a study on service quality and customer satisfaction by using the servqual model

CHAPTER I

INTRODUCTION

Bajaj is an automobile company with global presence and take pride in our Indian roots

and values. KVR motors (marketing branch) at Calicut deals with the sale and

service of bikes. They always intends to leverage through its strong marketing

initiative like brand building, creating strong franchisees, restructuring dealerships,

effective after sale service and sale of new brands. This project deals with the study

of customer experience after getting the product with regard to service and also

examines the service quality gap by comparing customer’s expectations and their

actual perceptions by using the SERVQUAL model.

Service quality is a concept that has aroused considerable interest and debate in the

research literature because of the difficulties in both defining and measuring it with

no overall consensus emerging on either. Customer satisfaction and service quality

are often treated together as functions of customer’s perceptions and expectations

and research has shown that high service quality contribute significantly to

profitability. Service quality is required to be first measured in order to improve

the quality in a service organization. The measurements used were based on the

widely accepted SERVQUAL model which is the most common method for

measuring service quality.

Customer participation in service production process greatly influences service

quality. It is related to cost, profitability, customer satisfaction, customer relation,

behavioral intention and positive word of mouth. Through this project those factors

can be identified that determines the relation between customer satisfaction and

service quality.

1

STATEMENT OF PROBLEM

The main focus of KVR Bajaj is on providing high quality service to its customers

and the firm usually uses modern technology to provide excellent service. But it’s

the customer who only judges the service quality after using the product.

Therefore, it is essential to evaluate the service rendered by KVR, Bajaj. The

management wants to know whether the customers are satisfied with the present

service which they are rendering. So the research problem is to conduct “a study on

service quality and customer satisfaction with reference to the SERVQUAL model”

OBJECTIVES OF THE STUDY

1. To determine the different factors influencing the service quality.

2. To ascertain whether there is any actual or perceived gaps between customer

expectations and perceptions of the service offered.

3. To ascertain whether there is any gaps between Service quality

specifications and actual service delivery.

4. To know the areas where gap exists so that the company can allocate more

resources to better service and,

5. To suggest measures to improve the service quality, if found needed.

SCOPE & SIGNIFICANCE OF THE STUDY

The study is intended to conduct the existing customers of Bajaj, who owns bikes

in the small segment. The project covers the customers of KVR Bajaj in Calicut

district. As the competition is increasing day by day in automobile industry, a

company like Bajaj should understand whether the customers are valued or not.

Since the major players are intended to enter the small segment, to keep its position

2

as now, they have to rethink that their customers are getting much benefits from

their product. Apart from these threats, the major fear of the firm is in increasing

the demand of the customers and retaining the customers in the market

SETTING OF HYPOTHESIS

Based on the objectives explained above, the following hypothesis has been set for

the study.

H0: There is no significance difference between customer expectations and actual

perceptions of service

H1: there is significance difference between customer expectations and actual

perceptions of service

H0: There is no significance difference between Service quality specifications and

actual service delivery

H1: there is significance difference between Service quality specifications and

actual service delivery.

RESEARCH DESIGN

The type of research design adopted is descriptive research design, since it

involves detailed numerical descriptions such as distribution of population of a

community by age, sex, geographical locality, cost and education.

3

DATA SOURCES

The study is based on both secondary and primary data.

Secondary sources: Secondary data were obtained from the articles, journals,

official website of Bajaj.

Primary source: The primary data were collected from customers of Bajaj with

the help of a structured questionnaire and also, individual interview with

employees of KVR motors.

SAMPLING DESIGN

A sample design is a definite plan for obtaining a sample from a given population.

Population: All customers of KVR motor at Calicut region.

Sample size: For the convenience of study the sample size was fixed at 75

respondents. Effort was taken to include different segments of customers in the

sample.

SAMPLING TECHNIQUE

Simple random sampling is used; the structured questionnaires are given to 75

respondents who visited KVR Bajaj within the time frame of the data collection

period. The simple random method is used because each and every population has

an equal chance of being selected and also it helps to reduce bias.

4

RESEARCH INSTRUMENT

In this study structured questionnaire is used as the research instrument which

contains closed ended questions.

VARIABLES OF THE STUDY

The variable list drawn up for the study included.

1. Reliability

2. Tangibility

3. Responsiveness

4. Assurance

5. Empathy

5

Fig no: 1 conceptual model of service quality

Model of Service Quality Gaps

There are five major gaps in the service quality concept, are

Gap 1: The difference between management perceptions of what customers

expect and what customers really do expect

The reasons for GAP 1 - not knowing what customers expect

– lack of a marketing orientation

6

Conceptual Model of Service Quality

Word-of-mouthCommunications

Personal Needs Past experience

Expected Service

Perceived Service

ServiceDelivery

ExternalCommunicationsTo Customers

Service QualitySpecs

ManagementPerceptions of

Customer Expectations

CUSTOMER

PROVIDER

Gap 1 Gap

2

Gap 3

Gap 4

Gap 5

– inadequate upward communication (from contact staff to

management)

– too many levels of management

Gap 2: The difference between management perceptions and service quality

specifications - the standards gap

The reasons for GAP 2 -the wrong service quality standards

-inadequate commitment to service quality

-lack of perception of feasibility - ‘it cannot be done’

-inadequate task standardisation the absence of goal setting

Gap 3: The difference between service quality specifications and actual service

delivery - are standards consistently met?

