The effect of service quality in SME banking on brand image and customer loyalty: A research in Istanbul

Banks, which are indispensable elements of economic life, carry out many different marketing strategies and activities while offering their products and services to their existing and potential customers through various distribution channels. At the centre of the customer-oriented marketing philosophy, it is known that establishing long-term permanent relationships with customers is very important. Marketing activities and service quality that will improve relations with customers are important for banks to create a competitive advantage in the market. The rapidly changing needs and expectations of businesses brought about by rapidly changing needs and economic conditions necessitate banks to design and create new products and services in a very proactive manner and to apply them effectively in all their processes (branch, ATM, internet/mobile branch, etc.) with different marketing activities. Considering that 99% of the businesses in Turkey fall into the SME category and that 73% of insured employees work in SMEs, in line with the data announced by the Turkish Statistical Institute (TUIK), the place of SMEs in economic activity is extremely important. It is observed that banks develop differentiated products and services in an intensely competitive environment for SMEs. Differentiation in the service quality of banks makes the institution stand out in the competition. This study is carried out with the aim of measuring the quality of the services developed by banks in line with the strategies they have created in response to the changing needs and demands of SMEs under changing economic conditions, and to investigate the effect of this service quality on SMEs' brand image perceptions and customer loyalty towards the bank's services. As the result of survey made on 154 SME representatives, it is found that service quality has positive, mid-level and significant effect on brand image; and service quality has positive, high-level and significant effect on customer loyalty.