Literature Review: Service Quality Impact on Customer Satisfaction

This report examines the impact of service quality on customer satisfaction, focusing on the A-Z store (Bilka) in Denmark. It begins with an introduction outlining the aims and objectives, which include evaluating the impact of effective service delivery, identifying the importance of service quality in gaining a customer base, and measuring the relationship between service and customer satisfaction. The literature review explores the viewpoints of various scholars on service delivery to target customers, emphasizing the importance of customer loyalty and retention. It discusses the significance of service quality dimensions like reliability, responsiveness, and assurance in building customer relationships and maintaining a strong customer base. The report highlights the importance of addressing customer issues, conducting surveys, and implementing customer resolution cells to enhance service quality and ensure customer satisfaction. It emphasizes that effective service delivery and understanding customer needs are crucial for business success, leading to customer loyalty, retention, and ultimately, increased profitability. The report also includes references to relevant literature.

Impact of service quality on customer
satisfaction – Literature Review

Table of Contents
INTRODUCTION...........................................................................................................................1
Impact of effective service delivery to target customer.........................................................1
Importance of service quality in order to gain appropriate customer base.............................4
Relationship between appropriate service and customer satisfaction....................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

Aims: “To determine the impact of service quality on customer satisfaction – A case study on A-
Z store (Bilka)”
Objectives: On the basis of provided aim and targets, several objectives get framed which stated
as follow:
 To evaluate the impact of effective service delivery to the target customer
 To identify the importance of service quality in order to gain appropriate customer base
 To measure the relationship between appropriate service and customer satisfaction
These are the aims and objectives which facilitate and made according to the provided topic
which is identification of impact of service quality on customer satisfaction. All these need to
analyse and underpin in an appropriate and effective manner so that better and suitable outcome
lead to underpin effectively.
INTRODUCTION
Literature review define about view points and opinion of various scholars which need to
include in a project properly so that effective and suitable gain could be enhance. It is important
in every research or dissertation to include articles, scholars perspective so that better and
suitable consideration get concluded (Chou, Lu and Chang, 2014). This project signifies about
impact of service quality on customer satisfaction for which various objectives get created by
taking example of Bilka stores in Denmark. They deal in all kind of retail products except from
food material. There are various view points get included which define about use of effective
service delivery to target customers so that repeat visit become possible in frame. All these
things which associated with service quality and customer satisfaction get evaluated properly
with presentation of appropriate information and data.
Impact of effective service delivery to target customer
According to the George and Kumar (2014), services of particular product or things need
to be appropriate and suitable in frame so that business become able to made positive impact
towards their target market. There are various market get evaluated in business environment
which enables an association to operate properly. Thus, management need to target the
appropriate one and start commencing their operations properly. The various targeted market for
each and every association is demographic, psycho graphic etc. All these need to understand
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properly so that absolute delivery of services become possible which enhance overall customer
satisfaction.
As per the context of Han and Hyun (2015), a satisfied user always provide response in
repeat sales through which appropriate growth and development lead to take place. It is essential
to resolve each and every context of user properly so that chances of better and suitable gain
become possible. An appropriate service delivery lead to gain customer loyalty, retain them
effectively etc.
In retail sector, complaints might be related with the products quality, problems
associated with manufacturing etc. Thus, all these issues and problems need to resolve on
frequent basis so that target audiences lead to gain effective satisfaction.
 The overall impact of effective service delivery to target customer enable business to
retain them properly . With effective and suitable steps of problem solving skills by
business managers, they lead to enhance it by 84%. Along with this, nature of complaints
have to articulate properly so that chances of similar manner issues could be resolve as
well as effective steps lead to carried down.
 Although, another major thing which lead to supported with appropriate service delivery
is consumer loyalty. This stated that service user become loyal towards their purchase
through which chances of appropriate gain with high profit become possible.
