Chapter One: 1.1 Background of The Study

The Impact Of Service Quality on Customer Satisfaction In case selected Private Banks Awash 7 Kilo
Town
CHAPTER ONE
1. INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Banks play an important and active role in the financial and economic development of a country.
An effective banking system greatly influences the growth of a country in various sectors of the
economy. Practitioners in the banking industry face a large number of complex challenges in the
global marketplace. It is crucial for banks to better understand changing customer needs and adopt
the latest information technology system in order to compete more effectively with global
organizations(Malhotra& Mukherjee, 2004).
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 (Ahmossawi,
2001). In addition, service quality has a significant impact on a bank’s success and performance
(Mouawad and Kleiner 1996). Nowadays, service quality has received much attention because of
its obvious relationship with costs, financial performance, customer satisfaction, and customer
retention.
Service quality has been defined in different ways by researchers. Gronroos (1978) suggests that
service quality is made of two components – technical quality and functional quality. Technical
quality refers to what the service provider delivers during the service provision while functional
quality is how the service employee provides the service. Parasuraman et al. (1988) define service
quality as a difference between customer expectation of service and customers’ perceptions of the
actual service. Kasper et al. (1999) defines service quality as the degree to which the service
offered can satisfy the expectations of the user. According to these definitions, customers are the
sole judges of service quality. If they perceive it to be good service, then it is. They assess the
quality of service by comparing their expectation with perception.
Customers are the heart of every successful business and therefore businesses need to more
concentrate on customers more than ever. According to Scott (2002), customer service is a series
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of activities designed to enhance the level of customer satisfaction, that is, the feeling that a
product or service has met the customer expectation.
“Customer satisfaction is crucial in the banking sector because of the special nature of the financial
services which are characterized by intensive contacts with customers who have different needs
and require customized solutions” (Molina et al., 2007). “Customer satisfaction is known to be one
of the most important and serious issues towards success in today’s competitive business
environment, as it affects company market shares and customer retention” (Ooi, et al., 2011).
Parasuraman et al., (1985) “found that service quality is significant predictor of customer
satisfaction by using SERVQUAL instrument.” Service quality and customer satisfaction “have
been identified as key elements of the service-profit chain” (Heskett et al., 1997). The
successfulness of organization is, therefore, determined partly by the customer satisfaction.
Therefore, this research is study concerning service quality and its relationship to customer
satisfaction in the case of selected private banks in Awash 7 kilo Town. So, this study will try to
examine customer’s perception of service quality.
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1.2. STATEMENT OF THE PROBLEM

Customer satisfaction and service quality are most important elements in achieving organizational
goals. Organization tries to have constant customer satisfied with the service provided by it.
Because of, service quality plays a pivotal role in determining customer satisfaction. In a way,
quality needs to be understood and manage throughout the services of an organization. Hence,
quality services are considered as most important aspect. Satisfaction and quality have evolved
along parallel tracks (Strandvik&Liljander, 1995 cited by S.Sivesan, 2012).
Furthermore, improving service delivery in the banking business is expected to affect the quality of
service and customer satisfaction. On the other hand, the client will use a variety of dimensions /
attributes that are important to customers to identify the quality of service through the customer
satisfaction. These service dimensions/attributes play a significant role within service
measurement, since they serve as indicators of service quality and customer’s satisfaction (Crane
and Clark, 1988 cited by Dr. Abdel).
Excellence in service quality is a key to achieve customer satisfaction and profitability. Today, the
increasing awareness among bank customers of their rights, changing demands and high
competition requires constant progress in service quality from the bank for their customers to stay
loyal. Additionally, the bank need to improve performance on all the dimensions of service quality
in order to increase customer satisfaction since customers expect more than what is been offered
by the bank. This will enable the bank to maintain high level of competitiveness. (Dr. Yassin et al,
2015)
According to A. Ananth (2011) state that more gaps are giving individual attentions, extended
working hours to meet customer needs, employees give customer personal attention, employees
understand the specific needs of the customers, employees are never too busy to respond to
customer’s request.
According to Agbemabiese et al (2015) state that the major problems are Absence of well – train
and professionally qualified banking staff ,Offensive and poor attitude and behavior on the banks
staff in their dealings with actual and potential customers ,Inadequate facilities and equipment
required to provide modern banking services ,Absence of frequent training programs for the staff
to shape up their attitude towards customers, Improperly long processes in responding to
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customer’s needs and Excessive competition from banks which perform commercial banking
services.
The availability of connection service, attractiveness of bank facility, number of front
desk(channels), managing waiting line, complain handling process, speed of service, waiting time,
customers caring manner, giving improved and consistent service for their customers, employees
handling customers with best interest and at heart, employees give promoting service for their
customers, employees inspire confidence and trust, availability of modern equipment, engagement
in occupation and distance have not satisfied the customer.(Habte et al, 2015)
Levesque and McDougall (1996) have confirmed and reinforced the notion that consistent poor
customer experience as a result of poor service quality leads to a decrease in the levels of customer
satisfaction and the chances of further willingness to recommend the service (i.e., word-of-mouth
advertising or referrals) is lessened.
Therefore, several studies have been done on service quality and customer satisfaction in service
organization in Ethiopia like EEPCO, Ethio-Telecom, insurance and Bank. Only few studies have
been done on bank, but the studies will be conduct in only selected private bank.it will be see
different private banks in Awash 7 kilo Town. So, the study will be to investigate the impact of
service quality on customer satisfaction in five private banks in Awash 7 kilo Town.
The questions will be raise in this study are:
 What is the tangibility of the bank’s service to satisfy customers?
 What is the Reliability of the bank’s service to satisfy customers?
 What is the Responsiveness and Assurance of the bank’s service to satisfy customers?
 What is the Empathy of the bank’s service to satisfy customers?
 What are the relations between service quality and customer satisfaction?
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1.3. OBJECTIVES OF THE STUDY
1.3.1. GENERAL OBJECTIVE
The general objective of this study will be examining the impact of service quality on customer
satisfaction in case of selected private banks in Awash 7 kilo Town.
1.3.2. SPECIFIC OBJECTIVES
The specific objectives of the research are:
 To examine the impact of tangibility on customer satisfaction of the bank.

 To examine the impact of reliability on customer satisfaction of the bank.
 To examine the impact of responsiveness on customer satisfaction of the bank.
 To examine the impact of assurance on customer satisfaction of the bank.
 To examine the impact of empathy on customer satisfaction of the bank.
 To analyze the association between Service quality and customer satisfaction
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1.4. SIGNIFICANCE OF THE STUDY

The significance of the study is greatly important to the banking industry to examine or identifies
the impact of service quality at bank and enhances the level of customer satisfaction.
Moreover, the study will be the following significances
 It helps the bank to assist in decision making, in identifying key variables in order to
develop strategies to address and improve service quality.
 To the management of Bank, the findings and results that will be reported in this study will
provide a more reliable scientific measure and perspective for describing and evaluating the
level of their customer satisfaction with the services they deliver.
 To other stakeholders like investors, shareholders, employees, pressure groups, consumer
associations, among others, the study will provide invaluable information that will allow
them to provide useful suggestions to the improvement in service delivery of their
respective Banks.
 The study will provide additional evidence as to the relationship between Bank service
quality and customer satisfaction.
1.5. LIMITATION OF THE STUDY

The limitation of this study focus the impact of service quality on customer satisfaction in some
selected private banks Awash 7 kiloTown, the fact that is only conducted in five private bank and
therefore not be consider as a representative of the whole service quality of some selected private
banks in Awash 7 kilo Town, that is the generalization of the finding and the conclusion drawn
will be limited to some selected private banks in Awash 7 kilo Town.
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1.6. SCOPE OR DELIMITATION OF THE STUDY

