Assessment of Service Quality on Customer Satisfaction (In Case of

Commercial Bank of Ethiopia, ticho branch)

A research paper submitted to the Department of Management of wolaita sodo

University in partial fulfillment of the requirements for the Degree of Bachelor of
ART (BA) in Management.
by:WENDOSEN DEGEFA

Advisor: Eden Kebede (MBA)

WOLAITA SODO UNIVERSITY

College of Business and Economics

Department of Management

NOVEMBER,2018, wolaita sodo Ethiopia

 DECLARATION
I would like to declare that the research entitled assessing service quality on customer satisfaction in case
of wolaita sodo university submitted to department of management, college of business and Economics in
partial fulfillment of the requirement for the degree of bachelor of art in management is record of the
original report word done by me and it has not formed before the base for the word of any degree or
diploma or any similar titles.

Wondosen degefa ________________ ________________________

Researcher Signature Date

This research has been submitted for the partial fulfillment of bachelor of art
degree in management with my approval as a university main advisor.
Advisor Eden kebede (MBA)_____________ _______________
(Signature) (Date)
CERTEFECATION
This is to certify that student wondosen degefa with ID No CBE/118/09 has
conducted his senior essay paper on the title” assessment of service quality on
customer satisfaction’ and has work is completed with satisfactory of evolution of
the advisor and the examiners as per the requirement of university.

Advisor
Name: Eden Kebede (MBA)_______________Signature_______ Date_________

Examiners name

1. ____________________Signature__________________Date______________

2.______________________Signature_________________Date______________
 ACKNOWLEDGEMENT

First, I would like to thank the almighty GOD for patience and support helped me pass ups and downs in
my life.

Secondly, my deep gratitude goes to my advisor Eden Kebede (MBA) for her great support from
beginning to the end of conducting the research.

Thirdly, I want to thank my elder brother Eyob Bancha for his moral and financial support throughout
the entire research process.

Finally, I would like to show my deep gratitude to my friends especially, Bereket and Bekele who
devoted me their valuable time.
 ABSTRACT

Service quality is commonly noted as a critical prerequisite and determinant of competitiveness

for establishing and sustaining satisfying relationships with customers. Previous studying
suggests that service quality is an important indicator of customer satisfaction. According to
Wang, service quality is a form of an attitude, related but not equivalent to satisfaction that
results from the comparison of expectation with performance. The general objective of the study
was to assess service quality on customer satisfaction in case of commercial bank of Ethiopia
(CBE) in Ticho branch. The researcher

I will use descriptive type of research method. For the purpose of the study, both primary data
and secondary data are use. To collect necessary data, the researcher employee questionnaire and
interview. The type of sampling technique used to select a sample from total population was
covinance sampling (non probability sampling).It is so because some peoples are with better
knowledge and are covenant to collect the relevant data. The collect data is analyze using
descriptive statistic. Finally, based on findings the study is recommend CBE (ticho branch)
regarding service quality.
Table contents Page

Acknowledgement…………………………………………………………………………………………………

Abstract…………………………………………………………………………………………………………………

Chapter one

1 Introduction………………………………………………………………………………………………………..

1.1. Back ground of study……………………………………………………………………………………

1.2. Statement of problem………………………………………………………………………………….
1.3. Research questions………………………………………………………………………………………
1.4. Objective of the study………………………………………………………………………………….
1.4.1 General objective………………………………………………………………………………
1.4.2 Specific objective……………………………………………………………………………….

1.5 Significance of the study…………………………………………………………………………………..

1.6 Scope of the study……………………………………………………………………………………………

1.7 Limitation of the study……………………………………………………………………………………..

1.8 Organization of the study………………………………………………………………………………

CHAPTER TWO

2.1 Literature review………………………………………………………………………………………………

2.2 Definition of service………………………………………………………………………………………….

2.3 Service quality…………………………………………………………………………………………………

2.4 Characteristics of service………………………………………………………………………………….

2.4.1 Intangibility of service………………………………………………………………………………

2.4.2 Inseparability of service……………………………………………………………………………

2.4.3 Heterogeneity of service……………………………………………………………………………

2.4.4 Pershability of service………………………………………………………………………………….

2.5 Service quality dimension…………………………………………………………………………………

2.6 Service quality dimension associated to the banking

sector……………………………………………………………………………………………………………………..

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

2.8 Factors that cause customer satisfaction…………………………………………………………

2.9 Customer satisfaction In banking service context……………………………………………

2.10 Empirical frame work……………………………………………………………………………………

CHAPTER THREE

3 Research methodology………………………………………………………………………………………..

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

3.2Target population………………………………………………………………………………………………

3.3 Sample size

determination…………………………………………………………………………………..

3.4 Sapling techniques……………………………………………………………………………………………

3.5 Source of data…………………………………………………………………………………………………

3.6 Method of data collection………………………………………………………………………………..

3.7 Method of data analysis and presentation…………………………………………………….

CHAPTER FOUR

4 Data analysis and discussion of results………………………………………………………………

4.1 Introduction……………………………………………………………………………………………………

4.2 Analysis of questionnaire…………………………………………………………………………………

4.3 Back ground information from respondents …………………………………………………….

4.4 Descriptive statistical analysis…………………………………………………………………………..

4.4.1 Response and percentage of service quality

dimension………………………………………………………………………………………………………………

4.4.2 Customer satisfaction…………………………………………………………………………………

CHAPTER FIVE

5 Findings, conclusion, and recommendation…………………………………………………………

5.1 Discussion of findings………………………………………………………………………………………

5.2 Conclusion………………………………………………………………………………………………………

5.3 Recommendation……………………………………………………………………………………………

Reference

Appendix
 List of table Page

Table 4.1 Demographic profile for customers…………………………………………………………

Table 4.2 Reliability………………………………………………………………………………………………..

Table 4.3 Assurance……………………………………………………………………………………………….

Table 4.4 Responsiveness……………………………………………………………………………………….

Table 4.5 Empathy………………………………………………………………………………………………….

Table 4.6 Tangibles………………………………………………………………………………………………

Table 4.7 Response and percentage of customer
satisfaction…………………………………………………………………………………………………………….
 CHAPTER ONE

1. INTRODUCTION
1.1 BACKGROUND OF THE STUDY

Quality have define as conforming for requirement and specification, this implies that the organization
must establish requirement and specification once establish the quality goal of the various function of
service quality can be defined by customer and accurse where an organization supplies goods and
service to specification that satisfy their needs (Juran, 1982)

Service quality it may be technical or functional. This refers to the relatively quantifiable aspect of
service deliver, because it can be easily measure by both customer and supplier. It forms an important
to bases for judging service quality (Parimer and Cole, 1995).

Customer satisfaction is the extent to which a product perceive performance matches a buyer
expectation. If the product performance falls short of expectation of the buyer will be satisfy ordering
hate. Today customer face arranges of choice in product and service as we choice in the bases of their
perception. Quality service value company need to understand the determinant of customer usual and
the difference between total customer value and total cost (Kotler, 2004)

Customer satisfaction is consider as important in defining organizational performance. Customer

satisfaction is critical, because it is a key to business success of any banking institution. In the
competition where organizations will take competitive advantage through the human factor and
customers (Singh et al, 2011).

Business environmental develop and free trade of global competition is increasing with exploding.
Because of these reasons, to stay in a competitive environment and deliver acceptable financial
managers must know to handle changes which un expected by cementing on customer’s satisfaction
(Nessecmetal , 2011)

In developing country, customer satisfaction is important to business success of banking institutions.

Suggest reason for this apparent trend includes flexible employment. Higher mobility and competition in
banking industry (Panda, 2003). Banking institutions across the globe have recognize the importance of
customer satisfaction and developing and maintaining enduring relationship with customers as two
crucial parameters leading to increase business profits. As the same time, several banking institutions
experiencing increasing level of retail customer dissatisfaction (Mistry, 2013). The causes of
dissatisfaction are not well known empirically, however from rational point of view. The probable causes
may include low technology, low responsiveness from the bank employees and unreliable service.
However, whether any of these really holds true and the extent to which are out of the above list of
possible causes but none of them are establish.

