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IJBM
29,3

Bank service quality: comparing

Canadian and Tunisian customer
perceptions

224

Riadh Ladhari

Received January 2010

Revised September 2010
Accepted November 2010

Faculty of Business Administration, Laval University, Quebec City, Canada

Ines Ladhari
Higher Institute of Management of Sousse, Sousse, Tunisia, and

Miguel Morales
Sobey School of Business, Saint Marys University, Halifax, Canada
Abstract
Purpose The aim of this paper is to compare perceptions of bank service quality among Tunisian
and Canadian customers, and to determine which dimensions of service quality make the greatest
contribution to overall customer satisfaction and loyalty.
Design/methodology/approach Data were collected using self-administered questionnaires from
two convenience samples of bank customers (250 in Canada and 222 in Tunisia). Service quality was
measured using the five SERVQUAL dimensions of tangibles, reliability, responsiveness, assurance,
and empathy. Data were analyzed using confirmatory factor analysis, ANOVA and linear regression.
Findings Respondents in both countries reported high levels of perceived service quality in banks.
However, Canadians reported higher perceived service quality than Tunisians for all five SERVQUAL
dimensions, and for 21 of the 22 individual items. In the Canadian sample, empathy and reliability
were found to be the most important predictors of satisfaction and loyalty, while in the Tunisian
sample, reliability and responsiveness were the most important predictors of satisfaction and loyalty.
Practical implications Canadian bank managers should recognize the importance of empathy
in service delivery by implementing appropriate customer-oriented strategies. Tunisian bank
managers should focus on performing promised services dependably and accurately.
Originality/value Despite the large number of studies on individual countries, few studies
compare bank service quality among different countries. The present study compares perceptions of
bank service quality between consumers in two countries Canada and Tunisia that have different
economic and cultural environments.
Keywords Banks, Customer services quality, Cross-cultural studies, Individual perception, Canada,
Tunisia
Paper type Research paper

International Journal of Bank

Marketing
Vol. 29 No. 3, 2011
pp. 224-246
q Emerald Group Publishing Limited
0265-2323
DOI 10.1108/02652321111117502

1. Introduction
In the banking industry, as in other service industries, providing superior service
quality enhances customer satisfaction and contributes to profitability. Superior
service quality lowers customer defection, enhances customer loyalty, provides
opportunities for cross-selling, increases word-of-mouth recommendation, and
enhances corporate image (Arasli et al., 2005a; Baumann et al., 2007; Cronin et al.,
2000; Ehigie, 2006; Jun and Cai, 2001; Nguyen and Leblanc, 1998; Wang et al., 2003). In
addition, outstanding service quality facilitates the development and maintenance of

long-term relationships with customers, which is especially important in the

competitive business environment of modern banking (Camarero, 2007; Hawke and
Heffernan, 2006).
A great deal of research exists on service quality in the banking sector. To measure
service quality and identify the dimensions that customers consider in evaluating bank
services, the most commonly used research instrument is SERVQUAL (Parasuraman
et al., 1988). This generic scale for measuring service quality in a variety of service
sectors is used in most studies of bank service quality (Arasli et al., 2005b; Chi Cui et al.,
2003; Lam, 2002; Mels et al., 1997; Othman and Owen, 2001; Zhou, 2004; Zhou et al.,
2002). In addition to the SERVQUAL scale, alternative instruments are available for
specific use in the banking sector (Avkiran, 1994; Bahia and Nantel, 2000; Aldlaigan
and Buttle, 2002; Jabnoun and Al-Tamimi, 2003; Karapte et al., 2005; Guo et al., 2008),
but they have not been used as extensively as SERVQUAL.
Studies on bank service quality have been conducted in a variety of countries,
including: Canada (Bahia and Nantel, 2000); the United Arab Emirates ( Jabnoun and
Al-Tamimi, 2003); China (Lam, 2002; Guo et al., 2008); South Africa (Mels et al., 1997);
Cyprus (Karapte et al., 2005); the UK (Aldlaigan and Buttle, 2002); Nigeria (Ehigie,
2006); South Korea (Chi Cui et al., 2003); Kuwait (Othman and Owen, 2001); Australia
(Avkiran, 1994; Baumann et al., 2007); and Malaysia (Amin and Isa, 2008), to name just
a few. Despite the large number of studies on individual countries, few studies compare
bank service quality among different countries, (Dash et al., 2009; Glaveli et al., 2006;
Lewis, 1991; Malhotra et al., 2005). Such studies are particularly scarce between
developed and developing countries. However, cross-cultural service quality studies
have become increasingly relevant as international business flourishes along with a
more integrated global banking environment (Arasli et al., 2005a; Dash et al., 2009).
The purpose of the present study is, therefore, to compare perceptions of bank
service quality between consumers in two countriesCanada and Tunisiathat have
different economic and cultural environments. Canada is one of the worlds wealthiest
developed countries. As one of the ten largest economies in the world, Canadas service
sector accounts for more than two-thirds of gross domestic product (GDP) and employs
nearly three-quarters of the workforce (Statistics Canada, 2010). In contrast, although
Tunisia is an emerging economy, it has one of the highest per-capita GDPs in Africa
and is ranked as the most competitive economy on the African continent (and the 40th
in the world) by the World Economic Forum (www.weforum.org). The service sector in
Tunisia accounted for about 40 percent of the GDP and employed half of the working
population in 2006 (OECD, 2008).
Culturally, Canada and Tunisia are quite different, as measured by Hofstedes
cultural dimensions. Tunisian society receives high scores for collectivism and
power distance, while Canada tends to be more individualistic and receives low
scores for power distance (Hofstede, 2001). Owing to cultural and economic factors,
service users in these two countries are expected to have different criteria for service
quality.
The objectives of this unique study are twofold. The first is to compare bank service
quality as perceived by Tunisian and Canadian service users. The comparison uses the
five dimensions (and corresponding 22 items) of the SERVQUAL instrument. The
second objective is to examine the contribution made by each of the five SERVQUAL
dimensions in explaining overall customer satisfaction and loyalty.

