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Executive Summary
Two important factors for understanding how to improve the success of service-oriented businesses are customer satisfaction and service quality. This analogy is true for telecommunication firms because their success depends on their service quality. Therefore, to quantify their success, they need to measure their service quality. However, service is intangible and difficult to measure. To solve this problem, this paper shows that the best way to measure service quality is to measure customer perspectives. Relative to this goal, this paper analyses the theoretical aspects of service quality by explaining the concept and evaluating different tools for measuring it. The theoretical background of this paper evaluates technical service models and establishes that many telecommunication firms use the SERVQUAL model to assess their service quality. However, few research studies have investigated whether this model also applies to the Saudi telecommunication industry. To bridge this research gap, this paper explores how SERVQUALs service gaps can measure service quality in the Saudi Arabian telecommunications industry. The research questions evaluate the top variables that reflect customer satisfaction and investigate the effects of quality on customer satisfaction. The study obtained data using self-completion questionnaires (based on the SERVQUAL model). The SPSS technique analysed the data and revealed that the SERVQUAL model was an unreliable measure of service quality in the Saudi Arabian telecommunications industry. Moreover, it revealed the failure of the SERVQUAL model to come up with reliable measures of service quality because some of its service items associated with different service dimensions.
This section of the dissertation introduces the research topic and helps the readers to understand the research focus. This chapter also explains the motivation for undertaking this study and its importance to academicians and service-oriented businesses. Furthermore, this chapter familiarises the readers with the empirical context of the study. It explains why it is important to measure service quality and how companies can benefit from doing so. This way, readers can understand the research gap and that informs this study. Similarly, by understanding the purpose and research questions outlined in this chapter, they can comprehend the roadmap used to fill it.
Introduction
Service quality is an important aspect of business operations. Indeed, managers, practitioners and researchers agree that it affects different aspects of a businesss performance, including a companys operational efficiency and customer loyalty (Chowdhary & Prakash 2007). Intense global competition and the fast-paced nature of the global economy have created the need for companies to understand customer perceptions about their services (Carpenter & Moore 2006). This fact shows the importance of service quality to the survival and growth of modern businesses. Moreover, it highlights the need for providing quality services to customers, if businesses want to maintain a competitive advantage (Chowdhary & Prakash 2007). Based on this fact, it is pertinent for service-oriented organisations to understand how improved service quality could help them meet their organisational goals.
Chowdhary & Prakash (2007) say that using advanced technology and adopting the best service quality measures (for monitoring customer perceptions and expectations) is the best way for organisations to gain a competitive edge in the cutthroat global business environment. Although customer perceptions and expectations share a close relationship with customer satisfaction, the latter is an important indicator of positive organisational performance because it affects different aspects of a companys operations, including profitability and business management acumen (among others). Therefore, researchers and managers often strive to learn new techniques for improving their service models to improve organisational competencies and profitability. This realisation prompted many researchers to affirm the need for companies to understand service quality indicators as tools for improving customer satisfaction. For example, Carpenter & Moore (2006) say this realisation comes from decades of focusing on product improvement strategies, at the expense of service improvement strategies. Based on this analysis, companies need to understand that service marketing is as important as product marketing.
While it is interesting to study how service quality affects different aspects of a companys operations, it is more interesting to study service quality perceptions in the telecommunications industry because, today, this industry contributes to the gross domestic products of many countries around the world. Secondly, the telecommunications industry oils the wheels of todays modern economy. Moreover, the service challenges that characterise the telecommunications industry have created the need to understand how these challenges would affect other global economic aspects that depend on the telecommunications industry.
Based on the above dynamics, this paper focuses on studying service quality indicators in the Saudi Arabian telecommunications industry, which is the largest telecommunications industry in the Gulf region (Delta Partners Group 2014). Experts say the industry is worth about $11.6 billion (2010 estimates) (Delta Partners Group 2014). They also project that the industry will grow by about $1billion annually. Comparatively, this figure sums the growth projections of all other sub-sectors of the GCC telecommunications industry. Today, the Kingdom of Saudi Arabia (KSA) telecommunication sector accounts for a significant part of the countrys economy. Specifically, its contribution has grown in the past few years, after the government introduced trade liberalisation laws in 2005 (Delta Partners Group 2014). Since then, it has evolved and now boasts of offering high-tech telecommunication services, including a well-established voice and data services. Six pillars of growth (a youthful customer base, a growing demand for internet and broadband services, innovative telecom applications and services, virtual banking, integral lifestyle choices, and a strong need for sophisticated information, communication and technology services) are at the centre of the industrys success (Delta Partners Group 2014). Based on this understanding, the findings of this study can greatly improve how telecommunication companies model their service provision models to exploit these industry dynamics. The main benefit of this analysis is its ability to provide directions for service improvements in the telecommunication industry.
