Analyze The Gaps In Customer Experience

Published Date: 02 Nov 2017

The Purpose of the study is ‘To Analyze the Gaps in customer experience in organized retail stores in Delhi NCR using Servqual model’.

The main objectives of conducting this research are

To measure the service quality of organized retail outlets in Delhi NCR region using Servqual model.

To identify the gaps in the dimensions of retail service quality and suggest remedial methods for improvement.

1.2 CONTEXT OF THE STUDY

The distribution of consumer products begins with producer and ends at the end consumer. Between the producer and the end consumer there is a middleman- the retailer, who links the producer and the end consumer. Retailing is defined as "a conclusive set of activities or steps used to sell a product or service to consumers for their personal or family use". It does this by organizing their availability on a relatively large scale and supplying them to the customers on a relatively small scale.

The word ‘retail’ is derived from a French word ‘retaillier’, meaning ‘to cut a piece off ‘or ‘to break bulk’. Retailer is a Person or Agency or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer

In broader sense, retail sector comprises of both the organized and unorganized sectors. Organized retailing refers to trading activities undertaken by licensed retailers, i.e. those who are registered for sales tax, income tax, VAT etc. These include the corporate-backed hypermarkets, supermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low cost retailing. For example: the local kirana shops, owner manned general stores, paan shops, hand cart and pavement vendor, etc.

Since ancient time people are purchasing their requirement basically from unorganized retail outlets and a major segment of people still prefers to visit those Mom and Pop shops due to advantages of this format like personal care, location, price, credit facility etc.

With the liberalization and growth of Indian economy since the early 1990s, the Indian customer witnessed an increasing exposure to new domestic and foreign products through different media, such as television and Internet. Apart from this, social changes also had a positive impact, leading to a rapid growth in the retailing industry. Changing lifestyle, increasing disposable incomes, more number of working women in the society, dual income group families, usage of plastic money, favorable demographics and growth of middle class, Increased availability of retail space, rapid urbanization, and qualified manpower also boosted the growth of organized retailing sector and a major segment of the people in urban areas now prefers to purchase their requirements from organized retail outlets.

Consumer is the reason for existence of retailing. Service quality is perceived as a means to position within a competitive environment through enhancing the customer satisfaction. Research has proven that service quality is a very significant predictor of customer loyalty-related intentions, and that relationships are built on a foundation of service quality. Providing high quality service is vital to increase customers’ purchase intentions, store loyalty, repurchase behavior and favorable word-of-mouth recommendations. When customers are satisfied with a high quality service, business firms increase their respective market share, and ultimately enhance the overall financial performance, have higher customer retention, and expanded market share. These benefits can be enjoyed by organized retail stores (supermarkets/ hypermarkets) if they focus on delivering high levels of service quality.

1.3 Significance of the Study

Indian Retail Industry

The retail environment in India is very competitive, being the second largest employment provider after agriculture sector, also the second largest untapped market after China. There are about 12 million retail outlets deeply penetrated across the whole country and contributing to more than ten percent of the country’s GDP. The sector is witnessing a radical change as traditional retail markets are being replaced with new formats such as departmental stores, hypermarkets, supermarkets reflecting the western style. The malls have begun appearing not only in the metros but also in Tier II cities giving the Indian consumer a new shopping experience. The growth of this sector is largely driven by changing life styles, favorable demographics, increasing disposable incomes, usage of plastic money, growth of middle class and an opportunity to tap the rural India. Indian retail market is estimated to grow from about $427 billion in 2010 and expected to reach $637 billion by 2015.

In today‘s highly competitive environment, virtually all companies are forced to be more customer-oriented. It is generally agreed that the level of customer satisfaction determines repeat sales, word-of-mouth recommendations, and customer loyalty repurchase behavior. Superior service quality has become a major differentiator in producing customer satisfaction, and a successful quality management is recognized as the most powerful competitive weapon that many leading service organizations are possessing. Service quality and customer satisfaction are thus the two core concepts of contemporary marketing theory and practice in the service industries. The key to a sustainable competitive advantage lies in delivering high-quality service those results in satisfied customers. The link between service quality and customer satisfaction is now firmly established, and it has been shown that this link subsequently produces higher revenues, increased cross-sell ratios, higher customer retention, repeat purchasing behavior, and expanded market share.