The study will be delimited conceptually and geographically.
Conceptually; the study will only focus on the servicequalitydimension (tangibility, reliability,
responsiveness, assurance, and empathy) and its impact on customer satisfaction.
Geographically; there are 2 commercial banks in Ethiopia but the study delimit itself some
selected private banks in Awash 7 kilo Town by their years of establishment which are Awash
International Bank, Lion International Bank, Dashen Bank, United Bank and Wagagen Bank.
Methodologically; the study used convenience sampling methods to select the sample from the
available population.
1.7. ORGANIZATION OF THE STUDY
This research will be organized into five chapters. Chapter one deals with the background of the
study, statement of the problem, research objectives, significance of the study, limitation and scope
of the study. Chapter two will be describe both theoretical and empirical literature review related
to the issue of service quality and customer satisfaction; Chapter three will provide research design
and methodology employed in the analysis part. Chapter four contains data presentation, analysis
and interpretation. Finally, the last chapter contains conclusions and recommendations.
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CHAPTER TWO
2. LITERATURE REVIEWS
It provides the reader with a literature review concerning the research area. Large number of
studies will conducted in the field of service quality and customer satisfaction. There are useful
contributions expressed by so many authors about service quality dimensions, tangibles, reliability,
responsiveness, assurance, and empathy as important factors of quality service delivery. The main
objective of this chapter is to discuss about the definitions of service quality, characteristics of
service, measuring of service quality, customer satisfaction and the relationship between service
quality and customer satisfaction etc.
2.1. SERVICE QUALITY: DEFINITION AND CONCEPTS
Services are a continuous process of on-going interactions between customers and service
providers comprising a number of intangible activities provided as premium solutions to the
problems of customers and including the physical and financial resources and any other useful
elements of the system involved in providing these services (Grönroos, 2004).
Services can be defined as actions, procedures and performance. Services are products that are
rendered but it is not correspondent to something which is physical. The main difference between
the product and services are that customers get value with no undying ownership of any tangible
components. Moreover, service quality which is not like product quality which is determined by its
unique characteristics which are intangible, perishable, inseparable, and heterogeneous (Zeithaml
et al., 2006).
Quality can also be defined as the totality of features and characteristics of a product or services
that bear on its ability to satisfy stated or implied needs (Kotler et al., 2002, p. 831). It is evident
that quality is also related to the value of an offer, which could evoke satisfaction or dissatisfaction
on the part of the user.
Parasuraman defines service quality as “the differences between customer expectations and
perceptions of service” (Parasuraman, 1988). They argued that measuring service quality as the
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difference between perceived and expected service was a valid way and could make management
to identify gaps to what they offer as services.
2.2 CHARACTERISTICS OF SERVICE
According to Bitner et al., (1993) service has four characteristics: intangibility, inseparability,
heterogeneity and perishability.
2.2.1. Intangibility of Services
Regan (1963) “introduced 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 intangibility
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.” Onkvisit and Shaw (1991) “feel that the importance of intangibility is over- emphasized”.
2.2.2. Inseparability of Services
Inseparability is taken to reflect the simultaneous delivery and consumption of services (Regan
1963; Wyckham et al 1975; Donnelly 1976; Grönroos 1978; Zeithaml 1981; Carman and Langeard
1980; Zeithaml et al., 1985; Bowen 1990 and Onkvisit and Shaw 1991) and it is believed to enable
consumers to affect or shape the performance and quality of the service (Grönroos, 1978;
Zeithaml, 1981).
2.2.3. Heterogeneity of Services
Heterogeneity “reflects the potential for high variability in service delivery” (Zeithaml et al.,
1985). 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 (Rathmell,
1966; Carman and Langeard, 1980; Zeithaml, 1985; Onkvisit and Shaw, 1991). Onkvisit and Shaw
(1991) consider “heterogeneity to offer the opportunity to provide a degree of flexibility and
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customization of the service.” Wyckham et al., (1975) suggest that “heterogeneity can be
introduced as a benefit and point of differentiation.”
2.2.4. Perishability of Services
In general, services cannot be stored and carried forward to a future time period (Rathmell, 1966;
Donnelly, 1976; and Zeithaml et al., 1985 as citied in Wolak et al., 1998). Onkvisit and Shaw
(1991) suggest that “services are “time dependent” and “time important” which make them very
perishable.” Hartman and Lindgren (1993) claim that the “issue of perishability 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.”
Figure 2.1: The service characteristics
Intangibility Inseparability
Service cannot be Service cannot be

seen, tested felt, or separated from their
smelled before provider.
purchase
Service
Variability Perishability
Quality of services
Service cannot be
depends on who
stored for later sell or
provides, them and
when, where and how.
use.
Source: (Kotler and Armstrong, 2008:258).
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2.3. MEASURING SERVICE QUALITY

The most widely used models in measuring service quality in the banking sector are the
SERVQUAL and SERVPERF models. According to the SERVQUAL model (Parasuraman et al.,
1988), service quality can be measured by identifying the gaps between customers’ expectations of
the service to be rendered and their perceptions of the actual performance of the service.
SERVQUAL is based on five dimensions of service quality (Parasuraman et al., 1988):
 Tangibles: the physical surroundings represented by objects (for example, interior design)
and subjects (for example, the appearance of employees).
 Reliability: the service provider’s ability to provideaccurate and dependable services.
 Responsiveness: a firm’s willingness to assist itscustomers by providing fast and efficient
serviceperformances.
 Assurance: diverse features that provide confidence tocustomers (such as the firm’s
specific service knowledge,polite and trustworthy behavior of employees).
 Empathy: the service firm’s readiness to provide eachcustomer with personal
Furthermore “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; 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” (Johnston 1995).
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” (Parasuraman et al., 1988). 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 (Parasuraman et al., 1985).
Parasuraman et al., (1985)” identify ten determinants for measuring service quality which are
tangibility, reliability, responsiveness, communication, access, competence, courtesy, credibility,
security, and 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 quality, SERVQUAL” (Parasuraman et al., 1988).
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These five dimensions identified as follows:

 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” (Zineldin, 2005).
 Reliability means ability to perform the promised service dependency and accurately.
Reliability is a significant factor of product quality in addition to good personal service,
staff attitude, knowledge and skills (Walker, 1990). “It is found that service reliability is the
service “core” to most customers and managers should use every opportunity to build a
“do-it-right-first” attitude” (Berry et al., 1990).
 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). (Gollway and Ho, 1996) reported that proper
balance between staff skills and customers' expectation resulted in superior service quality
towards customers.
 Assurance indicates knowledge and courtesy of employees and their ability to inspire trust
and confidence. (Parasuraman et al., 1988) found that assurance is an important factor of
service quality next to reliability and responsiveness towards customer satisfaction.
Assurance has “the strongest impact on customer satisfaction that leads to positive word of
mouth outcome” (Arasli et al., 2005).
 Empathy refers to caring, individualized attention the firm provides its customers (ibid).
Jabnoun and Al-Tamimi, (2003) found that bank customers believed empathy as an
essential factor of service quality. “It is suggested that employees' commitment to deliver
quality services, skillfully handling of conflicts and efficient delivery of services resulted in
satisfied customers for long term benefits” (Nelson and Chan, 2005).
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2.4. CUSTOMER SATISFACTION
Customer satisfaction means that a customer or the user of service is well contended with the
performance. (Johnson and Fornell, 1991).It can also be stated as the overall evaluation of a
customer either positive or negative for the services. (Woodruff, 1997).
Several authors have defined customer satisfaction in various ways:

 Gaither (1994) defines customer satisfaction as the determination of customer requirements
and demonstrated success in meeting them.
 According to Kotler (2000), satisfaction is a person’s feeling of pleasure or disappointment
resulting from comparing a product’s perceived performance (or outcome) in relation to his
or her expectation.
 Kotler and Armstrong (2001) in their Principles of Marketing, define customer satisfaction
as the extent to which a product’s perceived performance matches a buyer’s expectations.
They continued that, if the product’s performance falls short of expectations, the buyer
would be dissatisfied but if performance matches or exceeds expectation, the customer will
be satisfied or highly satisfied. In service quality literature , customer expectations are
understood as desires or wants of consumers (Zeithaml, berry &Parasuraman 1993) or
“what they feel the service provider should offer rather than would offer” (Parasuraman et
al., 1988). Customer perceptions are defined as “the customer’s judgment of the service
organization’s performance” (Parasuraman et al., 1988).
 Kotler (2006) again defined customer satisfaction by giving details on the attributes of a
highly satisfied customer. According to him, a highly satisfied customer stays loyal, longer,
and buys more as the company introduces new products and upgrades existing products;
talks favorably about the company and its products, pays less attention to competing brands
and is less sensitive to price, offers service or product ideas to the company and costs less
to serve him than new customers because transactions are routine.
 Customer satisfaction is a “psychological concept that involves the feeling of wellbeing
and pleasure that results from obtaining what one hopes for and expects from an appealing
product and/or service” (WTO, 1985);
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 Customer satisfaction “as an attitude-like judgment following a purchase act or a series of

consumer product interactions.” ( Lovelock &Wirtz, 2007);
 “Satisfaction is merely the result of things not going wrong; satisfying the needs and
desires of consumers.” (Besterfield, 1994);
 “Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing
a product’s performance (outcome) in relation to his or her expectation.” (Kotler& Keller,
2006 p. 144).
Again,Satisfaction is a feeling that surfaces from an evaluation process, i.e. when the consumer of
a good or service compares what is received against what is expected from the utilization of that
good or service (Kotler et al., 2009).
The following criteria are laid down by Liu et al. (2008) for measuring the satisfaction level of
customers regarding purchase and subsequent consumption of goods or services:
 Satisfaction: The perception developed by the customers that the goods or services are
acceptable or tolerable.
 Content:The features of goods or services and the underlying benefits gives customer a
positive consumption experience.
 Relived:The alleviation of the negative state of customers’ mind of by the goods or services
provided.
 Novelty:The goods or services bring freshness and excitement in customers.
 Surprise:The amazement and unexpected pleasure brought to people by goods or services
consumed
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2.5. RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER

SATISFACTION
Quality and customer satisfaction have long been recognized as playing a crucial role for success
and survival in today's competitive market. Regarding the relationship between customer
satisfaction and service quality, Oliver (1993) first suggested that service quality would be
antecedent to customer satisfaction regardless of whether these constructs were cumulative or
transaction-specific. In relating customer satisfaction and service quality, researchers have been
more precise about the meaning and measurements of satisfaction and service quality. 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 et al., 2008).
Although it is stated that other factors such as price and product quality can affect customer
satisfaction, perceived service quality is a component of customer satisfaction (Zeithaml&Bitner,
2003). As said by Wilson et al. (2008), service quality is a focused evaluation that reflects the
customer’s perception of reliability, assurance, responsiveness, empathy and tangibility while
satisfaction is more inclusive and it is influenced by perceptions of service quality, product price
and quality, also situational factors and personal factors. The relationship between service quality
and customer satisfaction is becoming crucial with the increased level of awareness among bank
customers Demographic characteristics should be considered by the bank managers to understand
their customers (Sureshchanderet al. 2002).
2.6. EMPIRICAL LITERATURE
Service quality is an important tool to measure customer satisfaction (Hazlina et al., 2011).
Empirical studies show that the quality of service offered is related to overall satisfaction of the
customer.
According to Hummayounand M. Iqbal(2009) concludes that there is a significant relationship

between service quality and customer satisfaction.
According to Mesay(2012) concludes there is positive relationship between all service quality
dimensions and customer satisfaction.
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According to Endalkachew (2013) concludes that core banking services has positive and
significant relationship with customer satisfaction. And also core banking has positive and
significant effect on customer satisfaction.
According to RashedandTabassum (2014) conclude that quality service is an important factor to
satisfied customer satisfaction. In the world of global economy, banking sector needs has become
more diverse and exotic than ever before. So, Banks should focus in service quality to satisfy their
customers in every dimension of service quality.
According to Tan Lay HongandMaran (2014) concludes all the dimensions of services quality are
positively correlated with customer satisfaction, therefore bank managers should emphasize all the
services quality dimensions in maintaining and improving the services quality that they provide.
According to Khan and Fasih (2014) conclude that service quality and all its dimensions such as
tangibles, reliability, assurance and empathy have significant and positive association with
satisfaction and loyalty of customers towards their respective financial service providing
organizations.
According to Dr.yassin , Adem and Habtom(2015) conclude the bank need to improve
performance on all the dimensions of service quality in order to increase customer satisfaction
since customers expect more than what is been offered by the bank.
According to Yalew(2015) concluded that the impact of Information and Communication