Purpose of Study
The purpose of this paper is to understand the main service dimensions for assessing service quality in the Saudi telecommunication industry. To do so, this paper measures the perceived service quality of telecommunication services and the performance of the various service quality dimensions (of the SERVQUAL model) in the Saudi telecommunications industry. Here, it is important to understand that the research questions also seek to understand the main service measurement tool for assessing service quality in this industry, evaluate the top variables that reflect customer satisfaction, and investigate the effect of quality on customer satisfaction. In line with these questions, the study evaluates the SERVQUAL model by investigating how it measures service quality in the telecommunications sector (as a theoretical contribution to comprehending how the SERVQUAL model works). Similarly, this paper also strives to understand the customer perceptions of service quality that apply to consumers in the Saudi telecommunications industry. The research objective of this paper appears below
Research Objectives
Main Objective
What are the Most Significant Service Quality Dimensions that have the Strongest Impact on Customer Satisfaction?
Research Questions
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What is the most Adopted measurement Scale to Assess Service Quality Dimensions?
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What Top Variables Reflect customer satisfaction?
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What is the Effect of Quality on Customer Satisfaction?
Importance of Study
Nejati (2011) says it is important to measure service gaps because it improves different aspects of an organisations performance. For example, researchers have affirmed its use in organisational planning and decision-making (Nejati 2011). Others say service quality information is beneficial in resource allocation and priority setting (Nejati 2011). Many scholars say abundant volumes of literature affirm service quality gaps in different service dimensions (Wicks & Roethlein 2009). Most of their studies are consistent with one another. However, there may be some slight variations regarding their consistency measurements across different service dimensions. For example, service quality dimensions that have the highest service gaps may show different outcomes from those that have lower quality gaps (Nejati 2011). Researchers have voiced several reasons for these varying outcomes.
However, social and cultural differences, family backgrounds and other demographic characteristics may explain many of these differences (Nejati 2011). The main message in this analysis is the influence of social factors on customer perceptions and expectations. Based on this analogy, Wicks & Roethlein (2009) cautions researchers against generalising their service quality findings across different contexts. Similarly, based on the same principle, some researchers prefer independent and contextualised studies to measure service quality dimensions. This study borrows from the same recoemmendation to investigate the main service dimensions in KSA.
Indeed, since defining the relationship between service quality and organisational performance is an important area of research in marketing literature, this papers findings are useful in improving the quality of services offered by telecommunication companies. Similarly, such companies could identify the most important quality enhancement measures for improving their bottom-line financial performance. Douglas & Connor (2003) define this benefit as the return on quality. Furthermore, based on the highly competitive nature of the Saudi telecommunication industry, telecommunication firms are seeking new and profitable ways of differentiating themselves, mainly through service improvements.
This is why there is a strong need to understand service quality measures in this industry because it is service-oriented and customers are highly sensitive to the kind of services these companies offer. This information would be useful to close the service quality gaps that may be impeding efforts to improve the performance of telecommunication companies. Furthermore, information obtained from this paper will help such companies identify the service quality gaps they should focus on. Such information would also be useful in identifying the strengths and weaknesses of the service quality model used by many firms in the Saudi telecommunications industry. Overall, this paper strives to understand the expectations and perceptions of service quality for Saudi telecommunication companies to improve customer satisfaction.
Delimitation of Study
To understand the gist of this dissertation, it is important to define our research scope and clarify the context of this paper. This paper focuses on the Saudi Arabian telecommunication industry by understanding how customers perceive the quality of services offered by firms that operate in this industry. Although, the size and market share of telecommunication firms matter to customers, and the types of services offered in the industry, this paper assumes that the telecommunication firms operating in the Saudi Arabian telecommunication industry offer the same retail assistance services to their customers. Therefore, this study is limited to the telecommunications industry in Saudi Arabia because its sample population mainly comes from this market. Moreover, the study focuses on sampling the views of customers who have shared experiences with Saudi telecommunication firms. Therefore, in the context of this study, the word customers refers to people who have used the services of Saudi telecommunication companies.
