Assessment on Factor that Affect Customer

Satisfaction in Case of NIB International Bank S.C

Adama Branch

A Research Proposal Submitted for the Partial full filament of the Course
Business Research Methods

Adviser:-Bogale Alemu (Phd)

Done by; Samson Shifera

Unity University, Adama Campus

School of PG program

Augest, 2021
Adama/Ethiopia

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Abstract

The purpose of this study is to explore customer satisfaction NIB International Bank Adama
Branch in Adama city. Determinants will be examine: probability of being customer
satisfaction; perception of private spending; perception of equity and fairness; financial
constraint; changes to current private policies; referral group; the role of the financial
authority; and banking knowledge. The target population of this study will be customer

satisfaction NIB International Bank Adama Branch in Adama city. A sampling techniques
and sample size determination will be employee in sample selection. Data will be collects
through questionnaire and interview methods. Collected data would be analyzed with
statistical techniques such as percentage, mean, and standard deviations.

Key Word: Factors that affected customer satisfaction in case of NIB International Bank
Adama Branch in Adama city.

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 1. Introduction

1.1 Background of the study

In a competitive market place where businesses compete for customers. customer satisfaction is
seen as a key differential and increasingly has become a key element of businesses strategy.
Customers’ satisfaction is an ambiguous and abstract concept and the actual manifestation of the
state of satisfaction will vary from person to person and product/service to product service. The
stat of satisfaction depends on a number of both psychological and physical variable which
correlate with satisfaction behavior such as return and recommend rate. The level of satisfaction
can also vary depending on other options the customers may have and other products, with banks
not only competing among each other; but also, with non-banks and other financial institution.
Most bank product developments are easy to duplicate and when banks provide nearly identical
service, they can only distinguish themselves on the basis of price and quality. Therefore,
customer satisfaction is potentially an effective tool that banks can use to gain strategic
advantage and survive in today’s ever-increasing banking competitive environment. The
argument for customer retention is relatively straight forward. It is more economically to keep
customer than to acquire new ones, the cost of acquiring customers to “replace” those who have
been lost are high. This is because the expense of acquiring customers is incurred only the
begging stage of the commercial relationship. Inanition, longer term customers buy more and, if
satisfied, may generate positive word-of mouth promotion for the company. Additionally, and
are less sensitive to price changes. These finding highlight the opportunity for management to
acquire referral business, as it is often of superior quality and inexpensive to obtain. Thus, it is
believed that reducing customer defection by as little as five percent can double the profits.

1.2 Background of the bank

The history of banking in Ethiopia goes back to the year 1905 E.C. When the bank of Abyssinia
was first established with a capital of $500,000.00. It was the foundation of this bank that
marked the beginning of modern banking in Ethiopia. The government of the Ethiopia and the
national bank of Egypt jointly owned it under a 50 years franchise agreement. The liquidation of
Abyssinia bank in the year 1931 due to inefficiency and poor profit orientation was followed by
the establishment of bank of Ethiopia with a capital of $750,000.00 the first indigenous bank in

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the country. The new economic policy introduce in November 1991 G.C. by the translational
government of Ethiopia laid the blue print for the transition from centrally planned economic
system to market economic system in which the critical role of the private sector in
development is fully recognized. In the banking industry, the policy was translated in to action
through the issuance of the licensing and supervision of banking business proclamation No
84/94, which allowed the Ethiopian privet sector to established privately owned bank.
Following this NIB international bank is private bank established in November 1994 G.C. with
a paid-up capital of birr 24.2 million by 486 shareholders. It started operation through five
branches in February 1995 G.C. From the first year operation, it has registered profits and
growth both in its customer and asset base. In 1995 G.C. the banks deposit were birr 146
million, loan & advance 129 million, from 1995 G.C. toward, these financial indicators have
shown a significant increase and in the fiscal year that ended June 30/2012, the bank has
registered 13.1 billion in total asset, birr 9.02 billion in deposits, Birr 5.4 billion in loan and
advances. Currently NIB international bank has created employment opportunities for more
than 3,750 Ethiopians.
1.3Statement of the problem

