The relationship between service quality, customer satisfaction, service quality and customer loyalty a study in telecommunication industry of laos

MINISTRY OF EDUCATION AND TRANING

MINISTRY OF EDUCATION AND SPORT

NATIONAL ECONOMICS UNIVERSITY

NATIONAL UNIVERSITY OF LAOS

VIETNAM

LAOS

PADAPPHET SAYAKHOT

THE RELATIONSHIP BETWEEN SERVICE QUALITY, CUSTOMER
SATISFACTION AND CUSTOMER LOYALTY: A STUDY IN
TELECOMMUNICATION INDUSTRY OF LAOS

Specialisation : Industrial Management
Code

: 62340414

Supervisor

: Assoc. Prof. Dr. Truong Doan The

A dissertation Submitted to the National Economics University, Vietnam
and National University of Laos in fulfillment of requirements for the
degree of Doctor of Philosophy in Economics

HANOI - 2015


i

DECLARATION
I hereby declare that this dissertation is my own work and effort. The
dissertation has not been submitted anywhere for any award. All the sources
of information used have been well acknowledged.
Signature

PADAPPHET SAYAKHOT


ii

ACKNOWLEDGMENTS

The path toward completion of a doctorate is long and often times can seem
quite arduous. Yet it has been an enriching and rewarding experience for me both
professionally as well as personally. I would like to express my thanks and
appreciation to the many that have encouraged and lifted my spirits along the way. I
especially want to thank Associate Professor Dr. TRUONG DOAN THE, my
principal supervisor, for his patient and proficient guidance. He has shared expertise
in research methods, inspired me to generate new ideas, and encouraged me to
become a higher level scholar.
My family has also been especially supportive in my journey to pursue a
doctorate. To my loving wife for the patience she demonstrated, and the
encouragement she provided throughout the long process. My children were always
there to express their love and appreciation for their dad.

Last but not least, I also would like to offer a special thanks to my friends
and colleagues within my business organization who have provided their support
along the way.Furthermore, I could not complete this thesis without the assistances
and supports from interviewee team and interviewers, please receive my
deepthankfulness from my heart.


i

TABLE OF CONTENTS

DECLARATION ....................................................................................................... i
ACKNOWLEDGMENTS ....................................................................................... ii
TABLE OF CONTENTSTable of contents ............................................................ i
ABBREVIATION ................................................................................................... iv
LIST OF FIGURES ..................................................................................................v
LIST OF TABLE..................................................................................................... vi
CHAPTER 1: INTRODUCTION ............................................................................1
1.1. Rationale ...........................................................................................................1
1.2. Research objectives ..........................................................................................4
1.3. Research questions ...........................................................................................4
1.4. Research framework .........................................................................................4
1.5. Research method ..............................................................................................5
1.6. Structure of the thesis .......................................................................................5
CHAPTER

2:

LITERATURE

REVIEW

ON

THE

RELATIONSHIP

BETWEEN SERVICE QUALITY, CUSTOMER SATISFACTION AND
CUSTOMER LOYALTY .........................................................................................7
2.1. Background of service quality, customer satisfaction, and customer loyalty ..7
2.1.1. Service quality ...........................................................................................7
2.1.2. Customer satisfaction...............................................................................26
2.1.3. Customer loyalty ......................................................................................36
2.2. Review of theory on the relationship between Service quality, customer
satisfaction and customer loyalty ..........................................................................38
2.2.1. Service quality and customer satisfaction ...............................................38
2.2.2. Service quality and customer loyalty.......................................................38
2.2.3. Customer satisfaction and customer loyalty ............................................39
2.3. Telecommunications and Telecommunication Service..................................40


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2.3.1. Telecommunications ................................................................................40
2.3.2. Telecommunication services ...................................................................42
2.3.3. The role of telecommunications in economic growth .............................44
2.4. Quality of Telecommunication Service and customer satisfaction and
customer loyalty ...................................................................................................51
2.4.1. Quality of Telecommunication Service ...................................................51

