The Effect of Service Quality on Customer Satisfaction in Selected Private Banks (In Case of Wolaita Sodo Town)

Wondmagegn Urgessa Urissa

doi:10.7176/ejbm/11-19-03

Abstract

In the competitive market, banks in both public and private sectors apply different strategies to improve the quality of their services provided. However, there is a lack of recent evidence to show how the quality of these services affects customer satisfaction, leaving a significant fleabag in Ethiopian literature. Therefore, this study attempted to explore the effect of service quality of private banks on customer satisfaction. Data were collected through questionnaire from a sample of 360 bank customer. The respondents were selected using simple random sampling method. The data collected from the questionnaire were analyzed using Statistical tools such as mean, standard deviation, correlation, and multiple regression analysis. The finding of this study also indicates that customers were most satisfied with the assurance dimensions of service quality. On the contrary, customers were less satisfied with reliability and empathy dimensions of service quality. The results also indicate that unlike responsiveness the four service quality dimensions (tangibility, empathy, assurance and reliability) have positive and significant effect on customer satisfaction. Keywords : Customer Satisfaction, Service Quality, DOI : 10.7176/EJBM/11-19-03 Publication date :July 31 st 2019

Highlights

The banking sector, as the main aspect of the financial sector, provides very important and productive strategy to manipulate stable of that sector achieving financial inclusion, maintaining favorable asset and balancing capital and liquidity level of the economy (Silva, 2009)
Descriptive statistics and correlation analysis The finding of this study indicates that customers were most satisfied with the assurance dimensions of service quality
Customers were less satisfied with reliability and empathy dimensions of service quality

Summary

Introduction

The banking sector, as the main aspect of the financial sector, provides very important and productive strategy to manipulate stable of that sector achieving financial inclusion, maintaining favorable asset and balancing capital and liquidity level of the economy (Silva, 2009). Bank is a customer oriented services industry. A bank depends upon the customers for their survival in the market. The customer is the focus and customer service is the differentiating factors (Guo et al, 2008). Service quality is defined as customer’s overall conception of the relative inferiority or greatness of the organization and its service (Bitner &Hubbert, 1994; Keiningham et al, 1995). According to Service Quality Theory introduced by Oliver (1980), if performance of the service firm does not meet customer’s expectation, customers will judge that firm has ‘low quality’ and if performance of that service firm exceeds the expectation of the customers, customers will judge firm has ‘high quality’

Objectives

Methods

Findings

Conclusion