Research Interest
I have been a marketer in the telecommunications industry for more than a decade now. My experience in this industry created an interest in this research field. Since marketers seldom use the SERVQUAL assessment tool in this industry, I became curious about the best tool for measuring service quality in the telecommunications sector. Moreover, customer satisfaction is very important in the service sector because many technology-based firms are service-oriented. Moreover, since service quality links with many intangible products in the telecommunications industry, it is important to identify an assessment tool that could effectively measure these intangible factors.
Structure of the Study
This dissertation contains six chapters. The first chapter is the introduction chapter, which explains the direction of the dissertation and the reasons for conducting the study. The second chapter is the literature review section, which evaluates past research findings about the research topic. The methodology chapter is the third chapter. It explains how I conducted the study. Its findings appear in the findings and analysis chapter. The last two chapters are the discussion and conclusion chapters. They discuss and summarise the research findings respectively.
Literature Review
This section of the paper reviews previous literatures regarding the research topic. It involves understanding the theoretical underpinning of the research topic, among other quality and customer satisfaction issues that are important to the study focus. Furthermore, this section of the paper defines important concepts of study that may help or impede our understanding of the research questions. Overall, this theoretical framework provides the conceptual framework for undertaking the empirical investigations that appear in later sections of this dissertation.
The Service Concept
Eshghi, Roy & Ganguli (2008) say that service is a difficult concept to understand because management literatures convey multiple meanings. For example, some people see it as a description of how organisations deliver their services, while others see it as the by-product of service-oriented businesses. Regardless of these definitions, Einarsson (2008) believes that a service is an intangible output that associates with a similarly intangible activity, as opposed to an intangible product. However, critics have said this definition is still ambiguous, because some intangible services have some tangible attributes, such as equipments and employees (Garc1a & Caro 2010). Fen & Meillian (2005) say this criticism is important in understanding service-oriented businesses because they must consider the physical attributes of quality if they want to provide quality services. Nonetheless, Garc1a & Caro (2010) believe people should convey the service concept as a pigment of a customers perception regarding the output service. In this regard, they say that since customers are part of the service delivery process, they often prefer to receive quality service outputs (Garc1a & Caro 2010).
According to Giese & Cote (2002), the service concept has only two main perceptions the customer and the service provider. The latter perception views service as a process that contains many elements, including core delivery, service operations, and service-attentiveness (among other factors) (Giese & Cote 2002). Comparatively, customers view service delivery as a phenomenon that includes their personal experiences. In their view, they see service delivery as a system that consists of core needs, customer choices, and emotional content. To them, these factors affect different service outputs, thereby creating different customer experiences.
Why is it Difficult to Measure Service?
Beamish & Ashford (2008) say the main problem with measuring service quality in the service industry is the intangibility of the services offered. Indeed, unlike products, a researcher can use no physical attribute to measure customer perspectives and expectations of service quality (in service-oriented industries). This way, it is similarly difficult for customers to understand what they receive from these companies. Indeed, as Johns (1999) says, consumers cannot touch, smell, or hear anything as they consume the products of service-oriented companies. This makes it difficult for them to understand the nature of output that such companies offer. This analogy applies to telecommunication companies because customers mainly make calls and do not receive other physical products from these companies. Although subsequent sections of this paper outline product as a service quality dimension for the telecommunication companies sampled in this study, service is the main output of such firms.
To understand the difficulty of measuring services in the telecommunications industry, it is similarly important to use the above analogy to understand the challenges researchers encounter when measuring intangible services in grocery stores. Such companies focus on offering physical products. Therefore, instead of focusing on understanding the intangibility of their services, Beamish & Ashford (2008) say that most researchers are better off including tangible elements in their service quality analyses. Another complication that arises when measuring service quality is the lack of heterogeneity in customer service provision (Johns 1999). This concept stems from the failure of human beings to offer the same level of services across different customer populations. This challenge mainly arises in the service delivery process. For example, it is difficult for one shopkeeper to deliver one service quality to multiple clients, in the same manner. Furthermore, most of these clients have different behaviours and are likely to perceive the same service differently.
Service perishability also creates a challenge to researchers who want to measure service quality because unlike products, if a customer does not use a service, when a service provider offers it, he cannot use it again. Although some researchers dispute the perishability of services in this regard (by saying that the concept does not suffice in some service industries), it is almost impossible for a client to store a service for a later date (Beamish & Ashford 2008). Inseparability is another challenge that emerges when measuring service quality because it is similarly almost impossible to separate the purchase and consumption processes. Mainly, this attribute applies to the telecommunication sector because customers often consume a service when they pay for it. By extension, this attribute means that the clients are involved in the service production and delivery processes.
