ASSESSMENT OF SERVICE DELIVERY AND CUSTOMER

SATISFACTION (THE CASE OF AWASH BANK S.C BISHOFTU

BRANCH)
RESEARCH PROPOSAL/PAPER SUMMITTED TO DEPARTEMENT OF
ACCOUNTING AND FINANCE FOR THE FULLFILMENT FOR
REQUIREMENTS OF BACHELOR OF ART DEGREE IN ACCOUNTING
AND FINANCE

NAME ID
Getachew Sintayehu 0320/18
Meron mamo 1380/18
Janet wondewosen 0327/18
Helen abate 0324/18
Haylu kebede 0634/18

Under the adviser of: Mr. Lemma (MSC)

ADMAS UNIVERSITY
FACULITY OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
March, 2022
BISHOFTU, ETHIOPIA
 ADMAS UNIVERSITY

FACULTY OF BUSINESS

DEPARTEMENT OF ACCOUNTING AND FINANCE

EXAMINERS’ APPROVAL SHEET

______________________________ _____________ _______________

Dean, Department Head Signature Date

______________________________ ______________ ________________

Advisor Signature Date

______________________________ _______________ ________________

Internal Examiner Signature Date

______________________________ _______________ ________________

External Examiner Signature Date

i
DECLARATION
the research work is based on our desire to investigate the Assessment of service delivery and
customer satisfaction (the case of awash bank S.C bishoftu branch) we, the undersigned, declare
that this research is our original work and all sources of materials used for the thesis have been
suitably acknowledged.

NAME SIGNATURE

1. Getachew Sintayehu _________________

2. Meron mamo _________________
3. Janet wondewosen _________________
4. Helen abate _________________
5. Haylu kebede _________________

ii
CERTIFICATION
we certify that this research work titled “investigate the Assessment of service delivery and
customer satisfaction (the case of awash bank S.C bishoftu branch)” was undertaken and finalized
by Getachew Sintayehu, Meron mamo, Janet wondewosen, Helen abate and Haylu kebede that
the research work was supervised by us and submitted to the department of Accounting and
Finance, Faculty of Business, Bishoftu, Ethiopia.

____________________________ _________________ ________________

Name advisor Signature Date

iii
ACKNOWLEGEMENT
For most, we would to express our sincere gratitude to our advisor instructor lemma (MSC) Head
of accounting and finance department for continuous support of our partial fulfillment of degree
and for his patience, motivation, enthusiasm, and immense knowledge. His guidance helped us in
all the time of research proposal and writing of this study.

Besides of our advisor, we would like to thank the rest of our thesis community directly or
indirectly supports us giving necessary information.

We also greatly indebted to Awash Bank former colleagues for their cooperation in collecting the
data on time. Finally, special thanks goes to all to friends for all the encouragements and supports.

Thank you all!

iv
ABBREVIATIONS AND ACRONOMY
AB = Awash Bank

NBE = National Bank of Ethiopia

SERVQUAL = Service Quality

SPSS= Statistical Package for Social Science

A=Borrower account holder
B=saving account holder

v
DECLARATION ............................................................................................................................ ii
CERTIFICATION ......................................................................................................................... iii
ACKNOWLEGEMENT.............................................................................................................. iv
ABBREVIATIONS AND ACRONOMY .................................................................................... v
LIST OF TABLE ......................................................................................................................... viii
CHAPTER ONE ............................................................................................................................. 1
1. INTRODUCTION ...................................................................................................................... 1
1.1 BACK GROUND OF THE STUDY ........................................................................................ 1
1.2 BACKGROUND OF THE ORGANIZATION ........................................................................ 2
1.3 STATEMENT OF THE PROBLEM ................................................................................... 4
1.4. OBJECTIVES OF THE STUDY ............................................................................................. 5
1.4.1 General objective: ................................................................................................................ 5
1.4.2 Specific Objectives ................................................................................................................ 5
1.5 RESEARCH QUESTIONS ...................................................................................................... 5
1.6 DELIMITATION OF THE STUDY ........................................................................................ 5
1.7 SIGNIFICANCE OF THE STUDY.......................................................................................... 6
1.8 ORGANIZATION OF THE STUDY ....................................................................................... 6
CHAPTER TWO......................................................................................................................... 7
1. INTRODUCTION ................................................................................................................... 7
2. LITERATURE REVIEW ........................................................................................................ 7
2.1 THEORETICAL REVIEW ................................................................................................... 7
2.1.1Customer Service ................................................................................................................ 7
2.1.2 Service Quality ................................................................................................................... 7
2.1.3 Service quality Dimensions................................................................................................ 8
2.1.4 Service Quality Models ...................................................................................................... 9
2.1.5 SERVQUAL..................................................................................................................... 10
2.1.6 Customer satisfaction ....................................................................................................... 10
2.1.7 Customer Satisfaction Measurement ................................................................................ 11
2.1.8 Importance of Customer Satisfaction ............................................................................... 11
2.1.9 Determinants of Customer Satisfactions .......................................................................... 11
2.1.10 Perception of Equity or Fairness .................................................................................... 12
2.2 EMPIRICAL REVIEW ....................................................................................................... 16

vi
2.2.1 Establishment of Commercial Bank of Ethiopia .............................................................. 18
2.2.2 Services Rendered by Commercial Bank of Ethiopia ...................................................... 18
2.2.3 Establishment of awash bank ........................................................................................... 18
2.2.4 Services Rendered by awash Bank................................................................................... 19
2.3 Total Quality Management.................................................................................................. 19
2.4 CONCEPTUAL FRAME WORK ...................................................................................... 20
3. RESEARCH METHODOLOGY ...................................................................................... 21
3.1INTRODUCTION ............................................................................................................ 21
3.2 RESEARCH DESIGN ..................................................................................................... 21
3.3 SAMPLE SIZE AND SAMPLING PROCEDURES ...................................................... 22
3.3.1 Population ..................................................................................................................... 22
3.3.2 Sampling Techniques ................................................................................................... 22
3.3.3. Sample Size ................................................................................................................. 22
3.4 SOURCE OF DATA AND COLLECTION METHOD ................................................. 24
3.4.1 Sources of Data and Type ............................................................................................. 24
3.4.1.1. Primary Data Source ................................................................................................. 24
3.5 Method of data collection ................................................................................................ 24
3.6DATA ANALYSIS AND PRESENTATION .................................................................. 25
3.6.1 Method of Data Analysis .............................................................................................. 25
3.7. Ethical considerations ..................................................................................................... 26
3.8DEFINITION OF CONCEPTS ........................................................................................ 27
3.8.1. Five dimensions of service quality .............................................................................. 27
3.8.2. How to measure the five dimensions of service quality .............................................. 28
3.8.3. Advantages of service quality questionnaires ............................................................. 29
3.9 work plan time schedule and cost estimation .................................................................. 29
3.9.1 Work plan or time schedule: ......................................................................................... 29
3.9.2Budget needed for research Details ............................................................................... 30
3.4References (bibliography) ................................................................................................ 31

vii
 LIST OF TABLE
Table 1: Service quality and customer satisfaction model ................................................................... 20
Table 2: work plan .................................................................................................................................... 29
Table 3: budget needed for research ....................................................................................................... 30

viii
 CHAPTER ONE
1. INTRODUCTION

1.1 BACK GROUND OF THE STUDY

The objective of this study is to seek and measure the level of customer satisfaction and services
rendered in the bank of awash at district of bishoftu branch. As a matter of fact, many banks
subscribe to the fact that high customer satisfaction will lead to greater customer loyalty (Yi, 1991;
Anderson and Sullivan, 1993; Boulding et al., 1993) which, in turn, leads to future revenue
(Fornell, 1992; Bolton, 1998).

