ST.

MARY’S UNIVERSTY
SCHOOL OF GRADUATE STUDIES

THE IMPACT OF SERVICE QUALITY ON CUSTOMER LOYALTY:

THE CASE OF WEGAGEN BANK SHARE COMPANY

BY
FILIMON ALENE

MAY, 2018

ADDIS ABABA, ETHIOPIA

THE IMPACT OF SERVICE QUALITY ON CUSTOMER LOYALTY: THE CASE
OF WEGAGEN BANK SHARE COMPANY

BY
FILIMON ALENE
ID №: SGS/0578/2008A

A THESIS SUBMITTED TO ST. MARY’S UNIVERSITY, SCHOOL OF

GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER IN MARKETING
MANAGEMENT

MAY, 2018
ADDIS ABABA, ETHIOPIA
 ST. MARY’S UNIVERSTY
SCHOOL OF GRADUATE STUDIES
FACULTY OF BUSINESS

THE IMPACT OF SERVICE QUALITY ON CUSTOMER LOYALTY:

THE CASE OF WEGAGEN BANK SH.COMPANY

BY
FILIMON ALENE
ID №: SGS/0578/2008A

APPROVED BY BOARD OF EXAMINERS

___________________________ ___________________ __________

Dean, Graduate Studies Signature Date

___________________________ ___________________
Advisor Signature & Date

___________________________ ___________________
External Examiner Signature & Date

___________________________ ___________________
Internal Examiner Signature & Date
 DECLARATION

I Filimon Alene, the undersigned, declare that this thesis is my original work, prepared under the
guidance of Asfaw Yilma (PhD). All sources of materials used for the thesis have been duly
acknowledged. I further confirm that the thesis has not been submitted either in part or in full to
any other higher learning institution for the purpose of earning any degree.

Filimon Alene ______________________

Name Signature & Date

 ENDORSEMENT

This thesis has been submitted to St. Mary‟s University, School of Graduate Studies for
examination with my approval as a university advisor.

Asfaw Yilma (PhD) ______________________

Advisor Signature & Date
 ACKNOWLEDGMENT

The assistance many individuals have made this study possible. First and foremost, I thank my
source and redeemer, Jesus the Lord, for his unfailing and agape love and also for his active
presence in my life as stated in His Holy Book.

I would also like to extend my deepest gratitude to my beloved mom, L/Colonel Medhin Nega
(Gual Dambush); my brother Winta Cherkos , for their consistent love, support and patience
while I was on this project. I know this dedication cannot compensate for the time you missed
out during the period of this study specially Tekalign Werdofa. However it is to say that I really
appreciate your love and support.

I also express my heartfelt gratitude to my study leader, Dr. Asfaw Yilma for his meticulous
reflections, valuable support and guidance in the course of conducting my study. He was always
available to offer me guidance through email and telephone call.
I wish to take this golden opportunity to express my deepest thanks to Ato Tekle Shifare for his
advice and full support.

Last but not least, my heartfelt gratitude goes to my family members and friends for their moral
and material supports and engagements, without whom it would have been difficult to complete
my study and thesis work.

My final appreciation goes to all the respondents and to my colleague staff, who have
contributed in diverse ways in ensuring the successful completion of this work. I say God richly
bless you.

i
 Abstract

The main goal of this study is appraising the service quality level of Wegagen Bank Share

Company’s and investigating its impact on customer loyalty. To this end, these customers’ level

of loyalty and their perception of the quality of service being provided by this bank were

investigated. To accomplish this, Descriptive research design employed Self-administered

questionnaire with 22 items SERVPERF scale, on a five-point Likert-type was used by this

research to evaluate the impact of service quality on customer loyalty to 301 customers of

Wegagen Bank using convenience sampling technique. Data from the questionnaires were

analyzed through descriptive statistics and chi square test. Binary logistics regression analysis

was also used with the help of SPSS version 25 statistical software program. According to the

findings, customers are not much complaining physical design and appearance of the bank.

However, of these dimensions, responsiveness and reliability were found to be low to customers.

The impact of service quality on loyalty is observed with reliability and tangibility dimension of

SERVPERF model according to Binary Logistics Regression result. The findings demonstrated

that improvement in service quality can enhance customer loyalty. It is recommended that

improving the reliability, looks of employees and physical facilities will enhance the loyalty of

customer to the Bank.

ii
Contents

DECLARATION ............................................................................................................................. i
ENDORSEMENT ............................................................................................................................ i
ACKNOWLEDGMENT.................................................................................................................. i
Abstract ........................................................................................................................................... ii
List of Table .................................................................................................................................... v
List of Figures ................................................................................................................................ vi
Acronyms ...................................................................................................................................... vii
CHAPTER ONE ............................................................................................................................. 1
INTRODUCTION .......................................................................................................................... 1
1.1 Background of the Study ....................................................................................................... 1
1.1.1Company Profile .......................................................................................... ….4
1.2 Statement of the Problem ...................................................................................................... 5
1.3 Research Questions ................................................................................................................... 8
1.3 Objectives of the Study .................................................................................................... 8
1.3.1 General Objectives ........................................................................................... 8
1.3.2 Specific Objectives ........................................................................................... 8
1.4 Significance of the Study ................................................................................................. 9
1.5 Limitations of the Study ................................................................................................... 9
1.6 Organization of the Study .............................................................................................. 10
CHAPTER TWO .......................................................................................................................... 11
REVIEW OF RELATED LITRETURE ....................................................................................... 11
2.1 Theoretical Literature .......................................................................................................... 11
2.1.1 A definition of Service .................................................................................... 11
2.1.2 Characteristics of Service ................................................................................ 12
2.1.3 Definitions of Service Quality .......................................................................... 14
2.1.4 Service Quality Dimensions ............................................................................. 15
2.1.5 Quality ......................................................................................................... 17
2.1.6 Emerging Quality Description .......................................................................... 18
2.1.7 SERVQUAL ................................................................................................. 18
2.1.8 Critiques of SERVQUAL ................................................................................ 19
2.1.9 SERVPERF ................................................................................................... 20
2.2SERVIQUAL Vs SERVPERF ............................................................................................. 21

iii
 2.3 Banking Service ............................................................................................................. 22
2.4Bank History in Ethiopia ...................................................................................................... 23
2.5 Customer ............................................................................................................................. 25
2.6Customer Loyalty ................................................................................................................. 26
2.15 The relationship between Service Quality and Customer Loyalty .................................... 28
2.16 Conceptual model of the Research .................................................................................... 30
CHAPTER THREE ...................................................................................................................... 31
RESEARCH DESIGN AND METHODOLOGY ........................................................................ 31
3.1Research Design ................................................................................................................... 31
3.2Data type and Source............................................................................................................ 32
3.3Target Population ................................................................................................................. 32
3.4 Sampling Size...................................................................................................................... 32
3.5 Sampling Technique ............................................................................................................ 33
3.6 Research Instrument ............................................................................................................ 33
3.7 Method of data Analysis ..................................................................................................... 33
3.8 Ethical Consideration .......................................................................................................... 34
CHAPTER FOUR ......................................................................................................................... 35
DATA PRESENTATION AND ANALYSIS .............................................................................. 35
4.1 Introduction ......................................................................................................................... 35
4.2 Demographic Characteristics of Respondents..................................................................... 36
4.3 Analysis of Dependency Test of Demographic Variables and Customer Loyalty ............. 40
4.4 Analysis of SERVQUAL Dimension using Descriptive Statistics ..................................... 42
4.4 Binary Logistic Regression Analysis .................................................................................. 43
4.5 Major Findings from the Data Analysis .............................................................................. 45
CHAPTER FIVE .......................................................................................................................... 47
CONCLUSION AND RECOMMENDATIONS ......................................................................... 47
5.1. Conclusion...................................................................................................................... 47
5.2. Recommendations .......................................................................................................... 50
REFERENCE ................................................................................................................................ 53
APPENDIX ................................................................................................................................... 57

iv
List of Table

Table 2.1 List of Commercial Banks in Ethiopia .........................................................................24

Table 4.1 The Demographic Characteristics of Respondents and respective chi square test ........40

Table 4.2 Desriptive statistics of SERVQUAL dimensions.............................. 42

Table 4.3 Reliability test of the main Variables ............................................................................43

Table 4.4 Binary Logistics Regression result ................................................................................43

v
List of Figures

Figure 2.1 The Theoretical Framework of the study ...................................................................30

Figure 4.1 Age and Gender of the Respondents ..........................................................................36

Figure 4.2 Educational Status of the Respondents.........................................................................37

Figure 4.3 Marital Status of the respondents ..................................................... 38

Figure 4.4 Length of relationship with Wogagen Bank .................................................................38

Figure 4.5 Type of Account maintained with Wogagen Bank ......................................................39

vi
Acronyms

WB Wogagen Bank
AIB Awash International Bank S.C
Abay Abay International Bank
BIB Berhan International Bank
BOA Bank of Abyssinia
Buna Buna International Bank
CBO Co operative Bank of Oromia
DB Dashen Bank S.C
EB Enat Bank
LDT Loan Delivery Time
LIB Lion International Bank
NIB Nib International Bank
OIB Oromia International Bank S.C
RM Relationship Manger
UB United Bank
WB Wogagen Bank
ZB Zeman Bank

vii
 CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The economic liberalization of the financial sector started, in 1991, laid the foundation

for the formation and expansion of private banks in Ethiopia (Hansson, 1995). This

coupled with rapid technological advancement and improved communication systems,

have contributed to the increasing integration and resemblance amongst banks in the

financial sector. As a result, banks are now faced with very high and intense competition

(Harvey, 2010). Banks operating in Ethiopia are consequently under a lot of pressure due

to increases in competition. Various strategies are formulated to retain the customer and

the key of it is to increase the service quality level. Service quality is particularly

essential in the banking services context because it provides high level of customer

satisfaction, and hence it becomes a key to competitive advantage (Almossawi, 2001). In

addition, service quality has a significant impact on a bank‟s success and performance

(Mouawad and Kleiner 1996). Nowadays, service quality has received much attention

because of its obvious relationship with costs, financial performance, customer

satisfaction, and customer retention (Shanka, 2012).

Success of a service provider depends on the high quality relationship which determines

customer satisfaction and loyalty. Research has shown repeatedly that service quality

influences organizational outcome such as performance superiority, increasing sales and

market share, improving customer relations, enhance corporate image and promote

customer loyalty Furthermore, service quality and customer satisfaction were found to be
1
related to customer loyalty through repurchase intentions Delivering quality service to

customers is a must for success and survival in today‟s competitive banking (Lo Liang

Kheng, 2010).

