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Monday, September 28, 2009

ASSESSING THE SERVICE QUALITY

ASSESSING THE SERVICE QUALITY OF SELECTED COMMERCIAL BANK THROUGH THE SERVICE MARKETING MIX PRACTICE
BY DASMANSYAH ADYAS
Lecturer of STIE Dewantara


BACK GROUND
This study attempt to assess the quality of services of selected commercial banks through the service marketing mix practices as perceived by the bank clients and service providers (employees).
Specifically, the study answered the following questions:
1. How do the clients of selected commercial banks perceived the service quality of the banks through the service marketing mix practices, such as:
1.1. product
1.2. price
1.3. place
1.4. promotion
1.5. participants or personnel
1.6. physical evidences
1.7. process
2. How do the employees (service providers) rate the extent to which the service quality of their banks melt the expectations through the above-mentioned marketing mix practices.
3. Are there significant differences on the expectations and rating of bank clients on service quality through the service marketing mix practices.
Review of Related Literature and Studies
Defining quality in services is especially difficult because of intangible nature of the service offering the definition of service quality may vary from person to person and from situation to situation.
In attempt to classify the approaches to service quality, the following four categories have chosen: dimensions of service quality, gap analysis, the design approach, and direct quality of know how from good services.
Parasurman, Zeitheml, and Barry identified ten determinants of service quality that may related to any service: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding, knowing the customer, tangibles. Later this to boiled down to five: tangibles, reliability, responsiveness, assurance and empathy.
In evolution of marketing in customer industries, most firms pass through what is called a production stage. In this stage firms can concentrate on increasing the efficiency of their product effort the use of their experiences. Most financial institution are now in a product stage of marketing evolution, especially in Indonesia. For example, many banks have multiple automotive loans product variables rate, KPR, fixed rates etc. The obvious problem with an orientation is that consumers do not understand financial service well enough to make the choices the banks epact them to make.
Marketing mix include and all elements that may potentially satisfy the consumer and over which the firm has some level of control. Bitner’s traces evolution of service marketing mix focusing of moment of the truth or service encounter. The mix presented useful tools for effective managing and enhancing the quality of service, the author augmented the traditional four P’s of marketing mix ( product, price, place and promotion) with additional P’s of physical evidence, participant and process.

Hypothesis of the Study
There is no significant differences on the expectation and rating of the bank clients on the service quality of the banks

Scope and Delimitations
The study deals on the access meant of service quality of selected commercial bank. The Service Marketing Mix include product. Price promotion, plane, participants, process and physical evidence.
The respondents of the study are the bank clients and personnel (service-providers) of the bank. The standard used in the assessment of the service quality are the perception from both clients and personnel selected commercial bank
Method of research
This study was used the descriptive analytical approach in eliciting data for analysis. The descriptive method is believed to be more applicable to answer and investigate the perceptions of commercial banking quality services. In other words this approach presented the perception from both the provider and user about the quality service of selected commercial banks.
Statistical Treatment
The following statistical techniques were used for in-depth analysis of data and table, these are process of summarizing raw date and displaying them in compact from for further analysis. This was done in the early stage of this study. Weighted mean, this technique was used to compute the mean of data to measure the opinion of respondents in quality services of commercial banks.
Ranking, determined the relative importance of answers each respondent in the order to priority, feasibility and urgency. The highest rank is for variable with the very great extent, the lowest rank is for that of not at all extent. The kruskall-wallis test statistics, was used for testing the null hypothesis.

FINDINGS
1. The perception of clients of service quality rendered by commercial bank through the service marketing mix practices.
1.1 Products/services
The respondents stated that banks presented all indicators in services rendered by commercial banks in terms of products and services. They agreed that banks provide prompt attention and high degree of courtesy. Depositing and withdrawing are done relatively is short time. They also agreed that banks provided state-of-the-art latest/technology, and offered an array of deposit products for safe and gain full options. The majority of the banks clients agreed that credit facilities are available.

