Evaluating Customer Satisfaction in Iranian Agricultural Cooperatives by use of SERVQUAL Model

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1 International Journal of Agriculture and Crop Sciences. Available online at IJACS/2014/7-4/ ISSN X 2014 IJACS Journal Evaluating Customer Satisfaction in Iranian Agricultural Cooperatives by use of SERVQUAL Model Mohammad Sadegh Ebrahimi 1, Farshad Imani 2 1. Assistant professor and graduated student of rural development, College of Agriculture, Isfahan University of Technology, Isfahan, Islamic Republic of Iran. 2. Isfahan , Iran. Corresponding author Ebrahimi_ms@cc.iut.ac.ir ABSTRACT: This study attempts to assess customer satisfaction in Iranian agricultural cooperatives by use of SERVQUAL model. The research is based on survey study. The population of research was the farmer s members in agricultural cooperatives in Saveh Towenship in Iran (N=4500). The sampling population is estimated 90 (with the use of Cochran formula and by use of random sampling were selected. The main tool for this study was a questionnaire and the reliability of questionnaire was calculated by Alfa Cronbach coefficient (0.639) for different sections after conducting a pilot study. SERVQUAL methodology is proven to be a powerful tool to analyze the customer satisfaction in different sections of science and industry. The standard SERVQUAL questionnaire including the two parts of individual characteristics and the five service quality dimensions was used for data collection. Data were analyzed by SPSS 21 using descriptive statistics and one-way variance analysis, Tukey s post hoc test and paired T-test. The results of research showed that, there are satisfaction gaps in all the customer satisfaction dimensions in SERVQUAL model for Iranian agricultural cooperative. Keywords: Customer Satisfaction, Agricultural Cooperatives, SERVQUAL Model. INTRODUCTION The evaluation of quality for services is complex because of their intrinsic nature of heterogeneity, inseparability of production and consumption, perishability and intangibility (Frochot and Hughes, 2000). Customer satisfaction is generally understood as the sense of satisfaction that a consumer feels when comparing his preliminary expectations with the actual quality of the acquired product. Thus, satisfaction is closely linked with the quality of the service (Krivobokova, 2009). Obtaining new customers and holding current customers have always been considered as two main approaches in service organizations. (Gronroos, 1982). A service can have too many qualitative specifications. Thus measuring the quality of a service can be a very difficult exercise. Moreover, the expectation of the customer from the service can vary noticeably based on a range of factors like prior experience, personal needs and the other people's experience. This may lead to expand the gap between expectations and perceptions of a customer. Research shows that service quality leads to customer loyalty and attraction of new customers, positive word-of-mouth, employee satisfaction and commitment, enhanced corporate image, reduced costs, and increased business performance (Akbaba, 2006). It is generally believed that successfully managed agricultural cooperatives have great potential in agricultural development in particular and rural development in general. Member farmers in agricultural cooperative running their farms independently for their own benefits are banded together voluntarily as one entity, a cooperative for their mutual benefits, participating in cooperative business as customers and owners and acting collectively. In doing so, they make commitments to marketing their products and purchasing their raw materials through their cooperative. Literature Review There is a general consensus among most researchers that satisfaction is an attitude or evaluation that is formed by the customer or client comparing their expectations and perceptions. Hardeep and Amandeep 2007 investigated the customer relationship management strategies and approaches it is possible to gain a competitive advantage in the market place as the expectations of customers can be reached due to the manner in which the product and/or service are presented to the customer. The results of this research declare when there is a difference between customers expectations and customers perceptions, a customer gap

