Overview of service quality

Service is a popular concept in marketing and business. There are many definitions of service, but according to Zeithaml (2000, p.68)“Services are behaviors, processes and methods to implement a certain task, to create values for customers, to satisfy their demands and expectations.”. It can be argued that, the quality of a product or a service is reflected through the level that it satisfies consumers’ demands and the financial benefit it brings to the supplier.

According to Lewis and Booms’ (1983, p101): “Quality is the measure of the appropriateness of the service with customers’ expectations. Providing a quality service means meetings customers’ expectations on a reasonable basis”.Parasuraman, Zeithaml, and Berry ‘s theory(1988) defines the quality of a service as “the level of difference between consumers’ expectations and their perception of the results of the service”.

For services, the assessment of quality is more difficult because services have different characteristics with tangible products. The theory of service marketing includes three basic characteristics are intangible, heterogeneous and not separating (Zeithaml, et al, 2006).

Firstly, the majority of services are considered intangible products. Services can not weighing, measuring, counting, testing or inspection before purchase, with intangible reasons, the company feels very difficult to understand customer perception of how to service and service quality evaluation.

Second, heterogeneous services, especially those services have high levels of human labor. The reason is that the operation of services often varies from service providers, from

customers, and the quality of service provided is not equal for each day, month and year of business (Vargo & Lusch, 2004).. It requires a consistent quality of staff would also be very difficult to ensure. The reason is what the company intends to serve it can be completely different from what the customer receives.

Third, production and consumption of many services are inseparable. Quality of service cannot be produced in factories, then move the status quo to customer service. For these services have high labor content, the quality of services shown in the interaction between customers and employees of the company providing the service.

Within the limit of a thesis, this paper is going to introduce some typical models for evaluating the quality of bank services; analyze the models and apply these models into introducing a suitable model to be applied in real-life research to improve customers’

satisfaction.

As the economy gets more and more developed, the role of services is also becoming more and more important; and service has become the research object of many different fields: economics, cultural studies, and law, administration and management studies.

Therefore, there many narrow and extended definitions of service, as well different interpretations.

However, Within the scope of this study, service are all the behaviors, procedures and methods to carry out a value for customers and satisfy their expectations and demands when using the services at the Vietinbank. This study use the model of Parasuraman, Zeithaml and Berry, (1985) with the modification by reviewd other studies for developing the model of this study.

The SERVQUAL model of Parasuraman, Zeithaml and Berry (1988) was established on the notion that the service quality perceived is the comparison between customers’

expectations and perception. SERVQUAL is a 22-item instrument that assesses two main dimensions of service quality: outcome and process in 5 criteria: reliability, responsiveness, tangibles, assurance and empathy:

Figure 2.1: The SERVQUAL model

(Sourece: Parasuraman, Zeithaml and Berry, 1988)

Reliability:Reliability is the ability to supply a service accurately, timely and with reputation. This requires the consistency in implementing the service and respect commitments as well as promises with customers. In banking sector, this criterion is usually measured by the following scales:

Responsiveness:This criterion assesses the ability to solve problems quickly, handle complaints, willingness to help customers and meet customers’ demands, specifically:

Tangibles:“Tangible” is the image of the Bank including facilities, equipment, devices, images of staff, documents, instruction materials and the communication system of the Bank.

In otherwords, “tangible” is everything that customers can see with their eyes and feel with their senses; this criterion can be affected specifically:

Assurance:Assurance is the trust and prestige of customers, created by the professional service of the staff, staff’s professional knowledge, elegant style and good communication skills, which assures customers whenever they use the bank’s services:

Empathy:Empathy is the caring for the customers, providing individual attention to customers, making the customers feel important and that they are welcomed all the time. The human factor is the key to this success and the more bank cares for their customers, the more empathy increases:

SERVPERF model (Cronin and Taylor, 1992) The SERVPERF model was developed on the basis of SERVQUAL model, but it assesses the service quality on the basis of the service conducted (performance-based), not basing on the difference between expectation and perception.