Customer satisfaction is the outcome, felt by buyers who will be experience of a company performance
that fulfill expectation of customer are satisfy when their expectation is exceed the satisfy customers
remain loyal logger buy more are less price sensitive to the favorable about the company. From this
point of view, to create customer satisfaction company must more their value chain as the whole value
delivered system in customer centered way.(Kotler,19996;215)and, therefore this study is conducted to
assess the service quality on customer satisfaction in case of CBE Arbaminch branch.

1.2 Statement of the problem

Customer satisfaction is the first mission and purpose of any business organization .It is when customers
are satisfied that the organization could achieve higher sales, profit and market share and vice versa
(Peter Durker, the legendary management guru).Customer satisfaction also helps the organization to
gain loyalty and achieve the decided objectives and; therefore, it is essential for organization to satisfy
their customers prompt, so that they can achieve what they plan.

In this competitive environment, each bank’s strong and sustainable competition position in the market
and in the customer mind can be attaining only if the customer was satisfied and become happy with
the delivery of service quality. Because customer satisfaction is also based up on the level of service
quality provided by service provider, it acts as a determinant of customer satisfaction (Wilson al, 2008).
Nevertheless; the banks are not satisfying their customers enough due to many factors in which using
traditional technologies is among them. Levesque and McDougall,( 1996) have confirmed and
reinforced the notion that consistent poor customer experience as result of service quality leads
decrease in the level of customer satisfaction and the chances of further willingness to recommend the
service (i.e. Word- of- mouth advertising of referrals) is lessened.

Because of the above reason, the researcher is interested to undertake the study on the problems
related to tangibility, responsiveness, reliability, assurance, and empathy in commercial bank of Ethiopia
ticho branch. Most of bank institutions are having the problems related to service quality on customer
satisfaction and in this case different researchers have been tried to find out solutions for those
problems, but still now they are not solve. Hence the researcher conducte the study on the assessment
of service quality on customer satisfaction in case of commercial bank of Ethiopia (CBE) ticho branch.

1.3 Research question

.
1. Is the bank provides quality service by considering tangibility, responsiveness, reliability, assurance,
and empathy to its customers?

2. How do consumers perceive the service quality of the bank?

3. What is the level of customer satisfaction in the bank?

4. What is the impact of service quality on customer satisfaction?

1.4 Objective of the study

1.4.1 General objective

The general objective of the study is to assess service quality on customer satisfaction in case of
commercial bank of Ethiopia (CBE) in ticho branch

1.4.2 Specific objective

The specific objectives of the study are:

1, To identify weather the bank gives quality service in terms tangibility, responsiveness, reliability,
assurance and empathy.

2, To evaluate customer’s perception toward the service quality.

3, To identify the impact of service quality on customer satisfaction in the bank.

4, To analyze the customer satisfaction level in commercial bank of Ethiopia Arbaminch branch.

1.5 Significance of the Study

The study will provide the following significance.

 It will help the managers and employees of CBE ticho branch to eliminate customer
dissatisfaction and its impacts if any, and identify the gap between customer think about
customer satisfaction and what actual customer satisfaction looks like in the bank.
 It can help those researchers who are motivate to conduct on similar issues.
 qIt help the researcher to gain experience in conducting the research in other community issues
that need to be solve.

1.6 Scope of the study

The study will give much emphasis on service quality on customer satisfaction in case of CBE ticho
branch. The whole output and recommendation of the study is delimited to CBE ticho branch.
 1.7 Limitation of the study
 The respondents were not gave accurate response which leads to problems for effective
recommendation.
 The researcher lacks experience, since it was the first time for the researcher to conduct the
research.
 Unavailability of sufficient and well documented secondary data also has decreased the
accuracy of the findings

1.8 Organization of the study

The research paper was organized in to five chapters. Chapter one contains introduction parts that
includes the background information, statement of the problem, objective of the study, research
question, significance of the study , scope of the study, limitation of the study and organization of the
study. Chapter two contains literature revieview that focused on reviewing related literatures include a
brief main purpose of literature review, which have a great help towards identification of the theories
and ideas that explored such as data subsequently relate to the study.

Chapter three contains research methodology, which divided in to sub-section, and specifies the
design ,methodology, target population, sample size and sampling techniques , sources and methods of
data collection and analysis and presentation of the study. Chapter four contains data analysis and
discussion of results of parts that includes introduction, data analysis, and background information from
a respondents, descriptive statistical analysis, response and percentage of service quality dimension,
analisis of close-ended questions. Chapter five contains conclusion, recommendation, reference and
appendix.
CHAPTER TWO
2.1Literature Review

This chapter is an overview and critical analysis of relevant literature on topic. It covers
customer satisfaction concepts, theories and models, service quality concepts and models and
customer behavioral intentions referral concepts and models.

2.2 Definitions of Service

Service: are deeds performances and processes provided or coproduced by one entity or person
for and with a mother entity or person (Zeithaml. 2009).
Service includes core service: products and product-service bundles provided a more inclusive
definition of service with the derived service perspective, suggesting that all products and
physical goods are valued for the inherent service (calue derived) they provide not the goods
itself. Services differ from product due to their intangibility, heterogeneity. simultaneous
production and consumption and perish ability (Zeithaml, 2009), (Vargo and Lusch, 2004).

It should precisely distinguish them on the basis of their attributes a good is a tangible physical
object or product that can be created and transferred: it has existence over time and thus can be
created and used later. A service is intangible and perishable. It is an occurrence or process that
is created and used simultaneously while the customer can’t retain. (Ear, Poul, and Daryl
Wyckoff, 1978).

But, majority of them are agreed that service is a serious of activities of more or less intangible
nature that normally but not necessarily take place in interaction between customers and service
employees and or physical resource or goods and or system of the service provider with are
provided as solution to customer problems “most authorities consider the services sectors to
include all economic activities whose output is not physical product or construction is generally
consumed at the time it is produced and provides added value in the form of continence.
Amusement, timelines, comfort which are basically intangible concerns of its purchaser” (James
Brain Quinn, Jordan. Bruch, Penny, Cushman).

2.3 Service Quality

Bandyopadhyay 2003, pp,187-188) claimed that quality in goods sectors is “commonly defined
as the product’s fitness for the its intended use, which mean how well product meet the needs
and the expectations of its customer.”

Garvin (1983) referred to “the production oriented quality approaches as objective quality.”
Clemes, Gan and Kao, 2007) However, “understanding quality in the good sector is inadequate
for understanding service quality because of the fundamental difference between the two terms”
(Parasuraman, et al, 1985) (Parasuraman, et,1985, pp.42 “Suggest that service quality is
performance based rather than object therefore precise manufacturing specifications concerning
uniform quality can rarely best”.
Hong and Goo argued (2004)Service quality is “more difficult for consumers to evaluate than
product quality : this is due to a lack tangible evidence associated with the service” in the past
decades. Researches (Carman 1990: 1990 Garvin 1983: Parasuraman et al, 1985.1988) have
defended and measured service quality by examining the attributes of service quality, while
others (Bitner and Hubbert 1994: Iacobacci. Greystone and Ostrom, 1994: Oliver, 1993 and
desarbo 1988: ParasuramanZeithaml, and Berry, 1994: focused on the application in services to
conceptualize the relationship between service quality and customer satisfaction. Therefore, a
combination of the service quality and customer satisfaction literature has formed the foundation
of service quality theory (Clemse et al 2007: Parasuraman et al, 1985).

Service quality is the customer’s overall impression of the relative infection or superiority of the
organization and its services.(Hubert and Bitner, 1994).Gronroos (1984) identified service
quality as the evaluation process outcome. In which the customers are involved and where a
certain experience is always compared to the perceived service received “service quality is not
objectively measure according to some technical stands but is subkectly felt by customers and
measured relative to customer determined standards (kwortnik, 2005).

Berry et al., (1990) also “defined service quality as the discrepancy between customer
expectations or desire and their perception.”

“The previous literature suggests that the evaluation of quality in services is more difficult than
goods (Parasuraman et al., 1985) and that delivering quality service is increasingly recognized as
the key to success for service provider” (Cronin and Taylor, 1992). But “perceived service
quality has confirmed to be a complex concept to understand” (Brady and Cronin, 2001, pp.34).
Therefore, Rust and Oliver (2000) propose that it is essential for companies to develop the
awareness of customers Perceptions of service quality.

