SALALE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

ASSESSMENT OF SERVICE QUALITY AND CUSTOMER

SATISFACTION (IN CASE STUDY OF AWASH BANK FITCHE
BRANCH)

A RESEARCH PAPER SUBMITED IN PARTIAL FULFILMENT OF THE

REQUIREMENTS FOR THE AWARD OF THE BA DEGREE IN
MANAGEMENT

PREPARED BY: NAGASO SHAMBAL

ID.NO 0989/11

ADVISOR: KALKIDAN W. (MA)

AUGUST, 2021

FITCHE, ETHIOPIA

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Table of Contents
Table of Contents.........................................................................................................................................i
LIST OF TABLES............................................................................................................................................iii
Acknowledgment........................................................................................................................................iv
List of Acronyms..........................................................................................................................................v
Abstracts.....................................................................................................................................................vi
CHAPTER ONE..........................................................................................................................................1
INTRODUCTION.......................................................................................................................................1
1.1. Background of study.........................................................................................................................1
1.2. Statement of the problem..................................................................................................................2
1.3 Basic Research Question...................................................................................................................3
1.4. Objective of the study.......................................................................................................................4
1.4.1. General objective.......................................................................................................................4
1.4.2 Specific objective........................................................................................................................4
1.5 Definition of Terms...........................................................................................................................4
1.6. Significance of the study..................................................................................................................5
1.7. Scope of the study.............................................................................................................................5
1.8 Limitation of Study............................................................................................................................5
1.9 Organization of the paper..................................................................................................................6
CHAPTER TWO.........................................................................................................................................7
REVIEW OF RELATED LITERATURE...................................................................................................7
2.1. Customer Service..............................................................................................................................7
2.2. Service Quality.................................................................................................................................7
2.3 Total Quality Management................................................................................................................9
2.4. Characteristics of Services..............................................................................................................10
2.5. Service quality Dimensions............................................................................................................11
2.6. Customer Perception.......................................................................................................................13
2.7. Relation between Customers’ perception & Customer Satisfaction................................................13
2.8. Distinction between Service quality and Customer satisfaction......................................................14
2.9 Empirical Review............................................................................................................................15

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 2.9.1 Outsourcing Service..................................................................................................................15
CHAPTER THREE...................................................................................................................................18
RESEARCH METHODOLOGY..............................................................................................................18
Introduction...............................................................................................................................................18
3.1 Research design...............................................................................................................................18
3.2. Research approach..........................................................................................................................18
3.3 Data type and source of data............................................................................................................18
3.4 Data collection method....................................................................................................................18
3.5 Target population and Sampling size...............................................................................................19
3.6 Sampling Technique........................................................................................................................19
3.7 Data Analysis and Interpretation.....................................................................................................19
CHAPTER FOUR.....................................................................................................................................20
DATA PRESENTATION, ANALYSIS AND INTERPRETATION........................................................20
4.1 INTRODUCTION...........................................................................................................................20
4.2. Questionnaires for the customers....................................................................................................20
4.2.1. Demographic information........................................................................................................21
4.2.2 Expectation Section..................................................................................................................23
4.2.3 Perception Part..........................................................................................................................25
4.2.4 Service Quality Gap Analysis...................................................................................................28
CHAPTER FIVE.......................................................................................................................................31
SUMMARY CONCLUSION AND RECOMMENDATIONS.................................................................31
5.1 Summary of Finding........................................................................................................................31
5.2 Conclusions.....................................................................................................................................32
5.3 Recommendation.............................................................................................................................32
REFERENCE............................................................................................................................................33
APPENDICES...........................................................................................................................................35

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LIST OF TABLES
Table 1: Age, sex and marital status distribution of respondents…………………………………...…….27

Table 2: Education level and work occupation of respondent…………………………………………….28

Table 3: Expectation analysis……………………………………………………………………….…….29

Table 4: Perception analysis…………………………………………………………………………...….32

Table 5: distribution of service value between customer expectation and perception………………….…35

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Acknowledgment
First and for most I would like to thanks "Almighty God" who give me life, health, and wisdom to
reach this stage of my life.

Secondly, I would like to express my deep appreciation and gratitude to my advisor "KALKIDAN
W. (MBA)” for her close supervision, correction, comment and encouragement for successful
completion of this paper.

Thirdly, my thanks escape to my family for their moral, financial support and irreplaceable
advice.

Lastly, highly grateful to the manager, employees and customers of Awash bank Fitche branch. I
would like to thanks all those who helped me with their valuable wisdom in this effort.

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List of Acronyms
JIT Just In Time

QI Quality Improvement

SERVQUAL Service Quality Model

TQM Total Quality Management

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Abstracts
This research paper was conducted on the assessment of service quality and Customer
Satisfaction in case of Awash bank Fitche branch. The major purpose of the study was to assess
service quality and how customers are satisficed and find mechanism to solve the problems. The
target populations of the study were the employees and customers of Awash bank Fitche branch.
Because of the descriptive research is description of the state of the nature of affairs as it exists
present. Data collection method were used questionnaires and interviews for primary data .The
major finding of this study indicates the level of service quality it’s assess of customer
satisfaction Awash bank Fitche branch was high and service quality given by the bank was also
good. Generally, the study shows the service which was giving to the customers by Awash bank
Fitche branch was excellent. So, it had better if the bank will continue in the future time by
providing more quality service for its customers.

Key terms: service, quality, customer, satisfaction

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 CHAPTER ONE

INTRODUCTION

1.1. Background of study

Every business is established having the aim of achieving success and being profitable. The
service industry as any other business sector shares this aim. The service industry is among the
oldest and most diverse industries in the world Services vary in many ways and include various
stages. (Lovelock and Wirtz, 2004) defined service is as “an act or performance made by one
party to another although the process may be tied to a physical product, the performance is
transitory, often intangible in nature and does not normally result in ownership of any of the
factors of production”. It is an economic activity that creates value and provides benefits for
customer at specific time and place by bringing about a desired change in or on behalf of the
recipient of the service (Robert Kneed, 2009).

The service industry is among the highly dynamic industries as consumers and customers often
demands change. These changes further drive the service provision and delivery forward with
increasing demand for quality. Since services are intangible in nature their success and failure
are not easily measured or quantified. The success of any service providing organization can be
measured in terms of its customers’ attitude towards the service delivery practiced which means
service quality will be the dominant element in customers’ evaluations of a given service.
Customers’ go to service providers expecting to get a quality service and the level of expectation
among each individual varies. Finding out what customers expect is essential in providing a
quality service. This can be done through marketing research focusing on issues such as what
features are important to customers, what levels of these features’ customers expect and what
customers think the company can and should do when problems occur in service delivery. In a
service business, the customer and the front-line service employee interact to create the service.

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Effective interaction, in turn, depends on the skills of front-line service employees and on the
support, processes backing these employees. Thus, successful service companies focus their
attention on both their customers and their employees (Kotler and Armstrong, 2012).

