ADMAS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMNT
ASSESSMENT OF SERVICE DELIVERY AND CUSTOMER SATISFACTION
(IN CASE OF AWASH INTERNATIONAL BANK OF SEBETA BRANCH)

A Research proposal Submitted in Partial Fulfillment for the Bachelor of Arts

Degree in Marketing Management

By: Edomiyas Solomon Jemal

Id no: 0278/13
Advisor: Muluken H. (MBA)

September 2015

OROMIA, ETHIOPIA

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 TABLE OF CONTENT

Contents
TABLE OF CONTEN………………………………………………………………………ii
Abstract.....................................................................................................................................iv
CHAPTER 1: INTRODUCTION...........................................................................................1
1.1. Background of the Study.....................................................................................................1
1.2. Background of the organization…………………………………………………………...2.

1.3. Statement of the problem....................................................................................................3

1.4. Objective of the study……………………………………………………………………..3

1.4.1. General objective......................................................................................................3

1.4.2. Specific objective......................................................................................................3
1.5. Research Question…………………………………………………………………………4.

1.6. Significance of the study…………………………………………………………………...4

1.7. Scope and limitation of the study…………………………………………………………..4

1.7.1. Scope of the study....................................................................................................,4

1.7.2. Delimitation of the study……………………………………………………...4.

1.7.3. Limitation of the study..............................................................................................4

1.8. Definition of terms..............................................................................................................5
CHAPTER TWO: LITRATURE REVIEW….………..………………………………………6

2.1. Definition of Service..............................................................................................……….6

2.2 Importance of charactertics of service .…………….…………………………………………..7
2.2.1. Intagability…………………………………………………………………..……….7
2.2.2. Perishability…………………………………………………………………………..7

2.2.3. Inseparability……………………………………………………................................7

2.2.4. Variability…………………………………………………….....................................7

2.3. Principles for complete customer service………………………………………………………8

2.4. Service Quality…………………………………………………………………………………9

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 2.4.1. Determinant of service quality………………………………………………………10

2.4.2. Benefits of service quality to the organization……………………………………….11

2.4.3. Service delivery………………………………………………………………………11

2.4.4. Gap in service delivery………………………………………………………………11

2.5. Measuring service quality delivery……………………………………………………………12

2.6. Dimension of service quality……………………….………………………………………….13

2.7. Customer satisfaction…………………………………………………………………………..13

2.7.1 Importance of customer satisfaction…………………………………………………..15

2.7.2 Strategies for Dissatisfied customer…………………………………………………..15

2.7.3. Customer Perception………………………………………………………………….16

2.7.4. Determinants of satisfaction…………………………………………………………...17

CHAPTER THREE…………………………………………………………………………………18

3. Methodology of the study …………………………………………………………………………18

3.1. Research design…………………………………………………………………………………..18

3.2. Source of a data…………………………………………………………………………….……..18

3.3. Sample technique…………………………………………………………………………………..18

3.4. Sample size………………………………………………………………………………….……..18

3.5. Methods of data analysis…………………………………………………………………….……..18

CHAPTER FOUR……………..………………………………………………………………………..19

4.1 Budget Frame………………………………………………………………………………………..19

4.2. Time plan of the study……………………………………………………………………………..19

REFERENCE……………………………………………………………………………… ……………21

Abstract

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The purpose of conducting this research is to understand how the service delivery is and its effect on
customer satisfaction .The objective of this study will be assessment of service delivery system and
customer satisfaction on Awash International Bank. The scope of the study theoretically limited on service
delivery and customer satisfaction and geographically limited on Awash International Bank in Sebeta
city. To accomplish the required work the researcher will use descriptive research design. The relevant
data for the study will collected through primary and secondary data and non-probability sampling
technique specifically convenient sampling technique will employed to conduct the study. Quantitative
data will be analyze and interpreted via table and percentage and qualitative data will analyze by using
theoretical or descriptive framework. Finally based on the findings the researcher tries to give
conclusions and recommendation

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 CHAPTER ONE

1. INTRODUCTION

1.1 Background of the study

A service is any act or performance that one party can affect another that essentially intangible and does
not result in the ownership of anything. Its production may or may not be tied to a physical production
(Kotler, 2006). According to Stephan 2001, service is any activity or benefit that one partly can offer to
another that is essentially intangible and does not result in the owner shih of anything.