Technology on accuracy, problem handling process and complains resolving process of the banks
was the least three among the factors affecting customers‟ satisfaction.
According to Habte, Bach and Dr. O.chandrasekhara (2015) study reveals as there is a significant
difference on customers satisfaction on the basis of accessibility of connection, waiting time,
number of front desks (channels), complain handling process category.
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2.7. CONCEPTUAL FRAMEWORK
Service Quality is a vital antecedent of customer's satisfaction (Cronin and Taylor, 1992).In turn
customer satisfaction is believed to affect post-purchase and perception and future decisions.
Following from the literature review done above, the relationship between service quality
variables and customer satisfaction can be shown as following. In this conceptual model the five
Service quality dimensions have been selected form the study conducted by Parasuraman et al.,
(1988).Parasuraman et al., (1985) conducted research on different service organization
(Bank, Hotel, Electrical Corporation, Hospital, Transportation) by using ten service quality
dimensions (tangibility, reliability, responsiveness, communication, access, competence,
courtesy, credibility, security, and knowledge). Later Parasuraman et al., (1985)
conductedresearch and then the ten dimensions were further purified and developed into five
dimensions (tangibility, reliability, responsiveness, assurance and empathy). The reason
behind purified the ten dimensions into five dimensions was the appropriateness of each service
quality dimensions to different service organizations for example security dimension is appropriate
for transportation, credibility dimension is appropriate for hotel. Therefore, this convinced me to
use Parasuramanet al., (1988)’s mode
SERVICE QUALITY
Tangible
Reliability
Customer
Responsiveness Satisfaction
Assurance
Figure 2.2 Conceptual model
Empathy Source: parasuraman et al., (1988)
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CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3. Introduction
This chapter presents details of the research design and methodology. This includes the research
design, sample size and sampling technique, data source and collection method, procedure
of data collection, questionnaire and reliability test. At the end the method of data analysis
was presented.
3.1 STUDY AREA
The study area will bein Awash 7 killo town, situated southern part of Afar regional state in
gebiresuzone. The town located 228 km distance from the capital city of Ethiopia and 380 km from
the regional state of semera. It sits at a latitude and longitude of 16°N 40°E, with an elevation
between 720 and 1,100 meters above sea level.
3.2 RESEARCH DESIGN
A research design is the program that guides the researchers in the process of collecting,
analyzing and interpreting the data. Both descriptive and explanatory study design using
quantitative method was used to analyze for data collected from customers.Descriptive research
involves gathering data that describe events and then organizes, tabulates, chart, depicts, and
describes the data collection. This study also used descriptive analysis that describes the service
quality dimensions that lead to customer satisfaction. The researcher also used explanatory study
design, to explaining, understanding, predicting and controlling the relationship between variables.
3.3 DATA TYPE AND SOURCE
In this study both primary and secondary types of data will be employed.
3.3.1 PRIMARY DATA
Primary data are fresh data that are gathered for the first time and thus happened to be original in
character. Primary source of the study was information gathered from customers of the bank.
Questionnaire that have both open and closed end question will prepared and delivered to
customers in order to gather the primary data.
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3.3.2 SECONDARY DATA

The secondary data will collected from different sources such as, websites, books, and journals,
periodicals released by the bank and articles national and international newspaper and magazines.
3.4 POPULATION
The target population for the study will comprise all individual customers and bank managers of
the selected private bankswhich are operating in Awash 7 kilo Town.
3.5. SAMPLING METHOD AND SAMPLING SIZE
The researcher used convenience sampling methods to select the sample from the available
population. A convenient sampling technique, which is a non-probabilistic sampling technique,
was used to select the respondents for two reasons. First the customers are very difficult to contact
each of them individually. Again, it is difficult for getting the exact number of customers for each
of the Bank companies in Awash 7 kilo Town which is required for the use of any random
sampling technique. Out of 8 private banks in Awash 7 kilo town, the researcher was selected 5
banks for the study based on theyears of establishment. The selected banks are Awash
International Bank, Bank of Abyssinia, Dashen Bank, United Bank and Wagagen Bank. This
formula is used since the total population of the organization’s customers is
unknown.Cochran (1963) developed the equation to yield a representative sample for proportions
of large Sample
2
.n=Z pq/e2
n= (1.96)² × 0.5(0.5) = 384

0.05²
Therefore, n = 384
Where,
n= sample size
z = 1.96 for 95% confidence level
p = population proportion 0.5 (50%) since this will provide the maximum sample size.
q = 1-p
e = allowable error at 5% (0.05)
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3.6 METHOD OF DATA COLLECTION
To achievement of the objectives of the study; the researcher used primary data source.
Data collection method that was used in this research was self-administered questionnaire that
consists of both open and closed end question.
3.7. QUESTIONNAIRE DESIGN
A questionnaire was used to measure the impact of service quality on customer satisfaction of
private banks in Awash 7 kiloTown. Five-point likert scale was used where 1 stands for
“Strongly Disagree”, 2 stands for “Disagree”, 3 stands for “Neutral”, 4 stands for “Agree” and 5
stands for “Strongly Agree.” The questionnaire is divided into three sections which cover
the dependent and independent variables of the research.
The First part contains the demographic details like status of area, age, gender,
educational qualification, type of family, occupation, income.
TheSecond part of the questionnaire measures the banks service quality by using a five – point
Likert response scale was used where 1 stands for “Strongly Disagree”, 2 stands for “Disagree”, 3
stands for “Neutral”, 4 stands for “Agree” and 5 stands for “Strongly Agree”. The service
quality attributes item were developed in the questionnaire.
The Third part of the questionnaire measures the level of customer satisfaction by using a five
– point Likert response scale was used where 1 stands for “Strongly Disagree”, 2 stands
for “Disagree”, 3 stands for “Neutral”, 4 stands for “Agree” and 5 stands for “Strongly Agree”.
Five customer satisfaction items were developed in the questionnaire.
3.8 Reliability Test
The term reliability is defined as consistency of measurement (Bollen, 1989). There are
variousreliability coefficients. The most popular and commonly used technique to estimate
reliability or
internal consistency in the behavioral sciences is coefficient alpha often referred to as
Cronbach’s alpha which was developed by Lee Cronbach in 1951 to provide a measure of the
internal consistency of a test or scale; it is expressed as a number between 0 and 1. Value of 0.6
or less generally indicates unsatisfactory internal consistency reliability (Malhotra, 2006).
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Internal consistency describes the extent to which all the items in a test measure the same
concept or construct and hence it is connected to the inter-relatedness of the items within the test.
Coefficients of internal consistency increase as the number of items goes up, to a certain point.
3.9. DATA ANALYSIS TECHNIQUES
In the analysis part, the data obtained from the survey will capture and analyzed using the
Statistical Package for Social Sciences (SPSS), Version 20.At first, descriptive statistics will be
used to study the characteristics of statistical sample. Then, Statistical tools like Correlation and
Multiple Regression analysis will be applied for analyzing the questionnaires in order to determine
the impact of service quality on customer satisfaction and the relationship between service quality
and customer satisfaction.
Descriptive Analysis
The descriptive statistical results were presented by tables, frequency distributions and
percentages to give a condensed picture of the data. This was achieved through summary
statistics, which includes the means, standard deviations values which are computed for
each variable in this study.
Pearson Correlation Analysis

In this study Pearson’s correlation coefficient was used to determine the relationships between
service quality dimensions (Tangibility, reliability, responsiveness, assurance and empathy) and
customer satisfaction.
Multiple Regression Analysis
Multiple regression analysis was used to investigate the impact of service quality
dimensions (Tangibility, reliability, responsiveness, assurance, and empathy) on customer
satisfaction.
Regression Functions
The equation of multiple regressions on this study was built around two sets of variable, namely
independent variables (Tangibility, reliability, responsiveness, assurance, and empathy) and
dependent variables (customer satisfaction).
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Independent variables Dependent variables

