International Journal of Pure and Applied Mathematics Volume 119 No. 12 2018, 15081-15094 ISSN: 1314-3395 (on-line version) url: http://www.ijpam.eu Special Issue ijpam.eu A Study on Service Quality Analysis of Rural Retail Outlets in Coimbatore District 1 A. Martin Jayaraj and 2A. Dharmaraj 1 Department of Management, Karpagam Academy of Higher Education, Coimbatore, Tamil Nadu, India. 2 Department of Management, Karpagam Academy of Higher Education, Coimbatore, Tamil Nadu, India. dr.a.dharmaraj@gmail.com Abstract The perception of service marketing focuses on selling the services in the best interest of user/customers. With the change in perception of the management, it has witnessed multi faceted changes which necessitated an analogous change in the concept of service marketing. The service generating organisation realised the interest of customers and thereafter they were compelled to assign due weightage to the interest of society in the pace of the holistic concept of management. This study aims to analyse the service quality of rural retail outlets in Coimbatore district. A sample size of 250 consumers were selected for the study. The study emphasises the gap between the perception and expectation of consumers towards the rural retail shops. The study will help the retail owners to know the perception of the consumers and will strive to fulfil the expectations of them in the future. Keywords: Service Quality, Gap Analysis, Rural Retail, Coimbatore. 15081 International Journal of Pure and Applied Mathematics 1. Introduction In a marketing function, the marketer plans, promote and deliver goods and services to the customers or clients. In the marketing of services, the providers influence and satisfy the customers or users. An institution or an individual is a provider who requires provisional excellence to influence the impulse of prospects and transform them into actual customers. When a person buys services offered by a service organization, he/she truly buys the time, knowledge, skill or resources. According to US Government‟s Standard Industrial Classification, “Establishments primarily providing a wide variety of services for individuals, business and government establishments and their organisations, hotels and other lodging places, establishments providing personal services, repair and amusement services, educational institutions, membership organization and other miscellaneous services are included”. 2. Features of Marketing Services 1. Intangibility: Intangibility is a vital consideration that complicates the role of a marketing manager, especially to influence and motivate the prospects/customers. The tangible nature of products can be displayed, the prospects can view it, they can even test and make a trial before making the buying decision, which makes the selling process easier. Services are of intangible nature and its intangibility complicates the task of decision-makers. 2. Perishability: The services can‟t be stored or preserved. Unutilized or underutilized services are found to be waste. A building unoccupied, a person unemployed, credit unutilized, vacant beds in a hospital are economic waste. Of course, this is mainly due to its perishability. This makes it essential that decision-makers or the executives by using their professionalism minimise the possibilities of economic waste. The opportunities have to be capitalised on the same by using one‟s excellence. 3. Inseparability: The inseparability focuses on the fact that the services are not of separable nature. Generally, the services are created and supplied simultaneously. In other words the service providers and the service are the same. Donald Cowell says, it is inseparability that makes the task of marketing services a bit difficult. The goods are produced at one point and distributed by other points. In the services, we find the selling processes making waste for the generation of services. The professionals while marketing the services thus bear the responsibility of removing or minimising the gap between the service-promised and serviceoffered. 15082 Special Issue International Journal of Pure and Applied Mathematics 4. Heterogeneity: The quality of services cannot be standardized. The prices may be too high or too low. In the case of entertainment and sports, we find the same thing. The same type of services can‟t be given to all the customers even if they pay the same price. The consumers rate services in different way. Of course, it is due to the differences in the perception of individuals at the levels of providers and users. The heterogeneity factor makes it difficult to market efficiently. 5. Ownership: It is also ownership that makes it significant to market the services in a bit different way. The goods sold are transferred from one place to another, the ownership is also transferred to the buyers an opportunity to resale. In the case of services, the users have a just an access to the service. 