Customers perceive services in terms of the quality of services and how satisfied they are with their experiences. Companies today recognize that they can compete effectively by distinguishing themselves with respect to service quality and improved satisfaction. This paper assesses various variables affecting service quality and satisfaction level of customers of public and private sector banks along with probability of switching the bank. A survey of 650 customers of both public and private sector banks was conducted. First, factor analysis was applied to the variables under consideration so as to identify key factors impacting the level of service quality. Secondly, binary logistic regression was applied to identify the probability of switching of service provider with reference to satisfaction of customers regarding key service quality dimensions. The three key factors identified were responsiveness, ease of banking and tangibles. A few permutations of the aforesaid with switching intentions exhibited various probabilities with which the bank managers can decide strategies to tap customer loyalty. The exercise had a common conclusion that employee empowerment would improve responsiveness and in turn customer satisfaction. Mere investment in tangibles or improvement in operational procedures will not lead to customer satisfaction by itself. In case of highest level of satisfaction too, there is a thin chance of customer switching over to other service provider. Hence, the banks have to constantly strive to meet customer expectations.

The era of economic liberalization has ushered in a rapid change in the service industry in India. The service industry, which is emerging as the dominant sector in every economy in the world today, has a substantial contribution of over two-thirds of the gross domestic product. This shows that services hold immense potential to accelerate the growth of an economy and promote general wellbeing of the people. Along with all the changes evolving in the service industry, a sea change is also witnessed in the buyer behavior. The new generation buyers are more aware, educated, informed and self motivated. As the country showcases growth in per capita income and prosperity of the people, they tend to become more conscious of their demands and look for sophistication. It becomes imperative for the service provider to display a competitive edge and eye for corporate image which would steer customer growth as well as customer satisfaction. This prompts the service businesses to continuously explore their behavior, lifestyle and demographics and thus get innovative insights for development. All the studies of marketing focus on researching into consumer needs and wants as they are the best source to create a competitive edge for a business. They not only suggest improvements but also provide ideas which are new and vital to the existence of business. Thus, ‘Quality’ can prove to be a magic bullet in this world of aware and urbane customers. It not only increases number of customers and profits but also lower costs and assures longer survival under competitive pressures. Without managing quality, assuring and adding value becomes an impossible proposition.

Marketing Management,Service Quality Management ,Retail Banking with Reference, Satisfaction and Switching Intentions of the Customers.