Int. J. Manag. Bus. Res.

, 5 (3), 189-206 Summer 2015

© IAU

Impact of Service Quality on Customer Perception: An Empirical

Study in India’s Post Office Savings Banking Sector Using SERVQUAL

1
* S. VijayAnand, 2 M. Selvaraj
1
Ministry of Information and Communication Technology, Tamilnadu, India

2
Department of Management Studies, Sona College of Technology, Tamilnadu, India

Received 3 June 2014, Accepted 9 August 2014

ABSTRACT:
The position of financial organization would be increasingly decisive in the next decade in view of the
frightening competition. With the increasing number of businesses and growing competitions today, each
organization wants to be the customer’s first choice and try to satisfy them for getting loyalty for their future
endurance in the market. However, it is open to ask whether the organizations are satisfying their customers
through quality in their service and this is the crucial hitch for every organization in today’s context. In view of
this, the author conducted an empirical study to investigate the role of service quality in customer perception. For
this purpose, they have considered India’s Post Office Savings banking sector, a primeval fiscal sector and
interviewed 106 customers through a self-administered questionnaire by convenience sampling method.
Empirical results acquired through application of tools like Factor analysis, Weighing score method, and Chi-
Square test and it revealed that all the SERVQUAL factors are resulted with negative value, which indicated that
the sector still not meet the expectation of the customers along with the minimum gap in Competence
dimension and huge service quality gap in Tangibility factor. In addition, there is no significant association
found between the demographic variables taken up for consideration. Standard deviation scores also showed that
there is moderate deviation existing between customer perception and expectation concerning service quality.

Keywords: Post office savings bank, Service quality, Competitiveness, SERVQUAL, Perception

INTRODUCTION
Banking sector in India plays a significant with 1, 55,333 Post offices in Urban and Rural
role in the development of economy of the areas under Ministry of Communications and
country. Due to the financial reforms initiated Information Technology, Government of India.
during 1990s, the entire banking sector including In the Department of Posts, Savings bank
products and structure has undergone a major operations commenced from 1.04.1882. The
change. The concept of Liberalization, object of establishing of Post Office Savings
Globalization and Privatization has also Bank was to extend banking facilities to millions
persuaded the market to be more competitive. of poor and middle class people living in the
Among the segment of Indian banking farthest corners of the country to accumulate and
sector, Post Office Savings bank (POSB) sector invest their saving and to use the same for
is one of the predominant fiscal services economic development of the country.
performing its functions all around the Nation
*Corresponding Author, Email: [email protected]
 S. VijayAnand; M. Selvaraj