For that matter, many organizations (including banks) that resorted to having superior service
quality have been found to be market leaders in terms of sales and long-term customer loyalty and
retention (Anderson and Sullivan, 1993; Boulding et al., 1993; Eklo¨ f and Westlund, 2002).

Customer satisfaction has become a global concern to organizations necessitating are thinking of
customer satisfaction strategy and the use of consumer insight to understand customer needs.
Maruca (2000) observes that organizations that seek to understand their customers’ pain points
will be able to design effective marketing strategies geared towards improving member experience.

Customer satisfaction varies from one customer to another according to different expectations and
perceptions they may have with the brand. An organization that satisfies its customers, improves
its value as satisfied customers tend to become loyal thereby creating competitive advantage.
Customer satisfaction studies have reported how banks are improving their infrastructure to
provide ATM machines, strategic office locations and interior designs (Mukhatar, Inam & Ashiq,
2014). Service quality on the other hand, is the promise organization gives to its clients through
their communication and what they actually deliver (Tracy, 2014). Customers are then able to
evaluate the level of their satisfaction by looking at what they were expecting prior to the purchase
based on the communication given by the organization.

This forms customer’s perception about the product. Where expectation is high with low
perception, dissatisfaction occurs and where there is high perception, satisfaction is felt which
improves value to an organization (Lankton & McKnight, 2012). Macharia (2014) recognizes a
strong link between service quality and customer satisfaction with recommendations from Oanda

1
(2015) that DT SACCOs should carry out segmentation of customers for targeted marketing to
improve customer satisfaction

customer satisfaction is also crucial in the banking sector because of the special nature of the
service which is characterized by intensive contact with customers who have different needs and
require customized solutions and it is known to be one of the most important and serious issues
towards success in today’s competitive business environment, as it stay affects company market
shares and customer loyalty (Clemes, 2008). Satisfied customer who and buy more. Good
customer relationship creates customer delight, in turn delighted customer remain loyal (Kotler,
2012).

Many empirical and conceptual studies have been done on customer service quality and customer
satisfaction. The finding of Mohammad and Alhamadani (2011), indicated that service quality is
an important antecedent of customer satisfaction.

Parasuraman et al. (1985) “found that service quality is significant predictor of customer
satisfaction by using SERVQUAL instrument.” Service quality and customer satisfaction “have
been identified as key elements of the service-profit chain”. Accordingly, Messay (2012),
“believes that excellent service quality is vital to business profitability and survival.” Thus, from
the finding of Messay (1996), the researcher understands that if service quality is going down in
the organization, it will have negative effects on the organization’s profitability.

Therefore, this study assesses that if service quality is going down in the organization and doesn’t
meet the expectation of its customers, it will have negative effects on the organization’s
profitability. Thus, this study, therefore, will assess customers’ satisfaction on the service quality
of awash bank. Service delivery and on customer satisfaction in the case of awash bank bishoftu
branch. And try to identify the problem hanging over the neck of providing quality service and
recommends possible solution to the identified problems of the bank.

1.2 BACKGROUND OF THE ORGANIZATION

Awash Bank is among the largest private banks in Ethiopia established in 1995 with a paid capital
ETB of 24.2 Million. As of now, Awash Bank has 4369 shareholders and capital of ETB 5.87
billion. Awash Bank has over 446 Branches across the country.

2
Awash Bank has flourished over 25 years in a quickly evolving economy. Started with a modest
beginning and a visionary aim, Awash Bank marks the history of Ethiopia to exceed a billion profit
which makes it the first private in Ethiopia in this regard in the financial year 2019. Since its
establishment, the Bank also has expanded in it’s a combination of substantial growth and an
improved client benefit encounter.

Services of Awash Bank

Diaspora Account Definition: It is a deposit account designed for Ethiopians and foreigners of
Ethiopian origin living in Diaspora to open and use foreign currency account with a bank in their
home country. A deposit made in other convertible currencies such as Canadian Dollar, Saudi
Riyal, Japanese Yen, Australian Dollar, and UAE Dirham shall be converted to any of the above
state three currencies at a spot exchange rate based on the preference of the account holder. Their
strategic goals and objectives are based on the aspiration of:-

Vision:
“To be the First Choice World Class Bank”
Mission:
“To provide Innovative, Competitive and Diversified banking services accessible to the
society with qualified and committed staff in a profitable and socially responsible manner”
Core Values of AB
A – Accessibility
W – Wisdom
A – Accountability
S – Socially Responsible
H – Honesty

3
 1.3 STATEMENT OF THE PROBLEM
Banks operating in Ethiopia are facing lots of challenges due to increase in competition amongst
them. As a result various strategies are formulated to retain the customer and increasing the service
quality level has been considered key success factor. (Ahmossawi, 2001).

At the present time, service quality has received much attention because of its obvious relationship
with costs, financial performance, customer satisfaction, and customer loyalty. Since customer
satisfaction is also based upon the level of service quality provided by many market leaders are
found to be highly superior customer service orientated. They have been rewarded with high
revenue and customer retention as well. Because, organizations in the same market sector are
forced to assess the quality of the services that they provide in order to attract and retain their
customers. Zeithaml et al. (1996).

Currently most banks in Ethiopia are negatively affected by the network failure and system
interruption which result delayed service delivery time, as a result customers are sometimes forced
to stay long time in the premises of the bank. As service giving organization, awash bank at
bishoftu branch tries to serve its customers. Even though, the purpose of studying or conducting
of the research is to analyze and assess the service quality and its customer satisfaction, Service
delivery is the heart of economic activity to make a business through attracting customers, Awash
Bank is a model bank in Ethiopia for the reputation it has on customer service and service quality,
i.e. why Awash Bank is the sample but really the our study wants to confirm this by empirical
evidences through a representative and objective sample and to enhance the needs of customer.
The study is to conduct with the objective of assessing the quality of service delivery practice and
customer satisfaction in awash bank at bishoftu district branch, using the five dimensions of
SERVQUAL model and its subsequent effect on customer satisfaction and to suggest possible
solutions for gaps that will be identified by the study.

4
 1.4. OBJECTIVES OF THE STUDY

1.4.1 General objective:

The main objective of the study is to investigate the quality of service and to identify the
level of customer satisfaction in awash bank on selected bishoftu branches and to give an
insight for the management regarding the level of service quality of the service they render
and to provide suggestions for their future actions. Which are more useful to awash Bank.

1.4.2 Specific Objectives

 To assess customers satisfaction with service quality offered by Awash Bank on selected
bishoftu branch.
 To measure customers’ satisfaction with each of the five dimensions of service quality
using SERVQUAL instrument.
 To determine the overall service quality perceived by Customers of the bank. To identify
those dimensions that brings satisfaction to customers.