2 emerges. Therefore, to manage customer relationships, it is necessary to decrease the gap between the customers expectations and their perceptions. Akaba (2006) investigated the service quality expectations of business hotels. The findings revealed that business travelers had the highest expectations for the dimension of convenience followed by assurance, tangibles, adequacy in service supply, and understanding and caring, respectively. Service quality has been increasingly recognized as a critical factor in the success of any business (Parasuraman, Zeithaml & Berry. 1988). The topic of measuring service quality has been studiedd widely in the past few decades. Parasuraman and et al. (1985) described service quality as the ability of an organization to meet or exceed customer expectations. They listed ten determinants of service quality that can be generalized to any type of service, including; Tangibles, Reliability, Responsiveness, Competence, Access, Courtesy, Communication, Credibility, Security and Understanding (Kitchroen, 2004). Gunderson, Gray and Akridge (2009) used a variant of the SERVQUAL framework to develop a hierarchical model of service quality for cooperatives that service row crop producers in the Midwest US. This work marks a departure from this literature by assessing which customer characteristics matter to different service quality groups. Also Brady and Cronin (2001) believed that the consumer perception of service quality is a complex process. Therefore, multiple dimensions of service quality have been suggested (Brady & Cronin, 2001). Research Setting and Methodology Research areas The selected area of this study is Saveh Township in Markazi province in Iran. Markazi province is located almost in the center of Iran between 33 30' and 30 35' N latitude and 48 57' and 51 E longitude. The province includes the townships of Arak, Ashtian, Delijan, Khomein, Komijan, Mahallat, Saveh, Shazand (Sarband), Tafresh and Zarandiyeh. It houses 1,314,849 people in an area of 29,152 km2 and has 18 districts, 61 sub-districts and 1342 villages. Markazi province has a unique position in the country because of its fertile lands, and the production of some agricultural and livestock products. It can be said that approximately 50% of the people in Markazi province live in rural areas and their main occupation is farming and animal husbandry. Saveh township is located at the east of. The area of this township is 8855 square kilometer. This area is important due to settlement of population, agricultural and industrial activates. This township has 4 sections and 13 districts. The population of this township is 607,000 and 52 percent are urban people and 48 percent are rural people. The agricultural products of this reign include wheat, barley, pulses, sunflower, cotton, sugar beet, tomato, onion, pomegranate, cantaloupe and pistachio. Figure1. the map of Iran, Markazi province and Saveh Township METHODOLOGY The SERVQUAL scale is a survey instrument which claims to measure the service quality in any type of service organization on five dimensions which are tangibles, reliability, assurance, responsiveness and empathy (Parasuraman et al., 1988). These methods can be broadly categorized in two groups, as incident- methods utilize the based or attribute-based service quality measurement methods. The incident-based incidents that customers experience in service contact situations. Attribute-based methods exist in a wide range of variants. Among these variants, the SERVQUAL instrument has attracted the greatest attention as a result of its claim of being able to measure the relevant dimensions of the perceived service quality, regardless of which service industry is being consideredd (Akbaba, 2006, p 172). Parasuraman and et al developed a multiple- ٢٠٣

3 attribute model called SERQUAL for measuring service quality. This model measures service quality using five distinct dimensions that can be considered as indicators of construct of perceived service quality. The five dimensions of SERQUAL are "Tangibles", "Reliability", "Responsiveness", "Assurance", and "Empathy" as described in Table1. Dimension Tangibles Reliability Responsiveness Assurance Empathy Table 1. five distinct dimensions in SERQUAL model Description The appearance of physical facilities, equipment, personnel and communication materials The ability to perform the promised service dependably and accurately The willingness to help customers and provide prompt service The knowledge and courtesy of employees and their ability to convey trust and confidence The caring, individualized attention the firm provides its customers A self-administered questionnaire, an adapted/modified version of SERVQUAL, was used in this study. The initial instrument consisted of 44 items capturing the 10 dimensions refined and condensed to a purified instrument that consisted of 20 sets of expectation and perception measuring items and five dimensions. Statements in both sections used a five-point Likert scale ranging from Strongly Agree (5) to Strongly Disagree (1), with no verbal labels for the intermediate scale points (i.e., 2 through 4) to measure the intended area. The resultant five dimensions and their definitions were: Tangibles: Physical facilities, equipment, and appearance of personnel. Reliability: Ability to perform the promised service dependably and accurately. Responsiveness: Willingness to help customers and provide prompt service. Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy: Caring, individualized attention the firm provides its customers. A pilot test was undertaken to assess the reliability of the attributes, and to ensure that the wordings of the questionnaire were clear. Twenty questionnaires were completed by the guests in accompaniment of researcher. Some problems were identified with the wordings and implications of some questions, so some minor revisions were made to avoid confusion. Validity and reliability of the adapted/modified scale were established. Validity tests how well an instrument that is developed measures the particular concept it is supposed to measure. Reliability of a scale on the other hand indicates the stability and consistency with which the instrument measures the concept and helps to assess the goodness of a measure (Sekaran, 2000). To have an idea on the internal consistency among the items and on the convergent validity of the overall scale, a reliability analysis was employed. Within-scale factor analyses were used to ensure that all indicators in the scale measure the same construct. This process is known as construct validity. Reliability analysis was also applied to test the internal consistency of each of the expectation and perception attributes. The results showed that the Cronbach s Alfa coefficient for all the expectations and perception attributes0.693 was internally consistent and reliable. Table 2. self-administered questionnaire in study Part 1: Center column contains some attributes that customers would expect from Agricultural cooperative. There are two scales on each side of this column, the one on the left measures your expectations and the one on the right measures your perceptions. Please read each attribute first and then circle the numbers in both scales that indicate your judgments. The corresponding values for the numbers are shown at the top of both scales. Expectations List of attributes Perceptions Very low Low Moderate High Very high Modern facilities and equipment Very low Low Moderate High Very high The Statistical Package for the Social Sciences version 18.0 was used to analyze the data. Descriptive statistics analysis was used to measure customers expectation and perception scores. Paired t-test was carried out to test the significant difference between the two means of expectations and perceptions. The agricultural cooperatives membership in Saveh was 5000 Shareholders as cooperatives customers. For responding the survey, 95 member had been selected randomly and all of them were participated the survey and returned their answers. RESULTS The results of research showed that for each service dimension based on SERQUAL model, (considering the table 3) there was gap in every aspect of service quality. There was a quality gap in all service quality dimensions and the related measuring phrases. ٢٠۴