Tangibility
Reliability Customer satisfaction
Responsiveness
Assurance
Empathy
Regress customer satisfaction on the service quality dimensions
Yi = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5
Where Y is the dependent variable- customer satisfaction
X1, X2, X3, X4, and X5 are the explanatory variables (or the regressors)
β0 is the intercept term-the expected value of Y when all the X’s (independent variables) equal
zero. The intercept can be thought of as the coefficient on regress, X0, that equal 1for all.
β1, β2, β3, β4, and β5 refer to the coefficient of their respective independent variable
which measures the change in the mean value of Y, per unit change in their respective
independent variables.
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CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
4.1 Introduction
In this chapter, the data was presented and discussed to address the research questions and
objectives. First the respondents’ background information such as such as gender, age
group, educational level, employment status and frequency of bank visits. Then the statistical
methods of analysis were discussed, which included a descriptive analysis, a correlation and
Regression analysis are presented through SPSS version 20.
4.2. Data Analysis
4.2.1. Response Rate
From the below figure, it can be inferred that, out of 384 distributed questionnaire 365
were collected while 19 of the questionnaire remained uncollected. Therefore, analyses were
madebased on the responses obtained from 365 (95.05%) questionnaire.
Non Response rate 4.95%
Response rate 95.05%
Figure 4.1 Respondents rate
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4.2.2. Socio Demographic Characteristics of Respondents
In order to understand the results and conclusions drawn, it is important to assess the background
of the sampled targets. This information in isolation does not add much information in
addressing the set objectives, however, in combination with other variables, could reveal
and enable concrete assumptions to be formulated, tested and conclusions drawn during the course
of the analysis.
Demographic analysis is concerned with the size, composition, and distribution of populations;
their patterns of change over time through births, education, deaths, etc.; and the determinants and
consequences of such changes, population studies yield knowledge important for planning.
In this section the age distribution, sex, educational status and the experiences in the job of the
respondent’s that were participated in this research finding were analyzed and interpreted.
The table below shows the details of background information of the respondents.
Table 4.1 Background Information of Respondents
Characteristics/variables frequency percent Valid Comulative

percent percent
Gender Male 207 56.7 56.7 56.7
Female 158 43.3 43.3 100.0
Total 365 100.0 100.0
Age 18-25 years 61 16.7 16.7 16.7
26-35 years 138 37.8 37.8 54.5
36-45 years 111 30.4 30.4 84.9
46-55 years 39 10.7 10.7 95.6
56 and above 16 4.4 4.4 100.0
Total 365 100.0 100.0
Educational level Primary to 55 15.1 15.1 15.1
10th complete
Certificate 27 7.4 7.4 22.5
Diploma 133 36.4 36.4 58.9
Degree 136 37.3 37.3 96.2
Master or 14 3.8 3.8 100.0
above
Total 365 100.0 100.0
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Gov`tal 124 34.0 34.0 34.0

Employment status employee
Private 102 27.9 61.9
employee
27.9
Self- 99 27.1 27.1 89.0
employment
Retired 11 3.0 3.0 92.1
Student 29 7.9 7.9 100.0
Total 365 100.0 100.0
Daily 49 13.4 13.4 13.4
Frequency of using Twice a week 66 18.1 18.1 31.5
the bank Weekly 86 23.6 23.6 55.1
Monthly 164 44.9 44.9 100.0
Total 365 100.0 100.0
Source: own survey,2018
As the above table 4.1 presents the background information of the respondents for this study. The
survey shown that majority of the respondents was more males as compared to females.
Male respondents represented 56.7%; on the other hand 43.3% were females.
As far as age of respondents is concerned, 16.7% of the respondents are in the range of 18-25
years, 37.8% of the respondents are in the range of 26-35 years, 30.4% are in the range of 36-45
years, 10.7% are in the range of 46-55 and 4.4% are above 55 years. The youth were the majority
indicating that most youth use banking services.
Concerning educational level of respondents, primary to 10th complete represented 15.1%,

certificate holders represented 7.4%, Diploma holders represented 36.4%, and degree
holders represented 37.3%; finally, 3.8% of the respondents were Masters holders. It indicates
that most of the bank customers are educated and have a good understanding of quality banking
service.
In relation to frequency of bank visits, 44.9% of the respondents use the service monthly, 23.6%
of the customer uses the service weekly, 18.1% of the customers uses the service twice a week,
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and the least (13.4%) of the respondents uses the services daily. It indicates that the majority of
the respondents are frequency banks visits monthly.
4.3. Descriptive Statistics Analysis
4.3.1. Frequency and percentages of Service quality dimension and Customer Satisfaction
Table 4.2 Tangibility
Tangibility Scale Frequency Percent Valid Cumulative

Percent Percent
1.The bank has modern Strongly disagree 2 0.5 0.5 0.5

Disagree 3 0.8 0.8 1.4
looking equipment
Disagree 12 3.3 3.3 4.7
Agree 160 43.8 43.8 48.5
Strongly agree 188 51.5 51.5 100.0
Total 365 100.0 100.0
2.The bank has visually Strongly disagree 2 0.5 0.5 0.5
Disagree 2 0.5 0.5 1.1
nice physical facilities
Neutral 18 4.9 4.9 6
Agree 164 44.9 44.9 51.0
Strongly agree 179 49.0 49.0 100.0
Total 365 100.0 100.0
3.The bank has Strongly disagree 2 0.5 0.5 0.5
Disagree 2 0.5 0.5 1.1
conductive service lay
Neutral 34 9.3 9.3 10.4
out Agree 207 56.7 56.7 67.1
Strongly agree 120 32.9 32.9 100.0
Total 365 100.0 100.0
4.The bank employees Strongly disagree 1 0.3 0.3 0.3
Disagree 6 1.6 1.6 1.9
has a neat and
Neutral 11 3.0 3.0 4.9
professional appearance Agree 89 24.4 24.4 29.3
Strongly agree 258 70.7 70.7 100.0
Total 365 100.0 100.0
5.Bank materials Strongly disagree 2 0.5 0.5 0.5
Disagree 3 0.8 0.8 1.4
associated with the
Neutral 46 12.6 12.6 14.0
service look attractive, Agree 200 54.8 54.8 68.8
Strongly agree 114 31.2 31.2 100.0
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(passbook, Total 365 100.0 100.0

form,brochures ,bank
cards etc.)
Strongly disagree - - - -
Disagree 10 2.7 2.7 2.7
Neutral 77 21.1 21.1 23.8
6.Bank uses modern Agree 190 52.1 52.1 75.9
banking technology Strongly agree 88 24.1 24.1 100.0
Total 365 100.0 100.0
Source: own survey,2018
This dimension shows the physical aspects of the services as physical facilities, appearance of
personnel and tools used for the provision of services. It is more concerned with visual part of the
banks. It is found that customers prefer tangible dimension of service quality in bank industry
(Jabnoun and Al-Tamimi, 2003).
According to the above table in the assessing of the banks used modern looking equipment, out of
the total respondents 51.5% of them indicate that they are strongly satisfied, 43.8% of the
respondents are satisfied, 3.3% of the respondents are neither satisfied nor dissatisfied, 0.8% of the
respondents are dissatisfied and 0.5% are strongly dissatisfied. From this it is clear that,
majority of the respondents indicating that banks are used modern equipment’s to render
the service for their customers. It implies that using modern banking equipment helps to increase
the quality service and in return this may enhance the satisfaction of customers. This result
coincides with the ideas of Abdullah and Arikiasamy (2013) also asserted that delivering
high service quality right at the first time demands use of modern equipment that can perform the
required service. There should be standard of excellence and a direction to attain customer
satisfaction by providing necessary equipment, tools and proper freedom to achieve the tasks.
To see the visually physical facility of the banks, 49% of the respondents stated that they are
strongly satisfied, 44.9% of the respondents are satisfied, 4.9% of the respondents are
neither satisfied nor dissatisfied, 0.5% of the respondents are dissatisfied and 0.5% of the
respondents are strongly dissatisfied. This implies that the customers are strongly satisfied by the
bank have nice physical facilities. It indicates that, the banks have visually nice physical
facility its advantages of the service render to increase the level of customer satisfaction. In
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accordance to conducive service layout of the banks, from the total respondents 32.9% of
them specify that they are strongly satisfied, 56.7% of the respondents are satisfied, 9.3% of the
respondents are neither satisfied nor dissatisfied, 0.5% of the respondents are dissatisfied
and 0.5% of the respondents are strongly dissatisfied. This indicates that bank has conducive
working environment and this help the employee to perform their activities comfortably and
timely. And this may also assist to deliver quality service to the customers.
According to the above table, to assess bank employees neat and professional appearance,
70.7% of the respondents are strongly satisfied, 24.4% of the respondents are satisfied , 3.0% of
the respondents are neither satisfied nor dissatisfied, 1.6% of the respondents are dissatisfied and
0.3% are strongly dissatisfied. This implies that bank employees have excellent neat and
professional appearance.
In the assessing of bank materials (Passbook, form, brochures, bank card etc.) associated with the
service look attractive or not, the survey results indicate that 31.2% of the respondents are
strongly satisfied by the materials available by the banks, 54.8% of the respondents are satisfied,
12.6% of the respondents are neither satisfied nor dissatisfied, 0.8% of the respondents are
dissatisfied and 0.5% are strongly dissatisfied. From this it is clear that customers are satisfied by
those materials available by the banks used to render their service. It implies that, the bank
materials has look attractive this help easy to get their service
Finally to assess modern technology used by the banks to deliver their service for the customers.
The survey results indicate that, 24.1% of the respondents are strongly satisfied, 52.1% of the
respondents are satisfied, 21.1% of the respondents are neither satisfied nor dissatisfied,
and 2.7% of the respondents are dissatisfied. This implies, if the banks use modern
bankingtechnology it will facilitate the service delivery process and also help the bank to have
updated and right delivery of service; and this may make the customers to feel happy and satisfied
with the quality of the bank’s service.
Table 4.3 Reliability
Reliability Scale frequenc percent Valid Cumulative

y percent percent
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1. The bank provides Strongly disagree - - - -

