Florida State University Libraries
Electronic Theses, Treatises and Dissertations
The Graduate School
2005
The Importance of Communication Quality
in Services
Elizabeth T. Jones
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THE FLORIDA STATE UNIVERSITY
COLLEGE OF COMMUNICATION
THE IMPORTANCE OF COMMUNICATION QUALITY IN
SERVICES
By
ELIZABETH T. JONES
A Thesis submitted to the
Department of Communication
in partial fulfillment of the
requirements for the degree of
Master of Science
Degree Awarded:
Spring Semester, 2005
i
The members of the Committee approve the Thesis of Elizabeth Jones defended
on November 30, 2004.
Steven McClung
Professor Directing Thesis
Jerome J. Cronin
Outside Committee Member
Gary Heald
Committee Member
Approved:
_______________________Stephen McDowell, Chair, Department of
Communication
_______________________ John K. Mayo, Dean, College of Communication
The Office of Graduate Studies has verified and approved the above named
committee members.
ii
TABLE OF CONTENTS
List of Tables
................................................................................................
List of Figures
................................................................................................
Abstract
......................................................................................................
iv
v
vi
1. Introduction
................................................................................................
1
Theoretical Foundation ...............................................................................
Purpose of Study .........................................................................................
1
2
2. Literature Review............................................................................................
4
Service Encounters......................................................................................
Communication Quality..............................................................................
Satisfaction ................................................................................................
Satisfaction and Service Quality ................................................................
Satisfaction and Communication ................................................................
Loyalty …... ................................................................................................
4
9
10
13
13
14
3. Method
................................................................................................
16
4. Results
................................................................................................
18
5. Discussion
................................................................................................
31
Implications ................................................................................................
Limitations ...............................................................................................
Conclusion ................................................................................................
34
35
36
APPENDICES
................................................................................................
37
A Select Questions from Survey
........................................................
B Human Subjects Form
....................................................................
38
42
REFERENCES …………………………………………………… ...................
44
BIOGRAPHICAL SKETCH ...............................................................................
49
iii
LIST OF TABLES
Table 1: Industry Sample Sizes
......................................................................18
Table 2: Overall Demographics
....................................................................19
Table 3: Scale Statistics
................................................................................20
iv
LIST OF FIGURES
Figure 1: Nordic Model ......................................................................................5
Figure 2: SERVQUAL Model ............................................................................6
Figure 3: Three Component Model .....................................................................6
Figure 4: Hierarchical Model of Retail Service Quality .....................................7
Figure 5: Hierarchical Approach ........................................................................8
Figure 6: Hypothesized Model of Service Quality ............................................12
Figure 7: Hypothesized Model of the Service Encounter ..................................15
Figure 8: Model of Service Quality (Banking) .................................................... 22
Figure 9: Model of Service Quality (Physician) .................................................. 23
Figure 10: Model of Service Quality (Sporting Event) .......................................24
Figure 11: Model of Service Quality (Fine Dining) ............................................ 25
Figure 12: Model of the Service Encounter (Banking) .....................................27
Figure 13: Model of the Service Encounter (Physician)....................................28
Figure 14: Model of the Service Encounter (Sporting Event) ...........................29
Figure 15: Model of the Service Encounter (Fine Dining) ................................30
v
ASTRACT
The purpose of this paper is to investigate the critical role of communication in
the services industry. By conducting two comprehensive studies, the effects of
communication quality in services can be assessed. In the first study, communication
quality will be integrated as a fourth primary dimension of overall service quality. In the
second study, the relative effects of communication quality on customer satisfaction and
loyalty will be demonstrated.
vi
CHAPTER 1
INTRODUCTION
Theoretical Foundation
Today, the competitive environment of the economy forces service firms to find
different ways to separate themselves from their competitors (Parasuraman, Zeithaml &
Berry, 1988). Since service quality appears to set the stage for these customer
evaluations, many researchers and practitioners have strived to define, measure, and
manage service quality perceptions.
However, due to the intangible nature of services, many of these efforts have led
to differing conclusions and definitions of service quality that for years have impeded
progress in the services literature. In an effort to unify many of the existing
conceptualizations of service quality, Brady and Cronin (2001) recently proposed a
hierarchical conceptualization of service quality that focuses on three primary
dimensions: interaction quality, physical environment quality and outcome quality.
Interaction quality deals with the dimensions of attitude, behavior and expertise of the
customers and salesperson. The physical environment encompasses ambient conditions,
design, and social factors of the service area. Outcome quality deals with social factors,
waiting time, tangibles, and valence. Valence is a relative capacity to unite, react or
interact. While this study helped establish the study of service quality, the authors
themselves suggest that there is still work to be done in this area.
Specifically, the Brady and Cronin (2001) model tends to focus more on process
and outcome variables and offers limited insight into the actual interaction between
customers and employees. For example, the three sub-dimensions of interaction quality
focus on employee attitudes, behavior and expertise, but fail to truly capture the effects of
communication in the service encounter. This lack of focus on communication in the
contemporary service quality model is surprising, since the symbiotic relationship
between communication and management dates back to the 1950’s (Bowman, 1964;
Katz, 1955; Mintzberg, 1973). An analysis of the services literature suggests that word
1
of mouth communications has paramount effects on a customer’s evaluation of the
service encounter (Parasuman, Zeithaml & Berry, 1998).
On the surface, interaction may appear to adequately address the area of
communication, but interaction treats communication in an extremely general manner
(Williams, Spiro & Fine, 1990). The vast majority of conceptualizations of interaction
describe communication as transaction, negotiation, or transmission (Williams, Spiro &
Fine, 1990). Willet and Pennington (1966) created that first customer salesperson model
recognized this conceptualization. This model stated that the relationship is dyadic in
nature and labeled it as interaction (Willet & Pennington, 1966). Willet and Pennington
(1966) gave no additional details about the critical components. Since then, Sheth’s
(1976) model of the customer-salesperson dyad is the only one to address a few specifics
of communication. Sheth (1976) stated that the interaction between a customer and a
salesperson is a function of communication content and style. Content is the utility
aspect what the customer desires from the product. An example of this is product
benefits or prestige. Style is operationally defined as the “format, ritual or mannerism
which the buyer and seller adapt in the interaction.” (Sheth, 1976). Content and style are
determined by product related factors, personal views, and organizational aspects.
