Zone of Tolerance as an Effective Management Tool to Assess Service Quality in Singapore's Stockbroking Industry

Abstract

The zone of tolerance (ZOT) is an innovative concept that has attracted considerable attention in the services marketing arena. Professional services are credence products with hardly any tangible cues to signal quality. A cross-section of 147 recent stock market investors in Singapore provided data on the way they rated their respective stockbroking agents. In developing an initial tool for the stockbroking context, the 44 attributes of service quality were operationalized generating five dimensions which were identified as trust/reliability, information cues, empathic investment advice, relationship building and understanding investor profile. Measure of service adequacy (MSA), measure of service superiority (MSS) and zone of tolerance were calculated. This study revealed that attention should be focused on the dimensions of empathic investment advice and information cues, as stockbrokers' performance on these two dimensions was clearly inadequate. The proposed exploratory instrument used here to measure the service standards in the stockbroking industry could serve as a start for other studies in the professional services context. Some interesting managerial implications of the findings have been discussed.