CPU BUSINESS AND INFORMATION

TECHNOLOGY COLLEGE

Master Of Business Administration(MBA) Program

A Research Proposal on:-

The Impact of service

quality on customer
satisfaction in case of
Afarensis International Hotel.

By: Birru Shumeya

Submitted to: Prof. Yonas H.

Addis Ababa, Ethiopia

November 2018

Contents
1. Introduction..................................................................................................1
1.1. Background of the study............................................................................1
1.2. The statement of the problem....................................................................3
1.3. OBJECTIVES OF THE STUDY...............................................................5
1.3.1. General objectives..................................................................................5
1.3.2. Specific objectives..................................................................................5
1.4. Definition of terms…….............................................................................5
1.5. Research questions....................................................................................5
2. Significance of the study...............................................................................6
3. The scope and Limitation of the Study.........................................................7
3.1 Scope..........................................................................................................7
3.2 Limitation...................................................................................................7
4. Literature Review.........................................................................................7
5. Research Methodology................................................................................8
5.1 Research design..........................................................................................8
5.2 Types and Source of Data...........................................................................9
5.3. Data collection technique...........................................................................9
5.4 Description the study population..............................................................10
5.5 sample design and sampling techniques....................................................10
5.6. Data analysis............................................................................................11
6. Ethical consideration..................................................................................11
7. Time frame and work Schedule..................................................................12
8. Budget Schedule.........................................................................................13
9. Organization of the paper...........................................................................14
10. REFERENCE:..........................................................................................14

1. Introduction

1.1. Background of the study

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One of the most effective tools in hotel Industry success is service quality. Juran (1988) defines quality
as “fitness for use” while in Crosby (1979) quality is defined as “conformance to requirements”. Mitra
(2000) on the other hand views quality of a product or service as “the fitness of that product or service
for meeting or exceeding its intended use as required by the customers”. Considering the hotel industry,
bringing about quality has complication that differs from when tangible product is involved.
Parasuraman et al., (1985) noted that it was inappropriate to use a product-based definition of quality
when studying the service sector. They therefore developed the expression, “service quality”. Service
quality refers to the difference between customers' expectations of service and their evaluation of the
services they received (Parasuraman, Zeithaml, and Berry, 1985). It is perceived as subjective since it
relies on the judgement of the customer. However, it is an important concept in influencing the extent
and nature of customer satisfaction experienced after service delivery. According to Gronroos (1984);
service quality is dependent on two variables: expected service and perceived service. Expectations are
beliefs about the level of service that will be delivered by a service provider and they are assumed to
provide standards of reference against which the delivered service is compared(Bitner et al,2003).If
there is congruence between the performance and the expectations, then a customer is said to be
satisfied.Various models have been proposed to measure service quality. Lehtinen and Lehtinen (1982)
proposed that service quality can be measured by its physical, corporate and interactive quality whereas
Le Blanc (1992) suggested a variety of factors such as responsiveness, corporate image and accessibility
as some of the factors used to evaluate service quality.However, the most popular model for measuring
service quality is the SERVQUAL model developed by Parasuraman et al. (1985) and engenders five
determinants of service quality presented in order of importance, reliability, responsiveness, assurance,
empathy and tangibles. This study focused on service quality and customer satisfaction: a case of hotel
industry in Addis Ababa Afarensis International Hotel. The hotel industry is highly service oriented as
through the experiences, customers’ form opinions by comparing the service encounters against their
expectations. The hotel industry in Addis Ababa is experiencing increasing competition with major
international hotel brands increasingly setting up operations in Addis Ababa. This is set to increase the
competition in the hotel industry. To survive in this dynamic and highly competitive business
environment the hotel operators will be forced to critically acknowledge the importance of service
improvement in order to gain competitive advantage.