Although, Bilka need to understand two basic concepts before determining about impact of
service quality on customer satisfaction. In this aspect, major one of consumer loyalty and
another one is retention. Retention only become possible with effective service delivery by
resolving each and every issue as well as problem. A basic evaluation of these two concepts are
stated as follow:
 Consumer loyalty: According to the Hussain, Al Nasser and Hussain (2015), it is a kind
of behaviour of user of a company in which they prefer to purchase particular products
and services rather than focus on other competitors. It concern with when users
consistently purchase particular goods and services so that profit get enhance in a suitable
manner (Customer Loyalty - Why It’s Important, 2018). In this consideration, this
signifies as an activity which perform by a firm properly by providing various offers and
discount through using several techniques which facilitate an option for gaining user by
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providing them a positive attribute and experience. Customer loyalty is important for
Bilka as it facilitate several number of things which signifies as follow:
◦ A loyal customer get obtain through effective delivery of service to target market
which further enables for repeat business. Such user will not going to move to any
other product and services and consume only single company products. This will
enables business to gain optimum market share and enhance their profit growth
◦ Another thing which associated through loyal user is that elimination of competition.
By consuming same and same entity products and services, chances of shift get
reduces which further impacted overall concern. Thus, chances of better and
appropriate gain get rises with this aspect
 Customer retention: As per the context of Izogo and Ogba (2015), it is a set of activities
and consideration which business usually prefer to reduce the number of defections. This
get done by considering a single goal as well as target through which business again
involve their existing user properly through applying customer loyalty and brand loyalty
initiatives. Following are several points which need to understand by business managers
of Bilka so that customer retention element lead to gain properly:
◦ The first thing which need to consider by business and maintain customer retention is
to ask them. Business managers have to ask about all major issues and problems
associated with services so that user lead to get retain properly. This also enables in
improving service delivery process when any kind of deviation get underpin.
◦ Next step which enables in providing appropriate service delivery is treatment of each
and every problem. Balika need to underpin all major problems effectively so that
suitable gain become possible. This enables in effective working assessment.
Thus, all these things need to estimated by Balika group when they start delivering services.
Positive and effective service delivery lead to made appropriate impact on target audience. This
section only get done by understanding concept of consumer retention and customer loyalty.
Although, a major consent regarding this factor is to determine all major issues and problems of
target audience. Thus, for this aspect, suitable survey need to get frame on each and every user
by distributing questionnaire to each one of them.
Target customers need to get retain and loyal with Balika in which they have to discuss
all major issues and problems with company management. This enable business to work on
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issues as well as enhance number of loyal customers and retain them as well with time course.
According to the Kaura, Durga Prasad and Sharma (2015), a satisfy user always work in favour
of business by make it loyal towards products and services. Thus, their satisfaction, lead to
reflect positive frame which also facilitate to accomplish targets and goals properly as well as
generate more and more profit. Although, service delivery need to adopt an appropriate
framework and follow all steps and consideration properly as well. This will going to maintain
appropriate customer base. Effective and absolute service delivery lead to support in gain
appropriate customer base which is ultimate consideration for every business. Customer base
could be manage only through effective and appropriate service delivery concept. It is a primary
obligation for every association to render suitable service as it ultimately reflect positive
attribution towards business and its concerning operations which enables to accomplish each and
every target properly and effectively.
Importance of service quality in order to gain appropriate customer base
Every business completely based on quality assurance. It is important for each and every
business to ensure that their products met with standard quality or not through which better and
effective working get promoted. Although, with appropriate quality standard delivery of products
customer satisfaction get enhance which ultimately improve and resolve all associated barrier of
business as well as it will gain leverage or competitive advantage.
As per the view point of Khan and Fasih (2014), quality is consider as one of a major
thing for every firm which facilitate them to grow and develop in an absolute frame which
ultimately support in accomplishment of target and objectives. Thus, it could be consider as one
of a way for creating customer base which support management to sustain into keen competitive
world.