Significant of the Study and Public Sector Banks and Public Sector
Service quality has become a very important Banks have failed to adequately satisfy the
issue in marketing and has received much customers (Debasish, 2009) Poor service quality
attention since deregulation of service sector in among Indian banks is mostly because of
India and thus increased competition among the deficiency in tangibility and responsiveness
sectors (Vanpariya and Ganguly, 2010). The (Bhat, 2005)
above point clearly defines that every Post Office savings banking sector have to
organization should think about the next rather adopt simplify procedure of the small savings
than to be improved. Firm could have a very schemes that suit the needs of illiterate and
good growth along with the profit only if they socially downtrodden people. Increase in the
are practicing distinctive marketing technique rate of interest small saving schemes to meet the
and appropriate strategy as there is no warranty challenges of commercial banks. In addition, it
for business companies to survive and only can also implement core banking, ATM
through the loyal customers (Kahreh and Facilities, Internet banking. etc (Tamilkodi,
Kahreh, 2012). 1983) in (Ramyadevi, 2011)
In today’s competition perspective, Post Office is embarking on one of its
customers have to make a choice among various biggest marketing campaigns to date to promote
service providers by making a trade-off between its new savings product and boost its number of
relationship and economies (Misra, 2012). account holders (Precision Marketing Bulletin,
Hence, measurement of service quality with 2006)
customer emotions is thus very important and Consumers perception are much more
the consistent delivery of superior service is the important than knowledge of objective reality
key factor for the customer satisfaction and for marketers (Schiffman and Kanuk, 2008)
loyalty. To upkeep these parameters, quality in Customer service and redress mechanism have
service would be the pioneer in any to be highly responsive, responsible and prompt.
organization. Even in this study, the primary (Subramanian, 2011)
aim is to investigate whether the quality in Banks need to be more innovative and
service is having a significant role in customer endeavor to provide more value added services
perception. to boost the satisfaction level of customers. In
Banks, reliability and competitiveness have
Literature Review maximum impact on customer satisfaction.
(Herington and Weaven, 2007) pointed out ( Premraj and Sankaralingam, 2012). Tangibility
that online service quality have no impact on and reliability provides maximum satisfaction to
customer delight and it fails to establish the customers of Private as well as Public sector
direct linkage between E-S-Q and relationship banks and bank need to focus other dimensions
strength. Customer and employee relationship such as responsiveness, assurance and empathy
should be strengthened only through good (Mengi, 2009).
interpersonal relationship, thereby developing Banks were in the process of introducing
trust and delivering a reliable and quality service internet banking as an assurance to their
which enhance customer’s trust and loyalty customers that they would be able to maintain a
(Auh, 2005) in (Bojei and Alwie, 2010) competitive quality of service in future (Jenkins,
Employees’ experiences and attitudes in the 2007).
organization affect Customers perceptions, Private and foreign Internet banks have
attitudes and intentions (Montes et al., 2003). performed well in offering a wider range and
Out of all the dimensions of SERVQUAL, more advanced services of Internet banking in
Tangibility and reliability provides maximum comparison with public sector banks and the
satisfaction to customers of private as well as determinants affecting the extent of Internet
public sector banks (Mengi, 2009) banking services are found to be significant.
(Maddern et al., 2007) informed that staff (Malhotra and Singh, 2010)
satisfaction and service quality are the main A large number of researchers for assessing
drivers of Customer Satisfaction. Foreign service quality in banking sectors have used
Banks provide better service quality then Private SERVQUAL instrument (Lewis, 1991;

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 Int. J. Manag. Bus. Res., 5 (3), 189-206, Summer 2015

Kumar et al., 2010; Vanpariya and Ganguly, Conceptual Framework

2010; Ganesh, 2012). Service quality appeared to be a rather
abstruse and abstract concept that is difficult to
Research Gap define and measure (Sureshchandar et al., 2002)
Attempts to improve the understanding and in (Dado et al., 2012). As the objective of this
prediction of customer with reference to service study is focusing the role of service quality on
quality have become common in both marketing customer perception and in order to identify the
research and practice, but the expression of the service quality gap between perception and
customers towards satisfaction resulted in many expectation, a well-developed instrument with
ways. The relationship between customers and five dimensions called SERVQUAL,
the fiscal sector in terms of service quality, (Parasuraman et al., 1985, 1988, 1994) have
satisfaction and loyalty was examined by the considered in this study.
researcher through many studies conducted In today’s context, all sectors are facing
earlier. Although there is a considerable amount fierce competition not only in the price of the
of academic literature on service quality in products but also in service. Consequently, it is
banking sector are available with various results, inevitable to review the performance of each
relatively a little research on the role of service firm by analyzing their competitiveness in the
quality perception in Post Office savings bank market. Many earlier studies measured service
sector existed at present that too analyzed the quality in banking services with other
performance of Post office savings schemes and dimensions along with existing five dimensions
not particularly focused on service quality. This of SERVQUAL (Kumar et al., 2010;
is the actual research gap identified and the basic (Balaji et al., 2011; Premraj and Sankaralingam,
proposition of this study is to identify the service 2012). This paper also attempted to study the
quality gap if any among the dimensions of service quality perception in Post Office Savings
SERVQUAL in terms of customer perception in Bank Sector along with one additional and
Post Office Savings bank sector through foreseeable dimension “COMPETENCE” to
measuring service quality. analyze whether the considered sector are also
providing services on par with other competitors
through a well planned questionnaire having 27
items under six SERVQUAL dimensions.