Customer service is a task ,other than common operation that involves interactions with customer service
varies from one organization to other .within service sector it can be described as the total quality of
service process as perceived by the customer(Kotler,2006).

When we come to service quality, it improves the probability of customer satisfaction .in this way, the
relation between service quality and customer satisfaction has emerged as a topic of significant and
strategic concept ( Bolton and Drew,1991).

Customer evaluations of service delivery are critical to service firms that aim to improve their marketing
strategies (Cronin& Taylor, 1992, Jain and Gupta, 2004; Ofir and Simonson, 2001).

Oliver, 1997 defines satisfaction as “the customer fulfillment response “. A post consumption judgment
by the consumer that a service provides a pleasing level of consumption related to fulfillment including
under or over fulfillment. Customer satisfaction view as influencing repurchase intension and behavior
which in turn leads an organization’s future revenue and profit, The issue of service delivery and customer
satisfaction has became a focus on banking industries. Mole and companies are compelled to assess and
improve their service quality in an effort to attract customer (Gilbert and Velousou, 2006).

Knowing what customer expect is the first and possibly most critical step in delivery good quality service.
Being wrong what customer want can mean expanding money, time and other sources on the things that
do not count to the customer s, losing a customer business or not serving in a fiercely competitive market
(Teas, 1993).

Customer satisfaction is major issue, in almost all sectors. This can be basically determine the success and
profitability of a company as a satisfied customer would most likely to 'spread the good word' or would
have to happy to do business again with the firm. Many empirical studies have investigated the

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relationship among the conflict of service quality and customer satisfaction. In a Varity of industries and
cultures, with in this research area, numerous empirical studies have reported the positive relationship
between customer satisfaction and service delivery (Andaleeb and Conway, 2006).

This study was conducted on Awash international bank of Mekelle branch; therefore, assessing the overall
service delivery and its effect on customer satisfaction within the organization or the bank were the main
concern of the project.

1.2 Background of the organization

Awash International Bank is a the pioneer private commercial bank in Ethiopia after the downfall of the
military regime and introduction of market economic policy which happened in 1991.the bank was found
y 486 shareholders with paid-up capital of birr 24.2 million .licensed on November 10,1994 it started its
banking operation on February 13,1995.it was named after the popular "Awash "which is the most utilized
river in the country specially for irrigation and hydroelectric power .Awash river plays a vital role in the
economic development of the country.

Awash International Bank is a full service, according to its website (www.awash international bank.com)
The bank has 80 branches and 480000 customer its in 2009 exceed 6. Billion birr.

By the end of June 2013 the number of shareholder risen to 3122 and its paid up capital to 1. Billion birr.
Their total number of branch reached 115including the fact that the bank continued to hold its leading
position among private banks in terms of branch network (Ato Tsehaye S. President).

The bank has opened its branch here in Sebeta on September 2012 and started its operation. Its operating
is provision of banking service to customer such as saving ,loan grating ,local transfer and foreign
exchange, Sebeta branch currently has 6998 saving and 956 current account and about 34 employees.

The reason behind to its establishment are to provide efficient ,competitive ,diversified and profitable
banking service to a continuous growing number of customer in a socially responsible manner supported
by appropriate modern banking technology as well a qualified train and motivated team of management
and employee imbued with highly professional and ethical standards. And also the vision of the bank is
"to be most preferable bank of the people".

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1.3. Statement of the problem
The number of bank especially privately owned is increasing from time to time in Ethiopia, Especially
after advent of privatization. Hence Awash international bank of Sebeta branch is facing a challenge in a
competition for customer’s share of wallet to gain customer product portfolio in order to enhance and
maintain long term profitability. Different banks are highly competing over through, diversifying and
improving the quality of their service and through opening their branches at different areas of the country
including Sebeta town.

Most banks product development is easy to duplicate and when banks provide nearly identical service,
they can only distinguish themselves on the basis of price and quality of service delivery (David Cohan,
Christopher Gan, Hua Au Young and Esther Chong, 2006).