Customer loyalty is seen as one of the major facilitators of service quality that emerged

from the literature. Customer loyalty happens when there is repeated purchasing by the

same customers and their willingness to recommend the product to other customers

without any outright benefits and eventually the repeated usages would generate positive

and quantifiable financial results. Among the economic benefits of customer loyalty are

improvements in retention and increase in market share of a company. Customer loyalty

means a customer would return or continue to use the same product or other products of

the same organization, make business referrals, and intentionally or even unintentionally

providing strong word-of-mouth references and publicity. Loyal customers are those

who are not easily swayed by price inducement from competitors, and they usually

purchase more than those less loyal customers. On the other hand, service providers must

avoid being complacent as retained customers may not always be the satisfied ones and

similarly not all satisfied customers may always be retained. There are many factors for

such manner of loyal customers. Some customers may remain loyal due to high

switching barriers or the lack of real substitutes, while others continue to be loyal

because they are satisfied with the services provided. Past researches have pointed out

that perceived service quality has an impact on customer loyalty. In their study on retail

trade, they discovered a positive relationship between service quality and customer

loyalty. Other researchers had found a positive relationship between service quality and

2
loyalty in the banking sector. All the researchers have unilaterally agreed that service

quality is related to behavioral outcomes, especially in the form of word-of-mouth,

complaint, recommendation and switching (Al-Rousan, 2010). Service quality is a

focused evaluation that reflects the customer's perception of specific dimensions of

service: reliability, responsiveness, assurance, Empathy, tangibles. Satisfaction, on other

hand, is more inclusive: it is influenced by perceptions of service quality, product

quality, and price as well as situational factors and personal factors (Zeithaml & Bitner

(2003: 85).

Service quality is one of the critical success factors that influence the competitiveness of

an organization. A bank can differentiate itself from competitors by providing high

quality service. Service quality is one of the most attractive areas for researchers over the

last decade in the retail banking sector (Siddiqi, 2011).

Customer loyalty is a result of customer retention programs that always giving

encouragement to remain active choosing their brand as exclusive brand. Customer

loyalty is a strategy that creates mutual rewards to benefit firms and customers. With

loyalty customers, companies can maximize their profit because loyal customers are

willing to purchase more frequently, spend money on trying new products or services,

recommend products and services to others, and give companies sincere suggestions

(Muchtar R. 2013).

Bank industry is one of service giving industry. The bank products are nearly identical

services and they can only differentiate themselves mainly on the basis of their quality

3
service and also terms and tariffs. Therefore, quality service is a potential and an

effective tool that banks can use to gain a strategic advantage in customer retention and

at most to survive in today‟s ever-increasing banking competitive environment.

The banks offered identical and on early growth phase, it carries the danger of creating a

downward spiral of perpetual price discounting - fighting for customer share (Mendzela,

1999).

1.1.1Company Profile

Wegagen Bank S.C was established on June 11, 1997. It came into being thanks to 16

visionary founding members who recognized the critical role that financial institutions

would play to create a suitable economic development and raised an initial of birr 30

million. As at June 30, 2016 the paid up capital of the Bank reached Birr 1.8 billion. The

number of Shareholders is now 2,349.

The vision of the company is to be one of the ten most reputable and competent banks in

Africa by the year 2025. And the mission statements of the company includes optimizing

the stockholder value through sustainable growth and profitability; provide wide range of

innovative and customer focused Banking products and services; boosting operational

excellence by employing state-of-the-art information Technology; be the employer of

choice by creating conductive working environment wherein employees achieve their

career aspiration.

4
 Core values of the company includes Honesty, integrity and loyalty; service Excellency;

professionalism;learning and innovation;employee satisfaction; respect and dignity;

social responsiveness; good corporate governance andequal employment.

As one of the early established banks in Ethiopia in the era of market economy Wegagen

Bank S.co. Expected to expand through delivery of best customer service and

satisfaction.As per the existing customer loyalty and company performance there must

be some explanation in terms of customer service which in turn affect customer

satisfaction which will influence the customers‟ loyalty. Therefore this research tries to

explain the customer service of Wegagen Bank SCo. In terms of loyalty as an outcome

of customer satisfaction.

1.2 Statement of the Problem

In today‟s world of intense competition, a firm‟s ability to deliver high quality service

which results in satisfied customers is the key to a sustainable competitive advantage to

service giving organizations (Shemwell et al. 1998). This quality service encourages

customers to be loyal to a given firm. Customer satisfaction gained from service quality

enormously influences sustainable company‟s performance and survival (Negi, 2009).

With the availability of goods and services, organizations need proactive strategies to

improve service quality, the absence of which can lead to a steady decline of market

share which in effect brought its survival to be in question (Collier, 2006). Researchers

recommended improving the customer service quality to the degree of greater than

expectation of their customer is a cornerstone of an organization‟s marketing strategy in

5
order to ensure successful and sustainable business (Asubonteng et al., 1996; Collier,

1991).

Customers have become knowledgeable than ever before and this has gradually led to a

greater degree of “consumer sovereignty” (Blanchard & Galloway, 1994), when making

a choice.

Customers‟ choice of a bank over another may be based on several factors such as the

location, interest rates, quality of service delivery and the bank‟s reputation. However,

service quality is seen as the dominant key factor and thus has got considerable attention

by organizations. (Stafford 1996) opines that the financial services, particularly banks,

compete in the marketplace with generally undifferentiated products, therefore service

quality becomes a primary competitive instrument to win competitors.

As per various researchers like (Voss et al 2004); (Vilares & Coehlo, 2003) and (Van der

Weile et al, 2002) providing excellent service quality is widely recognized as a critical

business requirement.

Rendering service quality is “not just a corporate offering, but a competitive weapon”

that means it is essential to corporate profitability and survival (Newman & Cowling,

2009).

Service quality has become useful in many ways for most organizations, but still the

general understanding is that organizations do not accomplish it effectively (Ton Van

Der Wigle, 2001). These authors further discussed service quality by quoting (Zemke

1990) finding as “Nothing is as common today as the organizations committed more to

lip service than customer service; more interested in advertising than action”. According

6
to them, “All too many companies seem to consider customers as nothing more than a

necessary nuisance. Oh, they may say otherwise, but they don‟t deliver. If the road to

hell is paved with good intentions, then the road to business failures is littered with

placard proclaiming “the customer is always right”.

To improve its services like to recruit, to deliver service quality and to retain customers,

Wegagen bank has introduced considerable measures like, investing in advertising,

branch networks, credit incentives, attractive interest rates, terms and tariffs among

others, all in the interest of enhancing customers satisfaction and yet its customer are also

customer of other banks. These all efforts, which were aimed to bring retaining its

customer for long, turned out to be as if it has been done for nothing (Merga B 2012).

Exporters‟ preferences and expectations seem not to match up with the bank‟s initiatives

since most of them are not loyal to only this bank. There is continual complaint of from

exporters due to insufficient credit availability and service delivery time as promised

during marketing, inadequate responsiveness from the staff after marketing, lack of

assurance originated from inconsiderable support, inconvenient customer service as the

customers contact point is at branch and also at head office in case of this bank and also

there is complaints on bank‟s failures to avail modern equipment‟s and physical

facilities.

These states of affairs justify the necessity of confirming whether there is impact on

customer‟s loyalty if service quality is improved so as to help Wegagen Bank to improve

its service quality and to ensure customer retention.

7
1.3 Research Questions

 Is Tangibles has an effect on customer loyalty of Wegagen Bank S.Co.?

 Is Reliability has an effect on customer loyalty of Wegagen Bank S.Co.?

 Is Responsiveness has an effect on customer loyalty of Wegagen Bank S.Co.?

 Is Empathy has relationship with customer loyalty of Wegagen Bank S.Co.?

 Is Assurance has an effect on customer loyalty of Wegagen Bank S.Co.?

1.3 Objectives of the Study

1.3.1 General Objectives

The general objective of the study is to investigate whether service quality of Wegagen

Bank Share company impact on its customer loyalty.

1.3.2 Specific Objectives

The specific objectives of the study are:

 To verify whether Tangibles have positive effect on customer loyalty.

 To verify whether Reliability has positive effect on customer loyalty.

 To verify whether Responsiveness has positive effect on customer loyalty.

8
  To verify whether Empathy has positive and significant relationship with customer

loyalty.

 To verify whether Assurance has positive effect on customer loyalty.

1.4 Significance of the Study

Loyal customers‟ role in maximizing profit is significant. In addition to profit

maximizing, its significance is both economical and non-economical. It has economic

benefit because customers‟ acquisition or replacement cost will be saved, free of charge

referrals of new customers from existing customers, which would otherwise be costly in

terms of commissions and price premiums as existing customers do not usually wait for

promotion. It has also non- economic benefit because feedback from the existing

customers will help in improving the service. Therefore, this research will enhance the

further understanding of service quality in Wegagen Bank and how it leads to customer

loyalty. It will have vital importance for bank management and for future researchers as

well. Wegagen Bank managements can also be benefited from this research. Because it

provided an important insight in evaluating its service quality dimensions in the eyes of

customers of the bank and their degree of loyalty. Beyond that, the study will contribute

much for future researchers who desire to conduct research on bank‟s service quality and

customer loyalty.

1.5 Limitations of the Study

Usually researches suffer from all inherent problems of studies conducted based on

survey questionnaires and this study may also face the same fact. Initially, it is hardly

9
 possible to place sufficient questions in the questionnaires to cover each aspects of given

subject.

Moreover, the use of questionnaires can also cause biased or incorrect results if an

unknowledgeable person fills in the questionnaire. To minimize this problem, however,

care is taken by only selecting respondents who reasonably have better understanding. In

addition, it may be impracticable to conclude the result of the research to the industry

level because the research was based only on the conclusion to be obtained from

Wegagen Bank. In addition of technical limitations, the research output may also suffer

if the customers under investigation were without interest to actively participate in the

research. On top of that Absence of research papers conducted on customers by senior

researchers in Ethiopian banking context for immediate reference and lack of time to

utilize maximum effort due to other work pressure are some of the limitations.

1.6 Organization of the Study

The final research report is structured in such a way that it can provide coherent flow of

ideas. The report is divided into five chapters. The first chapter is introduction, which

comprises background of the study, statements of the problem, objective of the study and

other related issues. The second chapter is review of related literature, which will present

the theoretical framework of the subject matter. The third part presented research design

and methodology. The fourth part of the report presented the results and discussions of

the study. Finally, based on the result of the study, summary of finding and the

recommendation will present in fifth chapter.