2.4 Characteristics of Services

According to Bitner et al … (1993) service has four characteristics: intangibility, inseparability,
heterogeneity and perish ability.

2.4.1 Intangibility of services

Regan (1963) “introduced the idea of services being activities, benefits or satisfaction which are
offered for sale, or are provided in connection with the sale of goods” the degree of intangibility
has been suggested as a means of differentiating tangible products with services (Levit, 1981)
Most of the time, services are explained ad being intangible since their outcome is considered to
be an action rather than a physical product (Johns 1999). (Darby and karni 1973 and
Zeithaml1981) highlight the fact that the degree of tangibility has implication for the ease
intangibility cannot be used to differentia clearly services with products. (Bowen 1990 and
Wyckham, Fitroy and Mandry 1975 suggest that the intangible tangible concept is difficult for
people to grasp. Bowen (1990)” provides empirical evidence to support this view. “Onkvisit and
Shaw (1990). “feel that the importance of intangibility is over-emphasized:

2.4.2 Inseparability of services

Inseparability is taken to reflect the simultaneous delivery and consumption of services (Regan
1963: Wyckham et al 1975: Donnelly 1976: Gronoroos 1978: Zeithamal 1981 Carman and
Langeard 1980: Zethaml et al., 1985: Bowen 1990 and Onkvisit and Shaw 1991 and it is
believed to enable consumers to affect or shape the performance and quality of the service
(Gronoroos, 1978 Zeithamal, 1981).

2.4.3 Heterogeneity of Service

Heterogeneity “reflects the potential for high variability in service delivery” (Zeithaml et al
1985). This is a particular problem for service with high labor content. As the service
performance is delivered different people and the performance of people can vary from day to
day (Rathmell, 1966: Carman and Langeard, 1980: Zeithamal 1985 Onkivistansshaw, 1991
onkvisit and Shaw (199 1) consider “heterogeneity to offer the opportunity to provide a degree
of flexibility and customization of the service. “Wyckham et al.; (1975) suggest that
“heterogeneity can be introduced as a benefit and point of differentiation.”

2.4.4 Perishability of Services

In general, services cannot be stored and carried forward to a future time period (Rathmell, 1966)
Donnelly, 1976: and Zeithaml et al., 1985 as citied in Wolak et al., 1998). Onkvisit and Shaw
(1991) suggest that “services are time dependent” and “time important” which make them very
perishable.” Hartman and linger (1993) claim that the “issue of perishability is primarily the
concern of the service producer” and that the consumer only becomes aware of the issue when
there is insufficient supply and they have to wait for the service.”
2.5 Service Quality Dimensions
Initially, Parasuraman et.al (1985) in their focus group study developed five dimensions of
service quality. These were: Reliability, responsiveness empathy, assurance and Tangibles
Reliability:refers to performing as per the promises and designated time, just ability to render
unfailing and reliable service.

Tangibles: pertain to the physical facilities, equipment, personnel and communication materials:

Responsiveness: refers to the willingness of service providers to help customers and provide
prompt service:

Assurance: relates to the knowledge and courtesy of employees and their ability to convey trust
and confidence: and

Empathy: refers to the provision of caring and individualized attention to customers.

Service’s unique characteristics of intangibility, heterogeneity, and inseparability lead them to

possess highly levels of experience and credence properties. Which in turn make them more
difficult to evaluate than tangible goods (Bitner 1990: Zeithaml 1981).

2.6 Service Quality Dimensions Associated to the Banking Sector

The Five dimension of Service Quality have developed for the service sectors: tangibility.
Reliability, assurance, responsive, and empathy (Van et. Al 2003). Tangibility represents
physical facilities, equipment and appearance of personnel. Examples of tangible factor related to
banc include comfortable store designs. Up-to-date equipment for customer use and sufficient
staff provide service. These aspects are important for retail banks, because there are extensive
face-face contacts between a customer and staff. Therefore. Maintaining a professional
Contemporary Management Research and Comfortable store environment can increase customer
satisfaction.
The next dimension is responsiveness, which represents the willingness to help customers and
provide on time services. In order to be helpful and responsive to customers, HSBC for example,
has incorporated the statement due date on SMS alerts sent to cardholders (HSBC 2011). This
personal service targeted to enhance satisfaction. The other crucial service dimension is
reliability which means the ability to perform the promised service dependably and accurately.
The major reason for customers to prefer banks for investment funds is because of the soundness
and reputation of banks. Banks always assure customers a high level of security during
transaction. Banking service can improve customers, confidence and trust if staffs are able to
provide proper service to each customer. For instance, understanding the needs of each
individual customer, such as knowing the customers expected retirement age, annual income.
And hobbies are required to help a good match of insurance and financial products for
customers. Assurance is the knowledge and courteousness of employees may save a large sum of
money in banks. For complicated products, such as insurance, funds and margins, employees
must provide a clear explanation of each product to customers to that customer can feel confident
about the services provided by banks.

The final dimension is empathy, which represents the individualized attention that firms provide
to its customers. Employees, who show understanding of customer needs and are knowledgeable
to solve customer problems, are success factors for the service industry. Friendly customer
services please customers when they walk into a bank. The purpose of this dimension is to retain
customers to keep using the bank service (Van Iwaarden et al., 2003).

2.7 Customer Satisfaction

Early concepts of satisfaction have typically defined satisfaction as a post utility evaluation and
judgment concerning a specific purchase decision (Churchill and Sauprenat and 1998) Oliver,
2001), Most researchers agree satisfaction is an attitude or evaluation that is formed by the
customer by comparing what they expect to receive to their subject perceptions of the
performance they actually get 9Oliver,2001).

Definition

Several authors have defined customer satisfaction in various ways:

 According to Kotler (2000). Satisfaction is a person’s feeling of pleasure or
disappointment resulting from comparing a product’s perceived performance (or
outcome) in relation his or her expectation.
 Gaither (1999) defines customer satisfaction as the determination of customer
requirements and demonstrated success in meeting them.
 Kotler (2006) again defined customer’s satisfaction by giving details on the attributes of a
highly-satisfied customer. According to him a highly-satisfied customer stay loyal, longer
and busy more as the company introduces new products and upgrades existing products:
talks favorably about the company and its products. Pays less attention to competing
brands and is less sensitive to price. Offers service or products ideas to the company and
costs less to serve him than new customers because transactions are routine.
 Kolter and Armstrong (2001) in their principles of marketing, define customer
satisfaction as the extent to which a product’s perceived performance match a buyer’s
expectations. They continued that, if the product’s performance falls short of
expectations, the buyer would be dissatisfaction but performance matches or exceeds
expectation, the customer will be satisfied or highly satisfied. In service quality literature,
customer expectations are understood as desires or wants consumers (Zethaml, berry
&Parasuraman 1993) or what they feel the service provide should offer rather than would
offer” (Parasuraman et.al.,1988).
 Customer satisfaction is a “psychological concept that involves the feeling of wellbeing
and pleasures that results from obtaining what one hopes for and expects. From an
appealing products and/or service” (WTO, 1985)
Lovelock and Wirtiz (2007) divine Customer Satisfaction “as an attitude like judgment
following a purchase act or a series of consumer product interaction.”
 Satisfaction is merely the result of things not going wrong; satisfying the needs and
desires of consumers.” (Bestefiled, 1994);
 “Satisfaction is a person’s feeling of pleasure or disappointment result from comparing a
products performance (outcome) in relation to his or her expectation (Kotlerkeller,
2006,144)
One area that has received considerable debate in customer satisfaction literature is
whether customer satisfaction should be defined as an outcome or a process. Many early
 definitions conceptualized satisfaction as process which is currently the dominant view
held by most scholars (Oliver, 1980 Parasurman et al…, 1988). The process perspective
presupposes that customer satisfaction is feeling of satisfaction that results from the
process of company perceived performance and one or more predictive standards, such as
expectations or desires (Khalifa& Liu, 2002). This perspective is grounded in the
expectancy disconfirmation theory proposed by Richard Oliver (Oliver, 1980). The
customer is satisfied if the performance of product/service is equal to his/her expectations
and he/she is dissatisfied if the product/service performance is perceived to be below
his/her expectation (negative disconfirmation). If an expectation exceeds perceived
performance, the customer is highly satisfied.