Disagree 5 1.4 1.4 1.4
its services
Neutral 79 21.6 21.6 23
at promised times Agree 198 54.2 54.2 77.3
Strongly agree 83 22.7 22.7 100.0
Total 365 100.0 100.0
2. The bank Strongly disagree - - - -
Disagree 60 16.4 16.4 16.4
employees show a
Neutral 190 52.1 52.1 68.5
sincere interest in Agree 58 15.9 15.9 84.4
solving Strongly agree 57 15.6 15.6 100.0
Total 365 100.0 100.0
customer’s problems
3. Bank insists on Strongly disagre 2 0.5 0.5 0.5
error free Disagree 7 1.9 2.5 7
records Neutral 160 43.8 46.3 160
Agree 138 37.8 84.1 138
Strongly agree 58 15.9 100.0 58
Total 365 100.0 100.0
4. The bank provides Strongly disagree 3 0.8 0.8 0.8

consistent service
Disagree 19 5.2 5.2 1.6

Neutral 164 44.9 44.9 46.3
Agree 107 29.3 29.3 80.0
Strongly agree 72 19.7 19.7 100.0
Total 365 100.0 100.0
5. Bank employees Strongly disagree 1 0.3 0.3 0.3
Disagree 5 1.4 1.4 1.6
provide
Neutral 163 44.7 44.7 46.3
accurate information Agree 123 33.7 33.7 80.0
to Strongly agree 73 20.0 20.0 100.0
Total 365 100.0 100.0
customers
Source: Own Survey, 2018
According to the above survey data, to assess whether the banks are deliver their service based on
promised time or not, 22.7% of the respondents are strongly satisfied, 54.2% of the
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respondents are satisfied, 21.5% of the respondents are neither satisfied nor dissatisfied, and
1.4% of the respondents are dissatisfied. From this it is clear that, customers are satisfied with
the services at promised timing of the banks. This implies that, banks render their service
promised time and this may help to increase customer usage and satisfaction. This result agree
with the idea of Ramzi (2010) pointed out that providing services as promised is one of
the important factors of customer satisfaction. A good way of impressing customers is by
doing what you promised and doing it right at the first time experience. This will enhance
repeat business.
The above table shows the result of customer’s response towards showing a sincere interest in
solving customer’s problems by the bank employees. From the results it can be obtained
that 15.6% of the respondents are strongly satisfied, 15.9% of the respondents are satisfied and
52.1% of the respondents are neither satisfied nor dissatisfied, and 16.4% of the respondent
are dissatisfied. It indicates that, the customers are neither satisfied nor dissatisfied by the
bank employees in terms of solving their problems. In this survey data to see the bank
employees show a sincere interest in solving customers problem are neutral with solving customer
problem it is not enough to competitive the market in the banking industry especially private
banks.
From the above table it is evident that customers are asked about whether the Bank employees
provide error free service or not and 15.9% of the respondents are strongly satisfied, 37.8% of the
respondent are satisfied, 43.8% of the respondents are neither satisfied nor dissatisfied, 1.9% of
the respondents are dissatisfied and 0.5% of the respondents are strongly dissatisfied. It
indicates that the customers are neutral with Bank employees insisting on error free records. This
implies the bank slightly not record properly error free service renders to the customers and this
may return the banks not lead to profitability or enhance customer satisfactions. According to
Ouyung (2010) suggestion business that fails to keep complete and accurate financial
records puts its success and sustainability in difficulty. Providing accurate records of contact
with the customer will help in continuity of relationship between firm and the customers.
In accordance to the bank provides consistent service render to the customers, from the
total respondents 19.7% of them specify that they are strongly satisfied, 29.3% of the respondents
are satisfied, 44.9% of the respondents are neither satisfied nor dissatisfied, 5.2% of the
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respondents are dissatisfied and 0.8% of the respondents are strongly dissatisfied. This show that
in terms of the consistency of the banks service the customers lack confidence to decide on the
consistency and this implies that the banks service have some fluctuation on its quality and this
may have influence the customers attachment with the bank and satisfaction and also this will
leads them to see other bank’s service.
Finally to assess the bank employees provide accurate information to customers, the survey
results indicate that,20% of the respondents are strongly satisfied, 33.7% of the respondent are
satisfied, 44.7% of the respondents are neither satisfied nor dissatisfied, 1.4% of the respondents
are dissatisfied and 0.3% of the respondents are strongly dissatisfied. It implies that, customers
have update information about the bank and increase the customers attachment with bank and
This may help to increase customer usage and satisfaction. This result coincide with the idea of
Abdullah &Ariokiasamy, (2013) bank employees may not always provide complete information to
customers, which can result in repeat complaints.
Table 4.4 Responsiveness
Responsiveness Scale frequenc percent Valid Cumulative

y percent percent
1. Bank employees Strongly 2 0.5 0.5 0.5
tell disagree
Disagree 12 3.3 3.3 3.8
customers exactly
Neutral 55 15.1 15.1 18.9
when Agree 195 53.4 53.4 72.3
certain services will Strongly agree 101 27.7 27.7 100.0
Total 365 100.0 100.0
be
Performed.
2. Bank gives prompt Strongly 1 0.3 0.3 0.3
and disagree
Disagree 2 0.5 0.5 0.8
updated services.
Neutral 37 10.1 10.1 11
Agree 180 49.3 49.3 60.3
Strongly agree 145 39.7 39.7 100.0
Total 365 100.0 100.0
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3. Bank gives service Strongly disagre 1 0.3 0.3 0.3

the right
Disagree 3 0.8 0.8 1.1
time.
Neutral 31 8.5 8.5 9.6
Agree 215 58.9 58.9 68.5
Strongly agree 115 31.5 31.5 100.0

Total 365 100.0 100.0
4. Banks are never Strongly 1 0.3 0.3 0.3

busy to disagree
Disagree 12 3.3 3.3 3.6
respond on customer
Neutral 161 44.1 44.1 47.7
request Agree 135 37.0 37.0 84.7
Strongly agree 56 15.3 15.3 100.0
Total 365 100.0 100.0
According to Armstrong (2012) the key aspects under responsiveness include keeping customers
informed as to when services will be performed; prompt service to customers, willingness
to help customers and Readiness to respond to customer’s request.
According to the above table in the assessing of bank employees tell customers exactly
when certain services will be performed or not, 27.7% of the respondents are strongly satisfied,
53.4% of the respondent are satisfied , 15.1% of the respondents are neither satisfied nor
dissatisfied, 3.3% of the respondents are dissatisfied and 0.5% are strongly dissatisfied. .
From the above analysis it is clear that, the customers are satisfied by the bank employees are
tell the customer exact services perform. This implies that, the bank employees tell customer
service exactly performed about the bank service and this may help to increase customer
satisfaction.
In accordance to bank gives prompt and updated services, from the total respondents 39.7% of
them specify that they are strongly satisfied, 49.3% of the respondents are satisfied, 10.1% of the
respondents are neither satisfied nor dissatisfied, 0.5% of the respondents are dissatisfied
and 0.3% of the respondents are strongly dissatisfied. This indicates that a bank gives prompt and
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updated services. This result coincides with the idea of Kariru&Aloo, (2014) argued that, these
includes providing timely responses to customer questions and inquiries, and informing
your clients promptly. Greeting them warmly, involving them to determine what they have come
for, and responding promptly and accurately to inquiries show customers’ quick understanding of
the firm. Failure to do so can result in lost business or damage a firm reputation.
From the above table, it can be assessed that the bank gives service the right time to the
customers, 31.5% of the respondents are strongly satisfied, 58.9% of the respondents are
are dissatisfied and 0.3% of the respondents are strongly dissatisfied.It impliesthat bank gives
service about the right time and this may help to enhance the customer satisfaction.
Finally, to assess the banks are busy to respond on customer request, 15.3% of the respondents
are strongly satisfied, 37.0% of the respondents are satisfied, 44.1% of the respondents are
neither satisfied nor dissatisfied, 3.3% of the respondents are dissatisfied and 0.3% are strongly
dissatisfied. It implies that, the customers responses are slightly satisfied when the banks
are busy to respond on customer request.
Table 4.5 Assurance
Assurance Scale frequenc percent Valid Cumulative

y percent percent
instill disagree
Disagree 31 8.5 8.5 9.0
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confidence in their Neutral 165 45.2 45.2 54.2

Agree 167 45.8 45.8 100.0
customers
Strongly agree 2 0.5 0.5 0.5
Total 365 100.0 100.0
are consistently disagree
Disagree 1 0.3 0.3 0.5
courteous to
Neutral 38 10.4 10.4 11
customers. Agree 122 33.4 33.4 44.4
Strongly agree 203 55.6 55.6 100.0
Total 365 100.0 100.0
3. Bank makes Strongly disagre 2 0.5 0.5 0.5
customer feel
Disagree 3 0.8 0.8 1.4
safe in their
transaction. Neutral 30 8.2 8.2 9.6
Agree 196 53.7 53.7 63.3
Strongly agree 134 36.7 36.7 100.0

Total 365 100.0 100.0
4. Bank employees Strongly - - - -

have sufficient disagree
Disagree 18 4.9 4.9 4.9
knowledge of
Neutral 93 25.5 25.5 30.4
Service information. Agree 171 46.8 46.8 77.3
Strongly agree 83 22.7 22.7 100.0
Total 365 100.0 100.0
This dimension indicates the employees' knowledge, courtesy and their ability to convey trust and
confidence. Service quality is also linked to the customer satisfaction as how employees use their
knowledge & courtesy and their ability to incorporate trust and confidence. Parasuraman et al.
(1988) reported assurance as an essential dimension of service quality after reliability and
responsiveness towards satisfaction. It is found that a bank can create customer satisfaction by
ensuring trustworthy behavior and reflection of genuine commitments to service provision
(Nelson and Chan, 2005).
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According to the above table in the assessing of bank employees instill confidence in their
customers, 0.5% of the respondents are strongly satisfied, 45.8% of the respondent are satisfied,
45.2% of the respondents are neither satisfied nor dissatisfied, 8.5% of the respondents are
dissatisfied and 0.5% of the respondents are strongly dissatisfied. Therefore, customers are
satisfied and neutral with the bank employees instill confidence in their customers. The
bank should maintain this performance level as it is and should satisfy those who didn’t satisfied.
To see the bank employees give service consistently courteous to customers or not, the survey
result indicate that, 55.6% of the respondents are strongly satisfied with staff courteousness to
customers, 33.4% of the respondents are satisfied, 10.4% of the respondents are neutral, 0.3% of
the respondents are dissatisfied and the rest 0.3% of the respondents are strongly
dissatisfied with courteousness of the employees.
With regard to the variable mentioned in the above table, the bank makes customer feel safe the
transaction, 36.7% of the respondents are strongly satisfied, 53.7% of the respondents are
are dissatisfied and 0.5 of the respondents are strongly dissatisfied. This implies that the
majorities of the respondents are satisfied with bank makes customer feel safe the transaction.
From the above table about employee of the bank have enough knowledge of service
information, 22.7% are strongly satisfied, 46.8% of customers are satisfied, 25.5% of
customers are neutral, and 4.9% of the customers are dissatisfied. It shows that employees have
sufficientknowledge to answer the entire question of customers even though they satisfy them.
Table 4.6 Empathy
Empathy Scale frequenc percent Valid Cumulative

y percent percent
1. Bank offers Strongly 1 0.3 0.3 0.3
personal disagree
Disagree 6 1.6 1.6 1.9
attentions and
Neutral 65 17.8 17.8 19.7
understanding Agree 221 60.5 60.5 80.3
Strongly agree 72 19.7 19.7 100.0
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customer need Total 365 100.0 100.0