10
 CHAPTER TWO

REVIEW OF RELATED LITRETURE

2.1 Theoretical Literature

The review focuses on the overview of concept of quality, concept of service, service

quality, service quality dimensions and characteristics, customer satisfaction, and the role

of service quality in ensuring customer loyalty. This chapter will further present service

quality concept, and its impact on customer loyalty adopted in this study and explain in

detail the constructs of the study.

2.1.1 A definition of Service

A service is an act, a process and performance. Services are all around as – as a

consumer we use services every day.

Several scholars tried to define service in different ways. Kotler and Amstrong (1991)

defined service as an activity or benefit that one party can offer to another that is

essentially intangible and does not result in the ownership of anything. Its production

may or may not be tied to a physical product.

According to the definition of Gronroos (2000), a service is a process that consists of

activities which take place in interactions between a customer and people, goods and

other physical resources, systems and/or infrastructure representing the service provider

and possibly involving other customers, which aim at solving customer‟s problems.

According to (Christopher Lovelock and Lauren Wright 2011), a Service is an act or

performance delivered by one party to another. Through the process of delivering tied to

physical product, the performance is invisible and does not result in ownership. This
11
author also described service as “Something that may be bought and sold, but which

cannot be dropped on your foot”.

Service is intangible in nature, it cannot be mass produced. It cannot be inventoried and

stored after production. Due to the fact that services and consumers of services are

inseparable, they cannot be produced until the consumer is ready to consume them.

Providing consistent quality is difficult for service because of the characteristic of

variability (Clow and Kurtz, 2003).

According to Zeithaml and Bitner (2004), services include all economic activities whose

output is not a physical product or construction, is generally consumed at the time it is

produced and provides added value in forms (such as convenience, amusement,

timeliness, comfort or health) that are essentially intangible concerns of its first

purchaser. Lovelock and Wirtz (2007) indicated that, service is “time based” and the

outcome of a service may result in desire change in consumer or any property of the

consumer.

As observed from the above definitions, service is an interaction between the service

provider and the customer. Unlike goods it is intangible, cannot be inventoried or stored,

and cannot be produced until the customer is ready to consume it.

2.1.2 Characteristics of Service

In practice, it can be very difficult to distinguish services from goods, for when a good is

purchased, an element of service is usually included. Similarly, a service is frequently

augmented by a tangible product attached to the service. According to Adrian (1995),

12
 pure services have several distinctive characteristics that differentiate them from goods

and have implications for the manner in which they are marketed. These characteristics

can be described as follows.

i. Intangibility: - a pure service cannot be assessed using any of the physical senses; it is

an abstraction which cannot be directly examined before it is purchased. It has no

tangible properties that can be used by consumers to verify advertising claims before the

purchase is made. The intangible process characteristics that define services, such as

reliability, personal care and attentiveness and friendliness of staff, can be verified only

when a service has been purchased and consumed.

ii. Inseparability: - the production and consumption of a tangible good are two quite

distinct activities. On the other hand, consumption of a service is said to be inseparable

from its means of production. Producer and consumer must interact in order for the

benefits of the service to be realized: both must normally meet at a mutually convenient

time and place in order that the producer can directly pass on service benefits. In the

extreme case of personal care services, like health care service and ATM service, the

customer must be present during the entire production process.

iii. Variability: - refers to the fact that the quality of services depends on who provides

them as well as when, where, and how they are provided (Armstrong and Kotler, 2011).

For services, variability impacts on customers not just in terms of outcomes but also in

terms of processes of production. The latter point causes variability to pose a much

greater problem for service than for goods. Because, customers are usually involved in

the production process for a service at the same time they consume it, it can be difficult

13
 to carry out monitoring and control to ensure consistent standards. Many service

organizations have sought to reduce variability by adopting equipment base production

methods such as automation of baking services.

iv. Perishable: - services cannot be stored for later sale or use (Armstrong and Kotler,

2011). A producer of cars that is unable to sell all its output in the current period can

carry forward stocks to sell in a subsequent period. However, the producer of a service

that cannot sell all its output produced in the current period gets no chance to carry it

forward for sale in a subsequent period. So, matching time of supply and demand for

service is a requirement.

v. Ownership: - The inability to own services is related to their intangibility and

perishability. In purchasing goods, buyers generally acquire title to the goods in question

and can subsequently do as they want with them. On the other hand, when a service is

performed, no ownership is transferred from the seller to the buyer.

2.1.3 Definitions of Service Quality

Concerning the definition and components of service quality, different scholars

developed their own opinions from different angles. In all cases they agreed that service

quality is the outcome of comparison between customer‟s expectation about the service

they need and their perception of the way the service actually performed.

Service quality is the overall evaluation of a specific service firm that results from

comparing that firm‟s actual performance with the customer‟s general or prior

expectations of the firms should perform. (Lo. Liaig Kheng, 2010)

14
Parasuramn, Zeithaml & Berry (1985) described that Service quality is the gap between

expectation of universal level service providers‟ service performance and the actual

performance perception of a specific enterprise.

“Providing service quality in excellent manner is widely accepted and practiced as a vital

business requirement. It is “not just a corporate offering, but a competitive weapon”

which is “important to corporate profitability and survival‟‟ (H.Maddern, D.R. (2014)”

Service quality is that the service delivered should fulfill the customers‟ requirements,

expectations and satisfactions (Dr. Jothijay a Krishnan, G. 2014)

According to these scholars in general, service quality is not a one dimensional concept,

but it includes a set of factors that evaluate customer about the delivered services.

2.1.4 Service Quality Dimensions

In view of (Parasuraman et al. 1985) focus group studies, there were ten detail

dimensions of service quality .These were: Reliability, Responsiveness, Competence,

Access, Curtsey, Communication, Credibility, Security, Understanding the customer and

Tangibles. According to them, Reliability is the most significant dimension among

others.

Reliability; It means that performing as per promises and designated time, just ability to

render unfailing and reliable service.

Responsiveness; Willingness or readiness of employee to provide service promptly or

even setting up appointment quickly, it is all about understanding customer's need, goals

or problems.

15
Competence; It is possessions of the required skills and knowledge to perform the

promised service; it adds research capability of the organization. It is all about sound

judgment and intelligent decisions

Access; it involves approachability and easy accessibility, convenient hours of operation

and convenient location of service facility. Here in view of these scholars, failure to

access is extended waiting or delays, regardless of how it happens, which will cause

customers to search for another individual or company who promptly and efficiently

solves their problems.

Courtesy; in involves politeness, respect, consideration and friendliness of contact

personnel. It includes respect for property, not just customers‟ only but also of

organization. This means treating products, merchandise, samples, display areas and

support materials of the organization as prized possessions. If customers sense you don't

care about your things, they begin to wonder how you‟ll treat them and their things.

Communication; it means keeping customers informed in language they can understand

as information is valuable to customers and listening to them.

Credibility; involves trustworthiness, believability, honesty. It involves having the

customers‟ best interest at heart. It may take years to develop reputation, but only

seconds to lose it. To achieve the desired results and goals, first, helping customers

achieve theirs.

Security; is the freedom from danger, risk or doubt, it involves physically safe,

financially secure and confidential. It is providing customers with a comfort zone or

peace of mind since they want to maximize gain and minimize or eliminate loss.

16
 Understanding / knowing the customer; it means making an effort to understand the

customer‟s needs / specific requirements providing attention individually. It is

recognizing and acknowledging by name regular, loyal and repeat customers.

Tangibles; it includes the physical evidence of the service, physical facilities,

promotional materials and personnel appearance. Here these “stuff”‟ matters.

In their next research these scholars examine & purify the content of the items and

making up each of SERVQUALS five dimensions (three original and two combined

dimensions) suggested the following labels and concise definitions for the dimensions:

 Tangibles,

 Reliability,

 Responsiveness,

 Assurance

 Empathy

The last two dimensions (assurance & empathy) contain items representing seven

original dimensions i.e. communications, credibility, security, competence, courtesy,

understanding /knowing customers and access. Therefore, according to these scholars,

while SERVQUAL has only five distinct dimensions, they capture facets of all ten

originally conceptualized dimensions.

2.1.5 Quality

According to scholars‟ opinions, quality is “Zero defects, doing it right the first time‟.

17
 (Crosby 1979) defines quality as “conformance to requirements” (Garvin 1983) measures

quality by counting the event of “internal” failures (those observed before a product

leaves the factory) and “external” failures (those incurred in the field after a unit has been

installed

2.1.6 Emerging Quality Description

During earlier times, while many manufacturing systems and the rim to meet the

expeditions of the customers in organizations are considered as important to improve,

quality was described as a “little q” which meant product quality. With the emerging of

service emerged along with these industries and labeled as big Q (smith, 1994). Table

2:1 the new quality thinking

2.1.7 SERVQUAL

During the growth of services in the last decades, many scholars have agreed the need to

develop measures of service quality. One of the most frequently used measures is the

SERVQUAL (the name stands for Service Quality).

The foundation for the SERVQUAL scale is the gap model proposed by (Parasuraman,

Zeithaml and Berry 1985, 1988). They held that when perceived service is less than

expected service, the obvious implication is that service quality is more than satisfactory.

But, when perceived or experienced service is less than expected service, it implies less

than satisfactory service quality.

On their empirical research, they identified a set of 22 variables tapping five different

dimensions namely Tangibles, Reliability, Responsiveness, Assurance & Empathy of

18
service quality construct. From the time when they originated, service quality as being a

gap between customer‟s expectations and perceptions.

According to them, service quality measurement scale is comprised of a total of 44 items

(22 for expectations and 22 for perceptions). Customers‟ responses to their expectations

and perceptions are obtained on a 7-point Likert scale and are compared to arrive at (P-

E) gap scores. The higher (more positive) the perception minus expectation score, the

higher is perceived to be the level of service quality

2.1.8 Critiques of SERVQUAL

The first article on SERVQUAL which introduces the SERUQUAL scale was authorized

by A. Parasuraman, V. Zeithmal and L.L Berry in 1988. Since then, it has been

attacked and criticized on various parameters. These critics have noted that

SERVQUAL‟s five demonisms /Reliability, Assurance, Tangibles, Empathy and

Responsiveness/ are not universal and the Model fails to draw on established, economic

statistical and psychological theory. Mainly, the criticisms are on the object of

measurements, length of questionnaire, timing of questionnaire, and administration use

of LIKERT scales, use of P-E difference score, generalization of service quality

demonisms and static nature of the model. It was also criticized that it was not clear

whether SERVQUAL measures service quality or customer satisfaction. Suggestions

given were that certain items can be eliminated or fusion of interrelated dimension likes

reliability, responsiveness and assurance into one dimension of task related. The issue of

whether it is appropriate to use a 5 points or 7 point LIKERT scale was also exposed to

criticism.