All of these arguments are especially applicable to contemporary retail service sector, which has more sophisticated and demanding customers with higher expectations. In these circumstances, it is generally agreed that the delivery of superior service quality is essential if retailers are to satisfy the customers and thus establish a sustainable competitive advantage, loyal customers, and repeat purchases.

1.4 Theoretical Framework

The retail environment is becoming increasingly competitive, characterized by intensifying global competition, sophisticated customer demands and increased sensitivity to service. To ensure competitive survival, it has become essential for retailers to differentiate themselves in ways that are meaningful to their customers. It is evident that service quality is the most basic retailing strategy for retailers to create competitive advantages and to enhance customers’ shopping experience. Service quality has been identified as a tool to improve retailers’ performance in the market through increasing value for the consumer; and as a means to ensure consumer satisfaction, retention, and patronage. In service organizations, customer perceived service quality is considered as one of the key determinants of business performance.

A range of models which measure service quality have been proposed and applied in different contexts. The literature review indicates that SERVQUAL is the most extensively used measure of service quality.

SERVQUAL was developed in 1985 by Parasuraman et al. (1988). An exploratory investigation was conducted, which was aimed at defining service quality and developing a generic model for service quality. Their investigation indicated that consumers evaluate service quality by using virtually similar criteria - regardless of the type of service. This criterion was labeled as "service quality determinants", and service quality was defined through 10 dimensions .Parasuraman et al. also conclude from their study that consumers evaluated service quality by comparing expectations to performance on these ten basic dimensions.

The Ten determinants that may influence the appearance of a gap were:

Competence is the possession of the required skills and knowledge to perform the service. For example, there may be competence in the knowledge and skill of contact personnel, knowledge and skill of operational support personnel and research capabilities of the organization.

Courtesy is the consideration for the customer’s property and a clean and neat appearance of contact personnel, manifesting as politeness, respect, and friendliness.

Credibility is the factors such as trustworthiness, belief and honesty. It involves having the customer’s best interests at prime position. It may be influenced by company name, company reputation and the personal characteristics of the contact personnel.

Security is the customer feeling free from danger, risk or doubt including physical safety, financial security and confidentiality.

Access is approachability and ease of contact. For example, convenient office operation hours and locations.

Communication means both informing customers in a language they are able to understand and also listening to customers. A company may need to adjust its language for the varying needs of its customers. Information might include for example, explanation of the service and its cost, the relationship between services and costs and assurances as to the way any problems are effectively managed.

Knowing the customer means making an effort to understand the customer’s individual needs, providing individualized attention, recognizing the customer when they arrive and so on. This in turn helps in delighting the customers i.e. rising above the expectations of the customer.

Tangibles are the physical evidence of the service, for instance, the appearance of the physical facilities, tools and equipment used to provide the service; the appearance of personnel and communication materials and the presence of other customers in the service facility.

Reliability is the ability to perform the promised service in a dependable and accurate manner. The service is performed correctly on the first occasion, the accounting is correct, records are up to date and schedules are kept.

Responsiveness is to the readiness and willingness of employees to help customers in providing prompt timely services, for example, mailing a transaction slip immediately or setting up appointments quickly.

In a revised scale, only three of the original ten components, namely reliability, tangibles and responsiveness remained distinct, while the remaining seven components merged into two aggregate dimensions of assurance and empathy. The result was a 22-question scale termed SERVQUAL, which measures five basic dimensions of reliability, responsiveness, empathy, assurance and tangibles, both on expectations and performance.

The five service quality dimensions can be summarized as follows:

Tangibles - are the physical evidence of the service, for instance, the appearance of the physical facilities, tools and equipment used to provide the service; the appearance of personnel and communication materials and the presence of other customers in the service facility like physical layout, arrangement, equipment, and appearance of personnel.

Reliability - is the ability to perform the promised service in a dependable and accurate manner. The service is performed correctly on the first occasion, the accounting is correct, records are up to date and schedules are kept.

Responsiveness - is to the readiness and willingness of employees to help customers in providing prompt timely services, for example, mailing a transaction slip immediately or setting up appointments quickly.

Assurance – refers to the company’s employees. The skill and ability of the employees to able to gain the trust and confidence of the customer.

Empathy – refers to the care, individualized attention that the firm provides its customers, to make them feel valued and special.