Quality Concept
Similar to service delivery, Ghylin, et al. (2006) say quality has many types of definitions. The lack of a common definition stems from the different perspectives and orientations that define quality. In the context of this study, we must define quality within the precincts of the telecommunications industry. This way, the concept should focus on multiple dimensions of product and services in the sector. However, it is pertinent to understand that the manufacturing and product industries have different definitions of quality. Academicians and practitioners fuel this divide. Nonetheless, the disjointed understanding of quality stems from the intangibility of the concept. This attribute makes it difficult to identify one measure for assessing it. Huddleston et al. (2008) say quality is an attribute of an entity. They also say it defines peoples characters, product dynamics, or their degrees of excellence (Huddleston et al. 2008). Moreover, since, it is a type of social status; people need to understand it through a ranking metric. Based on this understanding, Haider (2001) says, Quality is product performance, which results in customer satisfaction, freedom from product deficiencies, which avoids customer dissatisfaction (p. 5).
Service Quality
Many researchers agree on the importance of service quality in differentiating service-oriented businesses. This section of the paper acknowledges this fact and emphasises the need for improving service quality as a prerequisite of customer satisfaction improvements. Academicians and Practitioners have created a lot of interest about service quality in this regard (Zahorik & Keiningham 1995; Ghylin, et al. 2006). Many marketing scholars define service quality as the perceived quality of goods and services offered by different companies (Zahorik & Keiningham 1995; Ghylin, et al. 2006). Similarly, others define it as the quantity of effort that a company makes to meet its customer service expectations (Chowdhary & Prakash 2007). Using this logic, Parasuraman, Zeithaml and Berry (1985a) define service quality as The discrepancy between consumers perceptions of services offered by a particular firm and their expectations about firms offering such services (p. 44). Customer expectation is central to this study because if a company exceeds the expectations of the customers, it means they have a high service quality. Similarly, if they do not meet these expectations, they have a low service quality.
Many factors affect a customers service quality expectations. Brady & Cronin (2001) say personal experiences and word-of-mouth communications are the main influences of customer perceptions. Nonetheless, Johns (1999) defines it as a customers overall assessment of the service. Moreover, he says there is a need for companies to understand this definition because it is the only way they would understand how to improve their services to meet their customers expectations (Johns 1999). Nonetheless, understanding the concept requires people to understand that service quality involves many dynamics of service quality, including intangibility and heterogeneity (among other factors) (Brady & Cronin 2001). By understanding how these factors contribute to service quality, it would be easy to measure the concept.
In the context of this study, service quality refers to the difference between customer expectations and service performance. However, this difference applies to a time when both a service provider and a customer have not met. Here, customer expectations refer to a customers desire to seek quality products or services. Stated differently, customer expectations refer to what a service provider should offer, as opposed to what they would offer. The perceived service is both technical and functional, but, overall, it refers to how a customer views a service.
Service Quality Models
This chapter shows no significant definition regarding what service quality entails. However, this paper adopts the definition of Kumar, Kee & Manshor (2009) of the concept, which defines it as the difference between the expectations and perceptions of service. Nonetheless, it is pertinent to understand that measuring service quality is a common management topic. This interest stems from the need to establish reliable metrics for measuring customer views about a companys performance. Similarly, this interest stems from the need for associating service quality with key organisational outcomes. These factors have created the need to develop effective service quality models. This paper explains them below
Technical and Service Quality Models
Technical and service quality models demand that all organisations should understand the perceptions that their customers have about their products and services (Gilmore 2003). This demand is a key factor in understanding the models because they perceive customer perception as a benchmark of the service standards that an organisation should meet. Therefore, if organisations match this standard, they are likely to have satisfied customers. Rust, Zahorik & Keiningham (1995) say technical and service quality models have only three pillars that support service quality technical quality, functional quality, and image. The diagram below shows how these three pillars interrelate to create a service quality model.
The technical quality refers to what customers get from their company (quality of goods or services). Quality enables customers to evaluate the service quality standards that a company offers. The functional quality closely relates to the technical quality because it describes how customers get their technical outcomes. Furthermore, it has the same effect as the technical quality on customer perceptions. Image is a product of the last two types of service provisions highlighted above. Ladhari (2009) believes that it is the most important pillar of the service quality model. However, it is not only vulnerable to technical and service quality factors alone; traditions, company cultures, social ideologies (among other factors) affect it.
