The impact of service quality on customer satisfaction; an empirical study

This research study attempts to find out the impact of the quality of service on the satisfaction level of customers in the public sector General Insurance companies in Cochin.

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THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION; AN EMPIRICAL

STUDY Joshy K T

Research Scholar, Department of Management Studies, Karunya Institute of Technology and Sciences, Coimbatore, Tamil Nadu, India

Dr.F.J Peterkumar

Associate Professor, Department of Management Studies, Karunya Institute of Technology and Sciences, Coimbatore, Tamil Nadu, India

Sunil Vakayil

Director, RVS Institute of Management Studies and Research,

Coimbatore, Tamil Nadu, India

ABSTRACT

Customer satisfaction is viewed as an end rather than a means, as far as organizational goals are concerned This is because ensuring customer satisfaction will automatically end up with achievement of organizational objectives Many management writers consider service quality as the most important factor determining customer satisfaction This research study attempts to find out the impact of the quality of service

on the satisfaction level of customers in the public sector General Insurance companies

in Cochin The required data is collected from the customers of these companies in Cochin The study reveals that the employee service quality of public sector General Insurance companies in Cochin has a significant positive impact on customer satisfaction The study recommends improvement in quality of service in organizations

to ensure higher level of satisfaction among customers

Key words: Customer satisfaction, organizational goals, Public Sector General

Insurance, service quality

Cite this Article: Joshy K T, Dr.F.J Peterkumar and Sunil Vakayil, The Impact of

Service Quality on Customer Satisfaction; an Empirical Study, International Journal of Management (IJM), 11 (3), 2020, pp 76–88

http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=3

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1 INTRODUCTION

The aim of any organization will be to build up a happy customer base because it will ultimately lead them to the attainment of organizational goal One of most important factors that contribute

to the customer satisfaction is the quality of service of the employees Service quality is a perception from the customer’s side about the quality of service received by them Parasuraman et.al (1985) says that service quality is the difference between expected and actual service received and observes that when the former improves, the latter also goes up The impact of employee’s service quality on customer satisfaction has been a topic of discussion among organizational heads in the past many decades Today the organizations give the highest priority for service quality as they know that it is the ultimate method to increase their customer’s satisfaction

2 LITERATURE SURVEY

Parasuraman et.al (1985) compared the customer’s expected and actual service using SERVQUAL developed by them As per their paper published in 1988, service quality dimensions are Tangibility, Reliability, Responsiveness, Assurance and Empathy Olu ojo et.al (2010) in their study found that service quality showed a significant positive impact on customer satisfaction Mohsin Zafar et.al (2011) found that service quality had a very significant effect

on customer satisfaction Van Dinh et.al (2012) studied the effect of service quality on the satisfaction level of customers and found that service quality is positively related to customer

satisfaction Jasmina Lumanaj et.al (2013) in their study observed that service quality positively

affects competitive edge and relations with the clients Rahhal et.al (2015) in their study of relationship between service quality, customer satisfaction and customer retention found that the service quality dimensions other than empathy has significant influence on customer satisfaction whereas empathy has insignificant relation Minh et.al (2015) found that dimensions other than tangibility had significant impact on the satisfaction level of customers Al-Azzam et.al (2015) observed that better is the service quality, higher is the customer satisfaction Kumar et.al (2019) made a study on the impact of service quality on customer satisfaction and customer loyalty The study has found that service quality has a positive impact

on customer satisfaction Sukhvinder Singh Paposa et.al (2019) studied the impact of service quality on customer satisfaction in Life Insurance Industry in India The study revealed that all the service quality factors has significant positive influence on customer’s satisfaction

3 OBJECTIVES OF THE STUDY

• To examine the impact of service quality factors and customer satisfaction on demographic factors of customers

• To analyze the relationship between the service quality and customer satisfaction

• To study the impact of service quality factors on customer satisfaction

4 RESEARCH METHODOLOGY

The target population of this study is the customers of the four public sector General Insurance companies in Cochin City in Kerala A detailed questionnaire for collecting data from customers is prepared The service quality questions are based on SERVQUAL developed by Parasuraman et.al (1988) The factors on which these questions are based upon are tangibles, reliability, responsiveness, assurance and empathy Part 1 of the questionnaire has 8 demographic questions and Part 2 has 25 service quality questions and 10 customer satisfactions questions The responses to the part 2 questions are based on 5-point Likert scale

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5 DATA COLLECTION

Convenience sampling is used to select samples The questionnaire was prepared in Google Form were sent through e-mails/WhatsApp to 300 customers of Public sector General Insurance customers in the city of Cochin The Google Form survey was made open from 1st of August

to 31st October 2019 Fully completed forms received from customers were 81

6 ANALYSIS OF DATA

6.1 RELIABILITY

Cronbach Alpha value for Tangibility (TAN), Reliability (REL), Responsiveness (RES), Assurance (ASS), Empathy (EMP), Satisfaction (SAT) are 0.818, 0.868, 0.865, 0.796, 0.848 and 0.913 Since the values are above 0.7, it is inferred that the constructs and questionnaire are reliable