SERVQUAL proposes a gap-based conceptualization of service quality. Actual service performance and original consumer expectations of the store service are explicitly measured to assess the ‘gap.’ Conceptually, this gap assessment assumes that a consumer benchmarks the statement of desired attribute levels to assess store service performance. Good service quality means that customers’ perceptions of service performance meet or exceed their expectations of what the service firm should provide.

Perception of service performance means – "the process by which the customers translate the sensory and psychological impressions into a coherent unified view of the Quality of performance of the Service Organization."

Whereas Expectation here in this context means the "presumed degree or probability of the service organization providing the level of quality as benchmarked previously by the customers on the basis of personal needs, past experiences and Word-of-Mouth"

Figure 1.1 Service Quality Gap Model. (Parasuraman et al.)

The above model indicates that there are five gaps, which occur in the internal process of service delivery that influences consumer perceptions of quality. The basic premise is that service quality can be defined by the difference between perceived service and expected service .The first four gaps are on the service provider’s side of service, while gap five is on the customer’s side of service. These gaps are:

GAP 1: Gap between consumer expectation and management perception: This gap arises when the management does not correctly perceive what the customers want.

GAP 2: Gap between management perception and service quality specification: Here the management might correctly perceive what the customer wants, but may not set a performance standard.

GAP 3: Gap between service quality specification and service delivery: This gap may arise owing to the service personnel due to poor training, incapability or unwillingness to meet the set service standard.

GAP 4: Gap between service delivery and external communication: Consumer expectations are highly influenced by statements made by company representatives and advertisements. The gap arises when these assumed expectations are not fulfilled at the time of delivery of the service.

GAP 5: Gap between expected service and experienced service: This gap arises when the consumer misinterprets the service quality.

CHAPTER 2: LITERATURE REVIEW

Grönroos (1984) defined service quality as a perceived judgment whereby customers compare their prior expectations of a service with their perceptions of the service that they actually received.

Parasuraman et al. (1991) agreed with this general conception of service quality in defining service quality as, a measure of how well the service level which is delivered matches customer expectations". Based on this disconfirmation model (or so-called gap model) of service quality was developed, Parasuraman et al. developed the well-known ‚SERVQUAL model to measure how consumers assess service quality in terms of ten original dimensions, which were later reduced to five (tangibles, reliability, responsiveness‚ assurance and ‚empathy‘)

Griffin (1995) concluded in their study that improvement in customer retention by even a few percentage points can increase profits by 25 percent or more. However, a lack of customer satisfaction has an even larger effect on the bottom line. Customers who receive poor service will typically relate their dissatisfaction to between fifteen and twenty others. The average American company typically loses between 15 and 20 percent of its customers each year

Sulek et al. (1995) find that customer satisfaction positively affects sales per labor hour at a chain of 46 retail stores.

Armstrong & Kotler, (1996) Customer satisfaction is a well known and established concept in several areas like marketing, consumer research, retailing etc The most common interpretations obtained from various authors reflect the notion that satisfaction is a feeling which results from a process of evaluating what has been received against what was expected, including the purchase decision itself and the needs and wants associated with the purchase.

Dabholkar, Thorpe & Rentz (1996), concluded that retail service quality had a hierarchical factor structure which comprised of five basic dimensions. Service quality in retailing is different from other service environments Since the retail service is unique in nature, measuring retail service quality will have to be different from the conventional service quality measurement. To overcome the above mentioned constraint in service quality model developed the retail service quality scale (RSQS) for measuring service quality in the retail setup. The RSQS has a five dimensional structure of which three dimensions comprise of two sub-dimensions each. The scale includes 28 items, 17 of which came from the ‚SERVQUAL scale and 11 of which were derived from the researchers’ qualitative work. These items are grouped into the following five dimensions:

- Physical aspects: store appearance and convenience of store layout.

- Reliability: retailer keeps promises and does things right.

- Personal Interaction: associates are courteous, helpful, and inspire confidence and trust from the customer.

- Problem Solving: associates are trained to handle potential problems.

- Policy: operating hours, payment options, parking areas, and so on.

Ittner and Larcker (1998) provide empirical evidence at the customer, business-unit and firm- level that various measures of financial performance (including revenue, revenue change, and margins, return on sales, market value of equity and current earnings) are positively associated with customer satisfaction. However, in the retail industry they find a negative relationship between satisfaction and profitability which may be because benefits from increased satisfaction can be exceeded by the incremental cost in retail.