By taking satisfaction as a process these definitions do not focus on satisfaction itself but things
that cause satisfaction, the antecedents to satisfaction, which occur primarily during the service
delivery process (Vara, 1997).

Recent studies have found that satisfaction as an outcome or end result during the process of the
consumption of a service; it is viewed as a post-purchase experience (Vavra, 1997). This view
has its roots in motivation theories that postulate that people are driven by the desire to satisfy
their needs (Maslow, 1954) or that their behavior is directed at the achievement of relevant goals
(Vroom, 1964). In this way satisfaction is perceived as a goal to be achieved and can be
described as consumer fulfillment response (Rust & Oliver, 1994)

2.8 Factors that cause Customer Satisfaction

Customer satisfaction is the customer feeling that products service has meet or exceed his\her
expectations. Actual manifestation of the state of satisfaction will vary from person to person,
product to product and service to service. The state of satisfaction depends on a number of
factors which consolidate as psychological, economical and physical factors.

The quality of service is one of the major determinants of the customer satisfaction which can be
enhanced by using ICT available to survive (Vijay M.K.2012)
Several factors affect customer satisfaction. The kinds of product that banks offer to its
customers can cause customer satisfaction or dissatisfaction. Customer does not buy a product or
service for its own sake. They buy to acquire benefits that the terms of consumer need it is the
essential feature or benefit that the buyer expects to receive from using the product that
motivates buying behavior (Boating, 1994)

The service delivery process also plays a key role in customer satisfaction when the process of
service delivery is too long it lengthens customer waiting time

According t (Sasraku 2007) the physical evidence also plays a role in customer satisfaction the
physical evidence includes the edifice or buildings and its decorations an imposing banking hall
with comfortable seats places of conveniences etc. the office or building and its external and
internal decorations can satisfy a customer the customer can pride him or herself as costumer of
that bank.

Another service element that causes customer satisfaction or dissatisfaction is the people or they
employees delivering the product or service (covey, 2004) the employees occupy the first point
of contact with the customer. Employee behaviors are therefore impotent to customers if the
employee is cold or rude the customer takes it as a measure of the state of the company unhappy
employees will have difficulty in keeping customers happy (Dei- Tumi 2005)

Also, easy access to the bank premise would make a customer feel happy in transacting business
with a bank for example, if the bank premise is located on a high street. However,the nice edifice
of a banking hall will not be noticeable if customer service is poor and there `are, unnecessary
delayers and lack of personal support form staff (Sasraku, 2007)

The technology being used by the bank in service delivery could be a source of satisfaction to
costumer when electronic devise like computers are used they tend to speed the processing time
of transactions system and processing solely do no cerate satisfaction

Service system quality, behavioral service quality service transaction accuracy and machine
service quality are necessary to make the technology in use worthwhile (Aldlaingan&Buttle
2002)
Furthermore, the security of customer and their deposits in an area of concern to customers
when customer are assured of protection from external they feel secured and happy

For example, if a bank is situated at a place noted for criminal activates customers are scared and
dissatisfied (Sasraku, 2007).

2.9 customer satisfaction in banking service context

Customers are not reliable to evaluate services be for the service process takes place the
interaction with the service provider and the customer the so-called service, is key in the
evaluation of service performance (Gil, 2008) during these customer, the customer is able to get
an impression of the way the company provides its service. His/her experience is defined by the
interaction the organization then, the processes and the employees

According customer satisfaction is built upon the basis of service encounters service providers
have significant opportunities to manage the interactions that together form the experience (Wir
z 1994) they can design and the interactive production process select train and manage
serviceemployees, design and the service environment.; selectively target socialize and educate
customers.

In banking services, satisfaction is usually conceptualized as a multidimensional construct

(Manrai L.A, 2007) the list of bank service attributes used foe the measurement of satisfaction
composes element like appearance of the facility attitude and behavior of staff décor and
atmosphere, business hour interest rate waiting time bank customer may regard x=some of these
elements as being not equally important as the others.

2.10 Empirical framework

A difference between service quality and customer satisfaction

The literature on service has made a distinction between service quality and customer
satisfaction (Bitner 1990, Bolton & Drew, 1991 parasuraman et al 1988) As cited in Harr(2008)
this differentiation is important for firms to concentrate on enhancing their capability to satisfy
customers through high service quality
The position of scholars characterized by Parasuraman et al, (1988) is that service quality
involves an attitude and is an evaluation over several service encounters over time it is also ‘’
thought to be an overall assessment about a service category or an organization (parasuraman et
al 1988) In support of this respondents in parasuraman et al (1988)’s study demonstrated
satisfaction with specific service encounters but were not happy with the service quality of the
firm

Conversely, recent thought on customer satisfaction is summarized in the following definition of

satisfaction by Oliver (1981) as a’ psychological state resulting when the emotion surrounding
disconfirmed expectations is coupled with the consumer’s Prior feelings about the consumption

Experience ‘’ Moreover, Oliver (1981) distinguished customer satisfaction form service quality
in his definition of attitude as ‘’ the consumer’s relatively enduring affective orientation for a
product store or process while satisfaction is the emotional reaction following a disconfirmation
experience store or process which acts on the bats attitude level and is consumption – specific
oriel(Oliver, 1981 p 42

The two construct are related in that service encounters of customer satisfaction over time result
in perceptions of service quality (Oliver 1981 Parasuraman et al (1988) there is also a lot of
argument regarding whether customer satisfaction is the antecedent of service quality or the
outcome of service quality initially scholars take the position that satisfaction is an antecedent of
service quality since to reach an overall attitude ( service quality ) which implies an
accumulation of satisfactory encounters ( bitner1990 Bolton & Drew 1091) However other
scholars take the opposite view that service quality is the antecedent of customer satisfaction
Cronin &Taylor 1992 Ekinci 2004 rust & Oliver , 1994 swan & bowers

Empirical research by Cronin & Taylor (1992) showed that service quality has a significant
effect on customer satisfaction similarly recent studies by (Gonzalez & Brea 2005 &Ekinci
2004) using recursive structural models provided empirical support that service quality results in
concept than service quality which focuses specifically on dimensions of service

B Relation between service in quality and customer satisfaction

Private Banks dealing in retail banking Industry is consequently put into of pressures due to
wards increase in global competition

Different strategies are formulated to satisfy and retain the customer and the key of it increase
the service quality level Typically customers perceive very little difference in the banking
products offered by private banks dealing in service as any new offering is quickly matched by
competitors

Parasuraman et al (1985) and Zenithal et al (1990) noted that the key strategy for the success
and survival of any business institution is the deliverance of quality service to customers the
quality of service offered will determine customer satisfaction and attitudinal loyalty
(Ravichandran et al 2010)

Parasuraman A zeithmal, V A… & berry, LL (1988) found that the performance of the service
provider on core and relational dimensions of service was an important driver for customer
satisfaction in retail banking.

Chapter Three

3. Research Methodology

3.1 Research Design

The study focuses on the assessment of service quality on customer satisfaction in case of CBE (ticho
branch). In order to achieve objectives of the study; the required data need to be relevant and reliable.
Therefore, ai will use descriptive research design as it describes the problem and suggests some
recommendation on those problems.

3.2 Target population

Target populations of the study are customers and manager of CBE of Arbaminch branch, and the total
number of customer was70000, and one manager.
3.3 Sample Size Determination
From the total population of 70000 (seventy thousand) customers, the researcher derived 100(hundred)
customers as a sample by using Yamane (1967) formula

n= N/1+¿ N (e)2

n= 70000/1+70000(0.1)2 Where n= sample size

N= Total population size

70000/1+700 e= Acceptable level of error (0.1)

70000/701

99.85 Approximately 100

Thus, the researcher took 100 customers as a sample.

3.4 Sampling Techniques

The researcher used connivance sampling techniques of non-probability sampling. This is so because it
provides the opportunities for the researcher to take those who are willing and able to respond
properly.