6. Simultaneity: Services can‟t be delivered to customers or users. Services don‟t travel through the channel of distribution. For availing the services, either the users meet the providers or providers go to the users. Moreover the services have limited geographical area coverage only. 7. Quality Measurement: The quality of service cannot be measured in terms of service level. It is very difficult to rate or quantify the total purchase. A firm sells atmosphere, conveniences, consistent quality, status, anxiety, morale, etc. 8 .Nature of Demand: While going through the features of services, one can‟t underestimate the factor related to the nature of demand. Generally, the services have fluctuating nature and particularly during the peak season, an abnormal increase the demand can be found. 3. Service Quality According to Crosby (1984), Quality is, „conforming to requirements‟. This focuses the attention on the fact that the service generating organization first need to establish requirements on specialisation and then to comply, so that the promised quality of services are made available with the users. Juran (1982) opines the quality is all about fitness for use. Thus quality is based on satisfying the needs of customers. In both the opinions, the focus is on customers playing important role in defining quality. Swan and Combs (1956) identified two dimensions of service quality, viz., instrumental and expressive. The instrumental dimension describes the physical aspect whereas the expressive dimension is found related to psychological and intangibility aspects. Gronroos (1954) has defined technical and functional quality as the two important dimensions of quality. The technical quality refers to the relatively quantifiable aspects of service which are made available to the customers in the interaction 15083 Special Issue International Journal of Pure and Applied Mathematics process. It is considered as an important base for measuring service quality. The functional quality cannot be measured as objectively as the technical quality. 4. Importance of Service Quality 1. Quality for image projection: The organizations making sincere effort to innovate and define quality get an opportunity for image projection. Both the facets- image building and image projection are found correlated. The common masses start realising positive contributions of an organization to the process of socio-economic transformation. The general masses and beneficiaries start realising their contribution to the transformation of society and development of national economy. 2. Quality makes ways for cost-effectiveness: It is an age of techno-driven services and therefore the service generating organizations making use of new generation of technology are found successful in creating and expanding the markets. The educational institutions and healthcare sectors in particular need to make their services affordable. Increasing the number of customers/ uses and making possible cost economy depend on the quality of services that is offered. 3. Quality benefits the employees: Quality services generated by an organization create sense of confident among people serving the organization. They are duly motivated and therefore work with sense of confidence. A high morale is also found on account of lucrative incentives. The organizations realise their contribution and reward them suitability. The cycle of qualitative transformation keeps on moving and benefits organizations, customers and employees in many ways. They find themselves successful in establishing a distinct identity in the society. 4. Minimizing the risk factor: The service quality reduces the risk factors which creates confidence in the minds of the users. Quality is assured through the word-of-mouth promotion and this makes ways for reliability and dependability which contracts avenues for risk. 5. Quality helps creation of value system: The service generating organization defining quality in the phase of multi faceted developments in the socio-economic system find it easier tools which on the process of value engineering. The enhanced marketing activities increase the scope of profit generation and reduces unethical practices. Since business is done with the holistic touch, the providers have no option but to respect the value system as the moment customers/ users start realising that they are cheated negative attitude will start working which will make an invasion on their confidence and trust. 15084 Special Issue International Journal of Pure and Applied Mathematics 5. Service Quality Gap Zeithmal, Berry and Parsuraman (1988) identified four potential gaps which may lead to the serious gap between the expansions of users and offering of providers. It is also significant to mention that Lovelock (1994) has enlarged the gap to seven. The seven gaps are divided into internal and external gaps. The standard gap, delivery gap, and internal communication gap are known as internal gap whereas the knowledge gap, perception gap, interpretation gap and service gap are of external nature. The internal gap occurs between different functioned and departments within the organization and therefore we call them internal gap. Contrary to it, the external gap is influenced by the four external conditions and therefore we call them external gap. 1. The Knowledge Gap: It is the difference between the service provider‟s beliefs and the expectation of customers. If the service providers and services users do not believe and expect in the same way, it is known as knowledge gap. 2. Standard Gap: This gap is the difference between perception of customers‟ expectation and the quality standards for delivery. If the customers have high level of expectation and they do not see the services to the desired level, then it is standard gap. This gap is due to fail in forming the right perception of expectation. 