there was no appreciable difference in the satisfaction levels of the two groups

258
6. Moderating effect of Occupation on the relationship between Service
quality, its various dimensions and Customer satisfaction of the Private
and the public sector banks:
Occupation was one of the important factors to determine the service quality
perceptions and satisfaction levels of the customers. The data was classified into
Salaried, business, retired, housewives and the students. The results were analysed as
under:
The correlation and regression analysis found that in the private sector the
salaried class was the most satisfied with the tangibility of the bank as
compared to the business and the retired groups. In the public sector the
salaried group was the least satisfied when the banks decor and physical
facilities were considered. Housewives and the business class of SBI were
comparatively more satisfied with the tangibility of their bank.
It was observed that in both the private and the public sector the salaried class
found their bank most dependable and reliable followed closely by the
business people. The retired and students of both the sectors had lower
satisfaction levels and expected their banks to be more efficient.
In the private sector bank, the salaried class was the most satisfied with the
ability and knowledge of the bank employees. Here, the business people,
retired and the student groups expected more support from their bank while
performing the transactions. In the public sector the businessmen were the
most satisfied, followed by the housewives, students and lastly the retired
people who expected more safety and security while transacting with the bank
employees.
Overall, the salaried class of the private sector was highly satisfied with the
services of their bank. The businessmen here were comparatively lesser
satisfied when compared with that of the public sector. The retired group of
the public sector was the least satisfied amongst the others followed by the
students group.

259
L Moderating Effect of Marital Status on the relationship between Service
quality, its various dimensions and Customer satisfaction of the Private
and the public sector banks:
I The analyses showed that in the private sector the unmarried customers were
more satisfied with the banks ambience and physical facilities. In the public
sector there was no appreciable difference in the satisfaction levels of the
married and the unmarried customers when the tangibility of their banks was
considered.
' In the private bank, the married customers were less satisfied wdth the
reliability and dependability of the bank as compared to the unmarried people.
The situation was reverse in the public sector where the married people were
highly satisfied with the dependability of their bank but the unmarried ones
expected the bank to be more sincere in solving their problems.
I In both the sectors the unmarried customers were more satisfied with the
support they got from their banks as compared to the married ones. This may
be due to the fact that married customers due to larger responsibilities had
greater expectations from their bank to get satisfied.
' The unmarried customers of the private sector were more satisfied with the
individual attention they got from their bank as compared to the married ones.
In the public sector the unmarried group expected the bank to be more
empathetic towards their needs and requirements as compared to the married
customers.

' Overall, the unmarried customers of the private bank were the most satisfied
with the services of their bank. In the public sector the married people were far
more satisfied with the services as compared to the unmarried group.
Supportive evidence was given by Ogden & Ogden (2005) that the most
important demographic information is 'marital status' because it shows if
customers are buying for themselves, for a spouse, or a family with children.
The independent/single was somewhat more concerned with the nature and
quality of the interaction with the bank. The customers with family were more
concerned with privacy and the issues of personal treatment.

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 Thus, it was found that customers with different demographic characteristics
Uke marital status, gender, age, income, education and occupation, have different
perception of service quahty and customer satisfaction thereof Similar findings are
reported by Pautins (2005), Gal way and Blanchard (1996).

8. Moderating effect of Frequency of visiting the bank on the relationship

between Service quality, its various dimensions and Customer satisfaction
of the Private and the public sector banks:
As per the analysis, the customers who visited the bank 2-5 times a week in
the private sector were more satisfied with the tangibility of the bank as
compared to the customers who visited fortnightly, weekly and monthly. In
the public sector the frequent visitors were the least satisfied with the
equipments and machines of their bank as compared to the fortnightly and
monthly visitors.
Again, in the private bank the customers who visited 2-5 times a week found
their bank most reliable and were highly satisfied with its dependability
followed by monthly and fortnightly visitors. In the public sector the daily and
the weekly customers were least satisfied and wanted their bank to show
sincere and sympathetic interest in solving their problems. The fortnightly and
the monthly visitors of SBI, comparatively found the bank more reliable.
It was observed that in the private sector the very frequent visitors were highly
satisfied with the safety and security of their transactions with the bank and
had great confidence in the ability and knowledge of the bank employees. In
the public sector the weekly customers were more satisfied with the assurance
of their bank as compared to the fortnightly visitors.
The results showed that in the private sector the frequent visitors were most
satisfied with the personal attention they got from the staff. The situation was
reverse in the public sector where the frequent visitors demanded more
attention from their bank and expected the employees to understand their
needs. The fortnightly and monthly visitors were moderately satisfied with the
empathy of the bank employees.
In the private sector the most frequent visitors were highly satisfied with
services of the bank followed by fortnightly, monthly and weekly visitors. In
the public sector the frequent visitors were least satisfied with their banks