On the basis of Khan and Fasih (2014), sustainability is a only thing for large and small
business which determine by delivering of quality service. Service sector industries are highly
depend on their services rather than products. If staff have good behaviour towards them then
consumer loyalty and retention become possible. There are majorly several dimensions get
evaluated which opt by customers when evaluating service quality signifies as follow (The 5
Service Dimensions All Customers Care About, 2018): Reliability: One of a major thing which need to understand by customers and highly
focus is reliability of product and services. Users evaluate various number of providers
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and choose only such individual whom have better and reliable services. According to
Liat, Mansori and Huei (2014), reliability of products and services is essential through
which ultimate response could be gain. A reliable brand always support to impose
appropriate customer base through which better and effective gain become possible. Not
only uniform working as well as high quality equipments are important but business need
to be reliable in their working. This section will support to gain positive response. This
section signifies that reliable service delivery lead to formulate appropriate customer base
for the products and services which ultimately enhance profit margin. Balika have to
manufacture good quality products and services by delivering it on time through meeting
with demand and supply properly. This support in make brand reliable towards customers
through which options for customer enhancement become possible. Moreover, this will
also support in order to gain customer loyalty as well as brand loyalty which consider as
ultimate goal or target for most of the business concerns. Responsiveness: Another major thing is to take response from users properly. It is
essential to take appropriate and suitable response from each and every individual
properly so that deviations get underpin effectively (Oliver, 2014). All responses need to
be merge and maintain effectively so that chances of suitable and appropriate gain
become possible. Many of the times, user not provide their view instantly and take some
time. Thus, it is a major task for an association to wait for their response and take
appropriate action on them. This section will also support to service provider in order to
resolve all major issues and problems of their clients as well as work in favour of
business section. Although, to deal with this factor, many call centres track record and
response of their user which facilitate option to adopt them in future for making and
improving things. Although, this section will ultimately contribute in analysing the
performance review properly so that absolute gain could be possible. Balika need to
implement customer resolution cell where all responses of clients get included. This
enables them to identify the cause so that improvisation get done as well as customer
base get enhance. Assurance: A major thing on which business or any other organisation whether it is
profit or not for profit in nature have to assure about quality standard of products and
services (Orel and Kara, 2014). This need to done by assuring customers that business
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have appropriate number of expertise which ultimately encourage and support to improve
working section. Sometimes, customer confidence lead to get minimise by assuming that
management do not have much skilled individual. If customers start thinking that
organisation do not have sufficient number of expertise then production level of business
also get decline. Thus, to assure about product quality and service, business need to
present things by logo on their goods, emails and letter boards. Thus, it enables in
assuring user that firm deliver appropriate quality products and services which further
assist in better and suitable growth as well as development. Balika need to assure their
users that they deliver appropriate quality services and products through which their
expectations get manage. This enables in accomplishment of targets properly and
effectively which promote and support better working environment. Although, through
suitable and appropriate assurance related with products and services, business become
able to create customer base by targeting each and every kind of audience. Empathy: In this aspect, business need to understand the needs and demands of
customers and take care about their wants properly and deliver services according to
them (Sakhaei, Afshari and Esmaili, 2014). It is important to understand each and every
user demand perfectly through which chances of better and suitable gain become
possible. Hence, it is important to provide appropriate training to every staff personnel
which enables in accomplishment of goals and targets properly. Balika need to
understand the values and wants of others through which they become able to compete at
market world properly. This lead to support them to accomplish targets as well as become
able to enhance customer base. This will lead to contribute in overall working assessment
which provide better and suitable working environment.
 Tangibles: This section signifies that business have to make their amenities proper
through which most of the customers get attracted. In service sector context, tangibles are
associated with environment or area where each option is taking place (Saleem and Raja,
2014). Balika need to facilitate appropriate tangibles over in stores through which most
number of customers get attracted. This enables them to enhance their satisfaction as well
as loyalty and retention become possible. Such consideration need to implement properly
so that effective and suitable gains become possible.
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This SERVQUAL research enables in better and effective decision making regarding to
enhancement of customer base. It is really important for every business sector to determine the
importance of service quality so that customer base could be frame. This support an association
to accomplish their targets properly which consider as ultimate and most important factor for
business and its target accomplishment. Balika need to consider all these factors and elements
properly while analysing importance of service quality for increasing user base properly. This
factor will contribute to overall growth and development of business as well as chances of all
problems and issues could be minimise.
Relationship between appropriate service and customer satisfaction
Many changes could be disseminate in business process which need customer research
properly which have to take place before and after sales as well as during course of time. It has
been proven by Shi Prentice and He (2014), an organisation which is consistently working in
favour of customers, enjoy higher retention level and more profitability due to increase customer
loyalty. For this consideration, it is important to deliver high quality service to every individual
so that their satisfaction level get enhance in a better manner. It is important to maintain a
relationship between service quality and customer satisfaction properly so that better and suitable
gain become possible.
