The Service Quality (SERVQUAL) technique

by Dr. Dhanuskodi Rengasamy

Service is an invisible offering which is dependent on, and inseparable from, the person who extends it. In the point of view of economics, service is a type of economic activity that is intangible, is not stored, and does not result in ownership. A service is consumed only at the point of sale.

The term ‘service quality’ describes a comparison of expectations with performance. Service quality is defined as ‘a global judgment or attitude, relating to the overall superiority of the service’ (Parasuram etc. 1985). Hence, service quality is the conformance of services to customer specifications, perceptions or expectations. With the help of the above definitions, the following formula can be derived:

SERVQUAL = customer perceptions – customer expectations

The expectation of service and the perceived service result may not be equal, thus leaving a gap. Parasuram, Zeithamiland Berry initially identified ten dimensions with 97 determinants of quality relating to service which may cause such a gap. They were reliability, responsiveness, competence, access, courtesy, communication, creditability, security, understating/knowing the customer, and tangibles.

Later, these were reduced to five dimensions with 22 determinants, namely tangibles, reliability, responsiveness, assurance and empathy (Parsuram et al 1988).

Customer perception is the feeling or attitude of a customer towards a product or service after it has been used and is generally described as the full meeting of one’s expectation.

Satisfaction, meanwhile, is a person’s feeling of pleasure or disappointment resulting from the products’ perceived performance (or outcome) in relation to his or her expectations.

The SERVQUAL method is a technique which can be used to performing gap analyses of organisations’ service quality against their customers’ service quality needs. It is also an empirically derived method used by service organisations to improve service quality.

Organisations usually apply SERVQUAL with these two considerations in mind – firstly, to understand the perceptions of target customers and their service needs, as well as provide a measurement of the organisation’s service quality; and secondly, applied internally to understand employee perceptions of service quality with the objective of achieving service improvement.

The SERVQUAL technique is used extensively by Malaysian researchers in their work on service quality. A few empirical evidences of application are as follows:

Z. Sharifuddin undertook a study entitled ‘Public Sector Service Quality: An Empirical Study in the Road Transport Department, Malaysia’ which was published in the INTAN Management Journal (1999). The study measured service quality at ten Road Transport Department branches and found that the customers’ expectations were not met.

Vijayan, P., and Bala Shanmugam, (2003) published an article entitled ‘Service Quality Evaluation of Internet Banking in Malaysia’, in the Internet Banking and Commerce journal. Their study focused on the transaction sites of five leading anchor banks and found that two of the five banks surveyed obtained a four-star rating out of a maximum five stars. Three other banks obtained three-star ratings.

Pei Mey Lau, Dr. Abdolali Khatibi Akbar, and David Yong Gun Fie (2005) contributed an article entitled ‘Service Quality: A Study of the Luxury Hotels in Malaysia’ to the journal of the American Academy of Business, [Cambridge-Vol. 7-Num- 2 – September 2005]. Their research assessed the expectations and perceptions of service quality in Malaysia’s four- and five-stars hotels and found gaps between customers’ expectations and perceptions.

Izah Mohd Tahir and Nor Mazlina Abu Bakar (2005) published a research paper entitled ‘Service Quality Gap and Customers’ Satisfaction with Commercial Banks in Malaysia’ in the International Review of Business Research Papers [Vol. 3 No.4 October 2007 Pp.327-336]. The aim of their study was to investigate the level of service quality of commercial banks in Malaysia and the results indicated that their customers were only slightly satisfied with the overall service quality of the banks.

Jayaraman Munusamy and Vong Oi Fong conducted a study entitled ‘An Examination of the Relationship between Service Quality and Customer Satisfaction in a Training Organisation’ which was published in the UNITAR E-JOURNAL [Vol. 4, No. 2, June 2008]. The study examined the dimensions of service quality of IBBM’s training services and found that the dimensions of service quality were positively correlated to customer satisfaction among its corporate clients.

Hishamuddin Fitri Abu Hasan, Azleen Ilias, Rahida Abd Rahman and Mohd Zulkeflee Abd. Razak published a research study entitled ‘Service Quality and Student Satisfaction: A Case Study of Private Higher Education Institutions’ in the International Business Research journal  [volume 1, No. 3, July 2008]. The study concluded that service quality has a significant positive relationship to student satisfaction in private institutions of higher learning.

A research report entitled ‘Service Quality, Customer Satisfaction and Loyalty towards JKR Malaysia’ submitted by Mohammed Suhainy Abdull Rahim as part of his MBA requirement at University of Malaya in July 2009 concluded that the public works department was hard-pressed to meet the needs of its customers.

A. G. A. Ilhaamie, Member, IAENG published a research article entitled ‘Service Quality in the Malaysian Public Service: Some Findings’ in the International Journal of Trade, Economics and Finance [Vol. 1, No. 1, June, 2010]. It related how the study tried to identify the most important dimension of service quality and examine the level of service quality, expectations and perceptions of external customers towards the Malaysian public service. It found that the customers generally had very high expectations of the reliability of the public service.

In a study entitled ‘The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia’ published in the International Journal of Marketing Studies (Vol. 2, No. 2; November 2010), Lo Liang Kheng, Osman Mahamad, T. Ramayah and Rahim Mosahab (2010) examined the impact of service quality on customer loyalty among bank customers in Penang. The study found that though the customers evaluated the bank positively, there was still room for improvement.

Dr. Dhanuskodi Rengasamy is a senior lecturer in accounting in the School of Business at Curtin Sarawak. He has 21 years of teaching experience in India, Ethiopia and Oman, covering subjects such as financial accounting, management accounting, cost accounting, auditing, project management and banking at undergraduate and postgraduate level. He has also presented research papers at over 15 national and international conferences as well as published books and online journal articles on business subjects.