Quality refers to the closeness of an actual outcome to the expected outcome by the observer. In view of the changing scenario of customer needs, lifestyles and technological innovations, the market has become much more quality-conscious. Therefore, in service delivery, quality has become an essential prerequisite even in the healthcare sector. The SERVQUAL model pioneered by Parasuraman et al. (1988) measures service quality and identifies the potential gaps within the service organizations. The present study measures service quality in select hospitals of Krishna District of Andhra Pradesh, and attempts to diagnose service quality gaps. The results of the study confirmed that the demographic factors and socioeconomic status play a vital role in patients’ satisfaction towards service quality.

Classical marketing was based on the concept of supply. Gone are the days when customers, being part of the seller’s market, were prepared to take anything that was supplied. With the ever-increasing competition on the supply side consequent to implementation of new economic policy in respect of Liberalization, Privatization and Globalization (LPG), the situation on the demand side has been changing rapidly. Customers in these days have started to assert themselves to opt for products with superior quality/service at affordable price, which is also applicable to the healthcare industry. Competition is intensifying in the healthcare industry with the opening up of more and more hospitals. Quality thus gained a focal point in crafting and implementation of strategies at the organizational level.

The SERVQUAL model evaluates the hospitals’ service quality rendered to the patients and the outcome of the gap between expected and perceived quality with due emphasis on the key requirements of healthcare.

Implementation of service quality measures improves operational efficiency in the healthcare sector, resulting in optimum resource allocation, minimum wastage of available resource and significant improvement in the quality, leading to considerable improvement in value addition to the end-users of the hospital service. The primary obligation of hospitals are morals and ethical principals. The legal responsibility is to protect the interests of the patients by maintaining quality services.

Marketing Management Journal, Service Quality, Healthcare Sector, Exploratory Study on Hospitals, Liberalization, Privatization and Globalization (LPG), Below Poverty Line (BPL).