2. The bank employees Strongly - - - -
are quick enough to disagree
Disagree 10 2.7 2.7 2.7
serve the customers
Neutral 55 15.1 15.1 17.8
Agree 172 47.1 47.1 64.9
Strongly agree 128 35.1 35.1 100.0
Total 365 100.0 100.0
3. Bank employees Strongly disagre 2 0.5 0.5 0.5
understand the
Disagree 105 28.8 28.8 29.3
specific needs of their
customers. Neutral 155 42.5 42.5 71.8
Agree 53 14.5 14.5 86.3
Strongly agree 50 13.7 13.7 100.0

Total 365 100.0 100.0

demonstrate integrity disagree
Disagree 10 2.7 2.7 3.3
and trustworthiness in
Neutral 199 54.5 54.5 57.8
dealing with customers Agree 78 21.4 21.4 79.2
Strongly agree 76 20.8 20.8 100.0
Total 365 100.0 100.0
The basis of empathy is rooted in understanding the needs of customers and giving them
individual attention. Employee and customer interactions are reflected through the empathy
dimension (Armstrong, 2012). Service customers have an expectation on how the service
provider should understand and be concerned about their individual needs and wants. As a
service provider, trying to understand the situation from the customer’s point of view gives
a clearer picture of what is happening (Toosi&Kohonali, 2011). Showing an understanding and
having knowledge to solve customers’ problems are key factors in the banking industry. The key
aspects under empathy include giving customers’ individual attention, employees who deal with
customers in a caring fashion and employees who understand the needs of their customers
(Armstrong, 2012).
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In assessing of banks give service personal attention and understanding of the customer needs or
not, , the survey results indicate that, 19.7% of the respondents are strongly satisfied, 60.5% of
the respondents are satisfied, 17.8% of the respondents are neither satisfied nor dissatisfied, 1.6%
of the respondents are dissatisfied and 0.3 of the respondents are strongly dissatisfied. This
implies that if the customers get personal attentions from the employees and the bank able to
define what they need, this will help to deliver the service accurately and at the right quality and
this may help to increase customer’s satisfaction. This result agrees with the different literature
Saghierand Nathan (2013) argued that customer satisfaction increases if customers feel that they
have been served in a way that considers their own personal needs. When delivering customer
service, firms frequently deal with a large number of customers who seem to be the same,
but it is important to remember that each customer is an individual. Anything that can be done to
make each customer feel that they have had the firms complete attention and have been
dealt with personally increases their sense of satisfaction (Boon-itt&Rompho, 2012)
According to the above table, to assess banks employees are quick enough to serve the
customers or not, 35.1% of the respondents are strongly satisfied, 47.1% of the respondent are
satisfied , 15.1% of the respondents are neither satisfied nor dissatisfied, and 2.7% of the
respondents are dissatisfied. It implies that the customers are satisfied by bank employees quick
enough to serve the customers.
Based on survey result shows that 13.7% of the respondents are strongly satisfied, 14.5% of the
respondents are satisfied, 42.5% of the respondents are neither satisfied nor dissatisfied, 28.8% of
the respondents are dissatisfied and 0.5 of the respondents are strongly dissatisfied. From this it is
clear that, customers are neither satisfied nor dissatisfied with bank employees understand the
specific needs of their customers. This result coincides with the ideas of different persons
or authors Jayanthy&Umaran (2012) suggested that knowing and understanding customer needs is
at the heart of every successful business, whether it sells directly to individuals or other
businesses. Knowing what customers wants and making it possible to direct actions to
fulfill their needs will bring loyalty (Ilyas et al., 2011). According toGbadeyan and Gbonda
(2011) when dealing with a customer, a true professional should always respond in a way that will
show they understand customers’ needs.
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Table -4.6 shows that, 20.8% of the respondents are strongly satisfied, 21.4% of the respondents
are satisfied, 54.5% of the respondents are neither satisfied nor dissatisfied, 2.7% of the
respondents are dissatisfied and 0.5 of the respondents are strongly dissatisfied. It implies thatthe
customers are neither satisfied nor dissatisfied with bank employees demonstrate integrity and
trustworthiness in dealing with customers. I.e. the bank has not enough to competitive with the
market or the business they are neutral to get bank employees demonstrate integrity and
trustworthiness in dealing with customers.
Table 4.7 Customer Satisfaction
Level of Customer Scale frequenc percent Valid Cumulative

Satisfaction y percent percent
1. Ifeel satisfied bank Strongly 3 0.8 0.8 0.8
uses modern and disagree
Disagree 1 0.3 0.3 1.1
appropriate equipment
Neutral 45 12.3 12.3 13.4
and technology. Agree 198 54.2 54.2 67.7
Strongly agree 118 32.3 32.3 100.0
Total 365 100.0 100.0
2. I am satisfied with Strongly 1 0.3 0.3 0.3
bank provides accurate disagree
Disagree 6 1.6 1.6 1.9
information on
Neutral 189 51.8 51.8 53.7
customers demand Agree 103 28.2 28.2 81.9
Strongly agree 66 18.1 18.1 100.0
Total 365 100.0 100.0
3. I am satisfied with Strongly disagre 2 0.5 0.5 0.5
the Responsiveness to Disagree 10 2.7 2.7 3.3
customer preference. Neutral 159 43.6 43.6 46.8
Agree 129 35.3 35.3 82.2
Strongly agree 65 17.8 17.8 100.0
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Total 365 100.0 100.0
4. I am satisfied of Strongly 3 0.8 0.8 0.8

being a client of this disagree
Disagree 22 6 6 6.8
bank
Neutral 161 44.1 44.1 51.0
Agree 93 25.5 25.5 76.4
Strongly agree 86 23.6 23.6 100.0
Total 365 100.0 100.0
5. I am satisfied with Strongly 1 0.3 0.3 0.3
the respectful disagree
Disagree 4 1.1 1.1 1.4
behavior of employees
Neutral 165 45.2 45.2 46.6
Agree 121 33.2 33.2 79.7
Strongly agree 74 20.3 20.3 100.0
Total 365 100.0 100.0
Satisfied customer is the real asset for any organization that ensures long-term profitability even in
the era of great competition. It is found that satisfied customer repeat his/her experience to buy the
products and also creates new customers by communication of positive message about it to others
(Dispensa, 1997). On the other hand, dissatisfied customer may switch to alternative
products/services and communicate negative message to others. So, organizations must ensure the
customer satisfaction regarding their goods/services (Gulledge, 1996).
The above table shows the level of customers’ satisfaction to use the modern and
appropriate equipment and technology. The result indicates that, 32.3% of the respondents
are strongly satisfied, 54.2% of the respondents are satisfied, 12.3% of the respondents are neither
satisfied nor dissatisfied, 0.3 % of the respondents are dissatisfied and the rest 0.8% of the
respondents are strongly dissatisfied with the bank uses modern and appropriate equipment
and technology. From the above analysis it is clearly indicating that, majority of the
respondents are highlysatisfied with bank uses modern and appropriate equipment and
technology. The bank should try to enhance the satisfaction level of entire customer’s in
relation to the banks use modern and appropriate equipment and technology.
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The table shows the level of customers’ satisfaction to provide accurate information on
customers demand. And the result implies that, 18.1% of the respondents are strongly satisfied,
28.2% of the respondents are satisfied, 51.8% of the respondents are neither satisfied nor
dissatisfied, 1.6% of the respondents are dissatisfied and 0.3% of the respondents are strongly
dissatisfied. It shows that, customers are neither satisfied nor dissatisfied with bank
provides accurate information on customers demand. Definitely, Most of the customers of the
bank are neither satisfied nor dissatisfied in accurate information on customers demand; but
the bank should improve this situation and work more to create better satisfaction to entire
customers.
Above table represents the level of customers’ satisfaction to responsiveness to customer

preference. It implies that, 17.8% of the respondents are strongly satisfied, 35.3% of the
the respondents are dissatisfied and 0.5% of the respondents are strongly dissatisfied. It showsthat
the majority (43.6%) of the respondents are neither satisfied nor dissatisfied with
Responsiveness to customer preference. From the above analysis majority of the customers are
neither satisfied nor dissatisfied by to responsiveness to customer preference; but it is not enough
to the bank work more to create better satisfaction to entire customers.
The table 4.7 shows the level of customers’ satisfaction to being a client of this bank. And the
result of the above table shows that, 23.6% of the respondents are strongly satisfied, 25.5% of the
the respondents are dissatisfied and 6% of the respondents are strongly dissatisfied. From
theabove analysis most customers are neither satisfied nor dissatisfied by being a client of the bank
and significant number of respondents is dissatisfied. So that, the banks should make better
services renders to the customer and this may increase the satisfaction level of customer.
Finally, with regard to the level of customers’ satisfaction to the respectful behavior of
employees, the result indicates that, 20.3% of the respondents are strongly satisfied, 33.2% of the
the respondents are dissatisfied and the rest 0.3% of the respondents are strongly
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dissatisfied with the respectful behavior of employees. It can be concluded that, the levels of
customers are neither satisfied nor dissatisfied with respectful behavior of employees.
Table 4.8 Mean and standard deviation for the five bank’s Service quality dimensions and
Customer Satisfaction
Dimensions N Mean Std. deviation

