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Service Quality Dimensions and Its Impact on Customer Satisfaction on

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IOSR Journal of Business and Management (IOSR-JBM)
e-ISSN: 2278-487X, p-ISSN: 2319-7668
PP 01-09
www.iosrjournals.org

Service Quality Dimensions and Its Impact on Customer

Satisfaction on Private Bank in Ethiopia
Mengistu Guliti Buba 1, Dr. Debi Prasad Das 2, Dr. Hamed M. S. Ahmed 3
1
management Lecturer,Wollo University, Ethiopia
2
assistance Professor, School Of Management, Kiit University, India,
3
assistant Professor, Management Department, Wollo University, Ethiopia

Abstract: Service Quality Is An Attitude Or Global Judgment About The Superiority Of A Service. To Be
Globally Competitive, Service Industries Must Achieve A Quality Service That Exceeds Customers’
Expectation. Service Quality Determines An Organizations Success Or Failure. In A Competitive
Marketplace Where Businesses Compete For Customers, Customer Satisfaction Is Seen As A Key
Differentiator And Increasingly Has Become A Key Element Of Business Strategy. The Main Objective Of
The Study Was To Assess The Service Quality Dimensions And Its Impact On Customer Satisfaction On
Private Bank In Ethiopia, Dashen Bank, Kombolcha Branches. In Order To Address The Objective Of The
Study, Descriptive And Causal Study Design Were Used In Which Data Was Collected Across A Sample
Population Through Convenience Sampling. 315 Questionnaires Were Filled And Returned Back. Data Were
Analyzed Using Frequency, Percentage, Mean, Standard Deviation, And Correlation Presented In The Form
Of Tables. Results Show That The Servqual Score At Kombolcha Branch On Average Shows A Negative
Variance Except For Reliability And Tangibility Having A Positive Variance Of 0.06 And 0.08 Respectively.
This Indicates That The Bank Is Somehow Good In Meeting Its Customer Expectation In Terms Of Providing
Visually Appealing Features And The Different Materials Associated With The Service. The Branch Shows A
Sincere Interest In Solving The Problem Of Its Customer And It Can Provide Its Service At The Time It
Promise To Do. The Branch Should Make The Necessary Investments To Improve Its Service Quality
Dimensions’ Such As, The Appearance Of The Company’s Physical Facilities And Updating Its Equipment.
The Customers Of The Banks Expect Immediate Help And Answer For Their Problems And Questions From
Front Line Employees. So, The Employee Of The Branches Shouldn’t Be Get Busy To Treat Their Customers.
Key Words: Servqual, Service Quality, Customer Satisfaction

I. Introduction
The Ethiopian Government Promulgated The Monetary And Banking Proclamation No.83/1994 To
Liberalize The Financial Sector Through Reforms By Bestowed Banking Laws That Encourage The Entry Of
Private Banks Into The Financial System In Order To Stimulate Competition With The Public Banks Which
Significantly Promoted The Development Of The Banking Sector Is Tremendous. Accordingly, Many Private
Banks Have Already Been Established And Their Number Is Increasing From Year To Year. Due To This Fact, A
Fierce Competition Among Banks Has Come To Exist. Hence, It Is Vital For Banks To Improve On Their Service
Quality. Provision Of High Quality Of Service Will Result In Higher Customer Satisfaction And Enhance
Customer Loyalty.
Business Firms Realize That Marketing Is A Core Element Of Management Philosophy And Key To Its
Success Lies In Focusing More And More On The Customers. It Is The Customer Who Decides Where The Firm
Is Hedging. Customer Satisfaction Is An Evaluation By The Customer, After Buying Their Goods And Services.
The Most Popular View Of Customer Satisfaction In Academia Is That Customer Satisfaction Is The Judgment
Born Out Of The Comparison Of Pre–Purchase Expectations With Post Purchase Evaluation Of The Product Or
Service Experience (Kotler Et Al., 2012).
Quality Is An Ability Of Any Product To Meet Customers' Expectations And Requirements. It Is A Set
Of Features, Characteristics Or Attributes That Are Required Or Expected By The Customers. There Are Several
Studies That Found A Relationship Between The Service Quality Offered By Banks And Its Consequences As
Satisfaction Level Among Customers. It Is Reported That Quality Is Observed As A Major Factor In Reference
To Customer Acquisition And Retention (Galloway And Ho, 1996). Because Of This, Being Service Is Intangible,
It Is Difficult To Measure The Satisfaction Level Of Customer As A Result Its Quality Is Measured By Servqual
Which Was Developed By Parasuraman Et Al. (1997). Thus, Service Quality Is Defined As The Gap Between
Customers‟ Expectation Of Service And Their Perception Of The Service Experience. The Gap Theoryis The
Method For Calculating The Service Quality That Involves Subtracting A Customer‟s Perceived Level Of Service