Unlike product manufacturers who can adjust their machinery and inputs until everything is
perfect, service quality will always vary, depending on the interactions between employees and
customers. Banks play a very important role in the economic life of a nation. Although the
banking industry is growing and offering various types of financial services to the public, their
mere existence does not do any good unless they deliver a quality service. There is no doubt that
the increasing level of competition has improved the quality of service to customers of the
banking industry (Coleman, 2019).

Therefore, the main interest of this study is to assess the perception of customers concerning a
service provided by Bank of Awash and find out whether the bank has met the perception of its
customers under all the dimensions of service quality as service quality is becoming key choice
driver of customers.

1.2. Statement of the problem

In the world of competition, service quality is the most important parameter that needs critical
attention for an organization to exceed its competitors. This is especially true in the service
sector where there is frequent interaction with customers which hold the highest stake in
ensuring the organization exceeds its competitors and excel in the service it provides. In winning
this competition, it is obvious that customer satisfaction is a critical issue as it is highly
correlated with the quality of services provided by competing organizations (Ahmossaw, 2011).

A common agreement between numbers of literatures about the relationship between services
quality and customer satisfaction, and their findings were that there is strong relationship
between both of them. Spreng and Mackoy, (2016) stated that services quality guide to customer
satisfaction, while Sureschander et al (2003), and Lin (2003), emphasized that this two are
different from the customer point of view and when the customers see that the perceived
performance exceed their expectation then they will be satisfied, but if the perceived
performance is less than their expectation then they will be dissatisfied.

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Bank is one of the service industries sectors. This has strong relationship with customers. If
there is a bank, there are customers. Banks cannot survival without the presence of customers.
Customers are king of the service industries. So, the customer needs quality service from the
banks (Abate Moges 2018).

Banks operating in Ethiopia are consequently put into lot of pressures as a result of the increased
competition in the industry. Various strategies are formulated to retain the customer and the key
of it is to increase the service quality level. Service quality is particularly essential in the banking
services context because it provides high level of customer satisfaction, and hence it becomes a
key to competitive advantage (Mesay Shata, 2012).

Several studies have been done on service quality and customers’ satisfaction which results to
measure the satisfaction level of the customers on service organization in Ethiopia and all the
studies used SERVQUAL to measure the service quality. Only a few studies have been done on
banks, but many of the studies were conducted only at the government bank which is the
commercial bank of Ethiopia. What makes this research different from the previous was that this
research would assess the service quality and customers’ satisfaction of one of the private banks,
Awash Bank Fitche branch.

Awash Bank has been the first private commercial bank since the year of 1994 and currently has
430 branches all over the country as of December 2019G.C. So, Awash Bank Fitche branch is
one of the recently opened branches of Awash Bank. As the preliminary interview shows
customers are not happy with the bank’s service despite its years of service in the market. In
addition, it will not be sufficient to give generalization about other banks with a research made
only in one bank, Commercial Bank of Ethiopia. Thus, identifying these gaps the researcher
strives to assess service quality and the customer satisfaction of the bank and give an insight for
the management of Awash Bank Fitche branch about services quality and customers’ satisfaction
of the bank.

1.3 Basic Research Question

1. How do customers perceive the service quality in terms of tangibles, reliability,
responsiveness, assurance and empathy in Awash bank Fitche branch?

2. What is the extent of customer satisfaction in Awash bank Fitche branch?

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3. How does service quality contribute for customer satisfaction in Awash bank Fitche branch?

4. Does Awash Bank’s service quality meets its customers’ expectations?

1.4. Objective of the study

1.4.1. General objective

The general objective of the study was to assess service quality and customer satisfaction (In
case study of Awash bank Fitche branch).

1.4.2 Specific objective

1. To describe, how customers perceive the service quality in terms of tangibles, reliability,
responsiveness, assurance and empathy in Awash bank Fitche branch.

2. To identifies the extent of customer satisfaction in Awash bank Fitche branch.

3. To describe the contributions of service quality for customer satisfaction.

4. To investigate customer expectation meeting of service quality at Awash Bank Fitche.

1.5 Definition of Terms

Service: is an assessment of how well a delivered service conforms to the client’s expectations.

Quality: is the totality of features and characteristics of a product or service that bears its ability
to satisfy stated or implied needs.

Customer: a customer is a person or company that receives, consumes or buys a product or

service and can choose between different goods suppliers.

Satisfaction: is a feeling of happiness or pleasure because someone achieved something or got

what it wanted.

Customer satisfaction: is the number of customers or percentage of total customers, whose

reported experience with a firm, its products, or its service (ratings) exceeds specified
satisfaction goals.

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1.6. Significance of the study
This research would give a number of significance benefits among which the following were
list. The results of the study would serve as inputs for the organization. It would help to
identifying key variable in order to develop strategies to address and improve assessment of
service quality and customer satisfaction, the outcome of this research could be used by other
similar organization or banks to assess service quality and customer satisfaction, and also this
paper is uses as a reference for future researcher who study on assessment of service quality and
customer satisfaction or other company in Ethiopia.

1.7. Scope of the study

The scope of this study was delimited to assess service quality and customer satisfaction in
Awash bank at Fitche branch.

This study was limited conceptually, geographically and methodologically.

Geographically, the study was delimited to Awash bank Fitche branch at Fitche town.

Conceptually, the study was focused on tangible, reliability, responsiveness, assurance, &
emphatic as service quality dimensions.

The research was aimed to assess those attributes of service quality dimension and customer
satisfaction with regard of tangible, reliability, responsiveness, assurance, & emphatic aspects of
service quality.

Timely, this study or research is conducted from April to August.

Methodologically, this research used descriptive research method and self-administered.

Questionnaires were the main source of primary data.

1.8 Limitation of Study

In conducting this research, the researcher faced with in the following limitations that highly
affect the study in achieving its objectives.

The major problems that occur during the study were being,

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  The total questionnaire duplicated and distributed were not collected fully because of
corona virus and carelessness of some respondents.
 Shortage of secondary data to make comparison and to reference for more detail.
 The respondents were being involuntary to give their respective detail responses or data
about their operation.
 In addition to the five dimensions of service quality dimensions there are several
dimensions affecting customer satisfactions like consumer behavior, environmental factor
etc. which is the study does not occur.

1.9 Organization of the paper

This paper was organized into five chapters:

Chapter one contains introduction part that includes back ground of the study, statement of the
problem, basic research questions, objective of the study, definition of the terms, significance of
the study, the scope of the study and limitations of the study. Chapter two is concentrated on
literature review. Chapter three is focused on the research methodology. Chapter four was data
analysis and presentation. At the end chapter five was summery, conclusion and recommendation
of the study.

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

The primary purpose of this chapter is to get the theoretical understanding of the concept of
service Quality, characteristics of service quality, dimensions of quality, what customer service
and Satisfaction means, and what Quality management is. The researcher 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. Customer Service

According to Davidow and Uttal (2016), customer service means all features, acts and
information. That augments 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 (Osuagwu2002). 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.