Tangibility 365 4.4493 0.65531
Reliability 365 3.6586 0.58943
Responsiveness 365 4.0411 0.54220
Assurance 365 4.2315 0.54518
Empathy 365 3.7089 0.58456
Customer 365 3.7666 0.64235
Satisfaction
Customer 365
Satisfaction
Table 4.8 indicates that tangibility has the highest mean value; empathy and reliability have least
mean value. Therefore, it may be concluded that, respondents are highly satisfied with tangibility
dimensions with a mean and standard deviation of 4.4493 and 0.65531 respectively. The same has
been followed by assurance and responsiveness. However, customers are less satisfied with
empathy and Reliability dimensions at a mean of 3.7089 and 3.6586 respectively. Finally, it can
be concluded that, the customer satisfaction has a mean score 3.7666 which indicates that overall
customers are slightly satisfied with the service quality of banks.
4.4 Reliability Analysis
In this research the scale reliability was checked by Cronbach's alpha Reliability test for each item,
for all service quality dimensions and for all items. A summary of the reliability statistics of the
data from the SPSS version 20 is presented in Table 4.9
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Table 4.9 Test of Reliability
Multidimensional items Number of Items Cronbach’s Alpha
Tangibles 6 0.832
Reliability 5 0.760
Responsiveness 4 0.734
Assurance 4 0.752
Empathy 4 0.651
CustomerSatisfaction 5 0.846
All service quality items 23 0.890
All items 28 0.918

Since the value of chronbach alphas for this study is above 0.6 for all scale variables so the data
collected from respondents is reliable and consistent with the scale. In simple term the result is
confirmed the reliability and consistency of the questionnaire.
4.5 Pearson Correlation Analysis
To determine the relationship between service quality dimensions (tangibility, reliability,
responsiveness, assurance, and empathy) and customer satisfaction, Pearson correlation was
computed. The below table 4.9 presents the results of Pearson correlation on the
relationship between service quality dimension and customer satisfaction.
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Table 4.10 Relationship between Service Quality Dimensions and Customer Satisfaction
Customer Satisfaction
Tangibility Pearson Correlation 417**

. Sig. (2-tailed) .000
N 365
Reliability Pearson Correlation 670**

N 365
Responsiveness Pearson Correlation 614**

Sig. (2-tailed) .000
N 365
Assurance Pearson Correlation .557**

Sig. (2-tailed) .000
N 365
Empathy Pearson Correlation 659**

N 365
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Own, computed from survey data, 2018
The results in table 4.9 indicate that, there is a positive and significant relationship between all
service quality dimensions and customer satisfaction. Tangibility and customer satisfaction (r =
0.417, p < 0.01), reliability and customer satisfaction (r =0.670, P < 0.01), responsiveness and
customer satisfaction (r = 0.614, P < 0.01), assurance and customer satisfaction (r = 0.557, p<
0.01) empathy and customer satisfaction (r = 0.659, P < 0.01).
The finding on the above table 4.9 indicates that the highest relationship is found between
reliability and customer satisfaction (r = 0.670, p < 0.01).
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4.6 Multiple Regression Analysis
Multiple linear regression analysis was applied to investigate the impact of service quality on
customer satisfaction.
Coefficient of determination-R2is the measure of proportion of the variance of dependent

variable about its mean that is explained by the independent or predictor variables (Hair et.al,
1998). Higher value of R2represents greater explanatory power of the regression equation.
4.6.1 Impact of service quality on customer satisfaction

Table 4.11 Model Summary (Independent variables as predictors to customer satisfaction).
Model Summary
Model R R Square Adjusted R Std. Error of the

Square Estimate
1 a 0.628 0.622 0.39473
0.792
a. Predictors: (Constant), Empathy, Tangibility, Assurance, Responsiveness, Reliability

b. Dependent Variable: Customer satisfaction
Table 4.11 presents the model summary of the model which states customer satisfaction as
a function of empathy, tangibility, assurance responsiveness, and reliability. Based on the above
model summary R square value indicated that the independent variables explained the dependent
variable by 0.628. This result implies that service quality accounted for 62.8 percent of the
variance in customer satisfaction. So, Service quality variables explained the
customersatisfaction by 62.8 percent.
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Table 4.12 Regression model for Coefficients (Independent variables as predictors to

customer satisfaction)
Coefficients
Model Unstandardized Standardized

Coefficient Coefficients T Sig
B Std.Error Beta
(Constant) -.734 0.199 -3.694 .000
Tangibility .109 0.035 0.111 3.095 .002
Reliability .334 0.050 0.307 6.694 .000
Responsiveness .228 0.054 0.192 4.251 .000
Assurance .213 0.049 0.181 4.329 .000
Empathy .262 0.052 0.238 5.070 .000
a. Dependent Variable: Customer satisfaction
The results of multiple regressions, as presented in table 4.12 above, tangibility has a positive and
significant effect on customer satisfaction with a beta value (beta = 0.109), at 99 percent
confidence level (p < 0.01). The results of table 4.12.also showed that the standardized
coefficient beta and p value of reliability were positive and significant (beta= 0.334, p < 0.01).
As shown in table 4.11, responsiveness has a positive and significant effect on customer
satisfaction with a beta value (beta = 0.228), at 99 percent confidence level (p < 0.01), assurance
has a positive and significant effect on customer satisfaction with a beta value (beta = 0.213), at 99
percent confidence level (p < 0.01). Table 4.12 further shows that, empathy has a positive and
significant effect on customer satisfaction with a beta value of (beta = 0.262), at 99
percent confidence level (p < 0.01).
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CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1. Conclusion
The study was intended to investigate the impact of service quality on customer satisfaction
evidence from selected private banks in Awash 7 kilo town on the questionnaire consisting
of 365 randomly selected customers of five Private Banks.
The result of demographic background of the respondents indicates that majority of the
total respondents are male customers, the age categories in the range of are rise in the
economically active population. Concerning education background the largest groups of
respondents have a good level of education withhold degree and diploma, most of the
respondents are government employees and the majority of the respondents are frequently use
banks monthly.
The results of the descriptive statistical analysis also indicated that, customers were most
satisfied with the tangibility dimensions of service quality followed by assurance and
responsiveness. However, customers were less satisfied with empathy and reliability dimensions of
service quality. The correlation result shows that, there is a positive and significant
relationship between all items of service quality dimension, tangibility and customer satisfaction,
reliability and customer satisfaction, responsiveness and customer satisfaction, assurance and
customer satisfaction, empathy and customer satisfaction.
Furthermore, the multiple regression results shown that the five service quality dimensions
(tangibility, reliability, responsiveness, assurance and empathy) have positive and significant
impact on customer satisfaction.
The R square value of 0.628, demonstrates that 62.8% of variation in customer satisfaction can be
accounted by the service quality dimensions. The findings of this study also indicated that
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reliability is the most important factor to have a positive and significant impact on
customer satisfaction, followed by empathy, responsiveness, assurance and tangibility.
5.2. Recommendations
Based on the conclusions of the study, the researcher forwards the following recommendations to
the management of the banks and suggestion for other researchers.
Reliability is one of the most important factors influencing customer satisfaction. But customers of
the bank are less satisfied with this dimension. The bank managers should enhance customers’
reliability on the bank by providing the service at the promised time, showing a deep interest in
solving customer’s problems, insisting on error free record, provides consistent service and
Provide accurate information to customers.
Empathy is also considered as one of the most important factors influencing customer
satisfaction. However, the customers of the banks were less satisfied in terms of the
empathy dimensions. One way of addressing this could be by giving personal or individual
attentions and understanding customer need, quick responses enough to serve the customers,
understand the specific needs of their customers, shows integrity and trustworthiness in dealing
with customers, and treating customers in a friendly manner. This is to say, the bank management
should focus on this factor to maximize customer satisfaction.
Direction for future research

This study was conducted to examine the impact of service quality on customer satisfaction in
selected private bank in Awash 7 kilo. The sample was drawn from only five private banks, thus
this study may be limited in its generalizability of the findings to others private banks. So,
future research should have to draw sample of respondents on more number of private banks for
the sake generalizing the results of the study.
Further research can be performed with similar concepts in different areas of service
industry (insurance companies or telecommunication industry) to better generalize the
results. This investigation would also help to analyze different ways to serve the customer by
improving the service quality and produce more revenue for the companies.
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Appendices
Appendices A: Socio Demographic Characteristics of Respondents
Frequencies
Gender AGE EDUCATIONAL Employment Frequency of
LEVEL Status using the Bank
Valid 365 365 365 365 365
N
Missing 0 0 0 0 0
Frequency Table
Gender
Frequency Percent Valid percent Cumulative

percent
Vali Male 207 56.7 56.7 56.7
d Female 158 43.3 43.3 100.0
Total 365 100.0 100.0
Age

percent
18-25 years 61 16.7 16.7 16.7
26-35 years 138 37.8 37.8 54.5
36-45 years 111 30.4 30.4 84.9
Valid 46-55 years 36 10.7 10.7 95.6
56 or above 16 4.4 4.4 100.0
Total 365 100.0 100.0
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Educational Level

percent
Primary to 10th 55 15.1 15.1 15.1
complete
Certificate 27 7.4 7.4 22.5
Valid Diploma 133 36.4 36.4 58.9
Degree 136 37.3 37.3 96.2
Master or above 14 3.8 3.8 100.0
Total 365 100.0 100.0
Employment Status

percent
Governmental 124 34.0 34.0 34.0
Employee
Private employee 102 27.9 27.9 61.9
Valid
Self-employment 99 27.1 27.1 89.0
Retired 11 3.0 3.0 92.1
Student 29 7.9 7.9 100.0
Total 365 100.0 100.0
Frequency of using the Bank

percent
Daily 49 13.4 13.4 13.4
Twice a week 66 18.1 18.1 31.5
Valid Weekly 86 23.6 23.6 55.1