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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

Received From What Was Expected, Clow And Kurtz, 2003. This Gap Model Is One Of The Best-Received And
Most Heuristically Valuable Contributions To The Service Literature According To Brownlie Et Al (1995).
1.1. Statement Of The Problem
Any Organization Whether It Is Service Providing Or Manufacturing Company, The Key For The
Existence Of Success Lays Its Ability To Satisfy Its Customer (Hallowell, 1996) And Because Of This, Any
Organization Needs To Conduct Customer Satisfaction Survey So As To Get Resolve Their Problem Related
With How To Improve Customer Satisfaction And Retention Rate, Increase Market Share, Gain Feedback From
Customers About Products, Services And Support. In The Present Globalized World, When The
Customers Are Technically Sound, Banks Find It Challenging To Survive. When Customer
Demands Are Not Met, Customers Have An Option To Select Those Banks That Are Making A Real Effort Of
Providing High Quality, Fast And Efficient Services. These Services Are Provided Through All The Channels
Such As Atms, Voice, Internet And Physical Branches Etc.
As Cited By G. Mihelis, Et Al (2001), Customer Satisfaction Survey Repeatedly Shows That Perceived
Poor Customer Service Is One Of The Most Common Reasons Why Customers Are Not Willing To Repurchase
The Service; Rather They Search Other Provider (Supplier). The More Customers Are Satisfied With All Aspects
Of The Company‟s Service, The Higher The Reward For The Business. As The Competitive Environment
Becomes More Turbulent, The Most Important Issue The Sellers Face Is No Longer To Provide Excellent, Good
Quality Products Or Services Sustainable And Continuous Survival Of An Organization Mainly Depends On Its
Business Relation With Its Customers. When Business Firms Direct Their Resources And All Their Efforts For
Better Accomplishment Of Their Intended Purposes, Growth And Profitability Is Entirely Influenced By The
Quality And Reliability Of Their Service. These Could Be Done Through Delivering A Service That Could
Increase The Acceptance Of The Organization In The Face Of The Customers.
In Ethiopia, Many Customers Voice Concerns About Inefficiency And Lack Of Quality Excellence In
The Banking Sector. However, There Are Inadequate Published Studies Which Demonstrate If Indeed The
Quality Of Banking Service In Ethiopia Is Poor. This Study Aims To Examine The Gap Between Customers‟
Expectations And Perceptions Of Banking Service In Ethiopia Using The Servqual Model. The Bank Which Is
Included In This Study Is Dashen Bank, Kombolcha Branch. In Our Current Situation ,Because Of A Fierce
Competition All Over The World And The Effect Of Globalization, Being Reluctant To Accept Relationship
Marketing Or Unable To Provide Quality Service Will Cost The Organization A Big Deal Of Lose In Many
Directions Like: Losing A Potential Customers And Market Share, Letting Down The Reputation Of The
Organization, Lagging Behind Industry Leaders, Shortage Of Information From Customers That Could Give Big
Advantage, Failure Of Employees To Understand Customers Nicely And Many More Will Be The Negative
Impact Of Bad Service.
1.2. Objectives Of The Study
General Objectives: The General Objective Of The Study Was To Assess The Service Quality Dimensions And
Its Impact On Customer Satisfaction On Private Bank In Ethiopia, Dashen Bank, Kombolcha Branches.
Specific Objectives: The Specific Objectives Of This Study Were:-
 To Determine The Extent Of Customer‟s Satisfaction With Quality Of Banking Services On The Basis Of
Different Constituent Factors Like Service Quality Dimensions.
 To Determine The Gap In Customers Perceptions And Expectations In Each Of The Fivedimensions Of
Service Quality For The Bank.
 To Understand The Company‟s Commitment To Its Customer, And Pinpoint The Continuous Improvement
Of The Bank.
 To Assess The Level Of Importance Ranked To Each Of The Five Dimensions Of Service Quality By The
Banks Customers.