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The remainder of this paper is organized as follows: after this introduction, the next
section reviews the literature on perceived service quality and its relationship to overall
satisfaction and loyalty in the context of bank services. The following section describes
the methodology used in the empirical study of bank customers in Canada and Tunisia,
including the sampling procedure and the composition of the questionnaire. The paper
then presents the findings of the empirical study and concludes with a discussion of the
major findings, limitations, and managerial implications.
2. Literature review
2.1 Perceived service quality measurement
Perceived service quality refers to consumer judgment about a service providers overall
excellence (Parasuraman et al., 1988). This judgment is the result of the difference
between what a customer believes a service provider should offer (expectations) and his
perception of the actual performance of the service (Parasuraman et al., 1988).
Numerous models exist that measure service quality, including the well-known
SERVQUAL instrument (Parasuraman et al., 1988; Ladhari, 2009a) based on the
assumption that perceived service quality derives from the consumers comparison of
expected service and actual service performance (Gronroos, 1984; Parasuraman et al.,
1988). SERVQUAL measures five dimensions:
(1) tangible elements (appearance of equipment, physical facilities, and
personnel);
(2) reliability (ability to perform the promised service accurately and dependably);
(3) responsiveness (willingness to help customers and provide prompt service);
(4) assurance (courteous and knowledgeable employees who can inspire
confidence and trust); and
(5) empathy (personalized attention and care).
The SERVQUAL questionnaire includes two batteries of 22 items each, measuring
customer expectations and perceptions of the service actually received.
This model, originally developed and validated among customers of a credit card
company, a long-distance telephone company, an appliance repair-and-maintenance
services firm, and a bank (Parasuraman et al., 1988), has now been applied to a wide
variety of service industries, including telecommunication (Van der Wal et al., 2002);
health care (Kilbourne et al., 2004); restaurants (Lee and Ulgado, 1997); insurance (Mels
et al., 1997); retail chains (Parasuraman et al., 1985); information systems (Jiang et al.,
2000); and libraries (Cook and Thompson, 2001). The SERVQUAL instrument has been
used in countries that include the US (Kilbourne et al., 2004; Lai, 2006), China (Zhou
et al., 2002), Australia (Baldwin and Sohal, 2003), Hong Kong (Lam, 1997) and Cyprus
(Arasli et al., 2005b). However, despite its widespread use, SERVQUAL is not without
its critics, especially with regard to its reliability and validity (convergent,
discriminant, and predictive), the use of difference scores, and the stability of its
factor structure (Ladhari, 2009a).
The assumption that service quality is determined by the difference between
expectations and perception has been extensively debated in the literature. The
relevance of using difference scores (i.e. gap scores) to represent service quality has
been questioned on both conceptual and empirical grounds. Brown et al. (1993)

question the validity of the difference scores, claiming that they are not distinct from
perception and expectation scores. Babakus and Boller (1992) report that the perception
scores are the principal contributor to the perception-minus-expectation scores. Peter
et al. (1993) report that difference scores have poor reliability. Other researchers find
that SERVPERF (i.e. performance scores) outperforms SERVQUAL (i.e.
perception-minus-expectation scores) in predicting overall service quality (Angur
et al., 1999) and satisfaction (Nam, 2008). Cronin and Taylor (1992) claim that
SERVPERF is a more appropriate approach for measuring service quality, noting that
using the SERVPERF scale reduces the required number of statements in the
questionnaire from 44 to 22.
The validity of the SERVQUAL instrument in the banking sector elicits mixed
results (Mels et al., 1997; Lam, 2002; Zhou et al., 2002; Chi Cui et al., 2003; Zhou, 2004;
Arasli et al., 2005a). For example, Lam (2002) uses the SERVQUAL instrument in
Macaus (China) banking sector and finds six (rather than five) dimensions:
(1) tangibles;
(2) reliability;
(3) responsiveness;
(4) assurance;
(5) empathy 1 (called tacit understanding of needs); and
(6) empathy 2 (convenient operating hours).
Arasli et al. (2005b) apply SERVQUAL in the Cyprus banking sector and identify only
three dimensions:
(1) tangibles;
(2) reliability; and
(3) responsiveness empathy (which includes items from the original
responsiveness and empathy dimensions).
The assurance dimension was eliminated in this study due to inadequate factor
loadings. Ladhari (2009b) examines the psychometric properties of the SERVQUAL
scale in the Canadian banking industry. The empirical study supports the
dimensionality (i.e. five-dimensional structure), reliability, convergent validity,
discriminant validity, and nomological validity of the SERVQUAL scale. The author
concludes that SERVQUAL is a suitable scale for measuring bank services in Canada.
In addition to these studies that use SERVQUAL to measure service quality in
banks, other researchers propose alternative scales for measuring bank service quality.
Bahia and Nantel (2000) use the ten dimensions originally proposed by Parasuraman
et al. (1985) to develop a six-dimension scale:
(1) reliability;
(2) tangibles;
(3) access;
(4) effectiveness and assurance;
(5) range of services (or services portfolio); and
(6) prices.

