1.

9 Literature Review

E-service quality can be defined as the overall evaluations and judgments of customers regarding

the excellence and quality of e-service delivery in the virtual marketplace (Santos, 2003). One of

the definitions of e-service has been conceptualized by Zeithaml and Bitner: 2000). They stated

that internet service quality is the extent to which a web site facilitates efficient and effective

shopping, purchasing, and delivering of products or services.

Quality of service has long been an issue for service providers and in the internet era quality of

service is still an important topic. The quality of service that a customer gets has been linked to

satisfaction. Arguably, if a customer is satisfied, then it is likely that they will become more loyal

and this is a subject which is important to the banking industry (Molina et al., 2007). The

evaluation of service quality has been dominated by the SERVQUAL model developed by

Parasuraman et al. (1985) who identified five dimensions from which customer expectations

could be compared with customer perceptions.

As e-service quality becomes an important criterion to measure banking web sites, many

researchers have developed key dimensions of e-service quality to gauge consumer perception of

e-service quality. The four dimension of e-service model developed by Parasuraman et al. (2005)

was chosen for use in this study to measure perceived consumer e-service quality. The model

consists of four dimensions of E-S-QUAL (efficiency, system availability, fulfillment, and

privacy) and three dimensions of E-RecS-QUAL (responsiveness, compensation, and contact).

The first four dimensions of e-SQUAL are related to core online service, whereas the remaining

three dimensions concern service recovery. That is, E-S-QUAL is related to consumers'

perceptions of e-service quality when consumers experience no problems with the site (Yang and
Fang, 2004), whereas E-RecS-QUAL deals with problems encountered during the online

purchase process (Nusair and Kandampully, 2008). The perceptual attribute level and

categorized of e-SQ dimensions consists of 11 dimensions (Zeithaml et al 2000):

 Reliability, Responsiveness, Access, Flexibility, Ease of navigation, Efficiency,

Assurance/trust, Security/privacy, Price knowledge, Site aesthetics,

Customization/personalization

E-S-QUAL Dimensions

Efficiency: Parasuraman et al. (2005) defined efficiency as “the ease and speed of accessing and

using the site”. Well-organized site and information, fast transaction, and simplicity of using the

site are key elements related to the efficiency dimension. Loonman et al., (2006) indicated that

efficiency is the most crucial element in influencing e-service quality. Previous research

indicated that ease of use or ease of navigation is critical for influencing customer satisfaction

(Jayawardhena and Foley, 2000; Yang and Fang, 2004).

System availability: The dimension of system availability is defined as “the correct technical

functioning of the site” (Parasuraman et al., 2005, p. 220). Technical problems such as non-

working web sites and broken pages are related to consumers' perceptions of overall quality

(Eriksson et al., 2008; Santos, 2003).

Fulfillment: The fulfillment dimension is defined as “the extent to which the site's promises

about order delivery and item availability are fulfilled” (Parasuraman et al., 2005, p. 220).

Fulfillment is an important factor that affects e-service quality (Parasuraman et al., 2005;

Wolfinbarger and Gilly, 2003) and e-satisfaction (Al-Hawari et al., 2009: Morgan 1994).
According to Yang and Fang (2004), fulfillment has a significant effect on consumer satisfaction

and dissatisfaction.

Privacy: The dimension of privacy is defined as “the degree to which the site is safe and protects

customer information” (Parasuraman et al., 2005, p. 220). Privacy has a significant influence on

consumers' evaluations of web sites as well as their satisfaction with e-retailers (Branscum and

Tanaka, 2000). A number of studies have examined the importance of privacy on consumer

perceptions of e-shopping (Law and Leung, 2002; Santos, 2003; Yang and Fang, 2004; Zeithaml

et al., 2002) and consumer satisfaction (Lin, 2007; Szymanski and Hise, 2000). Consumers

hesitate to patronize a retail store when they feel insecure and perceive risk associated with

purchase (Korgaonkar and Karson, 2007). With regard to risk perceptions, protection of personal

information which facilitates consumer trust is a critical issue in the context of e-retailing.

E-RecS-QUAL Dimensions

Responsiveness: The responsiveness dimension is defined as “effective handling of problems

and returns through the site” (Parasuraman et al., 2005, p. 220). Responsiveness is related to a

company's willingness to help consumers and to provide prompt service when consumers have

problems (Kim et al., 2006). Previous studies indicated that responsiveness influences consumer-

perceived service quality and customer satisfaction (Lee and Lin, 2005; Yang and Fang, 2004;

Yang and Jun, 2002).

Compensation: The compensation dimension is defined as “the degree to which the site

compensates consumers for problems” (Parasuraman et al., 2005). Leibermann (2002) indicated
that compensation has great influence on customer’s perception on e-service quality and

customer satisfaction.

