THE EFFECT OF SERVICE QUALITY ON CUSTOMERS’

SATISFACTION: A COMPARATIVE STUDY BETWEEN

COMMERCIAL BANK OF ETHIOPIA AND AWASH
INTERNATIONAL BANK IN JIMMA TOWN

YITBAREK TEKUAM

JIMMA UNIVERSITY COLLEGE OF BUSINESS AND

ECONOMICS, DEPARTMENT OF MANAGEMENT

JULY 2023

JIMMA, ETHIOPIA

I
The Effect of Service Quality on Customers’ Satisfaction: A
Comparative Study between Commercial Bank of Ethiopia
and Awash International Bank in Jimma Town

BY:

YITBAREK TEKUAM

Under the Guidance of

Hagos Birhane
And
Taye Teshome

A Thesis Submitted to the School of Graduate Studies of Jimma University in

partial fulfillment of the requirements for the Award of the Degree of Master
of Business Administration

JIMMA UNIVERSITY

JULY, 2023

JIMMA, ETHIOPIA
II
 DECLARATION
I hereby declare that this thesis entitled “ The Effect of Service Quality on Customers’
Satisfaction: A Comparative Study between Commercial Bank of Ethiopia and Awash
International Bank in Jimma Town”, has been carried out by me under the guidance and
supervision of Mr. Hagos Birhane and Taye Teshome

The thesis is original and has not been submitted for the award of any degree or diploma
to any university or institutions.

Researcher’s Name Date Signature

_______________________ ___________________ ___________________

III
 CERTIFICATE
This is to certify that the thesis entitled “The Effect of Service Quality on Customers’
Satisfaction: A Comparative Study between Commercial Bank of Ethiopia and Awash
International Bank in Jimma Town”, submitted to Jimma University for the award of the
Degree of Master of Business Administration and is a record of bonafide research work
carried out by Mr. Yitbarek Tekuam, under our guidance and supervision.

Therefore, we hereby declare that no part of this thesis has been submitted to any other
university or institutions for the award of any degree or diploma.

Main Adviser’s Name Date Signature

Hagos Birhane __________________ ___________________

Co-Advisor’s Name Date Signature

Taye Teshome _______________ ________________

IV
ACKNOWLEDGEMENTS

First and foremost, I want to thank the Almighty God for abundant love, every blessing,
protection, and provision of good health and for granting me the gift of life. I give my
utmost thanks and appreciation to my supervisors, Mr. Hagos Birhane and Mr. Taye
Teshome for their guidance, encouragement and support starting from the inception of
this research topic to the final-write up of this thesis proposal. I acknowledge and value
all their efforts to passing the wealth of knowledge during the period of my postgraduate
study.

I would also like to express my sincere thanks to all staff of Awash International Bank,
particularly, staff from Jimma, Shenen-Gibe and Jiren Branches, for the excellent
interactions and unreserved support, which enabled me develop this proposal.

Finally, I would like to express my appreciation and great honor for my family, friends
and colleagues for their unreserved support and continuous encouragement through
providing idea and moral support during my postgraduate course work.

V
ABSTRACT

Provision of quality service has become a subject of fundamental importance and

concerns to all banks and indeed a prerequisite for local and global competitiveness in
the banking industry. The objective of this study was to assess and compare the current
level of service quality and its effect on customers’ expectation, perception and overall
satisfaction) in Jimma town. A survey questionnaire was used to collect responses from
399 customers of two major commercial banks (i. e., Commercial Bank of Ethiopia and
Awash International Bank) through non-probabilistic convenience sampling technique.
Primary data for the study were collected with structured questionnaire designed under
five dimensions of SERVEQUAL model. Descriptive statistical analysis was used to
determine the gap between customers’ expectations and their actual perceptions.
Pearson’s correlation analysis was used to examine the relationship between service
quality dimensions and customers’ satisfaction. In addition, the effect of service quality
dimensions on customers’ satisfaction was evaluated using a multiple linear regression
analysis. The collected data were analyzed with the help of SPSS software version 21.
The findings of the study indicated that the overall perceived service quality is below
customers’ expectations with respect to the five service quality dimensions in both CBE
and AIB. Furthermore, findings suggest that AIB has the highest gap for the dimension
tangibility, indicating the customers are not getting what they expect regarding this
dimension at AIB. On the other hand, responsiveness has relatively high gap score at
CBE which shows that CBE is less responsive to customers’ request compared to AIB.
Overall, results of the study showed that empathy, reliability, assurance, responsiveness,
and tangibles have a significant positive relationship with customer satisfaction. Our
findings suggest that it is critical for the banks to recognize the service quality factors
that contribute to customer satisfaction. Findings also suggest that empathy,
responsiveness and reliability have the strongest positive effects on customers’
satisfactions of both banks, and hence deserve due attention for improving the quality of
services provided by the banks.