Tangibility
Customer Profiles

Reliability

Responsiveness

Service Quality of Post Office

Assurance Savings Bank sector

Empathy

Competence

Figure 1: Conceptual framework diagram

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 S. VijayAnand; M. Selvaraj

Research Objectives customers were in rural area and 9.43% of

1) To exhibit the profile of the Customers. customers in Semi-Rural area. From this result,
2) To study the variance in the variables it was clear that maximum respondents had their
constructed for this study using factor analysis. habitation in urban area.
3) To study Customer Perception on six-service Regarding the age proportion, it was seen
quality dimensions of SERVQUAL scale. that 0.94% of customer were found under the
4) To analyze the association between the age up to 20 years: 32.08% under 21-40 years:
demographic and service quality variables. 55.66% of the respondents had the age found
5) To identify the Service quality gap between between 41-60 years and 11.32% were above 60
customers expectation and perception using years.
SERVQUAL scale. Gender category included 55.66% of Male
customers and 44.34% of female customers.
RESEARCH METHOD Hence, it was observed that maximum utilization
This is a primary data based empirical of services provided by the Post office savings
research collected through a well-designed bank was made only be Male customers.
questionnaire and through quantitative methods. In the demographic character, occupation
To accomplish the aforementioned research played a very important role and in this study, it
objectives, 27 service quality variables were was found that 13.21% of customers were found
included in the questionnaire and data collected under the category of agriculture work: 25.47%
personally by conducted survey with 106 were under Business category: 28.30% of
customers in various post office savings bank respondents were worked under Public sector:
branches of Salem District in Tamilnadu State. 21.70% were worked in Private sector and
All the Customers were informed about the 11.32% of respondents were carried out other
purpose of survey and asked to evaluate the type of occupation.
service quality experienced through their banks Regarding income category, it was observed
together with their expectation and perception. that 0.94% of customers came under the
Customers’ expectation and perception about category of no income and 20.75% of customers
service quality were measured through six had income below 5000/=
dimensions of SERVQUAL scale rated with 5- It was also noted that 38.68% of customers
point Likert-type scale ranging from 1- Strongly had a range of 5001-10000/= income per month:
Disagree to 5- Strongly Agree. 28.30% of customers had a range of 10001-
30000/= income per month and 11.32% of
Demographic Profile of the Sample Respondents customers had income of more than 30000/= per
As the demographic information plays a vital month.
role in service quality, important variables
related to the present scenario were considered Behavioral Information of respondents with Post
and results extracted through percentage analysis Office Savings Bank
for each category were computed below based In this section, the behavioral pattern of the
on the information collected from the respondents with Post Office savings bank sector
respondents concerned. Table 1 shows the was considered with a view that how they have
various demographic profile of the respondents utilized the services elaborately.
considered in this study and their percentage of The demographic profile of the respondents
participation in the interview. along with their behavioral information about
From table 1 it was observed that out of 106 the savings activities in Post office savings
respondents, 54.72% of customers were residing banking sector is elaborately furnished in
in urban area, and 35.85% of table 2.

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Table 1: Demographic profile of the respondents

S. No Demographic Variables Number of respondents (n=106) Percentage

Status of the Residential Area:

Rural 38 35.85%
1.
Urban 58 54.72%
Semi Rural 10 9.43%

Age:

Up to 20 1 0.94%
2.
21-40 34 32.08%
41-60 59 55.66%
Above 60 12 11.32%

Gender
3.
Male 59 55.66%
Female 47 44.34%

Marital Status
4.
Unmarried 93 87.73%
Married 13 12.26%
Educational Qualification
Uneducated 1 0.94%
th
1-5 std 1 0.94%
5. th
6-12 std 66 62.26%
Degree 26 24.53%
Postgraduate and above 12 11.32%

Type of family
6.
Single 62 58.49%
Joint 44 41.51%
Dependents in Family
1-2 24 22.64%
7.
3-4 52 49.06%
5 & above 30 28.30%
Occupation
Agriculture 14 13.21%
Business 27 25.47 %
8.
Public 30 28.30%
Private 23 21.70%
Others 12 11.32%