In previous research findings that conclude or investigate the positive relationship between service
delivery and customer satisfaction, i.e. customer satisfaction varies according to the nature of service
delivery. When service delivery is better and quality customer satisfaction increases and the reverse is true
according to previous research of( Selman Khalid, on customer satisfaction with service quality in
conventional bank in Pakistan, 2011).

In this study the researcher assessed or ensured the above findings of the positive effect of service
delivery on customer satisfaction and also attempted and enhanced understanding in the area of
relationship between customer satisfaction and service delivery.

1.4. Objective of the study

1.4.1 General objective

The general objective of the study is the assessment of service delivery system and its effect on customer
satisfaction on Awash International Bank of Sebeta Branch.

1.4.2 Specific objective

The specific objectives of the study are including the following: -

1. To determine the factors that leads to customer satisfaction with in the bank.
2. To evaluate the banks service delivery system in terms of accessibility.
3. To assess the banks delivery system in terms of customer satisfaction.
4. To show the effect of the quality service on customer satisfaction

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1.5. Research question
At the end of the study the researcher will try to find answer for the following research questions.

1. How is awash international banks service system in terms of accessibility?

2. How is awash international bank’s service system in terms of quality?
3. How service deliveries offer customer satisfaction?
4. What are the factors that can lead customers toward satisfaction in the bank?

1.6. Significance of the study

The study may provide significant on these three major aspects. It will provide concrete information to
other researches about the state of service delivery system and its effect on customer satisfaction. The
study will be used as a guideline by management to improve, design and administer the service delivery
system so as to satisfy customers more and also the other contribution of the paper will be to add new idea
and knowledge to existing stoke of knowledge of the researcher.

1.7 Scope and limitation of the study

1.7.1 Scope of the study

In theoretical aspect assessment of service delivery and its effect on customer satisfaction can conduct
with many service industries but the researcher was conduct on banks.

In geographical aspect the study can also be conducted at a country level but the researcher is focus on
Awash International Bank of Sebeta branch.

In methodological aspect the study can conduct by using different methodology, but the researcher will
use descriptive research design.

1.7.2 Delimitation of the study

As the topic indicates the study cover Assessment of Service Delivery and Customer Satisfaction. Though
such being the case, the paper tries to assess, the challenges and prospects of service delivery in the bank
under consideration of customer satisfaction in Awash International Bank.

1.7.3 Limitation of the study

The study may have the following limitations:

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Conducting effective research requires many things. Time and money may eat among the basic
requirements. During conducting research, there will be shortage of time. The time for the collection of
data might be sufficient to collect the required information.

Even though the main sources of data for the research ae through investigation of literature, the
availability literatures in the library are not recently published. There is lack of latest supporting
document.

And also, it may be difficult to get voluntary respondents to conduct data from them.

1.8 Definition of Terms

Customer Satisfaction: Customer satisfaction is defined as a measurement that determines how happy
customers are with a company's products, services, and capabilities. Customer satisfaction information,
including surveys and ratings, can help a company determine how to best improve or changes its products
and services.

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 CHAPTER TWO

2. REVIEW OF RELATED LITERATURE

2.1 Definition of Service

Service industries are playing on increasingly important Role in the overall economies of the countries of
developed and developing countries. The 21 st century is considered as service industry. Researchers have
tried to define service and to explain what service constitutes. There are many definitions regarding the
concept of service. Services are deeds, processes and performances (Parasuraman et.al.1985). Gronroos
(1994) defined service as “An activity or series of activities of more or less intangibles nature that
normally, but not necessarily, take place in interaction between the customer and service employees and
physical resources or good and service provider system, which are provided as solution to customer
problem”. Sassier.et.al,(1978) defined another meaning for service: “service is a package of explicit and
implicit benefits performed with a supporting facility and using facilitation goods”. Service is any primary
or complementary activities that does not directly produce a physical product that is non-goods part of the
transaction between customer and provider” (Payne, 1993) whereas Kotler et.al.(1999) defined service as
any activity or benefits that one party offers to another which is essentially intangible and does not result
in ownership of anything and it may or may not be tied to a physical product.

One common method of defining a service is to distinguish between the ‘core’ and ‘peripheral’ element of
the service. The ‘core’ service offering is the necessary output of an organization which are intended ton
provide the intangible benefit customers are looking for. ‘peripheral’ service are those which are either
indispensible for the exclusion of the core service or available only to improve the overall quality of the
service bundle(Barron &Harris, 1995).