Contact: The dimension of contact is defined as “the availability of assistance through telephone

or online representatives” (Parasuraman et al., 2005, p. 220). Providing e-mail addresses, phone

and fax numbers, and other communication channels such as live help and chat room would be

related to the contact dimension (Aladwani 2001). Previous studies indicated that degree of

contact influences consumer-perceived service quality and customer satisfaction (Eriksson et al.,

2008; Kim et al., 2010).

E-satisfaction

Anderson and Srinivasan (2003) defined e-satisfaction as ‘‘the contentment of the customer with

respect to his or her prior purchasing experience with a given-commerce firm’’. The positive

relationship between e-service quality and e-satisfaction is well examined in the previous e-

service quality related studies (Zenithal et al., 2002; Zhang and Prybutok, 2005).

Relationship between E-service quality and e-satisfaction

A number of studies have examined various aspects of e-service quality and e-satisfaction and

some have been hypothesized to be critical, whereas the importance of others has been

demonstrated empirically. E-satisfaction also can be defined as the contentment of the customer

with respect to his or her prior purchasing experience with a given electronic commerce firm. A

dissatisfied customer is more likely to search for information on alternatives and more likely to

yield to competitor overtures than is a satisfied customer. Also, a dissatisfied customer is more

likely to resist attempts by his or her current retailer to develop a closer relationship and more
likely to take steps to reduce dependence on that retailer. An excellent e-service quality resulted

in customer satisfaction. Customer satisfaction has long been recognized in marketing thought

and practice as a central concept as well as an important goal of all business activities. High

customer satisfaction has many benefits for the firm, such as increased customer loyalty,

enhanced firm reputation, reduced price elasticity’s, lower costs of future transactions, and

higher employee efficiency. According to Oliver (1997) satisfaction is “the summary

psychological state resulting when the emotion surrounding disconfirmed expectations is coupled

with a consumer’s prior feelings about the consumer experience.” From his perspective,

“satisfaction may be best understood as an ongoing evaluation of the surprise inherent in a

product acquisition and/or consumption experience.”

Ease of use appears relevant because Internet-based transactions are complex and intimidating to

many customers. System availability appear to be important because when users can control the

content, order, and duration of product-relevant information, their ability to integrate, remember,

and thereby use information improves (Ariely 2000). Reliability/fulfillment has been cited as an

important facet of e-SQ (Palmer, Bailey, and Faraj 1999; Wolfinbarger and Gilly 2003). In fact,

Wolfinbarger and Gilly (2003) found that reliability/ fulfillment ratings were the strongest

predictor of customer satisfaction and quality, and the second strongest predictor of intentions to

repurchase at a site. Privacy (the protection of personal information) and security (the protection

of users from the risk of fraud and financial loss) have been shown empirically to have a strong

impact on attitude toward use of online financial services (e.g., Montoya-Weiss et al. 2003).

Traditional service quality verses e-sq

Traditional service quality refers to the quality of all non-based customers interactions and

experience with companies. (Gronroos 1982, Lehtinen and Lehtinen 1982, Lewis and Blooms,
1983; Parasuraman, Zeithaml, and Berry 1985; Sasser, Olsen and Wyckoff 1978,) suggested that

service quality stems from a comparison of what customers feel a company should offer (i.e their

expectations) with the companys performance.

Researches by Parasuraman and Zeithaml 2002 have revealed that only a few scholarly articles

deal directly with how customers perceive e-sq and its antecedents and consequences.

Parasuraman, Zeithaml and Berry (198869, 1991) conducted empirical studies in several

industries to develop and refine servqual and they came up with three broad conclusion that are

potentially relevant to defining, conceptualizing and measuring perceived e-sq emerge from the

traditional sq literature.

 The notion that quality of service stems from a comparison of actual service performance

with what it should or would be has broad conceptual support, although some still

question the empirical value of measuring expectations and operationalising SQ as a set

of gap scores;

 The five SERVQUAL dimensions of reliability, responsiveness, assurance, empathy, and

tangibles capture the general domain of SQ fairly well, although (again from an empirical

standpoint) questions remain about whether they are five distinct dimensions; and

 Customer assessments of SQ are strongly linked to perceived value and behavioral

intentions

Challenges of using e-service

Consumers judge the privacy of online service, some customers appear to depend on the trust

symbols (such as a key) that appear on sites, and others read privacy policies. However, two

recent studies (Wolfinbarger and Gilly 2002; Zeithaml et al. 2000) found that consumers really
did not know how to judge privacy with confidence and that even with these cues, they felt

unsure of the privacy/security of a site.