19
On the other hand, many other Authors have rebuked all criticisms against SERVQUAL

and or various conceptual and operational criterion upheld SERVQUAL as a rigorous

tool, appropriate and perfect. Advances made in service quality measurement have

validated SERVQUAL. It was recommended as an instrument for improving service

quality, organizational performance and customer satisfaction is not in private sector but

also in public services. The scale has proved to be most versatile and adaptable with

applicability across diverse service industries in various countries (Raghunanandan

2012).

2.1.9 SERVPERF

SERVPREF was developed by Cronin and Taylor in 1992. They developed this

instrument to simplify the measurement of service quality and customer satisfaction. It

contains the same dimensions used in the SERVQUAL model. They developed this

model to study four service sectors: banking, pest control, dry cleaning, and fast food.

It is based upon the performance theory and is a modification of the SERVQUAL model.

The only difference between SERVQUAL and SERVPREF is that the SERVPREF does

not consider customer expectations. It brings into consideration only customer

perceptions of service performance. Therefore, this model does not have a

disconfirmation scale, which is the gap between expectations and perceived performance

of service. It has only one part, which is the perceived performance of service. In this

instrument, customers rate their perceptions of performance of the same attributes that

are covered in the SERVQUAL model. The five dimensions, i.e. Tangibles, reliability,

20
 responsiveness, assurance and empathy–identified in the SERVQUAL model are equally

applicable to the SERVPREF model.

According to these scholars, SERVPREF can provide managers with a summary of

overall service quality score, which can then be plotted in relation to time and specific

customer segmentations related to consumer characteristics. The SERVPREF scale thus

provides a useful tool for measuring the overall service quality attitudes of service

managers. However, they suggest that great care should be exercised by managers of

service organizations in attempting to derive more specific information from data

captured by the SERVPREF scale for strategic decision making (Cronin & Taylor 1994).

2.2SERVIQUAL Vs SERVPERF

Though many scholars supported the SERVQUAL, the use of gap scores has been

opposed. Among them (Cronin and Taylor 1992) recommended using “SERVPERF” -a

modified SERVQUAL instrument to measure service quality. According to them, instead

of measuring both customer expectations and perceptions as in the case of SERVQUAL,

the SERVPERF was practiced by only one part of the perceived performance on the

differently labeled 7-point scale. The expectation does not exist in the SERVPERF and

did not review the gap scores between expectation and perception. As a result, only 22

items will be remained when measurement of customer expectation is excluded. These

scholars concluded the superiority of SERVPERF over the SERVQUAL for service

quality measurement.

Later on in 1994, the SERVQUAL developers maintained on the superiority of their

measurement and criticized the use of the SERVPERF for practical issues. The claim

21
 made by criticizers about the practitioners preferring simpler measurement of perceived

quality through only the performance of the business was opposed by their argument that

a widespread preference did not necessarily support their claim of superiority

(Parasuraman et al., 1994). They emphasized the practical values of the SERVQUAL for

generating rich and meaning full information and as an analytical tool to cut off the weak

points of service quality.

Again, (Cronin and Taylor 1994) defended that the SERVPERF can also provide

practical values to managers. They suspected that the performance-based measure of

service quality could offer a longitudinal index of the service quality perceptions, relative

to time and customer subgroups. Finally their thoughts did not commit them to remain

supportive to the SERVQUAL, yet remained confident of their SERVPERF (Hussien

2012).

On the other hand, as per the study conducted by (Quester and Romaniuk 1997) and

(Angur, Nataraajan, and Jahera 1999) and cited in (Yeamdao Narangajavana 2007), both

models were found to have insignificant differences in their performance of prediction.

2.3 Banking Service

Basically banking is a profit making and service giving business that is formed to accept

a deposit from the surplus units and cannel it to the deficits units of the economy in the

form of loans. This task makes banks one of the most important financial intermediaries

in every economy of every country.

It is a customer oriented service giving industry. Banks highly depends on customer

service for their survival in the market. According to (Chowdhury 2014), customer is the

22
 center of attention and customer service is the differentiating factor. He further argues

that banks have to serve their customer carefully because of the existence of other

competitive banks.

On the other hand (Guo et al, 2008) recommended that in the dynamism of banking

industry in this 21st century, they had to have distinct identity to provide excellent

service. As per their recommendation, banks of these days have to be of world class

standard, committed to excellence in customer service and have to play a vital role in the

ever growing and diversified of this sector. Here, they wanted to explore that today‟s

customers are of global customer.

2.4Bank History in Ethiopia

As per the agreement reached in 1905 between Emperor Minilik II and Mr. Ma

Gillivaray, representative of the British owned National Bank of Egypt, the first modern

bank called Bank of Abyssinia was introduced and inaugurated in Feb 16, 1906 by the

Emperor. The bank was managed by the Egyptian National Bank. During that time, the

Ethiopian government promised not to allow any bank to be established in the country

within the coming 50 year concession period.

In short period of its existence, Bank of Abyssinia had been carrying out limited business

such as keeping government accounts, some export financing and undertaking various

tasks for the government. In 1931 Bank of Abyssinia was legally replaced by Bank of

Ethiopia shortly after Emperor Hailesilassie came to power. Bank of Ethiopia was a

purely Ethiopian institution and was the first indigenous bank in Africa.

23
In 1963 the function of commercial activity was separated and Commercial Bank of

Ethiopia was formed.

The first privately owned bank, Addis Ababa Bank S.C was established and started

operation in 1964. There were two other Banks in operation namely Banco di Roma and

Bank O di Napolis S.C.

Following the declaration of socialism in 1974, the government extended its control over

the whole economy and the private owned banks were merged and formed a bank called

Addis Bank. Then in 1980 both Commercial Bank of Ethiopia and Addis were merged.

In 1970 Agricultural and Industrial Development Bank was established.

Following the downfall of the Dengue regime, legal basis for investment in the banking

sector was laid down. Then after, the following private Banks come to operation.

Table 2.1 List of Commercial Banks in Ethiopia

S.no Bank Name Year Established

1 Development Bank Of Ethiopia 1909

2 Commercial Bank Of Ethiopia 1963

3 Awash Bank 1994

4 Bank Of Abyssinia 1996

5 Wegagen Bank 1997

6 United Bank 1998

7 Nib International 1999

8 Dashen Bank 2003

24
 9 Cooperative Bank Of Oromia 2005

10 Lion International Bank 2006

12 Oromia International Bank 2008

11 Bunna International Bank 2009

13 Zemen Bank 2009

14 Abay Bank 2010

15 Berhan International Bank 2010

16 Addis International Bank 2011

17 Debub Global Bank 2012

18 Enat Bank 2013

Source: National Bank of Ethiopia, Annual Report of 2017

2.5 Customer

A customer is anyone who receives products or services; customer can be internal or

external to the organization and are the foundation of any business (Salas 2006).

Kotler (2003) also defines customers at a person or organization that buys a product or

service either for use or resale. According to (Donna Eart 2004), there are two types of

customers. They are external customer and internal customer.

1. External customer; this is someone who signs a check, pays our employees, and

ultimately makes our pay check possible. External customers have choice, and if they

don‟t like your product or service they can take their business elsewhere. A customer

who suffers through a negative experience with a business, such as being treated

25
 impolitely by an employee, can also hinder a business by dissuading others from

patronizing it.

2. An internal customer or internal service provider can be anyone in the organization.

They are co-worker from each department unlike external customer.

These internal customers don‟t have choice. While internal customers may not

necessarily purchase the products or services offered by their employer, the internal

customer relationship also plays a dominant role in the business's success. For example,

the front line staffs who do not work well with customer service may have greater

complexity placing orders or obtaining answers to his external clients' questions,

consequentially in a poor level of service. Stressed internal relationships can also

adversely influence company morale.

Varey, R.J (2002) also described customer as “not producers, not citizens but „us‟

brought to life in our everyday talk.

2.6Customer Loyalty

Customer loyalty is the most precious intangible assets of modern business organization.

In fact only high loyalty is not the key of business organization competition to win but

also the major guarantee of business organization stability and in effect the main target

profitability (Tang, 2014). These researchers further argue that, in the era of service

economy, improving service quality always considered as one of the most effective to

build customer loyalty.

But (Mattila, J.W. 2003) argues that loyalty is an effective risk reduction strategy.

Especially when switching cost and risk associated with that product or service are high,

26
loyalty increases .They also further argues that loyalty is from objective knowledge. On

the other hand, there are scholars who relate loyalty with pricing.

Prrie, (2006) explained loyalty as “By improving service quality that is relevant to the

market, the company will have potential to develop a loyal customer base which is a

worthwhile goal. For one thing, it usually results in greater profits”

They agreed that customer loyalty as a prime determinant of long term financial

performance of service firms where developed loyalty can significantly improve profit.

Richards varay (2002) also explained that customer loyalty and retention is the new.

The author further explained customer loyalty as “Customer loyalty is the name of the

game and loyal customer will be behind tomorrow‟s profitable companies”

The findings of Berry and Parasuraman, 1991 supported the hypothesis that loyalty is

influenced by service quality. There is however, a difference between loyal customer and

who simply retained rather than expressing loyalty. Most of the time, true loyal

customers are known as being fewer prices sensitive when compared to retained

customers. They increase frequency of repurchase .They are advocators of a given

Organization. They can influence their family or peers. According to these scholars,

therefore, customer loyalty is distinct from customer retention. Loyalty is only a valid

concept to them in situations where customers can choose other providers.

In their researches, (Josee Bloemer, K, D. 1998) concluded that, customer loyalty of

many banks, as service giving organizations; it will increase by introducing innovative

products and services. They also relate customer loyalty as an expression of intended

behavior to the product or service or to the company. Jothijalyatrishnan & G. (2014)

27
 also relates customer loyalty as an expression of intended behavior to the product or

service or to the company. They also further explained customer loyalty as comprised of

both customers‟ attitudes and behaviors.

