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Effect of Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia, Branches in Wolaita Sodo

Received: 20 January 2022     Accepted: 16 February 2022     Published: 25 February 2022
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Abstract

Nowadays, there is increased demand for higher quality services as consumers throughout the world in all sectors become more concerned with quality. Currently, quality in service is the main issue by which producers differentiate themselves from the competitor. The overall objective of this study was to investigate the effect of service quality on customers’ satisfaction in the case of Commercial Bank of Ethiopia branches in Wolaita Sodo town. For this purpose, 383 respondents were selected from target population using simple random sampling method and 22 item likert scaled SERVPERF instrument questionnaires were distributed and 344 valid responses were analyzed. The correlation analysis result indicated that there were positive and significant relationship between all service quality dimensions and customer satisfaction. Regression analysis which was performed to study the effect of service quality on customer satisfaction found that four service quality dimensions: namely, empathy, responsiveness, reliability, and assurance were positively and significantly affect customers’ satisfaction and the tangibles dimension was insignificant for analyses. Compared with other quality dimensions in SERVPERF instrument, empathy has high effect on customers’ satisfaction. It can be concluded that the service quality has significant effect on customer satisfaction in the bank. The bank is recommended to work hard in all quality aspects and give more personal attention to customers, understand the interest of customers, care for their customers, and give prompt service as these will result in customers’ retention, positive word of mouth and increased profitability.

Published in European Business & Management (Volume 8, Issue 1)
DOI 10.11648/j.ebm.20220801.12
Page(s) 12-19
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Service Quality, Customer Satisfaction, SERVPERF

References
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[3] Almossawi, M. (2001). Bank selection criteria employed by college students in Bahrain: An empirical analysis. Int. J. Bank. Mark. 19 (3): 115-125.
[4] Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson education.
[5] Kanojia, D., & Yadav, D. R. (2012). Customer satisfaction in commercial banks: A case study of Punjab National Bank. International Journal of Trade and Commerce-IIARTC, 1 (1), 90-99.
[6] Shanka, M. S. (2012). Bank service quality, customer satisfaction and loyalty in Ethiopian banking sector. Journal of Business Administration and Management Sciences Research, 1 (1), 001-009.
[7] Dawit, J. B., & Adem, U. (2018). The Effect of Perceived Service Quality on Customer Satisfaction in Private Commercial Banks of Ethiopia: The Case of Selected Private Commercial Banks at Dire Dawa Administration. Bus Eco J, 9 (358), 2.
[8] Ferrel, O. C., & Hartline, M. (2011). Marketing strategy (5th ed.). South-Western Cengage Learning. USA.
[9] Qadeer, S. (2014). Service quality & customer satisfaction: A case study in banking sector.
[10] Yoseph Teklu, (2012). Assessment of Level of Customer Satisfaction with the Quality of Service at Commercial Bank of Ethiopia (Doctoral dissertation, St. Mary's University, Ethiopia).
[11] Commercial Bank of Ethiopia (2014). Annual performance report. Retrived from http://www.combanketh.et/AboutUs/Publications.aspx.
[12] Endalkachew Abebe, (2013). Assessing the impact of Core Banking and service quality on Customer Satisfaction: The case of Commercial Bank of Ethiopia, Bishofftu branch. (Doctoral dissertation, Hawassa University, Ethiopia).
[13] Melese Abebe, (2014). Customer Satisfaction with Service Quality: The Case of Commercial Bank of Ethiopia, Addis Ababa branch. (Doctoral dissertation, St. Mary's University, Ethiopia).
[14] Gronroos, C. (2007). A Service Quality Model and its Marketing Implications. European Journal of Marketing. 3 (18), 35-44.
[15] Kotler, P. T. & Keller, K. L. (2011). Marketing Management (14th ed.). New Jersey: Pearson Education.
[16] Zeithaml, V. A., Parasuraman, A., & Berry L. L. (2006). Delivering Quality Service: Balancing Customer Perceptions and Expectations. The Free Press: New York.
[17] Parasuraman, A., Zeithaml, V. A. & Berry, L. L. (1985). A Conceptual Model of Service Quality and its Implications for Future Research: Journal of Marketing, 49, 41-50.
[18] Brady, M. K., Cronin, J. J. & Brand, R. R. (2002). Performance-Only Measurement of Service Quality: a Replication and Extension. Journal of Business Research, 55, 17-31.
[19] Cronin, J. J. & Taylor, S. A. (1992). Measuring Service Quality: A Reexamination and Extension. Journal of Marketing, 56 (3), 55-68.
[20] Zeithaml, V. A. & Bitner, M. J. (2003). Service Marketing: Integrating Customer Focus across the Firm. Boston, MA: McGraw Hill.
[21] Hoffman, K. & Batteson, (2011). Service Marketing Concepts, Strategies and Cases. Mason, OH 45040, USA: South-Western, a part of Cengage Learning.
[22] Looy, B. V., Gemmel, P., Van Dierdonck, R. (2003), Services Management: An Integrated Approach (2nd ed.). Great Britain: Pearson Education.
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  • APA Style