Service are those separately identifiable ,essentially intangible activities that provide want satisfaction
and that are not necessarily tied to the sale of product or other service (Staton,1999).

Service is a multifaceted concept involving several activities performed by an individual or group of

individuals for the benefit of customer or group to enhance the primary produce.

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2.2 Important characteristics of service

Service possess four inherent characters not found in goods, intangibility, perish ability in separating and
variability. These characters create unique challenges and opportunities for service (Kenneth E. and David
L, 2003:9)

2.2.1Intangibility

Intangibility refers to the lack of tangible assets that can be seen, touch, smelled, heard or tested prior to
purchase, service vary in the degree to which they are intangible, however , for most service they are
tangibles items that are used to perform the service.

To reduce uncertainty, buyers will back for signs or evidence of the service duality they expect about
service quality from the place (physical setting) people equipment, communication material, symbols and
price that they see. Therefore, the service provider has to manage the evidence, to tangible to intangible.
Some service offers is still intangible because consumers are purchasing the service, not the good

2.2.2 Perishability

The second characteristic of service is perish ability, meaning the service can’t be inventoried or stored
this futures allows firms to mass produce and store them in marchioness until consumers are ready to
purchase. Perish ability can also occurs when demand can be greater than supply. To reduce the negative
impact of perish ability; service must develop strategies to cope with fluctuating demand. This goal can be
accomplished by making simultaneous adjustments in demand, supply is capacity

2.2.3 Inseparability

The third characteristics of service are inseparability is the simultaneous production and consumption of
services. Good can be produced and then sold at a later time, service cannot.

The quality of the service is highly dependent on the ability of the service provider and the quality of
interaction between the service provider and the customers. Managing the human element is critical for
success for service firms with a high degree of inseparability.

2.2.4 Variability

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The last unique characteristics of service is variability un wanted or random level of service quality
customers receive when they patronize a service firm variability is primarily caused by the human element
although machines may not malfunction causing a narration in the service different and even the same
service employees will provide varying levels of service from one time to another. Variability is also
caused by a variance in the input.

2.3 Principles for complete customer service

Here are the 15 principles of the complete customer service

1. The primary cause for any organization is service to its customer

2. Everyone in the organization provides service for its customer even if they never seen those
customers or known the customer or known their name
3. Is really the mind of every customer when it comes to experiencing service satisfaction
4. Every customer is different in some way from every other customer, discovering and
understanding these service difference results in a high probability of delivering service in a
manner that is perceived to be satisfying to each customer that is tail or to individual needs is the
primary objective of any successful organization.
5. Serve every customer as you would serve the person you must love
6. Every successful organization service to ensure that its internal system are designed and
implemented to deliver flawless and seamless service to every customer under all conceivable
condition and circumstance.
7. Service to customer is based not just on system, processor and procedure but also on personal
effort and creativity of these who serve. Encourage, support and reward personnel initiative in
exhibiting creative way to service ways to service other both inside and outside the organization.
8. Successful organization serves well those serve customers internal customers in priority.
9. Solicit feedback fromcustomers at all times and then listen, especially when it hurts.
10. Seek always to it right the first time this done, then do it every right the second time service
recovery after initial service failure it par amount to grasping victory from the jaws of defeat.
11. Continuously measure how well customer service is translating in to customer satisfaction.
Statistics tell stores are this stories what you want told to your customer.
12. Polices trump processes and these procedures should be designed and implemented in the service
of the organization stated reason for existence its mission to serve its customer.
13. Use philosophy of set goals improve every day in every ways.

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 14. Employee lagniappe: delight customers by providing more than they expect.
15. Always be willing to start from scratch in thinking about how to better serve customers effective
customers service policies processed and systems can viewed as(http://www.customer service
manager.com)

2.4 Service Quality

Service quality has become major area of attention during the pars decades, for managers, Researchers,
Practitioners because of its huge impact on business performance of the Firms. According to Brown and
Swartz (1989) think those customers prefer and value companies that provide high service quality.
Customer judge service quality relative to what they want by comparing their perceptions of service
experiences with theirexpectations of what the service performance should be. Marketers described and
measured only quality with tangible goods, whereas quality in services was largely undefined and un
researched (Parasuraman, et.al. 1985).