Customer satisfaction has great in pact to expand the existed service in the banking industries
that are found in the world and concerning the existed factory of customer satisfactions has also
direct as well as indirect in pact to bring the satisfaction conditions as a contriving urchin of
service business activities in the financial market of the bank that perform their service based on
the existence of quality service for the customers and concerning the direct impact of customer
satisfaction for the existed service different banks around the world. When the financial market
industry which are banks prove quality service and values, the rate of satisfaction of customers is
also increase with its size from the previous condition rates based on the existed quality service
and values at which the bank provide for its customer that is always use from the financial
market condition of the bank. When the bank follows first providing of quality service and value
for its customer and the existence high rate of customer satisfactions, however there are few
banks that may fail the above principles or decreased to follow first providing of quality service
and value and next to this customer satisfaction existence in the bank so that when banks do not
follow this principles customers satisfaction rate critically lowered with its size in the existed

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market of the country and so that the study touched in detail about, existence of problem on
positive of factor that determined for customer satisfaction, good satisfaction about those
delivery of services of the bank, existences of committed staffs that served the customers of
bank. And therefore, the study was assessed on factor effecting customer satisfaction of
customers in the case of NIB International bank Adama town at Denblla branch and put solutions
for the existed problem.

1.4Research Question

The following where some research questions are raised:

 What were the main factors that determined on customers satisfaction positively?
 How was the satisfaction of the customers about the delivery of service of the bank?
 What were the main problems that effected on the existence of customer satisfaction of
the bank?
 How were the skill conditions of staffs to serve the customer of the bank?
1.5 Objective of the study
1.5.1 General objective

The general objective of the study will be assessing on the factors effecting on customer
satisfaction of NIB International bank Adama town at Adama branch.

1.5.2 Specific Objective

The following will some of the specific objective of the study:

 To identify on positive factors that effect on customer satisfaction of the bank.

 To examine the service quality of the bank that satisfy the customers of the bank.
 To investigation the existence of problem on customer satisfaction of the bank.
 To identify on the skill conditions of staffs that serve the customers of the bank.
1.6 Significance of the study

The following will important of the study For the researches, when they work on the bank, this
study will help them to properly to give services to the customer. For the bank, when the bank

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will use the solution to put on this study at the end of and it will help for the bank to use solution
for the existed problems of the bank. For next generation: when the future generations want to
study on this title and they will take the documents of literature under this study and beach in put
for them.

1.7 Scope of the study

The scope of the study will be assessing on factors effecting customer satisfaction in the case of
NIB international bank in Adama town Adama branch.

1.8 Organization of the study

The study has five chapter : Chapter one describe about introduction, background of the study,
back ground of the bank, statement of the problem, research question, objective of the study,
signification of the study ,scope of the study, organization of the study; Chapter two describe
about: related literature review; Chapter three: described about methodology of the study;
Chapter four described about: data presentation and analysis and chapter five described about:
conclusion and recommendation.

2 Related Literature Review

2.1factor that influence customer satisfaction

there are many factors that affect customer satisfaction. Factors include friendly employees,
courteous employees, helpful employees, accuracy of billing timeless, competitive pricing,
service quality, good value, billing clarity and quick service (Hokanson,1995). From the studies
carried out in many countries factor like; service quality, and perceived value, is the key
constructs affecting customer satisfaction with mobile service, Studies also point out that
customer satisfaction results animatedly in trust, price tolerance, and customer loyalty.
Therefore, building customer relationship a backbone for all organization in general, and
companies in service industries in particular. Issue like customer satisfaction, service quality,
customer perception, customer loyalty are the main concerns of the nowadays service companies
which improves organization’s performance and translates in to more profit.