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 1.2. The statement of the problem

In today’s constantly changing business environment, providing superior quality through adequate and
strong focus on customers is one of key factor for enabling firms to gain lasting competitive advantage
in winning the market (chiara, G.2007).
For the hotel industry to achieve its objective of delivering quality service for its customers, it is
imperative to study how the hotel can conceivably meet and even exceed customers’ service delivery
expectations (Doyle, 2000). Management of organizations seeks to know the level at which the
customers are satisfied with their services and the kind of service quality levels their customers would
like in order to offer the exactly what would be taken positively. Parasuraman et al. (1988) provided a
list of five determinants of service quality as a result of their focus group studies with service providers
and customers: Reliability, Responsiveness, Assurance, Empathy and Tangibles. In a study to evaluate
service quality dimensions that impact customer satisfaction, Harr (2008) concluded that assurance,
empathy and tangibles are the most important to customers’ evaluation of service quality and thus, may
have positive influence on customer satisfaction. Krishna et al., (2010) after studying service quality and
it’s an impact on customer satisfaction in retailing in India concluded that customers have the highest
expectations on promptness of service, accuracy of transactions and security issues. Manyi (2011) while
studying the relationship between customer satisfaction and service quality found out that all the five
dimensions of service quality were significantly related to customer satisfaction. The outcome of the
study suggested that to satisfy customers, organizations need to improve dimensions of service quality.
For this, now a day’s marketers trying to focus more on continues monitoring and evaluation of service
quality, involving various innovate ive offerings and service developments which have a direct influence
on customer’s service experience (R. Laghari,2011). From the studies carried out in many countries,
factors like service quality and perceived value are the key constructs affecting customer satisfaction
with hotel industry. In addition to this, Studies dealing with the relationship between satisfaction and a
service quality have shown that a higher level of service quality leads to a higher level of customer
satisfaction (Pollack, 2008, p. 537). On the other hand, some studies could not show a strong
relationship between the service quality and the customer satisfaction (Lovreta et. al., 2010, p. 121) and
in relation to the quality of a product, it is more difficult for customers to measure objectively the quality

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 of service, due to the intangibility as one of the main characteristics. With regard to the impact of service
quality dimensions on customer satisfaction, many researchers are come up with different conclusion
about the impact of service quality dimensions on customer satisfaction. For instance, Mengi (2009),
indicated that responsiveness and assurance are more significant.Whereas, empathy had the highest
positive correlation with customer satisfaction followed by assurance and tangibility. On the other hand,
Araslietal, (2005), foundthat reliability had the highest impact on customer satisfaction. Finally, a
number of studies have identified the dimensions of service quality as the antecedents of customer
satisfaction ( Lau et al., 2013, Saghier, & Nathan, 2013)
In the contemporary business environment where business is expanding and competition is stiff both
nationally and internationally; doing business becomes a great challenge. Therefore, in order to
overcome this challenge organizations (businesses) are developing different strategies to achieve their
long run objective and for survival. One of the best strategies is about satisfying the customer that
ensures a long term growth and profitability of business. As a result, no one is questioning the
importance of customer satisfaction for the existence of hotel industry. Therefore my thesis is focused
on the impact of serves quality on customer satisfaction in the case of Afarensis International Hotel.

1.3. OBJECTIVES OF THE STUDY

1.3.1. General objectives

The general objective of the study is to assess the Impact of service quality on customer satisfaction, in
case of Afaransis international Hotel.

1.3.2. Specific objectives

 To investigate to what extent customers are satisfied with service delivered by the Hotel.
 To inform to the Hotelto what extent customers are satisfied by service quality dimensions.
 To state clearly which quality dimensions are more important or significant for customer
satisfactions.
 To recommend different constructive suggestions to enhance the service quality and customer
satisfaction.
 To determine factors influencing customer satisfaction

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 To examine the relationship between service quality and customer satisfaction
among hotels in Addis Ababa.

1.4. Definition of terms……

1.5. Research questions

Accordingly the following research questions are for warded

 1. What is the effect of service quality on customer satisfaction?

 2. Which service quality dimensions are more impacting on customer satisfaction?
 3. What are the determinants of service qualities influencing customer satisfaction?

2. Significance of the study

 The study mainly will focus on the impact of service quality on customer satisfaction and aimed
to state clearly the problems that cause customer satisfaction, in case of Afaransis international Hotel.
The study will also provide important imputes to other researches.
 We will expect that our findings provide additional insight into customers’ perceived satisfaction
within the AFarensis International Hotel.
 Results of this study will encourage strategy development for superior service quality
management particularly in the areas of quality dimensions.

3. The scope and Limitation of the Study

3.1 Scope
The study will delimit to assess the impact of service quality on customer satisfaction in Addis Ababa
Afarensis International Hotel with the study variables of tangibility, assurance, empathy, responsiveness
and reliability. The study will only conduct in Afarensis International Hotel and Customers will be the
target of the study population. Employees are not considered in the study, because it is difficult to cover
all areas at one time and in addition to this the research type is cross sectional from august 2018 to
December2018.