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Income
No Salary 1 0.94%
Below 5000 22 20.75%
9.
5001-10000 41 38.68%
10001-30000 30 28.30%

Above 30000 12 11.32%

Source: Calculation based on primary data

Table 2: Demographic profile with Behavioral information of respondents in post office savings bank

Knowing Information
S. No No. of respondents (n=106) Percentage
about the POSB Schemes

Newspaper 5 4.72%
Media 5 4.72%
01.
Agents 55 51.89%
Direct visit 41 38.68%
Type of account:
SB 53 50.0%
02.
RD 35 33.02%
FD 18 16.98%
Minimum investment
Up to 5000 50 47.17%
03. 5001- 10000 23 21.70%
10001- 50000 23 21.70%
50001-100000 10 9.43%
Frequency of visit
Everyday 7 6.60%
1-2 times/week 20 18.87%
04.
1-2 times/fortnight 15 14.15%
1-2 times/Month 38 35.85%
Rarely 26 24.53%
Source: Calculation based on primary data

From table 2, it is clearly seen that 51.89% of Savings habit played a significant role for the
the respondents have known the schemes of Post growth of the economy of the country. Hence, in
Office Savings Bank sector only through Agents this study also, “Type of account” opened by the
appointed by the State Government: 38.68% of customer was taken into account and from the
customers have came to know through Direct result, it was seen that 50% of customers had
visit and rest of the customers came to know savings bank account: 33.02% of customers had
through newspaper and media with 4.72% Recurring Deposit (RD) account and 16.98% of
respectively. customers had Fixed Deposit (FD) account.

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Minimum investment made by the customers formulating the following hypothesis:

in the Post Office savings banking sector
revealed that 47.17% of customers had the Association between the Nature of the Account and
minimum investment of up to Rs.5000/= and Frequency of Visit to Post Office
9.43% of customers had their investment to the H0: There is no significant relationship
range from 50001-100,000/=0 between the nature of the account and frequency
Frequency of visit to Post office bank of visit to post office.
played an important role for evaluating the H1: There is a significant relationship
service quality. From the above table, it was between the nature of the account and frequency
observed that 35.85% of customers were visiting of visit to post office.
Post office once or twice in a month and 24.53% In order to check the association between the
were visiting post office rarely. Nature of the account and Frequency of visit to
Post Office, Chi-Square analysis was carried out
DATA ANALYSIS AND RESULTS and the result obtained is detailed in table 3.
Data collected through the questionnaire By applying Pearson Chi-Square test, it was
were analyzed through the statistical techniques observed from the above table that the chi-
like factor analysis, Chi-Square analysis, square value is 12.511 and Asymp. Significant
Weighted score method and SERVQUAL scale value was 0.130 which was found greater than
with the level of significance of 0.05%. All the the critical value for this study (p=0.05). Hence,
analysis was done through SPSS 16.0 package. H0 was accepted and revealed that there was no
significant relationship between the nature of the
Chi-Square Analysis account and frequency of visit to post office.
Chi-Square is a statistical measure used in
the context of sampling analysis for comparing a Association between the Minimum Investment and
variance to a theoretical variance. The sampling Rate of Interest for the Accounts
distribution of the test statistic is a chi-square H0: There is no significant relationship
distribution when the null hypothesis (H0) is true between the minimum investment and Rate of
or any in which this is asymptotically true in a interest for the accounts:
test. H1: There is a significant relationship
As customers’ nature of account, minimum between the minimum investment and Rate of
investment, frequency of visit to post office and interest for the accounts:
rate of interest for the deposit schemes playing a In order to check the association between the
significant role on service quality, the Minimum Investment and Rate of Interest for the
association between these demographic variables accounts in the Post Office, Chi-Square analysis
were analyzed using Chi-square analysis by was carried out and the result obtained is
detailed in table 4.