3.5 Sources of Data

For the purpose of this research, both primary and secondary data were used. Primary data were
obtained from primary source which include the actual information received from customer and
managers of the bank. Secondary data has been gathered from book and other materials available in the
organization

3.6 Methods of Data Collection

The researcher obtained data through questionnaire and interview. Questionnaires consists close-ended
and the questions consisting two parts; service quality questionnaire and customer satisfaction
questionnaire, those were given to the customers of CBE-Arbamnich branch, whereas the interview was
conducted with the manager of the organization

3.7 Methods of Data Analysis and Presentation

After the relevant data has been collected, the researcher processed the data through tabulating and
percentage, and the processed data has been analyzed through descriptive analysis techniques. Then
the data has been interpreted, and finally, based on the findings, the recommendation was given.

CHAPTER FOUR
4. DATA ANALYSIS AND DISCUSSION OF RESULTS
4.1. INTRODUCTION
This chapter presents the analysis of the information gathered through questionnaire distributed
to customers of CBE-Arbaminch branch. It also presents the result of interview questions
conducted with the manager of the bank. Both background and general information gathered
from respondents is analyzed in this section.

.
4.2 Analysis of questionnaire

One hundred questionnaires were distributed to the respondents and out of the 100
questionnaires 91 of them is were collected with a response rate of 91 percent. However only 85
responses were valid with complete answers and the analysis was made on this response.

4.3 Background Information from Respondents

This section shows the background information of the respondents. The section includes the
demographic profile such as sex, age, educational background and occupation of the
respondents.

Table 4.1: Demographic profile for Customers

No Item Item Frequency Percent

1 Sex Male 50 58.8

Female 35 41.2

Total 85 100

2 Age 18-28 53 62.3

29-39 18 21.2

40-50 10 11.8

51-61 4 4.7

Total 85 100
 3 Education Illiterate 6 7

1-10 8 9.4

11-12 4 4.7

Diploma 12 14.1

Degree and Above 55 64.7

Total 85 100

4 Occupation Student 38 44.7

11 12.9

Self-employed

Government 14 16.5
employed

Unemployed 22 25.9

Total 85 100

Source Survey Result, 2010 E.C

Item 1 of the above table shows that 62.3% of the respondents are between the age group of 18-28,
21.2% of the respondents are under the age group of 29-39, 11.8% of the respondents are 40-50and the
remaining 4.7 of the respondents are under the age group of 51-61. This indicates that majority of the
customers of CBE are adult.

In the above table, item2 shows that out of the total respondents, 50(58.8%) are males and the
remaining 35(41.2%) are females, and this indicates that the majority of the respondents are male.

As the item 3 of above table indicates, 7% of the customers are illiterate, 9.4% of the customers are in
grade of 1-10, 4.7% of customers are in grade 11-12, 14.1% of the customers are diploma holders and
the remaining 64.7% of the customers are degree and above. This shows that large number of the
respondents 67(78.8%) are at least diploma holders, and therefore they can provide accurate and
relevant information for the study

Item 4 of the above table indicates that 38(44.7%) of the respondents are students, 11(12.9%) of the
respondents are self-employed, 14(16.5%) of the customers are government employee, and the
remaining 22(25.9%) of the respondents are unemployed. This shows that the majority of CBE
customers are students.

Generally, the above table shows that most of the customers are educated and have the diploma and
degree qualification, and this indicates that the respondents know more about the question and can
give the necessary and relevant information for the study.

4.4. Descriptive Statistical Analysis

4.4.1. Response and percentage of service quality dimension

Table 4.2 .reliability

No Item Response in no Response in %
1.1 Banks fulfill its
promise as promised
Very satisfied 22 25.8
Satisfied 53 62.4
Neutral 7 8.2
Dissatisfied 2 2.4
Very dissatisfied 1 1.2
Total 85 100%
Source: survey result (2010 E.C)

According to item1.1 of table 4.4.1, the result of customer response towards the question banks
fulfills its promise. From the result, it can be obtained that 25.8 percent of customer of CBE
Arbaminch branch are strongly satisfied with the question, majority (62.4 percent) are satisfied,
8.2 percent are neutral, 2.4 percent are dissatisfied and 1.2 percent are very dissatisfied. The
above table indicates that 88.2 percent of respondent perception towards the bank fulfillment of
its promise is good and the bank managers should possess a little effort in order to satisfy the
remaining 8.2and 3.6 percent respectively, are neutral and not satisfied.

No Item Response in no Response in %

1.2 Bank perform the
service exactly at the
 first time
Very satisfied 32 37.6
Satisfied 44 51.8
Neutral 2 2.4
Dissatisfied 5 5.8
Very dissatisfied 2 2.4
Total 85 100%
Source survey result (2010 E C)

The above table shows that for the question of banks perform the service exactly at the first time,
37.6 percent of respondents are strongly satisfied, majority (51.8 percent) of respondent are
satisfied, 2.4 percent of respondent are neither satisfied nor dissatisfied, 5.8 percent of
respondent are dissatisfied and 2.4 percent are strongly dissatisfied, and the table shows that
most of customer of bank are happy by the treatment which is performed by the bank. When they
get the service for the first time and the bank should treat those new customers who are not
happy in order to shoot the climax of their satisfaction.

No Item Response in no Response in %

1.3 Bank shows a keen
interest in solving
your problems
Very satisfied 26 30.5
Satisfied 40 47.1
Neutral 11 12.9
Dissatisfied 6 7.1
Very dissatisfied 2 2.4
85 100%
Source survey result (2010 E.C)

Above table indicates that 30.5 percent customers are very satisfied, 47.1percent of customer are
satisfied at the bank promised efficiently and on time, 12.9 percent are neutral and 7.1 and 2.4
percent customer are dissatisfied and very dissatisfied, respectively. With this specific reliability
question, customer is satisfied. The bank must also maintain this aspects and little bit effort is
needed to get worse.

No Item Response in no Response in %

1.4 Bank insist on error
free record
Very satisfied 29 34.1
Satisfied 25 29.4
Neutral 23 27.1
Dissatisfied 7 8.2
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)

Customer are asked about whether the bank employee provide error free service or not, and 34.1
percent of customer are strongly satisfied, 29.4 percent of customer are satisfied, 27.1 percent of
customer are neutral and 8.2 percent customers are dissatisfied and also 1.2 percent of customers
are strongly dissatisfied. The table shows most of respondents are satisfied, however, the
respondent who are neither satisfied nor dissatisfied are a little big, so the manager of the bank
need to give orientation for the employee to make error free record when they serve the
customers

When we see overall average of reliability question 32.1percent of respondents are very satisfied,
47.6 percent are satisfied, 12.6 percent are neutral, 5.9 percent are dissatisfied, and 1.8 percent
are very dissatisfied. This show that majority (79.7 percent) of the respondents are satisfied and
highly satisfied by the reliability dimensions.

Table 4.3 assurance

No Item Response in no Response in %

2.1 Banks staff behavior
instills confidence in
me
 Very satisfied 33 38.8
Satisfied 34 40
Neutral 11 13
Dissatisfied 7 8.2
Very dissatisfied - -
Total 85 100%
Source survey result (2010 E.C)

Table4.4.b, of above item shows the result of bank staff behavior and 38.8 percent are very
satisfied, 40 percent are satisfied, 13 percent are neutral and 8.2 percent are dissatisfied.
Therefore, majority of customers are satisfied with the first assurance question. The bank should
possess a little effort to get the climax aim that of satisfying those who did not satisfied and the
neutral customers.

No Item Response in no Response in %

2.2 I feel safe in my
transaction with the
bank
Very satisfied 40 47.1
Satisfied 30 35.3
Neutral 9 10.6
Dissatisfied 5 5.8
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)

Customers are asked whether they feel safe in transactions with the banks, 47.1 percent of
customers are strongly satisfied, 35.3 percent of customers are satisfied, 10.6 percent of
customers are neither satisfied nor dissatisfied, 5.8 percent of customer are dissatisfied, and 1.2
percent customer are strongly dissatisfied. Employee of the bank must shift those who are not
very satisfied, not satisfied, and neutral to highly satisfied customers.