2.2. 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 for Use" is the

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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.

(Bandy opadhyay (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).

Service quality is more difficult for consumers to evaluate than product quality; this is due to a
Lack of tangible evidence associated with the service (Hong and Goo, 2004). However, in the
above definitions, the concepts of quality were mainly applied to tangible products the
manufacturing sector. Due awakening of consumerism in 1980s, the quality of service as a
subject of academic interest caught the attention of marketing professionals and they attempted
to define service quality from customers' perspective. Experts like Kotler, Levitt, Gr6nroos,
Garvin, Cronin, Taylor, Teas, Rust, Parasuraman, Zenithal, and Berry have contributed to the
growth of the subject and many models were developed on its measurement.

In the past decades, researchers (Carman 1990; Garvin 1983; Parasuraman et al, 1985, 1988),
have defined and measured service quality by examining the attributes of service quality, while
others (Bitner and Hubbert 1994; Iacobucci, Grayson, and Ostrom, 1994; Oliver, 1993; Oliver
and DeSarbo, 1988; focused on the application in services to conceptualize the relationship
between service quality and customer satisfaction. Therefore, a combination of the service
quality and Customer satisfaction literature has formed the foundation of service quality theory
(Clemes et al., 2007; as cited in Wei 2010). 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

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addition, different researchers defined service quality in different ways. Lovelock Wright (1999),
define quality as the degree to which a service satisfies customers by meeting their needs, wants
and expectations. On the other hand, other researchers like Bitner and Hubbert (1994 describe
that the service quality as the customers’ overall impression of the relative inferiority or
superiority of the organization and its services. It is the evaluation process outcome, in which
customers are involved and where a certain experience is always compared to the perceived
service received. It cannot be objectively measured according to some technical standards but is
subjectively felt by customers and measured relative to customer determined standards as per
Kwortnik, (2005). Berry et al., (1990) also defined service quality as the discrepancy between
Customers’ expectations or desire and their perceptions.

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. In the same taken the team Parasuraman,
Zeithaml and Berry (hereafter PZB) 1990 had conducted several research studies to define
service quality and identify the criteria that customers use while evaluating the service quality in
service organizations. They define service quality as "the extent of discrepancy between
customers' expectations or desires and their perception of what is delivered". In other words, it is
the comparison of what customers expect before the use of product/ service with their experience
of what is delivered. This definition has been widely quoted and referred in service marketing
literature and the researcher chooses this definition as more appropriate for this research.

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 those are important to the customer. Heizer and Render (2006) have also
developed seven concepts for effective Quality Improvement (QI) program by modifying the 14

9
Point’s developed 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.

2.4. Characteristics of Services

According to Bitner et al., (1993) service has four characteristics: intangibility,
inseparability,heterogeneity and portability.

Intangibility of Services

The idea of services being activities, benefits or satisfactions which are offered for sale or are
provided in connection with the sale of goods. The degree of tangibility has been suggested as a
means of differentiating tangible products with services (Levitt, 1981). Most of the time, services
are explained as being intangible since their outcome is considered to be an action rather than a
physical product (Johns, 1999). (Darby and Karni 1973 and Zeithaml 1981) highlight the fact
that the degree of tangibility has implications for the ease with which consumers can evaluate
services and products. Other researchers propose that intangibility cannot be used to differentiate
clearly services with all products. (Bowen 1990 and Wyckham, Fitzroy and Mandry 1975)
suggest that the intangible-tangible concept is difficult for people to grasp. Bowen (1990)
provides empirical evidence to support this view feel that the importance of intangibility is over-
emphasized.

Inseparability of Services

Inseparability is taken to reflect the simultaneous delivery and consumption of services and it is
to enable consumers to affect or shape the performance and quality of the service (Grönroos
1978; believed Zeithaml, 1981 as citied in Wolak et al., 1998).

Heterogeneity of Services

Heterogeneity reflects the potential for high variability in service delivery. This is a particular
problem for services with high labor content, as the service performance is delivered by different
people and the performance of people can vary from day to day and from time to time (Rathmell,
1966). Heterogeneity to offer the opportunity to provide a degree of flexibility and customization
of the service. Heterogeneity can be introduced as a benefit and point of differentiation as per

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Wyckham et al (1975).

Perish ability of Services

In general, services cannot be stored and carried forward to a future time period (Rathmell, 1966;
Donnelly, 1976; and Zenithal et al., 1985 as citied in Wolaket al1998). Services are “time
dependent” and “time important” which make them very perishable. Hartman and Lindgren
(1993) also claim that the issue of perish ability is primarily the concern of the service producer
and that the consumer only becomes aware of the issue when there is insufficient supply and they
have to wait for the service.

2.5. Service quality Dimensions

Service's unique characteristics of intangibility, heterogeneity, and inseparability lead them to
possess high levels of experience and credence properties, which, in turn, make them more
difficult to evaluate than tangible goods (Bitner 1990; s Zeithaml 1981). Identification of the
determinants of service quality is necessary in order to be able to specify measure, control and
Improve customer perceived service quality. The SERVQUAL is a concise multiple-item scale
with good reliability and validity that researcher can use to better understand the service
expectations and perceptions of consumers and, as a result, improve service. SERVQUAL was
also selected since it is important when it is used occasionally to track the service quality trends,
and when it is used in combination with other forms of service quality instrument identify ten
determinants for measuring service quality which are tangibility, reliability, responsiveness
communication, access, competence, courtesy, credibility, security, an 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
equality, SERVQUAL (Service quality model) (Parasuraman et al., 1988).

These five dimensions identified as follows:

A. Reliability: delivering on promise

Reliability is defined as the ability to perform the promised service dependably and accurately.
In its broadest sense, reliability means that the company delivers on its promises, promises
about delivery, service provision, problem resolution, and pricing, customers want to do business

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with companies that keep their promises, particularly their promises about the service out comes
and core service attributes.

B. Responsiveness: being willing to help

Responsiveness is the willingness to help customers and to provide prompt service. These
dimensions emphasize, attentiveness and promptness in dealing with customer requests,
questions, complimented and problems.

Responsiveness is commentated to customer by the length of time they have to wait to for
assistance, answers to questions or attention to problem.

C. Assurance: inspiring trust and confidence

Assurance is defined as employee’s knowledge, courtesy, and the ability of the firm and its
employees to inspire trust and confidence.

This dimension is likely to be particularly important for service that the customer services as
involving high risk and /or about which they feel uncertain about their ability to evaluate out
comes. Trust and confidence may be embodied in the person who links the customer to the
company. In such service contexts the company seeks to build trust and loyalty between key
contact people and individual customers. The personal banker concept captures this idea:
customers are assigned to a banker who will get to know them individual and how well
coordinate all of their banking services.

D. Empathy: Treating customers as individual

Empathy is defined as the caring individualized attention the firm providence its customers. The
essence of empathy is conveying, through personalized or customized service that customers are
unique and special customers want to feel understood by and important to firms that provide
service to them.