2.4.2. Dimensions of Quality of Telecommunication Service ..........................55
2.4.3. Quality of Telecommunication Service, customer satisfaction and
customer loyalty.................................................................................................57
CHAPTER 3: OVERVIEW OF TELECOMMUNICATION INDUSTRY IN
LAOS ........................................................................................................................60
3.1. Background of Laos .......................................................................................60
3.2. Economy overview .........................................................................................61
3.3 Demographic Outlook .....................................................................................63
3.4. Overview of telecommunication industry in Laos .........................................66
CHAPTER 4: METHODOLOGY .........................................................................85
4.1. Overview of the research design ....................................................................85
4.1.1. Approaches of the research ......................................................................85
4.1.2. Research hypotheses ................................................................................86
4.1.3. Evaluation indicators for potential constructs .........................................86
4.1.4. Reliability and item analysis ....................................................................88
4.1.5. Exploratory factor analysis ......................................................................89
4.2. Main Survey ...................................................................................................90
4.2.1. Survey Sample .........................................................................................90
4.2.2. Questionnaires Development ................................................................92
4.2.3. Data collection ........................................................................................95
CHAPTER 5.: ANALYSIS AND RESULT ..........................................................97
5.1. Descriptive analysis of measurement scales ...............................................97
5.1.1. Descriptive analysis of customer satisfaction ............................................. 97


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5.1.2. Descriptive analysis of customer loyalty ..................................................... 97
5.1.3. Descriptive analysis of service quality ........................................................ 98
5.2. Exploratory factor analysis ...................................................................... 101

5.3. Reliability Analysis .................................................................................... 105
5.3.1. Reliability of telecommunication service quality measurement scale ... 105
5.3.2. Reliability of customer loyalty measurement scale.................................. 107
5.4. The relationship between telecommunications service quality and
customer satisfaction ........................................................................................ 108
5.5. The relationship between telecommunication service quality and
customer loyalty ................................................................................................ 114
5.6. The relationship between customer satisfaction and customer loyalty 119
CHAPTER 6. ........................................................................................................ 121
DISCUSSION, CONCLUSION AND RECOMMENDATION. ...................... 121
6.1. Discussion ............................................................................................................ 121
6.1.1. Service quality scale ..................................................................................... 121
6.1.2. Relationship between service quality, customer satisfaction and customer
loyalty ....................................................................................................................... 122
6.2. Conclusion ........................................................................................................... 122
6.3. Recommendation ............................................................................................... 123
6.4. Limitation of the study and suggestion for future research ..................... 124
6.4.1. Limitation ...................................................................................................... 124
6.4.2. Suggestion for future research .................................................................... 124
REFERENCES ..................................................................................................... 126
APPENDIX: QUESTIONAIRES ....................................................................... 144


iv

ABBREVIATION
2G

Second-Generation wireless telephone technology

3G

Third-generation technology

4G

Fourth Generation

ADB

Asian Development Bank

ADSL

Asymmetric Digital Subscriber Line

AM

Amplitude modulation

ASEAN

Association of Southeast Asian Nations

BMI
CDMA

Code Division Multiple Access

EFA

Exploratory factor analysis

ETL

Enterprise Telecommunications Lao

FM

Frequency modulation

GMS

Greater Mekong sub-region

GNI

Gross national income

GSM

Global System for Mobile Communications

ISPs

Internet service providers

ITU

International Telecommunication Union

Lao PDR

Lao People’s Democratic Republic

LAT

Lao Asia Telecom

LDB

Lao Development Bank

LTC

Lao Telecommunications

MDGs

Millennium Development Goals

MPT

Ministry of Posts and Telecommunications

NPTA

National Post and Telecommunications Authority

NSEDP

National Social and Economic Development Plan

PAF

principal axis factoring

UN

United Nations


v

LIST OF FIGURES

Figure 1: Research Model ...........................................................................................4
Figure 2. Laos' population pyramid for 2011 ............................................................63
Figure 3. Mobile market growth (2006 – 2014)........................................................68
Figure 4. Fixed-Line MarketGrowth 2006 – 2011 ....................................................72
Figure 5. Fixed-Line MarketGrowth 2012-2014 ......................................................73
Figure 6. LaosInternetMarketGrowth (2003-2011) ..................................................75
Figure 7. LaosInternetMarketGrowth (2012-2015) ..................................................76
Figure 8. LaosBroadband Market Growth (2005-2011) ...........................................78
Figure 9. Laos Broadband Market Growth (2012-2014) ..........................................79