No Item Response in no Response in %

 2.3 Banks staff are
courteous with me
Very satisfied 20 23.5
Satisfied 36 42.4
Neutral 10 11.7
Dissatisfied 17 20
Very dissatisfied 2 2.4
Total 85 100%
Source survey result (2010 E.C)

According to the above table, 23.5 of the respondent are strongly satisfied with staff
courteousness to customers, 42.4 percent of the respondents are satisfied, 11.7 percent of
respondents are neutral, 20 percent of respondents are dissatisfied. It is better for employee of the
bank to improve their behavior in a bit way in order to satisfy their customers for the smooth
running of the transaction created between them.

No Item Response in no Response in %

2.4 Bank staff have the
knowledge of to
answer all my
question
Very satisfied 18 21.2
Satisfied 33 38.8
Neutral 19 22.4
Dissatisfied 10 11.7
Very dissatisfied 5 5.9
Total 85 100%
Source survey result (2010 E.C)

For the question about employee of the bank have enough knowledge to answer required
questions, 21.2 percent are strongly satisfied, 38.8 percent of customer are satisfied, 22.4 percent
of customer are neutral, 11.7 percent of customer are dissatisfied and 5.9 percent of the customer
are strongly dissatisfied. Employee must update their knowledge to answer the entire question of
customers even though they satisfy them.

When we see overall average of assurance question 32.6 percent of respondents are very
satisfied, 39.1 percent are satisfied, 14.4 percent are neutral, 11.5 percent are dissatisfied. This
show that majority (71.7 percent) of respondent are satisfied and highly satisfied by the
assurance dimensions.

Table 4.4 responsiveness

No Item Response in no Response in %

3.1 Bank staff tell you
exactly the time the
service will be
performed
Very satisfied 14 16.5
Satisfied 27 31.7
Neutral 27 31.7
Dissatisfied 16 18.9
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)

Customer are asked whether the bank keeps them informed about when service will be
performed and 16.5 percent of customers are strongly satisfied, 31.7 percent of respondents are
satisfied and neutral each, 18.9 percent of respondent are dissatisfied and 1.2 percent of
respondents are strongly dissatisfied. Although large numbers of respondents are satisfied, the
neutral and not satisfied respondent are need information about the service delivered by the bank.

Item Item Response in no Response in %

3.2 Bank staff give your
 prompt service
Very satisfied 20 23.5
Satisfied 35 41.2
Neutral 4 4.7
Dissatisfied 22 25.9
Very dissatisfied 4 4.7
Total 85 100%
Source survey result (2010 E.C)

Another is whether the bank staff gives prompt services for the customers among the
respondent’s. For this, 23.5 percent of respondent are strongly satisfied, 41.2 percent are
satisfied, 4.7 percent neutral, 25.9 percent dissatisfied, and 4.7 percent strongly dissatisfied. The
bank needs to improve speed of its service, because certain number of respondent are below
strongly satisfied.

No Item Response in no Response in &

3.3 Bank staff always
willing to assist you
Very satisfied 23 27.1
Satisfied 40 47.1
Neutral 10 11.7
Dissatisfied 11 12.9
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)

Above table shows 27.1 percent of respondent are strongly satisfied, 41.7 of respondent are
satisfied, 11.7 percent of respondent are neither satisfied nor dissatisfied, 12.9 of respondent are
dissatisfied and 1.2 percent of respondent are strongly dissatisfied, with the bank willingness to
assist customer. Employees of the bank have to improve their behavior in assisting customers in
order to satisfy and make them loyal to the bank.

No Item Response in no Response in %

 3.4 Banks staff are not
busy to respond to
my question
Very satisfied 13 15.3
Satisfied 31 36.5
Neutral 22 25.9
Dissatisfied 12 14.1
Very dissatisfied 7 8.2
Total 85 100%
Source survey result (2010E.C)

Table 4.4.1c. of item 3.4 show that 15.3 of customer are strongly satisfied, 36.5 percent of the
respondents are satisfied, 25.9 percent of the respondent are neutral, 14.1 percent of the
respondent are dissatisfied and 8.2 percent of the respondent are strongly dissatisfied for the
question that banks staff are not too busy to respond to their question. The manager the bank
should tell the employee to serve their customer by giving their time effectively in order to
satisfy the neutral and not satisfied customers.

When we see overall average of responsiveness questions 20.6 percent of respondent are very
satisfied, 39.1 percent are satisfied, 18.5 percent are neutral, 18 percent are dissatisfied and the
remaining 3.8 percent are very dissatisfied. This show that majority (59.7 percent) of the
respondents are satisfied and highly satisfied by responsiveness of dimensions. This implies that
satisfy them.

Table 4.5.empathy

No Item response in no Response in %

4.1 Banks give me
individual attention
Very satisfied 15 17.7
 Satisfied 47 55.3
Neutral 8 9.4
Dissatisfied 12 14.1
Very dissatisfied 3 3.5
Total 85 100%
Source survey result (2010 E.C)

The customers requested to tell whether employees of the bank give individual attention for
them. For this , 17.7 percent of customers are strongly satisfied, majority (55.3 percent) of the
customers are satisfied, 9.4 percent of customers are neutral, 14.1 percent of the customers are
dissatisfied and 3.5 percent of the respondents are strongly dissatisfied. Employees must
maintain their current behavior with regard to giving individual attention to customers and make
lightly effort to satisfy those neutral and not satisfied customers.

No Item response in no response in %

4.2 Banks operating
hours convenient to
me
Very satisfied 21 24.7
Satisfied 45 52.9
Neutral 8 9.4
Dissatisfied 9 10.6
Very dissatisfied 2 2.4
Total 85 100%
Source survey result (2010 E.C)

The abobe tale indicates, 24.7 percent of the respondents are strongly satisfied, 52.9 percent of
the respondents aresatisfied, 9.4 percent of the respondents are neither satisfied no
dissatisfied,10.6 percent of the respondents are dissatisfied and the rest 2.4 percent of the
respondents are strongly dissatisfied. The bank should keep this operating hour and if it is
possible improve in a little bit, as it results in higher satisfaction of the customer.
 No Item Response in no Response in %
4.3 The bank has my
interest at heart
Very satisfied 16 18.8
Satisfied 43 50.6
Neutral 10 11.7
Dissatisfied 14 16.5
Very dissatisfied 2 2.4
Total 85 100%
Source survey result (2010 E.C)

Above table indicates that the result of whether the bank carries customers in interests at heart or
not. Accordingly, 18.8 percent of the respondents are strongly satisfied, majority(50.6 percent) of
the respondents are satisfied, 11.7 percent of the respondents are neither satisfied nor dissatisfied,
16.5 percent of the respondents are dissatisfied and the rest 2.4 percent of the respondents are
strongly dissatisfied. The bank is satisfying the customers significantly with this aspect and
should maintain or improve the performance in some way to satisfy the customers’ interest.

No Item Response in no Response in %

4.4 Bank’s staff
understand my
specific needs
Very satisfied 17 20
Satisfied 37 43.5
Neutral 12 14.1
Dissatisfied 18 21.2
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)
The last question for empathy is whether the bank staff understands specific needs of the
customer then 20 percent of the respondents are strongly satisfied, 43.5 percent of the customers
are satisfied, 14.1 percent neutral, 21.2 percent of the respondents are dissatisfied and 1.2 percent
of the customers are strongly dissatisfied. Employees must keep this performance as it is and if
possible to enhance in order to satisfy the customers.

When we see the overall average of empathy questions 21 percent of the respondents are very
satisfied, 48.7percent are satisfied, 11.5percent are neutral, 16.7 percent are dissatisfied, and the
remaining 2.1percent are very dissatisfied. This show that the majority(69.7percent) of the
respondents are satisfied and highly satisfied by the empathy dimensions which represents the
individualized attention that firms provide to its customers, which is supported by (Van
Iwaardenet.,2003) the main focus of the empathy dimension of service quality is to retain
customers.

Table 4.6 tangibles

No Item Response in no Response in %

5.1 The bank’s employee
has a neat and
professional
appearance matter
Very satisfied 49 57.6
Satisfied 27 31.8
Neutral 7 8.2
Dissatisfied 2 2.4
Very dissatisfied - -
Total 85 100%
Source survey result (2010 E.C)
Above table shows that, 57.6percent of customers are strongly satisfied,31.8percent of the
respondents are satisfied ,8.2percent of the respondents are neutral and 2.4 percent of the
customers are dissatisfied with regards to staff’s appearance the bank should keep the existing
condition.