6.2 SOCIO- ECONOMIC AND DEMOGRAPHIC PROFILE OF CUSTOMERS TABLE 1- SOCIO-ECONOMIC AND DEMOGRAPHIC PROFILE OF CUSTOMERS

PROFILE VARIABLE GROUPS FREQUENCY %

Company

Policy Type

Occupation

Age

Qualification

Experience with company

Source: Primary data

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The above percentage analysis shows that 27.2% of respondents are from New India Insurance which is the highest followed by Oriental Insurance with 25.9%, United India Insurance with 24.7% and National Insurance with 22.2% Motor policy customers are the highest with 58% followed by health policy with 27.2%, Pers Accident insurance with 7.4%, Fire insurance with 6.2% and Shop insurance with 1.2% Regarding occupation of customers salaried class is the highest with 45.7% followed by self-employed with 39.5% and retired people with 14.8% Highest percentage of respondents are from the age group of 31-40 and

41-50 with 24.7% each followed by up to 30 with 19.8%, above 60 with 16% and 51-60 with 14.8% Highest number of respondents are male with 71.6% and females are 28.4% 87% are married and 12.3 are unmarried Regarding qualification of the respondents, the highest percentage is graduates with 58% followed by Postgraduates with 21%, undergraduates 17.3% and below 10 with 3.7% Regarding insurance experience 35% are having 4-6 years’ experience followed by 2-3 with 21%, above 10 with 18.5%, 7-10 with 13.6% and 1year 11.1%

6.3 GENDER INFLUENCE ON THE CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering their gender

H1 = There is significant differences in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering their gender

Since the respondents belong to only two groups, Z-test is used to find out whether there are any statically significant differences in the customer perceptions on service quality dimensions considering their gender

TABLE 2 - CLASSIFICATION BASED ON GENDER

TAN Male 18.1034 0.559 0.578 Not Significant

Female 17.6957 REL Male 17.7586 0.314 0.754 Not Significant

Female 18.0435 RES Male 16.7719 0.571 0.569 Not Significant

Female 17.2609 ASS Male 17.4828 0.616 0.540 Not Significant

Female 17.9565 EMP Male 17.1724 0.871 0.386 Not Significant

Female 17.8696 SAT Male 34.8276 0.465 0.643 Not Significant

Female 35.5217

6.3 INFLUENCE OF MARITAL STATUS ON THE CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering their marital status

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H1 = There is significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering their marital status

Since the respondents belong to only two groups, Z-test is used to find out whether there is any statically significant differences in the customer perceptions on service quality dimensions considering their marital status

TABLE 3 – CLASSIFICATION BASED ON MARITAL STATUS

SATS Unmarried 33.7000 0.741 0.461 Not Significant

From the above table it may be observed that for Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction, the significance values are greater than 0.05, and hence the Null hypothesis is acceptable Therefore, it is concluded that there is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering their marital status

6.4 INFLUENCE OF DIFFERENCE IN COMPANIES ON CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction who are of different companies

H1 = There is significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction who are of different companies

Since the respondents belong to four company groups, One-Way ANOVA is used to find out whether there is any statically significant differences in the customer perceptions on service quality dimensions who are of different companies

TABLE 4 - CLASSIFICATION BASED ON INSURANCE COMPANY

TAN

New India 19.2273

2.806

0.445 Not Significant United India 17.0500

National 18.4444 Oriental 17.1905 New India 19.1364 0.124 Not Significant

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CONSTRUCTS INSURANCE

REL

United India 16.7500 1.978 National 18.3333

Oriental 17.0952

RES

New India 18.5909

2.860 0.428 Not Significant United India 15.9500

National 16.8889 Oriental 16.0500 ASS

New India 18.5909

National 18.2778 Oriental 17.1429

EMP

New India 19.0909

SAT

New India 37.8636

3.218

0.067 Not Significant United India 33.2000

From the above table it may be observed that for Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction, the significance values are greater than 0.05, and hence the Null hypothesis is acceptable Therefore, it is concluded that there is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction who are of different companies

6.5 INFLUENCE OF CCUPATION ON CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction who are of different occupation

H1 = There is significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction who are of different occupation

Since the respondents belong to three groups, One-Way ANOVA is used to find out whether there are any statically significant differences in the customer perceptions on service quality dimensions who are of different occupation