2.2 Customer relationship Marketing

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Customers are very different nowadays because of their exposure to information they are better
educated and more demanding in the products and services they require and they are more
familiar with technology. The 21 century consumer market causes many questions to those
ST

business that need to respond to this new war of consumerism. Customer relationship marketing
is a practice that includes all marketing activities directed toward establishing, developing and
maintaining successful customer relationships. Building and maintaining relationships with
customer has become a key strategy point with service industries. Therefore, relationship
marketing developed long-term relationship and improves corporate performance through
customer loyalty and retention. A research conducted by reached and sasses (2002) of the
Harvared business school showed that most customers are only profitable in the second year that
they do business with you companies spend money on advertising and marketing and finding out
about what customer want in order to satisfy their needs and requirement managers can used
relationship management (CRM) as the single strongest weapon to ensure that customer become
and remain loyal. In the literature review concerning relationship marketing there are some
definitions by some scholars Berry (1986) thinks that “Relationship marketing is the attraction,
maintaining and enhancing customer relationships. The marketing mind is the new customer is
merely the first step in the marketing process” (PP47-51) Gringos (1994) defined it. “
relationship marketing to identify and establish maintain and enhance relationship with customer
and other stakeholders at a profit so that the objective of all parties are met and that this is done
by mutual exchange and fulfillment of promises”(PP.4-21)

Reich held and sasser (1990) demonstrated that even a small increase in customer retention
produced a dramatic and positive effect on profitability increasing the customer retention rate
from say 85 percent to 90 percent represented a net present value profit increase from 35 percent
to 95 among the businesses they examined. Payne and frow (1996) researched 225 UK
organization and found that 41 percent of the typical marketing budget was spent on acquiring
customers and only 23 percent on retaining them. Company shouldn’t necessarily seek to retain
all their customer because some may cost too much to service. They should at the customer
lifetime value (CLV) which is defined as the net present value of the future profit flow over a
customer’s lifetime (Knox et al.2003). effective firms focus on their ability to understand and
fulfill individual customer, most important needs. Effective firms seek competitive advantage in
customer involvement, service and superior knowledge of customer motivation and behavior.

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Thus, moving from efficiency to effectiveness represents a big shift in business emphasis, and is
one of the drives behind the surge of attention and investment in CRM creating customer value is
a major source of competitive advantage for organizations. The vale the customers receive
derivers from the total experience they have with both the core product and the product surround.
In fact customers are not buying goods or services, but specifics, which solve problems. They
value the offer according to their perception of its ability to solve their problem (knox et al.
2003)

2.3 Customer satisfaction

Customer satisfaction has been a concept in marketing literature and is an important goal of all
business activities. Today, companies face their toughest completion, because they move from a
product and sales philosophy to a marketing philosophy, which gives a company a better chance
of outperforming competition (kotler, 2000). Overall customer satisfaction translates to more
profit for the companies and market share increase. The importance of customer has been
highlighted by many researchers and academicians. The principal concern of marketing is to
connect with customer by building a strong customers relationship in order to meet their
expectations. Therefore, managers who see customers as the only way of profit, they concede the
traditional of pyramid with the present at the top, management in the middle, and front-line
people and customer at the bottom. Companies that pretend to be successful invert the chart, like
figure 3. At the top are customers, next according to the importance are front-line people who
meet, serve and satisfy customers, under them are middle managers, whose job is to support the
front-line people so they can serve customers. Well and at the base is top management, whose
job is to hire and support good middle managers, for customer-centered companies, customer
satisfaction is both goal and marketing tool. Therefore, companies need to be concerned about
the customer satisfaction level, because of the internet technology which enable the quick spread
of bad of mouth marketing as well as good word of mouth to the rest of the world.

The more are satisfied with produces or service offered the more are chances for any successful
business as customer satisfaction leads to repeat purchases brand loyalty and positive word of
mouth marketing ‘customer satisfaction leads to repeat purchases, loyalty and customer retention
(zairi, 2000). Satisfied customers are more likely to repeat buying products or services. They will
also tend to say good things and to recommend the product or service to others. On the other
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hand, dissatisfied customers respond differently. Dissatisfied customers may try to reduce the
dissonance by seeking information that might confirm its high value (kotrr,2000). Companies
need to develop strategies of how handle dissatisfied customers businesses cannot afford under
any condition to lose comers because the cost of replacing the lost customer with a new customer
is bigger therefore companies must find ways of winning back the unsatisfied customers by
designing special programs for service recovery companies should handle customer complaints
with care and not seeing them as a time consuming.