However, in Sheth’s (1976) study, several communication codes and rules are ignored
(Williams, Spiro & Fine 1990). Overall, interaction deals primarily with the personal
characteristics of the buyer and seller.
Purpose of the study
In order to address this gap in the service quality literature, this research suggests
that the model proposed by Brady and Cronin (2001) needs to be expanded to reflect the
dominant effects on communication quality.
This study seeks to provide an important framework that offers new insight into
the consumer evaluations of the service encounter. Previous studies have assumed that
there are only three important dimensions of service quality: outcome, interaction, and
environment quality. While these dimensions are vital, this research aims to build upon
2
those finding and present evidence for the inclusion of communication quality as a
dimension.
The purpose of this research is to investigate the critical role of communication in
the services industry. In this study, communication quality will be integrated as a fourth
primary dimension of overall service quality and demonstrate its relative effects on
customer satisfaction and loyalty (see Figures 1 and 2). For example, if a highly involved
customer walks into a banking institution and in meeting with a salesperson, perceives
the communication quality to be poor, he/she will evaluate the quality of service poorly.
As a result of the poor communication quality, the consumer may decide to leave
institution, even when the service being offered is superior to others in the market
because the consumer will be too frustrated to try and learn more about that service
provider.
For this research, communication quality will be divided into two sub-dimensions
consisting of interpersonal and impersonal communication quality.
Interpersonal
communication quality addresses the face-to-face interactions that occur between an
employee and a customer. The impersonal communication quality addresses the mass
communication portion of the service encounter (Hulbert & Capon, 1972). These terms
are discussed further in the literature review section of this paper.
3
CHAPTER 2
LITERATURE REVIEW
Service Encounters
The satisfaction level of a service encounter is a result of discrepancies between
the customer’s expectations and the actual performance. Due to the social norms that
govern the interactions between customers and services providers, a “delicate balance
between conflict and cooperation” is required (Lockwood, & Jones, 1989, p.46). Service
quality developed out of satisfaction and product quality literature. In regards to creating
and maintaining profitable relationships between service firms and customers, the
importance has been widely recognized (Czepiel, 1990). The perceptions of service
encounters are critical elements in establishing long-term loyalty, customer satisfaction
and quality perceptions (Brown et al., 1993).
In 1984, Gronroos developed the Nordic conceptualization of service quality. It
examined how technical quality and functional quality affect the expected and perceived
service quality of a service encounter. While, this investigation (Gronroos,1982) only
provides preliminary support for the role of technical quality in the formation of overall
quality evaluations, subsequent investigations empirically confirm its effects in the
formation of service quality perceptions (Gronroos,1990; Rust and Oliver, 1994).
Technical quality is operationally defined as “what the customer is left with when the
production process is finished (Gronroos, 1984, p.38). This model is shown on the
following page.
Parasuarman, Zeithaml and Berry (1988) later created a new conceptualization
called the SERVQUAL model. The model is shown in figure 2 on the following page.
This model had five dimensions: reliability, responsiveness, empathy, assurances, and
tangibles. These dimensions created a basis to measure the service experience and to see
how the perceived and expected service would affect the perceived service quality. Since
4
The Nordic Model
(Gronroos, 1984)
Expected
Service
Perceived Service Quality
Perceived
Service
Image
Technical
Quality
Functional
Quality
What?
How?
Figure 1
its creation, this model has become highly criticized, however has been used by several
researchers as groundwork for new modified versions (Brady & Cronin, 2001;
Dabholkar, 1997). The criticism is due to its inability to quantify expectations and thus
can not sufficiently measure customer expectations (Kandampully, 1991).
The Three-Component Model by Rust and Oliver (1994) was created in order to
combine current research trends with service quality and create of updated and innovative
model. A visual of this model is depicted in figure 3 on the following page. Its focus was
the relationships that exist between service quality, service value and satisfaction.
This
model builds on the previous model by Gronroos (1982) and Bitner (1992). This model
proposes that service quality consists of three distinct parts: service product, service
delivery and service environment. The service product is the outcome and the
consumer’s perception of the service. The service delivery is the consumption process
and any relevant events that occur during the service act. The service environment is the
internal and external atmosphere. The service environment is important because it is
viewed as an integral role in consumer service perception development (Bitner, 1992).
5
The SERVQUAL Model
(Parasuraman, Zeithaml & Berry 1988)
Reliability
Perceived
Service
Responsiveness
Empathy
Assurances
Expected
Service
Perceived
Service
Quality
Tangibles
Figure 2
The Three Component Model
(Rust & Oliver, 1994)
Service
Quality
Service
Product
Service
Delivery
Figure 3
6
Service
Environment
Figure 4 demonstrates the model created by Dabholkar, Thorpe and Rentz in
1996. This was created with specific interest in retail service quality. The result of the
research was the initial evidence that service quality needs to be assessed at several
levels. This model shows that consumers tend to examine the quality of service based on
six main dimensions and those six dimensions are made up of several sub-dimensions.
This multi level of analysis is revisited in Brady and Cronin’s (2001) model shown in
figure 5. Their research also found that the SERVQUAL model is not generalizable
across all service industries. The SERVQUAL contained an inconsistent factor structure
in their analysis. The SERVQUAL model failed to adequately cover the complexity of
consumer perceptions. The study also found similar results from other scholars that
supported their findings (Babakus & Boller, 1992; Carman, 1990). Figure 4 is shown
below.
Hierarchical Model of Retail Service Quality
(Dabholkar, Thorpe & Rentz, 1996)
Retail
Service
Quality
Primary
Dimensions
Physical
aspects
Personal
Interaction
Reliability
Subdimensions
Appearance
Convenience Promises
Doing it Right Inspiring
Confidence
Figure 4
7
Courteous
Helpful
Policy
Problem
Solving
The hierarchical approach model by Brady & Cronin (2001) in figure 5 is the
most recent conceptualization of service quality. It was created from integrating previous
conceptualizations with a new approach that acknowledges that the service encounter
operates on various hierarchical levels. Figure 1 depicts this model. Brady and Cronin
(2001) transferred the SERVQUAL factors as modifiers of the model’s sub-dimensions.