3. The Delivery Gap: In this gap, the difference is found between the specified delivery standards and the actual performance of the standards given by services providers. The providers promise multi-faceted arrangements for delivery. If there is delay or indecency in the offering process, delivery gap is created. 4. Internal Communication Gap: In this gap, there is difference between the organizations opinion on advertising and sales people such as levels of service quality, features of product and performance. Of late, the communication process is much more effective as technology governs the operation. The gap may be created due to faulty operation and ineffective communication. 5. Perception Gap: A gap prevails between what is delivered and the customers‟ perception of it. Since technology governs the quality of services, the customers develop perception of delivery and in case if the delivery is not in tune with the perception, there will be gap. 6. The Interpretation Gap: It is the difference of interpretation between the service-users and serviceproviders. Such type of gap is found in advanced service offering. The providers may interpret in a particular way and the providers may not receive in the 15085 Special Issue International Journal of Pure and Applied Mathematics Special Issue desired way. 7. Service Gap: This type of gap is between what the users expect to receive and their perceptions of the services actually received. The users are influenced by the perception of high level service but they do not get the desired level and thus service gap is created. 6. Service Quality Analysis Based on the SERVQUAL model Parasuraman, Zeithaml and Berry (1985, 1988, 1991), the five dimensions with 22 statements describing service quality are as follows: Tangibles (1-4 statements): Appearance of the company`s facilities, equipments, staff and communication tools. Reliability (5-9 statements): The company`s capability to provide the promised services in an exact and reliable manner. Responsiveness (10-13 statements): The company`s propensity to assist the clients and provide prompt services. Assurance/promise (14-17 statements): The information, knowledge, politeness of the employee`s of the company and their capability to convey trust and reliability towards clients. Empathy (18-22 statements): Personal, careful attention given to clients. Parasuraman et al. (1991a) explained that researchers can get the expected true results if they apply the original model suggested by him without any changes to the model. They also provided a guide regarding the application of SERVQUAL. Further, they stated that minor changes may not affect the model, but omitting or inserting new statements would not provide reliable results. 7. Objectives of the Study 1. To study the conceptual framework of consumer behaviour in general and in particular to rural retail outlets in Coimbatore District 2. To analyse the factors influencing the consumers to purchase in rural retail outlets 3. To ascertain the gap between consumers expectation and their perception towards rural outlets 8. Hypothesis of the Study There is no significant relationship between the selected independent variables of service quality dimensions and the overall service Quality. 15086 International Journal of Pure and Applied Mathematics Special Issue 9. Research Methodology The researcher has adopted Descriptive research design for the study. The consumers who purchase from the rural retail outlets of Coimbatore district are selected as the universe population. The sampling technique used is convenience sampling method. The sample size for the study consists of 250 consumers residing in rural areas of Coimbatore district. The researcher has used schedule to collect primary data on the expectation and perception of consumers towards the retail outlets using service quality dimensions and also on the satisfaction level of consumers. The secondary data was collected from books, research journals, magazines and web sources. The statistical tools such as Wilcoxon Signed Rank Test andSpearman Correlation Coefficient are used to analyse the study. 10. Limitations of the Study 1. The opinion of consumers may not be good all times, due to individual differences in age, gender, income, education, etc. 2. The sample size taken for the study is 700, so the findings may not be applicable for the universe. 3. Since the study is conducted in rural retail stores, it would not be appropriate for other organized retail outlets. 