vi

LIST OF TABLE

Table 1. Summary previous models on dimensions of telecommunication services
quality ........................................................................................................................56
Table 2: Laos' Population By Age Group, 1990-2020 ('000) ...................................64
Table 3: Laos' Population By Age Group, 1990-2020 (% of total) ..........................65
Table 4: Laos' Key Population Ratios, 1990-2020 ...................................................65
Table 5: Laos' Rural And Urban Population, 1990-2020 .........................................66
Table 6: Mobile market growth (‘000) .....................................................................69
Table 7: Laos Telecommunications Subscriber MixSubscriber Mix .......................70
Table 8: Laos Internet Market by Service .................................................................77
Table 9: Competitive Landscape ...............................................................................83
Table 10: Telecoms sector in Laos – Historical Data and Forecasts ........................84
Table 13. Summary of characteristics of the sample ................................................91
Table 11. Items of customer satisfaction and customer loyalty ................................93
Table 12. Items of telecommunication service quality .............................................94
Table 14. Descriptive Analysis of Customer Satisfaction Items ..............................97
Table 15. Descriptive Analysis of Customer Satisfaction Items ..............................98
Table 16. Descriptive Analysis of Service Quality Items .........................................99
Table 17. KMO and Bartlett's Test ........................................................................ 101
Table 18. Total Variance Explained....................................................................... 102
Table 19. Rotated component Matrix ..................................................................... 103
Table 20. Constructs measure telecommunication service quality in Laos ........... 104
Table 21. Item-Total Statistics ............................................................................... 105
Table 22. Item-Total Statistics ............................................................................... 106
Table 23. Item-Total Statistics ............................................................................... 106
Table 24. Item-Total Statistics ............................................................................... 107
Table 25. Correlation matrix of relevant variables ................................................ 108


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Table 26. Model Summaryb ................................................................................... 109
Table 27. ANOVAa ............................................................................................... 109
Table 28. Coefficients ............................................................................................ 110
Table 29. Dummy variables ................................................................................... 111
Table 30. Model Summary..................................................................................... 112
Table 31. ANOVAa ................................................................................................ 112
Table 32. Coefficientsa ........................................................................................... 113
Table 33. Correlations ............................................................................................ 114
Table 34. Model Summaryb ................................................................................... 115
Table 35. ANOVAa ................................................................................................ 115
Table 36. Coefficientsa ........................................................................................... 116
Table 37. Model Summary..................................................................................... 117
Table 38. ANOVAa ................................................................................................ 117
Table 39.Coefficientsa ............................................................................................ 118
Table 40. Model Summaryb ................................................................................... 119
Table 41. ANOVAa ................................................................................................ 119
Table 42. Coefficientsa ........................................................................................... 120


1

CHAPTER 1.
INTRODUCTION
1.1. Rationale
Telecommunication technology plays a significant role in the flow of
information. It is an extremely useful tool to spread knowledge and new ideas,
which can reduce infrastructure development gap between people in rural and urban
area. Furthermore, it can improve education, health care services, and encourage
business activities. In addition, it also plays the crucial role in the national economic

development, especially in the developing country like Laos. Therefore,
telecommunication technology is a way that Lao government uses to generate
revenue and create job opportunity for people. In addition, the Lao government
aims to improve people living standard and increase the ability to compete in global
trade for Lao business by giving priority to the development of telecommunication
technology with the intention to promote sustainable development of the nation.
In line with the new Economic mechanism, the Telecommunication sector in
Laos was privatized at the year 1996 as a joint venture with a Thai investor
(Shinawana International Public Company Limited). However, this telecom
privatization policy has been revised due to the importance of a national
telecommunications development strategy which is able to resolve keen issues such
as digital divide among regions and the frequent telephonic traffic congestion
caused by a deficiency in the nationwide telecommunication facilities (eg.
switching and telephone line capacity and human resources) (MCTPC, 1982;
MCTPC, 1990 &1995; MCTPC, 1990 – 2007).
Besides, Lao P.D.R has a responsible position for promoting telecom
development programs planned for the Greater Mekong sub-region (GMS). This
development concept of GMS proposed by Asia Development Bank (ADB) and is
applied to an area or regional development approach to GMS, promoting networks