The reasons for GAP 3 - the service performance gap

– role ambiguity and role conflict - unsure of what your remit is and

how it fits with others

– poor employee or technology fit - the wrong person or system for the

job

– inappropriate supervisory control or lack of perceived control - too

much or too little control

– lack of teamwork

Gap 4: The difference between service delivery and what is communicated

externally - are promises made consistently fulfilled?

7

The reasons for GAP 4 - when promises made do not match actual delivery

– inadequate horizontal communication - between departments or

services

– a propensity to overpromise

Gap 5: The difference between what customers expect of a service and what

they actually receive

-expectations are made up of past experience, word-of-mouth and

needs/wants of customers

-measurement is on the basis of two sets of statements in groups according

to the five key service dimensions

These are the five factors of SERVQUAL model.

The independent variables which affect the above dependent variables can be

grouped as:

o Trust worthiness

o Service time

o Response

o Communication

8

o Approach of employees

o Facilities

DATA ANALYSIS

The data collected from the respondents using the research instrument is analyzed

with the help of statistical tools for the purpose of drawing inference regarding the

study

1. Classification and Tabulation

The data collected will be classified on the basis of the variables, and tabulated

as per methodology in order to facilitate analysis. Various statistical tools will

be used

2. Statistical analysis tools

• Z test

• Measurement of skewness

• Arithmetic mean

• Standard deviation

9

CHAPTERISATION

The whole project is divided into four chapters

Chapter

Number

Title Description

1 INTRODUCTION This chapter includes the brief introduction

of the topic, significance of the study,

objectives, the research methodology and

limitations of the study.

2 INDUSTRY

PROFILE

This chapter is divided into two parts. The

first part contains a detailed industry profile.

The second part deals with the company

profile.

3 LITERATURE

REVIEW

This chapter briefly describes the various

aspects of service quality

4 DATA ANALYSIS

AND

INTERPRETATION

In this part the classified and tabulated data

is analyzed using statistical tools from which

the inference is drawn. All the questions in

the questionnaire is subjected to analysis and

interpreted accordingly

5 FINDINGS AND

SUGGESTIONS

This chapter contains the main findings and

the suggestions. A summary and the

conclusion are also included in this part.

10

LIMITATIONS OF THE STUDY

As the study is concentrated on a particular unit, the project gets only a

limited area under study

Data will be collected through random sampling so the disadvantage of the

same will be reflected on the project.

1. One of the most obvious limitations of simple random sampling method is

its need of a complete list of all the members of the population.

2. This list is usually not available for large populations. In cases as such, it is

wiser to use other sampling techniques.

Time constraints

The data collected from 75 respondents form the basis of the entire study.

Since the study is based on SERVQUAL model the disadvantage of the same

will be reflected on the project:

1. SERVQUAL's 5 dimensions are not universals

2. The model fails to draw on established economic, statistical and

psychological theory

3. Concept of expectation is loosely defined and leads to multiple

interpretations and resulted operationalisation of SERVQUAL is open to

multiple interpretations,

4. A number of researchers cannot agree on the different dimensions are

appropriate for expectations, perceptions and gap scores.

5. SERVQUAL only focuses on process of service delivery rather than

outcomes of service encounters.

CHAPTER II

11

INDUSTRY PROFILE

The first form of motorbikes was a bicycle was a very crude one. It was

called clarifier or wooden horse which was invented in France sometime around

the 1770’s on this model there was a fixed steering wheel and no pedals, this

means that the person riding has a very little steering capability and had to push

their feet across the ground to propel them. The next improvement was the

attachment of a movable steering, which made for much easier riding, this model

was called Drasine or dandy horse in1839 a Scottish blacksmith named Kirkpatrick

Mac Millan added a very important invention to the Drasine it was the pedal which

he attached to the back wheel this made it easier to propel the bike. It was the first

ever bike to be patented in the U.S.

The automobile was the reply of the 19th century dream of self propelling the

horse drawn carriage. The similarly the invention of the motorcycle created the self

propelled bicycle.

Edward butter an English man built the motor cycle in 1884. The first

gasoline engine motorcycle to appear publicity was built by Gottieb Daimler of

Germany in 1885. One wheel in the front and one in the back although it has a

smaller spring loaded outrigger wheel on each side. It was constructed mostly on

wood; with the wheels being of the iron banded wooden spoiled wagon type,

definitely a bone crusher chassis.

The 1980’s saw the conversion of many bicycles or pedal cycle by adding

small certainty mounted spark ignitions engines. There was then felt the need for

reliable constructions; this lead to road trail test and completion between

manufactures such was the providing ground floor many new ideas early two stock

12

cycle designs to supper charge multi mate engines mounted on aerodynamic,

carbon fiber reinforced body work.

The popularity of the vehicle grew especially after 1910 during world war-I

all branches of the armed forces in Europe was principally sent for dispatching

after the war it enjoyed a spout vogue until the great depression began in 1929.

After the world war-II a revival of interest in motorcycle lasted into late 20 th

century with the vehicle being used for high speed touring and sport competition.