Customers‟ attitudinal component represents opinions like willing to repurchase or

purchasing another product or services from same company, willingness of advertising to

others through word of mouth, showing commitment not to easily switch to other similar

service provider and willingness to buy at a premium price. On the other hand a

behavioral aspect of customer loyalty represents actual repurchase, purchasing more and

different product or service from same company and as a result being customer for life.

In general customer loyalty is the ultimate goal of any service organization (Kiran, 2011)

2.15 The relationship between Service Quality and Customer Loyalty

The relationship between service quality and customer Loyalty has been vastly

researched in various service settings. Previous research has shown that service quality

directly affects customer loyalty (Kiran K.a 2011). Other scholars have reported that

service quality has an indirect effect on loyalty, mainly via customer satisfaction as a

mediating variable (Collier and Beinstock 2006; Cristobal; Flavian and Guinaliu 2007).

Meanwhile, (Agyapong, 2011) concluded that perceived service quality is necessary but

not adequate situation for customer loyalty. In the era of service economy, improving

service quality has always been considered as one of the effective ways to improve

customer loyalty. (Tang, Y.D. (2014). According to these researchers, to a large extent,

service quality can affect customer loyalty to the enterprise.

28
Also, previous researches have confirmed that the relationship between perceived quality

and customer loyalty exists and is positive (Bernard Adoyu, 2012). According to (Dr.

Jolhijayakrishnan, G. 2014) findings too, service quality demonisms such as tangibility,

reliability, responsiveness, assurance and empathy are positively related with customer

loyalty. As discussed under the loyalty title, loyalty is an intention to repurchase and

willingness to recommend to others. According to studies done by (Cronin and Taylor

1992), service quality did not appear to have significant (positive) effect on repurchase

intentions. Whereas (Boulding et al. 1993) found positive relationship between service

qualities and repurchase intentions and willingness to recommend.

On top of that, according to the meta-analysis conducted by (Carrillat et al. 2009) and

cited by (Bourlessab, 2013) service quality impacts purchase intentions and thus

customers‟ loyalty in a direct as well as in an indirect way through satisfaction.

Additionally, as cited by this researcher, in the context of banking services, (Bloemer et

al. 1998) discovered that reliability and efficiency of a service have impact on the level of

customers‟ loyalty. In the same way, (Kheng et al. 2010) investigated a direct positive

link between service quality factors such as reliability, empathy and assurance and

customer loyalty. Nevertheless, as cited by (Bourlessab, 2013) and found by (Bloemer et

al. 1999), the relationship between service quality and loyalty is unclear and needs further

investigation.

Hence, the present study examines the impact of Oromia International Bank service

quality factors (i.e. Tangibles, Reliability, Responsiveness, and Assurance & Empathy)

on its export customers‟ loyalty.

29
2.16 Conceptual model of the Research

The following conceptual model has been developed based on literature review findings

used in this research.

Figure 2.1: The theoretical framework of the study.

Independent Variables Dependent Variable

S Tangibility
E
Reliability
R Customer
V Responsiveness
Loyalty
P Assurance
E
Empathy
R

30
 F

Source: Parasuraman et al., 1988

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1Research Design

The overall research design of this study is descriptive research design. In order to

achieve the study objectives and to test the affirmed hypothesis, descriptive statistical

tools such as frequency, percentage and mean scores was use with Chi square test to

identify association of demographic factors and loyalty. Binary logistics regression

analysis was used to explain the effect of service quality dimensions on customer loyalty.

31
3.2Data type and Source

The study was used both primary and secondary data. The primary data wascollected

from customers of the Bank in Addis Ababa city branches. To investigate the study, Self-

administeredquestionnaire, on a five-point Likert-type scale was used is ranging from

“strongly disagree” (1) to “strongly agree” (5), representing the five SERVQUAL

dimensions is employed. In addition secondary sources such as bank annual bulletin,

internet, various journals and articles was explored to understand the association between

service quality and customer loyalty.

3.3Target Population

The target population of the study was customers of Wegagen Bank S.co. The study was

focused on capital city because a high number of customers are situated in it.

3.4 Sampling Size

The sample size for the study is determined using the formula developed by Taro
Yamane (1967).

n= N = 100,000 = 398.406
1+N(e)2 1+100,000 (0.05)2

Where, n - is the sample size

N - is the population size,

e - is the level of precision or sampling error = (0.05)

Having 10 branches to be selected out of 77 main city branches of Wegagen Bank S.Co.

Considering to have an average of 10,000 customers on every branch, added up to give

100,000 customers. So N = 100,000

32
3.5 Sampling Technique

Since the researcher is the customer of this bank and the number of customers of the

bank is numerous (in average 10,000 customers per branch in Addis Ababa),

samplingmust be used. Convenience sampling method was used to collection data from

customers of selected 10 main branches of the bank.

3.6 Research Instrument

A questionnaire is used by the researcher to collect the primary data. The questionnaire is

of structured type. A structured questionnaire is used to increase the credibility of

information that is provided by the respondents. In this approach the investigator first

checked whether the respondents used the bank service for at least one year. The

instrument was adopted from Andaleeb and Conway, (2006).

3.7 Method of data Analysis

The data was analyzed with the help of SPSS 22 that helps to tabulate and analyze the

valid responses. The data that are gathered through primary and secondary sources

wassummarized using descriptive statistics, Chi square test and Binary logistic

regression having dependent variable of loyalty (binary, yes or No) and independent

variables five SERVEQUAL dimensions (ordinal level, five level Likert scale).

The Binary Logistic Regression model can be formulated as

Where by:

33
 P is the probability of Y (loyalty occurring) 1= loyal, 0= not loyal

e is natural logarithm base

bo is interception at y-axis

b1is line gradient

bn is regression coefficient of xn

x1 is predictor variable (SERVQUAL dimensions)

So, the SERVQUAL dimensions (independent variables) predict the probability of

loyalty occurrence of the banks customers.

3.8 Ethical Consideration

The data collected from the customers are intended only wasused for academic purpose

and specifically for the consumption of this research; and wasprovided to anybody that

intends to use beyond this study. Questionnaire wasdistributed in a sealed envelope and

through emails. The researcher was clarify the questions only when requested. Other

than this, the researcher was not influence the response of any customer. By doing so,

this research was concluded without losing its validity.

3.9 Validity and Reliability Test

Validity of data in terms of content and face validities are tested using physical checking and

employing software test of validity of the data collected using questionnaires. When it comes to

reliability the data collected is tested using cronbach‟s alpha which test the level of the

association of variables included in the questionnaire with the of dependent variables.

34
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Introduction

This chapter focuses on the analysis of the data gathered from the 301 respondent,

customers of Wegagen Bank S.Co. The data is presented in tables, charts and diagram

and the result are critically analyzed and interpreted.

35
 At the outset, the questionnaire was planned to distribute to 398 customers of Wegagen

Bank S.Co. as per the sample size described in the methodology part and since the

customers under investigation are having high number of nonresponse rate (22.6%) , i.e.,

77.4% of the expected questionnaires were collected back and used for analysis purpose.

The analysis of the study is conducted using descriptive statistics, checking the

dependence level of demographic variable and dependent variable (customer loyalty) and

Binary Logistic Regression of loyalty and SERVQUAL dimensions.

4.2 Demographic Characteristics of Respondents

This section is designed to discuss the general demographic characteristics of respondents

which were presented in the first part of the questionnaire.

Figure 4.1 Age and Gender of Respondents

36
 200 184

150
117
102
100 87
58 61.1
50 28.9 33.9 29 38.9
19.3 25
9.6 8.3
0
20-25 26-30 31-35 36-40 Above 40 Female Male
Age of the respondent Gender of the respondents
Frequency Percentage

Source: Survey Result (2018)

As indicated in the above figure 4.1, among the total respondents, a 33.9 percent of the

respondents fall in the age bracket of above 26-30 years. The rest of the respondents

constitute 28.9 percent; a 19.3 percent, 9.6 percent and 8.3 percent represent in the age

bracket of 20 -25, 31-35, 36-40 and above 40 years respectively. From this survey it is

observed that most of the respondents represent in the age bracket of 26 -30 years.

As indicated in the above figure 4.1 regarding the gender of the respondents, the

researcher notes that, out of the total respondents, males dominate by 61.1 percent while

the female respondents constitute 38.9 percent.

37
 FIG. 4.2: EDUCATIONAL SATATUS OF RESPONDENTS
Below High
MA/MSc, 27, 9% PhD, 6, 2% School, 17, 6% High school
completed, 48,
16%

Degree, 113, 37%

Diploma, 90, 30%

Source: Survey Result (2018)

As it is indicated in the Figure 4.2above regarding educational level of the respondents

one can see that the educational level of most of the respondents is at the degree level

with the percentage position of 37.5 (113) followed by diploma level with the percentage

position of 29.9 the remaining are high school completed, masters, Below High School

and PhD with 15.9 percent, 9 percent 5.6 percent and 2 percent respectively. This

indicates that most of the respondents are educated with a degree level and can be

categorized as professional respondents.

38
 Fig. 4.3: Marital Status of the Respondents
160
Married, 137 Single, 137
140
120
100
80
60 45.5 45.5
40
Divorced, 16 Widowed, 11
20 5.3 3.7
0
Married Single Divorced Widowed
Frequency Percentage

Source: Survey Result (2018)

From the above Fig. 4.3 the researcher noted that of the respondents, majority of them

were equally dominated by married and single respondents by 45.5 percent followed by

5.3 percent and 3.7 percent divorced and widowed respectively.

Fig. 4.4: Length of Relationship with Wogagen Bank

100
100 92
90
80
70
60
50 39 42
30.6 33.2
40 27
30 14
13 9
20
10
0
Less than 1 1-2 Years 2-3 Years 3-4 Years above 4 Years
Year
Length of Relationship with the Bank

Frequency Percentage

Source: Survey Result (2018)

39
 As indicated in the Fig 4.4 the respondents‟ length of relationship with Wogagen Bank

shows that most of the respondents 33.2 percent 1-2 years followed by 30.3 percent less

than one year the rest 13 percent, 14 percent and 9 percent having 3-4 years, 2-3 years

and above 4 years respectively.

Fig. 4.5: The Type of Account maintained with Wogagen Bank

Fixed Deposit Account 34 11.3

Saving Account 184 61.1

Current Account 83 27.6

0 50 100 150 200 250 300

Frequency Percent

Source: Survey Result (2018)

As it can be seen from the above Fig 4.5 outall of the respondents 61.1 percent

maintained saving account and followed by 27.6 percent and 11.3 percent who

maintained current account and fixed deposit account with Wegagen Bank respectively.