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services. The weekly, fortnightly and monthly customers were comparatively
more satisfied with the banks service quality. This, may be due to the fact that
in the public sector, the customers who contacted less frequently do not think
of calling the organization again and again as were already satisfied with
service quality, hence additional satisfaction may have a diminishing effect on
them. However, more frequent contacting customers were calling more times
because they had some problems with the satisfaction and service quality of
public banks (Tiwari BK, 2011). A small increase in the quality of services
drives their satisfaction more (Sulieman, 2011).

Moderating effect of Years of relationship with the bank on the

relationship between Service quality, its various dimensions and
Customer satisfaction of the Private and the public sector banks:
The analysis showed that in the private sector as the years of relationship with
the bank increased the satisfaction due to tangibility decreased. In the public
sector also, the customers with 1-2 years of relationship were more satisfied
with the banks physical appeal as compared to long term customers.
It was observed that in the private sector as the years of relationship with the
bank increased the satisfaction due to the bank's reliability and dependability
decreased. The situation was reverse in the public bank where the new
customers were less satisfied with the banks efficiency as compared to the
older customers.
In the private sector the satisfaction due to the assurance decreased with the
increase in years of relationship with the bank. In the public sector the
customers with less than one year relationship and 2-5 years were highly
satisfied with the ability and knowledge of the bank employees as compared to
the 1-2 years group which was least satisfied with the banks support.
The older customers of HDFC expected their bank to give them more personal
attention. In the public segment scores were highest for 2-5 years group and
lowest for the new comers. Hence the new customers of SBI, to get satisfied
expected the bank to provide them more individual attention and keep their
best interests at heart while designing the service standards and procedures.

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 The overall analysis depicted that the new customers of the private sector were
highly satisfied with the services of the bank as compared to the older
customers who had greater expectations from their bank. This may be due to
the fact that the new customers may be highly impressed with the high service
quality of the private banks resulting in greater satisfaction but as the years of
relationship increases they are used to this level and it is just a hygiene factor
for them (Andronikidis Andreas (2009)). In the public sector the customers
with less than one year of relationship with the bank were least satisfied with
the services of their new bank as compared to the older customers. This may
be due to the fact that new customers join the bank with very high
expectations but the service quality of the public banks do not satisfy them
instantly(Reinartz and Kumar(2002)).

7.3 MANAGERIAL IMPLICATIONS

Banking is a hyper competitive industry. Success in the banking sector

inevitably depends on customer satisfaction. The banks those are not in a position to
meet expectations of their customers will be gradually driven away from competition.
In this study, service quality of private and public banks was measured and ftirther its
relationship with customer satisfaction was found. Service Quality has become an
important integral component of many organizations in order to differentiate
themselves from competitors and to build sustainable competitive advantage.
Following are some of the suggestions which should be taken into account by the
organizations so as to enhance the service quality and induce greater satisfaction
thereby attaining higher level of favourable outcomes

When assessing the service quality managers should not employ general
measures of service quality, but should ensure that they are evaluating all
aspects of their service. Service quality managers can use the results of this
study to enhance their understanding of which service quality dimensions are
associated with overall satisfaction Since it is more expensive to find and
attract a new customer than it is to retain an existing one (Schlesinger and
Heskett, 1991).Bank service providers should continually monitor the level of
fulfilment of personal needs and satisfaction with the organization, if they
wish customers to remain loyal and want them to recommend their banks to
others.