Table 3: Association between the nature of the account and frequency of visit to post office

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

a
Pearson Chi-Square 12.511 8 0.130
Likelihood Ratio 14.136 8 0.078
Linear-by-Linear Association 6.076 1 0.014
N of Valid Cases 106
a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is 1.19.
Source: Calculation based on primary data

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Table 4: Association between the minimum investment and rate of interest for the accounts

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 9.095a 12 0.695

Likelihood Ratio 9.539 12 0.656
Linear-by-Linear
0.136 1 0.0713
Association
N of Valid Cases 106
a. 12 cells (60.0%) have expected count less than 5. The minimum expected count is 0.75.
Source: Calculation based on primary data

By applying Pearson Chi-Square test, it was concept explained by the earlier studies.
observed from the above table that the
chi-square value was 9.095 and Asymp. Factor Analysis
Significant value was 0.695 which was found Factor Analysis is an exploratory technique
greater than the critical value for this study attempts to identify groupings among variables
(p=0.05). Hence, H0 was accepted and revealed (or cases) based on relationships represented in a
that there was no significant relationship correlation matrix. It is a powerful tool for better
between the minimum investment and rate of understanding the structure of the data, and used
interest for the accounts. to simplify analysis of a large set of variables by
replacing them with composite variables.
Reliability Statistics In order to test the validity of sampling
After identifying the dimensions for the adequacy collected for the study, Kaiser-Meyer-
study, a scale to measure each factor was Olkin measure of sampling adequacy together
selected and scale reliability was checked by with the Bartlett’s test of Sphericity and
Cronbach's alpha coefficient which declared as chi-square analysis were conducted for checking
the best method to find the internal consistency the validity factor analysis. Table 6 below
of scale. The internal consistency generally elaborates the result obtained through factor
increases as the intercorrelations among test analysis.
items increase and indirectly indicate the degree Kaiser-Meyer-Olkin measure of sampling
to which a set of items measures a single adequacy (0.863), a supportive data for factor
unidimensional latent construct. analysis showed that the factor analysis
Table 5 shows the Reliability statistics for established suitability since the value found with
the variables considered in this study obtained the range from 0.5 to 1.
through Reliability analysis along with the The following hypothesis were applied to
Cronbach's Alpha values for expectation and check the validity of factor analysis
perception of SERVQUAL Scale. H0: Factor analysis considered in this study is
Instrument used in basic research have not valid.
reliability of about 0.70 or better. For important H1: Factor analysis considered in this study is valid.
decisions about the fate of individuals was made From the above table, as the Approx.
based on test scores, reliability should be at least Chi-Square value is 2.048E3 and significance
0.90, preferably 0.95 or better. (Nunnally, 1978). value is (0.000) which is less than the level of
The instrument considered for this study significance (p=0.05) it was confirmed that the
satisfied the requirement of content validity with null hypothesis (H0) found rejected and factor
the result expectation (0.954) and Perception analysis considering for data reduction was
(0.867) found agreed with the theoretical effective and valid.

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Table 5: Reliability statistics: service quality expectations and perceptions

Service Quality Dimensions: Expectation Service Quality Dimensions: Perception

Cronbach's Alpha N of Items Cronbach's Alpha N of items

0.954 27 0.867 27

Source: Calculation based on primary data

Table 6: Test for sampling adequacy for service quality in post office savings bank sector

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.863

Approx. Chi-Square 2.048E3

Bartlett's Test of Sphericity
df 351
df 0.000
Source: Calculation based on primary data

For doing factor analysis, twenty-seven The result of the above table indicated that
perception variables in SERVQUAL scale was 1) 83.4% of variance was found in the variable:
considered and the result revealed the following: giving me the individual attention.
The purpose of performing Communalities 2) 80.3% of variance were found in attractive
was to show how the amount of variance in a building with modern looking equipments.
variable accounted for by the two factors taken 3) 80% of variance were found in physical
together. Higher communality values indicate facility is visually appealing
that the large amount of the variance in a 4) 79% of variance were found in the variable:
variable and small communalities show that a employees of post office savings bank sector are
substantial portion of the variable’s variance was having knowledge to answer my questions and
not accounted for by the factors. Although no understanding the specific needs of mine.
statistical guidelines indicate, exactly whether 79.1% of variance was found in the variable:
large or small, practical considerations dictate a post office savings bank sector are having
lower level of 0.50 for communalities in this employees who give me personal attention.
analysis (Joseph F. Hair et. al., 2008). Since Factor analysis plays a significance
role in extraction of the factor through
Table 7 shows the initial Eigen Value and Exploratory method, the factor loading along
the Extracted Eigen values for each variables with percentage of variance, Alpha and Eigen
considered in this study obtained through factor value for each factor and variables in the factor
analysis. considered is furnished in table 8.