The practice of attaching auxiliary engines in bicycle in western Europe and

parts of the us led to the development during the 1950’s of a new type of light

motorcycle is called moped originating in Germany has 50cc machine with simple

control and low cost. It was largely free of licensing and insurance regulations

except in Great Britain.

INDIAN SCENARIO

The Indian two wheeler industry contributes the largest volume among all

the segments in the automobile industry. Though the segments can be broadly

categorized into three sub segments viz scooters, motorcycles and mopeds. Some

categories introduced in the market area are combined of two or more segments.

Eg scooters and step thrus.

In the four to five years the two wheelers market has witnessed a market

shift towards motorcycle at the expenses of scooters. In the rural areas consumer

have come to sturdier bikes to with stand the bad road conditions. In the process of

motorcycle segment has grown from 48% to 58%. The share of scooters decline

drastically from 33% to 25% while that of Mopeds declined by 2% from 19% to

17% during the year 2000-01. The euro emission norms effective from april2000

led to the existing players in to the stroke segment to install catalytic converters.

13

Excise duty on motorcycle has been reduced from 32% to 24% resulting in price

reduction which has aided in propelling the demand for motorcycles. Fierce

competition has also forced players to cut prices of certain models. Two wheelers

are the entry- levels personal transport.

THE INDIAN MOTOR CYCLE MARKET

India has traditionally been a two stroke scooter market. With the

introduction of stricter euro I and II emission norms, scooter makers were forced to

upgrade their technology, gradually robbing them of their substantial price

advantage over motorcycles. This coupled with aggressive pricing by motorcycle

turned the tables of the two wheeler market in favor of motorcycles.

The recent years have seen the motorcycle market grow at scorching rates as it

wrestles share from the scooter and moped market. For the period of 1993-94 to

2001- 02, motorcycle sales recorded a CAGR of 25.8% compared to CAGR of

0.6% for scooters and 0.8% for Mopeds.

CREATING NEW SEGMENTS

The booming motorcycle market coupled with the low growth rates of the

scooter and moped market, has led many erstwhile scooters and moped

manufacturers to jump on the four stroke motorcycle bandwagon. The majority of

the market is still accounted for by the basic 100cc Rs 40000 to 45000 motorcycle.

However, the new launches in the last two years have created entirely new

segments in the market. At the lower end, there have been successful launches in

the Rs 30000-Rs35000 band, which have redefined the entry level market. At the

same time the upper end performance segment has been flooded with many new

launches in the 125cc+category. These segments also look all set to be further sub

14

segments as market players continue to launch new products to fill in any existing

gaps.

Positioning an Indian bike

While the scooters appeals to the family man, a motorcycle’s main

audiences has always been the young mail individual. Niche brands Bajaj pulsar

are targeted towards college students, while most mainline brands have

concentrated on the young working man in the 25-35 year age group. Being a high

involvement purchase, rational benefits derived are very important in deciding the

purchase. At the same time, a motorcycle, like a car is one of the most obvious

statement of self leading to immense potential on the emotional benefits paradigm

as well the brands in the markets have tried every trick in the book to appeal to the

Indian market from promoting rational benefits such as performance to creating

brands personalities that would appeal to the male buyer. From trying to cash in on

nationalistic feelings through corporate campaigns to using celebrities such as

Hrithic Roshan and Sachin Tendulkar to endorse the brand various tactics have

been used by various players to lure the motorcycle customers.

India is the second largest manufacturer and producer of two wheelers in the

world. It stands next to Japan and China in terms of the two wheelers produced and

doestic sales respectively. This distinction was achieved due to variety reasons like

restrictive policy followed by the government of India towards the passenger car

industry, rising demand for personnel transport inefficiency in the public

transportation system etc.

The Indian two wheeler industry made a small beginning in the early 50’s

when automobile products of India. Until 1958 API and ENFILD were the sole

producers.

15

In 1948, Bajaj auto began trading in improved VESPA scooters and three

wheelers. Finally in 1960, set up a shop to manufacturer them in technical

collaboration with piaggio of Italy.

In the initial stages, the scooter segments was dominated by automobile

products or India(API) later it was over taken by Bajaj auto, LML was one of the

leading scooters at that time and nova it stands shine among the scooter industry in

India.

The motor cycle segments in India was controlled by only three

manufacturers ENFIELD, JAVA and ESCORT bullet was a four stoke bike.

Initially the market was mainly captured by ENFIELD and ESCORT. ENFIELD

was a 350cc bikes and escort 175cc bikes.

The two wheeler market was opened ended to foreign competition in the mid

80’s. at the time it emerged the era of 100cc bikes and existing leaders enfield and

escorts werw thrown out from the market. It resulted in the emergence of hero

Honda, the only producer of four stroke bikes (100cc category)gaining the top slot.

The first japaneese motor cycle were introduced in the early 18 th century.

Tvs suzki and hero Honda brought in the first two strokes and four stroke engine

motor cycles.

The entry of kinetic Honda in the later 18th with a scooter helped in

providing easy and smooth use to scooter owners. This helped in the industry in

youngter and working women towards buying scooters.

Later the scooter industry had a decline and the trend of scooters was

changed to two strokes and four strokes bikes. In 1990 the entire automobile is a

drastic fall in demand. The main reason for the recession in this sector was the

16

raise in the fuel prices, high input costs and reduced purchasing power of the

people.