Monthly 164 44.9 44.9 100.0
Total 365 100.0 100.0
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Appendices B: Correlations Analysis
Correlations
Tangibility Reliability Responsiveness Assurance Empathy Customer
satisfaction
Tangibility Pearson 1 .363** .379** .298** .285** .417**
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000
N 365 365 365 365 365 365
**
Reliability Pearson .363 1 .460** .395** .684** .670**
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000
N 365 365 365 365 365 365
** **
Responsiveness Pearson .379 .460 1 .621** .529** .614**
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000
N 365 365 365 365 365 365
** **
Assurance Pearson .298 .395 .621** 1 .430** .557**
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000
N 365 365 365 365 365 365
Empathy Pearson .285** .684** .529** .430** 1 .659**
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000
N 365 365 365 365 365 365
Customer Pearson .417** .670** .614** .557** .659** 1
satisfaction Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000
N 365 365 365 365 365 365
**. Correlation is significant at the 0.01 level (2-tailed).
Appendices C: Multiple Regression Analysis
Model Summaryb
Model R R Squere Adjusted R Std. Error of the
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Squere Estimate
a
1 .792 .628 .622 .39473
a. Predictors: (Constant), Empathy, Tangibility, Assurance,Responsiveness, Reliability
b. Dependent Variable: Customer satisfaction
ANOVAa
Model Sum of df Mean F Sig.

Squares Square
Regression 94.256 5 18.851 120.988 .000b
1 Residual 55.936 359 .156
Total 150.192 364
a. Dependent Variable: Customer satisfaction

b. Predictors: (Constant), Empathy, Tangibility, Assurance, Responsiveness, Reliability
Coefficients a
Model Unstandardiz Stan t Sig.

ed dardi
Coefficients zed
Coef
ficie
nts
B Std. Beta
erro
r
(Const -.734 .199 - .000
ant) 3.69
1 4
Tangi .109 .035 .111 3.09 .002
bility 5
Reliab .334 .050 .307 6.69 .000
ility 4
Respo .228 .054 .192 4.25 .000
nsiven 1
ess
Assur .213 .049 .181 4.32 .000
ance 9
Empat .262 .052 .238 5.07 .000
hy 0
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a.Dependent variable: Customersatisfaction
Appendices D: Questionnaire (English)
Dear Respondents,
I am a final-year post graduate student of Leadstar college of management and leadership

currently taking up Master of Business Administration (MBA). I am currently conducting my
data collection for my research Thesis entitled “The Impact of Service Quality on Customer
Satisfaction in Private Banks at Awash 7 kilo Town”. So, I would like to know your attitudes and
behaviors related to Service Quality and customer satisfaction about the Bank service provider
you are using presently. The data collected is confidential and will only be used for
analysis of the study and not for any other purpose.
This questionnaire consists three sections. The first section consist 5 questions regarding
demographic information. The second section consist 23 attributes which are to be measured on a
five point Likert scale to measure Service Quality private banks. . The last section (third
section) contains 5 questions to indicate customers’ judgment of satisfaction measured in
five point Likert scale.
Hoping that you lend me a couple of minutes of your time for answering the survey and your
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Kindly help is crucial for our successful completion of this research thesis.
Your contribution in the study will be greatly appreciated. Thank you very much for your time and
assistance.
Ali Hassen
Section I: Demographical Information
Please tick [√] the appropriate box for your answers.
1. Gender:
 Male Female
2. Age
 18-25 26-35
 46-55 36-45
 56 or above
3. What is the highest level of formal education you have completed? (Please check only one.)
 Primary to 10thcomplete  Certificate
 Diploma Degree
 Master or above
4. Employment Status:
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 Employee of governmental Organization  Employee of private organization
 Self-employment  Student
 Retired
5. Frequency of using the bank
 Daily Twice a Week
 Weekly Monthly
Section II: Service Quality Dimensions
Please tick [√] the appropriate table box for your answers and rank each statement as follows:
1 = strongly disagree; 2= disagree; 3 = neutral; 4 =Agree; 5= strongly agree.
Service Quality Dimensions 1 2 3 4 5

Tangibility
1. The bank has modern-looking equipment
2. The bank has visually nice physical facilities
3. The bank has conducive service layout
4. The bank employees has a neat and professional appearance
5. Bank materials associated with the service look attractive.
(Passbook, form, brochures, bank card etc.)
6. Bank use modern banking technology.
Reliability
7. The bank provides its services at promised times
8. The bank employees show a sincere interest in solving
customer’s problems
9. Bank insists on error free records.
10. The bank provides consistent service.
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11. Bank employees provide accurate information to customers.

Responsiveness
12. Bank employees tell customers exactly when certain services
will be performed.
13. Bank gives prompt and updated services.
14. Bank gives service the right time.
15. Banks are never busy to respond on customer request
Assurance
16. Bank employees instill confidence in their customers.
17. Bank employees are consistently courteous to customers.
18. Bank makes customer feel safe in their transaction.
19. Bank employees have sufficient knowledge of service
Information.
Empathy
20. Bank offers personal attentions and understanding
customer need
21. The bank employees are quick enough to serve the customers.
22. Bank employees understand the specific needs of their
Customers.
23. Bank employees demonstrate integrity and trustworthiness in
Dealing with customers.
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Section III: Customer Satisfaction
Please tick [√] the appropriate table box for your answers and rank each statement as follows:
1 = strongly disagree; 2= disagree; 3 = neutral; 4 =Agree; 5= strongly agree
Satisfaction indicator 1 2 3 4 5
I feel satisfied bank uses modern and appropriate
equipment and technology
I am satisfied with bank provides accurate
information on customers demand
I am satisfied with the Responsiveness to customer
preference.
I am satisfied of being a client of this bank
I am satisfied with the respectful behavior of employees
Any additional comments you may wish to make
Thank you again for your cooperation. Your comments are valuable!
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Page
65

Chapter One: 1.1 Background of The Study

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Chapter One: 1.1 Background of The Study

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The Impact Of Service Quality on Customer Satisfaction In case selected Private Banks Awash 7 Kilo

1.1 BACKGROUND OF THE STUDY

1.2. STATEMENT OF THE PROBLEM

1.3. OBJECTIVES OF THE STUDY

1.3.1. GENERAL OBJECTIVE

satisfaction in case of selected private banks in Awash 7 kilo Town.

1.3.2. SPECIFIC OBJECTIVES

The specific objectives of the research are:

 To examine the impact of tangibility on customer satisfaction of the bank.

1.4. SIGNIFICANCE OF THE STUDY

1.5. LIMITATION OF THE STUDY

1.6. SCOPE OR DELIMITATION OF THE STUDY

2.2 CHARACTERISTICS OF SERVICE

Figure 2.1: The service characteristics

Service cannot be Service cannot be

2.3. MEASURING SERVICE QUALITY

These five dimensions identified as follows:

2.4. CUSTOMER SATISFACTION

customer either positive or negative for the services. (Woodruff, 1997).

Several authors have defined customer satisfaction in various ways:

 Customer satisfaction “as an attitude-like judgment following a purchase act or a series of

2.5. RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER

2.6. EMPIRICAL LITERATURE

According to Hummayounand M. Iqbal(2009) concludes that there is a significant relationship

According to Yalew(2015) concluded that the impact of Information and Communication

2.7. CONCEPTUAL FRAMEWORK

Empathy Source: parasuraman et al., (1988)

RESEARCH DESIGN AND METHODOLOGY

3.1 STUDY AREA

3.3.2 SECONDARY DATA

n= (1.96)² × 0.5(0.5) = 384

3.6 METHOD OF DATA COLLECTION

Pearson Correlation Analysis

Independent variables Dependent variables

DATA ANALYSIS AND INTERPRETATION

4.2. Data Analysis

4.2.1. Response Rate

Non Response rate 4.95%

Response rate 95.05%

Figure 4.1 Respondents rate

4.2.2. Socio Demographic Characteristics of Respondents

Table 4.1 Background Information of Respondents

Characteristics/variables frequency percent Valid Comulative

Gov`tal 124 34.0 34.0 34.0

Concerning educational level of respondents, primary to 10th complete represented 15.1%,

4.3. Descriptive Statistics Analysis

Table 4.2 Tangibility

Tangibility Scale Frequency Percent Valid Cumulative

1.The bank has modern Strongly disagree 2 0.5 0.5 0.5

(passbook, Total 365 100.0 100.0

Table 4.3 Reliability

Reliability Scale frequenc percent Valid Cumulative

1. The bank provides Strongly disagree - - - -

4. The bank provides Strongly disagree 3 0.8 0.8 0.8

Disagree 19 5.2 5.2 1.6

Table 4.4 Responsiveness

Responsiveness Scale frequenc percent Valid Cumulative

3. Bank gives service Strongly disagre 1 0.3 0.3 0.3

Agree 215 58.9 58.9 68.5

Strongly agree 115 31.5 31.5 100.0

4. Banks are never Strongly 1 0.3 0.3 0.3

Table 4.5 Assurance