They chose to preserve the factors due to the extensive agreement about the importance
of the elements. The factors of reliability, responsiveness and empathy are not shown in
the model directly, but were used as descriptors in the qualitative portion of the study.
The interpersonal interactions that occur during a service encounter tend to have the
greatest effect on service quality perceptions (Bitner, Booms & Mohr, 1994; Bowen &
Schneider, 1985; Gronroos, 1982; Hartline & Ferrel, 1996; Surpreneant and Solomon,
1987). Interaction is made of three distinct factors: attitude, behavior, and expertise.
The physical environment quality refers to the ambient conditions, design and social
factors that occur during a service encounter. The outcome quality consists of waiting
time, tangibles and valence.
Hierarchical Approach
Brady & Cronin, 2001
Interaction
Quality
Attitude
Behavior
Physical
Environment
Quality
Expertise
Ambient
Conditions
Design
Figure 5
8
Outcome
Quality
Social
Factors
Waiting
Time
Tangibles
Valence
Brady and Cronin’s (2001) model remains the most recent conceptualization of
service quality. However, research continues to test and retest for the most effective
model. Some of the research conducted has taken the various models proposed in service
quality literature and apply it to a specific industry. A study conducted in 2002,
examined the internet and its applications to the service literature (Trocchia & Swinder,
2003).
Communication Quality
The role of communication has important implications theoretically and
managerially in the services industry. Current marketing literature supports the critical
role it plays. In order for communication to occur, a shared willingness and rationality
must exist for successful verbal and non-verbal communication exchanges (Allwood,
1995).
For the purpose of this study, communication quality is operationally defined as
the degree to which the content of the communication is received and understood by the
other party in the relationship (Sengupta, Krapfel & Pusateri, 2000). Several researchers
(Parasuraman, et al., 1988, 1991; Zeithaml, et al., 1988; Cohan, 1990; Berry, et al., 1990;
Webster, 1991; Murray, 1991; Headley & Choi, 1992) have documented the critical role
of communication in service encounters. A unique characteristic of services verses
tangible products is that the customer has the opportunity to seek out, gather and process
information about the service provider (Murray, 1991). The sources of information
include the organization, word of mouth communications, past experiences, advertising,
etc. (Parasuraman, et. al, 1985, 1988).
The sources of information can be divided into two categories, internal and
external. Internal sources for consumers include memory and personal experiences. For
organizations, internal communications include formal networks and informal grapevines
(Harcourt et al., 1991). This internal organization often is used by employees to
communicate effectively with the consumer (Harcourt et al., 1991). External sources
include the impersonal communications such as advertising and promotions. An
excellent means for consumers to achieve quality is through communications between the
service provider and the receiver (Headley & Choi, 1992). Previous research concerning
9
service encounters has focused primarily on the external service provider to consumer
aspects. A portion of this study will address the importance of examining
communication quality in establishing satisfaction and loyalty in the service provider
relationship.
This study chooses to examine communication quality by dividing it into personal
communication quality and impersonal communication quality. Impersonal
communication quality deals with any advertising, promotions, and word of mouth
communications. Word of mouth communications is the information that the customer
receives about an organization in regards to a service from another individual. An
example of impersonal communications is when the perceived service quality is impacted
by the quality of communication provided promotional material to a consumer evaluating
health care plans. The personal communication quality deals with the interactions a
customer has directly with company personnel. The role that these constructs have in
evaluations of service quality are displayed in Figure 6.
The information that is transmitted to the customer plays a critical role in the
service encounter.
When information is incomplete or incorrect, severe inconsistencies
can arise and affect the service quality perceptions (Zeithaml, et al., 1988). By
recognizing the importance of personal and impersonal communications, organizations
are in a more effective position to prepare, control and correct any discrepancies that may
arise. This ability can link expectations and reality and prevent unsatisfactory
performance (Solomon, et. al., 1985; Johnson & Katrichis, 1988).
H1: Communication quality is comprised of two latent factors: impersonal and
interpersonal communication quality.
H2: Perceptions of communication quality will have a direct positive influence on the
quality of service interactions.
Satisfaction
Satisfaction is defined as a consumer judgment involving the comparison of a
products actual performance to its expected performance (Kardes, 2000). Hertzberg was
one of the earlier researchers to examine this concept. He identified satisfaction or
10
dissatisfaction as a relationship to fulfilled or unfulfilled needs (Wren, 1987). The
increasing popularity of consumer behavior research assisted in the growth and
development of research around satisfaction (Howard & Sheth, 1969). Two key
researchers in its early development Howard and Sheth, conducted an experiment that
proved when a customer’s experience is less than what they expected it to be, then the
resulting outcome of satisfaction will be lower than what the consumer may have hoped
for (1969). This was an important study because it stressed the importance of looking at
the consumer’s level of understanding, reinforcement frequency and overall value of a
purchase (Howard & Sheth, 1969).
There are two main theories of satisfaction that have relevance to this study. The
first is the expectancy-disconfirmation paradigm (Oliver, 1980) and the second is the
comparison-level theory (Thibaut & Kelly, 1959).
Oliver (1980) used several previous research projects to serve as the groundwork
for his study of satisfaction. Specifically, he examined expectancy, disconfirmation, and
other performance-specific measures. The result is the expectancy-disconfirmation
theory and the comparison level theory. The expectancy-disconfirmation theory posits
that consumer’s level of satisfaction is determined based on a comparison between
previously held expectations with perceived product performance. Positive
disconfirmation will occur when the performance is higher than the customer’s
expectations and the result will be an increase in satisfaction. Assimilation and contrast
effects are two important aspects to this theory. Assimilation occurs when customers rely
heavily on their expectations when they are trying to evaluate their satisfaction. Contrast
effects occur when the customer exaggerates the actual level performance that occurred
in the service encounter.
