Measuring the success and failure of SMEs (service industry) based on PZ&B service quality dimensions in rural areas: evidence from Pakistan

This research paper measures the success and failure of SMEs (service) industry in the rural areas based on Parasuraman, Zeithamal & Berry (PZ&B) service quality five dimensions: tangibility; service reliability; responsiveness; assurance; and empathy perceived by entrepreneurs. In this study, a qualitative approach is taken based on semi-structured interviews from 19 different local entrepreneurs who have launched their service firms in the rural areas of Pakistan. We classify our sample firms into: (a) Successful businesses and; (b) Struggling businesses on the basis of their growth and entrepreneurial performance. The results show that successful businesses adopt all service dimensions including tangibility, reliability, responsiveness, assurance and empathy which ultimately foster their entrepreneurial growth. On the other hand, struggling businesses focus towards service reliability, responsiveness, assurance and empathy but ignoring the significance of tangibility element. The contribution of this research paper is twofold. First, it provides an empirical evidence that how small businesses (service) industry considers the success and failure of businesses using PZ&B dimensions. Second, the paper shows the significance of tangibility service dimension for the success of businesses in the rural areas in developing countries like Pakistan where there is a lack of proper infrastructure for local entrepreneurs who operate (SMEs) service industry.