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Othman and Owen (2001) report six dimensions of perceived service quality in the
context of Islamic banking: the five SERVQUAL dimensions (tangibles, reliability,
responsiveness, assurance; empathy) and an extra dimension, compliance with
Islamic law. This last dimension refers to the ability of the company to operate under
the principles of Islamic banking and economy. Aldlaigan and Buttle (2002) use the
distinction between technical and functional service quality suggested by Gronroos
(1984) to develop a scale comprised of four dimensions:
(1) behavioral service quality;
(2) service system quality;
(3) machine service quality; and
(4) service transactional accuracy.
Jabnoun and Al-Tamimi (2003) propose a modified version of SERVQUAL comprising
three dimensions:
(1) empathy (consisting mainly of items originally belonging to the reliability
and assurance dimensions of SERVQUAL);
(2) tangibles (items belonging to the tangibles dimension of SERVQUAL); and
(3) human skill (items originally included in the assurance and reliability
dimensions of SERVQUAL).
Karatepe et al. (2005) propose a scale of four dimensions for measuring bank service
quality in Northern Cyprus:
(1) empathy;
(2) service environment (related to the tangibles dimension of SERVQUAL);
(3) reliability; and
(4) interaction quality (a combination of the assurance and responsiveness
dimensions of SERVQUAL).
Finally, in the corporate banking sector, Guo et al. (2008) present a bank service-quality
measure for China comprising two higher-order constructs (technical quality and
functional quality) and four lower-order dimensions (technology, communication,
reliability, and human capital; see Table I).
Most of the dimensions in these alternative measurement instruments are similar to
those of SERVQUAL. The few that differ probably reflect the particular characteristics
of bank service quality in specific contexts (for example, compliance with Islamic law
in the case of Islamic banks). However, most of these alternative scales have not been
replicated and their validity has not been evaluated.
2.2 Perceived service quality: cross-cultural studies
Several studies examine the impact of culture on consumer expectations, consumer
reactions to service experience, and subsequent consumer behaviors (e.g. Furrer et al.,
2000; Herbig and Genestre, 1996; Malhotra et al., 2005; Voss et al., 2004; Winsted, 1997).
For example, Furrer et al. (2000) report that the importance of the five SERVQUAL
dimensions is correlated with the Hofstede dimensions (power distance, individualism,
masculinity, uncertainty avoidance, and long-term orientation). Herbig and Genestre

Study

Country

Sample size

Scale and dimensions

Reliability (range)

Avkiran (1994)

Australia

791 bank
customers

0.80-0.88
17 items; perception minus
expectation scores; five-point
Likert scale
4 dimensions: staff conduct
(7), credibility (3),
communication (5), access to
teller services (2)

Bahia and
Nantel (2000)

Canada

115 bank
customers

0.78-0.96
31 items; perception and
expectation scores; sevenpoint Likert scale
6 dimensions: effectiveness
and assurance (13), access (5),
price (5), tangibles (4),
services portfolio (2),
reliability (2)

Aldlaigan and
Buttle (2002)

UK

975 bank
customers

0.80-0.93 (total
21 items; perception-only
sample)
scores; seven-point Likert
scale
4 dimensions: service system
quality (11), behavioural
service quality (5), machine
service quality (2), service
transactional accuracy (3)

Sureshchandar
et al.

India

277 bank
customers

0.82-0.96
41 items; perception-only
scores; seven-point Likert
scale
5 dimensions: core service or
service product (5), human
element of service delivery
(17), systemization of service
delivery (6), tangibles of
service (6), social
responsibility (7)

Jabnoun and
Al-Tamimi
(2003)

United Arab 462 bank

Emirates
customers

22 items; perception-only
scores; seven-point Likert
scale
3 dimensions: human skills
(12), tangibles (5), empathy
(5)

Jabnoun and
Khalifa

United Arab 115 customers of

Emirates
Islamic banks
and 115
customers of
conventional
banks

0.85-0.94
29 items; perception-only
scores; seven-point Likert
scale
4 dimensions: personal skills
(12), reliability (5), image (6),
value (6)
(continued)

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0.77-0.93

Table I.
Summary of selected
studies on bank service
quality measurement

IJBM
29,3

Study

Country

Sample size

Scale and dimensions

Karatepe et al.
(2005)

Cyprus

1,220 customers

20 items; perception-only
0.81-0.92
scores; five-point Likert scale
4 dimensions: service
environnement (4),
interaction quality (7),
empathy (5), reliability (4)

259 corporate
customers

0.88-0.93
20 items; perception and
expectation scores; sevenpoint Likert scale
2 higher order constructs and
4 second order constructs:
functional quality composed
of reliability (3) and human
capital (7); and technical
quality including
communication (6) and
technology (4)

230
Guo et al. (2008) China

Nam (2008)

Table I.

US and
129 student
South Korea residents of the
US (born in 29
different
countries) and
South Korea

23 items; perception-only
scores; seven-point Likert
scale
4 dimensions: helpful
employees, functionality,
appearance and
trustworthiness

Reliability (range)

0.72-0.85

(1996) find that Mexican respondents rate service quality higher than US respondents.
Zhang et al. (2008) review several empirical studies and identify consistent results
showing that service users from different countries and cultural backgrounds record
different expectations, react differently to service encounters, and show dissimilar
behavioral intentions. Sultan and Simpson (2000) show that nationality influences
expectations and perceived performance. For instance, they report that European
passengers rate both US and European airlines significantly lower than US passengers.
Indeed, they report that US passengers express higher expectations than European
passengers. Voss et al. (2004) find that UK and US customer reaction to good service is
similar, but UK customers are more tolerant of poor service quality than US customers.
In the banking sector, only a few studies examine differences in perceived service
quality across countries (Lewis, 1991; Malhotra et al., 2005). Lewis (1991) investigates
consumer expectations and perceptions of banks in the UK and US, reporting a number
of similarities and differences. The author finds that US respondents record higher
expectations for locations, opening hours, parking, and personal characteristics of
bank staff whereas UK respondents are more concerned about privacy, interiors, and
staff appearances. US respondents rate parking and location higher whereas UK
customers are more satisfied with the personal characteristics of staff and bank
responsiveness to their needs (e.g. opening hours, prompt service, availability of
information by telephone, number of staff available to serve). Malhotra et al. (2005) find
differences in the perception of service quality dimensions between developed and

