Service Quality effect on Customer Satisfaction and Word of Mouth

Sammanfattning: This study has investigated the effect of service quality on customer satisfaction and Word of Mouth in the grocery retail industry. The purpose of the study was to measure the dimensions of service quality and see its effect on customer satisfaction and Word of Mouth. The research question was created to investigate the aforementioned effect, expectations vs performance, How does service quality affect customer satisfaction and Word of Mouth? In order to compare expectations and perceived performance the service quality model, SERVQUAL was used. The thesis is a quantitative study and the data was collected through an online questionnaire where 106 respondents participated. The data was analyzed, both through measuring the gap score between expectations and perceived performance and also regressions were made to test the relationship of the variables. The findings of this study shows that service quality does affect both customer satisfaction and Word of Mouth. However the effect of service quality showed to affect customer satisfaction and Word of Mouth differently, where customer satisfaction had a higher explanatory power than Word of Mouth. Furthermore, the expectations exceeded the perceived performance of service quality in all the dimensions. This created a negative overall comparison gap between the expectations and performance. The comparison gap was fairly low and according to the theory it showed both customer satisfaction and positive Word of Mouth in the grocery retail industry in Luleå. The arithmetic mean which was collected from the questionnaire showed a high value of customer satisfaction and Word of Mouth even though a negative overall gap. However, it could be seen that only a few of the SERVQUAL dimensions could show a significant relationship, two with customer satisfaction and one Word of Mouth.