Gitomer (1998) estimated that nearly one half of American business is built upon this informal, "word-of-mouth" communication. Cost of gaining a new customer is ten times greater than the cost of keeping a satisfied customer. In addition, if the service is particularly poor, 91% of retail customers will not return to the store .In fact, if the service incident is so negative, the negative effects can last years through repeated recollection and recounting of the negative experience.

Keiningham & Vavra, (2001) found that for every percentage increase in customer satisfaction, there is an average increase of 2.37% of return on investment. Most people prize the businesses that treat them the way they like to be treated; they’ll even pay more for this service.

Babakus et al. (2004) link customer satisfaction to product and service quality within retail stores and find that product quality has a significant impact on store-level profits

Khare Arpita, Parveen Ceeba  & Rai Reena (2010) found that in retailing services, customer satisfaction would be dependent on the relationships retailers build with their customers through interactions. The interactions were determined by using the traditional SERVQUAL scale and adapting it for retail. The results showed that a high positive correlation existed between various service dimensions, and that customer evaluation of service quality was similar across different age groups.

Naik C.N. Krishna, Gantasala Swapna Bhargavi & V. Prabhakar Gantasala(2010) This research uses SERVQUAL to analyze the gap between perceptions and expectations of the customer, concerning with the service at retail units in the South Indian state of Andhra Pradesh. Customer Satisfaction level is assessed for the services offered at select retail units in the city of Hyderabad. Five dimensions in service quality (servqual), tangibility, reliability, responsiveness, empathy, and assurance have been considered for this empirical research.

Zekiri Jusuf(2011) The paper Service quality and customer satisfaction are very important concepts that companies must understand if they want to remain competitive and grow. In today’s competitive environment delivering high quality service is the key for a sustainable competitive advantage. Customer satisfaction does have a positive effect on an organization’s profitability. Satisfied customers form the foundation of any successful business as customer satisfaction leads to repeat purchase, brand loyalty, and positive word of mouth.

CHAPTER 3: RESEARCH METHODS AND PROCEDURES

3.1 PURPOSE OF THE STUDY

The Purpose of the study is "To Analyze the Gaps in customer experience in organized retail stores in Delhi NCR using Servqual model’.

The main objectives of conducting this research are

To measure the service quality of organized retail outlets in Delhi NCR region using Servqual model.

To identify the gaps in the dimensions of retail service quality and suggest remedial methods for improvement.

3.2 RESEARCH DESIGN

Cross-Sectional Descriptive Research Design

3.3 RESEARCH QUESTIONS

1.

H1

There is a significant difference between customer perception and expectation in terms of tangible dimension in service quality of organized retail stores in Delhi NCR.

H0

There is no significant difference between customer perception and expectation in terms of tangible dimension in service quality of organized retail stores in Delhi NCR.

2.

H1

There is a significant difference between customer perception and expectation in terms of reliability dimension in service quality of organized retail stores in Delhi NCR.

H0

There is no significant difference between customer perception and expectation in terms of reliability dimension in service quality of organized retail stores in Delhi NCR.

3.

H1

There is a significant difference between customer perception and expectation in terms of responsiveness dimension in service quality of organized retail stores in Delhi NCR.

H0

There is no significant difference between customer perception and expectation in terms of responsiveness dimension in service quality of organized retail stores in Delhi NCR.

4.

H1

There is a significant difference between customer perception and expectation in terms of assurance dimension in service quality of organized retail stores in Delhi NCR.

H0

There is no significant difference between customer perception and expectation in terms of assurance dimension in service quality of organized retail stores in Delhi NCR.

5.

H1

There is a significant difference between customer perception and expectation in terms of empathy dimension in service quality of organized retail stores in Delhi NCR.

H0

There is no significant difference between customer perception and expectation in terms of empathy dimension in service quality of organized retail stores in Delhi NCR.

3.4 Participants

Sample Size - 250 customers shopping at organized retail stores (supermarkets/ hypermarkets) across Delhi NCR

Sample Frame - Both high end and low end organized retail stores (supermarkets/ hypermarkets) across Delhi NCR

Sampling Technique - Non Probability Convenience Sampling

3.5 Instruments Used

Tools Used - SERVQUAL Questionnaire, SPSS, ms Excel

Methods Used - Paired T Test, Alpha Chronbach

3.6 Procedures

The research targeted 250 respondents shopping in supermarkets. The work was performed in the supermarkets/ hypermarkets segment of the organized retail stores located in Delhi NCR. SERVQUAL was adopted as the instrument to assess the service quality according to the literature review Parasuraman et. al. (1988).