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E. Tangibles: representing the service physically

Tangibility refers to physical facilities, equipment, and appearance of personnel. Jabnoun 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. According to Ananth et al (2011), tangibility is
measured by modern looking equipment, physical facility, employees are well dressed and
materials are visually appealing.

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). It involves timeliness of services (Parasuraman et al., 1985). It is also involves
understanding needs and wants of the customers, convenient operating hours, and individual
attention given by the staff, attention to problems and customers safety in their transaction
(Kumar et al., 2009).

2.6. Customer Perception

The other item that is highly correlated with customer satisfaction is perception. Perception is the
process by which people select, organize, and interpret information, to form a meaningful picture
of the world (Kotler& Armstrong, 2010). Customers perceive the quality of the service in these
two dimensions, what they get and how they get it (Gronroos, 1982). Perceived quality is
considered as good when the expectation becomes realistic. The perception level should be
higher than the expectation level to create the positive perception and satisfaction. If the
difference between expectation and perception is very significant, it can be said that the
customers are satisfied highly. In the moderate level, the gap becomes zero which refers that the
expectation level and perception level are the same. On the contrary, if the expectation becomes
higher than the perception, the negative results come to show that the customers are not satisfied
and the company should improve their service more than before (Gronroos, 1990).

2.7. Relation between Customers’ perception & Customer Satisfaction

The principal purpose of a business is to create satisfied customers Drucker (1954). Increasing
customer satisfaction has been found to lead to higher future profitability (Anderson, Fornell,
and Lehmann 1994), lower costs related to defective goods and services increased buyer

13
willingness to pay price premiums, provide referrals, and use more of the product (Reichheld
1996; Anderson and Mittal 2000), and higher levels of customer retention and loyalty. Increasing
loyalty, in turn, has been found to lead to increases in future revenue and reductions in the cost of
future transactions (Anderson, Fornell, and Lehmann 1994). A firm’s future profitability depends
on satisfying customers in the present – retained customers should be viewed as revenue
producing assets for the firm (Anderson and Sullivan 1993; Reichheld 1996; Anderson and
Mittal 2000 as cited in Malthouse et al., 2003).

Furthermore, Lin (2003), defined customer satisfaction as the outcome of a cognitive and
affective evaluation of the comparison between expected and actually perceived performance,
which Is based on how customers appraise delivery of goods or services. Jamal and Kamal
(2002), describes customer satisfaction as “a feeling or attitude of a customer towards a product
or service after it has been used.” Therefore, any business, service or manufacturing industry’s
main motive is increasing profit from time to time and all the industries know that profit is
generated only and only if they can satisfy their customer. Customer’s satisfaction is the positive
result of conformance to a specific service/product of their customers’ perception. Hence
customer satisfaction is the positive end result of customers’ perception.

2.8. Distinction between Service quality and Customer satisfaction

The literature on services has made a distinction between service quality and customer.
Important for Satisfaction (Bitners, 1990; Bolton & Drew, 1991; Parasuraman et al., 2016). This
differentiation is firms to concentrate on enhancing their capability to satisfy customers through
providing high Service quality. The position of scholars is that service quality involves an
attitude and is an evaluation over several service encounters over time. It is also thought to be an
overall assessment about a service category or an organization. In support of this, respondents in
Parasuraman et al., (1988)’s study demonstrated satisfaction with specific service encounters but
were not happy with the service quality of the firm. Conversely, recent thoughts on customer
satisfaction is summarized in the following definition of satisfaction by Oliver (1981) as
Psychological state resulting when the emotion surrounding disconfirmed expectations is
coupled with the consumer’s prior feelings about the consumption experience. Furthermore,
definitions by other scholars (Howard & Sheth 1969; Hunt, 1979 as cited in Harrs, 2008)
Support the thinking that it relates to a specific service encounter.

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 Moreover, Oliver (1981) distinguished customer satisfaction from service quality in his
definition of attitude as the consumer’s relatively enduring affective orientation for a product,
store, or process while satisfaction is the emotional reaction following a disconfirmation
experience which acts on the base attitude level and is consumption-specific Therefore, service
quality is “more stable and is situational oriented (Oliver, 1981, p. 42). Experience with a
product/service (Yi, 2015). Here customers’ perception takes the major share towards customers’
satisfaction because their satisfaction is the result of their perception towards the specific service.
For example, if the quality of service delivered is beyond their expectation then the customers
will be delighted and if customer’s perception is equal to their expectation level or under their
expectation with the delivered service quality the customers will be satisfied and dissatisfied
respectively. Customer satisfaction leads to repeat purchases, loyalty and to customer retention
(Zairi, 2000). However, dissatisfied customers may try to reduce the dissonance by abandoning
or returning the product, or they may try to reduce the dissonance by seekings information that
might confirm its high value (Kotler, 2000).

2.9 Empirical Review

2.9.1 Outsourcing Service

The out sourcing of material and services to the third party is business venture with long history
in advanced nations. This could take the form of offshore and onshore outsourcing. Off shoring
is the outsourcing of service activities to a lower cost organization in a foreign country. Lower
costs and better efficiencies allow the outsourcer companies to compete on a global basis. Off
shoring, however, has its own down side. It could lead to loss of local jobs due to relocation of
the business unit; lose control over a potentially extended supply chain etc (Alex Bank as cited in
Abebe Maru, 2015). The issue of job loss is becoming much politicized at a time hiding the
advantages of offshore outsourcing accruing to advanced countries in the form of global trade
and growth.

On shoring (domestic outsourcing) refers to letting some services to be provided by some

organizations outside a company but within the same country. This type of outsourcing helps
organization to achieve lower operation costs and benefits from having local employees which
are not obtained from other type of outsourcing (Alex Bank as cited in Maru, 2015). European
Central Bank in its survey conducted in 2004 highlighted the benefits of outsourcing. These

15
include cost reduction, access to better technology and infrastructure and strategy of focusing on
core activities, economies of scale, free scarce resources, quality services and flexibility in its
survey conducted in 2004. The study also reveals several risks associated with outsourcing, viz,
operational, legal, strategic risk, country risk, reputational risk, loss of flexibility, loss of control
and cultural/social problems (European Central Bank, 2004).

In Ethiopia the outsourced service is recent economic phenomenon the rationales of which are
the once mentioned in the above discussion. Currently, it is common to see government
institutions, banks, factories, NGO‟s etc outsourcing their none core functions such as guarding,
cleaning, carrier service, driving, event organizing etc to the outsourced service providing firms.
Commercial Bank of Ethiopia out sourced some 18 services including guarding, cleaning,
messenger service, driver, file operator, fork lift operator, etc. Dashen Bank, Cooperative Bank
of Oromia, Wegagen Bank, Buna Bank, Addis Bank, Enat Bank, Debub Global Bank, Birhane
Selam Printing, Artistic Printing, Investment Commission, Drug and Food Administration
Authority, are some example which out sourced services like guarding and cleaning. Ethio
Telecom further going to its core activities out sourced the whole sales and retail activities of
voucher cards, sim cards and mobile apparatus to the locale agents.