2.4 Customer Expectations

Expectation play an important role in the satisfaction formation .The extent to which a product or
service fulfills customer’s need and desire may play an important role in forming feelings of
satisfaction because of the impact of confirmation or disconfirmation that have on satisfaction.
Consumer expect to be delivered quality products and services. Therefore, companies try offer
quality products and services. The term expectations really matters to companies because they
want to know what costumer ‘expectation literature it is viewed as a prediction made by a
consumer about what is likely to happen during an exchange or transaction. According to Oliver
(1981)’…expectation are consumer-defined probabilities of the occurrence of positive and
negative events if the consumer engages in some behavior ‘(pp.25-48).

In the contrast, in the service quality literature it is define as desires and want what a service
provider should offer rather than would offer costumers from their expectations from their past
experience friend’s advice and marketers’ and competitors’ information and promise s (Kotler ,
2000) therefore, perceived service quality is viewed as the difference between consumers
perception and expectations for the service provided .organization in order to keep expectation
from rising they have to perform services properly from the first time (parasuraman et al .
1988)thus customer expectation for the points in customer’s assessment of performance ( Cronin
$ Taylor ,1992),thus retailers can increase customer satisfaction by decreasing customer
expectation .

2.5 Customer perception

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Perception is an opinion about something viewed and assessed and it varies from customers to
customers, as every customer has different beliefs towards certain services and products that play
an important role in determined by the customers’ perceptions and expectations of the products
and services in many cases. Customer perception is subjective but it provides some useful
insights for organizations to develop their marketing strategies providing high level of quality
service has become the selling point to attract customer’s attention and is the most important
driver that leads to satisfaction therefore customer perception and customer satisfaction are very
closely linked together because if the perceived service is close to customer’s provide
recommendations’ maintain loyalty towards the company and customers in turn are more likely
to pay price premiums ( Reichheld .1996 ).

2.6 Customer Loyalty

Customer loyalty is a crucial factor in companies growth and their performance loyalty is liked
with the repeat business thus a customer is loyal when he is frequently repurchasing a product or
service. The perceived from the product and the service affects customer judgment about his/her
satisfaction or loyalty is with the product or the service. The significance of customer loyalty is
that it is closely related to the company’s continued survival and to strong future growth
(Fornell,1992). Customers that are very satisfied with accompany are very likely to remain with
that company that leads to future revenue for the company; it is now a widely accepted business
theory that customer retention optimizes. The aim of a service company is to satisfy their
customers in order to stimulate them to retain and to repeat their service purchase.

2.7Customer Satisfaction models

Companies try to maintain their loyalty with their customers by improving product and service
quality. As a result, in the last decade, many indices have been developed in order to measure
consumer satisfaction across a wide range of organization. Thus, at the national level, the
customer satisfaction index (CSI) is used to measure companies and organization how they
satisfy customers needs. The CSI’s model can be also used for comparing services and products
within an industry. Most countries have set their own customer satisfaction indices to measure

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customer satisfaction and the business performance of companies and organizations. The first
truly nation customer satisfaction index was the Swedish customer satisfaction Barometer, or
SCSB, developing in 1989. The SCSB include 31 major customer expectations (Fornell,1992) in
Germany, the Deutsche Kinden barometer, or DK, was introduced in 1992 and as of 1994 also
includes 31 industries.

3 Methodology of the study

3.1 Research Design

The study will be descriptive type of research which it was described the exited data based on
tables numbers and percent and for the description method which were quantitative data
described data based on the verbal method of description of data whereas the quantitative data
description method described those based on number and percent to analyze in detail about the
existed data.

3.2 Source of Data

The study will use two source of data which were primary and secondary data the primary source
were deflect from questionnaire interview and defect observation of the researchers; whereas the
secondary source of data will be from internet source broachers and the bank’s secondary
published materials.

3.3 Target population

The study will use 20 total sample staffs of the bank’s which were 2 managers 6 accounts
auditors 7 customers service staffs of NIB international bank, share company at Adama branch
at Adama town. And therefore, the total target population of study was 20 staffs of the bank and
also the total sample size of study’s of also 20 sample staffs of the bank.