Quality in a service business has become a measure of the extent to which the service provided meets the
customer expectations. Companies have found that in order to increase profits and market share, they
should pay much attention to service quality. Giving service has become a key strategic factor for
companies to differentiate their product and services from other competitors by using service quality as a
process that customer evaluate (Parsumaran, et.al 1985).

Quality is a difficult concept to have a single definition. Some say, Quality means degree of excellence in
service performance. According to parasuraman (1985), Quality is the degree of discrepancy between
consumer’s perceptions and expectation in terms of different but relatively important dimensions of
service quality, which can affect their future purchase behavior.
The search for service quality is with no doubt the most important consumer trends of the new area, as
consumers now are demanding higher quality in products and services than ever before. The fierce and
intensifying competition and rapid deregulation have made many businesses in the service sector to seek
profitable ways and becoming competitive. Delivering high service quality is good strategy for businesses
to succeed in their business.

2.4.1 Determinant of Service Quality

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In order to avoid poor quality service and losing customer organizations must be aware of the following
determinates of service quality described in brief as below:

I. Reliability:- Dependability and Consistency of performance

II. Responsiveness: - Willingness or readiness of employees to provides service.
III. Access: - Approach ability and case of contact.
IV. Courtesy: - Politeness respect, concentration and friendness of contact personal.
V. Credibility: - Trust worthiness believability and honesty.

2.4.2. Benefits of Service Quality to the Organization

Service quality has so many Benefits to the organization that provides the service. Among those benefits,
parasuraman, (1985) enumerates the following:

I) Increasing Revenues

Quality customer service means increases Revenues, and Revenue increase translate to additional
customer sales. When customer service meets or exceeds customer expectations the customer is confident
in the company’s abilities and thus will be inclined to spend more money to purchase to company’s
products and services.

II) Enhancing Reputation

Companies are known for their service they provide. When customers have a bad experience with a
company, they will tell their friends, Neighbors any else who will listen. When customers have positive
interactions with the company, they will also rally that information. Though the use of blogs websites and
social media, customers are communicating about their interactions with a company and its products and
services. Quality customer service gives a company a good reputation.

III) Achieving Customer Loyalty

Quality customer service translates into customer loyalty. If the organization truly meets and exceeds
customer expectations, the customer will be hesitant to use the services of competitor. Often, competitors
enter the industry and offer their services for a lower price. The industry leader can avoid a “price war” by
offering and maintain quality customer services; they remain loyal to the company.

IV) Increasing Customer Satisfaction

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Customer satisfaction occurs because their needs are met. Providing quality customer service means that
the company is meeting and exceeding customers’ expectations. One of the best ways to find out what
customers think about a company is to simply ask through customer satisfaction surveys. The surveys
should ask question about the most recent customer experience with the company, the quality of the
company’s products and services and what the customer does not like about the company. The surveys
also should not be afraid to ask the customer regarding what he/she likes about the company’s
competition.

V) Engaging Employees

Quality customer service means that employees are spending time using their skills to enhance the
business. Instead of encountering the same problem repeatedly, employees takes the steps necessary to
satisfy the customer but also take steps to prevent the problem from recruiting the employee leaves a
positive impression on the customer directly affects the company’s operations and gains a sense of
accomplishment. It is a win-win situation for the Customers Company and employer.

2.4.3 Service Delivery

In the Past services were delivered by commercial organizations to passive receiving customers.
Customers are now viewed as active seekers of services; they choose the time and place and, as we said,
engage in service interaction with any other human presence.

2.4.4 Gap in Service Delivery

Service quality gap is the difference between customers’ expectations of service and the perception of that
service as it is delivered. Leading service companies measures the gap between expected service and
perceived service routinely based on customer feedback. The summary in following is shows the gap
between the customer expectation and perceptions; it shows the gap associated with service delivery.
Expectation exceeds service <Perceived service/service quality expectation meets expected service =
perceived quality/Quality service Expectation not meet Expectation> Perceived Service.

(Adopted from Parasumaran,et.al, 1985).