4 The highest average of quality gap was observed in the empathy (1.87) and then in tangibles (1.65), assurance (1.52) and reliability (1.42), respectively. The lowest average belonged to responsiveness (1.29). Table 3. Values for each attribute obtained through analysis Attributes Expectations means (SD Perceptions means (SD) (PM EM) Tangibles Reliability Responsiveness Assurance Empathy Note: SD represents standard deviation; PM represents perception mean; EM represents expectation mean. Table 4. The results of pair tests among perceptions and expectation Attributes Confidence Interval of t-value df Sig Std. Std. Error the Difference Mean Deviation Mean Lower Upper Tangibles Reliability Responsiveness Assurance Empathy The results of research showed that there was a statistically significant different between expectations and perceptions of services in agricultural cooperatives, the gap in different dimensions of services quality was significant (p<0.001). In other words there is a significant difference between every aspect of expectation and perception customer in all dimensions of services in agricultural cooperatives members viewpoint. CONCLUSION AND SUGGESTIONS The research findings also confirmed that, although the SERVQUAL scale was a very useful tool as a concept, it needed to be adapted for the specific service segments and for the cultural context within which it was used (Akbaba, 2006). The result of research showed that the level of service quality in agricultural cooperatives in five dimensional in SERVQUAL model was low from the agricultural cooperatives members viewpoint. The amount of computed service gaps reveals the priorities of modification and improvement of services in agricultural cooperatives. The scores for the tangibles, reliability, responsiveness, assurance and empathy reflect significant differences. In other words, they indicated that there were gaps among the observations and expectations of clients in terms of these dimensions; this result was similar with the result reported by Kumar et al. (2009). Also the result of research was similar as result reported by Douglas and Connor (2003), it seems that consumers perceive service quality as poor in some dimensions meaning their expectations fall short of their experience. According to the finding, there is to suggest several actions to reduce the amount of service gaps: Education or recruiting staff that understand the importance of service and have the aptitude to provide the members with effective resolutions on the first contact whenever possible. Reinforcing the staff capabilities through ongoing opportunities for training and development. Requesting feedback from the customers and members regularly using surveys or through representatives who have close interaction with students. The measuring and monitoring of customers and members complaints is vital and organization must have suitable systems and commitment to do this. Encouraging customers and members to share their ideas and using their opinions in planning. REFERENCES Akbaba A Measuring service quality in the hotel industry: A study in a business hotel in Turkey. International Journal of Hospitality Management, Volume 25, Issue 2, Pages Alves AR, Vieira A The SERVQUAL as a marketing instrument to measure services quality in higher education institutions. Poland; Second International Conference. Arambewela R, Hall J A comparative analysis of international education satisfaction using SERVQUAL. J Serv Res.6: Arbooni F, Shoghli A, Badri Poshte S, Mohajeri M Survey the gap between expectations and provided educational services to students of Zanjan University of medical sciences in SDMEJ. 5 (1): Brady M, Cronin J Some new thought son concept ualising perceived service quality: a hierarchical approach. Journal of Marketing, 65(3), Donnelly M, Neil JK, Rimmer R, Shiu M Assessing the quality of police service using SERVQUAL, An international journal of police strategies & management, vol. 29, No.1, pp Douglas L, Connor R Attitudes to service quality (The expectation gap). Nutrition & Food Science, 33(4), Frochot I, Hughes H Histoqual: the development of a historic houses assessment scale. Tourism Management 21 (2000), ٢٠۵

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