The comparison-level theory states that the level of satisfaction is determined
when two levels of standards are evaluated. One level is the actual perceived level and
the other is the comparison level. The comparison level is the standard that the customer
will evaluate the attractiveness of a relationship (Thibaut & Kelley, 1959, p.21). A
customer that has encountered continually waning outcomes in a service relationship will
move to a new company with a reduced comparison level. This customer will thus show
11
a higher level of satisfaction over other customers that have experienced little change in
their service outcome quality (Ganesh, Arnold & Reynolds, 2000).
12
Overall Service
Quality
Communication
Quality
Personal
Communication
Quality
Impersonal
Communication
Quality
Interaction
Quality
Attitude
Behavior
Outcome
Quality
Physical
Environment
Quality
Expertise
Ambient
Design
Conditions
Figure 6: Hypothesized Model of Service Quality
13
Social
Factors
Waiting
Time
Tangibles
Valence
A relationship can be assumed between communication and satisfaction level
because if the employee communication is frustrating to the customer and the level of
expected performance is too low, then the customer’s level of satisfaction will be
drastically impacted.
Satisfaction and Service Quality
A general view in service marketing literature states that consumers’ reactions to
a service experience follows a cognitive Æ affective Æ conative framework.
Transferring this framework to services, service quality is conceptualized as the cognitive
component of the service evaluation, satisfaction as the affective component, and finally
loyalty intentions as the conative reaction (Gotlieb, Grewal & Brown, 1994). Consistent
with this view and evidenced from the services literature (Cronin & Taylor, 1992), this
research proposes that the traditional dimensions of service quality will serve as
antecedents to satisfaction:
H3: Service quality dimensions (quality, physical environment quality and outcome
quality) will have a direct positive effect on customer satisfaction.
Satisfaction and Communication
From the organizational perspective, employees and managers that are satisfied
with an organizations communications typically outperform those employees that are
dissatisfied with the organizations communication strategies (Harourt, Richerson &
Wattier, 1991). This study will examine the relationship between satisfaction and
communication from the consumer perspective. Figure 7 provides a graphical description
of this model.
This model proposes that when consumers feel that the communication quality is
poor, they will be less satisfied and their behavioral intentions will be negatively
impacted. They will be more likely to spread negative word of mouth information about
the company and experience low trust and high regret. In addition, the customer will feel
low levels of loyalty to that company. Conversely, if the communication quality is high,
the consumer will be more satisfied and their behavioral intentions will be positively
14
impacted. Consumers will experience rejoice about the sale, experience high levels of
loyalty and will be more likely to spread positive word of mouth communications about
the service.
Furthermore, a study conducted at Cornell University found a positive and
significant relationship (p<.05) where high levels of communication quality led to
increased ranking of relationship success levels (Medina-Munoz, Garcia-Falcon &
Medina-Munoz, 2002). In addition, satisfaction was also measured concerning
communication quality and significant results were found. Communication exchanges
between customers and employees have been recognized as critical in service encounters
in a recent study that stated 75% of customers dissatisfaction and friction were traced and
linked to situations in which the customers expectations that were higher than what the
company could actually deliver (Nyquist, Bitner & Booms, 1985).
H4: Communication quality will have a direct positive impact on the level of satisfaction
that experienced by the consumer.
Loyalty
Loyalty is described as a mixture of overt loyalty behaviors and relationship
commitment, (Ganesh, Arnold & Reyholds, 2000). The comparison-level theory is one
standard that consumers will use when deciding to stay in the relationship or not. It is
used for understanding satisfaction, but also has substantial implications for
understanding loyalty. The moment that results perceived by the customer fall below the
level of other relative options, the customer will be motivated to leave the relationship.
Previous research has shown that loyal customers have considerable short term
and long-term benefits. Concerning the short run, customers will be more profitable
because they tend to be more willing to spend more (O’Brien & Jones, 1995). In the long
run, loyal customers are more likely to spread positive word of mouth to their peers
(Reichheld & Teal, 1996). Loyal customers will directly affect profits and new customer
growth. Due to this vital impact, loyal customers are the most valuable customer group
(Oliver, 1997).
15
Communication
Quality
Interaction
Quality
Satisfaction
With the Service
Encounter
Loyalty
Physical Env.
Quality
Outcome
Quality
Figure 7: Hypothesized Model of the Service Encounter
This is an important area for firms to address in their customers due to the
extensive benefits associated with loyal customers. When examining the comparison –
level theory, customers may become less loyal to a company if they encounter poor
communication with an employee and is unsuitable to the interaction desire by the
customers.
H5: Satisfaction will have a direct positive impact on the level of loyalty that is
experienced by the consumer.
16
CHAPTER 3
METHOD
This study involves a secondary analysis of data collected from a sample of
approximately 1054 consumers to address the hypotheses proposed in this study. The
sample focused on the following industries: financial services, fine dining, sporting
events and physicians. These industries were selected due to their similarity to other
industries previously used in service quality research (cf. Brady and Cronin 2001; Cronin,
Brady and Hult 2000). The survey method used in the data collection was self-completed
quantitative questionnaires. A quota sampling method was used to assist in
generalizability of the results as interviewers were required to recruit respondents within
pre-specified age categories. The questionnaire was distributed at various locations in
Tallahassee, Florida. Each respondent was requested to fill out the questionnaire reflect
upon a recent transaction with the service provider in the past six months. Respondents’
phone numbers were collected and verified across the sample to ensure the independence
of observations. The questionnaire consisted of Likert scale type questions that were
adapted from previous research studies showing high levels of reliability (α>0.70).
LISREL 8 was used to evaluate the items in the model proposed. The main
effects of the hypothesized model were analyzed using Anderson and Gerbing’s (1988)
two-step structural equation modeling process. In step one, a confirmatory factor analysis
is conducted to verify the psychometric properties of the measurement model.