II. Review Of Related Literature

Today‟s Consumers Have More Choices For Their Financial Needs Than Ever Before. Technology,
Globalization, Increased Competition And Increased Consumer Mobility Have Dramatically Changed The Way
People Bank (Harwood, 2002). For Example, Gale Et Al (2002) Explained How Customers Make Purchase
Decisions Between Competing Providers. The Author Argued That Customers Buy On Value; They Do Not
Simply Buy Products. Interestingly, It Was Observed That Customers Learn To Think Objectively About Value
In The Form Of Preferred Attributes, Attribute Performance, And Consequences From Using A Product In A Use
Situation. Thus, Banks Must Be Able To Provide “Up-Close” Personal Service For Customers Who Come With
High Expectations. For Customers Who Value Convenience Most, Banks Must Offer The Latest Product Such As
Electronic Banking, Touch-Tone Phone Account Access And Internet Banking. Clearly, Customer Value Can Be
A Strong Driver Of Customer Retention. Customer Satisfaction Has For Many Years Been Perceived As Key In
Determining Why Customers Leave Or Stay With An Organization. Organization Need To Know How To Keep

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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

Their Customers, Even If They Appear To Be Satisfied. Reichheld Et Al (1996) Suggests That Unsatisfied
Customers May Choose Not To Defect, Because They Do Not Expect To Receive Better Service Elsewhere.
Additionally, Satisfied Customers May Look For Other Providers Because They Believe They Might Receive
Better Service Elsewhere. However, Keeping Customers Is Also Dependent On A Number Of Other Factors.
These Include A Wider Range Of Product Choices, Greater Convenience, Better Prices, And Enhanced Income
(Storbacka Et Al., 1994). Fornell (1997), In His Study Of Swedish Consumers, Notes That Although Customer
Satisfaction And Quality Appear To Be Important For All Firms, Satisfaction Is More Important For Loyalty In
Industries Such As Banks, Insurance, Automobiles Etc…
Ioanna (2002) Further Proposed That Product Differentiation Is Impossible In A Competitive
Environment Like The Banking Industry. Banks Everywhere Are Delivering The Same Products. For Example,
There Is Usually Only Minimal Variation In Interest Rates Charged Or The Range Of Products Available To
Customers. Bank Prices Are Fixed And Driven By The Marketplace. Thus, Bank Management Tends To
Differentiate Their Firm From Competitors Through Service Quality. Service Quality Is An Imperative Element
Impacting Customers‟ Satisfaction Level In The Banking Industry. In Banking, Quality Is A Multi-Variable
Concept, Which Includes Differing Types Of Convenience, Reliability, Services Portfolio, And Critically, The
Staff Delivering The Service.
Customer Satisfaction Is A Person‟s Felling Of Pleasure Or Disappointment Resulting From Comparing
A Products Perceived Performance (Outcome) In Relation To His/Her Expectation.
Customer Satisfaction, A Business Term, Is A Measure Of How Product And Service Supplied By A
Company Meet Or Surpass Customer Expectation. In A Competitive Marketplace Where Businesses Compete
For Customers, Customer Satisfaction Is Seen As A Key Differentiator And Increasingly Has Become A Key
Element Of Business Strategy. (Www.Satisfactionstrategies.Com).
Customer Satisfaction Is Individual‟s Perception Of The Performance Of The Product Or Service In
Relation To His/Her Expectation. The Concept Of Customer Satisfaction Is The Concept/Function Of Customer
Expectation. A Customer Whose Experience Falls Below Its Expectation Will Be Dissatisfied. The Overall
Objective Of Providing Values To Customer Continually And More Effectively Than The Competitor Is, To Have
And To Retain With Satisfied Customers. This Strategy Of Customer Retention Makes The Bank In The Best
Interest Of Customers To Stay With The Company Rather Than Switch To Another Firm

2.1. Service Quality

Service Quality Is An Attitude Or Global Judgment About The Superiority Of A Service. To Be Globally
Competitive Service Industries Must Achieve A Quality Service That Exceeds Customers‟ Expectation. Service
Quality Determines An Organizations Success Or Failure. Companies And Organizations That Virtually Every
Industry Employs Customer Satisfaction Measures For The Straightforward Reason That Satisfied Customers Are
Essential For A Successful Business.
Service Quality Also Determines A Customer‟s Satisfaction. However, The Determinants Of Service
Quality Are Complicated With The Dynamic Business Environment. Therefore, This Measurement Dimensions
Depend On The Industry Itself.
Research Identifies Many Characteristics That Are Associated With Service Quality. Business
Researchers Bharadwaj Et Al 1993 Assert That “Service Organizations Must Meet Three Key Customer Needs To
Deliver Service Excellence:” Security, Esteem, And Justice.
In Businesses Where The Underlying Products Have Become Commodity-Like, Quality Of Service
Depends Heavily On The Quality Of Its Personnel. This Is Well Documented In A Study By Leeds (2002), Who
Documented That Approximately 40 Percent Of Customers Switched Banks Because Of What They Considered
To Be Poor Service. As Cited By Hallowell 1996, Leeds Further Argued That, Nearly Three-Quarters Of The
Banking Customers Mentioned Teller Courtesy As A Prime Consideration In Choosing A Bank.
Kotler, As Cited By Mohanty&Lakhe (2002), Also Defines Service As Any Kind Of Performance That
One Party Can Offer To Another That Is Essentially Intangible And Does Not Result In The Owner Ship Of
Anything. Its Production May Or May Not Be Tied Up With A Physical Product. Customer Satisfaction Differs
Depending On The Situation And The Product Or Service. A Customer May Be Satisfied With A Product Or
Service, An Experience, A Purchase Decision, A Salesperson, Store, Service Provider, Or An Attribute Or Any Of
These.