2

among the six Mekong riparian countries, including supporting activities for a
common standard of telecom services availability which is increasing in Laos.
Telecommunication increased steadily from 2007 to 2011 (MCTPC, 2007 – 2011).
At the present, there are five authorized enterprises which are providing
fixed and mobile telecommunication services in Laos. All these providers have the
government ownerships, including: Lao Telecommunication Corporation Limited
(LTC) with Government of Laos (GOL) and Shinawatra (Thailand) share 51% and

49% of possession respectively; Enterprise of Telecommunication Laos (ETL) with
GOL 100% but currently become to ETL public; Star Telecom (STL): GOL 51%
and Viettel Global 49% (now has been renamed to Unitel); Million international
cellular SA (now has been transferred to Vimpelcom Russia (Beeline): GOL 22%
and Vimpelcom 78%; and SKY communication Laos (SKY) with private retort
100% (since 2010).
The number of Internet service providers (ISPs) has grown from two forms
in 1990s to about seven after nearly 15 years. They are STEA, ETL internet, Lao
telecom Planet online, Lane Xang internet, Sky telecom KPL and Mill com. The
entry of Million and Sky, the large shareholding by Shincorp, the operation of
Planet and prevalence of Voice Over Internet Protocol (VOIP) operators show that
private investors are willing to invest in Laos even under the current policies and
regulatory regime (MPT, 2011). As a result, they face intense competition,
including competition from sources not previously existing. Over 10 million Laos
consumers own and use a mobile phone. The Laos government's recent
restructuring of state owned monopolistic telecommunication system and further
deregulation has led to a more open and free market system.
Recent reports show that a cloud of uncertainty seems to be hanging over the
whole Laos telecommunication market. Subscriber growth is weak after the market
had gone backwards for a while. The providers are now operating in an
environment where the regulator is keeping a tight hold on pricing and competition
is in effect discouraged. A further problem emerging for the mobile operators is that


3

network performance is deteriorating across the board. This in turn highlighted two
important issues – there has been insufficient investment by the operators in the
areas of network maintenance and upgrades, and, secondly, there are obvious
deficiencies in the regulatory environment in how the authorities apply and manage

network performance standards.
How does a firm survive under such turbulent conditions? Traditionally,
mobile and land phone providers competed fiercely for new customers. In some
countries, customers were provided with financial incentives to sign up or switch
service from one provider to another. Over time, and with the increased saturation
of the market, companies have come to realize their performance can improve by
focusing more on retaining customers than constantly a conquest mode. As the Laos
market provides an increasing range of opportunities for consumers, how can
telecommunication service providers maintain customer loyalty? Those question
require more research in Laos telecommunication context.
A comprehensive survey of the literature reveals that the relationships
between service quality, customer satisfaction, and customer loyalty have been
examined by numerous scholars, in many studies conducted in varied
business/services settings. These studies led me to look more closely at the possible
positive role of service quality on customer satisfaction and customer loyalty as
well as of customer satisfaction on customer loyalty.
Additionally, in recent research in multinational telecommunication
companies’ performance. Kommasith (2014) finds that cultural differences are one
of

the

important

factors

affecting

the

performance

of

multinational

telecommunication companies in Laos. That means although the relationships
among service quality, customer satisfaction and customer loyalty has been well
studied, there is a need to confirm each entity’s components and their relationship in
different contexts. To date no published work on those relationship has been found
in the context of telecommunication industry in Laos.


4

1.2. Research objectives
This research aims to examine a model of relationships among service
quality, customer satisfaction, and customer loyalty in the Laos telecommunication
sector. That addresses the lack of research of these relationships in terms of research
setting and provides information for telecommunication companies in Laos
improving their performance and competitive abilities.
1.3. Research questions
The following research questions have been addressed in this study:
1. Using a telecommunication services setting in Laos, what are the specific
quality attributes that measure service quality, and influence customer satisfaction?
2. Using a telecommunication service setting in Laos, how service quality
attributes and customer satisfaction influence customer loyalty?
1.4. Research framework
Drawing from the literature on the relationships among service quality,
customer satisfaction and customer loyalty. I proposed a research framework that

describe the influences of service quality on customer satisfaction and customer
loyalty and of customer satisfaction on customer loyalty (see Figure 1).