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Table 7: Communalities

Communalities

Variable particulars Initial Extraction

Attractive building with modern equipments 1.000 0.803

Physical facility is visually appealing 1.000 0.800
Front end employees are neat appearing with attractive uniforms 1.000 0.495
Materials associated with savings bank are visually appearing and readily available 1.000 0.482
Provides its services at the time it promises to do so 1.000 0.708
Having problem, savings bank branch shows sincere interest in solving it 1.000 0.627
Performs the service right at the first time 1.000 0.279
Delivers error free records 1.000 0.643
When promises to do something by a certain time, it does so 1.000 0.778
Employees in post office savings bank branch keeps informed when the services will
1.000 0.682
be performed
Employees in savings bank branch give prompt service 1.000 0.754
Employees in savings bank branch are always willing to help 1.000 0.682
Employees in savings bank branch are never too busy to respond to request 1.000 0.704
Behaviour of employees instils confidence 1.000 0.784
Feel safe in transactions 1.000 0.699
Employees in Post office saving bank branch will be consistently courteous with 1.000 0.753
Employees in post office savings bank branch have knowledge to answer customer
1.000 0.790
questions
Having operating hours convenient to all 1.000 0.457
Post office savings bank will give individual attention 1.000 0.834
Having employees who give personal attention 1.000 0.791
Post office savings bank has best interest at heart 1.000 0.680
Employees understand the specific needs 1.000 0.790
Rush to solve grievances and complaint immediately 1.000 0.736
Having ATM Facilities, internet banking and instant mobile alerts 1.000 0.723
Having competent and experienced employees 1.000 0.589
Having simplified formalities for transactions 1.000 0.621
Gives competitive interest rates for the deposits 1.000 0.622
Extraction Method: Principal Component Analysis: Source: Analysis based on Primary data

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Table 8: Factor analysis

factors Loading % of variance Cronbach’s Alpha Eigen Value

Factor 1: Responsiveness

Behaviour of employees instils confidence in me

0.844
Employees in my post office have knowledge to
0.809
answer my questions
Employees in saving bank branch will be
0.772
consistently courteous with
Employees in savings bank branch are never too
0.711
busy to respond to request
41.711 0.927 11.262
Employees in Post office savings bank branch are
0.701
always willing to help

Employees understand the specific needs 0.657

Feel safe in transactions 0.653

Employees in Post office savings bank branch keeps

0.612
informed when the services will be performed

Factor 2: Competence

When promises to do something by a certain

time, it does so 0.817
Employees in savings bank branch give
0.774
prompt service

Delivers error free records 0.719

8.380 0.891 2.263
Provides its services at the time it promises to
0.717
do so

Having simplified formalities for transactions 0.643

Having competent and experienced

0.627
employees
Factor 3: Empathy
Post office savings bank will give individual
attention 0.786
Having employees who give personal
0.751 7.262 0.919 1.961
attention
Post office savings bank has best interest at
0.620
heart