developing economies. For instance, respondents in their study report that banks in
developed countries (US) exhibit more sophisticated relationship marketing than those
in developing countries (India and Philippines). Malhotra et al. (2005) state that due to
cultural and environmental differences, consumers of services in different countries
may have different perceptions of what service quality is. Glaveli et al. (2006) compare
bank customers from five Balkan countries (Greece, Bulgaria, Serbia, Albania, and
FYROM), finding that Greeks perceive higher level of service quality. Finally, Dash
et al. (2009) find that cultural dimensions, both at the individual and national levels,
affect the importance of various SERVQUAL dimensions. For instance, Canadian
Indian consumers attach higher importance to reliability while Indian consumers find
tangible attributes more important.
2.3 The relationship between service quality and overall satisfaction
Satisfaction is defined here as an overall judgement at the cumulative level of bank
services received by customers. Satisfaction is determined by satisfying and
dissatisfying service encounters with the bank over time.
Previous studies demonstrate that perceived service quality has a positive influence
on customer satisfaction in a variety of service settings. Cronin and Taylor (1992)
report that perceived service quality has a positive effect on consumer satisfaction in
four service settings: dry cleaning, banking, pest control, and fast food. Cronin et al.
(2000) find that perceived service quality has a positive effect on satisfaction in several
other service settings. Similarly, Bei and Chiao (2006) report a significant relationship
between service quality and satisfaction in three service industries: automobile repairs,
petrol stations, and banking. In the bank setting, Aldlaigan and Buttle (2002) identify
significant correlations between service quality dimensions and overall satisfaction.
Johnston (1995) attempts to identify which attributes of bank service quality create
satisfaction or dissatisfaction. The author reports that attributes related to assurance,
empathy, responsiveness, and reliability are the most frequently cited sources of
satisfaction. Zhou (2004) reports that the reliability/assurance dimension of bank
service quality has a significant impact on satisfaction. However, two dimensions,
tangibles and empathy/responsiveness, have no significant impact.
Brady et al. (2005) show that service quality has a direct impact on satisfaction in
five countries: the USA, Australia, The Netherlands, Hong Kong, and Morocco. Kassim
and Souiden (2007) report a positive effect of service quality on satisfaction in the retail
banking sector in the United Arab Emirates while Arasli et al. (2005b) finds a similar
relationship in the Greek Cypriot banking industry. The latter study uses a revised
SERVQUAL scale (including three dimensions: tangibles, reliability, and
responsiveness-empathy), with the reliability dimension having the greatest
effect on overall satisfaction.
2.4 Relationship between service quality and loyalty
Loyalty is defined here as a deeply held commitment to re-buy or re-patronize a
preferred product/service consistently in the future (Oliver, 1999). Loyalty in this
study refers to the continuing patronage of a particular bank by a client over time.
Loyalty should be the prime objective of company strategy. It has been shown that the
increase in profit resulting from a 5 percent increase in retention varies between 25 and
85 percent.

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The theoretical relationship between perceived service quality and loyalty has been
confirmed empirically in several studies (Bloemer et al., 1998; Boulding et al., 1993;
Cronin et al., 2000; Fornell, 1992). Cronin et al. (2000) report that perceived service
quality has a significant positive effect on behavioral intentions (loyalty and
recommendation) in four service industries (fast food, spectator sports, participation
sports, and entertainment). However, the positive effect was not significant in health
care and long distance carriers. In the retail banking sector, Bloemer et al. (1998) and
Karapte et al. (2005) both find that quality has both a direct influence and an indirect
influence (through satisfaction) on loyalty. Baumann et al. (2007) find that overall
satisfaction, affective attitude, and empathy predict loyalty. Ehigie (2006) finds that
perceived service quality and satisfaction are important predictors of loyalty among
bank customers in Nigeria.
3. Empirical study
3.1 Research questions
An empirical study was conducted to address these research questions:
RQ1. Are there differences between the levels of service quality perceived by
Tunisian versus Canadian bank customers?
RQ2. Which dimensions of service quality contribute most to overall satisfaction
and to loyalty in Tunisian and Canadian bank contexts?
3.2 Sample and data collection
Data were gathered in 2009 from bank customers in Canada and Tunisia.
Self-administered questionnaires were distributed to a convenience sample of
customers using the mall-intercept method. Research assistants at mall entrances
asked potential respondents to complete a survey dealing with bank service quality.
The objective was 200 to 250 completed questionnaires for each country. The
questionnaire was initially written in English and translated to French, using a
back-translation procedure. In Canada, the survey was administered in English and
French, and in Tunisia only in French. In Canada, 264 completed questionnaires were
collected, with 14 incomplete questionnaires eliminated, leaving 250 valid
questionnaires for further analysis. In Tunisia, 229 completed questionnaires were
collected, with seven incomplete ones eliminated, leaving 222 questionnaires for
further analysis in the Tunisian sample.
In the Canadian sample, the majority of respondents were female (52 percent) and
40.1 percent of respondents had an annual income of less than CAD $20,000, 39.2
percent had an annual income of $20,000 $59,999, and 20.7 percent had an annual
income of $60,000 or more. In terms of education, 61.9 percent of the respondents had a
university degree, 16 percent had a college education, 18 percent had a secondary
school education, and 4.1 percent had a primary school education. In the Tunisian
sample, a majority of the respondents were male (57.3 percent). In terms of income, 16.9
percent of the respondents had an annual net income of less than TND (Tunisian
Dinar) 6,000; 33.3 percent had an annual net income of TND 6,000 8,999; 42.6 percent
had an annual net income of TND 9,000 17,999; and 7.2 percent had an annual net
income of TND 18,000 and above. These Canadian and Tunisian income bands were
chosen because they are broadly comparable in terms of standard of living in the two

countries. In education, 65.9 percent of the Tunisian respondents had a university

