Application of Servqual Model on Measuring Service Quality: A Bayesian Approach

Abstract

Financial liberalization has led to intense competitive pressures and private banks dealing in retail banking are consequently directing their strategies towards increasing service quality level which fosters customer satisfaction and loyalty through improved service quality. This article examines the influence of perceived service quality on customer satisfaction suing an adaptive Bayesian frame work in private sector banks Bayesian structural regression estimates are shown to provide a banking institution with reliable information for use in positioning the private banks in its market place.. The article concludes that increase in service quality of the banks can develop customer satisfaction which ultimately retains valued customers.

Keywords: Perceived Service Quality, SERVQUAL, customer satisfaction, BSR, Structural Regression