Factor 4: Tangibility

Attractive building with modern equipments

0.848
4.858 0.836 1.312
Physical facility is visually appealing 0.838

Source: Analysis based on Primary data

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Instrument with 27 variables framed for the The relationship between the Eigen Value
study was reduced into 19 variables by principal and the percentage of Variance extracted is
component analysis extraction method through shown in figure 2.
Varimax with Kaiser Normalization rotation
converged in 9 iterations. Although factor The relationship between the Eigen Value
loadings of 0.30 to 0.40 (Positive or Negative) and the Factors extracted through exploratory
are minimally acceptable, values 0.50 (Positive factor analysis is shown figure 3.
or Negative) are generally considered necessary
for practical significance (Rules of Thumb 3-5). Figure 4 shows the proportion of Eigen
For this study, 19 variables with variance of Value extracted through exploratory factor
0.60 and above were considered for further analysis.
analysis. The most important factors for this
study are Responsiveness (8 variables) and Measuring Service Gap
Competence (6 variables) with the Eigen Value As this paper mainly focusing the service
11.262 and 2.263 and with the reliability of quality perception of customers, SERVQUAL
0.927 and 0.891. The Percentage of variance scale was considered to measure the service
explained with regard to responsiveness and quality gap between expectation and perception
Competence are 41.711 and 8.380 respectively. of customers. The 27 variables, which were
The third factor identified was Empathy framed earlier, reduced to 19 variables by factor
(three variables) with the Eigen Value 1.961, analysis and these reduced variables were
percentage of variance explained 7.262 with the considered for measuring the service quality gap.
reliability of 0.919. The fourth and the last factor Mean and Standard deviation were also
identified were Tangibility (two variables) with calculated and the gap mean evaluated will be
the Eigen value 1.312, percentage of variance the actual service quality gap of the dimensions
explained 4.858 with the reliability of 0.836. in the organization considered for this study.
A Comparative representation between the The service quality gap for each variable
factors considered and its percentage of variance between the expectation and perception of the
for the five factors reduced after factor analysis customers are detailed in table 9.
was shown in the following Graphs:

% of Variance
41.711
45
40
35
% of Variance

30
25
20
15 8.38 7.262 4.858
10
5
0
1 2 3 4

Factor %of Variance

Figure 2: Relationship between the Eigen Value extracted

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12

10

6 Factor
Eigen Value
4

0
1 2 3 4

Figure 3: Relationship between the Eigen Value extracted

Eigen Value
1.312
1.961

1
2
3
2.263
4

11.262

Figure 4: Bar chart showing the percentage of Eigen Value extracted

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Table 9: Measurement of service quality gap

Service
Mean Mean Quality Gap
S. No. Variables
Perception (P) Expectation (E)
(P-E)

Behavior of employees instills confidence in

1. 4.25 4.44 -0.19
me

Employees in post office have knowledge to

2 4.09 4.37 -0.28
answer questions

Employees in saving bank branch will be

3 4.25 4.43
consistently courteous -0.18
Employees in Post office savings bank
4 branch are never too busy to respond to 4.19 4.10 0.09
request
Employees in Post office savings bank
5 3.99 4.27 -0.28
branch are always willing to help

6 Employees understand the specific needs 4.08 4.25 -0.17

7. Feel safe in transactions 4.42 4.57 -0.15

Employees in Post office savings bank

8. branch keeps informed when the services 4.17 4.25 -0.08
will be performed
When promises to do something by a certain
9. 4.37 4.38 -0.01
time, it does so