Specifically testing the hypotheses that posited the inclusion of Overall Communication
Quality and its sub-dimensions (interpersonal and impersonal communication quality) as
factors of overall service quality. In order to test these hypotheses, a modified third-order
factor model is estimated, similar to the approach used in Brady and Cronin (2001). This
approach avoids problems of local identification associated with higher-order factor
models as well as providing a final solution that is more managerially and theoretically
relevant.
17
In order to assess the fit of the measurement and structural models, several
indicators are adopted to assess the overall goodness of fit (NNFI, CFI, and IFI) due to
the specific information that each index provides. Both the Non-Normed Fit Index
(NNFI) and Comparative Fit Index (CFI) have proven to be among the most reliable and
consistent fit indices, and it has been demonstrated that the CFI provides the best
approximation of the population value for a model (Bentler, 1990). Finally, the
Incremental Fit Index (IFI) is used to judge the relative fit of competing models to the
data in relation to the null model (Bollen, 1989). Recent guidelines suggest that when
using these indices (CFI, NNFI, and IFI) in conjunction, values greater than .95 are
indicative of good fit. Specifically, these indices are adopted because they do not suffer
from sample size artifacts, like earlier fit indices such as goodness of fit index and the
chi-square test statistic.
Specifically when evaluating the fit of the measurement model, the following was
assessed; the significance of all specified paths, the overall fit of the model and finally the
validity and reliability of the scales using the procedure outlined by Fornell and Larcker
(1981). The results of this analysis are provided in a table listing scale statistics such as
means, standard deviations, average variances extracted and construct reliabilities. In
addition, the goodness of fit estimates, completely standardized path estimates are
provided in unique figures for each industry.
Once an acceptable goodness of fit is found for the measurement model and
hypotheses specified therein, the full hypothesized structural model is evaluated. The
same criteria is used to assess the fit of the structural model as those used in the test of
the measurement model. However, a test of the direct effects specified in the model is
done by calculating t-statistics for each path. Since there is an posited expected direction
of the effects in the preceding hypotheses, a path is considered to be significant when the
t-statistic is greater than or equal to 1.65 (df ≈ ∞; α = .05). Moreover, the amount of
variance explained in each endogenous variable is demonstrated by calculating the
coefficient of determination (R2) for each. Collectively these series of tests allows the
confirmation of the direct effects specified in hypotheses. These results will be listed in a
final figures for each sample that will outline the completely standardized path
coefficients, overall fit indices, and variances explained in the model.
18
CHAPTER 4
RESULTS
Prior to conducting the formal hypothesis tests, general statistics describing the
characteristics of each sample were calculated. These descriptive results are provided in
Tables 1 – 2. The average age of the respondent was 39 years old. The male to female
ratio was close: 46.5% male respondents and 53.1% were female. In terms of ethnicity,
78.1% of the respondents were Caucasian, 5.4% African American, and 9.3% were
Hispanic, 3.6% were Asian American, and 3.7% of the respondents did not list
themselves in one of the preceding categories. Moreover, the majority of the respondents
had some level of college education and the group was found to be diverse economically
across the five income groups.
All items from the questionnaire were used in constructing the scales for this
study. However, outliers from the study were eliminated. Any responses with residuals
greater than 3.0 for any of the univariate relationship in the model were considered
outliers and were subsequently removed before the final analysis. This process resulted
in the removal of 25 respondents from the dataset.
Table 1: Overall Sample Sizes for Each Industry
Frequency
Valid
Percent
Banking
233
22.1
Fine Dining
312
29.6
Physician
252
23.9
Sports
257
24.4
1054
100.0
Total
Following an examination of the demographic makeup of the sample, formal
hypothesis tests were conducted. As discussed earlier the results of the study were
assessed in two distinct phases. In the first phase, the overall fit of the modified third
19
order factor model was assessed for each industry. In this stage the first two hypotheses
were formally tested (H1 and H2) and also a global test of the fit of the overall factor
model was conducted. In the second phase, the final hypotheses (H3 – H5) were tested
by conducting a comprehensive, item-level structural equation model analyses for each
industry. For each phase, the reliability and validity of all variables was established first
and then an overall test of the model fit was conducted.
Table 2: Demographics of overall sample
Gender
Ethnicity
Count
Frequency
Male
490
46.7%
Female
560
53.3%
White / Caucasian
823
78.8%
African American
57
5.5%
Hispanic
98
9.4%
Asian American
38
3.6%
Native American
3
.3%
26
2.5%
9
.9%
High School Graduate
112
10.8%
Some College
422
40.8%
College Graduate
336
32.5%
46
4.4%
Graduate Degree
110
10.6%
Less than $20,000
181
18.7%
$20,000 - $39,999
166
17.1%
$40,000 - $59,999
153
15.8%
$60,000 - $79,999
118
12.2%
$80,000 - $99,999
133
13.7%
More than $100,000
217
22.4%
Other
Education
No High School Degree
Some Graduate School
Annual Household
Income
Age
Mean
39
Note: Total Sample Size = 1054
20
Std.
Deviation
15
Phase One: Analysis of the Measurement Model
The original model of service quality proposed three primary dimensions. The
purpose of this study is to demonstrate that four dimensions are needed to adequately
measure and understand service quality. In order to assess the overall fit of the
conceptual model of service quality, modified third order factor models were estimated
for each sample, using the procedure outlined by Brady and Cronin (2001). However,
before the predicted effects could be assessed, the reliability and validity of the variables
was conducted using the procedure outlined by Fornell and Larcker (1981). Specifically,
the construct reliabilities for each variable exceeded the recommended levels of 0.70. In
addition convergent validity was demonstrated as the average variance extracted for each
variable exceeded 0.50. Finally, discriminant validity was supported for each variable as
the average variance extracted was greater than the squared correlation between the
constructs (Fornell and Larcker 1981). For simplicity scale statistics for the aggregated
sample are provided in the Table 3 below, however, the relationships were consistent
across industries.