Customer
satisfaction
H3

H1

Service
quality

Customer
loyalty
H2
Figure 1: Research Model


5

1.5. Research method
After reviewing the literature which reveals that the relationships among
service quality and customer satisfaction and customer loyalty has been studied by
many researchers in various service fields including of telecommunication.
Therefore, quantitative approach has been employed to confirm the relationship
between service quality and customer satisfaction, service quality and customer
loyalty, customer satisfaction and customer loyalty in Laos telecommunication
setting. Data was collected in a survey of telecommunication customers in
Vientiane, then was analyzed by SPSS 20.
1.6. Structure of the thesis

This thesis comprises of six chapters.
Chapter 1: Introduction (this chapter) has provided an overview of the
research, in particular the research problem, research goals and research questions.
In addition, the research method also has been identified.
Chapter 2: Literature review on the relationship between service quality,
customer satisfaction and customer loyalty discusses service quality, customer
satisfaction, and customer loyalty in depth, and argues why these entities are worthy
of investigation in Laos telecommunication context.
Chapter 3: Overview of telecommunication industry in Laos briefly
introduces the background of Laos’ economy and demography. This chapter
focuses on reviewing the picture of Laos’ telecommunication industry.
Chapter 4: Methodology provides explanation for and justification of the
research approach used in this research. In particular, this chapter describes
measurement scales of service quality, customer satisfaction and customer loyalty
in telecommunication; analysis techniques; data collection.


6

Chapter 5: Analysis and result presents analysis procedures of collected data
and the results. Main analyses are descriptive analysis, exploratory factor analysis,
reliability analysis, and tests of proposed relationships
Chapter 6: Discussion, conclusion, and recommendation provides overview
of the key findings and identifies the theoretical and practical contributions that
emerged from this research. This chapter also points out research limitations and
suggestions for future research.


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CHAPTER 2.
LITERATURE REVIEW ON THE RELATIONSHIP BETWEEN
SERVICE QUALITY, CUSTOMER SATISFACTION AND
CUSTOMER LOYALTY
The purpose of this chapter is to review and analyze previous research
relative to the concepts of service quality, customer satisfaction and customer
loyalty. Theory development in service quality over the past few decades has built
upon earlier research that was initially conducted in the study of customer
satisfaction models, most of which initiated with studies involving consumer
satisfaction with products. This review of the literature seeks to identify and explain
some of the key terminologies associated with service quality and customer
satisfaction, including expectations and disconfirmation theory. Additionally, it will
examine the differences and similarities in the constructs of perceived service
quality and customer satisfaction, as well as investigate the degree and direction of
causal links. The current research presents a basis for understanding the service
quality and customer satisfaction constructs in the context of industrial technical
field service. The following sections describe prior research from the service
quality, customer satisfaction and customer loyalty literature, and seek to extend
these concepts to the field service context, where heretofore very little attention has
been placed. The dimensions of service quality will be examined relative to the
existing literature and how they relate to the topic under study. The concept of
customer expectations and its effect on the determination of perceived service
quality and satisfaction will also be explored.
2.1. Background of service quality, customer satisfaction, and customer loyalty
2.1.1. Service quality
2.1.1.1. Conceptualization of Service Quality
Service quality is a concept that has aroused considerable interest and debate
in the research literature because of the difficulties in both defining it and

8

measuring it with no overall consensus emerging on either (Wisniewski, 2001).
There are a number of different "definitions" as to what is meant by service quality.
One that is commonly used defines service quality as the extent to which a service
meets customers’ needs or expectations (cited in Dehghan, Zenouzi, & Albadvi,
2012). Service quality can thus be defined as the difference between customer
expectations of service and perceived service. If expectations are greater than
performance, then perceived quality is less than satisfactory and hence customer
dissatisfaction occurs (Parasuraman et al., 1985; Lewis and Mitchell, 1990).
The concept of service quality began to receive substantial attention in the
early 1980s with the writings of Gronroos (1982; 1984), Lehtinen and Lehtinen
(1982), Lovelock (1981) and others. The development of the SERVQUAL
(Parasuraman et al., 1985, 1988) performance - expectations gap model, along with
its subsequent refinements, played a key role in the establishment of an instrument
for the evaluation of perceived service quality. Key criticisms of the SERVQUAL
instrument on issues such as problems with difference scores and dimensionality
inconsistencies across service environments were quickly pointed out by several
researchers. This review will examine many of these criticisms. It will also as
investigate alternative instruments used in the measurement of service quality, such
as performance-only and subjective disconfirmation scales.
2.1.1.2. Perceived Service Quality
Service quality has been equated to the customer's judgment about a
providers overall excellence or superiority (Zeithaml, 1987). Consistent with the
concept of excellence or superiority, Parasuraman et al. (1988) liken perceived
service quality to being a global judgment, similar to an attitude, and relating to the
superiority of a service. They contend that this form of attitude results from the
comparison of expectations with perceptions of performance, and is related to but
not equivalent to satisfaction. Building upon Oliver's (1980) proposition that
satisfaction is a function of the disconfirmation of performance from expectation,