Employees in Post office savings bank

10. 4.35 4.32 0.03
branch give prompt service

11. Delivers error free records 4.44 4.46 -0.02

Provides its services at the time it promises

12. 4.25 4.30 0.05
to do so

Having simplified formalities for

13.
transactions 4.12 4.38 -0.26

Having competent and experienced

14. 3.89 4.23 -0.34
employees

Post office savings bank will give me

15. 3.77 4.01 -0.24
individual attention

Having employees who give personal

16 3.76 3.99 -0.23
attention

Post office savings bank has best interest at

17. 3.93 4.12 -0.19
heart

18. Attractive building with modern equipments 3.91 4.33 -0.42

19. Physical facility is visually appealing 3.97 4.25 -0.28

Source: Analysis based on Primary data

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From table 9, it is noticed that positive SERVQUAL by considered the mean value of
service quality was found for the variables: perception and expectation and the result
1. Employees in my savings bank branch are revealed is detailed in table 10.
never too busy to respond to my request 2. From table 10, it is observed that the service
Employees in my savings bank branch give me quality gap is found more for Tangibility (-0.35)
prompt service and for the rest of the variables, followed by Empathy (-0.22), Responsiveness
negative service quality was found. Large (-0.15) and Competence (-0.12). It is also
service quality gap was found with the variable presumed that the standard deviation of
“Attractive building with modern equipments” customer expectation and perception finds
(-0.42) and the least service quality gap found moderate which concludes that there is no
with “When promises to do something by a significant difference in perception and
certain time, it does so”. This showed that the expectation of service quality by the customers
sector had a good opinion about the promises of post office savings bank sector.
and need to concentrate in ambience. In order to assess the association between the
It is inevitable to analyze which factor had profile of the customers and their level of
ranked first by the customers among the perception on service quality factors, One Way
SERVQUAL dimensions. For this purpose, gap ANOVA test was carried out the result obtained
summary was analyzed with the factors of is showed in table 11.

Table 10: Gap summary

Mean Mean
Gap
Sl. No. Factors Perception Expectation S.D (P) S.D (P) Rank
(P-E)
(P) (E)

1. Responsiveness 4.18 4.33 -0.15 0.941 0.823 3

2. Competence 4.23 4.35 -0.12 0.850 0.840 4

3. Empathy 3.82 4.04 -0.22 1.159 1.019 2

4. Tangibility 3.94 4.29 -0.35 1.119 0.919 1

Source: Primary data & Acronym: SD-Standard Deviation

Table 11: Association between the profile of the customers and their level of perception on service quality factors

S No. Demographic Variables Empathy Responsiveness Tangibility Competence

1. Status of the area 0.056 1.476 1.781 0.987

2. Age 0.872 1.978 0.829 2.181*

3. Educational Qualification 0.756 1.562 1.938* 0.663

4. Occupation 1.839 0.812 1.136 0.973

5. Income 0.169 0.165 0.923 0.762

Source: Analysis based on Primary data

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 S. VijayAnand; M. Selvaraj

Table 11 clearly showed that there is no CONCLUSION

significant association between the demographic Poor service quality among Indian banks is
variables and the level of perception on service mostly because of deficiency in tangibility and
quality except educational qualification in case responsiveness (Bhat, 2005). As explained in the
of tangibility and age in case of competence earlier studies cited above, (Hamer, 2006) Post
since the respective F-statistics were significant office savings bank sector was also having large
at five percent level. negative service quality gap in Tangibility and
Empathy. Regarding association between the
RESULTS AND DISCUSSION Demographic variables, result of the study
Most of the earlier studies have analyzed the showed that there was no significant relationship
service quality in banks and there is not between them taken out for consideration in this
sufficient studies related to analyze the impact of study.
service quality on customer perception in post Service quality and service excellence are
office savings bank sector. Hence, this study the twin factors that area going to transform the
was conducted in the above sector and study had destiny of service marketing and management
revealed the following: programs (Sankari, 2010). Hence, the above-
The result of the study showed that there was considered sector should definitely give priority
a positive service quality for the variables: 1. for all the above factors especially, for ambience
Employees in my savings bank branch are never (Tangible factors), the most important factor
too busy to respond to my request 2. Employees which immediately reach the customer and
in my savings bank branch give me prompt influence their opinion and attitude about the
service and for the rest of the variables, negative service provider and also act as a forebear for
service quality was found. satisfaction and loyalty.
In addition, large service quality gap found
with the variable “Attractive building with Limitations and Scope for Future Research
modern equipments” (-0.42) and the least service Despite the useful findings of this study, this
quality gap found with “When promises to do empirical study has several limitations that need
something by a certain time, it does so”. This to be recognized. Since the data collected is very
clearly showed that the sector had a good small (n=106) from Salem district of Tamilnadu
opinion about the promises and need to State in India in India’s Post Office savings
concentrate in ambience. banking sector, the result obtained may not be
Regarding overall Gap summary among the same with different samples in various
Four factors resulted from the factor analysis, all demographic region. Future research could be
the factors were resulted with negative gap conducted with large size of samples along with
value with the least gap in Competence (-0.12) various sampling techniques in different
and large service quality gap is found with districts/ states in the country so that significant
Tangibility (-0.35). result might be obtained which would be very
Hypothesis formulated also revealed that much useful for the development of fiscal
there was no significant difference in perception sectors of India.
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