degree, 27.6 percent had a secondary school education, and 6.5 percent had a primary
school education.
3.3 Measures
3.3.1 Service quality. The performance-only items of the SERVQUAL instrument were
used to measure service quality. SERVQUAL was chosen because:
.
despite criticisms, it remains the most widely used measurement instrument in
the service-quality literature; and
.
the scale was judged a more useful instrument than alternative scales (most of
which are based on the SERVQUAL model anyway).
Performance-only items (i.e. SERVPERF model) were chosen for the study because:
.
this facilitates comparison of findings with previous studies that have not used
the difference scores (e.g. Zhou, 2004);
.
the gap scores may have poor reliability (Peter et al., 1993) and validity (Brown
et al., 1993);
.
the predictive accuracy of the SERVPERF (performance-only) scale may be
greater than that of the SERVQUAL (gap score) scale (Carrilat et al., 2007); and
.
the SERVPERF model may be a more reliable measure of banking service
quality (Ladhari, 2009b).
Perceived service quality was therefore measured using the 22 items representing the
five SERVQUAL dimensions as follows:
(1) tangibles: measured using four items (for example, XYZ banks physical
facilities are visually appealing);
(2) reliability: measured using five items (for example, When XYZ bank promises
to do something by a certain time, it does so);
(3) responsiveness: measured using four items (for example, Employees of XYZ
bank are always willing to help me);
(4) assurance: measured using four items (for example, Employees of XYZ bank
have sufficient knowledge to answer my questions); and
(5) empathy: measured using five items (for example, Employees of XYZ bank
understand my specific needs).
A full list of the items appears in the Results section of this paper. Respondents were
asked to respond to each of the 22 items on a seven-point Likert-type scale ranging
from strongly disagree (1) to strongly agree (7).
The reliability and validity of the SERVQUAL scale was assessed by mean of
confirmatory factor analysis (CFA) performed using maximum likelihood estimation
and robust method. The Satorra-Bentler statistic (S-Bx2) value was 335.0473
(p , 0:001). The chi-squared ratio (by degrees of freedom) was 1.684 (, 3, acceptable).
The other fit indices were all within an acceptable range. The non-normed fit index
(NNFI) was 0.927 and the comparative fit index (CFI) was 0.937 (NNFI and CFI values
of 0.90 and above suggest adequate fit). The root mean square error of approximation

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(RMSEA) was 0.057, with confidence interval from 0.050 to 0.063. These results
suggest a good fit of the model to the data.
The reliability of the five SERVQUAL dimensions was evaluated using the
composite reliability index (r). The values were 0.859, 0.894, 0.871, 0.897, and 0.856 for
tangibles, reliability, responsiveness, assurance, and empathy, respectively.
Convergent validity was assessed considering the loadings of the 22 items and the
average variance extracted (AVE) criteria. The results of the CFA revealed that all 22
item-loadings were significant. All loadings were statistically significant at the 0.05
level (t . 1.96). The AVE for each of the factors were: 0.607 for tangibles, 0.631 for
reliability, 0.629 for responsiveness, 0.688 for assurance, and 0.576 for
empathy. These results support the convergent validity of the SERVQUAL scale
scores. The discriminant validity was supported, as the AVE for each pair of variables
was greater than the squared correlation for the same pair. For instance, the squared
correlation between tangibles and reliability was 0.355, a lower value than the AVE
associated with tangibles (0.607) and reliability (0.631). Predictive validity of the scale
scores was assessed by undertaking a correlation analysis of each of the five
SERVQUAL dimensions with satisfaction and loyalty. All correlations were
significant; the results confirm the predictive validity of the scale (Table II).
Constructs and items

Table II.
Construct measurement
summary

Tangibles
I1
I2
I3
I4
Reliability
I5
I6
I7
I8
I9
Responsiveness
I10
I11
I12
I13
Assurance
I14
I15
I16
I17
Empathy
I18
I19
I20
I21
I22

Standardized loadings

Robust t-values

0.859
0.840
0.694
0.708

25.927
13.224
15.046

0.826
0.854
0.783
0.884
0.590

19.429
20.486
23.729
9.432

0.734
0.841
0.861
0.727

16.311
16.764
13.014

0.898
0.898
0.801
0.705

31.177
17.105
11.922

0.912
0.199
0.908
0.748
0.788

3.722
27.691
16.787
21.209

3.3.2 Dependent variables. The dependent variables in the study were measured as
follows:
.
Satisfaction. Measured using one item: Overall, I am satisfied with the services
provided by XYZ bank.
.
Loyalty. Measured using one item: XYZ bank is always my first choice.
Respondents were asked to respond to these two items on a seven-point Likert-type
scale ranging from strongly disagree (1) to strongly agree (7).
Several studies in the service domain have retained mono-item measures for
measuring satisfaction and loyalty (e.g. Cronin and Taylor, 1992).

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235

4. Results
4.1 Canadian and Tunisian perceptions of bank service quality
Canadian respondents and Tunisian respondents both responded that bank service
was of a high quality. However, in general, Canadian respondents perceived higher
levels of service quality than their Tunisian counterparts.
4.1.1 Dimensional analysis. The five SERVQUAL dimensions showed scores
between 5.25 and 5.99 for Canadian respondents and between 4.30 and 4.90 for
Tunisian respondents (see Table III). The highest scores for both the Canadian
respondents and the Tunisian respondents were recorded on the assurance
dimension, followed by the tangibles dimension. The lowest scores for both Canadian
and Tunisian respondents were on the empathy dimension.
ANOVA was performed to assess whether there were statistically significant
differences between the perceptions of Canadian bank customers and Tunisian bank
customers for the five SERVQUAL dimensions. Table III shows that there were
significant differences p 0:00 between Tunisian and Canadian respondents on all five
SERVQUAL dimensions. For instance, the mean score for Canadian respondents on
responsiveness was 5.65 while Tunisians scored 4.63, a significant difference F
90:024; p 0:000: The mean score for Canadian respondents on empathy was 5.25 while
Tunisians reported 4.30, a significant difference F 61:381; p 0:000 (see Table III).
4.1.2 Item analysis. On an item basis, the mean scores for all 22 SERVQUAL items
were greater than four in the Canadian sample; indeed, 21 of the 22 items had mean
scores greater than five (the mean score on item 19 was 4.49). In the Tunisian sample,
19 of the 22 items showed mean scores greater than four; the other three items (18, 20,
and 22) showed mean scores slightly less than four.
For Canadian respondents, the highest perception scores were for item 3 (XYZ
banks employees have a neat appearance) (6.08), followed by item 15 (I feel safe in

Items
Tangibles
Reliability
Responsiveness
Assurance
Empathy

Canadian
(n 250)

Tunisian
(n 222)

Sig.