3.4 Sampling Technique

Since the total target population of study will be small in number and used a non- probability
sampling method which will be purposive sampling method and the reason behind using method
was that there was no further requirement of data for further analysis again.

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 3.5 Sample Size

The total target population of the study will small and the sample size of the study was equal to
the total target population and therefore the sample size of the study was 20 sample staffs of the
baranch

3.6 Data Presentation and Analysis

Data will be presented those data based on tables, number and percent and used both data
describing methods which were: qualities as wee as quantitative Data description methods the
quantitative data description method of describe those data based on the verbal method where as
the quantitative a data description method it described those data based on number and percent to
analyze in detail the case.

Ethical Consideration
Ethical clearance and permission obtained from the institutional review board Faculty of
Business and Economics of different University, Ethiopia. Permission is also granted from
Investment office National bank through formal letter. Participation in the study was on the
voluntary basis and participants are asked for willingness before they are provided the
questionnaire. The subjects are also assured that their responses used only for the purpose of the
study. An attempt is made to first explain the objectives and significance of the study to the
respondents. Name and other identifying information are not used in the study. The researcher
safeguarded all information related to the participants. Their privacy, identity and confidentiality
are maintained by assigning them code numbers instead of names (anonymity).

4. Budget and time schedule

4.1 Budget schedule

No, Item Quantity Cost per unit Total cost (birr)

(birr)

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 1 Stationary material

paper 0.5pad 150.00 150.00

pens
5 Pcs 8.00 40.00
flash
1 Pcs 280.00 280.00

፶2 Telephone expense 200 minute 0.75 9000

3 Printing 185page 6 108.00

4 Transportation 25 days 20.00 500.00

5 Other cost -- 1000 1000

4.2 Time schedule

No, Activities Month1 Month2 Month3 Month4 Month5 Month6

1 Title selection

2 Writing the back xxxx

ground

3 Literature review Xxxx

4 Data collection xxxx Xxxx

5 Data processing xxxx
and organize

6 Data analyzing xxxx

and interpreting

7 Submitting and xxxx

presentation

8 Final Xxxx
presentation or
defence

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References
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marketing,spring,pp.47-51
2. Brown, S.W. & swartz, T. (1989).” A Gap Analysis of professional service, quality”
journal of marketing, Vol. 53(2) pp92-8. cronin, J, J, and Taylor, S.A (1992). Measuring
service quality: A reexamination and extension. Jornin of marketing, 56 (3), pp 55-68.
3. Crosby, P.B (1984) “Quality without Tears: The art of hassle-free management”.
McGraw-hill, New York.
4. Eiglier, P and Langeared, E (1987). Servuction, Les Marketing des services,paris:
McGraw-Hill.
5. Fornell, C. (1992). A national customer satisfaction Barometer: The Swedish Experience.
Journal of marketing, Vol. 56 No,pp6-21
6. Gronroos, C. (1994). From marketing mix to relationship marketing: towards a paradigm
shift in marketing. Management Decision,32(2),4-20
7. Gronoroos,C. 1083. Strategic Management and marketing in the service sector.
Marketing science institute. Boston, MA
8. Gronoroos, Christian (1978)” A service –oriented Approach to Marketing of services,”
European journal of marketing, vol. 12(8), pp 588-601.
9. Hansemark ,O.C & Albinson, M,(2004) “ customer satisfaction and retention : The
Experiences of individual with employees “Managing service Quality, Vol.14(1)

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 10. Hirschman. Albert o. (1970), Exit voice and loyalty-responses to decline in firms.
Organizations. And sates. Cambridge MA: Harvard University press.
11. Hokanson, s, (1995) “The Deeper you Analyze. The more you satisfy customers”,
marketing
12. Knox.s, maklans, payne. A peppard J, ryals (2003). Customer relationship management
butterwith –Heinemann.
13. Kotler, p. (2000), marketing Management .10th end, New jersey, prentice –Hall.

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