4.3 Analysis of Dependency Test of Demographic Variables and Customer Loyalty

In the case of the dependency test of the demographic variable with the main dependent

variable, customer loyalty, the researcher used chi square test indicated in the table

4.1.Below Chi square test shows that the marital status and length of relationship with the

40
 bank are significantly dependent on the customer loyalty at the significance level of 95

percent. Age of the respondents, gender of the respondents and type of account

maintained with the bank are associated with loyalty of the customer with the

significance level of 80 percent.

Table 4.1 the Demographic Characteristics of Respondents and Their Respective Chi Square

S.No. Chi square

Question Items Frequency Percent Test
1. Age of the respondent 20-25 87 28.9 6.947 (0.12)
26-30 102 33.9
31-35 58 19.3
36-40 29 9.6
Above 40 25 8.3
2. Gender of the Female 117 38.9 2.476 (0.12)
respondents Male 184 61.1
3. Educational Level of Below High School 17 5.6 7.180 (0.21)
the respondents Highschool completed 48 15.9
Diploma 90 29.9
Degree 113 37.5
MA/MSc 27 9.0
PhD 6 2.0
4. Marital Status of the Married 137 45.5 35.208 (0.00)
respondents Single 137 45.5
Divorced 16 5.3
Widowed 11 3.7
5. Length of Relationship Less than 1 Year 92 30.6 300 (0.00)
with the Bank 1-2 Years 100 33.2
2-3 Years 39 13.0
3-4 Years 42 14.0
above 4 Years 27 9.0
6. Type of Account Current Account 83 27.6 3.465 (0.18)
maintained with WB Saving Account 184 61.1
Fixed Deposit Account 34 11.3
7. Types of service avail Credit 11 3.7 5.488 (0.36)
with other banks International banking service 129 42.9
Electronics Banking 82 27.2
Credit/Profit Sharing 29 9.6
Guarantee 8 2.7
Others 31 10.3

41
Source: Survey Result (2018)

4.4 Analysis of SERVQUAL Dimension using Descriptive Statistics

SERVQUAL dimension are the five main variables to measures the levels of customer

satisfaction in the service industry. The level of satisfaction which is one of the

independent variable of this research can easily be explained prior to the main research

objective achievement to help the readers understanding.

According to table 4.2 below all the dimensions in the SERVQUAL are more than the

average of 3 where by our measurement was done using five level Likert scale with

minimum of 3.87 by reliability dimension and maximum of 4.07 by tangibility with

assurance scoring average of 4.06 responsiveness and empathy scored of 3.95. When

Standard deviation is observed it has maximum of 0.584 by responsiveness and minimum

of 0.502 by reliability while the rest scored 0.528, 0.525, 0.512 by tangibility, assurance

and empathy respectively. From this we can conclude that tangibility and assurance are

the two dimensions better in comparison to the rest of the SERVQUAL dimensions. Even

if reliability scored the lowest average in comparison to others its standard deviation is

also low.

42
 Table 4.2 Descriptive Statistics of SERVQUAL Dimensions

S.No. Standard

Items N Mean Deviation

1. Average of Reliability 301 3.87 .502

2. Average of Assurance 301 4.06 .525

3. Average of Responsiveness 301 3.95 .584

4. Average of Empathy 301 3.95 .512

5. Average of Tangibility 300 4.07 .528

Source: Survey Result (2018)

4.4 Binary Logistic Regression Analysis

The reliability of the data collected on the main questions regarding service quality in

SERVQUAL model is in relation to loyalty indicates 83.7 percent reliable based on

cronbach‟s alpha for all the 22 questions, based on table 4.3, used to measure the five

dimensions of SERVQUAL. But in the case of the average of the five SERVQUAL

dimensions reliability reduce to 82.4 percent using the same measurement. The

researcher decided to use the average of the five SERVEQUAL dimensions because of

the insignificant difference in the reliability of the two methods, i.e., averaging the

SERVQUAL dimensions from the specific questions used to measure them and the

specific questions (22 questions) as they are.

43
 Table 4.3 Reliability Statistics of Main variables

S.No. Cronbach's

Alpha N of Items

1. .837 22

2. .824 5

Source: Survey Result (2018)

Table 4.4 Binary Logistics Regression

Hosmer and Lemeshow Test

Step Chi-square df Sig.

1 8.529 8 .384

S. No. Variables in the equation B S.E. Wald Sig.

1. Average of Reliability .729 .309 5.569 .018

2. Average of Assurance .070 .323 .047 .829

3. Average of Responsiveness -.351 .293 1.436 .231

4. Average of Empathy -.683 .367 3.467 .063

5. Average of Tangibility 1.153 .357 10.413 .001

6. Constant -2.862 1.307 4.793 .029

Source: Survey Result (2018)

The overall chi square test of the model shows a higher level which indicates there is

independence of the variables even if the significance level is almost 60%. Based on the

result of the binary logistics regression customer loyalty as dependent variable and the

44
 five SERVEQUAL dimensions as independent variable, reliability and tangibility

influence significantly in 95% significance level the customer loyalty positively with

coefficient and significance of 0.729 (0.018) and 1.153 (0.001) respectively. Empathy is

negatively influencing by -0.683 coefficient in a significance level of 0.063, at the level

of significance of 90%.

4.5 Major Findings from the Data Analysis

In this part major findings of the research based on the data analyzed and method used to

analyze presents.

 The researcher found out that most of the respondents participated in this research are

Male (61.1%), age between 20-30 years (62.8%), holds Diploma (TVET) and Degree

(67.4%), married and single (91%) and having two years and less length of relationship

with Wegagen Bank (63.8%).

 In the other case most of the respondents are having saving account (61.1%) maintained

in the Wegagen Bank and go to other banks to find service related to international

banking (42.9%).

 From all the respondents demographic factors only marital status (35.108 Chi square) and

length of relationship the respondent has with Wegagen Bank (300 Chi square) are

significantly associated with the loyalty of the customer.

 Except for tangibility as SERVQUAL dimension almost all the other dimensions scored

more than 3.5 average out of the five level Likert scale (5 as maximum score) and

reliability the least of all and tangibility as the largest of all.

45
 Based on the binary logistics regression result reliability and tangibility from the five

SERVQUAL dimensions are significantly (95%) affecting the loyalty of customers of

Wegagen Bank. While empathy negatively affect the loyalty of the customers at the

significance level of 90%.

46
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

The results of this study proved that there is a problem in connection with Wegagen

Bank service quality towards customer loyalty. The effect of one on other is also reveled

in the findings. As the major objective of this research was to assess the impact of

service quality on customer loyalty, the findings showed us all dimensions have positive

impacts except responsiveness and empathy, and in effect it inferred the importance of

high effort in improving these areas of service.

5.1. Conclusion

The following conclusions were drawn from the findings of the study.

To fulfill the objectives of the research, customers with different demographic profile

were invited in providing detail information. Accordingly, the majority of respondent

were males accounting for 61.1 percent of the total respondents. Most of these exporters

are less than 36 year old with 82.1 percent of the total. This shows that customers of

Wegagen Bank are mostly made up of youth males. Regarding the educational level of

these respondents, 78.4 percent of them are above Diploma level and from it can be

concluded that in most of WOGAGEN BANK customers are compose of professionals.

The next and much associated with the objective of this study is relationship duration of

customers with WOGAGEN BANK. The bank is more than 20 years since its

establishment and as per this study, only 9 percent of them stayed greater than 4 years

and above with this bank. The rest 14 percent stayed from 3-4 years, 13 percent from 2-3

years, 33.2 percent from 1-2 years and 30.6 percent for less than one year. From this

47
finding one can observe that as the age of the bank increases, the number of customers

stay (loyalty) with the bank age equivalently reduces. The other indicative findings and

become points of discussion and highly associated with the objective of this study is that

all customers under discussion have relationship with other competing banks. It is an

opportunity to Wegagen bank to evaluate and compare service quality of other

competing banks and change to better server of the need of the customers. In relation to

this about 42.9 percent of the customers have international banking relationship with

other banks and this implies that they fairly and comparatively evaluated this bank in this

specific service. It also implies that these customers did not get adequate service in

international banking service from WOGAGEN BANK and went to their banks for it.

The service quality dimension that scores better mean in customer's perception on

WOGAGEN BANK Physical design and appearance followed by Assurance with mean

scores of (4.07), (4.06) respectively. This means that for their current banking need

neatness of the staff and the placement of materials and formats on proper place,

availability of good physical facility and its modernity on top of staff politeness in

contacting their customer is not bellow their expectation. Due to the safeness of

customer‟s transaction in WOGAGEN BANK, they also trust the staff and feel secure in

this bank.

The third and fourth having equal mean score of 3.95 are empathy and responsiveness

which is related to how the service hour is convenient, how the staffs understand specific

needs of the customer and how far they give individualized attention to their customer;

how far the employees give information on when to deliver, prompt service delivery,

employee willingness to help customers, responding to customer needs even in pick

48
hours. The fifth rated perception of the quality service is reliability dimension with

mean score of 3.87. In this dimension respondents were less satisfied in comparison to

the rest of the SERVQUAL dimensions and WOGAGEN BANK shall strictly review its

service in this area so that it can improve customers‟ loyalty.

Furthermore, the dependence and/or association between each item of demographic

factors of respondents and customer loyalty was analyzed using Chi square test. The

result of the analysis showed that there is positive and significant relationship between

marital status and length of relationship with wegagen bank and customer loyalty even

though the degree of the dependence varies as the items in each dimensions varies.

Furthermore, the effect of each item of service quality dimensions on customer loyalty

was analyzed using Binary Logistic Regression. The result of the analysis showed that

there is positive and significant effect of reliability and tangibility (Physical design and

appearance) on customer loyalty. Empathy is the other SERVQUAL dimension with

lesser significance level but affect customer loyalty negatively. Responsiveness and

assurance are the least significant quality dimensions in the equation.

From this study results, the highest significant effect is Tangibility with beta value

(coefficient) of and significance of 0.001, followed by Tangibility the second highest

beta value of 0.729 and significance of 0.018.

