Service Quality and Customer Satisfaction in the Retailing Industry: Evidence from Sarawak, Malaysia

Abstract

These days all organizations are facing challenges in delivering quality services, creating values and satisfying customers, let alone in the retailing industry. The economic instability due to government policy, the rising cost of living, players in the retailing industry are forced to downsize, relocate branch and minimize its operations. Not only that, retailers, specifically hypermarkets which have direct access to individual customers personally try their best to satisfy its customers through monthly promotions, member's discounts, extending physical store to online store and many more. But what are the elements of service quality and how does it affect customer satisfaction? Some studies found that customer's satisfaction seemed to be lower in the retailers that have rigid operating hours. Another study claimed that a long queue was also the culprit for lower customer satisfaction. The truth is, service quality needs assurance, responsiveness, reliability, and tangibility in order to satisfy customers. There was not enough evidence regarding service quality and customers in the retailing industry in Sarawak. Thus, this study seeks to identify the relationship between the two variables in Sarawak’s setting. The researchers adapted the SERVQUAL questionnaire to analyze the gap between perceptions and expectations of the customer, concerning the service at a hypermarket. A total of 169 responses from 181 questionnaires distributed were used for the analysis of this study. The results showed that all the variables in the service quality were positively related to customer satisfaction. These findings showed that assurance, responsiveness, reliability, and tangibility are considered as service quality which then translated into the retailers' policy, management, and operations. The study also proved that service quality can be considered as a competitive advantage and should be taken seriously to ensure the survival of the hypermarket.