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The major aim of the research paper is to measure the quality of service offered by private banks
operating in Ethiopia. Moreover, it tries to investigate the relationship between service quality,
customer satisfaction and loyalty. The five dimensions of SERVPERF model i.e. reliability, assurance,
tangibility, empathy and responsiveness were used to measure the quality of service offered by the
private banks. In order to achieve the aims, both primary and secondary sources of data were used. The
primary data were collected through administrating questionnaire. Convenient sampling procedure was
used to obtain 260 responses from customer of banking services in Hawassa city on the 22 item
SERVPERF scale measure perception regarding their respective banks service. Correlation and multiple
regressions were used to investigate the relationship between dependent and independent variables.
The correlation results indicate that there is a positive correlation between the dimensions of service
quality and customer satisfaction. The results of the regression test showed that offering quality
service have positive impact on overall customer satisfaction. The research proves that empathy and
responsiveness plays the most important role in customer satisfaction level followed by tangibility,
assurance, and finally the bank reliability. The research findings also indicate offering high quality
service increase customer satisfaction, which in turn leads to high level of customer commitment and
loyalty.
Key words: Service quality, customer satisfaction, loyalty, SERPERF.
INTRODUCTION
service quality has a significant impact on a banks
success and performance (Mouawad and Kleiner 1996).
Nowadays, service quality has received much attention
because of its obvious relationship with costs, financial
performance, customer satisfaction, and customer
retention.
Different meaning could be attached to the word quality
under different circumstances. It has been defined in a
different way by various scholars. Some of the prominent
definitions include "Quality is predictability" (Deming,
1982), conformance to specification or requirements
(Crosby, 1984), fitness for use (Juran, 1988) and
"customer's opinion" (Feigenbaum, 1945). These initial
efforts in defining quality originated largely from the
manufacturing sector. A solid foundation in defining and
measuring service quality was emanated in the mid
eighties by Gronroos (1984) and Parasuraman et al.
002
Authors
Beerli et al (2004)
Wang et al (2003)
Lee and Hwan (2005)
Zahoor (2011)
Mensah (2010)
Sulieman (2011)
Country
Spain
China
Taiwan
Pakistan
Ghana
Jordan
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Hypotheses
This research is conducted to address the following
hypotheses:
- There is a strong relationship between service quality
dimensions and customer satisfaction in banking
services.
- There is relationship between service quality and
customer satisfaction in banking services.
- There is relationship between customer satisfactions
and loyalty in banking services.
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Frequency
Percentage
Gender
Male
Female
Total
164
81
245
67.0
33.0
100.0
Age
18-30
31-50
above 50
Total
83
142
20
245
34.0
58.0
8.0
100.0
Educational Background
Diploma and Below
Undergraduate
Postgraduate and Above
Total
39
169
37
245
16
69
15
100.0
Frequency of use
Daily
Weekly
Monthly
Other
Total
0
8
113
124
245
0
3
46
51
100.0
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005
Mean score
3.4000
3.0000
2.6250
3.1750
2.6050
Standard deviation
0.52967
0.73598
0.54327
0.64603
0.54132
Variables
Tangibility
Reliability
Responsiveness
Assurance
Empathy
Customer satisfaction
0.798
0.642
0.818
0.796
0.886
Tangibility
Reliability
Responsiveness
Assurance
0.676
0.579
0.625
0.648
0.382
0.701
0.687
0.683
0.668
0.723
Unstandardized Coefficients
B
Std. Error
(Constant)
-0.115
0.079
Tangibility
0.052
0.023
Reliability
0.039
0.074
Responsiveness
0.166
0.145
Assurance
0.145
0.048
Empathy
0.721
0.153
Adjusted R Square: 0.907
F: 18.566*
Model
Standardized Coefficients
Beta
0.052
0.038
0.155
0.143
0.730
Sig.