Gronroos model for service quality: Service quality is evaluated on two criteria, FSQ:

Functional Service Quality and TSQ: Technical Service Quality; service quality is influenced greatly by corporate image. Gronrooslisted 3 influencing factors on service quality: functional service quality, technical service quality and corporate image (FTSQ model).

Technical service quality:Is the quality that customers receive through the contact with the business and is it perceived by customers? In other words, technical service quality is the result of interactions between business and customers, in which business provides services (what?) and customers perceive the service. There are five 5 criteria to evaluate this factor:

Problem-solving skill, - Professional skills, Working level. Facilities, Information storage system.

Functional service quality:Functional service quality reflects how service is done and how it is provided. Between the two above qualities, functional service quality has a more important role and it is reflected through the following criteria: Convenience of transactions, Behaviors, Attitude, Business organization, Contact with customers, Service style,

Basing on the advantages and disadvantages of the models, the author will propose the following model to be used in the research. The first influential factor on customers’

satisfaction is identified to be the quality of credit grant, due to generalized factors in Gronroos model, factors in Servqual model such as Reliability, Staff conduct, Tangibles, Convenience, Assurance, and Empathy. The second influential factor is Price in CSI model and factors basing on Kano model. Basing on such models, the author proposed the factors to be used in the scale for measuring customers’ satisfaction with credit grant service of the bank as follows:

Figure 2.2: Proposed service quality model

Reliability is the factor that reflects the ability to provide a credit service in an accurate, timely and reliable manner. To have reliability, the service provider needs to be consistent in granting credit as well as respect commitment or promises made with customers. Only when customers trust the bank can they be satisfied with the service.

To satisfy the customer in banking industry the services need to meet customers’

demand, e is provided quickly, provided without any fault or error, the staff consults suitable service with customers’ purpose and the bank provides data accurately and quickly.

Staff Conduct: This includes the ability to solve problems quickly, resolve effectively complaints about the credit grant; the willingness to help customers and respond to customers’

request for credit grant with a nice attitude, good communication skill and good knowledge to answer all customers’ queries about credit service (Avkiran, 2002). In other words, staff conduct is the response of the bank to customers’ demands. Customers will feel satisfied if staff has good conduct. the items include: Staff solves customers’ complaints appropriately

Staff is knowledgeable (consult customers with the best service), Staff does the service accurately and quickly, Staff answers customers’ queries, Staff is ready to serve customers

The item for Convenience includes: The convenience in all transactions, The bank has convenient location for customers to do all transactions, The bank has a widespread network of agents, Business hours are convenient and suitable, Easy-to-use communication system

Easy and quick transaction procedures, The bank has instant information about balance and account

Competitiveness in price:Competitiveness in loan interest and relevant fees.This is the new variable to be considered in the theoretical model. Due to the fluctuations of the financial market in Vietnam and the business culture, customers always compare the interest rate and transaction fee among different banks. Therefore, attractive interest rate and transaction fee will keep customers satisfied. the item as: The bank has a flexible price policy, The bank has competitive interest rate, Transaction fees are acceptable,

Assurance: This is the factor that creates trust for the customers. They can feel assured if the staff is professional, competent and knowledgeable; have good conduct and communication skills, which make them feel safe whenever using the services. There are four items as: The staff is polite to customers, Customers feel safe when they do transactions with the bank, The staff always provides necessary information for customers, The staff answers customers’ queries accurately, clearly.

Empathy is the caring for the customers and being nice to them so that customers feel that they are important and welcomed anytime. Human is the key to this success; by caring more for customers, the bank will increase the empathy for their customers: The staff pays individual attention to customers, The staff understands clearly customers’ demands, The staff always pays special attention to customers, Customers do not have to wait long to be served.

and The staff is always caring for customers.