2.3. Dimensions Of Service Quality

Good Service Delivery Creates Increased Profit Through Enhanced Revenues, Reduced Costs To
Acquire Customers, Lower Customer-Price Sensitivity, And Decreased Costs To Serve Customers Familiar With
A Firm‟s Service Delivery System. The Service Management Literature Argues That Customer Satisfaction Is
The Result Of A Customer‟s Perception Of The Value Received In A Transaction Or Relationship – Where Value
Equals Perceived Service Quality Relative To Price And Customer Acquisition Costs (Blanchard Et Al 1994;) –
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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

Relative To The Value Expected From Transactions Or Relationships With Competing Vendors (Zeithamlet Al.,
1990).
Parasuramanet Al. (1997)Investigated The Different Service Industries And Explored 10 Dimensions Of
Service Quality I.E. Tangibility, Responsiveness, Reliability, Courtesy, Access, Credibility, Communication,
Competence, Understanding, And Security. They Continued Their Research To Purify The Dimensions Of
Service Quality And Developed A Widely Used Research Instrument Called Servqual. It Is Equally Applicable In
Different Service Industries Including Banking Industry. They Refined These Dimensions And Summed Up Into
Five Dimensions Like Reliability, Responsiveness, Tangibility, Assurance And Empathy.

Source: (Rust Et Al, 1999).

Tangibles: Physical Facilities, Equipment, And Appearance Of Personnel

Reliability: Ability To Perform The Promised Service Dependably And Accurately
Responsiveness: Willingness To Help Customers And Provide Prompt Service
Assurance: Knowledge And Courtesy Of Employees And Their Ability To Inspire Trust And Confidence
Empathy: Caring, Individualized Attention The Firm Provides To Its Customers.
2.4. Underlying Principles Of Service Quality
According To Clow Et Al (2003), Receiving A High Level Of Service Is Important To Consumers But
Understanding How To Evaluate The Service Quality Received Is More Difficult. Two Consumers Receiving
What Appears To Be The Exact Same Service E Form A Company May Evaluate The Quality Of The Service
Differently. One Consumer May Feel The Service Was Good While The Other May Feel The Service Was
Performed Poorly.
The Origins Of Service Quality Theory: The Foundation Of Service Quality Theory Lies In The Product
Quality And Customer Satisfaction Literature. Early Conceptualizations (E.G.,Gronroos 1982, 1984;
Parasuraman, Zeithaml, And 1985) Are Based On The Disconfirmation Paradigm Employed In The Physical
Goods Literature. This Suggest That Quality Results Form A Comparisons Of Perceived With Expected
Performance As Is Reflected In Gronroos‟s(1982,1984) As Cited By Brady And Cronin(2001), Similar
Conceptualization Of Service Quality That “Puts The Perceived Service Against The Expected Service”
(Gronroos 1984,P.37, Emphasis In Original.) As Cited By Brady And Cronin (2001), In Addition To Adapting
The Disconfirmation Paradigm To The Measurement Of Service Quality, Gronroos (1982) Identifies Two Service
Quality Dimensions I.E., Functional Quality And Technical Quality. Functional Quality Represents How The
Service Is Delivered; That Is, It Defines Customers' Perceptions Of The Interactions That Take Place During
Service Delivery. Technical Quality Reflects The Outcome Of The Service Act, Or What The Customer Receives
In The Service Encounter. Gronroos (1982) . Levesque‟s And His Colleagues (1996) Survey Indicated That The
Bank‟s Features (E.G. Location), The Competitiveness Of The Banks Interest Rates, The Customers‟ Judgments
About The Bank Employees‟ Skills And Whether The Customer Was A Borrower Were All Factors That Drove
Customer Satisfaction, While Bank Features And Competitive Interest Rates Were Important Contributors.