    Natnael Salfore Sharecho, Devulapalli Raghava. (2022). Effect of Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia, Branches in Wolaita Sodo. European Business & Management, 8(1), 12-19. https://doi.org/10.11648/j.ebm.20220801.12

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    ACS Style

    Natnael Salfore Sharecho; Devulapalli Raghava. Effect of Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia, Branches in Wolaita Sodo. Eur. Bus. Manag. 2022, 8(1), 12-19. doi: 10.11648/j.ebm.20220801.12

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    AMA Style

    Natnael Salfore Sharecho, Devulapalli Raghava. Effect of Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia, Branches in Wolaita Sodo. Eur Bus Manag. 2022;8(1):12-19. doi: 10.11648/j.ebm.20220801.12

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  • @article{10.11648/j.ebm.20220801.12,
      author = {Natnael Salfore Sharecho and Devulapalli Raghava},
      title = {Effect of Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia, Branches in Wolaita Sodo},
      journal = {European Business & Management},
      volume = {8},
      number = {1},
      pages = {12-19},
      doi = {10.11648/j.ebm.20220801.12},
      url = {https://doi.org/10.11648/j.ebm.20220801.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20220801.12},
      abstract = {Nowadays, there is increased demand for higher quality services as consumers throughout the world in all sectors become more concerned with quality. Currently, quality in service is the main issue by which producers differentiate themselves from the competitor. The overall objective of this study was to investigate the effect of service quality on customers’ satisfaction in the case of Commercial Bank of Ethiopia branches in Wolaita Sodo town. For this purpose, 383 respondents were selected from target population using simple random sampling method and 22 item likert scaled SERVPERF instrument questionnaires were distributed and 344 valid responses were analyzed. The correlation analysis result indicated that there were positive and significant relationship between all service quality dimensions and customer satisfaction. Regression analysis which was performed to study the effect of service quality on customer satisfaction found that four service quality dimensions: namely, empathy, responsiveness, reliability, and assurance were positively and significantly affect customers’ satisfaction and the tangibles dimension was insignificant for analyses. Compared with other quality dimensions in SERVPERF instrument, empathy has high effect on customers’ satisfaction. It can be concluded that the service quality has significant effect on customer satisfaction in the bank. The bank is recommended to work hard in all quality aspects and give more personal attention to customers, understand the interest of customers, care for their customers, and give prompt service as these will result in customers’ retention, positive word of mouth and increased profitability.},
     year = {2022}
    }
    

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  • TY  - JOUR
    T1  - Effect of Service Quality on Customer Satisfaction in Commercial Bank of Ethiopia, Branches in Wolaita Sodo
    AU  - Natnael Salfore Sharecho
    AU  - Devulapalli Raghava
    Y1  - 2022/02/25
    PY  - 2022
    N1  - https://doi.org/10.11648/j.ebm.20220801.12
    DO  - 10.11648/j.ebm.20220801.12
    T2  - European Business & Management
    JF  - European Business & Management
    JO  - European Business & Management
    SP  - 12
    EP  - 19
    PB  - Science Publishing Group
    SN  - 2575-5811
    UR  - https://doi.org/10.11648/j.ebm.20220801.12
    AB  - Nowadays, there is increased demand for higher quality services as consumers throughout the world in all sectors become more concerned with quality. Currently, quality in service is the main issue by which producers differentiate themselves from the competitor. The overall objective of this study was to investigate the effect of service quality on customers’ satisfaction in the case of Commercial Bank of Ethiopia branches in Wolaita Sodo town. For this purpose, 383 respondents were selected from target population using simple random sampling method and 22 item likert scaled SERVPERF instrument questionnaires were distributed and 344 valid responses were analyzed. The correlation analysis result indicated that there were positive and significant relationship between all service quality dimensions and customer satisfaction. Regression analysis which was performed to study the effect of service quality on customer satisfaction found that four service quality dimensions: namely, empathy, responsiveness, reliability, and assurance were positively and significantly affect customers’ satisfaction and the tangibles dimension was insignificant for analyses. Compared with other quality dimensions in SERVPERF instrument, empathy has high effect on customers’ satisfaction. It can be concluded that the service quality has significant effect on customer satisfaction in the bank. The bank is recommended to work hard in all quality aspects and give more personal attention to customers, understand the interest of customers, care for their customers, and give prompt service as these will result in customers’ retention, positive word of mouth and increased profitability.
    VL  - 8
    IS  - 1
    ER  - 

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Author Information
  • Department of Management, University of Gondar, Gondar, Ethiopia

  • Department of Master of Business Administration, QIS College of Engineering & Technology, Andhra Pradesh, India

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