The Influence of service quality on market performance: a case of Standard Gauge Railway (SGR) freight services from a clearing agent perspective

Abstract

The Standard Gauge Railway (SGR) is the most expensive infrastructure project Kenya has embarked on since it gained independence in 1964. The project is largely funded through debt and it is expected that revenues from the railway operations shall be used to repay the loan. One product offered on this infrastructure is SGR freight services. Market performance of this product is therefore a critical success factor for the project. The objective of the study was to establish the influence of service quality on market performance of SGR freight services from a clearing agent perspective as measured through intention to buy. Data was collected from 273 clearing agents using a structured questionnaire. A modified SERVQUAL instrument was used to capture customers' perception of service quality. The instrument further captured information on the influence of WOM on intention to use SGR freight services and the influence that each SERVQUAL dimension has no intention to use SGR freight services. Data was then analysed using descriptive, correlational and inferential techniques. A factor analysis was conducted to distinguish dimensions from the customer's perspective, Spearman's rank correlation coefficient applied to draw conclusions on the influence of WOM communication and Binary logistic regression was used to predict the probability that each service quality dimension influences market performance of SGR freight services. The study revealed that there is a positive relationship between service quality and market performance of SGR freight services as determined by intention to buy/ use the services. Other findings revealed that disconfirmation was negative for SGR freight services across all service quality dimensions and that there was a moderate positive relationship between WOM communication and future purchase intention for SGR freight services. Further, it determined two dimensions as distinguished by customers namely accessibility & effectiveness and service encounters and determined tangibles and responsiveness to be the largest source of influence on use of SGR freight services. The study recommended that service improvement strategies focus on these areas. This study contributes to the body of academic knowledge by providing evidence of the relationship between service quality and market performance for SGR (train) freight services in Kenya.