III. Methodology
Research Design: The Research Design That Was Used In This Investigation Is A Survey Approach. Descriptive
Approaches Had Been Used To Investigate Service Quality And Customer Satisfaction Using Survey Study. The
Survey Was Designed To Obtain Information About The Determinants Of Customer's Bank Selection Criteria.
Data Source And Collection Methods: The Study Had Largely Depends On Primary Data, Which Was
Collected Through Questionnaire Method By Using Servqual Instrument. The Respondents Were Asked To Rate
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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

Each Statement Using Likert Scales But As A Whole, The Relevant Data For This Study Were Collected From
Both Primary And Secondary Source Of Data, In Which The Primary Data Was Collected By Using
Questionnaires (Structured). The Questioner Was Already A Developed Model Question On Service Quality But
The Investigator Has Made Little Amendment And Also To Alleviate The Problem Of Language Barrier, The
Researcher Had Interpreted The Questionnaires In To Understandable Language I.E. Amharic. The Questionnaire
Had Comprise Three Parts; Part One Had Contain Demographic Questions (Respondents Profile), Part Two Had
Questions Related To The Level Of Importance Of The Five Dimensions Service Quality- Tangibility, Reliability,
Responsiveness, Assurance, And Empathy. The Third Part Had Questions Related To Respondents‟ Expectation
Of Service Quality And Perception Of The Services Of The Bank Based On Their Actual Experience Using The
Five Dimensions Of Service Quality, And Interview (Unstructured) Which Was Administered By
Investigator/Researcher And The Secondary Data Was Gathered From Manuals Of The Bank, Books, Documents,
Journals, And Different Articles.
Sampling Design And Techniques: The Sampling Design That Was Used In This Research Was
Non-Probabilistic Distribution With A Sampling Technique Of Convenience Sampling. This Is Because Of Since
The Population Were Too Large And Do Not Arrive At The Same Time, It Was Impossible To Include And Give
Equal Chance For Every Individual And Also, The Researcher Had Used A Non-Probability I.E.
Purposive/Judgmental Sampling Technique This Is Aimed For The Advantage Of Getting In-Depth Information
With Limited Time And Money.
Sample Size Determination Method: As Cited By Zelalem (2005) The Sample Size Determination Method
Developed By Carvalho (1984) Is Presented In Table Below.

Table 3.1 Sample Size Determination Method

Population Size Sample Size
Low Medium High
51-90 5 13 20
91-150 8 20 32
151-280 13 32 50
281-500 20 50 80
501-1200 32 80 125
1201-3200 50 125 200
3201-10000 80 200 315
10001-35000 125 315 500
35001-150000 200 500 800
(Source: Zelalem, 2005)

Respondents Were Taken As A Sample Based On Carvalho (1984) Sample Size Determination Method.
Once The Total Sample Size Was Determined, The Appropriate Samples From The Respondent Were
Determined By Using The Convenience Sampling Method. Accordingly, The Samples From The Branch Were
Taken Based Up On The Ranges Given In The Above Table That Means In Which Range That The Total
Population Belongs. As Indicated In The Above Table, The Population Size Of The Study Was 5648 For
Kombolca. So, For The Branch, Which Ranges Between 3,201-10,000, According To Carvalho‟s Sample Size
Determination Indicated In Table 1.1., The Selected Sample Were 315 ( High Range). Therefore, From The
Banks Customer, 315 Customers Were Taken For Kombolca Branch.
Data Analysis Method: The Purpose Of The Study Was To Determine If The Service Quality Dimensions Have
An Effect On The Customer Satisfaction On Dashen Bank, Kombolcha Branch. So, The Data In This Study Were
Analyzed To Determine If Causality Can Be Inferred From The Relationship Between The Independent Variable
(The Dimensions Of Service) And The Dependent Variable (Customer Satisfaction). And Accordingly To
Analyze The Gathered Data, The Researcher Have Used The Software Packages Spss V. 20 And Other
Statistical Methods Which Help To Analysis The Five Dimensions Of The Service Quality
Dimensions‟ With Each Respective Attribute.

IV. Major Findings

Table 1: Respondents Profile For Kombolcha Branch
Gender
Frequency Valid Percent Cumulative Percent
Female 129 41.0 41.0
Male 186 59.0 100.0
Total 315 100.0
Age
Frequency Valid Percent Cumulative Percent
18-30 118 37.5 37.5
31-50 163 51.7 89.2
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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia
Above 50 34 10.8 100.0
Total 315 100.0
Level Of Education
Frequency Valid Percent Cumulative Percent
Below Grade 12 95 30.2 30.2
Certificate 111 35.2 65.4
Diploma 56 17.8 83.2
Bachelor Degree 45 14.3 97.5
Master‟s Degree And 8 2.5 100.0
Above
Total 315 100.0
Occupation
Frequency Valid Percent Cumulative Percent
Business 198 62.9 62.9
Government Employee 82 26.0 88.9
Ngo, Private Organization 35 11.1 100.0
Employee
Total 315 100.0
Frequency Of Using The Bank
Frequency Valid Percent Cumulative Percent
Daily 2 0.6 0.6
Once A Week 43 13.7 14.3
Once A Month 112 35.6 49.8
Other‟s 158 50.2 100.0
Total 315 100.0
(Source: Own Survey, 2017)