4. There is a risk of fitness associated with the suggestions of the study due to dynamic nature of consumers‟ behaviour from time to time. 11. Review Studies Parasuraman et al (1988)1 have defined service quality as attitude of customer reflecting the perceived overall superiority and excellence in the process and as the outcome of a service provider. They identified set of 22 variables tapping five different dimension of service quality construct. They defined service quality as a gap between customer‟s expectation and perception of performance on these variables. The service quality measurement scale comprised of a total of 44 items (22 for expectations and 22 for perceptions). The SERVQUAL scale is designed to uncover the broad area of good or bad service quality. The SERQUAL scale is based on a difference score between customers‟ expectations of service and their perceptions after receiving the service. Shetha and Gross (1991) 2 identified three antecedents used as shopping preference among an evoked set of alternative outlets. They are shopping motives, shopping options and choice calculus. According to them, shopping motive is made up of customers‟ wants and needs and or influence to buy personal values as well as product related characteristics. Mehta et al (2000)3 explored the benefits of SERVPERF and the retail service quality scale in measuring the service quality of different retail environments. Specifically, they investigated the performance of two scales measuring the 15087 International Journal of Pure and Applied Mathematics service quality of retailers where goods purchase is the primary focus, against another where both goods and services are equally important. The results described that the scale was superior within the context of a “more goods and less service” environment, i.e. a supermarket, while SERVPERF was better for a retailing context where the service element becomes more important, i.e. an electronic goods retailer. Siu et al (2001)4 analysed the service quality of a department store‟s chain and its impact on consumption behaviour. The findings of the study showed that the impact of physical appearance and the policy were salient on the overall perceived service quality. Among the six service dimension, the physical appearance and the policy had the greatest impact on the overall service quality and on the future consumption respectively. Vazquez et al (2001)5 studied the conceptualization and the measurement of service quality in the retail environment. The review of the retail and service quality literatures and the findings from a qualitative study conducted by the authors revealed that service quality in retail companies adopting the commercial format of supermarkets have a four factor structure (physical aspects, reliability, personal interaction and policies). Wong and Sohal (2003)6 observed the relationship between the dimensions of service quality and the customer loyalty in a retail chain departmental store setting in Victoria. The results showed that the service quality is positively associated with customer loyalty and the most significant predictor of customer loyalty in the retail district is empathy, while the most predictor of customer loyalty in the country retail district is tangibility. McKenzie (2006)7 signified how the consumers interpret and perceive retail service quality in Estonia. He found retail service quality was a relevant construct for examination in Estonia. He concluded that there is an expectation from the consumers to exert their own sense of shopping capabilities. There is an expectation that selling staff need to be authoritative and to show consideration to the consumers through acts of politeness and courtesy. Also there is an expectation that policies exist to make things right when a problem occurs. Parikh (2006)8 empirically assessed the gap between the customers‟ expectation and their perception about the service quality of retail stores in India. Statistical analysis proved that although the RSQS scale was found to be quite reliable, the gap score did not merge into five dimension of service quality as proposed by the scale developers, rather, the gap score roughly merged into nine dimensions. He concluded that RSQS may not be applicable to the retail sector in India without further restructuring. Wong and Sohal (2006)9 investigated consumer perceptions of their shopping experience in a retail environment. They found that service quality related 15088 Special Issue International Journal of Pure and Applied Mathematics factors such as being consistently courteous to customers‟ enquires, and ability to handle customer complaints assist in the establishment of higher level of trust. They empirically tested the effect of service quality, trust, and commitment on relationship strength. Further, they proposed a model of relationship strength which explored the impact of relationship strength on attitudinal outcome such as perceived relationship quality and behavioural outcome such as customer loyalty. Singh and Adlakha (2012)10 aimed to understand the dimensions of service quality that is vital for food and grocery