Table 3: Scale Statistics
Reliability
5.3
5.41
5.42
5.29
5.43
5.26
Standard
Deviation
1.20
1.21
1.22
1.22
1.22
1.08
.92
.95
.96
.95
.96
.93
Average Variance
Extracted
.74
.85
.88
.87
.80
.73
5.55
1.02
.96
.79
Variable
Mean
Environment Quality (3)
Overall Service Quality (3)
Interaction Quality (3)
Outcome Quality (3)
Communication Quality (6)
Interpersonal
Communication Quality (5)
Impersonal Communication
Quality (5)
Note: The number in parenthesis above refer to the number of items used in creating
each scale
Following confirmation of the reliability and validity of the measures, the
conceptual model of service quality was assessed. The results of the analysis provided
strong support for the overall model. The overall fit statistics indicated that the modified
third order factor model offered excellent fit to the data as all fit indices exceeded
recommended cut off criteria (Hu and Bentler 1999). See figures 8-11 for more specific
21
details on the model fit. Moreover, the first hypothesis that that proposed that overall
communication quality was comprised of two underlying factors (impersonal and
interpersonal communication quality).
This was supported in all four industry samples as the factor loadings for the sub
dimensions were significant in each (loadings for the impersonal dimension ranged from
0.57 to 0.75 and for the interpersonal dimension, the loadings ranged from 0.86 to 0.97).
In addition, the second hypothesis was also supported as perceptions of overall
communication quality significantly predicted overall service quality in three of the four
industry samples (banking, physician, and sports sample).
In the banking sample, the path from overall communication quality to service
quality was 0.36 (p <0 .01). In the physician sample, the path from overall
communication quality to service quality was 0.33 (p < 0.01). In the sporting events
sample, the path from overall communication quality to service quality was 0.13 (p <
.05). However, the path from communication quality to service quality was not
significant (p < 0.05) for the fine dining sample. Complete details including completely
standardized path coefficients, variances explained, and overall fit indices for each
industry sample are provided in Figures 8 – 11.
Phase 2: An Analysis of the Structural Model
Following support of 4-factor measurement model, all direct effects using
structural equation modeling were tested. Separate structural models were estimated for
each sample to demonstrate the generalizability of the results. Prior to assessing the
results of the structural analysis, the reliability and validity of the variables included in
this model were tested. While it was shown that the dimensions of service quality are
reliable in the previous analysis, this study also conducted the same tests to demonstrate
that satisfaction and loyalty are both reliable and valid as well, in addition to being
discriminant from all other constructs. The results of these analyses also indicated that
all the variables in the analysis were reliable and valid (Fornell and Larcker 1981).
Following this test, a formal test of the final hypotheses was conducted by assessing both
the overall fit for each model in addition to the direct effects proposed within the
structural model.
22
Overall Service
Quality
R2 =.87
.36**
.42**
.18 *
Communication
Quality
.88**
.03 NS
Interaction
Quality
Physical
Environment
Quality
Outcome
Quality
.75**
Interpersonal
Communication
Quality
Impersonal
Communication
Quality
Attitude
Behavior
Ambient
Expertise
Conditions
Figure 8: Conceptual Model of Service Quality (Banking)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI= .99 (>.95)
IFI= .99 (>.95)
SRMR= .060 (<.08)
Degrees of Freedom: 312
23
Design
Social
Factors
Waiting
Time
Tangibles
Valence
Minimum Fit Function Chi-Square: 807.40 (P=0.0)
24
Overall Service
Quality
R2=.93
.33**
.40**
.20**
Communication
Quality
.97**
.10**
Interaction
Quality
Physical
Environment
Quality
Outcome
Quality
.57**
Interpersonal
Communication
Quality
Impersonal
Communication
Quality
Attitude
Behavior
Ambient
Expertise
Conditions
Figure 9: Conceptual Model of Service Quality (Physician)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI= .98 (>.95)
IFI= .98 (>.95)
SRMR= .091 (<.08)
Degrees of Freedom: 312
Minimum Fit Function Chi-Square: 976.59 (P=0.0)
25
Design
Social
Factors
Waiting
Time
Tangibles
Valence
Overall Service
Quality
R2=.83
.13*
.29**
.47**
Communication
Quality
.86**
.15 *
Interaction
Quality
Physical
Environment
Quality
Outcome
Quality
.74**
Interpersonal
Communication
Quality
Impersonal
Communication
Quality
Attitude
Behavior
Ambient
Expertise
Conditions
Figure 10: Conceptual Model of Service Quality (Sporting Event)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI= .98 (>.95)
IFI= .98 (>.95)
SRMR= .074 (<.08)
Degrees of Freedom: 312
Minimum Fit Function Chi-Square: 910.81 (P=0.0)
26
Design
Social
Factors
Waiting
Time
Tangibles
Valence
Overall Service
Quality
R2=.91
NS
.74**
.20**
Communication
Quality
.87**
NS
Interaction
Quality
Physical
Environment
Quality
Outcome
Quality
.73**
Interpersonal
Communication
Quality
Impersonal
Communication
Quality
Attitude
Behavior
Ambient
Expertise
Conditions
Figure 11: Conceptual Model of Service Quality (Fine Dining)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI= .98 (>.95)
IFI= .98 (>.95)
SRMR= .073 (<.08)
Degrees of Freedom: 312
27
Design
Social
Factors
Waiting
Time
Tangibles
Valence
Minimum Fit Function Chi-Square: 1110.79 (P=0.0)
28
Overall the results of the structural tests provided support for the hypothesized
model as the overall fit statistics also exceeded recommended cutoff criteria.
Specifically, the third hypothesis was partially supported as Interaction quality had a
significant effect on satisfaction in 1 of the 4 samples, Physical Environment Quality had
a significant effect on satisfaction in 2 of the 4 samples, and outcome quality had a
significant effect on satisfaction in all 4 samples.
While, the effects of these service quality dimensions was not uniform across
samples, this is not unexpected as other researchers have demonstrated that the
dimensions of service quality may have very degrees of importance across industries
(Brady and Cronin 2001; Parasuraman, Zeithaml, and Berry 1988). Moreover,
hypothesis 4 was supported as communication quality had a significant effect on
satisfaction in all four industry samples. These results demonstrate that while some of
the other dimensions or service quality varied in their importance across industries, it
appears that communication quality is an important determinant of satisfaction in each
industry. Finally, customer satisfaction significantly affected loyalty in all four-industry
samples, thus supporting hypothesis 5. Complete details on the overall fit and the direct
hypotheses tests are provided in Figures 12 – 15 as they provide, completely standardized
path estimates, variances explained, and details on overall model fit.