The Result Of Table 1 Provides Data On Demographic Characteristics Of The Respondents Of Dashen
Bank, Kombolcha Branch Which Includes Variables Like Gender, Age, Educational Qualifications, Occupation,
And Frequency Of Use. The Total Sample Selected From The Branch Is 315 Customers. And Accordingly, Based
Up On The Representation Of The Table, Females Make 41% Of The Respondent, And The Remaining 59% Of
The Surveyed Population Makes Male. Similarly, As It Is Depicted In The Table, The Largest Group Of
Respondents Is Aged Between 31 And 50 I.E. 51.7% And The Next Largest Group Is Aged Between 18 And 30
Which Accounts 37.5% Of The Total Sample. Smaller Groups Of Respondents Are Aged Above 50 I.E. 10.8%.
With Regard To Educational Level, Certificate Holders Are The Largest Group Of Respondents Comprising 35.2
% Of The Total Customer And The Next Largest Groups Are Respondents Which Are Below Grade 12 Which
Makes 30.2% Of The Total. The Remaining 17.8%, 14.3% And 7.3 % Are Holders Of Diploma, Bachelor Degree
And Postgraduate Degrees Respectively. In Relation To Their Occupation, More Than Half Of The Respondents
Are Business Peoples Which Accounts For 62.9% Of The Surveyed Population, And The Remaining 26% And
11.1% Are Government Employee, And Ngo, Private Organization Employee Respectively. Regarding The
Frequency Of Use, Majority Of The Respondent Are Not Frequent Users Of The Bank I.E. 50.2%. This Shows
That, They Use The Service At Most At Any Time They Need Money Without Exact Interval. And The
Remaining 0.6,13.7& 35.6 % Are Daily, Once A Week And Once A Month Users Respectively.

Table 2: Servqual Importance Level Corresponding To Overall Satisfaction With A Point Score At Kombolcha
Branch With Its Mean And Standard Deviation
Service Quality Dimensions Mean Score Std. Deviation
Tangible 2.04 0.866
Reliability 2.08 0.921
Responsiveness 2.17 0.959
Assurance 2.15 0.945
Empathy 2.03 0.829
(Source: Own Survey, 2017)

Table 2 Indicates The Five Servqual Model Ranked By The Customer Of Kombolcha Branch And
Accordingly Responsiveness Has The Highest Mean Value And Tangibility And Empathy Have The Least Mean
Value. Therefore, It May Be Concluded From Table 2 That Respondents Are Most Satisfied With Responsiveness
Dimensions With A Mean And Standard Deviation Of 2.17 And 0.959 Respectively. This Is Followed By
Assurance And Reliability. However, Customers Are Less Satisfied With Empathy And Tangibility With A Mean
Score Of 2.03 And 2.04 Respectively. No Matter How All The Service Quality Dimensions Are Different Based
Up On Their Priority I.E. Ranking With Which One Have The Utmost Influence On Customer Satisfaction, They
All Have A Direct Or Indirect Impact On Customer Satisfaction Which Indicates That Overall Customers Are
Slightly Satisfied With The Service Quality Of Banks.

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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