1.5 RESEARCH QUESTIONS

The main issues that we wants to address in this research are service quality and customer
satisfaction using the SERVQUAL model in Awash Bank context. We are interested in the
dimensions of service quality from the customer’s perspective through assessing their
expectations and perceptions of service quality. The research study guided by the following
research question for the investigations as follows:
 Are customers satisfied with service quality offered by Awash Bank?
 How are the five service quality dimensions ranked by Awash Bank customers?
 Does Awash Bank’s service quality meet its customers’ expectations?

1.6 DELIMITATION OF THE STUDY

The Study covers the theme of awash bank service quality and customers satisfaction specifically
the case of bishoftu district branch. The research methodology has deployed SERVQUAL model
and customer Satisfaction Index through administering questionnaire to individual customers. The
study is confined in the service provision of bishoftu branches of the bank.

5
 1.7 SIGNIFICANCE OF THE STUDY
The study in general having the following importance:
 It provides literature for the bank industry under customer service quality.
 The findings of this research will help the bank’s management to understand the role
of good quality service.
 It helps to other researchers who want to conduct further study on the subject in the
future.
 It provides solution for Awash Bank service quality problems and it may give an
insight for the management what they should do in the future.
 Study creates a chance for customers to speak their feelings about quality of the
services provided by the bank.
 It helps management of Awash Bank to develop and implement effective service
quality improvement initiatives.

1.8 ORGANIZATION OF THE STUDY

The study report of proposal is organized in to three chapters. The first chapter deal with
introduction, background of the study, background of the organization, statements of the
problem ,objectives of the study , general objective, specific objectives, research question
,delimitation of the study, significance of the study and organization of the paper.In the second
chapter literature review of the topic which includes different perspective of different authors
and various theoretical concepts that relates with service quality and its measurement and
dimension of service quality and empirical review issues related with quality service were
finally conceptual frame work discussed.
The third chapter deal with the research design & methodology such as research design,
population and sampling, data sources and collection of the research briefly and Budget
preparation and time schedules.

6
 CHAPTER TWO
1. INTRODUCTION
This chapter gives an overview of literature that is related to theoretical framework and empirical
studies that have been carried out investigate the research problem Presented in the previous
chapter. Service characteristics, service quality, customer satisfaction, relation between customer
satisfaction, service quality and service quality model is included in order to give a clear idea about
the research area.

2. LITERATURE REVIEW
2.1 THEORETICAL REVIEW
The primary purpose of this chapter is to get the theoretical understanding of the concept of
service quality, dimensions of quality, what customer service and satisfaction means, and what
Quality management is. We beliefs that this part of the research gives a clear insight for readers
about the components of service quality management and customers’ satisfaction. In addition,
in this chapter, literatures that are related and important for this research are reviewed and
presented as follows.

2.1.1Customer Service
According to Davidow and Uttal (1989) customer service means all features, acts and
information that augment the customer’s ability to realize the potential value of a core product
or service. Customer service is concerned with establishing, maintaining and enhancing
relationships between and/or among relevant business parties in order to achieve the objective
of the relevant parties Osuagwu (2002). According to W.L. Robert (2005) customer service is
defined as the ability of knowledgeable, capable and enthusiastic employees to deliver products
and services to their internal and external customers in a manner that satisfies identified and
unidentified needs and ultimately result in positive word-of-mouth publicity and return
business.

2.1.2 Service Quality

Though quality is a much studied subject in manufacturing, as well as service sectors, there is
no universally accepted definition to define quality. The definition of quality is subjective,
personal and changes from person-to-person, place-to-place, organization- to- organization,
situation- to situation and time-to-time. However, "Conformance to Standards" and "Fitness

7
for Use" is the classic definitions of quality, FEATHER [John] and STURGES Paul (2003).
Quality research in the goods sector was established long before it was established in the
service sector. (Bandyopadhyay (2003, 187-188) claimed that quality in goods sectors is
commonly defined as the product’s fitness for its intended use, which means how well the
products meet the needs and the expectations of its customer. However, understanding quality
in the goods sector is inadequate for understanding service quality because of the fundamental
difference between the two terms. Service quality is performance based rather than objects,
therefore precise manufacturing specifications concerning uniform quality can rarely be set
(Parasuraman, et al., 1985, 42).

The conceptualization and measurement of service quality is one of the most debated topics
in service marketing literature. Several researchers pointed out that service quality is difficult
to measure as it is an elusive and abstract construct (Carman 1990). Parasuraman et al., (1985)
argue that service quality involves not only the outcome but also the delivery process. And
also, service quality relates to satisfaction but the two are not the same. In addition, different
researchers defined service quality in different ways.

The previous literature suggests that the evaluation of quality in services is more difficult than
goods and that delivering quality services is increasingly recognized as the key to success for
service providers (Cronin and Taylor, 1992 as cited in Wei 2010). But, perceived service
quality has confirmed to be a complex concept to understand as per (Brady and Cronin, 2001,
pp.34). Therefore, Rust and Oliver (1994) propose that it is essential for companies to develop
the awareness of customers’ perceptions of service quality.

2.1.3 Service quality Dimensions

Parasuraman et al. (1985) identify ten determinants for measuring service quality which are
tangibility, reliability, responsiveness, communication, access, competence, courtesy,
credibility, security, and understanding/knowledge of customers. Later these ten dimensions
were further purified and developed into five dimensions i.e. tangibility, reliability,
responsiveness, assurance and empathy to measure service quality.“SERVQUAL”
Parasuraman et al. (1988). These five dimensions identified as follows:

Tangibility: - refers to physical facilities, equipment, and appearance of personnel. (Jabnoun

8
and Al-Tamimi, 2003). Indicated that customers choose tangibility factor of service quality in
the banking industry “Bank could build customer relationships by delivering added tangible
and intangibility elements of the core products” (Zineldin, 2005).

Reliability: - means ability to perform the promised service dependency and accurately.
Reliability is a significant factor of product quality in addition to good personal service, staff
attitude, knowledge and skills (Walker, 1990). “It is found that service reliability is the service
“core” to most customers and managers should use every opportunity to build a “do-it-
rightfirst” attitude” (Berry et al., 1990).

Responsiveness: means willingness to help customers and provide prompt service.

“Customers are very sensitive to employees' working environment in service organizations”
(Brown and Mitchell, 1993). (Gollway and Ho, 1996) reported that proper balance between
staff skills and customers' expectation resulted in superior service quality towards customers.
Assurance: - indicates knowledge and courtesy of employees and their ability to inspire trust
and confidence. (Parasuraman et al., 1988) found that assurance is an important factor of
service quality next to reliability and responsiveness towards customer satisfaction. Assurance
has “the strongest impact on customer satisfaction that leads to positive word of mouth
outcome” (Arasli et al., 2005).

Empathy:-refers to caring, individualized attention the firm provides its customers (Jabnoun
and Al-Tamimi, 2003) found that bank customers believed empathy as an essential factor of
service quality. “It is suggested that employees' commitment to deliver quality services,
skillfully handling of conflicts and efficient delivery of services resulted in satisfied customers
for long term benefits” (Nelson and Chan, 2005).