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In addition, a Number of gaps cause unsuccessfully service delivery i.e., that affect the customers
perception. Among these:

1. The first gap is the gap dependency between customer expectation and management perception of
these expectations: this may arise from management lack of full understanding about how
customer formulate their expectation on the basis of a number of sources like advertising and
sharing past experience with friend strategies for closing the gap by taking different actions
including market research in order to faster communication between management and the
customer.
2. The second gap results from management’s inability to formulate target level of service quality to
meet perceptions and expectation and translate these into workable specification. This may also
result from lack of management commitment to service quality or perception of the unfeasible.
However, setting goals and standardizing service quality delivery can close this gap.
3. The third gap is referred to as the service performance gap because actual deliveries of the service
do not meet the specification set by management. Gap three can arise from a number of a reason
including lack of team work, poor employee selection, inadequate training and inappropriate job
design. Media advertising and other communication means may satisfy customer expectation
about the service of the firm.
4. The fourth gap is dependency between service delivery and external communication in the form of
exaggerated promise and lack of information provide to contact personnel.
(Parasuraman, et.al, 1985).

2.5 Measuring Service Quality Delivery

Measuring goods quality is easier because it can be measured objectively with indicators like durability
and number of defects, but service quality is an abstract item. According to parasuraman et,al.(1985)
service quality has four features which unique to services: intangibility, heterogeneity, inseparability and
perishability. Therefor they suggest that in the absence of objective measures, an appropriate assessment
of the service quality of a firm is to measure consumer perceptions of quality.

Production and Consumption of many services are inseparable; as consequence quality is not designed at
manufacturing plant. Quality of service occurs during service delivery during an interaction between a
client and service firm.

From literature review three underlying themes can be suggested:

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  Service quality is more difficult for the consumer to evaluate than goods quality;
 Service quality perceptions result from a comparison of consumer expectations with actual service
performance;
 Quality evaluation is not mode solely on the outcome of service; they also involve evaluations of
the process of service delivery (Parasuraman et, al.1985).

It is easy for consumers to evaluate purchasing goods because of many tangible cues that help them judge
the quality, for exchange style, package, color, fit, label, feel, etc. whereas with services fewer cues exist
which make difficult for consumers to judge and in many cases the provider’s physical facilities
equipment and personal are like tangible evidence.

2.6 Dimension of Service Quality

According to Gronroos (1994) there are three dimension of service quality, the technical quality,
functional quality and the corporate image:

1. The Technical Quality: - Which involves what the customer is receiving from the service delivery.
This can be measured by consumer in a rather objectives manners.
2. The functional Quality: - Which involves the manner in which the service is delivered. This is
concerns the psychological interaction between the buyer and the seller an is perceived in a very
subjective way, and would include elements such as:
Attitude and behavior of employees;
Approachability of service personnel;
Accessibility of service;
Appearance and personality of personnel;
Relationship between employees and;
Interrelationships between Employees and Customers
3. Corporate image dimension of quality is the result how consumers perceive the firm, and it is
expected to be built up mainly by the technical and functional quality of its services and will
eventually affect service perceptions.

2.7 Customer Satisfaction

Giese and Cote, (2002) have summarized 20 (twenty) definition of the terms given by 20 (twenty)
different scholars. Generally, it seems that customer satisfaction is the customers overall feeling of

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contentment with customer interaction. Customer satisfaction realizes the difference between customer
expectation and customer perception.

Customer satisfaction has been a central concept in marketing literature and is an important goal of all
business activities today companies face their toughest competition, because of they move from a product
and sales philosophy to a marketing philosophy, which gives a company a better chance of outperforming
competition (Kotler, 2000).

Overall customer satisfaction translates to more profits for companies and market share increase. The
important customer has been highlighted by many researchers and academicians. The principal concerns
of marketing are to connect with customers by building strong customer relationship in order to meet their
expectation. Therefore managers who see customer as the only way of profit, they consider the traditional
chart in figure below a pyramid with the president at he top, management in the middle and front line
people and customer at the bottom.

Figure 1: Traditional Organizational Chart

Top
Man
Middle
Management

Front line Management

Customers

Figure 1: Modern Customer Oriented Organizational Chart

Source: Kotler et al.(2000).