India is one of the very few countries manufacturing three wheelers in the

world. It is the world’s largest manufacturing and sellers of three wheelers. Bajaj

auto commends a monopoly in the domestic market with a market share of above

80%.

17

COMPANY PROFILE

About Bajaj

Bajaj automobile is one of the India’s top 10 companies in terms of market

capitalization and one among top 5 in terms of annual turnover. Bajaj automobile

limited came into existence on Nov 29, 1945 as Automobile Pvt Ltd. The founder

of Bajaj Automobile Pvt Ltd was Jamnalal Bajaj. The wheeler areas they produce

include pick up vans, autorikshas and delivery vans. Bajaj is also popular in

manufacturing various consumer goods which have become so relevant, for all the

people over the world. Goods like bulb, tube lights, and fan are the other products.

The most important persons of Bajaj Auto Ltd are Rahul Bajaj (Managing

Director), R.A.Mahtra ,Rajiv Bajaj (President) and R.L.Ravichandran (Vice

President) with overall 350 dealership all over India and one regional office at

Cochin they are rated as the best dealer in India.

The main advantage of Bajaj Automobile are they have low maintenance value and

good mileage and pick up compared to other two wheelers.

The Bajaj two wheelers are also rated as five star vehicles in terms of its cultural

gearbox, good handling, power breaking, lasting style, comfort and of course in

terms of money which is affordable by every person. The Bajaj Auto Ltd has got

over a strength of 12000 employees, which is definitely supreme that other

automobile companies. The Bajaj

Automobile Ltd has got around 25 dealers in India including Bajaj dealers at

Calicut. The main competitors of Bajaj are Hero Honda, TVS, are Hero Honda,

TVS, Yamaha and Suzuki.

18

About KVR

KVR motors is the authorized dealers of M/S Bajaj Auto Ltd for selling and

servicing of two wheelers and three wheelers in the district Calicut, Wayanad,

Kannur and Malappuram. KVR motors is a sole proprietorship concern owned by

K.P.Nair an NRI hailing from Kannur district. KVR Bajaj was started on Nov 21,

1987. KVR motors namely KVR Bajaj is now one of the leading services, sales

and spare parts provider in India.

KVR has execellent facilities at their show room and service workshop at

Chakkorathkulam, Kannur road, Calicut. The company was inaugurated on 20 th

1997 by Sri Madhur Bajaj who was the president of Bajaj Auto Ltd in 1997.

The opening of KVR group in Calicut has been born to the customers in the

Malabar region. KVR motors was the first business organization when the KVR

group had set up at Calicut 10 year back and more production projects had

followed with the main aim of providing employment to the youth of Malabar

region.

KVR motors has its main show room and service enters at WEST HILL- Calicut

and has branches at VADAKARA, QUILANDY, RAMANATTUKKARA,

SULTTHAN BATHERY, KALPETTA, MANATHAVADY, PRERAMBRA,

BALUSSERY, KUNNAMANGALAM, KODUVALLY and THAMARASSERY.

M/S Bajaj Auto Ltd awarded the dealership performance award to KVR motors

several time. KVR motors was successful in increasing the market share of Bajaj

Auto Ltd from 7% to 30% in motorcycle industry managed by a professional team.

KVR motors was awarded the best spare parts dealer at all India Bajaj dealer

conference held at KualaLampoor May 2002. Bajaj Auto having convinced with

19

financial and management capabilities of KVR motors awarded the dealership

status at Kannur in 2003.

The main financiers of KVR motors are ICICI, HDFC, Bajaj finance and

SBI. They provide attractive scheme to the customers.

KVR Bajaj has 6 departments namely services, sales, administration, finance and

EDP. Each department has got its own managers to control the department. It

consists of 176 staff in total. KVR Bajaj show room spread out in 1000 sq feet.

The working hours are from 9am to 6pm. KVR mainly concentrate on the

satisfaction of customer providing better quality services.

20

PRODUCT PROFILE

Bajaj products are classified on the basis of its rate

1 ECONOMY/ ENTRY PRODUCTS RATE

CT 100 ORDINARY 100 CC30 to 40 thousandsCT 100 DLX 100 CC

PLATINA ORD 100 CC

PLATINA DLX 100 CC

2 EXECUTIVE PRODUCTS RATEDISCOVER JADOO 112 CC K 70

40 to 55 thousandsDISCOVER KS 125 CC Dts i

DISCOVER ES 125 CC

DISCOVER Dtssi 135 CC

3 PREMIUM PRODUCTS RATE

PULSAR 150 ES 150 CCabove 55 thousand

PULSAR 150 KS 150 CC

PULSAR 180 ES 180 CC

PULSAR 180 ES 180 CC UG-3

PULSAR 150 ES 150 150 CC UG-3

PULSAR 200 CC Dts i

PULSAR 220 CC Dts iAVENGER 180 CC ES

Table no: 1 product profile

21

ORGANISATIONAL CHART

Fig no: 1 organizational chart

22

PROPRIETOR

JOINT MANAGER

P & A MANAGER

FINANCE MANAGER

EDP MANAGER

SERVICE MANAGER

SPARE PARTS MANAGER

GERNERAL MANAGER SALES

ASSISTANT FINANCE OFFICER

SYSTEMS OFFICER

ASSISTANT MANAGER

ASS. SPARE PARTS MANAGER

SALES MANAGER

ACCOUNTANT ASS. SALES MANAGER

SUPERVISOR

SERVICE ENGINEER

STOREKEEPER

SALES EXECUTIVES

STORE ASSISTANT

SALES OFFICER

SALES EXECUTIVE

CLERICAL STAFF

MECHANICS

CHAPTER III

REVIEW OF LITERATURE

THEORECTICAL PERSPECTIVE OF STUDY

The most basic concept underlying marketing is that of human needs. The task of

any business is to deliver customer value at a profit. In a hyper competitive

economy with increasingly rational buyer faced with abundant choice, a company

can win only by fine tuning he value delivery process and choosing, providing and