As per the view point of Yuen and Thai (2015), business need to understand the
relationship between customer satisfaction and service quality properly through which absolute
and effective gain become possible. Service quality is highly based on perception of reliability,
responsiveness, assurance, empathy and tangible while satisfaction is more inclusive and get
influence by taking service quality, product price, situational factor and personal experience in
consideration. Although, this section lead to get understand by applying relevant figure which
stated as follow (What’s the Difference between Service Quality and Customer Satisfaction,
2017):
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(Sources: What’s the Difference between Service Quality and Customer Satisfaction?, 2017)
This diagram present all things and factors in several dimensions which need to
understand by business managers properly so that appropriate and effective estimation could be
done (JENET MANYI AGBOR. The Relationship between Customer Satisfaction and Service
Quality: a study of three Service sectors in Umeå). Thus, it lead to have basically two sections
one is satisfaction and another one is dissatisfaction. For considering such aspects, below is a
description signifies as follow: Satisfied: Whenever a customer have high expectations with particular products and
services they need high quality services. Thus, such consideration only get fulfil with
only single section which is perceived quality. It is important to deliver high quality
products and services as per target audience to each and every user properly so that
better and suitable gain become possible. On the other hand, sometimes, user have low
expectations with product and service quality but such particular brand deliver ultimate
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Illustration 1: What’s the Difference between Service Quality and Customer Satisfaction?, 2017

quality service which further enables in appropriate satisfaction through which chances
of highly appropriate gain become possible so that appropriate aspects enhancement
become possible.
 Dissatisfied: Another section is dissatisfaction in which business users have high
expectations but they get low quality service. This will restrict business to grow as well
as each and every user lead to gain poor service delivery. Although, high and low
expectation with service delivery create dissatisfaction between various individual which
need to understand by management and start delivering high quality services as well.
Along with this, high expectations but low quality also create dissatisfaction between
customers of a company. This element need to understand in an appropriate and suitable
manner so that chances of highly effective and appropriate gain become possible.
On the basis of this provided figure, it get identify that customer satisfaction and high
quality services both are related with each other. It is important for business managers to
understand this concept properly. Although, sometimes, customers have high expectation with
particular brands and services but organisation lead to get failed in deliver high standard
services. This lead to create dissatisfaction between users and impacted overall working. This
should be consider as negative relationship between customer satisfaction and service delivery
process. All services need to be appropriate in frame so that overall growth and development of a
business could become possible.
On the other hand, sometimes, expectations are usually low in frame with certain number
of products and services. But organisation lead to render and perform more than expectations
which support to maximise satisfaction. This lead to enables business and managers to gain and
lead to sustain at market world more properly and effectively. This section also have to
understand in a suitable frame so that chances of appropriate and efficient gain become possible.
This section stated a positive relationship between service quality and customer satisfaction so
that better and efficient gain options could be enhance in a better and supportive manner.
All these things stated that service quality lead to facilitate appropriate and effective gain
for business organisations. Balika is a one of a finest retail sector business in all over Denmark as
they have to deliver high and appropriate quality service to each and every customer properly so
that chances of better and suitable gain become possible. They need to analyse the overall impact
of service delivery on customer satisfaction through which chances of user retention and loyalty
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lead to enhance. Moreover, these factor get understand by applying SERVQUAL investigation in
which five phases get evaluated.
Moreover, relationship get underpin by using and analysing each and every dimension
properly and effectively. A positive and negative relationship of customer satisfaction and
service quality need to understand by business managers of Balika properly so that effective and
efficient gain could become possible. This will contribute and support in overall working as well
as option accomplishment. Hence, a major objective of business is target and goal
accomplishment which facilitate suitable and effective working. All these sections need to
understand in an appropriate and effective manner by business association through which better
and suitable gain options could become possible with overall growth and development.
CONCLUSION
It get derive from this literature review that service quality made vast impact on customer
satisfaction through which chances of retention and loyalty get enhance. Managers of a company
have to underpin each and every section properly by applying and using suitable scholars and
their view points so that better and effective working get done. Although, there is a need to
determine target audience properly and evaluate impact of service delivery on them. This lead to
facilitate in order to promote and support for growth and development through which overall
efficiency could be expand in a positive frame. Along with this, customers are the god for every
business in which management need to work in order to create suitable customer base. This
consideration is helpful for many association by delivering right and optimum quality of services
for managing effectiveness and efficiency. At last, relationship between customer satisfaction
and service quality need to analyse effectively so that better and suitable gain become possible in
order to maximise effectiveness and appropriateness of working.
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