2.1.4 Service Quality Models

If we want to manage something, it should be measured first. Without measurement, managers
cannot be sure of whether service quality gaps exist or not and of course, measurement is
needed to determine whether goals for improvement are being met after changes have been
implemented (Christopher et al., 1992).

Measuring service quality has been one of the most persistent topics in management literature.
This is because the need to develop valid instruments for the systematic evaluation of firms‟

9
performance from the customer point of view; and the association between perceived service
quality and other key organizational outcomes, which has led to the development of models
for measuring service quality( Cronin et al., 2010).

2.1.5 SERVQUAL
For the purpose of measuring customer satisfaction with respect to different aspects of service
quality and to overcome problems which is created as a result of the gap between management
and customers, a survey instrument was developed by (Parasuraman, Zeithmal and Berry in
1988). The instrument is called SERVQUAL. The basic assumption of the measurement was
that customers can evaluate a firm’s service quality by comparing their perception with their
experience. It is designed to measure service quality as perceived by the Customer.

Though, the SERVQUAL model has been the major generic model used to measure and
manage service quality across different service settings and various cultural backgrounds, it
has been subjected to a number of theoretical and operational criticisms (Buttle, 1996).

2.1.6 Customer satisfaction

Customer satisfaction is a post-purchase evaluation of a service offering. A traditional
definition of customer satisfaction followed the dissatisfaction paradigm of consumer
satisfaction/dissatisfaction, suggesting that customer satisfaction/ dissatisfaction is the result
of interaction between the consumer’s pre-purchase expectations and post purchase evaluation.

Good customer satisfaction has an effect on the profitability of nearly every business. For
example, when customers receive good service, each will typically tell nine to ten people.
However, customers who receive poor service will typically relate their dissatisfaction to
between fifteen and twenty others Naiketal. (2010). Therefore, customer satisfaction is an asset
that should be monitored and managed just like any physical asset.

The satisfaction judgment is related to all the experiences made with a certain business
concerning its given products, the sales process, and the after- sale service. Whether the
customer is satisfied after purchase also depends on the offer’s performance in relation to the
customer’s expectation. Customers form their expectation from past buying experience,
friends‟ and associates‟ advice, and marketers‟ and competitors‟ information and promises
(Kotler; 2010).

10
 2.1.7 Customer Satisfaction Measurement
Customer satisfaction measurement involves the collection of data that provides information
about how satisfied or dissatisfied customers are with a service. This information can be
collected and analyzed in many different ways. Many organizations regularly check the levels
of customer satisfaction to monitor performance over time and measure the impact of service
improvement.

Henley center headlight vision (Smith, 2007) states the research carried out in the UK with
public sector organizations suggests that there are five themes that are likely to be relevant to
all organizations in measuring customer satisfaction.

 Delivery of the service (how problems were handled, reliability, outcome.)

 Timeliness (waiting times, number of times contacted)
 Information (accuracy, enough information, kept informed)
 Professionalism (competent staff, fair treatment)
 Staff attitude (friendly, polite, sympathetic)

2.1.8 Importance of Customer Satisfaction

Customer satisfaction measures how well a company's products or services meet or exceed
customer expectations. These expectations often reflect many aspects of the company's
business activities including the actual product, service, company, and how the company
operates in the global environment. Customer satisfaction measures are an overall
psychological evaluation that is based on the customer's lifetime of product and service
experience (Smith, 2007).

Effective marketing focuses on two activities: retaining existing customers and adding new
customers. Customer satisfaction measures are critical to any product or service company
because customer satisfaction is a strong predictor of customer retention, customer loyalty and
product repurchase.
2.1.9 Determinants of Customer Satisfactions
Customer satisfaction is influenced by specific product or service features, perception of
quality, customer’s emotional responses, their attributions and their perception.
Product Service Features- Customers satisfaction with a product or service is influenced by

11
customer evaluation of product or service feature. (Zettmal et al., 1985)

Customer Emotion- Customer’s emotion can also affect their perception of satisfaction with
products and services. These emotions can be stable preexisting emotion. (Zettmal et al, 1985)

Attribution of Service Success or Failure- Attribution influence perception of satisfaction when

they have been surprised by an outcome, (the service is either much better or much worse than
expected), customers tend to look for the reasons their assessments of the reasons can influence
their satisfaction. (Zettmal et al., 1985)

2.1.10 Perception of Equity or Fairness

Customer satisfaction is also influenced by perception of equity and fairness customers ask the
service. Have I been treated fairly compared with other customers? Did other customers get
better treatment, better prices or better quality service and the like? Notions of fairness are
central to customer‟s perception of satisfaction with products and services. (Zettmal et al.,
1985)

Organizations take different approaches to identifying customer service standards and they
vary in detail. Robert-Phelps uses “SPECIAL” as a model to satisfy customers.

 Speed
 Personality
 Exceed expectations
 Competence and courtesy
 Information
 Attitude
 Long-term relationship.

Speed and time

These two are very important factors to many customers to measure a company’s ability and
performance to satisfy their needs. Thus an organization whatever service it provides has to
accomplish as fast as possible. (Smith, 2007)

12
Personal Interaction with Customer Things

Like how well remembering a customer’s name, a tone of voice and remembering the case of
the customer change the satisfaction of the customer. An organization should identify every
opportunity that it possibly can to make the customer feel unique. An organization has to train
employees based on how to answer telephone and how to deal with customer’s face-to-face, to
treat every single customer as, not their only customer, but their most important customer.

Expectations

The ability to manage expectations well and then systematically and consistently exceed them
is the hallmark of a successful organization. There are three scenarios of satisfaction based on
customer expectation. (Smith, 2007)

Delighted Happy Customer

This is situation when actual service is greater than expected or experienced service. This kind
of customer will come back and tell his friends about his experience and will become an
advocate for your service. An organization tries and finds something extra and the way that
attracts this kind of feeling. (Smith, 2007)

Satisfied Customer

This is the situation when actual service is equal to their experience. It is not any better
significantly, neither is it any worse- they are satisfied. However, this does not seem to enter
the customer’s memory for any long period of time. (Smith, 2007)

A Dissatisfied Customer

This is the case when actual service is less than expected/ experienced service. As well known,
many organizations today struggle to win customers by telling those things they think in their
services by using brochures and presentations. This over promising has poor experience and
poor customer satisfaction built into it. So always make sure that you and your organization
deliver more than you promise. (Smith, 2007)

13
Courtesy and Competence

The two go hand in hand. Courtesy means customers seem to be happier be determined by
whatever it is being served with as a customer. Competence means whoever services the
customer within the organization has to do things and do them well. It means doing what you
can do to the best that you can do it. Competence and courtesy serve as licenses to keep
customers for life. (Buttle, 1996)

Information and Keeping Customer Informed

As well known, the world today is a much more complicated with a mass of information
created by technology, social changes and education patterns. So, one of the simplest ways to
keep customers feeling special and make them feel important to organization is to keep them
informed about any service provided for them. Whatever it is that even if their expectation that
is going to be broken or damaged then let them know as soon as you know (Buttle, 1996).