1.2 Price
The majority of respondents gave the ratings which range from 3.25 to 3.33 that is verbally interpreted as “undecided” with regard to price practices of commercial banks. The first rank, the respondents are undecided whether the low interests on loans is lower compared to other banks. The respondents also could not decide whether the low interests on loans are available and the credit offering fixed loans are available. The majority of respondents also were undecided wheatear the banks service charge are nominal or interest rates for the saving deposit are higher than other banks.
1.3. Promotions
Rank 1 indicated that the advertisement practices in banks provide essential honest and truthful information. The respondent also agree that publicity builds the image of commercial banks. The respondents also agreed threat the promotion giveaways are given by the banks.
1.4. Place
The actual places practices by banks treated by banks client as agree. The bank’s location are accessible, the branches are teller machines are conveniently located. Findings also revealed that branches and teller machines also found in relatively many cities/towns; and some of banks provide a limited parking lot.
1.5. Participant / personnel
As to the expected services of commercial banks by clients in terms of participant/personnel, the banks clients agreed that banks personnel are trustworthy and polite. The majority of respondents also agreed that banks employees are never too busy to respond to clients request, they are always willing to help clients and are cheerful to give attention to the client. The majority of the respondents agree that employees speak clearly and simply.
1.6 Physical Evidence
The actual service rendered by commercial banks in terms of physical evidence were agreeable. The first priority among five indicators is that banks premises make them feel source and safe, second, that adequate security measures are visible, the third was that automated machines are always in good condition, and that the necessary from are always available. The banks not only provide comfortable seats but also the comfortable waiting rooms.
1.7 Process
Ranked first in perceived service rendered by commercial banks in term of process in the service marketing mix practices was the commercial banks perform fast and accurate transaction. Ranked second, is up-to-minute information and current state of finances (bank balances) are provided. Ranked second, is up-to-minute information and current state of finances (bank balances) are provided. Ranked third is that monthly statements and billing notices are promptly sent and that an adequate information dissemination for clients benefit is provided.

2. Rate of the extent of service quality of commercial banks through the service marketing mix practices as perceived by banks’ personnel
2.1. Product /Services
The majority stated that the extent of customer relation for providing prompt attention and highest degree of courtesy is great extent. Depositing and withdrawing in the banks with the aid of teller are done in shortest possible time. Also the respondents agreed that to a great extent the banks offer an array of deposit products for safe and gainful options for hard-earned saving provide state-of-the-art latest technology.
And the latest was the present of services of commercial banks in term of variety products/services through service marketing mix practices.
2.2. Price
The ratings ranging from 3.20 to 3.30 involving the indicators of price practices were all verbally interpreted as lower extent that banks have provided price practices. For example, the extent indicator rank 1 which is that interests on loans are effectively lower than those of other banks is “lower extent”. The avail ability of cheap loans are lower extent. Similarly the interest rates for the saving deposit are higher than other banks to a lower extent. Likewise, the bank service charges are nominal to lower extent.
2.3. Promotions
The majority of respondents responded that the promotional practices of commercial banks have provided the essential information to their target market. The respondents also agreed that commercial banks did an honest and truthful advertisement; on the statement publicity help build the image of banks, majority of respondents agreed the present of publicity will build the image of commercial banks in the eyes of public or target market.
Rate, that they have always kept their automated machines in good conditions and that the necessary forms and comfortable waiting room are provided.
2.4 Place
The bank personnel agreed that their banks are a strategically located and easily accessible. They also agreed that commercial banks placed they branches/teller machine in convenient locations. The third indicators was that the branches/teller machines are found in many parts of the cities and towns. But the perception is that parking area is available only to a lesser extent.
2.5 Participant/personnel
The first rank under participant/personnel was that the banks’ personnel are trustworthy and polite and always willing to help the client cheerful ways and give adequate attention to the clients. This is the followed by the indicator that the bank employees are never too busy to respond to client requests and they should speak clearly and simply. Lastly, bank employees recognize their regular clients.
2.6. Physical Evidence
Majority of the respondents agreed that to great extent the banks’ premises make the client feel secure and safe, that the bank provide proper and adequate security, that they have always kept their automated machines in good conditions and that necessary forms and comfortable waiting room are provided
2.7. Process
In terms of process, the respondents agreed that to a great extent the banks performs fast and accurate transactions, and that up-to-minute-information of current state of finances (bank balance) is provided. Likewise, adequate information is disseminated for the benefits of clients.
Monthly statements of account and billing notices that the expectation are promptly sent to client are met to a great extent. However, undecided or lesser extent. However, undecided or lesser extent is exhibited in the indicator that the waiting time is very short.