5.72
5.58
5.65
5.99
5.25

4.77
4.71
4.63
4.90
4.30

76.604
59.110
90.024
84.915
61.381

0.000
0.000
0.000
0.000
0.000

Table III.
Canadian and Tunisian
perceptions of bank
service quality on
dimensional basis

IJBM
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236

my transactions with XYZ bank) (6.07), and item 16 (Employees of XYZ bank are
consistently courteous to me) (6.02). The lowest score was for item 19 (XYZ bank has
operating hours that are convenient to all its customers) (4.49). For Tunisian
respondents, the highest scores were for item 19 (XYZ bank has operating hours
convenient to all its customers) (5.45), followed by item 3 (XYZ banks employees
have a neat appearance) (5.13), and item 17 (Employees of XYZ bank have sufficient
knowledge to answer my questions) (5.06). The lowest scores were for item 18 (XYZ
bank gives me individual attention) (3.99), item 22 (Employees of XYZ bank
understand my specific needs) (3.95), and item 20 (XYZ bank has employees who
give me personal attention) (3.91).
Table IV which includes the results of ANOVA analyses done on an item-by-item
basis, shows significant differences at the 5 percent level between Tunisian
respondents and Canadian respondents on all 22 SERVQUAL items. For instance,
Canadian respondents reported a higher mean score on item 5 (When XYZ bank
promises to do something by a certain time, it does so) than that reported by Tunisian
respondents (5.60 vs 4.86); the difference was significant F 28:894; p 0:000:

Items

Table IV.
Canadian and Tunisian
perceptions of service
quality on an item basis

1. XYZ bank has modern-looking equipment

2. XYZ banks physical facilities are visually appealing
3. XYZ banks employees are neat-appearing
4. Materials associated with the service (such as pamphlets or
statements) are visually appealing at XYZ bank
5. When XYZ bank promises to do something by a certain
time, it does so
6. When you have a problem, XYZ bank shows a sincere
interest in solving it
7. XYZ bank performs the service right the first time
8. XYZ bank provides its services at the time it promises to do so
9. XYZ bank insists on error-free records
10. Employees of XYZ bank tell you exactly when services will
be performed
11. Employees of XYZ bank give you prompt service
12. Employees of XYZ bank are always willing to help you
13. Employees of XYZ bank are never too busy to respond to
your requests
14. The behaviour of employees of XYZ bank instils confidence
in customers
15. You feel safe in your transactions with XYZ bank
16. Employees of XYZ bank are consistently courteous with you
17. Employees of XYZ bank have the knowledge to answer your
questions
18. XYZ bank gives you individual attention
19- XYZ bank has operating hours convenient to all its
customers
20. XYZ bank has employees who give you personal attention
21. XYZ bank has your best interests at heart
22. Employees of XYZ bank understand your specific needs

Canadian Tunisian
(n 250) (n 222)

Sig.

5.86
5.52
6.08

4.78
4.72
5.13

65.572 0.000
34.089 0.000
61.139 0.000

5.44

4.50

45.305 0.000

5.60

4.86

28.894 0.000

5.72
5.20
5.75
5.62

4.82
4.33
4.89
4.66

43.114
37.511
44.956
45.282

5.59
5.74
5.87

4.84
4.46
4.82

29.562 0.000
78.197 0.000
62.652 0.000

5.40

4.10

75.752 0.000

5.94
6.07
6.02

4.78
4.90
4.82

62.372 0.000
66.667 0.000
90.743 0.000

5.81
5.73

5.06
3.99

30.497 0.000
133.618 0.000

4.49
5.58
5.30
5.09

5.45
3.91
4.24
3.95

31.776
132.401
48.616
56.604

0.000
0.000
0.000
0.000

0.000
0.000
0.000
0.000

Canadian respondents recorded higher scores than their Tunisian counterparts on 21 of

the 22 items. The only item on which Tunisian respondents recorded a higher score
(5.45 vs 4.49; F 31:776; p 0:000 was item 19: (XYZ bank has operating hours that
are convenient to all its customers).
4.2 Importance of dimensions in predicting satisfaction and loyalty
To identify the service-quality dimensions that make the greatest contributions to
satisfaction and loyalty, four linear regression analyses were conducted (two in each of
the Canadian and Tunisian samples) with satisfaction and loyalty as the dependent
variables and the five dimensions of service quality (tangibles, reliability,
responsiveness, assurance, and empathy) as the independent variables.
Tables V and VI show the results for the Tunisian sample. For the first regression
with overall satisfaction as the dependent variable (Table V), the adjusted R-square
was 0.710, which indicates that the five SERVQUAL dimensions explained 71 percent
of the variation in satisfaction. Of the five SERVQUAL dimensions, four showed a
significant effect on satisfaction; in order of importance these were:
(1) reliability b 0:269;
(2) responsiveness b 0:267;
(3) assurance b 0:225; and
(4) empathy b 0:138:

Bank service
quality

237

In the second regression with loyalty as the dependent variable (Table VI), the adjusted
R-square was 0.628, which indicates that the five SERVQUAL dimensions explained

Constant
Tangibles
Reliability
Responsiveness
Assurance
Empathy

Unstandardized
coefficients

Standard
error

Standardized
coefficients

20.555
0.077
0.309
0.302
0.241
0.164

0.262
0.055
0.092
0.097
0.077
0.074

_
0.067
0.269
0.267
0.225
0.138

22.118
1.401
3.351
3.126
3.149
2.230

Notes: Adjusted R-square 0.710; F 93.725; Sig. 0.000

Constant
Tangibles
Reliability
Responsiveness
Assurance
Empathy

Sig.
0.036
0.163
0.001
Table V.
0.002
0.002 Regression analysis with
0.027 satisfaction as dependent
variable (Tunisian
sample)

Unstandardized
coefficients

Standard
error

Standardized
coefficients

Sig.