Parasuraman, et al. (1985; 1988) subsequently put forward that service quality is a


9

function of the differences between expectation and performance along an
established set of quality dimensions. In other words, they proposed that the
differences between perceived performance and expected performance ultimately
determine overall perceived service quality (Lee, Lee, & Yoo, 2000; Parasuraman et
al., 1985; 1988). Bolton and Drew (1991a) explored how customers integrate their
perceptions of a service to subsequently form an overall evaluation of that service.
Their findings suggest that customer's prior expectations, along with their
perceptions of current performance, coupled with their disconfirmation experiences
affect their satisfaction or dissatisfaction with a service. This in turn affects the
customer's assessment of service quality. According to Parasuraman et al. (1985,
p.46) a customer perceives service quality as "a function of the magnitude and
direction of the gap between expected service and perceived service". Gronroos
(1988), moreover, contends that customers often perceive quality in a much broader
sense than do service providers. Therefore, quality within a service organization
must be defined in a manner consistent with the way customers define it, so as not
to spend time, effort, and resources inefficiently, by following ineffective courses of
action. Bolton and Drew (1991b), however, assert that customers' attitudes about
service depends largely on their prior attitudes, modified by their perceptions of
current performance, along with their prior expectations about performance, and the
discrepancy between those expectations and the subsequent perceptions of service
quality — suggesting the overall importance of performance. They further conclude
that attitudes are affected substantially by the assessment of performance and to a
lesser extent by disconfirmation. O'Neill and Palmer (2003) likewise assert that
customers' perceptions of service quality are significantly influenced by their past
experience, or lack thereof, relative to a particular service product. An experimental

design study utilizing college students and an amusement park confirmed their
hypothesis.


10

2.1.1.3. Dimensions of Service Quality
Johnston (1995) argues that the determinants (or dimensions) of service
quality should be a central concern for service management, as well as for
academics and practitioners, in that it is necessary to identify these determinants in
order to be able to specify, measure, control, and improve service quality as
perceived by the customer. Schneider and White (2004) explain that if a researchers
sole goal is to predict other constructs, for instance, satisfaction, or behavioral
intentions, with a service quality measure, an overall service quality measure would
be sufficient. If, however, the primary objective is to manipulate service quality, it
is essential to identify the various aspects that might be potentially influenced to
affect the overall judgment. These factors are in essence the dimensions of service
quality. Most conceptualizations of service quality thus far have considered the
service quality construct to be multidimensional. As such it is reasoned that service
quality associated with industrial technical field service should likewise be viewed
as a multidimensional construct.
Gronroos (1988) posits that the quality of service, as perceived by the
customer, has two dimensions; a technical — or outcome dimension, and a processrelated dimension. Gronroos (1988) further suggests that the outcome dimension, or
technical quality of the outcome, can be measured rather objectively by the
customer, since it is what he/she is left with at the end of the process. The functional
quality of the process itself, on the other hand, cannot be so readily measured and is
often perceived quite subjectively by the customer. The behavior of a maintenance
technician, for instance — how he or she performs the necessary tasks, what they
say and how they do it — all influences the customer's perception of the service
(Gronroos, 1988).