With regards to the domestic outsourcing (Mekuria 2017) in her post graduate paper indicates in
connection with the outsourced services of Commercial Bank of Ethiopia that the management
got opportunity to focus on the Banks core issue by outsourcing the non-core functions despite
some problems on the quality of the outsourced service delivered.

An important feature of all the prior research studies documented in the preceding section show
that outsourcing has a benefit of operational cost cutting, helping the management focus on core
activities, have access to the expertise and up-to-date knowledge, improve capacity and quality
of service. These advantages ultimately help to bring about customer satisfaction which is one of
the focuses of this paper.

Relationship of Quality and Customer Satisfaction

Oliver (1993), first suggested that service quality would be antecedent to customer satisfaction
whether these constructs were cumulative or transaction-specific. Some researchers have found
empirical justification for this view where customer satisfaction came as a result of service

16
quality (Anderson & Sullivan, 1993; Fornell 1996; Spreng & Macky1996). Despite the fact that
factors such as price, product quality, delivery etc. can affect customer satisfaction, perceived
service quality is a component of customer satisfaction (Zeithaml, 2006). Satisfaction and service
quality have certain things in common, but satisfaction generally is a broader concept, whereas
service quality focuses specifically on dimensions of service (Wilson, 2008). This theory
conforms to the idea of Wilson (2008) and has been confirmed by the definition of customer
satisfaction presented by other researchers.

More evidence has been proved that the service quality acted as one of the factors that influence
satisfaction. Parasuraman (1985), in their study confirmed that when perceived service quality is
high, then it will lead to increase in customer satisfaction. Some other authors also acknowledged
that customer satisfaction is based on the level of service quality be a provided by the service
entities (Saravana &Rao, 2007).

17
 CHAPTER THREE

RESEARCH METHODOLOGY

Introduction
This chapter was mainly describing the research methodology of the study. It includes research
design, data types and source of data including primary data, sampling technique, data collection
method and data analysis method.

3.1 Research design

In this study descriptive research design was applied. Because, it tried to describe the nature of
existing problem and come up with appropriate solution.

3.2. Research approach

The research approach to be applied in this proposed study would be both quantitative and qualitative
approach. Quantitative approach refers to any data collection or data analysis procedure that generates or
uses numeric data. Qualitative approach refers to any collection or data analysis procedure that generates
or uses non numerical data.

3.3 Data type and source of data

The researcher was used primary source of data. Primary data was collected from customers,
employees and manager of the Awash bank at Fitche branch.

3.4 Data collection method

To collect the required data from the participants, questionnaire and interview tools were used.
Questioner with close end and open end was used mostly in the study and interview was the

18
other instrument of data collection method in which the researcher was interviewed the manager
of the bank and customers of the bank. Convenience sample is a type of non- probable sampling
that is based on judgment of the researcher.

3.5 Target population and Sampling size

The target populations of the researcher were both the employees’ and customers of Awash bank
of Fitche branch. Since the number of employees was 22 in number, here the researcher used
census method. To collect the required information from the customers of the bank the
researcher was used convenience sampling method. As the manager of the bank estimated the
number of the customer can be 12500. So, the researcher was used Yamane sampling method.
That is

n=N/1+N (e) 2 where n: sample of the study

n=12500 N: number of populations

1+12500(0.1)2=99 confidence level: 90%

Marginal error: 10%

3.6 Sampling Technique

The researcher used both census and simple sampling techniques.

3.7 Data Analysis and Interpretation

The researcher analyzed the data by using descriptive method of data analysis tool such as
percentage, table, and averages. These were achieved through summary of simple statistics,
which includes the mean, or average. Finally, the researcher interpreted the analyzed data in
communicable and understandable manner for the reader.

19
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION
Delivering quality service is one of the most important elements that help an organization to
server and compete in the competitive business environment. Customers always look for services
with better quality.

The significance of evaluating the quality of service and customer satisfaction has become a
prominent issue for companies. Many researchers have applied SERVQUAL model to assess the
quality-of-service delivery and customer satisfaction. By using this model customer’s
expectation and perception about the quality of service, and the gap between the two can be
determined and the gap can be computed and so that customer’s level of satisfaction to
dissatisfaction with the service delivered to them can be determined. In this study, the
standardized SERVQUAL question was used and it is constructed from twenty-two (22) service
quality attributes, which from five service quality dimensions’ tangible, assurance, reliability,
responsiveness, and empathy.

The study was analyzed customer’s expectation and perception about the quality of Awash bank
Fitche Branch; saving account service. It also identified the gap between customers’ expectations
and their perceptions about the delivered service and they’re by customer’s satisfaction or
dissatisfaction was determined. This chapter also presents the finding.

NB: were the total sample of respondents 99, the researcher could not address for all
respondents then take 85 % of these percent of total respondent were 84. Because at the time the
study was in processes the corona virus conquered all the world. Due to this reason a researcher
couldn’t address all respondents.

4.2. Questionnaires for the customers

Ninety-nine questionnaires were distributed to the respondents and out of the 99 questionnaires
84 of them were collected with a response rate of 85 percent.

20
The demographic characteristics include: gender, age, level of education, and frequency of usage
of the respondent. This aspect of the analysis deals with the personal data on the respondents of
the questionnaires given to them. The table below shows the details of background information
of the respondents.

4.2.1. Demographic information

I. Age, Sex and Marital Status Distribution of respondents.

Table1: Age, sex and marital status distribution of respondents.

Items Alternatives Frequency Percentage

Under 20 0 0

Age 21-30 38 45.23%

31-40 26 30.95%

41-50 18 21.42%

Above 50 2 2.38%

Total 84 100%

Male 54 64%

Sex Female 30 36%

Total 84 100%

Single 40 48%

Marital Married 24 28%

Divorced 20 20%

Total 84 100%

Source: Researcher’s survey, 2021.

21
The above table clearly indicate that the age distribution of 84 respondents there is no
respondent’s underage of 20, 45.23% are between the age 21& 30, 30.95% are between the age
of 31-40, 21.42% are between the age of 41 & 50, 2.38% are above the age of 50. This indicates
that large numbers of respondents are found in the age 21-30.

As we can understand from the above table, the number of males is greater than the number of
female with the ratio of 54(64%) to 30(36%).

As can be seen from the above table 48% of the bank’s customers are single or unmarried, 28%
married, 24% are divorced. This clearly indicates the large number of unmarried customers and
low number of divorced customers.

II. Education level and work occupation of the respondent

Table 2: Education level and work occupation of respondent

Items Alternatives Frequency Percentage
Educational Below grade 12 20 24%
Level Grade12 complete 5 6%
Certificate 8 10%
College diploma 18 21%
First degree 32 38%
2nd degree & above 1 1%
Total 84 100%
Work Government employee worker 13 15%
Occupation Private company employee 15 18%
worker
Students 36 43%
Self-employee worker 20 24%
Total 84 100%
Source: Researcher’s survey, 2021.