Conceptual Model for understanding and improving E-service Quality

A conceptual model of SQ developed by Parasuraman et al. (1985) defines customer-perceived

SQ as the magnitude and direction of the discrepancy between service expectations and

perceptions and depicts this discrepancy as a function of four organizational gaps associated with

the design, marketing, and delivery of services:

Gap 1: Difference between customer expectations and management perceptions of customer

expectations

Gap 2: Difference between management perceptions of customer expectations and SQ

specifications

Gap 3: Difference between SQ specifications and the service actually delivered

Gap 4: Difference between service delivery and what is communicated about the service to

consumers

Although the above gaps were identified in the context of traditional SQ, Zeithaml et al.'s (2000)

exploratory research indicated the presence of similar shortfalls in companies interacting with

their customers through the Internet. Figure 1 presents a conceptual model that brings together in

a common framework the following:

 Customer assessment of e-SQ and its consequences (top half of the model) and

 Organizational deficiencies that could contribute to poor assessment of e-SQ (bottom half

of the model).
The company side shows three potential disconnects-- depicted as the information, design, and

communication gaps--that can occur in the process of designing, operating, and marketing Web

sites. These gaps collectively contribute to the "fulfillment gap" on the customer's side,

triggering a chain of adverse effects on perceived e-SQ, perceived value, and

purchase/repurchase behavior.

Figure 1; the conceptual Model for understanding and improving E-service Quality

Customer

Customer Customer
website website Perceived E-sq Perceived Purchased/
requirement experiment value
Repurchase
d
Fulfillment
Gap
 Company

Information
Gap
Marketing Design and
of the operation of
website the website

Managements
believes about
Designs
customers
Gap
requirement
Communication

Gap

Source: Zeithaml et al.'s (2000)

CUSTOMERS PERCEPTION OF E-SERVICE QUALITY AND SATISFACTION IN

THE BANKING INDUSTRY: FNBB

Purpose
The survey is aimed at compiling information on customer’s perception of e-service quality in
the bank industry in Gaborone. Please be kind enough to assist completing this study as it is part
of my Degree Program. Your information will be kept as confidential as possible. Thank you in
advance.

1. What is your nationality? -----------------------------------------------------

2. Gender : Male Female

3. Age: Under 20
 21-35
36-50
51-60
Over 60

4. Education : primary
Secondary
Certificate/diploma
Undergraduate degree
Post graduate degree
Other, please specify-------------------------------------------

6. Occupation: unemployed
Employed
Other, please specify------------------------------------------------

7. How often do you use online service?

Never
Weekly
Monthly
Other, please specify ------------------------------------------------------

Please turn to the next page

This questionnaire will be used in a study to find out how your experience and opinion on the e-
service quality offered by FNBB. Please answer the following questions based on what you
expect from an excellent e-service provider indicating your level of agreement where: 5=strongly
agree, 4=agree, 3= neutral, 2= disagree and 1=strongly disagree
Strongly agree neutral disagree Strongly
agree disagree
Efficiency
It is easy to find what I want with FNBB’s online
service
It is easy to get anywhere on the FNBB site
The FNBB service enable me to complete a
transaction quickly
Information on the FNBB site is well organized
The FNBB site load its pages fast
The FNBB site is simple to use
 System availability
FNBB network is always available
The FNBB site pages do not freeze after I
entered my order information
When logging on the FNBB site it launches and
run right away

Reliability/fulfillment
FNBB delivers orders when promised
The FNBB site makes items available for every
delivery within a suitable time frame
FNBB site has in stock the items the company
claims to have
FNBB is truthful about it offerings
FNBB makes accurate promises about delivery
of products

Privacy
FNBB protects information about my
transactions
FNBB do not share my personal information
with other bank users
FNBB protects information about my credit
card

Please turn to the next page

Satisfaction/dissatisfied FNBB Questionnaire

I. Think of a time when you had a very dissatisfied interaction with FNBB staff. Can you
explain what exactly
happened?---------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------

II. When did the incident happen?

---------------------------------------------------------------------

III. What was your reaction? Please tick the appropriate answer(s); you may tick more than
one answer.

Reported to the management

Told a friend
Got crossed with the employee
Did nothing with it
 Any other
………………………………………………………………………………………………………
………………………………………………………………………………………………………

IV. If you reported the incident to the management how was it handled? (Please tick the
appropriate answer (s); you may tick more than one answer.

Received an apology
Corrected the mistake
Referred to other employees
Did nothing

V. Explain the cause of the

incident-------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------

VI. Were you satisfied with the way he/she handled it? (Please tick the appropriate answer)

Very satisfied
Satisfied
Somewhat satisfied
Not satisfied
Very dissatisfied

VII. If not what is it that the management should have done ---------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------