49
5.2. Recommendations

As discussed in the findings of the study two service quality dimensions

(reliability and tangibility) have a positive and significant relationship with

customer loyalty. As a result with no debate to improving these aspects of service

areas will absolutely contribute to the overall WOGAGEN BANK‟s customers'

loyalty and sustainability in view of the fact that the current customer loyalty

level has no continual guarantee. On top of this, understanding of the major

factors in the service quality dimensions that influence customer loyalty should

be critically revisited by the management of the bank to redesign and deliver

what has promised at what time has been promised. Relying on these findings of

the study, the following recommendations are forwarded by the researcher to

improve the weak service quality areas so as to maintain borrower export

customers‟ loyalty of WOGAGEN BANK.

In order to improve and maintain customers‟ loyalty which will in effect helps

these customers in recommending this bank to other bank users, in considering

WOGAGEN BANK first among other competitors in this highly competitive

industry and in relabeling the continuity of customers at hand in the future too,

the following recommendations are provided on the already described items of

service quality dimensions.

50
  The Bank should keep its promise during its marketing activities and

advertisements. And the bank should provide the international banking service

because the customer switching point is on that specific service.

 The Bank should also need to promote on other accounts than only saving

account as majority of the services the respondents are maintained is saving

account.

Responsiveness attributes also requires special attention and therefore the following

recommendations are found to be important.

 WOGAGEN BANK should standardize its service delivery time and integrating

them across various groups so as to give confidence to its staff to tell their

customer when exactly service will be performed.

 The bank shall arrange trainings to its staff in the area of serving international

banking customer since these men have exposure of international service.

Because of the facts revealed in analysis of Empathy dimensions, the following

recommendations became valid.

 WOGAGEN BANK should give attention in branch location selection for better

service convenience and render personalized attention to these Customer

Though it is not strong enough up to the desired level, Assurance scored

relatively better than others and also need attention of the bank for better

customer loyalty. Accordingly, WOGAGEN BANK staff should serve customers

politely to the extent of the desired level and offer continual and considerable

51
support to these customers since most of them are credit customer of other banks

and they might easily shift to other banks.

The last service quality dimension but relatively scored better score than all

dimensions is Tangibles. Though better agreement is there, it is not strong

enough, and is not free from recommendation and indispensable recommendation

is hereof. Accordingly, the bank should cultivate a physical environment and

organizational culture to make conducive to warm customers.

In general the researcher wants to recommend that WOGAGEN BANKshould

minimize complaints on service quality dimensions at all costs to enjoy

sustainable customer LOYALTY.

52
REFERENCE

Agyapong, D. R. (2011). Analysis of the Antecedents of Customer Loyalty of

Telecommunication Industry in Ghana: The Case of Vodafone (Ghana). International
Business Research, 229-240.
Almossawi M (2001). Bank selection criteria employed by college students in Bahrain: an
empirical analysis. Int. J. Bank. Mark. 19(3): 115-125.
Alok Kumar Rai, S. M. (2013). The Antecedents of Customer Loyalty: An Empirical
Investigation in Life Insurance Context. Journal of Competitiveness, 139-163.
Al-Rousan, M. R. (2010). Customer Loyalty and the Impacts of. International Journal of
Human and Social Sciences, 886-887.
Andaleeb, S. and Conaway, C. (2006), customer satisfaction in the service industry: an
examination of the transaction specific model, Journal of Services Marketing, Vol.20
No.1, PP3 p-11.
Asubonteng, P., McCleary, K.J. and Swan, J.E. (1996), SERQUAL revisited: a critical
review of service quality, Journal of services Marketing Vol.10, No.6, PP. 62 18.
Balachandran, M. (2005); Strategic Model for Re-positioning of PSBS, IBA Bulletin, Vol.
XXVII,No. 8 (August), pp. 5-8
Bernard Adoyo, C. O. (2012). The Relationship between Customer Service Quality and
Customer Loyalty among Retail Pharmacies in Western Kenya. Business and
Management Review, 11-21.
Bloemer, J., de Ruyter, K., Peeters, P., (1998). Investigating Drivers of Bank Loyalty: The
Complex Relationship between Image, Service Quality and Satisfaction, International
Journal of Bank Marketing 16: 276-286.

53
Bourlessab, A. K. (2013). Investigating the relationship between service quality and loyalty
in Greek banking sector. International Conference on Applied Economics (ICOAE)
(pp. 453-458). Macedonia:
Elsevier B.V.
Carrillat, F., Jaramillo, F., Mulki, J.P., (2009). Examining the impact of Service Quality: A
Meta-Analysis of Empirical Evidence, Journal of Marketing Theory and Practice 17:
95-110.
Caruana, A., Money, A. H. & Berthon, P. R. (2000). Service quality and satisfaction-the
moderating role of value. European Journal of Marketing, 34(11/12), pp. 1338-1353.
Chowdhury, R. A. (2014). Customer Satisfaction On Service Quality In Private
Commercial banking Sector In Bangladesh. British Journal of Marketing Studies, 1-
11.
Collier, J.E., and Bienstock, C.C. 2006. Measuring service quality in e-retailing. Journal of
Service Research, Vol. 8, no.3: 260-275.
Cristobal, E., Flavian, C. and Guinaliu, M. (2007). Perceived e-service quality PeSQ:
Measurement validation and effects on consumer satisfaction and web site loyalty.
Managing Service Quality, Vol.
17, no.3: 317-340.
Crosby, Philip B.(1979),Quality is free ,The art of making quality certain, New York :New
American
Library.
Dr.JothiJayakrishnan, G. &. (2014). Effect Of Service Quality On Customer Loyalty:
Empirical Evidence From Co-Operative Bank. International Journal of Business and
Administration Research Review, 87-94.
Earl, D. (2004). What Is Internal Customer Service? Retrieved Feb 09-02-2015, 2015, from
http://www.donnaearltraining.com/Seminars/
Garvine,David A,(1983),”Quality on the line”, Harvard Business Reviewed (September-
october,65-73)
Guo, X., Duff, A. and Hair, M. (2008) Service quality measurement in the Chinese
corporate banking market, International Journal of Bank Marketing, 26 (5), 305-27.
H Maddern, D. R. (2014). Customer Satisfaction And Service Quality In Uk Financial
Service. 1-39.

54
Hansson, Gote (1995). "Ethiopia 1994: economic achievements and reform problems"
(Institute for
Economic Research, Lund University, Macroeconomic Studies 61/95)
Harvey (2010). Banking Reform in Ethiopia, Institute Of Development Studies, IDA
Working p. 37. http://www.nss.gov.au/nss/home.nsf/
Internal Customer Service Seminar.html: http://www.donnaearltraining.com/
Josée Bloemer, K. d. (1998). Investigating drivers of bank loyalty: the complex relationship
between image, service quality and satisfaction. International Journal of Bank
Marketing, 276-286.
Kheng, L., Mahamad, O., Ramayah, R., (2010), The Impact of Service Quality on
Customer Loyalty: A Study of Banks in Penang, Malaysia, International Journal of
Marketing Studies 2: 57-66.
Kiran, K. a. (2011). Antecedents of customer loyalty: Does service quality suffice?
Malaysian Journal of Library & Information Science, 95-113.
Kotler Philip. (1999). Kotler on marketing: How to create, win, and dominate markets. New
York: The Free Press.
Lo Liang Kheng, O. M. (2010). The Impact of Service Quality on Customer Loyalty: A
Study of Banks in Penang, Malaysia. International Journal of Marketing Studies, 57-
58.
Mendzela, E. (1999). Managing Customer Risk. The CPA Journal, 69(6), June, pp. 56-59.
Mouawad M, Kleiner B (1996). New developments in customer service training. Managing
Service Quality, 6(2): 49-56.
Muchtar Rizka (2013) Customer Loyalty the Effects of Service Quality and The Mediating
Role of Customer Relationship Marketing. Integr. Bus. Econ. Res, 493-494.
Negi, R. (2009). Determining customer satisfaction through perceived service quality: A
study of Ethiopian mobile users, International Journal of Mobile Marketing; Vol.4,
Number 1; p.31-38.
Oliver, R. (1980) A cognitive Model of the Antecedents and Consequences of Satisfaction
Decisions.
Journal of Marketing research, 460-469.
Parasuraman, A., Zeithaml, V. A. & Berry, L.L. (1985). A Conceptual Model of Service
Quality and its Implications for Future Research. Journal of Marketing, 49, pp. 41-50.

55
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A Multiple-item
Scale for measuring consumer perceptions of service quality. Journal of Retailing, 64
(1), pp.12–40.
Rahim Ajao Ganiyu, I.I (2012). Is customer satisfaction an indicator of customer loyalty?
Australian journal of Business and |Management Research. 14-20.
Rosen, L. D. Karwan, K.R. Scribner, L.L. (2003), „Service quality measurement and the
Disconfirmation model: taking care in interpretation‟, Total Quality Management,
Vol. 14, No. 1, pp.3- 14
Shanka, M. S. (2012). Bank Service Quality, Customer Satisfaction and Loyalty in
Ethiopian Banking Sector. Journal of Business Administration and Management
Sciences Research,0-2.
Tang, Y. D. (2014). A Literature Review on the Relationship between Service Quality and
Customer Loyalty. Business and Management Research, 27-32.
Ton Van Der Wiele, P. B. (2001). Empirical Evidence For The Relation Between Customer
Satisfaction And Business Performance. Netherlands: Erasmus Universities
Rotterdam.
S. Raghunanandan, D.M. SERVQUAL Revisited: A systematic Review of Literature.
International Journal in multidisciplinary and Academic Research (SSIJMAR). 1-28

56
APPENDIX

57
 Appendix A: Questionnaire in English

ST. MARY’S UNIVERSITY

SCHOOL OF BUSINESS

MASTERS IN MARKETING MANAGEMENT

Questionnaire for customers of WEGAGEN BANK S.CO

I am Filimon Alene, Marketing Management graduating student from St. Marry University
School of Graduate Studies Department of Marketing Management.

Dear respondent,

This questionnaire is meant to collect information about the influence of Service quality on
customer loyalty in case of WEGAGEN BANK SCO.

The information obtained will be used to complete the study in partial fulfillment of the
requirements for the award of Master Degree in Marketing Management.

The information that you would provide me is highly essential for significant contribution
to the existing body of literature on consumer behavior and successful completion of my
study. Please answer all items objectively. The researcher assures you that the
information provided will be kept confidential and be used only for academic and
professional ends.

Note: Kindly put a (√) mark with the option that reflects your level of agreement with the given
statement.