Attitude and Customer Liaison

Attitude is not always easy to understand. In this context it is defined as a positive and helpful
attitude. A good customer service experience is on where the customer service person imagined
if nothing else, that they enjoy their job and they like doing what they do and they are pleased
to see the customer. Employees in service rendering organization have to see every single
customer as most important customer. (Parasuraman et al., 1985)

Long term Relationships

This is the last element of making customer feel special. A customer will feel special if
organization will actually reward, recognize and encourage their loyalty at every contact with
a customer. If an organization implements ideas based around the above seven elements
(SPECIAL) and makes them a constant focus of attention, it becomes more customer focused.
(Parasuraman et al., 1985).

Satisfaction Measurement

According to (Smith, 2007) Satisfaction measures involve three psychological elements for
evaluation of the product or service experience: cognitive (thinking/evaluation), affective

14
(emotional-feeling/like-dislike) and behavioral (current/future actions).Customer satisfaction
usually leads to customer loyalty and product repurchase. But measuring satisfaction is not the
same as measuring loyalty.

Relationship between Service Quality and Customer Satisfaction

(Kotler and Armstrong, 2012) advocate that satisfaction is the post-purchase evaluation of
products or services taking into consideration the expectations. Researchers are divided over
the antecedents of service quality and satisfaction.

Whilst some believe service quality leads to satisfaction, others think otherwise. The studies
of many researchers suggest service quality leads to customer satisfaction. To achieve a high
level of customer satisfaction, they suggest that a high level of service quality should be
delivered by the service provider as service quality is normally considered an antecedent of
customer satisfaction (Mesay, 2012).

As service quality improves, the probability of customer satisfaction increases. Quality was
only one of many dimensions on which satisfaction was based; satisfaction was also one
potential influence on future quality perceptions (Clemes, 2008).

Parasuraman et al (1988) defined service quality and customer satisfaction as follows: Service
quality is a global judgment, or attitude, relating to the superiority of the service, whereas
satisfaction is related to a specific transaction. Satisfaction is a post consumption experience
which compares perceived quality with expected quality, whereas, service quality refers to a
global evaluation of a firm's service delivery system” (Parasuraman et al., 1985).

Siddiqi (2011) described that all the service quality attributes are positively related to customer
satisfaction and customer satisfaction is positively related to customer loyalty in the retail
banking settings. Furthermore, Daniel O. Auka (2012) also stated that high quality of service
will result in high customer satisfaction and increase loyalty.

Customer loyalty
Customer loyalties is a deeply held commitment to re buy or re patronize a preferred product
or Service consistently in the future, thereby causing repetitive purchasing of the same brand,
despite situational influences and marketing efforts. It can also be defined as the degree to

15
which a customer exhibits repeat purchasing behavior from a service provider, possesses a
positive attitudinal disposition toward the provider, and considers using this provider when a
need for this service arises. Loyalty is therefore an attitude or behavior that customers explicitly
repeat or exhibit (Seyed, 2007).

2.2 EMPIRICAL REVIEW

Ameme, B., & Wireko, J. (2016) claimed in his research that in today’s competitive world
where technology plays a very important role and if we talk about banking sector or industry
there is a positive relationship between technology and customer satisfaction. They also stated
that satisfaction of customers is not merely introducing innovative products and services rather
it is much more than that. They also found that if the bank wants to become the market leader
in the competitive environment it must use the innovation approach in all the aspects like
products and services. Also there is a significant relationship between technological innovation
and cost. As the innovation increase the cost is also increase.

Machogu, A. M., & Okiko, L. (2015) research brought to light that with e-banking
complexities on customer satisfaction. Results shows that there are factors which
leads to customer satisfaction particularly in e-banking, which is one of the very important
and fast growing way of doing banking. Factors are accessibility, convenience, security,
privacy, content, design, speed, fees and charges have influence on customer satisfaction where
the other factors notified have no significant influence.

Kaur, N., & Kiran, R. (2015) founded in their research which was on public, private and
foreign shows that customer are more satisfied with the services quality of the foreign banks
then the private and public banks.

Kundu, S., & Datta, S. K. (2015) research found regarding e-service quality, customer
satisfaction and trust they found that there is a significant relationship among e-service quality,
trust and customer satisfaction. Internet banking service quality has huge impact on trust. They
also researched that in case of internet banking privacy and fulfillment are the main factors of
service quality which have influence on trust. Also banks should be more concerned about the
privacy of individual transaction of the customers. According to Ernest and young 2012 survey
showed that price factor was the main concern for 50 percent customers.

16
Zeinalizadeh, N., Shojaie, A. A., & Shariatmadari, M. (2015) opined that out of the nine
customer satisfaction factors fees and loan, prompt service and appearance are the major
factors which have more significant impact on customer satisfaction followed by interest
rate and accessibility of bank and availability of service which have less impact on the
satisfaction on the banking customers.

Rahi, S. (2015) research findings show customers are more loyal towards those banks who are
facilitating internet banking services. Also good brand image build relationship between banks
and customer and enhance the customer loyalty toward bank. He also concluded that those
banks that are giving the internet banking services to their customers, loyalty of those
customers are more towards the banks. He also suggested that if the brand image also plays a
significant role between loyalty of the customers and internet banking. The role of brand image
is positive in making a positive relationship between customers and internet banking.

Rod, M., Ashill, N. J., Shao, J., & Carruthers, J. (2009) research findings suggests that online
banking positively influences customer perception. So bank management focus should be on
good customer service quality in terms of reliability, responsibility, and tangibility and
empathic. This study was also found to be significant that online information system
quality is very important predictor of overall banking service quality.

Lopez, J., Kozloski Hart, L., & Rampersad, A. (2007) Research claimed that by using the one
of the service quality tool in which customer satisfaction was measured on the basis of
ten dimensions. Results significantly show that out of ten six dimensions namely
reliability, responsiveness, tangibles, access, communication, and credibility shows the
positive impact on customer satisfaction.
Mols, N. P. (2000) stated internet banking with the help of customer feedback that is in no time
helps banks to construct and keep secure relationships with their customers and
diminish operating and fixed costs makes it is easy for them to utilize electronic fund transfer
and foreign exchange transactions (Kam & Riquelme, 2007).Conclusion and Managerial
implication
In addition, Loyalty in service businesses refers to the customer‟s commitment to do business
with a particular organization, purchasing their products repeatedly and recommending others

17
to the organization‟s products. (Christopher and Jochen, 2006) ascertain that customer loyalty
is actually the result of an organization creating a benefit for customer so that they will maintain
or increase their purchases from the organization. They indicate that true loyalty is created
when the customer becomes an advocate for the organization without incentives.

2.2.1 Establishment of Commercial Bank of Ethiopia

Commercial Bank of Ethiopia was incorporated as a share company on December 16, 1963
per proclamation number 207-1955 to take over the commercial banking activities of the
former state Bank of Ethiopia. Under this name, it began operation on January 1, 1964, with a
capital of Ethiopian Birr 20,000,000 and served for about 16 years. The bank was wholly
owned by the state and operated as an autonomous institution under the commercial code of
Ethiopia under the socialist regime in Ethiopia (1974-1991). The Commercial Bank of Ethiopia
Share Company and Addis Bank had identical objectives power and duties. Hence, the socialist
regime saw it necessary to merge them in order to eliminate the duplication of efforts and bring
them under a centralized banking structure; consequently, the present day commercial Bank of
Ethiopia was established under proclamation No.184 of Augest2,1980 (Belay, 1987).