communicating superior value. Consumer’s needs and wants are fulfilled through

Marketing offer some combination of products, services, information, or

experiences offered to a market to satisfy a need or want. Marketing offers are not

limited to physical products. They also included services, activities or benefit

offered for sale that are essentially intangible and do not result in ownership of

anything.

Services have been studied extensively since 1980’s. The idea of linking services

value and customer satisfaction has existed for a long time. Customer satisfaction

has been studied and recognized as an important factor in the management

literature fp0r the past decades. A study indicates that there are links among

customer satisfaction, customer loyalty, and profitability. During recent years

there have studies that have established mechanisms that attempt to link customer

satisfaction and service quality. Many studies additionally attempt to establish

connections between service quality, customer satisfaction, customer loyalty and

profitability. Many organizations spend millions of dollars annually on marketing

research because it can be used for various purposes. Marketing researcher can

help an organization improve quality of its customer service, identify new service

23

opportunities and gain a competitive edge over competitors. Service organizations

can use different approaches to conduct market research.

Customer satisfaction

To understand the importance of customer satisfaction, consider these facts:

customers with problems usually don't react and only 4% of them complain;

normally a person with problem tells 9 other people about it; while satisfied

customers tell 5 other people about their good experiment; keeping a current

customer costs about 1/7 of the cost of acquiring a new customer; retaining a

current employee costs one tenth of hiring and training a new one. These facts;

highlights the crucial role of satisfying customers which brings employee

satisfaction; hence, the profit maximization of the company. Therefore,

organizations need to understand that to what extend their customers would be

satisfy. Customer satisfaction in marketing context has specific meanings: Anders

Gustafsson, Michael D. Johnson, & Inger Roos (2005) brought customer

satisfaction definition as customer's overall evaluation of the date. This satisfaction

has positive influences on retaining customers among different variety of services

and products. In service based enterprises; service quality directly affects customer

satisfaction.

Ingrid FecÏikovaÂ, (2004) interpreted satisfaction as a feeling which results from a

process of evaluating what was received against that expected, the purchase

decision itself and/or the fulfillment of needs/want. Satisfaction refers to achieving

the things we want. If satisfaction interprets as "not going wrong" the firm should

decrease complaint which by its own is not sufficient. In order to satisfy customers,

company should improve its services and products. Customers with less

24

expectation are more satisfied: companies by adding innovative features would

easily increase customer satisfaction. In contrast, when customers are unaware of

improvements but critical of losses in existing quality are less satisfied and expect

more.

One of the main ingredients of success in the market place is customer satisfaction.

Jochen Wirtz (2003) listed the results of customer satisfaction as follows: repeat

purchase; loyalty; positive word-of-mouth and increased long term 8 profitability.

Therefore, companies should measure their customers' satisfaction to fortify their

strengths and improve their weaknesses.

Customer satisfaction in 7 steps

1. Encourage face to face dealings

2. Respond message promptly & keep your clients informed

3. Be friendly and approachable

4. Have clearly defined customer service policy

5. Attention to detail(also known as ‘the little niceties’)

6. Anticipate your clients needs & go out of your way to help them out

7. Honor your promises.

Service Quality

Service quality is a concept that has aroused considerable interest and debate in the

research literature because of the difficulties in both defining it and measuring it

with no overall consensus emerging on either (Wisniewski, 2001). There are a

25

number of different "definitions" as to what is meant by service quality. One that is

commonly used defines service quality as the extent to which a service meets

customers’ needs or expectations (Lewis and Mitchell, 1990; Dotchin and

Oakland, 1994a; Asubonteng et al., 1996;Wisniewski and Donnelly,1996).

Service quality can thus be defined as the difference between customer

expectations of service and perceived service. If expectations are greater than

performance, then perceived quality is less than satisfactory and hence customer

dissatisfaction occurs (Parasuraman et al., 1985; Lewis and Mitchell, 1990).

Always there exists an important question: why should service quality be

measured? Measurement allows for comparison before and after changes, for the

location of quality related problems and for the establishment of clear standards for

service delivery. Edvardsen et al. (1994) state that, in their experience, the starting

point in developing quality in services is analysis and measurement. The

SERVQUAL approach, which is studied in this paper is the most common method

for measuring service quality.

Model of Service Quality Gaps There are five major gaps in the service quality

concept, are

Gap 1: The difference between management perceptions of what customers

expect and what customers really do expect

The reasons for GAP 1 - not knowing what customers expect

– lack of a marketing orientation

– inadequate upward communication (from contact staff to

management)

– too many levels of management

26

Gap 2: The difference between management perceptions and service quality

specifications - the standards gap

The reasons for GAP 2 -the wrong service quality standards

-inadequate commitment to service quality

-lack of perception of feasibility - ‘it cannot be done’

-inadequate task standardisation the absence of goal setting

Gap 3: The difference between service quality specifications and actual service

delivery - are standards consistently met?

