Define Service Quality

In this chapter we define some concepts which related to this study such as: Customer Satisfaction, Customer Satisfaction and Banking Sector, Customer Satisfaction and Customer Loyalty, Customer Satisfaction and Service Quality, Consumer Perceptions and behavior: relationships between service satisfaction, quality and loyalty.

2.1 Definition of Service and Service Quality

Undertaking business in order to earn profit is a legal activity which is allowed by the law. The activities of the business can be divide into three section such as manufacturing which mean that through the transformation process , inputs is converted into outputs, trading which means the buying and selling of goods, and the last one services which refers to the provision

Among the researchers there is a lack of agreement in the literature about the uniform dimensions. This may be due to demographics, cultural, religious, geographical or other attributes that vary from one country to another. Actually, there are two perceptions of service quality: which is the Europeans and Americans. Service quality is a multilevel and multidimensional concept, which have different meanings between the researchers (Cronin et al., 2000).

Parasuraman et al. (1985) examined the different service industries and found 10 dimensions of service quality such as tangibility, responsiveness, reliability, courtesy, accessibility, credibility, communication, competence, understanding, and security. They sustained their research to find out the dimensions of service quality and established a widely used research instrument called SERVQUAL. It is applicable in different service industries as well as the banking sector. They polished these dimensions and summed it up into five dimensions such as reliability, responsiveness, tangibility, assurance and empathy (Pararsuraman et al. 1988,

(1985, 1988, 1991b) experienced this research instrument in different industries such as the banking industry, in insurance company and telephone repair industry. The result obtained from the SERVQUAL instrument in terms of reliability and validity coefficients were very high and this contribute to its acceptance all over the world. Nowadays researchers use SERVQUAL in order to measure service quality in the banking sector.. There are constant study undergone by researchers on the service quality due to their local environment , cultural and socioeconomic conditions. There are several studies that identified a number of dimensions due to lack of global dimensions.

A list of service quality dimensions used in the banking

1. Reliability

Reliability is the competency to perform services regularly and correctly in a consistent style. It contains five elements to assess the precision and integrity of bank services. This measurement of service quality estimates the promises of banks and its execution from customers' point of view. Reliability is a very important factor of product quality in addition to the good personalized service, the attitude of the staff , the knowledge and the ability (Walker, 1990).

Berry and Parasuraman (1991) reported that reliable service is the result of the continuous improvement. Similarly in another study, it is found that service reliability is the service “core” to most customers. So managers should use every opportunity to build