-1.457
2.245
0.792
1.143*
3.019*
4.712*
0.219
0.088
0.473
0.017
0.039
0.009
006
Unstandardized Coefficients
B
Std. Error
Constant
2.047
0.341
Satisfaction
0.446
0.113
Adjusted R Square: .620
F: 15.713*
Standardized Coefficients
Beta
Variable
0.814
t
5.998
3.964
Sig.
0.000
0.004
Conclusion
DISCUSSION
The main aim of the study was to assess the service
quality of private banks and its impact on customer
satisfaction. The study also tried to test the relationship
that exists between customer satisfaction and their
loyalty. The mean score values for service quality
dimensions was between 2.6 and 3.4. This indicates that
improvements of service quality should be conducted on
all the five service quality dimensions, especially the
dimensions of responsiveness and empathy. This study
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REFERENCES
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Babakus E, Boller GW (1982). An Empirical Assessment
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Baumann C (2007). Predication of Attitude and
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Beerli A (2004). A Model of Customer Loyalty in the
Retail Banking Market, Eur. J. Mark. 38(1/2): 253 - 275
Benito E (2008). Size, growth and banks Dynamics,
Banco de Espana Working p. 0801.
Bolton Ruth N, James Drew H (1991). "A Longitudinal
Analysis of the Impact of Service Changes on
Customer Attitudes," J. Mark. 55 (1): 1991, 1-10.
Buttle F (1998). SERVQUAL: Review, Critique, Research
Agenda, European Journal of Marketing, 30 (1), 8 - 32
Chang YH, Yeh, CH (2002). A survey analysis of
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139 (2002): 166-177.
Clemes MD (2008). An empirical analysis of customer
satisfaction in international air travel, Innovative
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Cronin Joseph Jr J, Taylor S (1992). "Measuring Service
Quality: A Reexamination and Extension," J. Mark., Vol.
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Crosby Philip B(1984). Quality without Tears: The Art of
Hassle Free Management, New York, McGraw-Hill
Deming WE (1982). Out of Cruses, Cambridge, Mass
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QUESTIONNAIRE
The objective of this questionnaire is to collect information about the quality of service offered by banks in Ethiopia.
1.
2.
3.
4.
Sex:
Age:
Educational level:
Frequency of using the bank:
Male ( )
Female ( )
18 to 30 ( ) 31 50 ( ) 51 and above ( )
Diploma ( )
Undergraduate ( ) Postgraduate (
Daily ( ) Weekly ( ) Monthly (
) Other: ___
The following statements relate to your feelings about the particular bank you have chosen. Please show the extent to
which you believe this bank has the feature described in the statement. Here, we are interested in a number from 1 to 5
that shows your perceptions about the bank. You should rank each statement as follows:
Strongly Disagree
1
2
Strongly Agree
3
Statement
1. The bank has modern looking equipment.
2. The bank's physical features are visually appealing.
3. The bank's reception desk employees are neat appearing.
4. Materials associated with the service (such as pamphlets) are visually appealing at the bank.
5. When the bank promises to do something by a certain time, it does so.
6. When you have a problem, the bank shows a sincere interest in solving it.
7. The bank performs the service right the first time.
8. The bank provides its service at the time it promises to do so.
9. The bank insists on error free records.
10. Employees in the bank tell you exactly when the services will be performed.
11. Employees in the bank give you prompt service.
12. Employees in the bank are always willing to help you.
13. Employees in the bank are never too busy to respond to your request.
14. The behavior of employees in the bank instills confidence in you.
15. You feel safe in your transactions with the bank.
16. Employees in the bank are consistently courteous with you.
17. Employees in the bank have the knowledge to answer your questions.
18. The bank gives you individual attention.
19. The bank has operating hours convenient to all its customers.
20. The bank has employees who give you personal attention.
21. The bank has your best interests at heart.
22. The employees of the bank understand your specific needs.
23. Overall, I am satisfied with the bank services
24. I say positive things about the bank to other people
25. I intend to continue being a customer of the bank for a long time to come
26. I will encourage friends and relatives to use the service offered by the bank
Score