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 3.2 Limitation

4. Literature Review
The Literature review focuses on theoretical framework and empirical studies related to service quality
and customer satisfaction. In particular, the study covers literature related to the study as studied by
other scholars. The literature is reviewed in two streams. First, literature on service quality and its
measurement is reviewed. Then, literature relating to customer satisfaction is reviewed. Finally,
literature relating to the relationship between service quality and customer satisfaction is reviewed and a
conceptual framework of the study developed.

Service Quality Researchers proposed different views on the definitions of service quality. Service
quality is defined as a comparative function between consumer expectations and actual service
performance (Parasuraman et al., 1985). On the other hand, Parasuraman et al., (1988) defined service
quality as the ability of an organization to meet or exceed customer expectations. According to Cronin &
Taylor (1994), service quality is a form of attitude representing a long-run overall evaluation of service.
As observed by Chang, Chen and Hsu (2002), the traditional notion of service quality by Parasuraman et
al., (1985) is most commonly accepted.

Determinants of Service Quality When purchasing goods, the customer employs many tangible aspects
to judge quality; style, hardness, color, label, feel and package. However, when purchasing services
fewer tangible aspects exist. In the absence of tangible evidence on which to evaluate quality, customers
must depend on other aspects. Service quality dimensions are the aspects/characteristics which
customers use to evaluate service quality. A research by Parasuraman et al., (1985) identifies ten
determinants that influence customers’ perceptions of service quality as reliability, responsiveness,
tangibility, communication, credibility, security, competence, courtesy, understanding and access.

4.1. Service Quality Service quality is defined as customer’s perception of how well a service meets or
exceeds their expectations (Parasuraman, Berry and Zeithmal 1985). Service quality is often judged by
customers and not by the organization itself (Abbasi, Khalid, Azam and Riaz, 2010).Martin (1999)
suggested that a service is characterized by attributes such asintangibility, heterogeneity, perishability

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and inseparability which delineate a service from a good which further complicates the evaluation of the
performance of a service.

4.2 Customer SatisfactionCustomer satisfaction is defined as the consumer’s fulfillment response

(Oliver, 1997). It is a judgment that a product or service feature, or the product or service itself, provided
a pleasurable level of consumption-related fulfillment, including levels of under- or overfulfillment.
According to Williams et al., (2003), customers are satisfied when their judgment of the service they
have received equals or exceed what they expected. If performance matches, the customer is satisfied
and, if it exceeds expectations, even delighted (Kotler et al., 1996). If the performances fall short of
expectations, the customer is dissatisfied. Proper understanding of the factors that influence customer
satisfaction makes it easier for the service provider to design and deliver service offers that correspond
to customer demands(Gibson, 2005). The term service quality and customer satisfaction have been
conceptualized similarly in the literature and therefore might be considered as one evaluative construct
(Iacobucci et al; 1995). The SERVQUAL model is proved to best advisable instrument to measure
customer service and perceived satisfaction. This model includes five dimensions. First, reliability
which refers to the company ability to provide services on time. Second, responsiveness which deals
with the extent to which service provider’s readiness to provide quickly. Third, assurance, this
dimension focuses on the ability of workers to communicate trust to customers or their professional
ability related to the service. Fourth, empathy, related with care and attention given to the customers.
Lastly, tangibility which is related with the observable facilities.It is physical facilities as (zeithaml,
etal.1990, Hemon, and Nitecki, 2001) discussed, cited in (Loke, etal. 2011).

5. Research Methodology
Research methodology will outline the following points, research design, description study population,
source and types of data, sampling techniques ,data collection instrument, data analysis methods.

5.1 Research design

It details all the necessary information needed to structure and solve the research problems.
Accordingly, from different types of research designs descriptive type of research design is employed

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for this proposal for the realization of intended objectives and to describe the service quality effect to
customers. That research design is a fact finding study with adequate and accurate interpretation of
findings and furthermore, it allows describing both qualitative and quantitative approaches (Kothari,
2004).The researcher will employ the survey method. The questionnaire will be designed related to
service quality elements such as empathy, reliability, and responsiveness, assurance, and tangibility
effects towards customer’s satisfaction among other factors. In addition to this, researcher will employ
convenience sampling techniques to select sample respondents. Finally, the research will be again cross
sectional type, since the research will be conducted with in short period of time.