Keywords: Service Quality, SERVQUAL Model, Customer Satisfaction

VI
 TABLE OF CONTENTS Page
DECLARATION………………………………………………………………………. iii
ACKNOWLEDGMENTS……………………………………………………………… v
ABSTRACT……………………………………………………………………………. vi
TABLE OF CONTENTS ……………………………………………………………… vii
LIST OF TABLES……………………………………………………………………… ix
LIST OF FIGURE ……………………………………………………………………... x
ACRONYMS/ABBREVIATIONS…………………………………………………….. xi
CHAPTER ONE………………………………………………………………………. 1
1. INTRODUCTION ………………………………………………………………... 1
1.1 Background of the Study ………………………………………………………… 1
1.2 Statement of the Problem………………………………………………………… 4
1.3 Objectives………………………………………………………………………… 6
1.3.1 General Objective………………………………………………………….. 6
1.3.2 Specific Objectives…………………………………………………………. 6
1.4 Research Hypothesis……………………………………………………………… 6
1.5 Significance of the Study…………………………………………………………… 7
1.6 Scope of the Study………………………………………………………………….. 7
1.7 Limitation of the Study……………………………………………………………... 8
1.9 Organization of the Paper…………………………………………………………... 9
CHAPTER TWO……………………………………………………………………… 10
2. REVIEW OF RELATED LITERATURE………………………………………... 10
2.1 Theoretical Review………………………………………………………………. 11
2.1.1 Concept of Service Quality…………………………………………………. 12
2.1.2 Measures of Service Quality ……………………………………………….. 13
2.1.3 Concept of Customer Satisfaction………………………………………….. 14
2.1.4 Theories of Service Quality………………………………………………… 15
2.1.5 Concept of Customer Satisfaction………………………………………….. 16
2.1.6 Theories of Customer Satisfaction …………………………………………. 19
2.1.6 Service Quality Models…………………………………………………….. 20
2.1.7 Measuring Service Quality Using SERVQUAL Model……………………. 21
2.1.8 Customers’ Expectations Compared to Perceptions ……………………….. 21
2.1.9 Factors that Affect Customer Satisfaction………………………………….. 22
2.1.10 Relationship Between Service Quality and Customer Satisfaction……….. 22
2.2 Review of Empirical Studies…………………………………………………….. 23
2.3 Research Gaps…………………………………………………………………….. 24
2.4 Conceptual Framework…………………………………………………………… 25
CHAPTER THREE…………………………………………………………………… 26
3. RESEARCH DESIGN AND METHODOLOGY………………………………… 26