Data was collected through SERVQUAL, developed using five service quality dimensions (tangibility, reliability, responsiveness, assurance and empathy) with 22 questions. The answers were offered using a 7 point semantic differential scale anchored by "1 – Strongly Disagree" to "7 – Strongly Agree" based on a two column format questionnaire that generates separate ratings of "expected" (E), and "perceived" (P) with identical questions, side by side. The reliability of the data was checked by alpha cronbach, and further the weighted average Gap scores were calculated for all the dimensions. Dimensions where the expectation score exceeded the perception score were considered and if difference was found to be significant using Paired T test, the gaps were identified suitable recommendations were given for the same.

3.7 Data Analysis

The SERVQUAL customer perception tool consists of 22 statements that are grouped and related to one of the five service quality dimensions listed above. Each of the statements is presented in two different forms. The first time that the question appears it is designed to measure customers’ general expectations (E) about the service area being measured. The second time that the question appears it is designed to measure customers’ perceptions (P) about the organization whose service quality is being assessed.

In both cases, customer responses are being measured on a seven point semantic differential scale that ranges from "strongly disagree", which elicits a score of 7, to "strongly agree", which elicits a score of 1. The SERVQUAL instrument captures customer expectations of service quality as well as their perception of the services actually provided to them. "The perceived service quality, or gap, score is calculated for each statement by subtracting the E score from the P score, implying a Gap score for each statement ranging between -6 and +6". A negative Gap score indicates a level of service quality which is below that which is expected by the customer. Conversely, a zero to positive Gap score indicates a level of service which is equal to or exceeds customer expectations.

The SERVQUAL developers’ research indicated that the customers don’t hold each of the service quality dimensions in the same regard and are not uniformly important. Therefore, the SERVQUAL customer perception tool also collects respondent input as to the importance of each construct by having them allocate a total of 100 points across the various service quality dimensions. This information allows for a measure of salience that can be used to determine which of the service quality dimensions are the most important to the customers. The salience scores may also be used to weight the results of the SERVQUAL Gap scores for each service quality construct by multiplying the gap score by the salience score obtained from the survey population. The weighted scores provide greater insight as to the overall importance of the service quality construct to the survey population, thus allowing service leaders to implement more targeted service improvement initiatives later on.

The weighted average Gap Scores are used to scan out for undesirable gaps across the 5 dimensions of service quality. The dimensions which receive a positive Gap means that the perception of service quality is already higher than the expectation of the customers and it is a favorable condition, hence these dimensions will not be considered for any further analysis. The Undesirable Gaps or the Dimensions which receive a negative gap score are considered for further analysis. The factors involved in such dimensions are subjected to a Paired T test between the unweighted perception and expectation scores in order to find out if there is a significant difference of Gap present among those factors and further suggest remedial measures for the same.

3.8 Limitations

The sample may not be a true representation of the whole population because of small sample size

The survey was limited to only 3 locations in Delhi NCR.

The sample of population is not focused on any specific target group and therefore it is not possible to make any kind of generalizations about different groups.

The questionnaire is long which sometimes was a reason for negative reaction from the respondents, that way we lost a few respondents and some questionnaires where answered quickly without deep thinking.

There is no consensus in the literature of which instrument is most effective; SERVQUAL was chosen because it was tested in similar work conducted by many other researchers.

CHAPTER 4: DATA ANALYSIS AND FINDINGS

4.1 DATA ANALYSIS

Dimensions

Reliability Statistics (P)

Tangibles

0.761

Reliability

0.709

Responsiveness

0.795

Assurance

0.781

Empathy

0.738

overall scores

0.867

Table 4.1 Internal consistency reliability analysis (cronbach’s alpha) for the responses obtained across the five dimensions and the overall score for the perception questions.

Dimensions

Reliability Statistics(E)

Tangibles

0.798

Reliability

0.875

Responsiveness

0.763

Assurance

0.76

Empathy

0.833

overall scores

0.894

Table 4.2 Internal consistency reliability analysis (cronbach’s alpha) for the responses obtained across the five dimensions and the overall score for the expectation questions.