Service Quality Gap Analysis

Table 3: Service Quality Gap At Dashen Bank, Kombolcha Branch

Expectation Of Variance Between
Actual And Expectation Actual Service Service By The The Actual And
By The Customer. Provided By Customer. The Expectation.
The Bank. (Gap Score)
Questionnaire On
Std.
Servqual Model
Deviatio
Std. Std. n
Deviati Deviati Mean Varianc
Mean on Mean on Variance e
Tangibility
1 The Bank Has Modern Looking Equipment. 3.72 .818 3.61 .868 0.11 -0.05
2 The Banks Physical Features Are Visually
3.60 .606 3.52 .674 0.08 -0.068
Appealing.
3 The Bank Reception Desk Employees Are
3.46 .664 3.38 .705 0.08 -0.041
Neat Appearing.
4 Materials Associated With The Service
Such As Pamphlets Are Visually Appealing 3.94 .599 3.89 .595 0.05 0.004
At The Desk.
Average Score Dimension Of Tangibility 3.68 0.672 3.6 0.711 0.08 -0.155
Reliability
5 When The Bank Promises To Do Something
3.94 .615 3.89 .621 0.05 -0.006
By A Certain Time, It Does So.
6 When You Have A Problem The Bank
3.49 .796 3.34 .880 0.15 -0.084
Shows A Sincere Interest In Solving It.
7 The Bank Performs The Service Right The
3.65 .944 3.74 .872 -0.09 0.072
First Time.
8 The Bank Provides Its Service At The Time
3.50 .746 3.41 .770 0.09 -0.024
It Promises To Do So.
9 The Bank Insists On Error Free Records. 3.73 .673 3.63 .713 0.1 -0.04
Average Score Dimension Of Reliability 3.662 0.755 3.602 0.771 0.06 -0.0164
Responsiveness
10 Employees In The Bank Tell You Exactly
3.51 .688 3.44 .686 0.07 0.002
When The Services Will Be Performed.
11 Employees In The Bank Give You A
3.40 .919 3.64 .795 -0.24 0.124
Prompt Service.
12 Employees In The Bank Are Always
3.87 .634 3.92 .600 -0.05 0.034
Willing To Help You.
13 Employees In The Bank Are Never Too
3.47 1.020 3.54 1.004 -0.07 0.016
Busy To Respond To Your Request.
Average Score Dimension Of
3.563 0.815 3.635 0.771 -0.073 0.044
Responsiveness
Assurance
14 The Behavior Of Employees In The Bank
3.89 .841 3.97 .777 -0.08 0.064
Instills Confidence Up On You.
15 You Feel Safe In Your Transactions With
4.21 .695 4.11 .716 0.01 -0.021
The Bank.
16 Employees In The Bank Are Consistently
3.70 .909 3.73 .914 -0.03 -0.005
Courteous With You.
17 Employees In The Bank Have The
4.00 .802 4.02 .788 -0.02 0.014
Knowledge To Answer Your Questions.
Average Score Dimension Of Assurance 3.95 0.812 3.958 0.799 -0.03 0.013
Empathy
18 The Bank Gives You Individual Attention. 3.95 .830 3.94 .815 0.01 0.015
19 The Bank Has Operating Hours Convenient
4.15 .601 4.10 .637 0.05 -0.036
To All Its Customers.
20 The Bank Has An Employee Who Gives
3.85 .857 3.90 .831 -0.05 0.026
You Personal Attention.
21 The Bank Has Your Best Interests At Heart. 3.99 .755 3.99 .749 0 0.006

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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

22 The Employees Of The Bank Understand

3.83 .852 3.85 .839 -0.02 0.013
Your Specific Needs.
Average Score Dimension Of Empathy
3.954 0.779 3.956 0.774 -0.002 0.0048
General About Customers Attitude Towards The Bank
23 Overall, I Am Satisfied With The Bank
3.84 .805 3.82 .833 0.02 -0.028
Services.
24 I Say Positive Things About The Bank To
3.79 .931 3.75 .963 0.04 -0.032
Other People.
25 I Intend To Continue Being A Customer Of
4.00 .786 3.97 .802 0.03 -0.016
The Bank For A Long Time To Come.
26 I Will Encourage Friends And Relatives To
3.95 .851 3.92 .861 0.03 -0.01
Use The Service Offered By The Bank.
Average Score Of The Dimension 3.895 0.843 3.865 0.865 0.03 -0.0215
(Source: Own Survey, 2013)

As It Is Indicated In The Above Table (Table 3), All Service Quality Dimensions Have Negative
Variance Except Tangibility And Reliability, Which Indicates That The Fails To Meet Customers Expectation
Which Leads To Customer Dissatisfaction. While Discussing Each Dimension Separately, Tangibility Has The
Largest Positive Mean Showing That Dashen Bank, Kombolca Branch Is Acting Positively In Terms Of Visibility
Of Facilities I.E. The Physical Features Like Pamphlet‟s Are Visually Appealing, The Reception Desk Are Neat,
The Equipment's Are Modern.
Reliability Dimension Has An Average Mean Gap Score Of 0.06 (Table 3) Which Has The Second
Largest Mean Next By Tangibility. In Terms Of Reliability The Bank Is Performing Better But The Bank Don‟t
Perform The Service Right The First Time Like Providing Core Banking Service Is -0.09. But In Terms Of
Performing The Promised Service At A Certain Time, Showing A Genuine Interest In Solving The Problem Of
The Customer And Insisting On Error Free Records, The Bank Is Acting Even Beyond The Expectation Of The
Customer.
Responsiveness Has An Average Mean Score Of -0.073 (Table 3) Indicating That The Willingness Of
Employee In Treating The Customer Of The Bank Is Not As Of The Expectation Of The Customer I.E. It Is Below
Their Expectation. They Can Only Tell Them Exactly When The Service Will Be Provided. That Is, With Positive
Variance (0.07). On The Other Hand, Employee Are Too Busy To Respond To The Request Of Customer (-0.07)
And They Don‟t Give The Customer A Prompt Service (-0.24).
The Average Gap Score Of Assurance Dimension Is -0.03 Indicating That Employees In The Bank Are
Not Working From Their Heart I.E. They Are Not Courteous, They Don‟t Respond To The Question Of The
Customer With A Good Awareness Because Of Lack Of Detail And Good Know About The Banks Service.
Empathy At Dashen Bank, Kombolcha Branch Has An Average Score Of -0.002, The Third Important
Service Quality Next By Tangibility And Assurance. In Stipulations Of Empathy, The Bank Appears To Be Weak
Particularly In Attributes Like „„Employees Who Give Personal Attention And Employees Of The Bank
Understand The Specific Need Of The Customer ‟‟ With A Mean Value Of -0.05 And -0.02 Respectively,
Indicating The Insufficient Of The Employee In Meeting The Need Of The Customer.
To Put It In Nutshell, In Comparison With The Other Dimensions, Attributes Under Tangibility And
Reliability Have Relatively A Better Variance Score Supporting That The Bank Has A Better Prospect Of
Meeting Or Exceeding Customer Expectation Which Helps To Create A Good Satisfaction With The Customer.
Over All Dashen Bank, Komolcha Branch Is Performing Better In The Service Quality Dimensions Under Study
Especially In Terms Of Tangibility And Reliability Dimensions.