VII
 3.1 Description of the Study Area…………………………………………………. 26
3.2 Research Design……………………………………………………………….. 26
3.3 Research Approach……………………………………………………………. 27
3.4 Type and Source of Data……………………………………………………… 27
3.5 Target Population……………………………………………………………… 27
3.6 Sampling Design and Sampling Techniques…………………………………... 28
3.6.1 Sample Size Determination……………………………………………….. 28
3.6.2 Sampling Techniques……………………………………………………… 29
3.7 Methods of Data Collection… 30
3.8 Research Variables……………………………………………………………. 31
3.9 Reliability and Validity of Data ……………………………………………… 32
3.10 Method of Data Analysis…………………………………………………….. 33
3.11 Ethical Consideration………………………………………………………… 35
CHAPTER FOUR……………………………………………………………… 36
4. RESULTS AND DISCUSSIONS……………………………………………… 36
4.1 Respondents’ Background Information 36
4.2 Descriptive Analysis of Service Quality Gap 38
4.2.1. Total Gap Analysis of Both Banks 38
4.2.2. Service Quality Gaps Analysis of each Studied Bank 45
4.2.3 Comparative Analysis of the Two Banks Service Quality Performance 48
4.3 Correlation Analysis between Service Quality Dimensions and Customer 50
Satisfaction
4.4 Multiple Linear Regression Analysis 51
4.4.1 Testing the basic assumptions of multiple linear regression model 52
4.4.2 Overall Multiple Linear Regression Analysis Results 56
4.4.2.1 The Effect of Service Tangibility on Customer Satisfaction 56
4.4.2.2 The Effect of Service Reliability on Customer Satisfaction 56
4.4.2.3 The Effect of Service Responsiveness on Customer Satisfaction 58
4.4.2.4 The Effect of Service Assurance on Customer Satisfaction 59
4.4.2.5 The Effect of Service Empathy on Customer Satisfaction 60
CHAPTER FIVE………………………………………………………………… 61
5 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS………………. 61
5.1 Summary of the Major Findings 61
5.2. Conclusions 62
5.3 Recommendations 63
5.4. Suggestions for Future Research Directions 65
REFERENCES……………………………………………………………………….. 67
APPENDICES………………………………………………………………………. 71

VIII
 LIST OF TABLES Page
Table 1 Number of customers holding saving accounts in the selected branches in 28
Jimma Town
Table 2 Distribution of sample size among the selected branches 29
Table 3 Summary of reliability test results 32
Table 4 Characteristics of the respondents 37
Table 5: Gap score in relation to tangibility dimension of both sample banks 39
Table 6: Gap score in relation to reliability dimensions of both sample banks 40
Table 7: Gap score in relation to responsiveness dimension of both sample banks 41
Table 8: Gap score in relation to assurance dimension of both sample banks 42
Table 9: Gap score in relation to empathy dimension of both sample banks 44
Table 10: The gaps between customers’ expectations and perceptions of CBE 46
Table 11: The gaps between customers’ expectations and perceptions of AIB 47
Table 12: Comparison of Service quality gap between CBE and AIB 48
Table 13 Correlation matrix between the dependent and independent variables 51
considering both sample banks
Table 14 Multicollinearity test of independent variables 55
Table 15 Model Summary of Service quality dimensions 56
Table 16 ANOVA for service quality dimensions and customer satisfaction 57
Table 17 Regression Analysis between Service Quality Dimensions and Customer 58
Satisfaction

IX
 LIST OF FIGURES Page
Figure 1: Conceptual framework for the study 25
Figure 2: Regression Model Assumption of Linearity Test 53
Figure 3: Regression Model Assumption of Normality Test 54
Figure 4: Homoscedasticity Assumption of Multiple Linear Regression Analysis 55

X
 ACRONYMS/ABBREVIATIONS

ANOVA Analysis of Variance

CBE Commercial Bank of Ethiopia

AIB Awash International Bank

NBE National Bank of Ethiopia

SERVQUAL Service Quality

P Perception
E Expectation

XI
 CHAPTER ONE
1. INTRODUCTION

This chapter deals with the main concepts of the study, including the background of the
study, the problem explored, and its objectives, significance, scope and limitation of the
study.

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 market place. 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 and Mukherjee,
2004).

In recent years, it is essential for banks to establish a sturdy and solid loyal customer base
to weather tougher economies and more intense competition. Now a day, to be able to
survive the prevailing intense competition in the banking industry, what most of the bank
attempt to do is to create convenient banking activities for their customers. Such activities
include the Automated Teller Machine (ATM), Money Transfers, Banking via Mobile
Phone, etc. Though these services are virtually duplicated by most banks, what is the
focus now is the quality of the service which is provided. The practice of excellent
service quality integrated with consumer products is a powerful generator to cater to
customers’ needs and engage with them. Considering that many banks offer
undifferentiated products in a rival market place, banks are paying more attention to
Service quality in order to gain a competitive advantage. Banks that master service
quality can gain a competitive edge in terms of higher revenue, customer loyalty and
customer retention (Kumar et al., 2010).