2.2.2 Services Rendered by Commercial Bank of Ethiopia

Commercial Bank of Ethiopia provides three major services which comprises of Domestic
banking service, International banking service and recently E-payment services. Domestic
banking services consist of Deposit, Credit and Local transfer service, International banking
services consists of Trade service, Foreign service and International money transfer using
different money transfer agencies and E-payment service also includes Internet Banking
Service, ATM, POS, Card Banking and Mobile Banking Service (www.cbe.com)

2.2.3 Establishment of awash bank

Awash Bank was established by 486 founding shareholders with a paid-up capital of Birr 24.2
million and started banking operations on Feb. 13, 1995.

The number of shareholders and its paid-up capital increased to over 5400 and Birr 10 billion,
respectively. There total assets reached Birr 150 billion with over 660 branches found across
the country, Awash Bank continues to be leading private bank next to commercial Bank in
Ethiopia.(https://www.awashbank.com/company-profile/)

18
 2.2.4 Services Rendered by awash Bank

 Loan and Advances including term loan and Over Draft Facilities
 Value added Deposit Accounts (Current, Fixed Time Deposit, Special Saving)
 Payroll Administration solution Service
 F Solution Account Service
 Door Step Banking- Cash/Cheque/BC Pickup and Cash Delivery
 Digital Channels
 Guarantee Services
 Training, Consultancy and Advisory Services.

2.3 Total Quality Management

Total quality management (TQM) is different from the old concept of quality because its focus
is on serving customers, identifying the causes of quality problems, and building quality into
the production process. According to Heizer and Render (2006) TQM stress a commitment by
management to have a continuing companywide drive towards excellence in all aspects of
products and service that are important to the customer. Heizer and Render(2006) have also
developed seven concepts for effective Quality Improvement (QI) program by modifying the
14 points developemd by Deming as follow: (1) Continuous Improvement, (2) Six Sigma, (3)
Employee empowerment, (4) Benchmarking, (5) Just-in-Time, (6) Taguchi concept, and (7)
Knowledge of TQM.

After going through the theoretical and empirical literatures related to customer satisfaction in
banking industry it has been reviewed that there are so many factors which leads to customer
satisfaction in banking industry. Customer satisfaction is very crucial aspect for banking
industry also a very wide area to be studied.

Researches and academician are continuously doing research on this topic. Because of the
rapid changes in technology, perception of consumer, services etc. it is mandatory for the
awash bank to cope up with the change.

Traditional banking has been taken shape into modern banking. Customers’ expectations are
increasing in terms of services quality, attention etc. banks are more concerned about
satisfaction of customer rather than any others aspect. Result of my study significantly shows
that modern banking leads to moderate customer satisfaction with the help of recent customer
satisfaction trends. Results of the study produce the trends which contribute in customer

19
 satisfaction in awash banking system. Such are Service quality, want their customer
satisfaction. Managerial implication every bank wants to retain and maintain their valuable
customers for long term. Fact is that they due to too much competition in the banking
industry (public, private and foreign banks) it becomes difficult for the bank managers of
awash to frame out the customer satisfaction strategies.

Our research regarding customer satisfaction in awash bank will give an insight to the bank
managers of awash about the customer satisfaction. We are sure after applying these research
result in their respective bank; they will work with more focused approach for customer
satisfaction. It is time to understand for the bank managers that customer is not merely a
customer, they are more than what awash bank of thinks. So they need to understand the factors
like service quality, customer services, employee behavior, prompt services, customer
relationship management which significantly contribute in customer satisfaction. So we hope
this study will definitely provide important information to the bank managers regarding
customer satisfaction in awash bank service providing system.

2.4 CONCEPTUAL FRAME WORK

The conceptual framework indicates the crucial process, which is useful to show the direction
of the study. The study shows the relationship between the five service quality dimensions
(reliability, responsiveness, assurance, empathy and tangible) and customer satisfaction.
The following conceptual model has been used in this study.

Independent variable dependent variable

Service quality dimensions Intervening factor(control variable)

Tangible  Infrastructure
Reliability  Technology and Network
Responsiveness  Education and Knowledge Customer satisfaction
Empathy  Staffs
Assurance Empathy
Table 1: Service quality and customer satisfaction model

20
 CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1INTRODUCTION
While the study primary aim is to assess the impact of service quality on customer satisfaction
of awash bank bishoftu branch, the research design and methodology section was clearly
define the research design, the sample and sampling techniques, sources and instruments that
have been utilized in collecting data, the procedure of data collection and finally the method
of data analysis were intensively presented.

3.2 RESEARCH DESIGN

This study used a descriptive research design of the awash bank in bishoftu district branch.
According to Cooper & Schindler (2006) in a descriptive design, either the entire population,
or a subset thereof is selected, and from these individuals, data are collected from randomly
selected from population to help answer research questions and describe the current situation
of the variables at the time of data collection.
This study will be conducted based on the descriptive research design using quantitative and
qualitative method to analyze the data from customers. The objective of descriptive research
is ‘to portray an accurate profile of persons, events or situations’ (Saunders et al, 2009).
The descriptive research type describes data and characteristics about the population or
phenomenon being studied. Descriptive research answers the questions who, what, where,
when and how. It is mainly concerned with describing the nature or condition and the degree
in detail of the present situation.
In addition Creswell (1994) also states descriptive research design is a technique of gathering
information about the existing condition. Descriptive studies are usually the best methods for
collecting information that will demonstrate relationships and describe the world as it exists.
So this study used descriptive research approach to describe the customers’ satisfaction
towards the service quality of Awash Bank.
It will also use descriptive analysis to assess the service quality dimensions and the
satisfaction level of the customers. In addition, it will help obtain an accurate profile of the
situation under this study and thus the study will consist of quantitative and qualitative data
types and sources.

21
 3.3 SAMPLE SIZE AND SAMPLING PROCEDURES
3.3.1 Population
According to (Zikumund, 2003) the definition of population is identifiable total set of elements
of interest being investigated by a researcher. The target population is defined as the entire
group a researcher is interested in. The populations of this study were customer of awash bank
bishoftu branch. The target populations for the study were those who are customer in bishoftu
branches. This branch selected for this research because carries out two banking function such
as borrowing and saving account holders. For this reason the branch can be qualified as a good
representative of the two categories of customer of awash bank.

3.3.2 Sampling Techniques

(Creswell, 2009) define that it is the way of drawing inference about a population without
studying the entire population under study. It is also advantageous in time consuming and cost
saving. Thus, we select awash bank bishoftu district by using purposive sampling method.
From the variety of probabilistic sampling techniques, the study use stratified random sampling
methods for large target population of the study. Robson (2002) tell us that sampling theory
supports stratified random sampling as an efficient choice because the means of the stratified
samples are likely to be closer to the mean of the population overall. Based on stratified
sampling technique, customer of awash bank are categorized under two strata: which is A
AND B. From this category; the study selected only two account holder were selected as a
sample by using lottery method to select sample from customers. Finally, after determining
the sample group the study employs convenience sampling technique to distribute
questionnaire for the respondent. The rationale behind employing convenience sampling
method is because all customers are not available in the bank at the same time and it is not
possible to contact everyone who may be sampled.