2 1.623
0.025
0.351
0.486
0.131
0.222

0.364
0.076
0.128
0.134
0.106
0.102

_
0.018
0.253
0.355
0.101
0.154

24.462
0.323
2.748
3.621
1.232
2.170

0.000
0.747
0.007
0.000
0.220
0.031

Notes: Adjusted R-square 0.628; F 62.124; Sig. 0.000

Table VI.
Regression analysis with
loyalty as dependent
variable (Tunisian
sample)

IJBM
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238

62.8 percent of the variation in loyalty. Of the five SERVQUAL dimensions, three
showed a significant effect on loyalty; in order of importance these were:
(1) responsiveness b 0:355;
(2) reliability b 0:253; and
(3) empathy b 0:154:
Tables VII and VIII show the results for the Canadian sample. For satisfaction (Table VII),
the adjusted R square was 0.602, which indicates that the five SERVQUAL dimensions
explained 60.2 percent of the variation in overall satisfaction. Four of the five SERVQUAL
dimensions showed a significant effect on satisfaction; in order of importance, these were:
(1) empathy b 0:312;
(2) reliability b 0:244;
(3) responsiveness b 0:192; and
(4) assurance b 0:139:
For loyalty (Table VIII), the adjusted R-square was 0.653, which indicates that the five
SERVQUAL dimensions explained 65.3 percent of the variation in loyalty. Two
dimensions showed significant effects ( p , 0.05) on loyalty. These were empathy
b 0:399;followed by reliability b 0:254: The responsiveness dimension
was significant only at the 0.09 level.
Table IX presents a summary of the results of all four regression analyses. It is
apparent that the tangibles dimension was not a significant determinant of either

Table VII.
Regression analysis with
satisfaction as dependent
variable (Canadian
sample)

Table VIII.
Regression analysis with
loyalty as dependent
variable (Canadian
sample)

Constant
Tangibles
Reliability
Responsiveness
Assurance
Empathy

Unstandardized
coefficients

Standard
error

Standardized
coefficients

Sig.

20.326
0.000
0.327
0.241
0.191
0.335

0.426
0.075
0.088
0.085
0.096
0.073

2
0.000
0.244
0.192
0.139
0.312

20.765
20.002
3.735
2.853
1.992
4.567

0.445
0.998
0.000
0.005
0.048
0.000

Notes: Adjusted R-square 0.602; F 70.038; Sig. 0.000

Constant
Tangibles
Reliability
Responsiveness
Assurance
Empathy

Unstandardized
coefficients

Standard
error

Standardized
coefficients

Sig.

0.530
20.011
0.375
0.193
20.110
0.474

0.571
0.100
0.118
0.113
0.128
0.098

2
20.007
0.254
0.139
20.073
0.399

0.928
20.106
3.194
1.705
20.860
4.822

0.354
0.916
0.002
0.090
0.391
0.000

Notes: Adjusted R-square 0.653; F 33.118; Sig. 0.000

NS
S
S
S
S
1*
2*
3*
4*

NS
S
S
NS
S
2*
1*
S
3*

NS
S
S
4*
S
2*
3*
NS
1*

NS
S
S

1*

2*
3**

Canadian sample
Satisfaction
Loyalty
Order of
Order of
Significance
importance
Significance
importance

Notes: *p , 0.05; * *p , 0.10; S Significant effect ( p , 0.05); NS Non-significant effect. The order of importance, with 1 is the most important

Tangibles
Reliability
Responsiveness
Assurance
Empathy

Tunisian sample
Satisfaction
Loyalty
Order of
Order of
Significance
importance
Significance
importance

Bank service
quality

239

Table IX.
Summary of the results of
the regression analyses

IJBM
29,3

satisfaction or loyalty in either sample. In the Canadian sample, empathy was the
most important predictor of both satisfaction and loyalty, followed by reliability. In
the Tunisian sample, reliability and responsiveness were the most important
predictors of both satisfaction and loyalty. These results reflect clear differences
between Canadians and Tunisians regarding the aspects of bank service that create
satisfaction and loyalty.

240
5. Conclusions, limitations, and managerial implications
5.1 Major conclusions
The first objective of this study was to examine any differences between Canadians
and Tunisians on perceptions of bank service quality. This is the first study to
compare perceived service quality between Canadians and Tunisians. The study finds
that, in general, both Canadian and Tunisian respondents perceived that bank service
was high quality. Nevertheless, Canadian respondents reported significantly higher
levels of perceived service quality than their Tunisian counterparts. This was so on all
five of the SERVQUAL dimensions and on 21 of the 22 SERVQUAL items.
The second objective of the study was to identify which dimensions of service
quality have the greatest influence on customer satisfaction and loyalty. The study
finds that the tangibles dimension was of little consequence among Tunisian and
Canadian bank customers, but there were differences between the two groups for the
other dimensions. In the Canadian sample, empathy was the most important
predictor of both satisfaction and loyalty, followed by reliability. In the Tunisian
sample, reliability and responsiveness were the most important predictors of
satisfaction and loyalty. These results indicate that the preoccupations of banking
customers are different in the two countries. The banking sector in Tunisia is at an
earlier stage of development than it is in Canada. Tunisian bank customers therefore
place more emphasis on basic aspects of service quality, such as responsiveness and
reliability (that is, providing services as promised and free of error). In subsequent
years, as the Tunisian banking sector matures, other dimensions of service quality
(such as empathy) will probably become more important. The same tendency was
observed in China (Wang et al., 2003).
The study results emphasize the importance of reliability (first or second in all
four regression analyses) and empathy (first in both Canadian regression analyses),
in accordance with the findings of Amin and Isa (2008). They report that reliability
and empathy were the most important dimensions of service quality in Malaysian
Islamic banks. The results also agree with the findings of Karapte et al. (2005), who
find that empathy and reliability were the second- and third-most important
determinants (after interaction quality) of overall bank service quality in Northern
Cyprus. The results support the finding of Dash et al. (2009) that Canadian bank
customers attach high importance to reliability. Taken together, these findings
emphasize the continuing importance of the employee in providing banking services.
Despite technological automation and internet banking, customers apparently continue
to value person-to-person contact (Molina et al., 2007). Despite the changing banking
environment, customers still assess bank service quality primarily in terms of the
personal support they receive from employees, rather than technical innovations
(Arasli et al., 2005a). According to Molina et al. (2007), bank customers expect certain
benefits if they are to maintain a long-term relationship with a particular bank. These