retailers. The retail service quality scale (RSQS) developed by Dabholkar et al (1996) was used for the study. The dimensions used for analysis are physical aspects, reliability, personal interaction, problem solving and policy. The authors inferred that negative gap was evident in all dimensions and suggested that the services expected by consumers are not provided by the Retailers. Further they also commented that all the five dimensions play a vital role in overall service quality. They concluded that retailers have to offer quality service to retain customers. Martin and Dharmaraj (2016)11in their study, “Competitive Advantage Strategies adopted by Rural Retailers in Coimbatore District” highlighted that rural retailers are using personalized customer service and quality of products as the major competitive advantage strategy to defend their competitors. Martin and Dharmaraj (2016)12 in their paper “A Study on Customers, Perception towards Marketing Mix Strategies adopted by Rural Retailers in Coimbatore District”, have told the factors that facilitate the spread of chains are the quality at lower prices, improved shopping standards, convenient shopping and display. They have also commented that retailers upgrade their strategies to satisfy the demanding and awakened consumer group. Service Quality Analysis The Service Quality Analysis is conducted to find the gap between the expectation and perception of consumers on service quality dimensions. The service quality dimensions include tangible, reliability, responsiveness, assurance and empathy dimensions. The Wilcoxon Signed Rank Test and Spearman‟s coefficient of correlation are used to study the gap analysis. These non-parametric tests can be used if the collected data does not qualify for assumption of parametric tests. Hence, normality test was checked. Normality Test The data was checked for normality with the help of one sample KlomogorovSmirnov Test. The table results depicts that P values were less than 0.05. Thus, the data were not normally distributed and hence, non-parametric tests were applied to test the data. 15089 Special Issue International Journal of Pure and Applied Mathematics Special Issue Table 1.1.Normality Test Tangible Reliability Responsiveness Assurance Empathy N 250 250 250 250 250 Mean 12.20 14.46 11.75 11.73 13.92 Std. Deviation 2.222 2.317 2.305 2.174 2.746 Z Value 4.222 3.745 4.209 3.363 4.428 P Value .000 .000 .000 .000 .000 Source: Primary data In this study, the Klomogorov-Smirnov Test shows that Tangible, Reliability, responsiveness, assurance and empathy dimensions have P <0.05, thus the selected data can be used for non-parametric tests. Service Quality Gap Analysis The service Quality Gap Analysis identifies the gap between expectation of the consumers and their perception towards the service dimensions of Tangible, Reliability, responsiveness, assurance and empathy dimensions. The table shows that the expectations of the consumers towards the overall service quality were not met as there is a difference of 2.90 in the mean scores. Further, The Wilcoxon Signed Rank test shows that there was significant difference between the expectations and perception of the consumers about the service quality of retail stores (Z = 22.926 – 22.967, P = 0.000). Table 1.2.Service Quality Gap analysis Means Service Quality Dimensions Tangible Dimension Reliability Dimension Responsiveness Dimension Assurance Dimension Empathy Dimension Overall Service Quality Expectation 5.54 5.84 5.92 5.94 5.82 5.81 Perception 3.05 2.89 2.94 2.93 2.78 2.92 Wilcoxon Signed Rank Test Gap -2.49 -2.95 -2.99 -3.01 -3.04 -2.90 Z Value 22.963 22.967 22.954 22.945 22.954 22.926 P Value 0.000 0.000 0.000 0.000 0.000 0.000 Source: Primary Data The table 1.2 also shows that the highest gap between the expectation and perception of customers was found in empathy dimension (-3.04), which was followed by assurance (-3.01), responsiveness (-2.99), reliability (-2.95) and tangible (-2.49). The Wilcoxon Signed rank tests showed that there was significant difference between expectations and perceived value of all dimensions. The Z values range between 22.945 and 22.967 with P=0.000. 15090 International Journal of Pure and Applied Mathematics Special Issue Thus, the results clearly show that the service quality perceived by the consumers did not match with what they were expecting from the retail store. Relationship between Service Quality Dimension and Overall Service Quality The relationship between service quality dimensions and overall service quality is analysed using spearman coefficient of correlation. The P value is less than 0.01 in all cases, thus all five dimensions are significant at 1 percent level of significance. Further, the results from the table 1.3 show that there was high and positive correlation between service quality dimension and overall service quality. Table 1.3.Correlation between Service Quality Dimension and Overall Service Quality Spearman Correlation Overall Service Quality Correlation Coefficient Sig Tangible Dimension 0.693 Reliability Dimension .691 Responsiveness Dimension .772 Assurance