3.3.3. Sample Size

Sample size is actually the total number of units which are to be selected for the analysis in the
research study. Awash bank (AB) has 660 branches in the financial year which having 6,100
employees serving more than two million customers and the bank is stretched across the
country. Due to financial constraints, bishoftu branch is convenience and selected for
collecting data. Awash bank account holders of bishoftu branch is divided in to four districts.

22
Those are saving deposits account holder, Current account holder, Borrower and International
Banking account holder. But, study selected bishoftu branch two account holders for
questioner those are borrower (A) and saving account holder(B) reason behind it is the
remaining account holders having the same character either of the two. To make the study
manageable and because of resource constraint, the study is not able to undertake census
survey instead use sample survey. Among 412 branches that are found in awash bank and from
those branches bishoftu district branch is one of them which we decided to make our study and
we need to take a sample from total clients of 78,352. Total client number is 78,352 is our
population from this population 48,000 clients are borrower account holder (A) and 30352
clients are saving account holder ( B) we select a sample from the banks on the assumption
that they could represent awash bank (AB) bishoftu district.
In order to determine sample size; the study used formula for calculating the required sample
size in two sampled account holder customer. The formula was developed by Taro Yamane
(1967). ). It is calculated as follows
It is calculated as follows;
N
n=
1 + N(e)2
78,352
n= = 400
1 + 78,352(0.05)2
Where; n is the sample size
N is the population size (78,352)
e is sampling error (0.05)
Hence; the total sample size is 400.sinece the number of people in sample bank of specified
strata A and B will not the same, this need to proportionate for each strata category and
calculate using the following formula.
nN1
n(A or B) =
N
Where; n is total number of sample
N is total number of population
N1 is total number of population in each strata (A& B)
n(A or B) is total number of sample in each strata

23
 3.4 SOURCE OF DATA AND COLLECTION METHOD
3.4.1 Sources of Data and Type
In order to achieve the objective of the study, the research approach used in this study were
quantitative. Quantitative research focuses on determining the relationship between variations of
independent and dependent variables. The reason for choosing quantitative research approach is
to meet the purpose of examining how an independent variable affects a dependent variable. With
regard to the sources of data, the study used both primary and secondary source of data. Based on
the nature, scope, objectives and availability of time and resource, our study used questionnaires
and secondary data source like books, documents, existing research papers, journals and
publication, websites, Awash bank(AB) reports and other relevant journal.

3.4.1.1. Primary Data Source

Questionnaire
To gather primary data structured questionnaires were prepared in English and interpreted to
Amharic before they were distributed. The questionnaires have four parts: The first part of the
questionnaire was about the personal information of respondents. The second section information
related to service quality of awash bank (AB) using SERVQUAL, five dimensions. The third part
of the questioner is about service quality in respect with technology advancement, waiting time
and responsiveness and the last part is about customer expectation towards awash bank service.

3.5 Method of data collection

For the proper achievement of the objectives of the study; among different primary data collection
method, questionnaire were used. The respondents who are the clients of the branch banks were
ask for cooperation and given the questionnaire when they were receiving the service of bishoftu
branch. Structured questionnaires were developed containing closed ended and the respondents
can easily understood. The variable is measured using Likert scale with five response categories.
(Poor, Satisfactory, Good, Very good, and Excellent).The Likert scale method was Preferred to
make questions interesting to respondents and thereby enhance their cooperation. (Robson Colin,
2002).and the questioner is prepared separately for borrower and saving account holder. those
questioner that is prepared for borrowing account holder is given to customer service manager
Clint’s of bank to fill it and questioner that is prepared for saving account holder is directly
addressed for customer by our group member to fill it by the Clint of saving account holder b/c

24
getting borrower account holder is not been possible they are not came with in bank continues way

Procedure of Data Collection

The study is based on both primary and secondary data sources. It was begin by secondary data
analysis through the detailed review of related literature and survey questionnaire is used as the
main data gathering instrument for this study.(appendix B) questionnaire were prepared and
distributed to the samples that is selected from customer of awash bank. After the data is collected;
it is necessary to utilize statistical techniques to analyze the data. The survey data is processed
using SPSS to be analyzed and presented.

3.6DATA ANALYSIS AND PRESENTATION

3.6.1 Method of Data Analysis
The collected data has to be changed and interpreted in to meaningful information, figure and
statement. So it is analyzed, processed and interpreted according to the nature of data. Statistical
Package for Social Science (SPSS) software version 20 was employed to analyze and present the
data through the statistical tools used for this study, namely descriptive analysis, correlation and
multiple regression analysis.

A. Descriptive analysis

The descriptive statistical results were presented by tables, frequency distributions and Percentages
to give a condensed picture of the data. This was achieved through summary of statistics, which
includes the means and standard deviations values which are computed for each variable in this
study.

B. Pearson Correlation analysis

In this study Pearson’s correlation coefficient was used to determine the relationships between
service quality dimension (Tangible, reliability, responsiveness, assurance, empathy) and
customer satisfaction.

25
 C. Multiple Regression Analysis

Multiple regression analysis was used to investigate the effect of service quality dimensions
(Tangible, reliability, responsiveness, assurance, empathy) and customer satisfaction.
D. Regression functions

The equation of multiple regressions on this study is generally built around two sets of variable,
namely dependent and independent variables. The basic objective of using regression equation is
to make the study more effective at describing, understanding, predicting, and controlling the
stated variables. Regress customer satisfaction on the service quality dimensions

Y = β1 + β2X2 + β3X3 + β 4X4 + β 5X5 + β6X6

Where Y is the dependent variable- customer satisfaction

Tangible =X2, reliability =X3, responsiveness =X4, assurance =X5 and empathy=X6 are the
explanatory variables (or the regresses).

β1 is the intercept term- it gives the mean or average effect on Y of all the variables excluded from
the equation, although its mechanical interpretation is the average value of Y when the stated
independent variables are set equal to zero. β2, β3, β4, β5 and β6 refer to the coefficient of their
respective independent variable which measures the change in the mean value of Y, per unit change
in their respective independent variables.

3.7. Ethical considerations

Since the study is used the data from customers which is collected through questionnaire,
permission will expected to obtain from the customers. To maintain the confidentiality of the
information provided by the respondents, the respondents were instructed not to write their names
on the questionnaire and assured of that the responses would be used only for academic purpose
and kept confidential. Brief description of the central objectives or purpose of the study and the
potential benefit of the research outcome to respondents and awash bank (AB) is clearly given in
the introductory part of the questionnaire so as to motivate them and participate in the study and
provide relevant information about the company under study. Finally, respondents were included
in the study based on their free will. Texts belonging to other authors that have been used in any
part of this study have been fully referenced with reference page.