5.2 Types and Source of Data

There are two types of data which is usually used in researches, primary and secondary data. Primary
data does not actually exist until and unless it is generated through the research process as part of the
consultancy or dissertation or project. It will often be collected through techniques such as
experimentation, interviewing, observation and surveys. But in that research, primary data will be
collected through well designed questionnaire from sample respondents. On the other hand Secondary
sources are information sources that interpret, include, describe, or draw conclusions based on works
written by others. In addition to this, Secondary sources are often referred to as being “one step
removed” from the actual occurrence or fact. Again secondary source consists of a review of relevant
literature conducted to assess the previous research studies conducted by other researchers and some
statistical reports related to the topic of the study were reviewed. In addition review of various books,
journals, articles, and notes from the internet pertaining to the study.

5.3. Data collection technique

There are two major approaches to gathering information about person, situation, problem or
phenomena. Sometimes, information required is already available and only need to be extracted.
However, there are times when the information must be collected. Based up on those broad approaches
to information gathering, data are categorized as secondary data and primary data.

According to Malhotra and Birks (2003, pp. 224), the survey approach is the most common method of
primary data collection in marketing research and the advantages are simple administration and data

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consistency. The questionnaire employs the typical form of fixed-response alternative questions that
require the respondent to select from a predetermined set of answers to every question. In addition to
this, questionnaires are often viewed as quick and easy to do. To get useful responses, in a cost-
effective way, it is important to be clear about the aim of the questionnaire and how the responses will
help you improve the learning technology or its implementation.
Think also about the analysis of results. It can be sobering to consider the amount of data you will
generate and the time it will take to analyze. The responses will be gathered in a standardized way, so
questionnaires are more objective, certainly more so than interviews. Generally it is relatively quick to
collect information using a questionnaire. Potentially information can be collected from a large portion
of a group. This potential is not often realized, as returns from questionnaires are usually low. However
return rates can be dramatically improved if the questionnaire is delivered and responded to in class
time. Therefore, after carefully reviewing all the sources, the researcher will be developed five point
liker- scales questionnaire and distributed to the samples selected from the customers of Afarensis
International Hotel. The scores will be coded 5 for strongly agree or strongly satisfied, 4 slightly agree
or satisfied,3,for neutral or indifferent, 2 for somehow disagree or slightly dissatisfied, and 1 for
strongly disagree or highly dissatisfied. The items used to measure customer satisfaction were
constructed mainly from SERVQUAL parameters. The data will be collected by well trained one
enumerator.
In addition, as secondary source, literatures, related researches and questions will be also considered
especially for service quality parameters. In the questionnaire both open and closed ended questionnaire
are incorporated in order to get the designed information.

5.4 Description the study population

The target population of the study is the customers of Afarensis International Hotel. The customer is
mainly users of the service provided by the industry which is difficult to state the exact number. But
approximately the researcher will interview 30 targeted populations. Since the users have more familiar
with the service and knows more about quality of the service or performance.

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 5.5 sample design and sampling techniques
Kothari (2004) states that a sample design is a definite plan for obtaining a sample from a given target
population and it refers to the techniques or procedures the researcher would adopt in selecting items for
sample.
The participants will be selected using convenient sampling technique, Non-probability sampling
method (Saunders et. al., 2009). According to Saunders et. al.(2009) unlike probability sampling, there
are no rules in non-probability sampling techniques.
Rather the logical relationship between your sample selection technique and the purpose and focus of
your research is important; generalizations being made to theory rather than about a population. On-
probability sampling involves the selection of subject based on assumption regarding the population of
interest, which forms the criteria for selection. Convenience sampling (or haphazard sampling) involves
selecting haphazardly those cases that are easiest to obtain for your sample (Saunders et. al., 2009).
It involves selecting participants from the part of the population which is close to hand. This strategy is
chosen for this study because sampling participants using list of customers who have using the service of
the Hotel will be a challenge for the researcher. Therefore researcher prefers to use this sampling
technique to get the required information from the required respondents at a place.

