A path analysis of perceived service quality, customer satisfaction, perceived value, and behavioural intentions in Indian retail banking

Abstract

The paper investigates the path ‘perceived service quality – perceived customer value – customer satisfaction – behavioural intentions’ in Indian retail banking. The service quality attributes were identified from literature and finalised after interviews with bank managers. Two service quality dimensions were extracted using exploratory and confirmatory factor analysis of data. Lisrel ver 8.5 software was used to compare two competing models, i.e. direct effects and indirect effects models. The direct effects model was of acceptable fit based on indices of fit. Perceived service quality, customer satisfaction and perceived value were significant antecedent variables of ‘intention to recommend to others’. Customer satisfaction and perceived value were significant antecedents of ‘intention to repurchase’. The two service quality dimensions had significant direct effects on customer satisfaction and perceived value. The results support the direct effects model of effect of perceived service quality on behavioural intentions in the Indian retail banking context.