As can be seen from the above table 24% are below grade 12 level, 6% are at grade 12 complete
level 10% are certificate level, 21% are at college diploma level, 38% are at 1st degree level, 1%

22
 is at 2nd degree level this. Percentage indicates that the large number of respondents have first
degree education level.

The above table shows 15% are government employee worker, 18% are private company
employee work, 43% are students, and 24% are self-employee work. This percentage indicates
that the large number of respondents have students of work occupation.

4.2.2 Expectation Section

Table 3: Expectation analysis.

There were 22 items from five dimensions were available in the expectation section. The table
below showed the summary of the percentage score of each of an expectation statement.

Dimension Measurement

No Tangible Strongly Agree Moderate Disagree Strongly

agree disagree
1 The bank has up to date equipment’s 35 20 15 9 5
2 The physical facilities (office layout, 25 35 10 8 6
furniture, etc. of bank will be visually
appealing)
3 The employees of the bank are well 40 22 18 3 1
dressed and appear neat
4 The equipment and materials will be in 20 36 14 7 7
line with the type of service provided
Total 120 113 57 27 19
Average 30 28.25 14.25 6.75 4.75
Reliability Strongly Agree Moderate Disagree Strongly
agree disagree
5 The staff can provide you the services 25 18 30 7 4
as promised
6 The staff provide to you accurate 15 29 32 6 2
information
7 The staff perform the service right at 12 37 22 8 5

23
 the first time
8 The staff offer you some help 16 25 32 9 2
9 Keep record accurately 22 31 16 10 5

Total 90 140 132 40 18

Average 18 28 26.4 8 3.6
Responsiveness Strongly Agree Moderate Disagree Strongly
agree disagree
10 The staff tells you exactly when service 12 33 16 18 5
will be provides
11 The staff gives your on-time services 17 29 23 8 7
12 The staff are willing to help you 27 30 15 8 4
13 The staff respond to requests properly 19 31 22 7 5

Total 75 123 76 41 21
Average 18.75 30.75 19 10.25 5.25
Assurance Strongly Agree Moderate Disagree Strongly
agree disagree
14 The staff product knowledge of bank 18 32 14 16 4
information
15 The staff have required skill to perform 25 24 12 13 10
services
16 The staff speak with you by suing an 10 26 32 9 7
appropriately
17 The staff are trust worthy 19 25 28 9 3
Total 72 107 86 47 24
Average 18 26.75 21.5 11.75 6
Empathy Strongly Agree Moderate Disagree Strongly
agree disagree
18 The staff make you feel safe 16 34 17 11 6
19 The staff are able to communicate 17 38 13 10 6
effectively with you

24
20 The staff shows personal attention to 19 28 17 15 5
you
21 The staff knows your specific needs 15 29 25 13 2
22 The staff use convenient time 18 32 21 8 5
management
Total 85 161 93 57 24

Average 17 32.2 18.6 11.4 4.8

Source: Researcher’s survey, 2021.

(Zeithamal and Betener, 2003) defines customer expectations as beliefs about service delivery
that function as standards or reference points against which performance is judged. So, from the
above table one can understand that the expectation that the respondents have towards the service
of the bank. Their expectation for the five service damnations were collected from the
respondents and discussed as follows. Under tangible dimension as the measurement indicates
respondents strongly agree 30 and agree 28.25. This shows that respondents expect towards the
tangibility dimension is high. Furthermore, they consider tangibility to evaluate service quality of
the bank. On the “reliability” dimension the respondent’s expectation was relatively” lower than
of tangibility and it measures 28 agree and 26.4 moderate this would implies the according to
their expectation they have less trusts on service that related with reliability dimension. The
customers also have medium expectation of service delivery on the dimension of
“Responsiveness.” When the researcher saw the customer expectation averagely it would
measure 30.75 agree and 19 moderates. This implies that they have a doubt on this dimension.

Towards the all dimensions of service quality, average respondent’s expectation the highest
expectation was from the “Assurance” dimension which scorn 30 strongly agrees and 28.25
moderate. This indicates that from all dimension the customer has a greatest trust on this
dimension and they also consider getting really on the service delivery process of the bank.

Generally, to increase customers’ expectations towards Assurance, reliability, and

responsiveness dimension the bank should promote variables that are located under those
dimensions and improve the area of service quality related to those dimensions to transfer the

25
customers’ expectation from agree to strongly agree and to minimize the moderate to those
measurements.

4.2.3 Perception Part

Table 4: Perception analysis.

There were 22 items from five dimension were available in the perception part. The table below
showed the summery of percentage score of each of each of apperception statement.

Dimension Measurement

No Tangibles Strongly Agree Moderate Disagree Strongly

disagree disagree
1 Awash bank Fiche branch has up to date 15 29 26 10 4
equipment
2 The physical facilities (office layout, 17 28 27 7 5
furniture, etc, of Awash bank Fitche branch
will be visually appealing)
3 The employees of the Awash bank Fitche 26 29 23 4 2
branch are well dressed and appear neat
4 The equipment and materials of Awash bank 18 27 23 10 6
Fitche branch will be in line with the type of
service provided
Total 76 113 99 31 17
Average 19 28.25 24.75 7.75 4.25
Reliability Strongly Agree Moderate Disagree Strongly
agree disagree
5 The staff of Awash bank Fitche branch can 14 34 22 8 6
provide you the service as promised
6 The staff of Awash bank Fitche branch to 24 35 12 10 3
your accurate information
7 The staff of Awash bank Fitche branch 25 22 29 6 2
performed service right at the first time

26
8 The staff of Awash bank Fitche branch offer 25 21 26 8 4
you some help
9 Awash bank Fitche branch keep record 28 22 17 9 8
accurately
Total 116 134 106 41 23
Average 23.2 26.8 21.2 8.2 4.6
Responsiveness Strongly Agree Moderate Disagree Strongly
agree disagree
10 The staff of Awash bank Fitche branch tells 26 22 26 8 2
you exactly when services will be provides
11 The staff of Awash bank Fitche branch gives 29 30 15 9 1
your on-time service
12 The staff of Awash bank Fitche branch are 27 24 21 8 4
willing to help you
13 The staff of Awash bank Fitche branch 25 26 21 7 5
respond to requests properly
Total 107 102 83 32 12
Average 26.75 25.5 20.75 8 3
Assurance Strongly Agree Moderate Disagree Strongly
agree disagree
14 The staff of Awash bank Fitche branch 28 21 20 9 6
product knowledge of bank information
15 The staff of Awash bank Fitche branch have 24 26 23 7 4
required skill to perform services
16 The staff of Awash bank Fitche branch 26 29 19 6 4
speak with you by with an appropriately
17 The staff of Awash bank Fitche branch are 25 24 16 17 2
trust worthy
Total 103 100 78 39 16
Average 25.5 25 19.5 9.75 4

27
 Empathy Strongly Agree Moderate Disagree Strongly
agree disagree
18 The Awash bank Fitche branch make you 27 20 28 7 2
feel safe
19 The staff of Awash bank Fitche branch able 25 29 21 3 6
to communicate effectively with you
20 The staff of Awash bank Fitche branch 26 22 23 8 5
shows personal attention to you
21 The staff of Awash bank Fitche branch 24 24 21 8 7
knows your specific needs
22 The staff of Awash bank Fitche branch use 21 27 19 10 7
convenient time management
Total 123 122 112 36 27
Average 24.6 24.4 22.4 7.2 5.4
Source: Researcher’s survey, 2021.

