Path Analysis of Perceived Service Quality, Satisfaction and Loyalty in the Banking Industry of Iran

The purpose of this study is to determine the path of service quality, satisfaction and loyalty in the Iranian banking industry. A SERVQUAL scale was designed to measure service quality for the Iranian banking industry. A path analysis was conducted to examine the model, which links the constructs of service quality, customer satisfaction and loyalty at the level of individual indices of these constructs. Among the dimensions of the SERVQUAL scale, only “tangible” dimensions have not had an effect on customer satisfaction in Iranian banking system. The limitation of the research is the relevance of this model to another service industry. Another limitation is the available sampling. Banking managers may seek to use the SERVQUAL scale in order to measure banking service quality. Instead of tangible components, they must improve other intangible components and attempt to direct their support towards the increase in the customers who tend to use word of mouth advertisement. This paper deals with the investigation of the path of service quality, customer satisfaction and loyalty at some specific levels originating from the Iranian banking system.