An examination of the model across the four industries provided several import
insights. In the banking model, sporting event and fine dining models, interaction quality
was found to not have significant results. However, communication quality was found to
be significant in these industries. The failure of interaction quality to be statistically
significant provides important support the integration of communication quality into the
service encounter model. Earlier it was discussed that communication quality and
interaction quality often are confused as being identical, but in reality, interaction only
covers a small portion of communication quality. A deeper discussion of these results is
presented next.
29
Communication
Quality
Interaction
Quality
.54**
NS
.79**
.12*
Physical Env.
Quality
Satisfaction with
Service Encounter
R2=.76
.36*
Outcome
Quality
Figure 12: Hypothesized Model of the Service Encounter (Banking)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI = .99
IFI = .99
SRMR= .052
Degrees of Freedom = 178
Minimum Fit Function Chi-Square = 449.31 (P=0.0)
30
Loyalty
R2=.79
Communication
Quality
Interaction
Quality
Physical Env.
Quality
.35**
.23**
NS
Satisfaction with
Service Encounter
R2=.84
.83**
Loyalty
R2=.83
.39**
Outcome
Quality
Figure 13: Hypothesized Model of the Service Encounter (Physician)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI = .99
IFI = .99
SRMR= .044
Degrees of Freedom = 178
Minimum Fit Function Chi-Square = 518.04 (P=0.0)
31
Communication
Quality
Interaction
Quality
Physical Env.
Quality
.15*
NS
.29**
Satisfaction with
Service Encounter
R2=.83
.70**
Loyalty
R2=.55
.53**
Outcome
Quality
Figure 14: Hypothesized Model of the Service Encounter (Sporting Event)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI = .98
IFI = .98
SRMR= .045
Degrees of Freedom = 178
Minimum Fit Function Chi-Square = 445.85 (P=0.0)
32
Communication
Quality
Interaction
Quality
.09*
NS
NS
Physical Env.
Quality
Satisfaction with
Service Encounter
R2=.84
.77**
Loyalty
R2=.59
.74**
Outcome
Quality
Figure 15: Hypothesized Model of the Service Encounter (Fine Dining)
* P<.05; **p<.01; NS = non-significant (p>.05)
Overall Fit
CFI = .99
IFI = .99
SRMR= .043
Degrees of Freedom = 178
Minimum Fit Function Chi-Square = 585.96 (P=0.0)
33
CHAPTER 5
DISCUSSION
The analyses provide at least partial support for each hypothesis. Moreover, the
results provide clear and strong support for integrating communication quality as a fourth
dimension of the Cronin and Brady (2001) model of service quality. Communication
quality was shown to have strong results for managers to control their service quality
from inside the store and realize the importance of the communications from outside the
store that can impact their service quality and encounters.
The results also supported the effects of communication quality on customer
satisfaction and loyalty. Managers can evaluate a service encounter more
comprehensibly when they recognize the important role that communication quality can
play. Consumer’s intentions to be satisfied and loyal to the service firm can be
significantly influenced by employee’s communication quality, providing an even greater
need for both managerial and research focus in this area. The following sections will
provide a detailed look at the implications of the results for both the measurement and
structural models.
Measurement Model
The results of the measurement model analyses provide strong support for the
inclusion of both interpersonal and impersonal communication quality as key underlying
dimensions of overall communication quality. Moreover, communication quality was a
significant driver of overall service quality in 3 of the 4 industry samples. These results
demonstrate that while it is clear that service firms must manage quality perceptions once
customers are in their “factory” that consumers will also evaluate the quality of their
communication, and subsequently the quality of the service based on impersonal
communication that can occur even before the service encounter begins. Realizing the
importance of these two sub-dimensions, firms can be in a better position to provide
quality service to their customers and be in a position to correct and prevent discrepancies
about their service from occurring.
34
An examination of the four industries provided several interesting results to
discuss. In the banking industry, all dimensions except environment quality proved to be
significant. This may be because in banking, the consumer may be more interested in the
outcome quality and making sure that their banking needs were handled quickly and
properly and less concerned with the ambience, design and social factors of the lobby.
The results suggest that good service depends more on how well the bank employee
understand the needs of the customer and was able to meet those needs, which is largely
based on interaction, communication and outcome quality.
In the physician sample, physical environment dimension also fell out and did not
prove to be significant. The same rational can be used when examining a physician’s
office as was used for the banking industry. Unless the physical environment falls to the
extremely low levels, then it is unlikely that the patient will consider its effects when
assessing service. Basically, the results indicate that the patient is more concerned that
that the ailments were identified and explained (communication), handled properly
(interaction), and they were cured or the problem was eased (outcome).
In the sporting event model, all dimensions proved to be significant. Specifically,
customers are interested in the actual game results (outcome), having good
seats/entertainment and being in a new stadium (environment) and being ushered in to
their seats efficiently (interaction). These results provide additional justification for the
continual investment in stadium design and construction throughout the sports industry.
The actual communication between a customer and employee during the game is
important as well. For example, the advertising and promotions that occur around a
sporting event can contribute considerably in creating enthusiasm and support for the
event.
Lastly, in the fine dining situation, communication quality did not prove to be
significant. All other items proved to be strong paths and contribute to service quality.
The communication quality may have fallen out because the communication that occurs
is actually fairly limited. Many consumers depend on eating in a clean, organized
restaurant setting, expect the service personnel to be aware of the menu and be able to
make suggestions. Finally, they expect waiting time to be minimized and their meal to be
excellent.