Gronroos (1988) identifies six criteria of good perceived service quality to be
used as guidelines for empirical and conceptual research: professionalism and skills,
attitudes and behaviors, accessibility and flexibility, reliability and trustworthiness,
recovery, and reputation and credibility. He classifies professionalism and skills as


11

outcome-related, and thus a technical quality dimension quality. Reputation and
credulity is characterized as image related, while the remaining criteria are
considered as functional, or process related dimensions.
It has been argued by some, however, that the overall perceived service
quality level is not determined solely by the performance level of the technical and
functional quality dimensions, but rather by the gap between the expected and the
experienced service quality. Parasuraman et al. (1985) identified ten determinants,
or dimensions that customers use in forming expectations about, and perceptions of
service quality: access, communication, competence, courtesy, credibility,
reliability, responsiveness, security, tangibles, and understanding / knowing the
customer. These ten were later reduced to five through exploratory factor analysis
by Parasuraman et al. (1988). The five final dimensions factored down to:
Tangibles: Physical facilities, equipment, and appearance of personnel
Reliability: Ability to perform the promise service dependably and accurately
Responsiveness: Willingness to help customers and provide prompt service
Assurance: Knowledge and courtesy of employees and their ability to inspire
trust and confidence
Empathy: Caring individualized attention the firm provides its customers
(p.23).
Oliver (1997) notes that this operationalization of service quality,
SERVQUAL, in essence measures feature levels which are later summed into
dimensions. Research by Johnston et al. (1990) tested the comprehensiveness of

Parasuraman et al.'s (1988) service quality determinants in light of empirical data
gathered in ten UK service organizations. Their analysis, although generally
supportive of the ten determinants, suggested a refined list of twelve from which
five additional quality determinants were identified: attentiveness/helpfulness, care,
commitment, functionality, and integrity (Johnston 1995). However, the most
commonly used service quality instrument SERVQUAL, uses the five dimensions
established by Parasuraman et al. (1988). Customers entertain expectations of


12

performance on these service dimensions (Oliver, 1993). Performance perceptions
are formed after having observed performance of the service provider. The
customer then compares these performance perceptions with prior expectations.
Reliability. Irrespective of the level of intangibility of the service, Bebko
(2000) submits that reliability, doing it right the first time, remains the most
important service quality expectation. Moreover, of the five service quality
dimensions originally proposed by Parasuraman et al. (1988), reliability is
consistently reported as the most important in replication studies. Boulding et al.
(1993) for instance, contend that while service quality is multidimensional,
reliability is the key dimension in determining overall perceived service quality. In
their dynamic model of service quality, they found reliability to be the primary
driver of customers' overall service quality perception. This seems to hold true in
many other studies as well, where different dimensions may surface and supplant
one or more of the original five, or collapse the overall number of dimensions into a
lesser number, reliability is one that typically remains present in the service quality
models. Parasuraman et al's. (1994) revamp of SERVQUAL, for example, resulted
in the five factor structure being reduced to three. The reliability factor, however,
remained intact with all five items loading separately onto the factor.
Responsiveness. Parasuraman et al. (1985) identified responsiveness as "the

willingness or readiness of employees to provide service... it involves timeliness of
service" (p.47). Examples of this include calling the customer back quickly, or
responding promptly by setting up appointments quickly. In review of the
Parasuraman et al. (1988) responsiveness items in SERVQUAL, however, it is
apparent that the wording for the responsiveness items are reflective of traits and
behaviors typically associated with consumer retail type settings. The phrases
"always willing to help you" and "never to busy to respond to your requests", could
indeed apply to the general sense one might get from walking into a store, or up to a
counter, or possibly asking for information over the phone. Attentiveness might be
an appropriate description.


13

The inflection of these indicator items, however, may be somewhat out of
character with what could be expected from a customer in a business-to-business
setting whose equipment is down, and judges the ability of the service provider to
respond in a timely manner to the request for repair work. Responsiveness in field
service parlance takes on more of an aspect of "timeliness", thus more so relating to
what is termed as response time. Response time in industrial field service is
described as the sum of queue time and travel time that elapses between the
placement of a service call and the arrival of the service engineer at the customer's
location (Simmons, 2001). Another matter related to the timeliness aspect
responsiveness in technical field service might relate to mean time to repair
(MTTR), which has to do with the total time associated with fault finding, and the
actual time spent to make the repair of the equipment (Kumar & Kumar, 2004).
While the Parasuraman et al. (1985) definition of responsiveness may not fit
well in the industrial field service context per say, its characteristics do fit with
boundary spanning functions that are essential to the support of the field service
organization. Responsiveness from a boundary spanning type service, such as call