TABLE 5 – CLASSIFICATION BASED ON OCCUPATION

TAN

Self employed 17.9375

0.073 0.930 Not Significant Salaried 18.1081

Retired 17.7500 REL

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CONSTRUCTS OCCUPATION MEAN F SIGNIFICANCE REMARK

Retired 17.1667

RES

Retired 15.5455

ASS

Retired 16.6667

EMP

Retired 16.7500

SATS

Self employed 34.9063 1.320

0.273

Not Significant Salaried 35.8919

Retired 32.6667

From the above table it may be observed that for Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction, the significance values are greater than 0.05, and hence the Null hypothesis is acceptable Therefore, it is concluded that there is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction who are of different occupation

6.6 INFLUENCE OF AGE OF CUSTOMERS ON CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangibility, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in age groups

H1 = There is significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in age groups

Since the respondents belong to five groups, One-Way ANOVA is used to find out whether there is any statically significant differences in the customer perceptions on service quality dimensions considering the difference in age groups

TABLE 6- CLASSIFICATION BASED ON AGE

TAN

Up to 30 years 18.3750

0.457 0.767 Not Significant

31 to 40 years 17.9500

41 to 50 years 17.4500

51 to 60 years 18.7500 Above 60 17.6923

REL

31 to 40 years 18.8000

41 to 50 years 17.3000

51 to 60 years 18.6667

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Above 60 17.0769

RES

31 to 40 years 17.8000

41 to 50 years 17.4000

51 to 60 years 16.7500 Above 60 15.0769

ASS

0.891

31 to 40 years 18.3500

41 to 50 years 17.7500

51 to 60 years 18.1667 Above 60 16.6923

EMP

31 to 40 years 18.2500

41 to 50 years 17.4500

51 to 60 years 16.8333 Above 60 16.6154

SAT

31 to 40 years 36.6000

41 to 50 years 35.0000

51 to 60 years 36.0833 Above 60 32.6923

From the above table it may be observed that for Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction, the significance values are greater than 0.05, and hence the Null hypothesis is acceptable Therefore, it is concluded that there is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in their age groups

6.7 INFLUENCE OF QUALIFICATION ON CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in the qualification

H1 = There is significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in qualification of customers

Since the respondents belong to five groups, One-Way ANOVA is used to find out whether there are any statically significant differences in the customer perceptions on service quality dimensions considering the difference in qualification of customers

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TABLE 7 – CLASSIFICATION BASED ON QUALIFICATION

TAN

Postgraduate and above 18.1765

REL

RES

ASS

Not Significant

Under

EMP

Not Significant

SAT

Not Significant

Source: Primary data

From the above table it may be observed that for Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction, the significance values are greater than 0.05, and hence the Null hypothesis is acceptable

Therefore, it is concluded that there is no significant difference in the customer perceptions

on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in qualification of customers

6.8 INFLUENCE OF EXPERIENCE ON CONSTRUCTS

H0 = There is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in experience of the customers

H1 = There is significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in experience of the customers

Since the respondents belong to five groups, One-Way ANOVA is used to find out whether there are any statically significant differences in the customer perceptions on service quality dimensions considering the difference in experience of customers

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TABLE 8 - CLASSIFICATION BASED ON EXPERIENCE

TAN

One year 18.1111

0.322 0.863

Not Significant

2 to 3 years 18.4118

4 to 6 years 17.5517

7 to 10 years 17.8182 Above 10 18.4000

REL

One year 16.8889

0.508 0.730

Not Significant

2 to 3 years 18.0588

4 to 6 years 17.3793

7 to 10 years 18.4545 Above 10 18.6000

RES

One year 15.8889

0.863 0.490

Not Significant

2 to 3 years 17.9375

4 to 6 years 16.3448

7 to 10 years 16.9091 Above 10 17.5333

ASS

One year 17.0000

0.582 0.676

Not Significant

2 to 3 years 17.9412

4 to 6 years 17.1034

7 to 10 years 17.9091 Above 10 18.4000

EMP

One year 16.3333

0.593

0.668

Not Significant

2 to 3 years 16.8235

4 to 6 years 17.5862

7 to 10 years 18.2727 Above 10 17.5333

SAT

One year 33.6667

0.472

0.756

Not Significant

2 to 3 years 35.9412

4 to 6 years 34.1724

7 to 10 years 35.6364 Above 10 36.0000

From the above table it may be noted that for Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction, the significance values are greater than 0.05 Therefore,

it is concluded that there is no significant difference in the customer perceptions on service quality dimensions Tangible, Reliability, Responsiveness, Assurance, Empathy and Satisfaction considering the difference in qualification of customers

6.9 INTER RELATIONSHIP BETWEEN VARIABLES

Correlation analysis is done between the variables Tangibility, Reliability, Responsiveness, Assurance, Empathy and Satisfaction to find the inter relationship between them The following table shows the correlation between all the constructs under study

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