Dimension

Statement

Perception Score

Expectation Score

Gap Score

(P-E)

Average unweighted gap scores

Average weight by respondents

Weighted average gap scores

Tangibles

TA1

3.816

4.876

-1.06

 

 

 

TA2

3.056

5.224

-2.168

 

 

 

TA3

5.928

3.968

1.96

 

 

 

TA4

5

4.384

0.616

 

 

 

 

 

 

 

-0.163

21.3

 -0.03472

Reliability

RL1

3.584

5.24

-1.656

 

 

 

RL2

3.528

4.296

-0.768

 

 

 

RL3

5.2

4.968

0.232

 

 

 

RL4

6.136

5.288

0.848

 

 

RL5

3.888

3.672

0.216

 

 

 

 

 

 

 

-0.2256

18.92

-0.04268 

Responsiveness

RS1

6.152

3.016

3.136

 

 

 

RS2

6.368

3.888

2.48

 

 

 

RS3

6.496

4.512

1.984

 

 

RS4

6.352

4.6

1.752

 

 

 

 

 

 

 

2.338

20.94

0.489577 

Assurance

AS1

5.856

3.096

2.76

 

 

 

AS2

6.192

4.648

1.544

 

 

 

AS3

6.808

5.44

1.368

 

 

AS4

6.104

3.8

2.304

 

 

 

 

 

 

 

1.994

18.06

0.360116 

Empathy

EM1

4.176

2.368

1.808

 

 

 

EM2

6.2

5.216

0.984

 

 

 

EM3

5.528

2.168

3.36

 

 

EM4

6.168

4.584

1.584

 

 

 

EM5

6.336

3.88

2.456

 

 

2.0384

20.78

0.42358

Table 4.3 Weighted average Gap score across all five dimensions of service quality.

Paired Samples Test

Paired Differences

t

df

Sig. (2-tailed)

Mean

Std. Deviation

Std. Error Mean

95% Confidence Interval of the Difference

Lower

Upper

Pair 1

pta – eta

1.837000E0

1.107942

.553971

.074018

3.599982

3.316

3

.045

Table 4.4 Paired sample T test for Tangibles Dimension.

Paired Samples Test

Paired Differences

t

df

Sig. (2-tailed)

Mean

Std. Deviation

Std. Error Mean

95% Confidence Interval of the Difference

Lower

Upper

Pair 1

prl - erl

2.572800E0

1.508298

.674531

.700001

4.445599

3.814

4

.019

Table 4.5 Paired sample T test for Reliability Dimension

CHAPTER 5: CONCLUSION AND RECOMMENDATION

5.1 SUMMARY OF FINDINGS

RELIABILITY OF QUESTIONS RELATED TO PERCEPTION

For the perception dimension of service quality, twenty two questions have been designed and the results of internal consistency reliability analysis ( Cronbach’s Alpha) for the responses obtained across all the five dimensions and the overall score for the perception questions are found to be reliable as shown in table 4.1. The acquired number is bigger than 0.6 (0.867) so the data can be used for further analysis.

For the expectation dimension of service quality, twenty two questions have been designed and the results of internal consistency reliability analysis ( Cronbach’s Alpha) for the responses obtained across all the five dimensions and the overall score for the expectation questions are found to be reliable as shown in table 4.2. The acquired number is bigger than 0.6 (0.894) so the data can be used for further analysis.

Cronbach’s Alpha

Internal Consistency

α > 0.9

Excellent

0.9 > α > 0.8

Good

0.8 > α > 0.7

Acceptable

0.7 > α > 0.6

Questionable

0.6 > α > 0.5

Poor

0.5 > α

Unacceptable

Table 5.1 Cronbach’s Alpha Score Interpretation

Once a reliability analysis was done the weighted average gap scores for all dimensions (tangibility, reliability, responsiveness, assurance and empathy) were calculated and it as shown in table 4.3. It was found that the expectation score of respondents were more than their perception score in the Tangibility and the Reliability Dimension, which was (-0.03472) and (-0.04268) respectively, hence considered for further analysis. As the weighted average gap scores in the responsiveness, assurance and empathy dimension were found to be positive i.e. the perception score of the customers was already more than the expectation score and hence no further indulgence of the management was needed yet in these dimensions.

The perception and expectation scores of tangibility and the reliability dimensions were analyzed using Paired T Test to find out if the difference of scores was significant or not.