centers, may include response time to answer phones, but also attentiveness and
accuracy in the attention to detail of information received from customers in placing
requests for service. Expressing attitudes of helpfulness, and not appearing too busy
to accurately take information about the customer and the nature of problem for
which they are calling to request service certainly apply.
Assurance. The assurance dimension was initially based on Parasuraman et
al.'s (1985) attributes of communication, credibility, security, competence, and
courtesy. In their development of SERVQUAL in 1988, these attributes combined
through factor analysis into a single dimension referred to as assurance. Ham et al.
(2003) summarize the various components associated with assurance as:
"Communication concerns keeping customers informed. Credibility involves
trustworthiness, believability, and honesty. Competence means having the required


14

skill and knowledge to perform the service. Courtesy encompasses politeness,
respect and consideration. Security is freedom from danger or risk" (p. 198).
Because many services are difficult for customers to evaluate there is a need
to develop trust between the customer and the service provider (Lovelock, 2001).
Armistead and Kiely (2003) point out that professionalism within an organization's
customer service roles builds trust through dependability, respect, empathy, and
diplomacy. Moreover, they contend that, in the future, effective customer service
will require an increasing degree of professionalism from both service management
as well as front line service staff.
Burton, Sheather, and Roberts (2003) propose that attribution of problems to
factors outside of the control of the service provider are positively associated with
customers' perceived performance, satisfaction and behavioral intentions. Swanson
and Davis (2003), however, based on attribution theory, suggest that the person the
customer holds most responsible for the service experience can substantially

influence which service quality dimensions take precedence in customer satisfaction
as well as in subsequent behavioral intentions. Their findings indicate that
customer's consider the contact employee most responsible for the service delivery,
and take this into account in the service quality and satisfaction evaluation.
Professionalism in industrial field service comes into play where the customer
support engineer assumes full ownership and responsibility for the service delivery
process.
The assurance dimension is not always retained in many replication studies.
Brady and Cronin (2001) did not find assurance to be distinct in the pretest factor
analysis and thus did not retain it as a dimension, nor as a modifier of the nine subdimensions in their model. They cited several other studies (Babakus & Boiler,
1992; Carman, 1990; Dabholkar et al., 2000; Llosa et al., 1998; MacDougal &
Levesque, 1994; Mels, et al. 1997) in which assurance, was likewise dropped due to
measures loading on several different factors, and suggest that this it is largely
industry context dependent. However, from the conceptual standpoint of technical


15

field service, a hypothesis in this study suggests that many of the attributes reflected
in the assurance dimension are vital in the assessment of service quality and could
align as a single dimension when factor analyzed.
The associated concept of professionalism, however, may have significant
impact with tying some of these various dimensions together in field service
quality. For instance, in a situation in which a difficult problem is experienced on a
piece of sophisticated equipment, the amount of time taken to complete a repair
may be considered acceptable by the customer if the engineer appears competent
and inspires confidence in the customer that their problem will be resolved. On the
other hand, a similar amount of time taken to repair the equipment may be
considered unacceptable if the engineer does not come across as experienced and or
knowledgeable, and does not convey a sense of confidence. This may indicate that

the customer's perception of the mean time to repair (MTTR), a timeliness, or
responsiveness determinant, is influenced by the assurance dimension.
Qualitative analysis may help in the understanding of how customers classify
underlying dimensions within a given service industry. As in other studies, it is
entirely possible that in the technical field service context the attribute structure
may not perfectly align with the five SERVQUAL dimensions. Tangibles, for
instance in the SERVQUAL operationalization, typically involves the physical
premises and surroundings in which the service is conducted. In field service,
however, the physical environment in which the service takes place is typically
within the customer's own facility. This may indicate that tangibles, in the context
of industrial technical field service, could be limited to the appearance of the service
engineer, and the condition of his or her tools, test equipment, materials, and spare
parts. It is plausible that these indicators may be perceived by the customers as
more relative to a conceptualization of professionalism. Likewise, it is possible that
several of the assurance indicators such as competence, courteousness, knowledge
and skills, as well as retained items associated with empathy, may along with
tangibles, collapse into a single "professionalism" dimension in a factor analysis.