Service Quality and Customer Satisfaction (The Case of Cooperative Bank of Oromia, Addis Abeba, Ethiopia)

Abstract

In any business–to-customer (B2C) type of environment, satisfying a customer is the ultimate goal and objective. This is perhaps due to the fact that banks sometimes do not really understand of what actually goes on in a customer’s mind. As such, this predicament has provided as a challenging task to most business conglomerates that places strong emphasis on customer satisfaction. The general objective of this study is to determine the relationship between service quality and customer satisfaction, and also investigate the strategies utilized by the bank to deliver exceptional service quality and customer satisfaction through customer service. It is also clear from this research that customer service has impact on service quality perception and customer satisfaction. In this research, the SERVQUAL instrument developed by Parasuraman (1985), has been applied in designing the questionnaire by using five dimensions of service quality: tangibility, reliability, responsiveness, assurance, and empathy. Questionnaires are distributed to 258 customers and 42 employees of the two selected area branches. The questionnaire aimed to determine the level of customers’ expectation and perception towards the service quality of the bank. The results revealed that the assurance and empathy dimensions raised the highest level of expectation, whereas the assurance, empathy, and tangibility dimensions fulfilled the highest level of perception. The study also investigates the dimensions and their levels of service quality that have significant effect on customer satisfaction in CBO. The findings showed that the dimensions of service quality such as tangible, reliability, responsiveness, assurance, and empathy are positively correlated to customer satisfaction. Data collected from respondents was analyzed by using qualitative analysis, descriptive, correlation, and regression analysis.

Keywords: Service Quality, Customers’ expectation and perception, Customer Satisfaction, Customer Gap.

DOI: 10.7176/RJFA/11-17-02

Publication date:September 30^th 2020