The reasons for GAP 3 - the service performance gap

– role ambiguity and role conflict - unsure of what your remit is and

how it fits with others

– poor employee or technology fit - the wrong person or system for the

job

– inappropriate supervisory control or lack of perceived control - too

much or too little control

– lack of teamwork

Gap 4: The difference between service delivery and what is communicated

externally - are promises made consistently fulfilled?

The reasons for GAP 4 - when promises made do not match actual delivery

– inadequate horizontal communication - between departments or

services

27

– a propensity to overpromise

Gap 5: The difference between what customers expect of a service and what

they actually receive

-expectations are made up of past experience, word-of-mouth and

needs/wants of customers

-measurement is on the basis of two sets of statements in groups according

to the five key service dimensions

The Five Key Service Dimensions

-TANGIBLES - the appearance of physical facilities, equipment, personnel and

information material

-RELIABILITY - the ability to perform the service accurately and dependably

-RESPONSIVENESS - the willingness to help customers and provide a prompt

service

-ASSURANCE - a combination of the following

o Competence - having the requisite skills and knowledge

o Courtesy - politeness, respect, consideration and friendliness of contact staff

o Credibility - trustworthiness, believability and honesty of staff

o Security - freedom from danger, risk or doubt

28

-EMPATHY - a combination of the following:

o Access (physical and social) - approachability and ease of contact

o Communication - keeping customers informed in a language they understand

and really listening to them

o Understanding the customer - making the effort to get to know customers

and their specific needs

29

CHAPTER IV

ANALYSIS AND INTERPRETATION

RELIABILITY

Reliability is defined as the ability to perform the promised service dependably and

accurately. In the broadest sense, reliability means that the company delivers on its

promises. Customers want to do business with the companies that keep their

promises particularly about the service outcomes and core service attributes all the

firm needs to be aware of customer’s expectation of reliability.

The mean reliability scores and its standard deviation both for the expectation and

experience of consumers are worked out and presented in table no 1.

Table no: 1 mean reliability score and standard deviation in respect of KVR Bajaj

Particulars expectation experience difference Z valueMean 3.925 3.671 0.254 1.827STDV 0.809 0.892Tabular value 1.960

From the table it can be noticed that the mean expectation score for reliability is

3.925 where the experience score is 3.925. The difference is 0.254. The z test is

used to test the significance of difference and the results are shown below.

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The computed Z value (1.827) is less than the table value (1.960) at the 5% level

so the null hypothesis that there is no significant difference between customer

expectation for reliability and their actual experience at KVR Bajaj is accepted.

Hence it can be concluded that there is no gap between customer expectation for

reliability and their actual experience at KVR Bajaj.

Fig no: 1 A 5% level of significance, with acceptance and rejection regions of reliability.

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0-1.960 +1.960+1.827

Acceptance region

Rejection regionRejection region

RESPONSIVENESS

Being willing to help, responsiveness is the willingness to help customers and

provide prompt service. This dimensions emphasis attentiveness and promptness in

dealing with the customers’ requests questions complaints and problems. To excel

on the dimensions of responsiveness a company must be certain to view the

process of service delivery and handling of request from the customer’s point of

view rather than from the company’s point of view.

The mean responsiveness scores and its standard deviation both for the expectation

and experience of consumers are worked out and presented in table no.2.

Table no: 2 mean responsiveness score and standard deviation in respect of KVR Bajaj

Particulars expectation Experience difference Z valueMean 4.133 3.819 0.314 2.311STDV 0.733 0.92Tabular value 1.960

From the table it can be noticed that the mean expectation score for responsiveness

is 4.133 where the experience score is 3.819. The difference is 0.314. The z test is

used to test the significance of difference and the results are shown below.

The computed Z value (2.311) is less than the table value (1.960) at the 5% level

so the alternate hypothesis that there is significant difference between customer

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expectation for responsiveness and their actual experience at KVR Bajaj is

accepted.

Hence it can be concluded that the gap is because of service gap already exists.

fig no: 2 Gap exists between responsiveness expectation and experience.

Fig no: 3 A 5% level of significance, with acceptance and rejection regions of responsiveness.

ASSURANCE

Inspiring trust and confidence, assurance is defined as employee’s knowledge and

courtesy and the ability of the firm and its employees to inspire trust and

confidence. This dimension is likely to be particularly important for the services

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Acceptance region

Rejection region Rejection region

+1.960-1.960 0 +2.311

that the customer perceives as involving high risk about which they feel uncertain

about their ability to evaluate outcomes.

The mean assurance scores and its standard deviation both for the expectation and

experience of consumers are worked out and presented in table no:3

Table no: 3 mean assurance score and standard deviation in respect of KVR Bajaj

Particulars expectation Experience difference Z valueMean 3.963 3.851 0.112 0.83STDV 0.785 0.867Tabular value 1.960

From the table it can be noticed that the mean expectation score for assurance is

3.963 where the experience score is 3.851. The difference is 0.112. The z test is

used to test the significance of difference and the result is shown below.