From Table 4.4 is seen that the t-test value (.045) for the tangibility dimension is less than 0.05 at 95% level of significance. Hence the null hypothesis will be rejected and accepting the alternate hypothesis it can be said that there is a significant difference between customer perception and expectation in terms of tangible dimension in service quality of organized retail stores in Delhi NCR.

Since the expectation scores of statement 1 and 2 were more than the respective perception scores (Table 4.3), it is evident that retail industry needs to improve in these particular factors.

Also from Table 4.5 is seen that the t-test value (.019) for the reliability dimension is less than 0.05 at 95% level of significance. Hence the null hypothesis will be rejected and accepting the alternate hypothesis it can be said that there is a significant difference between customer perception and expectation in terms of reliability dimension in service quality of organized retail stores in Delhi NCR.

Since the expectation scores of statement 1 and 2 were more than the respective perception scores (Table 4.3), it is necessary that retail industry improves in these particular factors.

5.2 DISCUSSION OF RESEARCH QUESTION

The retail environment in India is highly competitive. The sector is witnessing a radical change as traditional retail markets are replacing with new formats such as departmental stores, hypermarkets, supermarkets reflecting the western style. The growth of the sector is largely driven by changing lifestyle, increasing disposable incomes, more number of working women in the society, dual income group families, usage of plastic money, favorable demographics and growth of middle class, Increased availability of retail space, rapid urbanization and an opportunity to tap the rural India.

In today‘s highly competitive environment, virtually all companies are forced to be more customer-oriented. It is generally agreed that the level of customer satisfaction determines repeat sales, word-of-mouth recommendations, and customer loyalty. Superior service quality has become a major differentiator in producing customer satisfaction, and successful quality management is recognized as the most powerful competitive weapon that many leading service organizations possess.

This study was aimed to analyze the Gaps in customer experience in organized retail stores in Delhi NCR using Servqual model. For the same the research targeted 250 respondents shopping in supermarkets. The data collected using ‘SERVQUAL Questionnaires’ was put in an electronic ‘spreadsheet’ to organize it and SPSS was used to check the data for Internal Consistency/ Reliability. Once the data was found reliable the weighted average gap scores were found for all the dimensions. It was found that the expectation score of respondents were more than their perception score in the Tangibility and the Reliability Dimension, which was (-0.03472) and (-0.04268) respectively, hence considered for further analysis. The perception and expectation scores of tangibility and the reliability dimensions were analyzed using Paired T Test to find out if the difference of scores was significant or not. Eventually it was seen that the t-test value (.045) and (.019) for the tangibility and reliability dimension respectively was less than 0.05 at 95% level of significance. Hence the null hypothesis will be rejected and accepting the alternate hypothesis it can be said that there is a significant difference between customer perception and expectation in terms of Tangibles and Reliability dimension in service quality of organized retail stores in Delhi NCR, and there is a need for further improvement in these dimensions.

5.3 CONCLUSION

Dimension

Statement

Perception Score

Reliability Statistics (P)

Expectation Score

Reliability Statistics (E)

Weighted average gap scores

P value

Tangibles

TA1

3.816

4.876

 

TA2

3.056

5.224

 

TA3

5.928

3.968

 

TA4

5

4.384

 

 

 

0.761

 

0.798

-0.03472

.045

Reliability

RL1

3.584

5.24

 

RL2

3.528

4.296

 

RL3

5.2

4.968

 

RL4

6.136

5.288

RL5

3.888

3.672

 

 

 

0.709

 

0.875

-0.04268 

.019

Responsiveness

RS1

6.152

3.016

 

RS2

6.368

3.888

 

RS3

6.496

4.512

RS4

6.352

4.6

 

 

 

0.795

 

0.763

0.489577 

-

Assurance

AS1

5.856

3.096

 

AS2

6.192

4.648

 

AS3

6.808

5.44

AS4

6.104

3.8

 

 

 

0.781

 

0.76

0.360116 

-

Empathy

EM1

4.176

2.368

 

EM2

6.2

5.216

 

EM3

5.528

2.168

EM4

6.168

4.584

 

EM5

6.336

3.88

0.738

0.833

0.42358

-

Table 5.2 Summary of results obtained.

