Income Level of the Consumer and Service Quality

Abstract

The bankingsector in Sri feqtp recent years. Services sector accoLr attitudetowardscu eisatisfactionandoptimization ofservice quality. With this background this study is aimed at identifying the significance of the income level of the consumers' on the evaluation of service quality in the retail commercial banking industry of Sri Lanka. Further, to identify whether there is any difference based on the level of income of the consumers on evaluation of service quality of the banks of which they are dealing with. A sample of 150 consumers was selected tfuougli stratified random sampling technique. The scope of the study was retail consumers of private and public commercial banks situated in the Gampahadistrict, who have been dealing with those particular banks rnofe than two years. The 1. lntroduction Deregulation of the banking sector has speed up the competition between banks and expanded the industry to greater extent and also the entrance of foreign banks to Sri Lankan market intensify the competition since the competitive edge that they are having with their huge asset base and advanced technology. Therefore banks need themselves to differentiate from other institutes. But being differentiated is not that easy for banks since their core business is to sell a service. Products can be differentiated easily with its features where as it is difficult with services due to its intangible nature. The only way of differentiating services is tangiblizing the service through improving the quality of the service. Therefore, due to the undifferentiated nature of money and other financial services, banks are now heavily rely on improving qualityof service to getthe competitive edge. Across all service industries, the issue of service quality remains a critical one as businesses strive to maintain a . comparative advantage in the marketplace (Stafford, 1996); ' Because,financi.al services, particularly banks, compete in the marketplace with generally undi{ferentiated products, hence service quatrity becomes a primary competitive weapon (Stafford, 1996). Banks that excel in quality service can,have a data groups based on their income