benefits include first-rate service, personal recognition and friendly interactions, and a
sense of confidence and trust. The findings of the present study, especially with respect
to the Canadian sample of respondents, are in accordance with this view.
The results of this study support the claims of Malhotra et al. (2005) that perceptions
of service quality vary by nationality due to differences in economic, social, and
cultural environments. Researchers are encouraged to replicate this study in different
countries. Considering the debate in the literature about the significance of using
country or nationality as surrogate variables for culture (e.g. Craig and Douglas, 2006),
researchers should examine these differences using a more elaborate conceptualization
of culture (e.g. cultural values orientations). In addition, future research should
consider globalization effects (e.g. Craig and Douglas, 2006) and how they accelerate
the emergence of a global consumer (e.g. Cleveland and Laroche, 2007). Previous
studies confirm the existence of homogeneous consumer segments, sharing similar
needs and preferences that transcend countries. The global consumer in internet
banking services may be a promising avenue of research.
5.2 Limitations
The most significant limitation of this study is the use of a convenience sample. The
results may therefore not be representative of the perceptions of the whole population
of bank customers in Canada and Tunisia. Future studies in this area could address
this problem by using representative and larger samples. Future studies should be
replicated in other countries, specifically those with different cultural, social and
economic environments.
5.3 Managerial implications
The service sector now accounts for almost two thirds of the GDP in industrial
countries and even in several developing countries. The banking sector has become
intensively competitive due to globalization. Therefore, bank service managers need to
understand how people in different countries rate service quality and what critical
dimensions contribute to improving service quality.
Practitioners in both Canada and Tunisia can use the findings of this study to
identify the dimensions of service quality that determine satisfaction and loyalty in
their own country. Bank priorities vary depending on the origin of their customers. In
Canada, empathy is clearly the most important dimension for predicting satisfaction
and loyalty among customers. Canadian banks could realize a competitive advantage
by emphasizing empathy in service delivery since Canadians expect their banks to:
.
give them individual attention;
.
have convenient operating hours;
.
have their best interests at heart;
.
employ staff who provides customers with personal attention; and
.
employ staff who understand their specific needs.
Also, Canadian customers prefer human interactions when dealing with banks. These
findings suggest that bank managers should implement customer-oriented strategies.
Frontline employees should be motivated and trained to understand customer needs,
personalize services, provide individual attention, and generally demonstrate caring
behavior in all of their interpersonal dealings with customers.

Bank service
quality

241

IJBM
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242

In Tunisia, bank managers should emphasize the reliability and responsiveness

dimensions of service quality, the most important predictors of satisfaction and loyalty
among Tunisian customers. Banks should keep their promises to customers, show a
sincere interest in solving client problems, inform users of the time required to perform
transactions, perform the service right the first time, and insist on error-free records.
Since responsiveness refers to the willingness to help customers and provide prompt
service, frontline employees should be trained to give prompt service, show care and
interest in helping customers, and respond appropriately to their requests. Employees
should not neglect user questions because they are too busy.
In both countries bank managers should emphasize the important dimensions in
their communication strategies. For example, Canadian advertising copy should stress
the customer-employee interaction and highlight bank efforts to provide individual
attention. In Tunisia, banks should emphasize the institutions reliability when dealing
with customer assets and the willingness of employees to solve any problem customers
may have. In fact, bank advertizements in both countries should use relevant cues to
improve the effectiveness of their communications dollars. Since empathy and
responsiveness are human dimensions of service quality, the bank should devote
financial resources to training programs on these areas. The ability to be responsive
and provide an empathetic service can be best developed through a comprehensive
training program that encourages a culture of excellence in service delivery.
In terms of international marketing strategies in the banking sector, this study
shows differences between Canadian and Tunisian consumers. Therefore, a common
marketing strategy in these two countries (i.e. standardization) characterized by
different economic, social and cultural environment, is not appropriate. This
conclusion may apply in other contexts. This study focused only on perceptions but
expectations may also vary by nationality. Bank management and employees should
strive to find the underlying dimensions and levels of expectations and service
performance in different countries. The SERVQUAL instrument could be used as a
starting point for understanding expectations and perceptions of service.
With the development of electronic commerce, internet banking has become an
alternative for developing, operating and offering bank services and products. The
internet extends market coverage and offers banks the opportunity to increase their
market share, reduce operation costs, and develop customer relationships. However, it
poses serious challenges because internet users may have different demands,
expectations, and needs from in-person customers. International banks operating on
the internet should develop a personalized approach (acknowledging users by name,
addressing personal e-mail, developing user friendly systems emphasizing the personal
touch, having customers best interests at heart, providing a customer feedback system,
availability for help) when dealing with Canadian users, who value empathy highly.
Banks should not completely automate their interactions with Canadian customers.
When dealing with Tunisian customers, these banks should emphasize reliability (e.g.
offering the service promised in an accurate and timely manner) and responsiveness (e.g.
prompt responses to users enquiries, quickly solving problems).
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About the authors
Riadh Ladhari is an Associate Professor of Marketing at Laval University, Quebec, Canada. His
current research is focused on services marketing, cross-cultural studies and e-commerce. His
work has been published in journals such as Psychology & Marketing, Journal of Business
Research, Journal of Service Management, Journal of Financial Services Marketing, International
Journal of Hospitality Management, Managing Service Quality, International Journal of Quality
and Service Sciences and Journal of Retailing and Consumer Services. Riadh Ladhari is the
corresponding author and can be contacted at: [email protected]
Ines Ladhari is a Doctoral student at the Higher Institute of Management of Sousse, Tunisia.
Her research interests include bank efficiency and financial services quality.
Miguel Morales is an Assistant Professor of Marketing at Saint Marys University in Halifax,
Nova Scotia. His research is in the areas of service quality, cross-cultural service quality,
cross-cultural consumer behaviour and international services marketing. He has an MBA from
Escuela de Administracion de Negocios para Graduados from ESAN in Lima, Peru; an MSc in
marketing from Laval University in Quebec City, Canada, and a PhD from Laval University in
Quebec City, Canada.
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