No Item Response in no Response %

5.2 Material associated
with the service like
pamphlets,
statements, are
visually appealing at
the bank
Very satisfied 35 41.2
Satisfied 32 37.6
Neutral 10 11.8
Dissatisfied 7 8.2
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)

According to the above table, 41.2percent of the respondents are strongly satisfied, 37.6percent
of the respondents are satisfied 11.8percent of the respondents are neither satisfied nor
dissatisfied, 8.2 percent of the respondents are dissatisfied and the rest of 1.2percent of the
respondents are strongly dissatisfied. The bank should work more to improve material associated
with the service in the bank to satisfy the customers.

No Item Response in no Response in %

5.3 Bank’s physical
facilities visually nice
Very satisfied 12 14.1
Satisfied 31 36.5
Neutral 11 12.9
 Dissatisfied 22 25.9
Very dissatisfied 9 10.6
Total 85 100%
Source survey result (2010 E.C)

According to the table4.4.1c, 14.1 percent of the respondents are strongly satisfied, 36.5 percent
of the respondents are satisfied, 12.9 percent of the respondents are neither satisfied nor
dissatisfied, 25.9 percent of the respondents are dissatisfied and 10.6 percent of the respondents
are strongly dissatisfied with this specific tangible dimension question. It is better for the bank to
work more to improve the physical facilities in the bank in order to enhance customer
satisfaction.

No Item response in no response in%

5.4 Banks has modern
equipment and tools
(like ATM)
Very satisfied 27 31.8
Satisfied 44 51.7
Neutral 4 4.7
Dissatisfied 8 9.4
Very dissatisfied 2 2.4
Total 85 100%
Source survey result (2010 E.C)

Customers are asked whether the bank has modern equipment and tools or not. It shows that 31.8
percent of the respondents are strongly satisfied, majority(51.7percent) of the respondents are
satisfied, 4.7percent of the respondents are neutral, 9.4 percent of the respondents are dissatisfied
and 2.4percent of the respondents are strongly dissatisfied. Therefore, the bank has to maintain
the existing situation and is better to further improve the equipment and tools of the bank, if it is
possible.

When we see the overall average of tangibles questions, 36.2 persent of the respondents are very
satisfied, 39.4 percent are satisfied, 9.4 percent are neutral, 11.5 percent are dissatisfied, and the
remaining 3.5 percent are very dissatisfied. This show that majority(75.6 percent) of the
respondents are satisfied and highly satisfied by the empathy dimensions.

 In general, the result of the survey implies that respondents of CBE Arbaminch branch
are very satisfied and satisfied with the quality of service provided by the bank, on the
other side, this can show that the service quality has significant effect on the customer
satisfaction which is supported with the study of empirical research by Cronin &Taylor
(1992).

4.4.2 Customer satisfaction

Table 4.7 response and percentages of customer satisfaction

No Item Response in no Response in %

1.1 I’m satisfied with the
bank’s complete
range services
Very satisfied 20 23.5
Satisfied 53 62.4
Neutral 3 3.5
Dissatisfied 9 10.6
Very dissatisfied - -
Total 85 100%
Source survey result (2010 E.C)
The result indicates that 23.5 of the respondents are strongly satisfied, majority (62.4 percent) of
the respondents are satisfied, 3.5 percent of the respondents are neither satisfied nor dissatisfied
and 10.6 percent of the respondents are dissatisfied with the bank’s complete range of service.
The bank ought to try to enhance the satisfaction level of entire customers in relation to the
complete range of its services.

No Item Response in no Response in %

1.2 I’m satisfied with the
performance of this
bank
Very satisfied 23 27
Satisfied 35 41.2
Neutral 18 21.2
Dissatisfied 9 10.6
Very dissatisfied - -
Total 85 100%
Source survey result (2010E.C)

Table 4.4.2.of item 1.2 shows the level of customer’s satisfaction to performance of the
employees. The result indicates majority 27 percent of the respondents are strongly satisfied,
41.2 percent of the respondents are satisfied, 21.2 percent of the respondents are neither satisfied
nor dissatisfied and 10.6 percent of the respondents are dissatisfied with the performance of the
employees of this banks. Certainly, most customers of the bank are satisfied in employee’s
performance, but the bank should keep this situation and work more to create better satisfaction
to entire customers of the bank.

No Item Response in no Response in %

1.3 I’m satisfied of being
a client of this bank
Very satisfied 33 38.8
Satisfied 41 48.2
Neutral 3 3.5
 Dissatisfied 6 7.1
Very dissatisfied 2 2.4
Total 85 100%
Source survey result (2010E.C)

While the customers are asked the level of the customer satisfaction to the performance of the
employees, 38.8 percent of the respondents are strongly satisfied, 48.2percent of the respondents
are satisfied, 3.5 percent of the respondents are neither satisfied nor dissatisfied, 7.1 percent of
the respondents are dissatisfied and the least (2.4percent) of the respondents are strongly
dissatisfied with the performance of the employees of this bank. From the above analysis, most
customers are satisfied by being a client of the bank and the significant number of respondents is
neutral and not satisfied. Therefore, the bank ought to make an endeavor to create a sense of
belonging in the mind of the customers.

No Item Response in no Response in %

1.4 I’m satisfied with the
bank employees
professional
competence
Very satisfied 21 24.7
Satisfied 40 47.1
Neutral 19 22.4
Dissatisfied 5 5.8
Very dissatisfied - -
Total 85 100%
Source survey result (2010E.C)
Regarding above table, 24.7 of the respondents are strongly satisfied, 47.1 percent of the
respondents are satisfied, 22.4 percent of the respondents are neither satisfied nor dissatisfied,
and 5.8 percent of the respondents are dissatisfied with the bank employee’s professional
competence. Although most of the bank customers are highly satisfied with professional
competence of employee, the bank should improve in order to better satisfy specially those
dissatisfied

No Item Response in no Response in %

1.5 I’m satisfied with the
quick service of this
bank
Very satisfied 20 23.5
Satisfied 35 41.2
Neutral 7 8.2
Dissatisfied 19 22.4
Very dissatisfied 4 4.7
Total 85 100%
Source survey result (2010 E.C)

According to the above table, 23.5 percent of the respondents are strongly satisfied, 41.2 percent
of the respondents are satisfied,8.2 percent of the respondents are neither satisfied nor
dissatisfied, 22.4 percent of the respondents are dissatisfied and 4.7 percent of the respondents
are strongly dissatisfied with the quick service of this bank Accordingly, the bank should also
improve speed of the services to address those who are neutral dissatisfied.

No Item Response in no Response in %

1.6 I’m satisfied with the
respectful behavior of
employees
Very satisfied 20 23.5
 Satisfied 45 53
Neutral 3 3.5
Dissatisfied 16 18.8
Very dissatisfied 1 1.2
Total 85 100%
Source survey result (2010 E.C)

Customer are asked whether they are satisfied with respectful behavior of employees, then
majority (23.5 percent) of the respondents are strongly satisfied 53percent of the respondents are
satisfied, 3.5 percent of the respondents have neither satisfied nor dissatisfied, 18.8 percent of the
respondents are dissatisfied and the list (1 percent) of the respondents are strongly dissatisfied
with the respectful behavior of employees. The bank employees should first keep their existing
behavior to satisfy dissatisfied ones.

Analysis of the result of Interview questions

The researcher conducted the interview with manager of CBE-Arbaminch branch to get
additional data for the study. The following section shows the analysis of the information gained
through interview with manager of the bank.

1. What mechanisms do you have for delivering quality service?

 ATM machine
 Mobile banking
 E-payment
 CBE-birr
 Internet banking
 Introduction of technologically advanced equipments and so on.

2. Do you think the current mechanisms are prorating for quality service on customer
satisfaction?
  The above mechanisms are necessary to expand the branches of CBE in different areas in
order to provide access for the customers to get various service of the bank.

3. Are the current service quality delivering mechanisms necessary in the future?

 Yes, since such mechanisms support our long term intention including the vision of the
organization, and it is long term designed mechanism based on the current technological
development of a country.