SERVQUAL Model
Three American scholars, Parasuraman, Zeithaml and Berry (1988) developed the SERVQUAL Model to understand the correct metrics for evaluating an organisations service quality. At its inception, the scholars identified ten metrics for measuring service quality. However, they later revised and reduced them to five dimensions reliability, responsiveness, empathy, tangibles and assurances (Buttle 1996, p. 34). When developing these dimensions, their main concern was the metrics ability to capture access to quality services and understand customer characteristics. Based on this need, the researchers made several other modifications to the model. For example, they replaced the word, should with would when referring to how such service dimensions denote service quality. They also reduced the total number of items underscoring the model to 21 (Parasuraman, Zeithaml and Berry 1988). However, the five-dimensional structure of the model remained the same. The Gap model was a central pillar of the SEVRQUAL technique
The Gap model outlines the difference between customer perceptions and expectations. Parasuraman, Zeithaml and Berry (1988) say this gap exists at five levels. The first gap exists between what managers and consumers expect. Often, it arises when managers have no idea about the types of services to offer their customers. The second gap denotes the perceived level of service quality that the managers provide and their customers expectations. The main difference between this second service provision gap and the first service provision gap is the perceived value of service quality. Usually, specifications of improper service quality standards denote this gap. The third gap outlines the service performance gap (Parasuraman, Zeithaml and Berry 1988). It is the difference between what an organisation specifies as the service quality standards and what its employees provide to the customers. The fourth gap exists when there is a difference between the delivery of service quality and the communicated specifications of the same (Seth & Deshmukh 2005). Here, experts usually investigate whether the promised service quality meets the quality of services provided (Parasuraman, Zeithaml and Berry 1988). The fifth gap exists when there is a difference between what customers expect and their perceptions of the services offered. This gap is also a product of the above-mentioned gaps because it depends on the size and direction of the four gaps mentioned above. The diagram below shows how these five gaps interrelate
According to the diagram above, the five gaps span across two points of contact in the service delivery model consumers and marketers. The first, second, third, and fourth gaps depend on marketing strategies, while the fifth gap depends on consumer expectations (Seth & Deshmukh 2005). The delineation of the first four gaps identified in this diagram also extended the model to focus on communication and control factors in an organisation. Lee, Lee & Yoo (2000) say ten dimensions may affect the appearance of a gap competence, courtesy, credibility, security, access, communication, understanding customers, tangibles, reliability, and responsiveness.
Cronin & Taylor (1994) came up with four important equations that help us to understand how the above intrigues affect service quality. The first equation stipulated that the SERVQUAL model is equal to performance minus expectations. The second equation outlined the weighted SERVQUAL model by saying it is a product of the SERVQUAL model and its importance (Seth & Deshmukh 2005). The third equation says SERVPERF is equal to performance (Abdullah 2006). Here, it is important to understand that the SERVPERF model differs from the SERVQUAL model because it focuses on attitude-based measures for assessing service quality (Cronin & Taylor 1994). In this regard, this model focuses on understanding customer feelings about service quality. Researchers say the model is good for measuring service quality, but they criticise if for its failure to provide recommendations (or basis for recommendations) to improve service quality (Cronin & Taylor 1994). This way, the model does not provide service providers with an opportunity to improve their services.
Lastly, the fourth equation says the weighted SERVPERF model is a product of its importance and performance (Buttle 1996). Based on the above equations, it is important to point out that the SERVPERF model measures customer satisfaction based on the metrics outlined by the SERVQUAL model (Rodrigues & Barkur 2011). Moreover, based on its measures, it closely conforms to the findings of researchers who have analysed satisfaction and attitude measures about service quality (Seth & Deshmukh 2005). While the SERVQUAL model has traditionally contained five service quality elements, different researchers have included new service perspectives of the model to their analysis. For example, some researchers have increased the service dimensions of the model to suit their analysis. Others have reduced the models scope by eliminating some of its elements. The SERVQUAL-P model emerged in this regard. Sebastianelli & Tamimi (2002) say the SERVQUAL-P model reduces the original components of service quality to four factors reliability, responsiveness, personalisation, and tangibles. Here, it is important to understand that the SERVQUAL-P model differs from the SERVQUAL model because it contains the personalisation dimension, which underscores the importance of understanding the social content of interaction between companies and their customers.
Where have other People Used the SERVQUAL Model before?
Researchers have developed different conceptual models to explain the importance of measuring customer service metrics in organisational performance. Relative to this fact, Seth & Deshmukh (2005) say, It is envisaged that conceptual models enable management to identify quality problems and thus help in planning for the launch of quality improvement programs, the
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