Companies that pretend to be successful invert the chart, like figure below. At the top are customers, next
according to the importance are frontline people who meet, serve and satisfy customer, under them are
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middle management, whose jobs is to support the front line people so they can serve customer well and at
the base is top management, whose job is to hire and support good middle managers. For customers
centered companies customer satisfaction is both a goal and a marketing tool. Therefore, companies need
to be concerned about the customer satisfaction level, because of the internal technology which enables
the quick spread of bad word of mouth marketing as well as good word of mouth to the rest of the world.

Figure 2: Modern Customer Oriented Organizational Chart

Customers

Front Line People

Middle Management

Top
Customer Customer
Management

Source: Kotler, et, al, (2000).

Parasuraman et, al, (1985) distinguish service quality and satisfaction:

“Perceived service quality is a global judgmental or attitude, relating to the superiority of the service,
whereas satisfaction is related to a specific transaction”. Customer Satisfaction is an attitude is like a
judgment following a purchase act or based on series of consumer product interaction.

2.7.1 Importance of Customer Satisfaction

Customer satisfaction has positive effect on an organization’s profitability. The more customers are
satisfied with product or service offered, the more are chances for any successful business as customer
satisfaction leads to repeat purchase, brand loyalty and positive word of mouth marketing. (Kotler, etal.
2000).

2.7.2 Strategies for Dissatisfied Customer

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Companies need to develop strategies of how to handle dissatisfied customers. Business cannot afford
under any condition to lose customers because cost of replacing the lost customer with a new customer is
bigger. Therefore, companies must find ways of winning back the unsatisfied customers by designing
special program for service recovery. Companies should handle customer complaints with care and not
seeing them as time consuming.

2.7.3 Customer Expectation

Expectation play an important role in the satisfaction creation/formation the extent to which a product or
service fulfills a customer’s need and desire may play an important role in forming keeling of satisfaction
because of the impact of confirmation that have on satisfaction (Zekir, 2011).

Consumers expect to be delivered quality service; therefore, companies try to offer quality services. The
term expectations really matters to companies because they want to know what customer’s expectation
are. The term “expectation” has different uses, in the satisfaction literature, it is viewed as a prediction
made by a consumer about what is likely to happen during an exchange or transaction. According to
Oliver (1981) … expectations are consumer defined probabilities of the occurrence of positive and
negative events in the consumer engage in some behavior.

In contrast in the service quality literature it is defined as desires and wants, what the service provider
should offer rather than would offer. Customer from their expectation from their past experience friend’s
advice, and marketers and also competitors information and promises (Kotler, 2000). Therefore, perceived
service quality is viewed as the difference between consumer perception and expectations for service
provided. Organization in order to keep expectation from rising they have to perform service properly
from the first time (Cited as Zekir, 2011).

Thus customer expectation for the service likely to rise when the service is not performed as promised.
Expectation serves as reference points to customer’s assessment of performance.

2.7.3 Customer Perception

Perception is an opinion about something viewed and assessed and it varies from customers to customers,
as every customer has different belief towards service and product that play an important role in
determining customer satisfaction. Customer Satisfaction is determined by the customer’s perceptions and
expectation of quality of the product and service.

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In many cases customer perceptions is subjective, But it provides some useful insight for organization to
develop their marketing strategies. Providing high level of quality service has become the selling points to
attract customer attention and is the most important driver that leads to satisfaction. Therefore, customer
perception and customer satisfaction are very closely linked together, because if the perceived service is
close to customer’s expectation it leads to satisfaction. Satisfied customer provides recommendations;
maintain loyalty towards the company and customer in turn is more likely to pay premiums price (Zekri,
2011).

2.7.4 Determinants of Satisfaction

Since performance expectation and actual performance are the major factors in the evaluation process, we
need to understand the dimension of product as service performance. A major study of the reason
customer’s switch and service providers found competitors actions to be actively minor cause most
customer did not switch from a satisfactory provider to better providers. Instead, they switch because of
provide problem with their current service provided. The nature of others problem and percent listing each
as a reason they changed providers follows:

A) Core Service Failure: Mistake, billing errors, service catastrophes that harm the customer.
B) Service Encounter Failure: Service Employees were uncaring impolite, unresponsive or
unknowledgeable.
C) Inconvenience: In convenient location hours of operation, waiting time for service or appointment.
D) Response To Service Failure:- Reluctant Responses, failure to respond and negative responses.
E) Attractions by Competitors: More personal more reliable, higher quality better value.
F) Ethical Problem: Dishonesty behavior intimidating behavior unsafe or unhealthy practice or
conflicts of interest.
G) Involuntary Switching: Service Provider or customer moves or a third party player such as
insurance company requires a change.