5.6. Data analysis

First data will be collected, the collected data will be edited, coded, classified and tabulated to ensure the
accuracy, completeness, assigning numerical or other symbols to answers, arranging data’s in group on
the basis common characteristics and orderly or systematic presentation of numerical data respectively
and finally will be changed and interpreted into meaningful information, figures and statements. It will
be analyzed and processed both qualitatively and quantitatively. The data will be analyzed through
descriptive data analysis techniques. Descriptive data analysis will be used to reduce the data into a
summary format and also transforming data raw data into a form that will make them easy to understand
and interpret. The analysis completely will be done on the basis of data and information will be collected
from respondents through questionnaires from customers especially outsiders. Response of each
customer obtained from the questionnaires will be tabulated-question by question and summarized.
Tabulation methods, frequency distribution, figures, percentage, mean and standard deviation and

10
description of facts based on some statistical analysis will be the techniques used in the study to analyze
and interpret the data. The collected data, from the questionnaire will be summarized using statistical
package for social science (SPSS 21.0) and Microsoft excel by means of statistical methods such as
tabulation, percentage charts and frequency count, in a way that can show the level of customer
satisfaction. In addition to this, to show the degree of relationship among independent variables and
dependent variables, inferential data analysis technique will be used by the researcher. Inferential data
analysis consists of regression and correlation will be employed by the researcher to estimate the degree
and nature of relationships between variables.

6. Ethical consideration
Any information provided from the survey will be treated with the strictest confidence it deserves. The
researcher will take care of for the issues related with plagiarism to do his own work. In addition to this,
at the time of data collection, researcher will not force the respondents to fill the questionnaire rather
communicate politely. In general researchers should have to avoid cheating, copying the work of others
as it is, instead of putting things in clear for the readers.

7. Time frame and work Schedule

Table 7.1. Time frame and work Schedule

Research Week1 W W W W W W W W W W
activities start e e e e e e e e e e
December2 e e e e e e e e e e
018 k k k k k k k k k k
2 2 3 1 5 6 1 1 1 1
Meeting
supervisor
Finalizing
research proposal
Establishing
objectives

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Literature review
Methodology, &
designing
questioner, data
collection &
Analysis

data collection &

Analysis
data Analysis,
findings
,conclusion,
recommendation
Finalizing all
remaining
research work
and submission

8. Budget Schedule
Table 8.1 Budget Schedule
Quantity

S. Items
Unit cost

Total cost

No.

1 Payment for data collector and training. 1x10day= 10 100 1000

2 A, Print outs questioner prepare for 30 30 copies 2 60

respondent

B, Printing first draft research paper. 100 x 2 =200 2 400

page

C, Second draft printing 100 x 2= 200 2 400

12
 page

D, Printing final Research Report for 100 x 3= 300 2 600

hours and page

Total 1460

3 Stationery requirement

a) Rewritable CDs 2 20 40

b) Flash Disc 1 200 200

c) For binding research paper. 3 10 30

Total 270

4 Transportation expense and Other Per a day 20 1540

expenses

Total 1540

Grand Total 4270

9. Organization of the paper

The paper will have five chapters,

Chapter one will about background of the study, statement of the problem, the objectives of the study,
research questions, and the scope of the study, limitation and organization of the paper.

Chapter two presents the review of related literature, which will serve as a basis for
understanding the subject matter together with empirical studies.

Chapter three will be the methodology part of the study. This chapter will include description of study
area, research design, types and source of data, study population, sample design, data collection
methods, and data analysis, validity, reliability and ethical issues of the research.

13
Chapter four consists of data analysis and presentation.

Chapter five will be about conclusions and recommendation.

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 JasminaGržinić, “Concepts of service quality measurement in hotel industry”, Professional
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 A.Parasuraman, Valarie A. Zeithaml and Leonard L. Berry, “Servqual: A Multiple-Item
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1988
 ArashShahin, “SERVQUAL and Model of Service Quality Gaps: A Framework for
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Mattila, Alicia A. Grandey and Glenda M. Fisk, “The Interplay of Gender and Affective
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 M. Sheela, “Economics of Hotel Management”, New Age International Publisher, 2007
 Timothy L. G. Lockyer, “The International Hotel Industry: Sustainable Management”,
Routledge, Business & Economics, 2007
 William F. Theobald, “Global tourism”, Butterworth-Heinemann, Business & Economics,
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 Edward James, “A History of the Hotel Industry”, Associated content, October 10th 2008
 Jacques Levy-Bonvin, “Hotels | A Brief History”, Hospitality net, December 15, 2003

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