35
Some of the differences encountered between the four industries may be
explained by examining the consumption reasoning. Hedonic and utilitarian rational are
two methods of consumption that may describe the differences. Hedonic use has to do
with pleasure seeking and utilitarian use deals with services that are functional and
practical. Sporting events and fine dining would fall into the hedonic category and
physician and banking would fall under the utilitarian categories. The communication
quality played a much more important role in the utilitarian industries over the hedonic
industries. Managers of firms in these industries should realize that these results
demonstrate the sub-dimensions of service quality have varying importance across
industries. Specifically, it appears that while outcomes are universally important,
communication and interactions are paramount in utilitarian services, while the
environment plays a more important role for hedonic encounters.
Structural Model
Overall the results of the structural analysis demonstrated that the effects of
interaction and physical environment quality on satisfaction varied across consumption
contexts. However, communication and outcome quality significantly predicted
satisfaction in each industry sample.
Specifically, in the sporting event industry, much of the satisfaction is derived
from what team wins and not by the actual interactions with the employees. Even when
the employee provides poor service at a sporting event, the overall level of satisfaction is
affected less by these factors than if the consumer had poor seats, the team lost and they
could not hear the announcers.
In the banking industry, the results may signify that having a transaction
completed correctly (outcome) affects the customer’s satisfaction much more any other
dimension. Even if all other factors were demonstrated well by a service firm, if the
banking transaction was done incorrectly and the customer was given the wrong balance
and then in turn bounced several checks, the outcome quality would then overrule the
other items and the service quality would be determined as poor.
In the physician industry, physical environment quality was the only one that was
found to be not significant. This may be due to that the decor only effects the satisfaction
36
if the office is extremely dirty or unsanitary. This is a very unlikely situation for a
doctor’s office. The patient may not tend to care about the actual ambient designs as long
as they feel that the doctor or nurse can understand their condition and help them cure it.
In the fine dining industry, interaction and physical environment quality were not
significant. The physical environment quality fall out is surprising since many restaurant
critics tend to discuss this in their reviews. A cold barren restaurant may inhibit the
customer’s ability to truly enjoy their food when they are not comfortable in their
surroundings. Interaction is also surprising because if the waiter/waitress is not attentive
enough to their needs, the customer may leave the restaurant feeling unsatisfied and fail
to become a loyal customer.
In addition to demonstrating the service quality dimensions to some extent can
drive customer satisfaction, the outcomes of satisfaction are also important to consider.
In a study by Garbarino and Johnson (1999), satisfaction was found to be a primary
driver of loyalty. Liu and Leach (2001) also found similar results. Both trust and
satisfaction have been found to lead to strong customer retention, making this an
extremely worthwhile model to continue studying and improving upon (Ranaweera &
Prabhu 2003).
By recognizing all aspects of the service encounter than can significantly
affect satisfaction and loyalty levels, the service firm can position itself more successful
to meet their customer needs.
IMPLICATIONS AND FUTURE RESEARCH
Specifically, there are several implications that this research has for the services
industry. The results of this study can assist service managers in creating a more
productive and satisfactory purchasing environment for the consumer. Much of the
previous literature concentrated on service encounters that take place inside the store and
disregard the external influences that can occur, such as word of mouth communications
and advertising. This is a critical gap that the Brady and Cronin (2001) model failed to
address and by adding the communication quality dimension a more comprehensive
service quality model can be assessed.
37
There have been vast amounts of research dedicated to the actual selling situation,
but more research still needs to be pursued in this topic area of the communication
interaction. Areas still requiring further study include the role of different
communication styles on evaluation of services, the role of communication in generating
trust and commitment and relationships and finally the moderating role of self-efficacy
on communication quality.
Other future research areas to be address may be attempting to create new
terminology and covers communication quality and interaction under the same umbrella
to simplify the model.
The two terms are often confused to cover similar factors. A
unified term would clear up any confusion and provide a stronger, less cluttered model.
LIMITATIONS
The limitation of the study is the sample. Using only a sampling from
Tallahassee, Florida reduces the generalizability of the findings and the results may not
transfer to other regions of the United States. Additional studies across more industries
could assist in strengthening the results of this study and the generalizability of the
findings. Samples from other service industries can also assist in the generalizability of
the results.
The use of quota sampling, a non-probability sampling type, may have
contributed to non-response bias. In quota sampling, when each group reaches its quota,
other respondents that would have responded to the survey are excluded from the data.
The non-response bias in this situation would be caused by the fact that those who did not
get a chance to respond, may have very different beliefs than from those that did respond.
The bias was minimized by the researchers attempting have the largest sample size as
possible in the time allowed.
Another limitation is that participants were not paid for their services and
volunteer bias may influence results. Those that chose to involve themselves in the
study may have ulterior motives of trying to bring attention to a poor experience that they
had with the service company. Those who chose to participate and those that did not
may have very different views on the nature of services.
38
Finally, the nature of a field study preclude any conclusions of cause and effect in
the models, so future researchers may want to replicate some of these effects using
experimental design to enhance the internal validity of our results.
CONCLUSION
This study serves as an extension to the Brady and Cronin (2001) model of
service quality and demonstrates that communication quality is a strong sub-dimension of
service quality. Both impersonal and interpersonal communication quality are supported
as factors of overall communication quality and communication quality was subsequently
demonstrated to influence overall quality perceptions. Service researchers and managers
would be well advised to consider this new model when trying to evaluate their service
quality and encounters.
39
APPENDIX A
SURVEY QUESTIONS
Note: The below items are selected items from a larger questionnaire. The items below
were chosen due to their relevancy to this thesis topic.
40
41
42
43
44
APPENDIX B
HUMAN SUBJECTS CONSENT FORM
45
46
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BIOGRAPHICAL SCKETCH
Elizabeth (Betsey) is from Rochester, NY. She received her bachelor’s degree
from Ithaca College in Business Management in 2002. She moved to Tallahassee,
Florida, following graduation. In the summer of 2004, Betsey married Clay Voorhees in
her hometown. Betsey plans to pursue her doctorate degree in Marketing
Communications. She has recently joined CFS Inc as an Imaging Specialist and
Marketing Coordinator. Betsey plans to continue developing her research interests in
marketing communications under the guidance of Dr. Steven McClung. The two will be
working on a research paper and conference presentation over the upcoming year.
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