58
 Demographic questions

1. Age : 20-25 26-30 31-35 36-40 >41

2. Gender : Male Female

3. Educational level: Below high school High school completed Diploma Degree

Master

4. Marital status: Married Single Divorced Widowed

5. Length of relationship with the WEGAGEN BANK SCO: 1year 1-2years 2-3
years 3-4 >4

6. Do you think you are loyal customer of WEGAGEN BANK SCO: Yes No

7. Types of Accounts Maintained with WEGAGEN BANK SCO: Current Account Saving
Account Fixed Deposit Account

8. Relationship with other Banks: Yes No

9. If your answer is yes to question # 8, Please list out such bank(s)

A……………. B ………….. C………….. D…………E….………F…………G…………

10. In such case, type of service availed with other banks: Credit and International banking service

others

59
 Service Quality Related Questions

Note: Please also kindly put a (√) mark with the option that reflects your level of
agreement

1 .Strongly disagree 2. Disagree 3. Neutral 4. Agree 5 strongly agree

S/N Dimensions Scale of Measurement

1 2 3 4 5
I. Reliability

1 WEGAGEN BANK SCO promises to do

something by a certain time
2 WEGAGEN BANK SCO Shows genuine interest
in solving problems
3 WEGAGEN BANK SCO Performs services
dependably
4 WEGAGEN BANK SCO Provides services at
time promised
5 WEGAGEN BANK SCO is Committed to error
free services
II. Assurance
6 Customers trust the employees of WEGAGEN
BANK SCO
7 Transactions are safe in WEGAGEN BANK SCO
8 Employees of WEGAGEN BANK SCO are polite
9 There is considerable support from this Bank
III. Responsiveness
10 Staff of WEGAGEN BANK SCO are able to tell
customers exactly when services would be
performed
11 Staff of WEGAGEN BANK SCO give prompt
services to customers
12 Staff of WEGAGEN BANK SCO are always
willing to help customers
13 Staff of WEGAGEN BANK SCO are never found
too busy to respond to customers

IV. Empathy

60
14 Staff of WEGAGEN BANK SCO give customers
individualized attention

15 Services of WEGAGEN BANK SCO are

convenient to customers

16 Staff of WEGAGEN BANK SCO gives

customers personalized attention

17 The operating hours of WEGAGEN BANK SCO

are convenient

18 Staff of WEGAGEN BANK SCO understand the

specific needs of their customers
V. Tangibles
19 The equipment of WEGAGEN BANK SCO is
modern looking
20 WEGAGEN BANK SCO has good physical
facilities
21 The staff of WEGAGEN BANK SCO appear
neatly
22 Every material and format associated with the
services is in proper place

26. If you maintain relationship with other banks, and if your reason is other than service quality,
please specify.
______________________________________________________________________________
_____________________________________________________________________________
27. What do you feel that the company should be doing so as to make you loyal and remain
adhering to WEGAGEN BANK SCO?
______________________________________________________________________________
____________________________________________________________________________
Thank You so much.

61
Appendix A: Questionnaire in Amharic

ቅድስት ማርያም ዩኒቨርሲቲ

ድሕረ- ምረቃት ምህርት ቤት

ሇደንበኞች የተዘጋጀ መጠይቅ

ውድምሊሽሰጪ

ይህመጠይቅበማርኬቲንግማኔጅመንትየማስተርስዲግሪሇማግኘትየተዘጋጀማሟያነው፡፡

እኔፊሉሞንአሇነከቅድስትማርያምዩኒቨርሲቲየሁሇተኛዲግሪትምህርትክፍሌበማርኬቲንግማኔጅመንትተመራቂተማሪነኝ፡፡

ይህመጠይቅየወጋገንባንክአ.ማየአገሌግልትጥራትሇደንበኞችታማኝነትያሇውንተፅዕኖሇማጥናትመረጃሇማሰባሰብየተዘጋጀነው፡፡

የሚሰበሰበውመረጃሇጥናቱዓሊማሆኖበማርኬቲንግማኔጅመንትየማስተርስድግሪሇማግኘትከፊሌማሟያበመሆንጥቅምሊይይውሊሌ፡፡

የሚሰበሰበውመረጃጥራትናታማኝነትሇማካሂደውጥናትስኬታማነትከፍተኛአስተዋጽኦአሇው፡፡
እባክዎንሁለንምጥያቄዎችሇመመሇስይሞክሩ፡፡
ተመራማሪውየሚሰጡትንመረጃዎችሚስጥራዊ፣ሇአካዳሚክእናፕሮፌሽናሌዓሊማብቻጥቅምሊይእንደሚያውሌያረጋግጣሌ፡፡

ማስታወሻ፡-እባክዎትንየእርስዎንሃሳበምርጫበሚያጸባርቀውምርጫፊትሇፊትባሇውሣጥንውስጥየራይት()ምሌክትያስቀምጡ፡፡

62
ስሇመሊሾችየተጠየቁጥያቄዎች

1. እድሜ 20-25  26-30  31-35  36-40  ከ41በሊይ

2. ፆታ፡ ወንድ ሴት

3. የትምህርት ደረጃ፡ ከ2ኛደረጃ በታች 2ኛደረጃ ያጠናቀቁ

ዲፕልማ ዲግሪ ማስተርስ ፒኤችዲ

4. የጋብቻ ሁኔታ፡ ያገቡ ያሊገቡ የፇቱ ባሎ/ሚስቱ የሞተባት/ችበት

5. ከወጋገን ባንክ አ.ማ ጋር የነበርዎት ግንኙነት ርዝመት፡ 1 ዓመት 1-2 ዓመት 2-3 ዓመት 3-4 ዓመት

ከአራት ዓመት በሊይ

6. የወጋገን ባንክ አ.ማ ታማኝ ደንበኛ ነኝ ብሇው ያስባለ? አዎ አሊስብም

7. ወጋገን ባንክ አ.ማ ያሌዎት የሂሳብ አይነት፡ ከረንት አካውንት የቁጠባሂሳብ ቋሚ ተቀማጭ ሂሳብ ከአንድ አመት

በሊይ

8. ከላልች ባንኮች ጋር ግንኙነት አሌዎት፡ አዎ  አይ

9. ሇጥያቄ ቁጥር 8 ምሊሽዎ አዎ ከሆነ ባንኮችን ሥም ይዘርዝሩ

ሀ. ሇ. ሏ. መ. ሠ. ረ. ሰ.

10. ከላልች ባንኮች የሚያገኙት የአገሌግልት አይነት ምንድ ነው? የዱቤ  ኢንተርናሽናሌ ባንኪንግ አገሌግልት (ሏዋሊ) 

ኤላክትሮኒክ ስባንኪንግ (ኢ ፔይመንት)  ጋራንቲ  ከወሇድ ነፃ ሇሆኑት የትርፍ ክፍፍሌ (Profit Sharing) 

ላልች

63
 ከአገሌግልትጥራትጋርየተያያዙጥያቄዎች

ማስታወሻእባክዎንየራይት()ምሌክትበቀረቡትመግሇጫዎችየሚስማሙበትሊይየእርስዎንምርጫየሚያጸባርቀውንም
ሌክትያድርጉ፡፡
1. በጣምአሌስማማም 3.በመስማማትና ባሇመስማማትመካከሌ
2. አሌስማማም 4.እስማማሇሁ 5.በጣም እስማማሇሁ
ተ.ቁ ዳይሜንሽን የሌኬትስኬሌ
1 አስተማማኝነት(Reliability) 1 2 3 4 5

1 ወጋገንባንክአ.ማበተወሰነጊዜየሆነነገርሇመስራትቃሌይገባሌ
2 ወጋገንባንክአ.ማችግሮችንሇመፍታትእውነተኛፍልትንያሳያሌ
3 ወጋገንባንክአ.ማአገሌግልቶቹንበአስሥተማማኝነትይሰጣሌ
4 ወጋገንባንክአ.ማቃሌበተገባበትጊዜአገሌግልትይሰጣሌ
5 ወጋገንባንክአ.ማከስህተትየፀዳአገሌግልትሇመስጠትቁርጠኛነው
2. ዋስትና( Assurance)
6 ደንበኞችየወጋገንባንክአ.ማሰራተኞችንያምናለ
7 ወጋገንባንክአ.ማሌውውጥ(Transaction)ደህንነቱየተጠበቀነው
8 የወጋገንባንክአ.ማሠራተኞችእንግዳተቀባይናቸው
9 የወጋገንባንክአ.ማሇደምበኞቹከፍተኛድጋፍይሰጣሌ
3 ኃሊፊነትመውሰድ(Responsiveness)(መፍትሔሰጪነት)
10 ወጋገንባንክአ.ማሠራተኞችሇደንበኞችመቼአገሌገከልቶችበትክክሌእንደሚሰጡያ
ሳውቃለ
11 ወጋገንባንክአ.ማሠራተኞችሇደንበኞችፇጣንአገሌግልትይሰጣለ
12 ወጋገንባንክአ.ማሠራተኞችደንበኞችንሇመርዳትሁላምፍቃደኛችናቸው
13 ወጋገንባንክአ.ማሠራተኞችሇደንበኞችምሊሽሇመስጠትፇጽሞስራአይበዛባቸውም
4. አትኩሮት(Empathy)
14 ወጋገንባንክአ.ማሠራተኞችሇደንበኞችግሇሰባዊ(Individual)አትኩሮትይሰጣለ
15 ወጋገንባንክአ.ማአገሇክግልቶችሇደንበኞችአመቺናቸው
16 ወጋገንባንክአ.ማሠራተኞችሇደንበኞችሰብአዊ(Personal) አትኩሮትይሰጣለ
17 ወጋገንባንክአ.ማየሥራሰዓቶችአመቺናቸው
18 ወጋገንባንክአ.ማሠራተኞችየደንበኞቻቸውንሌዩፍሊጎቶችይረዳለ
5. ተጨባጮች(Tangibles)
19 የወጋገንባንክአ.ማመሣሪያዎችዘመናዊእይታአሊቸው
20 ወጋገንባንክአ.ማጥሩቁሣዊተቋማቶችአሇው
21 ወጋገንባንክአ.ማሠራተኞችፅዱናቸው
22 ከአገሌግልትጋርተያያዥነትያሊቸውእያንዳንዳቸውቁሳቁሶችእናቅፆችበተገቢውቦ
ታተቀምጠዋሌ
23. ከላልችባንኮችጋርግንኙነትካሌዎትምክንያትዎከአገሌግልትጥራትላሊከሆነእባክዎንይግሇፁ

24. እርስዎታማኝበመሆንከወጋገንባንክአ.ማጋርእንዲቆዩባንኩምንማድረግአሇበትብሇውያምናለ

በጣም አመሰግናሇሁ!

64