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 CHAPTER THREE

3. METHODOLOGY OF THE STUDY

3.1. Research design

As an approach and mechanism of accomplishing the required work in developing this research paper, the
researcher will use descriptive research design.

3.2. Source of data

The researcher will use both primary and secondary source of data to gather adequate and relevant data.
The primary source includes data from customers and employees by using questionnaires, interviews, and
observation. While the secondary data will be collected from banks officials, documentary books,
journals, magazines, executive summary of the bank and internet.

3.3. Sampling techniques

The researcher will use non probability sampling techniques specially convenience method uses to collect
data from those candidates.

3.4. Sample size

There are 6998 total customers in the service account category and 34 employees in organization. To
select sample size, the researcher will use a sample size determination or adapted previous research
experience. Because of the heterogeneity of the population and bias in reaching the correct size, sample
proportion and error determination ,the researcher will find it best to use previous sample size in which
40 customers and 10 employees when conducting a research in the bank sector on the time of service
delivery and customer satisfaction(Mr. Aschalew,2012 sample size in which he took 50 customers when
he conducted a research in the banking sector on the title of service quality and customer satisfaction ).

3.5. Methods of data analysis

Quantitative data will obtain by survey questioners will be analyzing by using simple tabular and
percentage based on respondent information. Qualitative data also will analyze by using theoretical or
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descriptive frame work. This is will used to confirm the data gathered questioner as on service delivery
system.

CHAPTER FOUR

4. BUDGET FRAME AND TIME PLAN

4.1. Budget Frame

This chapter is the financial requirement of this study will be as follow with the list of materials and
services. The budget frames listed below are according to the current market prices and budget is included
in the lists and Ethiopian birr as shown in the tables below.

Estimation cost
No Items Birr Cents Remarks

1 Stationary cost 1500 00

2 Per diem of researcher 8000 00
3 For Internet and telephone 1000 00
4 Printing and Binding 800 00
5 Transportation 2500 00
6 Secretarial service 1200 00
Total 15000 00

4.2 Time plan of the Study

Time schedule is a plan item of weeks/months that explains when each of important phases of research
paper is conducted on expected manner so as to accomplish over the total span time available.

Activity Aug Au Aug Sep Sep Oct Oct Oct Dec Dec
g
Material preparation X

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Identify research X
Literature review X
Proposal preparation X
Data collection X
Data processing X
Review literature X
Reporting X
Comment X
Submission X

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Reference

 Andaleeb and Conway, 2006, reported the positive relation between customer satisfaction and
service delivery.
 Bolton and Drew, 1991; Cronin and Taylor, 1992; Taylor and Baker, 1994, association between
service quality a customer satisfaction .
 Gilbet and Velouo,2006, the issue of service delivery and customer satisfaction become a focus
of banking industry.
 Kottler, p.(2000). Marketing management 10th edition prentice hall of India pvt Ltd, Newdelhi
 Kotler and Armstrong, (2006) “principle of marketing, 11 editions, prentice Hall of India pvt
Ltd.
 Kotler P. and Keller K. 2006,marketing management 12ed,New Delhi
 Oliver,1997 ,Defines as "customer satisfaction".
 Teas, P.K, 1993, Service delivery and customer satisfaction.
 Giese S and Cote J. (2002), “Defining customer satisfaction” Academy of marketing service
review vol.No1
 Gronroos, M (1994). Assessment of service delivery and customer satisfaction in American
customer satisfaction model, journal of marketing research vol 20, pp 45-56.

 Parasuraman, A. (1985) et al “re assessment of expectations comparison standard in

measuring service quality: implication for further research” journal of marketing research, vol 58
pp. 111-124

 Teas, R.k (1993) “The expectation, performance evaluation and consumer perception of
quality”, Journal of marketing, oct, vol 57 pp 18- 34
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 Zekiri .G. (2011) “assessing service quality and customer satisfaction” international journal of
academic research octvol 2 pp 240-250

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