The research targeted 250 respondents shopping in supermarkets. The data collected using ‘SERVQUAL Questionnaires’ was put in an electronic ‘spreadsheet’ to organize it and SPSS was used to check the data for Internal Consistency/ Reliability. Once the data was found reliable the weighted average gap scores were found for all the dimensions. It was found that the expectation score of respondents were more than their perception score in the Tangibility and the Reliability Dimension, which was (-0.03472) and (-0.04268) respectively, hence considered for further analysis. Whereas the dimensions of Responsiveness, Assurance and Empathy were dropped from further analysis as the perception score in these exceeded the expectation score and this is a favorable gap for the company.

The perception and expectation scores of tangibility and the reliability dimensions were analyzed using Paired T Test to find out if the difference of scores was significant or not.

It is seen that the t-test value (.045) for the tangibility dimension is less than 0.05 at 95% level of significance. Hence the null hypothesis will be rejected and accepting the alternate hypothesis it can be said that there is a significant difference between customer perception and expectation in terms of tangible dimension in service quality of organized retail stores in Delhi NCR.

Since the expectation scores of statement 1 and 2 were more than the respective perception scores it is evident that retail industry needs to improve in these particular factors.

Also it was seen that the t-test value (.019) for the reliability dimension is less than 0.05 at 95% level of significance. Hence the null hypothesis will be rejected and accepting the alternate hypothesis it can be said that there is a significant difference between customer perception and expectation in terms of reliability dimension in service quality of organized retail stores in Delhi NCR.

Since the expectation scores of statement 1 and 2 were more than the respective perception scores, it is necessary that retail industry improves in these particular factors.

5.4 RECOMMENDATIONS

Tangibles

Organized Retail Stores (Supermarkets/ Hypermarkets) should implement the use of modern equipments and maintain them.

The Physical Facilities, layout, arrangement of merchandize etc should be in a manner such that they look visually appealing

Employees in the excellent retail stores should be neat in their appearance.

Reliability

The stores should make policies for exceptional customer service and abide by them.

The staff should be well trained and equipped to handle any problem the customers might have.

The staff should have some amount of authority to take decisions and actions when required to help the customers.

5.5 LIMITIATIONS

The sample may not be a true representation of the whole population because of small sample size

The survey was limited to only 3 locations in Delhi NCR.

The sample of population is not focused on any specific target group and therefore it is not possible to make any kind of generalizations about different groups.

The questionnaire is long which sometimes was a reason for negative reaction from the respondents, that way we lost a few respondents and some questionnaires where answered quickly without deep thinking.

There is no consensus in the literature of which instrument is most effective; SERVQUAL was chosen because it was tested in similar work conducted by many other researchers.

5.6 IMPLICATIONS FOR PRACTICE

In today‘s highly competitive environment and the approval of FDI in retail the Organized retail industry is bound to get even more competitive in the coming future. All companies are forced gear up and to be more customer-oriented. It is generally agreed that the level of customer satisfaction determines repeat sales, word-of-mouth recommendations, and customer loyalty. Superior service quality will become a major differentiator in producing customer satisfaction, as successful quality management is recognized as the most powerful competitive weapon that many leading service organizations possess.

It’s time for marketers to look beyond the usual benchmarks of customer satisfaction in India. Many leading brands have mostly played conservative with existing norms of customer satisfaction.. However, the opportunities extend to many other forms and innovations.

Clearly, the organized retail industry is set for interesting times ahead, not just in terms of a greater competition and availability of options to the customers, but also in terms of more experimentation from marketers to attract a huge chunk of market share by differentiated offerings leading to customer satisfaction. It is for the industry to capitalize on the growth potential from this medium.

5.7 IMPLICATION FOR FUTURE RESEARCH

SERVQUAL although a good instrument for measuring the service quality has been debated over the decade for its use in respect to the retail environment. Servqual fails to take into account the factors like Convenience (proximity to the customer, parking facility, children’s play area etc), Problem Solving and Policy etc. which might be applicable to a certain extent.

Also due to the huge cultural and income variation in India the perception of service quality may differ from one area to another. The retailing sector growing to meet the global standards will have to evaluate on the lines of how customers perceive service quality and how they evaluate it. With the growing organized retail market and the increasing number of the competitors the customer’s perception on a particular retailer is critical in determining the satisfaction and the loyalty of the customer. Measures will have to taken in the near future to provide quality as perceived by the customer rather than what they can afford and therefore calling for extensive research.