4. Which of the complaints directly related to management problem?

 No complaints are attributable to manager problem, and most of them are external factors
like connection problem of ATM.

5. Which of the complaints are directly related to customer’s problem?

 Lack of awareness of customers
 Network interruption
 Problem happened by giving a loan advance.

CHAPTER FIVE
5. FINDINGS, CONCLUSSION AND RECOMMENDATION

5.1. DISCUSSION OF FINDINGS

The main purpose of this study was to assess service quality on customer satisfaction in case of
CBE Arbaminch branch. The data were obtained through questionnaires from customers of the
bank. The result of this study shows that, most of the respondents are satisfied and have a good
image towards the service quality delivered by the commercial bank of Ethiopia. Most of the
customers are very satisfied and satisfied respectively with the reliability dimensions of service
quality followed by tangibles, assurance, empathy and responsiveness. Moreover, customers
were relatively less satisfied with responsiveness dimensions of service quality. And as the result
of descriptive statistics also indicates that customers are satisfied with the service quality.
5.2 conclusions

The study indicates that, the overall average number of very satisfied and satisfied are greater
with the reliability dimensions of service quality that of (79.9percent) and followed by tangibility
(75.6), assurance (71.7percent) and empathy (69.7percent). Moreover, the numbers of very
satisfied and satisfied are relatively less for the responsiveness (59.7percent) dimensions. In
other words, customers were most satisfied with the reliability dimension of service quality.
However, relatively customers were less satisfied with the responsiveness dimensions.

Generally, the overall average of service quality dimension indicates that the satisfied number of
respondents for empathy dimension that of (48.7percent) is the most and followed by
reliability(47.6percent), tangibility(39.4percent) and that of assurance and
responsiveness(39.1percent) each. This indicate most of the customers respond that they are
satisfied by the overall service quality delivered by the bank.

From the finding of this study, the researcher conclude most saving account holding customers
of CBE have a positive response about their satisfaction level by the five service quality
dimensions, that are tangibility, reliability, responsiveness, assurance and empathy.

5.3 Recommendations

Based on the findings and conclusions of the study, the researcher forwarded the following
recommendations to the management of the CBE.

Among the average satisfied number of respondents, the reliability dimension of service quality
is relatively less compared with the empathy dimension of service quality. However, it was one
of the most important factors influencing customer satisfaction. Therefore, bank managers
should enhance customer’s reliability on the bank by fulfilling the service as promised,
performing the service exactly at the first time, showing a keen interest in solving customer’s
problems, providing the service at the promised time by insisting an error free record and others.
If customers do not have a trust on the banking service, it is meaningless to talk about the good
will of the bank. Therefore, the bank should handle its customers well to achieve its
organizational intentions. And it is better to know that customers are the key for any business
organizations success.

Assurance dimension was also considered as one of the most important factor influencing
customer satisfaction. But, the customers of the banks were relatively less satisfied in terms of
the assurance dimensions when compared with reliability and tangibility dimensions. One way of
addressing this could be by treating customer to feel safe in their transaction with the bank,
showing great courteous, making the customer confidence to instill about their transaction and
answering the customers question in the way they can understand. This means that the bank
management should focus on this factor to maximize customer satisfaction.

As findings of the study shows responsiveness dimension is relatively low by the customer
response of very satisfied and satisfied respectively. However, in order to gain sustained
customers, the employees of the bank should have told for them exactly the time the service will
be performed, to give prompt service, willing to assist them and staffs need not busy to respond
to their question.

In addition the bank should create some mechanism to minimize the network problem or to find
other techniques that unstop the service at the time of disconnection of the network and also
should have to eliminate the ATM problem as much as possible in order to sustain the customer
and to keep them loyal.
 REFERENCES

 Allegan, A.H. and Buttle, F.A. (2002), “SYSTRA-SQ; a new measure of bank service
quality”, international journal of industry management, vol. 13 No. 4, pp.362-81.
 Babakus E, Boller GW (1982), an imperialassesement of the SERVQUAL scale, j.Bus.
Res. 24(3); 253-268
 Berry LL, Zenithal VA, ParasuramanA (1990). Five imperatives for improving service
quality. Sloan manage rev, 31(4); 29-38
 Carman, Jam. (1990), consumer perception of service quality; an assessment of the
SERVQUAL dimensions. Journal of retailing, 66(spring), pp.33-35
 Cronin, J.J.Jr., and Taylor, S.A. (1992). Measuring service quality; a reexamination and
extension. Journal of marketing, 56(July), pp 55-66.
 Ekinci, Y. (2004). “an investigation of the determinants of customer satisfaction”,
tourism analysis, 8(2), 197-203.
 Garvin, D.A. (1983). Quality on the line. Harvard business review, pp.65-75
 Hartman, D.E. and lindgrenJ.H.Jr (1993). “Consumer evaluations of goods and services-
implications for services marketing”, journal of services marketing, 7,2,4-15.
 Kotler P. and Kelvin K., (2006) marketing managemet, 12th edition person education inc,
new jersey.
 Manrai L.A., manrai, A.K. (2007), “a field study of customers swithing behavior for bank
services”, journal of retailing and consumer services, vol. 14, issue 3, pp.208-215.
 RathmellJ.M. (1966), “” what is meant by services?” jornal of marketing, 30,32-36.
 Regan W.J. (1963). “the service revolution”, journal of marketing, 47,57-62.
 Zeithaml, V.V., Bitner, M.J and gremler, D.D (2006). Services marketing; integrating
customer focus across the firm. McGraw Hill, newyourk.
 APPENDIX A

ARBAMINCH UNIVERSITY

COLLEGE OF BUSSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Questionnaires to be filled by customer of CBE-Arbaminch branch

Dear the respondents, the aim of this questionnaire is only for the academic research purpose as a
partial fulfillment in order to get BA degree in management. Your cooperation is important for
finding of the study, please provide your guanine response, and, thank your cooperation in
advance!!

Instruction

 No need of writing the name

 Give your answer by putting X mark
Personal Information

1. Sex

Male □ Female □
2. Age

18-28 □ 29-39□ 40-50□ 51-61□

3. Qualification

Illiterate □ 1-10 □ 11-12 □ diploma □ Degree

and above □

4. Occupation Student □ Self-employed □ Government employed □

Unemployed □

The General information

Put your answer by putting x mark according to your choice in the table
where;

1=very satisfied 2= satisfied 3=neutral

4=dissatisfied 5=very dissatisfied

 RESPONSIVENESS
9 Banks staff tell you exactly the time the service will be
performed
10no Item
Banks staff give your prompt service
Very satisfied
11 Banks staff always willing to assist you
Very dissatisfied
12 Banks staff are not busy to respond to my
1 questions
2 3 4 5
RELIABLITY
EMPATHY
131 Banks fulfill
Banks giveitsme
promise at theattention
individual time
14 indicates
Banks operating hours convenient to me
2 Banks perform the service exactly at
15 The bank has my interest at heart
the first time
16 Banks staff understands my specific needs
3 Banks show a keen interest in solving
TANGIBLES
your problems
174 Theinsist
Banks banksonemployee
error freehas a neat and professional
record
appearance matter
ASSURANCE
18 Material associated with the service like pamphlets,
5 Banks staff behavior instills
statements are visually appealing at the bank
confidence in me
19 Banks physical facilities visually nice like that of
6 I feel safe in my transaction with the
parking, client sitting material
bank
20 Banks has modern equipment and tools like ATM
7 Banks staff are courteous with me
8 Partstaff
Banks 2: customer satisfaction
have the knowledge toquestionnaire
21 answer all my questions
I’m satisfied with the banks complete service

22 I’m satisfied with the performance of the employees of

this bank
23 I’m satisfied of being a client of this bank

24 I’m satisfied with the bank employees professional

competence
25 I’m satisfied with the quick service of this bank
26 I’m satisfied with the respectful behavior of employees
Interview Question for Manager of CBE Abaminch Branch

1. What mechanisms do you have for delivering quality service?

2. Do you think the current mechanisms are prorating for quality service on customer
satisfaction?
3. Are the current service quality delivering mechanisms necessary in the future?

4. Which of the complaints directly related to management problem?

5. Which of the complaints are directly related to customer’s problem?

.