Kano-Based Measurement of Customer Expectations in Retail Service Industry Using IT2 DEMATEL-QUALIFLEX

Kano-Based Measurement of Customer Expectations in Retail Service Industry Using IT2 DEMATEL-QUALIFLEX

Hasan Dinçer (Istanbul Medipol University, Turkey), Serhat Yüksel (İstanbul Medipol University, Turkey) and Fatih Pınarbaşı (İstanbul Medipol University, Turkey)
DOI: 10.4018/978-1-7998-0058-3.ch020

Abstract

This study aims to analyze customer expectations in European retail banking industry. For this purpose, five different criteria are identified. Furthermore, IT2 FDEMATEL approach is used to weight these criteria. In addition, three different factors are also defined which have a negative influence on customer satisfaction. In this context, IT2 FQUALIFLEX approach is used to rank these three alternatives. In this process, Kano model-based evaluation factors are converted into the fuzzy numbers. The findings show that the most important problem to be solved to ensure customer expectations and satisfaction is the communication problems. Therefore, European retail banks should firstly focus on solving this problem to meet customer expectations and provide customer satisfaction. These banks should employ the necessary number of personnel to provide services in different channels, such as social media, mobile banking, telebanking. Moreover, these personnel should also be trained effectively to increase the quality of communication.
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Introduction

Customer is accepted as the most important factor for service companies. Therefore, these companies should take necessary actions to satisfy their customer needs. With the help of this aspect, they can be preferred more by the customers. Otherwise, it becomes impossible to survive in competitive environment (Ye et al., 2019). However, identifying customer expectations is not so easy issue for service companies. Thus, service companies must make very detailed analysis to define this situation according to each different types of the customers. It is obvious that the quality of the methodology plays a very key role in this situation (Hsieh and Yuan, 2019; Alauddin et al., 2019).

Kano model was developed mainly to understand the expectations of the customers. The main purpose of this methodology is to identify the relationship between customer satisfaction and customer expectations. Within this framework, customer needs and expectations are categorized because it is thought that each expectation does not have the same importance for the customers (Tan and Pawitra, 2001). In other words, some expectations have more powerful impact on the customer satisfaction in comparison with the others. Hence, it can be understood that which conditions should be mainly focused on by the service companies to increase customer satisfaction more effectively (Chiang et al., 2019; Bi et al., 2019).

Retail banking sector in Europe has a hard competition especially after the globalization periods. Because a lot of international banks entered to European market after this period, retail banks have to take necessary actions to compete with their rivals (Seyfang and Gilbert-Squires, 2019). This hard competition had a very negative influence on the performance of the European retail banking sector. According to the European Union reports, retails banks’ return on equity was 16.28% in 2006, but it decreased radically to 5.12% at the end of 2017 (Omoregie et al., 2019). This situation gives information that European retail banks must firstly understand the expectations of the customer needs and expectations in a detailed manner. After that, necessary policies should be implemented by these banks to satisfy the customers so that financial performance of them can be increased (Sayil et al., 2019).

The popularity of multicriteria decision making approach increased very much with respect to the understanding customer needs in retail banking sector. Because they consider many different factors at the same time, it is believed that they are very helpful to reach more appropriate results. Owing to this situation, it can be seen that there are many different studies in the literature which tries to analyze customer expectations by using these approaches. For example, Dinçer and Hacıoğlu (2013) used VIKOR methodology to understand customer needs. In addition to these studies, Pakizehkar et al. (2016) and Tavana et al. (2016) are other studies that consider other approaches, such as AHP and TOPSIS to reach this objective.

Owing to this condition, it is obvious that the studies which analyze customer satisfaction in retail banking with qualified methodology is very crucial. Hence, the aim of this study is to evaluate customer satisfaction in European retail banking sector. Within this framework, 5 different criteria are identified regarding customer expectations. On the other side, 3 different factors are also defined with respect to the customer satisfaction. By using Kano method, the items are converted into the fuzzy sets. Moreover, IT2 FDEMATEL approach is taken into the consideration to weight the criteria. Additionally, IT2 FQUALIFLEX method is used to rank the alternatives that represent customer satisfaction.

The main novelty of this study is that an integrated approach to multicriteria decision making model is provided in the analysis process. IT2 FDEMATEL and IT2 FQUALIFLEX methods are firstly used in this study at the same time. In addition to this issue, Kano-based evaluation method is converted to the fuzzy numbers in the analysis process. It is thought that these conditions increase the originality of the study. By making a detailed analysis with qualified approaches, it is aimed to present necessary recommendations for European sector to increase customer satisfaction.

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