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Impact of Service Innovation on Customer Satisfaction: An Evidence from Pakistani Banking Industry

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  • Rimsha Kanwal
  • Salman Yousaf

Abstract

The purpose of this study is to appraise the linkage between service innovation (SI), customer value creation (CVC), and customer satisfaction (CS) with a specific focus on the Pakistani banking sector. In addition, the study evaluates the moderating role of brand equity (BE) fit between SI and CS. A survey is conducted on 250 customers from commercial banks in Pakistan and scales were acquired from past literature. The study showed that CVC mediates the relationship between SI and CS. Therefore, SI must create value for their customers in order to enhance CS. Moreover, BE has a partial positive moderation effect on the relationship bewteen SI and CS. By relating to the findings, managers of firms should focus on SI that adds to or create holistic value for their customers, which ultimately increase the CS level. This study relies on two theories, which include signaling theory and expectation disconfirmation theory to explain how SI in Pakistani banking sector creates customer value which achieves CS. The other uniqueness of the study is that it will be helpful for researchers by giving baseline regarding BE effect as a moderator between SI and CS in Pakistani banking industry.

Suggested Citation

  • Rimsha Kanwal & Salman Yousaf, 2019. "Impact of Service Innovation on Customer Satisfaction: An Evidence from Pakistani Banking Industry," Emerging Economy Studies, International Management Institute, vol. 5(2), pages 125-140, November.
    • Handle: RePEc:sae:emecst:v:5:y:2019:i:2:p:125-140
    DOI: 10.1177/0976747919870876
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    References listed on IDEAS

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    1. Salunke, Sandeep & Weerawardena, Jay & McColl-Kennedy, Janet R., 2013. "Competing through service innovation: The role of bricolage and entrepreneurship in project-oriented firms," Journal of Business Research, Elsevier, vol. 66(8), pages 1085-1097.
    2. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    3. C. Storey & D. Kelly, 2001. "Measuring the Performance of New Service Development Activities," The Service Industries Journal, Taylor & Francis Journals, vol. 21(2), pages 71-90, April.
    4. Joseph E. Stiglitz, 2000. "The Contributions of the Economics of Information to Twentieth Century Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1441-1478.
    5. Yoo, Boonghee & Donthu, Naveen, 2001. "Developing and validating a multidimensional consumer-based brand equity scale," Journal of Business Research, Elsevier, vol. 52(1), pages 1-14, April.
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    Cited by:

    1. Singh Rajesh & Sarangal Rajani Kumari, 2021. "Innovation in Quick Service Restaurants (QSRs): A Future Perspective," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 11(2), pages 210-218, December.

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