3. Differences between banks’ clients perceptions and banks personnel rate of extent of service quality rendered by commercial banks
The analysis showed that there were highly significantly difference between perception and the rate of extent of service quality in term of product service quality in term of product service hence the hypothesis was rejected.
In term of price practices in the service marketing mix practices, findings revealed that there were no significant differences hence significant differences hence null hypothesis was accepted
The promotion practices showed significance differences hence the null hypothesis was rejected.
Findings, also reveal the significant differences between clients perception and banks personnel perception in term of both promotion and place practices hence the null hypothesis was rejected.
Likewise, significant differences was notes in the banks client and banks personnel perceptions in the following element of the service marketing mix practices participant/personnel, physical evidence and process, thus the null hypothesis was rejected.

CONCLUSIONS
From the foregoing findings, the following conclusions are given.
1. The Perception of clients of service quality rendered by commercial banks through the service marketing mix practices.
1.1. Product
Findings strongly indicated that bank clients are satisfied with the way commercial banks provide variety of products/services and with their high respect and courtesy.
1.2. Price
The findings indicated that majority of the banks client do not really know about the pricing practices on their respective banks.

1.3. Promotions
The respondents agreed that commercial banks render the service quality through the promotion practices.
1.4. Place
It can be concluded that the banks’ clients agreed that banks provided a good place to transact.
1. 5 Participant/Personnel
It was found that banks’ employees are helpful and trustworthy and the banks provide good service in term of participant or personnel practices.
1.6. Physical Evidence
In general, banks’ client agreed that their expectation met the actual physical evidence practiced by commercial banks.
1.7. Process
As a whole, the respondents agreed that the process of quality services of commercial banks in marketing mix practices met their expectation.

2. Rate of the extent of service quality of commercial banks through the service marketing mix practices as perceived by banks personnel.
2.1. Product
Finding strongly indicated that banks personnel rated as a great extent that commercial banks provide a variety of product and delivery it with high degree of respect and courtesy.
2.2. Price
As a whole expectation regarding the pricing practices in commercial banks as perceived by banks personnel was rated as lower extent.
2.3. Promotion
It can be concluded that banks personnel considered all indicators under the promotional practices expect “promotion/give-away are regular given” to a great extent to be observed in the banks.
2.4. Place
The respondents agreed that the indicators under place practices are observed to a greater extent except “parking area is available” which is rated to a lesser extent.
2.5. Participant / Personnel
In terms of participant personnel, the banks personnel agreed that extent of participant/personnel is an important indicator of quality service rendered by commercial banks.
2.6. Physical Evidence
In term of the element of the physical evidence, the banks personnel agreed that to a great extent they are observed in commercial banks.
2.7. Process
The respondent agreed that the extent of process as an element in the service marketing mix practices, is an important indicator of quality service rendered by commercial banks.

3. Differences between banks’ clients perceptions and banks’ personnel rate of extent of service quality rendered by commercial banks.
Respondents differ significantly in their perception of service quality rendered by commercial banks, except in the price practices no significant differences, thus the null hypothesis was rejected in all element of the service marketing mix practices except on price practices was accepted.

RECOMMENDATIONS.

From the foregoing conclusions, the following recommendations are given.
1. Use the research department to identity the quality determinant most important and needed by customer to increase the quality service standard.
2. Translate the customers expectation into clear deliverable service features, to give the best customers satisfaction.
3. Banks should inform to the customer about their price practices (service charge, interest, etc). As simply as and as clearly as possible. So the banks client will understand easily their price practices.
4. Management should build service quality environment among personnel participant to achieve the highest service quality standard
5. Conduct a periodic evaluation/assessment of the process delivery quality service system to keep the present quality standard stable and to achieve the best quality standard in the future.
6. Set up the organization of delivery system and integration into service quality standard, to give the best satisfaction to the clients.
7. Make a guideline for both banks clients and banks’ personnel about price practices in the commercial banks in clear and simple way.



Bibliography:
Bitner, Mary Jo The Evolution of the service marketing mix and the relationship to service quality, USA, Lexington Books, 1991.
Cristobal, M. Pagoso and Rizalina A Montana, Introductory Statistic ( Manila : Rex Bookstore, 1995)
Jonhston, Robert and David Lyth. Implementing The Integration of The Costumer Expectation and Operational Capability, USA, Lexington Book, 1991
Kotler, Philip, Principles of Marketing, New Jersey : Prentice Hall, Inc, 2000.
Tjiptono, Fandy dan Gregorius Chandra, Service, Quality & Satisfaction, Andi Offset,2005.

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