26
 3.8DEFINITION OF CONCEPTS
3.8.1. Five dimensions of service quality
Every industry has different service quality standards. After all, you don’t expect the same
type of service from a hotel and a retail store. And service quality also varies by brand promise,
as a five-star resort has very different expectations than a roadside motel.
Despite these variations, there is a popular and standard way to measure service quality:
SERVQUAL. Coined by Valerie Zeithaml, A. Parasuraman, and Leonard Berry in the book
Delivering Quality Service, SERVQUAL is a widely-used metric based on a set of five
dimensions that customers have consistently ranked as the most important for service quality
in any industry.
The five service quality dimensions are tangibility, reliability, responsiveness, assurance, and
empathy.
Tangibility
Tangibility is the appearance of physical facilities, equipment, personnel, and communication
materials. Customers tend to expect clean and professional facilities and shops, employees
who look groomed and neat, and well-written and designed materials such as menus, websites,
and signs. Attention to appearance can indicate that your company takes customer comfort
seriously. While appearance is not the most critical aspect of service, it does make a difference
in how customers perceive your business, especially if your brand promises a premium or
luxury experience.
Reliability
Reliability is the ability to perform the promised service dependably and accurately. Doing
what you say you’re going to do when you say you’re going to do it is essential to pleasing
your customers. They want to rely on your business to deliver a working product or effective
service, to get help when they need it, and for all of this to happen in a timely fashion.
Customers want to count on the businesses they buy from - that’s at the heart of this dimension.
Responsiveness
Responsiveness is the willingness to help customers and provide prompt service. Responding
quickly to customer questions and concerns is vital, especially in today’s fast-paced world.
Responsiveness even applies when customers are slow in responding to you. Answer swiftly
to, at the very least, let customers know that you’re working on their request. Responsiveness

27
lets your customers know that you’re listening to them and working actively to solve their
problems.
Assurance
Assurance is the knowledge and courtesy of employees and their ability to convey trust and
confidence. Customers expect businesses to be the experts in the service they deliver.
Communicating that expertise to customers helps reassure them that they can trust you,
whether you accomplish this by displaying credentials and industry certifications or customer
testimonials. Assurance is significant when customers have many options but aren’t sure who
to trust when purchasing. Suppose you run an ecommerce store, for example. In that case,
customers are bombarded regularly with ads from potentially untrustworthy online shops all
day, so you need to determine how to set yourself apart and gain consumer trust.
Empathy
Empathy is the caring, individualized attention the firm provides its customers. Customers
want to feel like they’re more than a transaction; they want to build a relationship with your
business. Even if you have the best product or services on the market, you can still fall short
of their expectations. Showing empathy to customer’s means ensuring your company
showcases your care. Training employees on how to provide excellent and empathetic
service—where smiles and engaging conversation occur regularly—can help you exceed
expectations.

3.8.2. How to measure the five dimensions of service quality

The 5 service quality dimensions are used to measure your customers’ expectations versus
how the service was actually delivered. Measuring these dimensions regularly over time can
help your business understand customer expectations, perceptions, and areas for
improvement, as well as track your progress in increasing your service quality. There are many
ways you can measure the SERVQUAL dimensions.
Service quality questionnaires
To improve your business’s service, you need to understand how satisfied customers are and
if their expectations are fulfilled. One of the best ways to do this is by asking customers for
their feedback using service quality questionnaires.
These questionnaires are typically sent after a customer interaction, they aren’t meant for

28
 merely gathering data. If your customer reports a negative experience or interaction, you
should follow up with them right away to resolve it and report on the action taken.

3.8.3. Advantages of service quality questionnaires

Service quality questionnaires have several advantages. Since they’re sent immediately after
an interaction, the details are still relatively fresh in the customer’s mind and thus more
accurate. They also offer information quickly so you can take swift action on the most pressing
issues.

3.9 work plan time schedule and cost estimation

3.9.1 Work plan or time schedule:

S.No Activities Months, 2022

January February March April May
Weeks Weeks Weeks Weeks Weeks
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1 Identification of title
2 Preparation of work place
3 Discussing with group member
about selected title
4 Proposal writing
5 Literature search and review
6 Research design
7 Method of the study
8 Submitted the proposal to
Advisor for edition
Submitting the final proposal
paper to the department.

Table 2: work plan

29
 3.9.2Budget needed for research Details
To accomplish Proposal writing as per time we will be finalized based on the following schedule.

NO Description of items Unit Cost Quantity Unit Cost Total Cost

Total Cost
1. Stationary and other Materials
Duplication Paper 2 500birr 1000
Flash disk (USB 8.0 GB) 1 300birr 300
Stapler 1 100birr 100
Correction fluid 1 55birr 55
Printing papers 400/pages 3birr/pages 1200
Photocopy Service 150/pages 2birr/page 300
Secretarial Service 50/pages 10birr/page 500
Transportation Distance 500birr 500
Communication (mobile card) 100/5 500birr 500
Sub Total 4455
2. Man power Cost
Refreshment for people who 5 200birr/(person 1000
participate in questionnaire. two times)
Per dime for data collector 2 200birr/(person) 400
who work in the organization.
miscellaneous expenses 200 200
Sub total 1600
Table 3: budget needed for research

30
 3.4References (bibliography)

Aaltonen, P. G. (2004). Customer Relationship Marketing and Effects of Demographics and Technology
on Customer Satisfaction and Loyality in Financial Services (Doctoral dissertation, Old
Dominion University).
Alam, M., Nandan, R. (2007) Organisational change and innovation in small accounting
practices: evidence from the field, Proceedings of the Asia Pacific Interdisciplinary Research in
Accounting, July, Auckland, NZ.
Alam, M., Nandan, R. (2010) Organisational change and innovation in small accounting
Ameme, B., & Wireko, J. (2016). Impact of technological innovations on customers in the banking
industry in developing countries. The Business & Management Review, 7(3), 388.
Anderson, E. W., & Rego, L. L. (2000). How Much Control Do Managers Really Have Over Customer
Satisfaction. University of Michigan Working Paper (NQRC Ref W00-029).
Burns, J., Ezzamel, M., Scapens, R. (2003) The challenge of management accounting change:
behavioural and cultural aspects of change management, CIMA, Elsevier, Oxford.
Burns, J., Scapens, R. (2000) conceptualizing management accounting change: an institutional
framework, Management Accounting Research, 11, 1, pp. 3 – 25.
Chochol'áková, A., Gabcová, L., Belás, J., & Sipko, J. (2015). BANK
Ciccotosto, S., Nandan, R., Smorfitt, D. (2008) Issues facing small accounting practices in regional
North Queensland, Australian Accounting Review,18, 4, pp. 324-333.
CUSTOMERS'SATISFACTION, CUSTOMERS'LOYALTY AND ADDITIONAL PURCHASES OF
BANKING PRODUCTS AND SERVICES. A CASE STUDY FROM THE CZECH
REPUBLIC. Economics & Sociology, 8(3), 82.
Ganguli, S., & Roy, S. K. (2011). Generic technology-based service quality dimensions in
banking: Impact on customer satisfaction and loyalty. International Journal of Bank
Marketing, 29(2), 168-189.
Gibbins, M., Wright, A. (1999) Expertise and knowledge management in public accounting
professional services firms: a North American perspective, Australian Accounting Review,
9, 3, pp. 27 – 34.
Gupta, A., & Dev, S. (2012). Client satisfaction in Indian banks: an empirical

31
study. Management Research Review, 35(7), 617-636.
Jamshaid, M., Qureshi, T. M., & Khokhar, S. Z. (2012). Mediating role of employee's behavior to
build customer loyalty through customer satisfaction. African Journal of Business
Management, 6(45), 11152.
practices: evidences from the field, Journal of Accounting and Organisational Change, Vol. 6,
No. 4, pp. 460 – 476.

32