The above table indicates the perception of customers get from the bank from the five services
quality dimensions. Under tangibility dimension, as the average indicates, the respondent’s
perception is agree (28.25) and a moderate (24.75). This implies that what customers perceive
from tangibility dimension is god levels. Among the five dimension of service quality the highest
perception related to “the staff of Awash bank Fitche branch provide to your accurate
information “that is from the tangibility” have (28.25) respondents. The second highest
perception from the five dimensions of service quality reliability respondent (26.8) were related
to “The staff of Awash bank Fitche branch can provide you the services as promised”, which is
the reliability, “The staff of Awash bank Fitche branch are willing to help you”, from
responsiveness, “The staff of Awash bank Fitche branch are trust worthy”, which is from
assurance. From the above explanation the three highest perceptions were identified from
reliability, responsiveness and assurance dimension. This implied that in Awash bank Fitche
branch customer’s feels best and satisfied on those dimensions.

28
In addition to the highest perception the respondents also have a lowest perception. The lost was
the statement related to “The physical facilities (office layout, furniture, etc, of Awash bank
Fitche branch will be visually appealing)” from the tangibility dimension (4.25).

4.2.4 Service Quality Gap Analysis

Table 5: distribution of service value between customer expectation and perception

No Dimensions Measures Perception Expectation Gap score

average score average score

1 Tangible Strongly agree 19 30 -11

Agree 28.25 28.25 0

Moderate 24.75 14.25 10.5

Disagree 7.75 6.75 1

Strongly disagree 4.25 4.75 -0.5

2 Reliability Strongly agree 23.2 18 5.2

Agree 26.8 28 -1.2

Moderate 21.2 26.4 -5.2

Disagree 8.2 8 0.2

Strongly disagree 4.6 3.6 1

3 Responsiveness Strongly agree 26.75 18.75 8

Agree 25.5 30.75 -5.25

Moderate 20.75 19 1.75

Disagree 8 10.25 -2.25

Strongly disagree 3 5.25 -2.25

29
 4 Assurance Strongly agree 25.5 18 7.5

Agree 25 26.75 -1.75

Moderate 19.5 21. -1.5

Disagree 9.75 11.75 -2

Strongly disagree 4 6 -2

5 Empathy Strongly agree 24.6 17 7.6

Agree 24.4 32.2 -8

Moderate 22.4 18.6 3.8

Disagree 7.2 11.4 -4.2

Strongly disagree 5.4 4.8 0.6

Source: Researcher’s survey, 2021.

Service quality gap shows whether customers are satisfied or delights by purchasing service from
services organization. As indicated in the above table respondent’s perception towards tangible is
lower than what they expect from the bank. This does not mean that the respondents are
dissatisfied from the service of the bank. Even if their expectation is greater than what they
perceived, one can conclude the respondents are satisfied, because the average respondents
towards tangibility dimension is strongly agree (19%) and agree (28.25%) which shows their
perception is high. Furth more, it is important to reference zone of tolerance at which
respondents accept service (Parasuaman, Bitnet, 1994).

Sometimes, customers, expectation is very high science they set their expectation based up on
different criteria, so that what they expect is greater than what they price based on this it is
difficult to say that customers are dissatisfied because there is a level at which they desired
service adequate service. Therefore, the highest gap shows that the aspect is not delivered
properly the bank has supposed to pay more attention to the aspect.

30
Generally, what bank should do is that increase customer expectation and increases their
perception and also delights them by providing more than what customer expect from the bank.

In this part of the study the researcher concerned with the analysis of data obtained from the
manager of the bank questionnaires on service quality and customer satisfaction in the case of
Awash bank Fitche branch. According to the manager interview can saw the bank can collect and
solve the customer’s complaints. It is more or less they have good relationship with their
customer. And also they collect complains and feedbacks of customer by using different
mechanism like: suggestion box, survey and this complain can solve by the top manager and
whit other subordinates respectively and collectively.

The bank employee has their own union and collective agreement with the employee so based
on this agreement we punish the employee who made a mistake and we also awarded the
employee who perform best.

In addition to measure their customer’s satisfaction and the service quality of their banks they
made survey annually, in deed they also see some indicators like:

 If the customer can get a service quickly.

 If the customer can demand to work with us always.

31
 CHAPTER FIVE

SUMMARY CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Finding

The SURVQUAL (Service quality model) instrument is conceptualized as the yielding gap
scores that can inform the service provider as when their service exceeds or fall below
customers’ expectations along the five dimensions which are tangible, reliability, responsiveness,
assurance and empathy. This study also addressed the significant elements of customer
perception and expectation influencing their overall satisfaction with the banking services
provided at bank of Awash bank Fitche branch. Positive gaps are seen as indicating customer’s
satisfaction. Negative gap indicted dissatisfaction. This means perception falls below expectation
and suggest service quality aspects that may need improvement or change.

5.2 Conclusions
The following conclusion are drawn from the findings

As the customer demographic information shows most of them are young and they are mostly
male customers. Most of the time customers at this age need more workers by their money. In
addition to this the greater numbers of customers are first degree education level. This implies
that those customers have potentially to save money in the bank.

Do to the work occupation the greater number are the students. Most of the time the student is
more secure on their money.

Based on the above analysis the higher number of respondent’s expectation was from the
dimension of Empathy 32.2 respondents, responsiveness 30.75, tangibility 30, reliability 28 and
assurance 26.75 respectively and also the lower number of respondents expected from the
dimension of assurances.

On the other hand, in the perception part the higher average number of respondents perceived on
the tangibility 28.25 dimensions and the lower number of respondents precise on the dimension
of assurance.

32
5.3 Recommendation
Customer satisfactions are ensured by quality services. That means if there is quality service,
customer become satisfied.

Those customers who are dissatisfied in switch warn their friends and relations. So that the bank
has better improve the quality of service to satisfy those dissatisfied customers in continuous
manner to ensue consistence quality service. So, the bank would use better communication for
the customers and the clients.

On the customer expectation and perception part there was a gap on the dimensions for example:
from the five dimensions much of the dimensions shows satisfaction were tangibility, reliability,
responsiveness and empathy, but on the other hand assurance dimension it was very
recommendable that the bank has better avoids a poor service design. Know the culture of the
customer, not promised the service that cannot delivered at a time, and improve the work hand to
minimize the gap and increase customer satisfaction.

Since the customer’s suggestion or complain is one method of improving quality service and
solve customer problem, the bank should initiate customers to give suggestion by providing
forms, critical incidents studies to get the real intention of the customer instead of waiting annual
survey.

