The Impact of Quality of Customer Service Delivery on Customer
CHAPTER ONE
Objectives of the Study
General Objective
The main purpose of this study is to assess and know the current satisfaction/dissatisfaction level of customers with regard to insurance service provided to them and also to recommend possible remedial solutions that should be undertaken by the concerned working unit in order to improve the service quality.
Specific Objectives
- Assess the level of service quality of Life Insurance
- Identifying the extents of differences exist between customers‟ expectation and their
- To describe the relationship between service quality and customer satisfaction of Life Insurance Company
- To assess the impact of customer dissatisfaction with respect to the provided service and provide recommendations which enable the company to improve its service
CHAPTER TWO
LITERATURE REVIEW
Service
Scholars in the field understand the concept „service‟ from different perspectives. For example, Gronroos (1990: 27) understands service as “an activity or series of activities of more or less intangible in nature that normally, but not necessarily, take place in interactions between the customer and service employees which are provided as solution to customer‟s problems”. Similarly, Kotler (2001) defines service as any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything; its production may or may not be tied to a physical product.
Some researchers have viewed service from a system-thinking paradigm. Lakhe and Mohanty (1995: 140) have defined service as “a production system where various inputs are processed, transformed and value added to produce some outputs which have utility or benefit to the service seekers.” It is not merely in an economic sense but from supporting the life of the human system in general, even maybe for the sake of pleasure. Moreover, Grönroos (2000: 47) summarizes characteristics that are identified for most services as follows:
- Services are processes consisting of activities or a series of activities rather thanthings;
- Servicesare at least to some extent produced and consumed simultaneously;
- The customer participates in the service production process at least to some extent(Grönroos, 2000: 47)
There are two parties to the service which are the producer and the customer. Thus, the delivery of the service is not a simple exchange, since the service is produced typically on the spot. Besides, both the producer and customer must be seen as an actor since both are participating in the service production.
Characteristics of Services
A number of characteristics of service have been suggested to help distinguish goods and services in the past decades. It is the combination of these characteristics which creates the specific context in which service organizations must develop their marketing policies. Though different authors suggest different characteristics of service, Kotler (2001) lists intangibility, inseparability, variability, and perishability as the common characteristics services.
Intangibility of Services
Unlike physical products, services cannot be seen, tasted, felt, heard or smelled before purchased. Obviously, opinions and attitudes may be sought beforehand, but a repeat purchase may rely upon previous experience. To reduce uncertainty buyers will look for signs or evidence of service quality. They will draw inferences from place, people, equipment, price, etc. that they see. Therefore the service provider‟s task is to “manage the evidence”, to “tangibilize the intangible”. According to Kotler (2001), Services are essentially intangibles, in which the service marketers are able to manage evidences and visualize the intangible services or the abstract offers. Regan (1963) also introduced the idea of service as activities, benefits or satisfactions which are offered for sale or provided in connection with the sales of goods. The degree of intangibility has been suggested as a means of differentiating tangible products with services (Levitt, 1981). Most of the time, services are explained as being intangible since their outcome is considered to be an action rather than a physical product (Johns, 1999).
Inseparability of Services
The other characteristic of service is inseparability. Services are typically produced and consumed simultaneously and often cannot be separated from the person who sales the service. Thus, performing the service occurs at the same time as full or partial consumption of it. Unlike physical goods, services cannot be manufacture, put into inventory, distributed through seller and consumed later. Whereas, services are produced, sold and consumed at the same time. According to Zeithaml (1981), inseparability is taken to reflect the simultaneous delivery and consumption of services. It is believed that, inseparability of service enable consumers to affect or shape the performance and quality of the service (Grönroos, 1978; Zeithaml, 1981 as citied in Wolak et al., 1998).
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
Research Design
The research design of this study was cross-sectional as it assessed service quality at a predetermined moment of time. Besides, quantitative method was employed to gather and analyze data. It is predominantly quantitative for concepts that are in the form of distinct variables are described with generated numerical data; the researcher compared factors of service quality to find top priorities which help to understand the customers‟ criteria in judging service quality. It also includes explanation of customer satisfaction, which cannot be measured numerically alone.
Therefore, this study used descriptive inquiry to describe the service quality dimensions that lead to customer satisfaction and explanatory inquiry to explain, understand, predict and control the relationship between variables.
CHAPTER FOUR
DATA ANALYSIS AND RESULT PRESENTATIONS
Background Information of Respondents
To conduct this study a total of 319 (Three hundred nineteen) questionnaires were distributed to different major customers of Life Insurance Company. Out of the figure mentioned above, 292 (91.52 %) respondents filled and returned the questionnaire and gave appropriate response to all questions. Among 319 questionnaires 19 (5.97%) were not returned and the rest 8 (2.51%) were returned back but found incomplete. Therefore, the researcher analyzed and discussed only those accurately filled and returned questionnaires.
CHAPTER FIVE
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS
Summary of Major Findings
Quality is an important element of value and it is a key strategic asset of companies for applying on the market regardless of whether it is a product or a service. Customer perception of quality is an important determinant of their purchase choice and the achieved customer satisfaction. Quality can be defined in different ways and from different perspectives. From the customer‟s perspective, quality is what a customer or a target segment considered to be, i.e. the ability of a product or a service to meet or to exceed his expectations (Veljković, 2009, p. 103).
Evaluating the quality by customers is the result of benefits that they gain by using a product (service), and its image. However, the main problem that arises in the management of service quality, in service companies, is that quality cannot be easily identified and measured due to the specificity of services (Jain, Gupta, 2004, p. 25). In relation to the quality of a product, it is more difficult for customers to measure objectively the quality of service, due to the intangibility as one of the main characteristics. The dominant perception is that the quality of a service is its delivery that is in accordance with the expectations of customers, i.e. the result of customers comparisons between expectations related to a certain service and their perception on how services should be provided (Caruna,et. al., 2000, p. 1339).
This research was conducted to assess whether there is significant similarities or differences of service quality provision between what is expected from Life Insurance Company and the actual performance as perceived by customers‟ vis-à-vis the five dimensions of SERVQUAL model. Thus, to successfully meet the objectives of the research data were collected, analyzed and reached on some findings. Accordingly, the findings of the research were summarized as follows:
Conclusion
This study intended to examine the level of service quality provision by Life Insurance Company. In order to accomplish the objective, 319 major customers who were served in city branches were taken as a sample using judgment sampling method.
A number of implications can be drawn from this study. Accordingly, the study proves the direct effect of service quality and customer satisfaction on Life Insurance Company Services based on responses given by the respondents. The result reveals that perception towards service quality level provided by OIC was consistently lower than their expectation. As the analysis of the responses to the questionnaires revealed, the expectation of OIC‟s major customers is much greater than what is there in actual performance of the company in four of the five dimensions of service quality (Reliability, Responsiveness, Empathy and Assurance).
Recommendations
Based on the findings and conclusions, the following recommendations were forwarded for the purpose of improving the service quality of insurance service of OIC.
- As it has been found in the research; even if, the two variables which determine customer‟ssatisfaction score mean value of above average (Mean > 3) with respect to the tangibility service quality dimension, but still it is not enough to say it is the right level since the rapid growth in the area requires competing with other insurance service providers in the industry. And also OIC should think about improving insurance policy wordings in order to make its customers easily aware of its content.
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