Dimension .722 Empathy Dimension .743 0.00 0.00 .000 .000 .000 Source: Primary Data The dimension responsiveness was highly correlated with overall service Quality (r=0.772), which was followed by empathy (r=0.743), assurance (r=0.722), tangible (r=0.693) and reliability (r=0.691). Recommendations and Discussion As urban market has become competitive, the big corporate have turned towards the untapped rural market. Hence, it is high-time for rural retailers to think of the growth strategies in terms of marketing such as product, price, location, presentation, customer, and employee attributes. A very vital factor that needs to be looked by retailers is the proliferation of spurious products. Rural masses are mostly illiterate people and they identify products by its packaging (color, visuals, size etc.). The counterfeit products can easily enter into the rural retail market in place of established reputed brands. Some retailers also encourage this, as they receive a larger profit on selling the counterfeits rather than the genuine products. Thus rural retailers have to ban the sales of these products, as they will lose the trust of the consumers and in the long run. The massive development of media and telecommunication services provide information to the rural consumers on branded and fashionable products. It is likely to influence the purchase decision of the rural market. Word of mouth is still the primary source of information to the consumers, still the retailer can engage in other promotional activities. Wall painting is one of the promotional strategies with less cost and also makes the retail outlet look colourful and clean. 15091 International Journal of Pure and Applied Mathematics The rural consumers are evolving towards value provided by products and services which involves aspects of price combined with utility, aesthetics and features, and not just low prices. Thus, rural retailers should not stock and sell only low priced products, but also valued products. Credit is the major key for success of the retail in India. Thus rural retailers have to provide more credit facilities and instalment facilities for consumers. The major challenge for rural retailers is the widely dispersed population. The rural retailer can set the retail store in densely populated rural area and can target many small markets which are nearby also. The use of vans can support the wide coverage. Further the syndicated distribution can be adopted, wherein tie-up can be made between noncompetitive products. 12. Conclusion The rural retail in India has been witnessing a tremendous change in the recent years. The Urban retail market has become more competitive and the profits growth rate has declined which has compelled the retailers to eye on the huge untapped market in rural areas of India. References [1] Parasuraman, A. Zeithaml, V. A. Berry, L. L. 1988, SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality, JournalofRetailing, Vol. 64, pp. 12-40. [2] Sheth, JNBI and Newman BL Gross, BL 1991, „Why we buy what we buy – a theory of Consumer Behaviour‟, Journal of Business Research, vol. 22. pp. 159-170. [3] Mehta, SC, Lalwani, AK and Han, SL 2000, „Service quality in retailing: Relative efficiency of alternative measurement scales for different product/service environments‟, International Journal of Retail & Distribution Management, vol. 28, pp.62-72. [4] Siu, NYM and Cheung, JTH 2001, „A measure of retail service quality‟, Marketing Intelligence and Planning, vol. 19, no. 2, pp. 88-96. [5] Vazquez, R, Rodriquez-Del Bosque, I, Diaz, A. and Ruiz, A, 2001, 'Service quality in supermarket retailing: Identifying critical service experiences‟, Journal of Retailing and Consumer Services, vol. 8, no. 1, pp. 1-14. [6] Wong, A and Sohal, A 2003, „Assessing customer – salesperson interactions in a retail chain: Differences between city and country retail districts‟, Marketing Intelligence and Planning, vol. 21, no. 5, pp. 292-304. 15092 Special Issue International Journal of Pure and Applied Mathematics [7] McKenzie, B 2006, „Retail service quality success factors in Estonia: a qualitative approach‟, Baltic Journal of Management, vol. 1 no. 3, pp. 352-369. [8] Parikh, D 2006, „Measuring retail service quality: An empirical assessment of the instrument‟, Vikalpa, vol. 31 no. 2, pp. 45-55. [9] Wong, A and Sohal, A 2006, „ Understanding the quality of relationships in consumer services- A study in a retail environment‟, International Journal of Quality & Reliability Management, vol. 23 no. 3, pp. 244-264. 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A Study on Consumer Satisfaction towards Selective LG Products with special reference to Gobichettipalayam. Sai Om Journal of Commerce and Management, 1(9), 5-10. [15] Mathai, S. T., & Dharmaraj, A. (2017). Factors Affecting the Impulse Buying Behaviour of Consumers of Cochin City. [16] Arul J, Dharamraj, A. (2017), Impact of Corporate Retailing on Consumers and Small Traders in Salem and Namakkal District, International Journal of Pure and Applied Mathematics, Volume. 117, Issue.21, Pages. 721-733. 15093 Special Issue 15094