The computed Z value (0.83) is less than the table values (1.960) at the 5% level so

the null hypothesis that there is no significant difference between customer

expectation for assurance and their actual experience at KVR Bajaj is accepted.


assurance and their actual experience at KVR Bajaj.

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Fig no: 4 A 5% level of significance, with acceptance and rejection regions of assurance.

EMPATHY

Treating customers as individuals, empathy is defined as the caring individualized

attention the firm provides to its customers. The essence of empathy is conveying,

through personalized or customized service that the customers are unique and

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Acceptance region


0 +1.960-1.960 +0.83

special. Customers want to feel understood by and important to firms that provide

service to them.

The mean empathy scores and its standard deviation both for the expectation and

experience of consumers are worked out and presented in table no.4

Table no: 4 mean empathy score and standard deviation in respect of KVR Bajaj

Particulars expectation Experience difference Z valueMean 3.963 3.843 0.12 5.48STDV 0.906 0 .915Tabular value 1.960

From the table it can be noticed that the mean expectation score for empathy is

3.963 where the experience score is 3.843. The difference is 0.12. Z test is used to

test the significance of difference and the result is shown below.

The computed Z value (5.48) is less than the table value (1.960) at the 5% level so

the alternate hypothesis that there is significant difference between customer

expectation for empathy and their actual experience at KVR Bajaj is accepted.

Hence it can be concluded that the gap is because of service gap already exists.

Fig no: 5 Gap exists between empathy expectation and experience.

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Fig no: 6 A 5% level of significance, with acceptance and rejection regions of empathy.

TANGIBLES

Representing the service physically tangibles are defined as the appearance of

physical facilities, equipment, personnel and communication materials. All of these

are physical representation or images of the service that customers particularly new

customers, will use to evaluate quality. In contrast, firms that don’t pay attention to

the tangibles dimension of the service strategy can confuse and even destroy an

otherwise good strategy.

The mean tangibles scores and its standard deviation both for the expectation and

experience of consumers are worked out and presented in table no:5

Table no: 5 mean tangibles score and standard deviation in respect of KVR Bajaj

Particulars expectation Experience Difference Z value

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Acceptance region


5.48+1.9600-1.960

Mean 3.864 3.747 0.117 0.93STDV 0.672 0.856Tabular value 1.960

From the table it can be noticed that the mean expectation score for tangibles is

3.864 where the experience score is 3.747. The difference is 0.117. Z test is used to

test the significance of difference and the result is shown below.

The computed Z value (0.93) is less than the table values (1.960) at the 5% level


expectation for tangibles and their actual experience at KVR Bajaj is accepted.


tangibles and their actual experience at KVR Bajaj.

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Fig no: 7 A 5% level of significance, with acceptance and rejection regions of tangibility.

SERVICE QUALITY

Service quality is more difficult for the customers to evaluate that the quality of

goods. It is based on the consumer’s perception of the outcome of the service and

their evaluation of the process in which the service was performed. The perception

results from a comparison of what the customers expected prior to the service and

the perceived level of service received

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Acceptance region

0.930-1.960 +1.960

The mean service quality scores and its standard deviation both for the expectation

and experience of consumers are worked out and presented in table no:6

Table no:6 mean service quality score and standard deviation in respect of KVR Bajaj

Particulars expectation Experience Difference Z valueMean 3.923 3.872 0.051 0.367STDV 0.843 0.860Tabular value 1.960

From the table it can be noticed that the mean expectation score for tangibles is

3.923 where the experience score is 3.872. The difference is 0.051. Z test is used

to test the significance of difference and the result is shown below.

The computed Z value (0.367) is less than the table values (1.960) at the 5% level


expectation for service quality and their actual experience at KVR Bajaj is

accepted.

Hence it can be concluded that there is no gap exists between customer expectation

for service quality and their actual experience at KVR Bajaj.

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Fig no:8 A 5% level of significance, with acceptance and rejection regions of service quality.

CHAPTER V

FINDINGS

The study is related to service quality and customer satisfaction by using

SERVQUAL model with reference to KVR Bajaj, Calicut and 75 respondents were

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Acceptance region


-1.960-1.960 0 +1.9600.367

interviewed with the help of the questionnaire on the basis of the data analysis

presented in the chapter four, the following findings have been drawn.

1. From the study it is found that, there is actual or perceived gap between

customer expectation and perception of the service provided.

2. There is gap between service quality specifications and actual service

delivery.

3. KVR Bajaj is providing satisfactory service to its customer.

4. The overall service performance at KVR Bajaj is good.

5. KVR Bajaj has the ability to perform the promised service dependably and

accurately in case of reliability

6. 69% of the customers recommend KVR Bajaj dealership to their friends and

relatives.

7. Majority (55%) of customers agree that KVR Bajaj is able to provide

consistency in service

8. The personnel show interest in solving the problems of the customers.

9. The components and spare parts provided by the company are of high

quality.

10.There is significant difference between customer expectation for

responsiveness and their actual experience at KVR Bajaj the difference is

mainly because of the service gap already exists.

11.The main problem found in the study is that customers are not highly

satisfied with the followup call and service reminder of periodic service

maintenance at KVR Bajaj.

12.The billing system in KVR Bajaj is good.