Table 4: Relationship Between Service Quality Dimensions And Customer Satisfaction

Reliability Responsiveness Assurance Empathy Tangibl
es
Customer .605 .602 .557 .544 .431
Satisfaction

Correlation (Pearson) Between Customer Satisfaction And Service Quality Dimensions, Significant At The 0.01
Level (1-Tailed)
(Source: Spss Correlation Output)

As It Is Indicated In The Above Table, Table 4, There Is Positive Correlation Between Service Quality
Dimension And Customer Satisfaction I.E. Customer Satisfaction Has Positive Relationship With All The
Servqual Dimensions. From All The Service Quality Dimensions, It Is Reliability Which Has A Score Of 0.605
2nd International Conference on 'Innovative Business Practices and Sustainability in VUCA World' 8 |Page
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 Service Quality Dimensions And Its Impact On Customer Satisfaction On Private Bank In Ethiopia

That Has The Greatest Linkage Or Correlation With Customer‟s Satisfaction. I.E. Customers Need The Promised
Service To Be Provided Dependably And Accurately. Customers Evaluate The Promise Of The Banks And Its
Execution From Their Own Point Of View. Responsiveness Which Has 0.602 Is The Second Dimension That
Customers Need At Most. Customers Need The Employees Of The Bank To Be Willing To Treat And Need They
Get Ready To Treat The Customer. The Third Is Assurance With A Value Of 0.557. The Fourth And The Fifth
Dimension Having Slightly Less Correlation With Customer Satisfaction Are Empathy And Tangibility.

V. Conclusion
With Regarded To Kombolcha Branch, The Results Of Background Information Of Respondents
Indicated That Majority Of The Total Respondents (59.0%) Are Male, (51.7%) Aged In The Range Of 31-50
Years, (35.2%) Are Certificate Holders, And (62.9%) Of The Respondents Are Business Peoples. The Results Of
The Descriptive Statistical Analysis Also Indicated That, Customers Were Most Satisfied With The Reliability
(0.06) And Tangibility (0.08) Dimensions Of Service Quality. However, Customers Were Less Satisfied With
Assurance (-0.03), Responsiveness (-0.073) And Empathy (-0.002) Dimensions Of Service Quality. In
Comparison With The Other Dimensions, Attributes Under Tangibility And Reliability Have Relatively A Better
Variance Score Supporting That The Bank Has A Better Prospect Of Meeting Or Exceeding Customer
Expectation Which Helps To Create A Good Satisfaction With The Customer.
The Servqual Score At Kombolcha Branch On Average Shows A Negative Variance Except For
Reliability And Tangibility Having A Positive Variance Of 0.06 And 0.08 Respectively. This Indicates That The
Bank Is Somehow Good In Meeting Its Customer Expectation In Terms Of Providing Visually Appealing
Features And The Different Materials Associated With The Service. Dashen Bank, Kombolcha Branch Shows A
Sincere Interest In Solving The Problem Of Its Customer And It Can Provide Its Service At The Time It Promise
To Do. And To The Inverse, Responsiveness Has The Highest Negative Gap Score Of -0.073 Demonstrating
That The Bank Has Some Lacks In This Dimension Which Indicates That, The Bank Is Not Good In Terms Of
Giving A Prompt Service And During The Customer Asks Them Something New, They Would Like To Make
Them Self-Busy. The Empathy Dimension Also Has A Gap Score Of -0.002 Showing That The Employee Of The
Bank Doesn‟t Give Individualized Attention To The Customers Of The Bank. Assurance Has A Score Of -0.03,
Indicating That The Service Provided To The Customers Is Not Dependably.

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