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While considering the" parameters of service quality, the Branch Managers
should lay great emphasis on assurance. Is the degree of trust and confidence
that the customer feels its service provider is competent to supply the service.
Mostly, this stems jfrom the degree of confidence that the customer has in the
service provider's staff. The customer will not be satisfied if he/she does not
feel assured about the competence of the service provider. Assurance shows a
positive correlation with customer satisfaction in the current study and has
come out to be the most significant contributor towards customer satisfaction.
The possible explanation of this finding is that the bank can instil feelings of
confidence in its customers and the banks handle their customers in a
professional and competent way. So, all banks irrespective whether it is
private or public should make effort to include interpersonal skills training in
their overall training programme to satisfy the needs of their customers.
In both the public and the private sector banks the managers need to
understand the importance of the Reliability and Tangibility as the significant
factors contributing towards customer satisfaction. The reliability of the banks
was dependent on handling customers' service problems effectively and
maintaining error free records. Thus the services delivered should match
standards expected and promised. Furthermore the managers should not
undermine the importance of the Tangible components of the bank. The
visually appealing facilities of the bank satisfy the customers to a great extent.
Thus, the banks should continuously monitor the bank's decor, ambience,
physical facilities and even the appearance of the bank staff as the customers
assessed, the premises of the bank as indicator of service quality.
As per the study, the demographic and situational factors played a crucial role
in moderating the relationship between service quality and customer
satisfaction. Thus the managers while considering the service quality
dimensions should lay emphasis on the gender, age, marital status, education,
income and occupation of the customers as these factors have a moderating
effect on their satisfaction levels. Furthermore, importance of the situational
factors which include the frequency of visits and the years of relationship with
the bank should also be taken into consideration.

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 The results suggested that the private sector organizations had more
favourable ratings on customers' perception of service quality and satisfaction,
than in the case with the service from the public sector. Thus the public sector
banks should recognize the importance of service quality and customer
satisfaction and of developing and maintaining enduring relationship with
their customers as two crucial parameters leading to increased performance.
There is a need of investing in Employee training programs with major focus
on interpersonal communication and personalized customer care factors in
order to provide the service with an emphatic approach. They need to improve
those employee-related attributes of service quality since they are the main
sources of the competitive advantage. Besides, these organizations must
constantly monitor customers' expectations through customer surveys, in-
depth interviews or other informal means of research. On a closing note, the
service managers need to understand that Service quality is an important
feature of customer satisfaction in the Indian banking industry irrespective of
the public and the private sector banks and customer satisfaction is strongly
associated with it.

7.4 LIMITATIONS AND SUGGESTIONS FOR FURTHER RESEARCH

The study was conducted in the tricity region of Chandigarh, Panchkula and
Mohali. Both the HDFC Bank and The State bank of India have numerous
branches across the nation. For a more comprehensive study the data could be
collected from other cities and towns also. Further, foreign banks and rural
banks could have also been included for a wider view of the service quality
perceptions and its influence on customer satisfaction. Thus empirical research
may be conducted comparatively with other branches or with other sectors so
that service quality and its impact on customer satisfaction across the different
contexts or organizations can be measured and can be utilized for future
development and improvement
The researcher has investigated the relationship been service quality and
customer satisfaction in a limited setting. There may be other drivers of
service quality and customer satisfaction which may be explored into by the
future researchers. The researchers may concentrate on building a broader
conceptual model of factors that influence service quality and customer

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satisfaction. This can be done by using relationship management and other
psychological factors related to consumer behaviour.
The study considered the perceptions of service quality and customer
satisfaction from the customers' viewpoint. Future researchers can take into
account the perceptions of the bank employees also which can provide a more
comprehensive model for the study. Besides, fiiture research may explore and
expand situations like negative/positive word of mouth, negative/positive
switching barriers and problematic customer encounters and their long term
financial/ no financial impact.
The study was confined to retail banking only. Future researchers can take into
account other departments of the banks like wholesale corporate banking
which targets markets from large blue chip manufacturing companies in the
Indian corporate to small and mid-sized corporate and agri-based businesses.
Besides, product studies can also be included.

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