13. KVR Bajaj lack the ability to inspire trust and confidence among the

customers

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14.There is no significant difference between customer expectations on delivery

time and their actual experience at KVR, Bajaj.

15. The factors like time promptness, service person behavior etc have great

influence on service.

16.There is significant difference between customer expectation for empathy

and their actual experience at KVR Bajaj, it occurs because of the service gap

already exist.

17.Consumers expectations on employee performance matches with their

experience.

18.There is no significant difference between customer expectation for tangibles

and their actual experience at KVR Bajaj. This is because them the

technology and machines used by KVR Bajaj are modern.

19.The service providers’ physical facilities are not visually appealing.

20.There is no significant difference between customer expectation for service

quality and their actual experience at KVR Bajaj.

21.The major problem is that the customers’ complaints are not fully solved,

they are having repeated complaints but the amount charged by them for the

service is reasonable.

22.From the entire study it is found that the KVR Bajaj should improve a lot to

meet customer expectation.

SUGGESTIONS

i. Delightful and prompt service should be provided.

ii. Provide good customer care facility as usual.

iii. Collect periodical feedback from the customer in order to understand

changing market demand.

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iv. As the automobile industry is highly competitive, the company can adopt

different types of promotion which can attract different kinds of customer.

v. Introduce more attractive schemes for the customers. Easy monthly

repayment loan, attractive prizes for every new purchase, free accessories in

every new purchase, etc.

vi. Collect all the details of customer and remind them for a periodic service

through the call or e-mail. In other words give follow up calls to the

customers for a periodic maintenance.

vii. Provide better technical service in the first time so that KVR can reduce

repeated complaints from customer.

viii. The physical infrastructural facility of KVR Bajaj should improve.

CONCLUSION

Quality means the degree of excellence in service performance. Service quality is

based on consumer’s perception on the outcome of the service and their evaluation

of the process by which the service has been performed. Service quality

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perceptions result from a comparison of what the consumer expected prior to the

service and the perceived level of service received.

In this project SERVQUAL model is used to know whether there is any gap

between consumer expectations and experience offered by KVR Bajaj. It enables

us to understand that how company can provide service conveniently to equate

with maximum satisfaction. Through this project we came to a conclusion that

there is actual or perceived gap between customer expectations and their

experience, but KVR Bajaj can improve by providing delightful and prompt

service by knowing what the customer actually wants.

Bibliography

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QUESTIONNAIRE

We are Manasa Sunny & Vidhya S H (MBA, DCMS, University of Calicut).This questionnaire is for the purpose of conducting project work with regard to a study on service quality and customer satisfaction by using the SERVQUAL model with reference to KVR Bajaj, Calicut.

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We will be grateful if you could fill this questionnaire and help us to complete our project work

successfully. The study is purely academic and we assure strict confidentiality of the subject.

PART ONE: PERSONAL DETAILS

Name:

Age group: 18-25 25 -35 35-45 45 and above

PART TWO: SERVICE DETAILS

Mark your answers in 5 point scale

RELIABILITY

PARTICULARS EXPECTATION EXPERIENCE

5 4 3 2 1 5 4 3 2 1

1.You recommend KVR BAJAJ dealership to your friends and relatives2.All the spare parts are original and quality tested3.You are always getting the new replaced parts of your vehicle after service4.There is always consistency in service provided by KVR BAJAJ5.The personnel shows interest in solving the problems of customers

RESPONSIVENESS

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5 4 3 2 1 5 4 3 2 1

6.For lodging the complaints over telephone the service provider is easily accessible7.Your complaints or queries are taken seriously and attend timely8.Application/ registration formalities in KVR are convenient to customer9.KVR offers satisfied follow up and service reminder of periodic maintained service10.The billing system of the firm is accurate and error free

ASSURANCE


5 4 3 2 1 5 4 3 2 1

11.KVR BAJAJ offers timely delivery12.KVR BAJAJ offers promising delivery security13.You are kept well informed prior to service14.KVR BAJAJ is always trust worthy to customer15.Your overall experience at KVR BAJAJ dealership is satisfactory

EMPATHY

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PARTICULARS

EXPECTATION EXPERIENCE

5 4 3 2 1 5 4 3 2 1

16.KVR BAJAJ is operating at convenient working hours17.Service executive are friendly and polite while handling your complaints18.KVR BAJAJ shows interest to give personnel attention to you and your specific needs19.KVR BAJAJ has less formalities to be completed before providing service20.While waiting for the service of the vehicle the customers are given the facilities for all comfort in the waiting lounge

TANGIBLES


5 4 3 2 1 5 4 3 2 1

21.KVR BAJAJ operating at convenient location22.The service provider’s physical facilities infrastructure are visually appealing23.Technology and machines used are modern24.The service personnel are skilled enough to diagnose your problem25.The billing system accurate and up to the mark

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SERVICE QUALITY


5 4 3 2 1 5 4 3 2 1

26.KVR BAJAJ successfully match customer expectation through all forms of communication

27.KVR BAJAJ educate customers adequately

28.KVR BAJAJ always keep service promise which they communicate through advertisement

29.KVR BAJAJ able to match between advertisement and its operation

30.After sale service of the KVR BAJAJ is satisfactory

31.Same complaints are reoccurring after the service

32.Comfortable with the performance of the vehicle after the service

33.All complaints are fully solved

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