It is better for the manager to insure and motivate the employee to provides and deliver quality
service every time to every customer.

The fast delivery of service is preferable: as a result, the bank would better improve the length of
time a customer spent until he/she gets the intended service.

Even if, the employees have good relationship with customers, the bank should improve the
employee relationship continently by using different mechanism.

It is better for manager to focus on and think physical layout of the bank.

33
 REFERENCE
Alex Bank as cited in Maru, A. (2015). Challenges and Prospects of Outsourcing in Commercial
Bank of Ethiopia,
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Arab Business Review (1917), Outsourcing-vendor Management. Retrieved on January, 2018 from
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Buttle, F. (1996).

SERVQUAL: review, critique, research agenda: European Journal of Marketing, Vol. 30 No. 1.
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Chen, Z.X. (2007). An Empirical Assessment of the SERVQUAL Scale, Journal of Business
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An empirical study of relationship quality in a service setting: Marketing Intelligence &

Planning Vol. 26 No. 1, pp. 11-25 Clemes, M., Malenkov, D. and Burn, D. (2000).

Vol. 56, July, pp. 55-68. `Measuring service quality: a re-examination and extension'', Journal of
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European Central Bank, (2004) Macro Research Project.

Fornell, C., et al. (1996), Retrieved January 15, 2018 from

https://www.scribd.com/document/18167910/pp.16

The American customer satisfaction index: nature, purpose, and findings, Journal of Marketing,
Vol. 60, No.4, pp. 7-18. Gronroos, C. (1984).

vol. 2018, No.4 pp. 36-44. A Service Quality Model and its Marketing Implementations.

Grönroos, Christian (2000). sEuropean Journal of marketing.

Chichester: John Wiley. Giese, J. L., and Cote, J. A. (2002). Service Management and Marketing: A
Customer Relationship Approach.

Vol. 2000, No. 1, PP.1-24 Defining Consumer Satisfaction, Academy of Marketing Science.

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Gunderson as cited in Johns, N. (1998). What is this thing called service? European Journal of
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35
 APPENDICES
SALALE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
Appendix 1: Questionnaire to be completed by Respondents
Dear respondents,
This questionnaire is designed to obtain necessary information for conducting the research
entitled Assessment of Service Quality and Customer Satisfaction in Case Study of Awash
Bank Fitche Branch”. The study is for academic purpose i.e., for partial fulfillment of the
requirement for the award of Bachelor Degree in Management (BA). Your genuine responses
for each question on this questionnaire, will completely determine the success of the study. You
are hereby assured that your identity and the information you provide will be kept strictly
confidential.
General Direction:
 You need not write your name anywhere on this questionnaire.
 Please, carefully read each of the following questions and make a tick mark (√) in
the appropriate box.
 If you have any difficulty or further query on how to fill this questionnaire, please
don’t hesitate to contact me via the following address:
Name: Nagaso Shambal
Phone: +251938461182
Thank you in advance for your cooperation!!!

Part I. Demographic Information of Respondents

I. Age distribution of respondents

Under 20 21-30 31-40 41-50 Above 50

II. Sex distribution

Male Female

36
 III. Marital Status of the respondents

Single married Divorced

IV. Education level of the respondent

Below grade 12 Grade 12 complete Certificate College diploma

First degree Second degree & above

V. Work Occupation of the respondents

Government employee worker private company employee worker

students self-employee worker

Part II. Question Designed to Examine the Subject Of Study

I. Expectation

Table 5.1 Expectation

Dimension Measurement

No Tangible Strongly Agree Moderate Disagree Strongly

agree disagree
1 The bank has up to date equipment’s
2 The physical facilities (office layout,
furniture, etc. of bank will be visually
appealing)
3 The employees of the bank are well
dressed and appear neat
4 The equipment and materials will be in
line with the type of service provided
Reliability Strongly Agree Moderate Disagree Strongly
agree disagree
5 The staff can provide you the services
as promised

37
6 The staff provide to you accurate
information
7 The staff perform the service right at
the first time
8 The staff offer you some help
9 Keep record accurately

Responsiveness Strongly Agree Moderate Disagree Strongly

agree disagree
10 The staff tells you exactly when service
will be provides
11 The staff gives your on-time services
12 The staff are willing to help you
13 The staff respond to requests properly

Assurance Strongly Agree Moderate Disagree Strongly

agree disagree
14 The staff product knowledge of bank
information
15 The staff have required skill to perform
services
16 The staff speak with you by suing an
appropriately
17 The staff are trust worthy
Empathy Strongly Agree Moderate Disagree Strongly
agree disagree
18 The staff make you feel safe
19 The staff are able to communicate
effectively with you
20 The staff shows personal attention to
you
21 The staff knows your specific needs

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22 The staff use convenient time
management

II. Perception

Dimension Measurement

No Tangibles Strongly Agree Moderate Disagree Strongly

disagree disagree
1 Awash bank Fiche branch has up to date
equipment
2 The physical facilities (office layout,
furniture, etc, of Awash bank Fitche branch
will be visually appealing)
3 The employees of the Awash bank Fitche
branch are well dressed and appear neat
4 The equipment and materials of Awash bank
Fitche branch will be in line with the type of
service provided
Reliability Strongly Agree Moderate Disagree Strongly
agree disagree
5 The staff of Awash bank Fitche branch can
provide you the service as promised
6 The staff of Awash bank Fitche branch to
your accurate information
7 The staff of Awash bank Fitche branch
performed service right at the first time
8 The staff of Awash bank Fitche branch offer
you some help
9 Awash bank Fitche branch keep record

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 accurately
Responsiveness Strongly Agree Moderate Disagree Strongly
agree disagree
10 The staff of Awash bank Fitche branch tells
you exactly when services will be provides
11 The staff of Awash bank Fitche branch gives
your on-time service
12 The staff of Awash bank Fitche branch are
willing to help you
13 The staff of Awash bank Fitche branch
respond to requests properly
Assurance Strongly Agree Moderate Disagree Strongly
agree disagree
14 The staff of Awash bank Fitche branch
product knowledge of bank information
15 The staff of Awash bank Fitche branch have
required skill to perform services
16 The staff of Awash bank Fitche branch
speak with you by with an appropriately
17 The staff of Awash bank Fitche branch are
trust worthy
Empathy Strongly Agree Moderate Disagree Strongly
agree disagree
18 The Awash bank Fitche branch make you
feel safe
19 The staff of Awash bank Fitche branch able
to communicate effectively with you
20 The staff of Awash bank Fitche branch
shows personal attention to you
21 The staff of Awash bank Fitche branch

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 knows your specific needs
22 The staff of Awash bank Fitche branch use
convenient time management

Interview for the manager

1. What looks like the relationship that the bank has with its customer?
2. How the bank can collect and solve the customer complaints and feedback?
3. How can the bank administer its employee?
4. What are the techniques applied to measure satisfaction and service quality of the bank?

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