1
Services are different from goods because they are intangible as they cannot be seen,
touched or felt; perishable as we are unable to store them; inseparable because they are
attached with a service provider, and insubstantial due to heterogeneity (Hoffman and
Bateson, 2002). To achieve a high level of customer satisfaction, most researchers
suggest that a high level of service quality should be delivered by the service provider as
service quality is normally considered an antecedent of customer satisfaction. As service
quality improves, the probability of customer satisfaction increases. Quality was only one
of many dimensions on which satisfaction was based; satisfaction was also one potential
influence on future quality perceptions (Clemes, 2008).

Customer satisfaction is also crucial in the banking sector because of the special nature of
the service which is characterized by intensive contact with customers who have different
needs and require customized solutions and it 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 loyalty (Clemes, 2008).

Delivering high quality service has become a strategic approach for satisfying and
retaining customers, as well as building and sustaining profitable and long-term
relationships with them (Cronin and Taylor, 1992). The service industries are mostly
customer driven and their survival in competitive environment largely depends on the
quality of service they provide.

Stafford and Wells (1998) suggested that service quality is a critical issue in the service
industry and of particular importance for financial service providers who
characteristically offer products that are homogeneous in nature. Banks seeking to
improve profitability are, thus, advised to monitor and make improvements to their
service quality on an ongoing basis. On the other hand, Murthy (2010) stipulated that
banks have to be efficient in dealing with individual customers, traders and companies. It
is also necessary for banks to strive hard to retain the existing customers in the face
attracting new customers.

2
Therefore, service quality becomes more critical for banks because they are challenged
by many factors such as, the pressures of globalization, customers ‘sophisticated
demands and expectations, and competition from non-banking financial institutions
(Parasurmn and Berry, 1990). By considering these factors, banks should constantly seek
new ways to improve their service quality in order to attract new customers, satisfy and
retain current customers, and maintain their market shares.

The other important factor that cause banking industry to rethink their strategies for
services offered to both commercial and individual customers is the technological
changes which take place in global market place. It is within this rapidly changing
marketing environment that customer satisfaction and service quality are compelling the
attention of all banking institutions because, perceived quality of services tends to play an
important role in high involvement industries like banking services (Dick, 2005).

In Ethiopia continuous establishment of commercial banks leads to fierce competition in

terms of maintaining the existing customers and attracting potential customers. Therefore
provision of quality customer service is mandatory to sustain profitability and growth. So
ensuring service quality can have positive contribution towards maintaining the existing
customers and attracting potential ones (Yassin et al., 2015). Hence, the researcher
decided to measure service quality performance of commercial banks which are currently
operating in Jimma Town through service quality dimensions from customers’ point of
view. It is clear that this method is the most relevant approach in defining and measuring
service quality in banking and other financial institutions as suggested by Parasuraman et
al. (1988).

Even if customers’ services provided by the banks are modified and improved time to
time, structured and more facilitated day to day, there is still customers’ compliance and
dissatisfaction in the service delivered to them. For this reason, the researcher is
motivated to compare the service rendered by the selected banks from customers ‘point
of view.

3
1.2 Statement of the Problem

Today globalization and liberalization are affecting economies of not only developing but
also developed countries. The focus areas for organizations are also changing from profit
maximization to maximizing profits through increased customer satisfaction. The
pressures of competition are forcing the organizations to not only look on the processes
but also on the way they are delivered (Seth and Deshmukh, 2005). Marketers are facing
with the challenge of examining their service quality from customers’ point view. To
achieve this, marketers of service organizations try to determine customers’ expectations
and then develop their service quality dimension to meet or exceed their customers’
expectation (Abedniya and Zaeim, 2011).

Providing a good service quality is a major issue for all business. Customer satisfaction
may determine the success or failure of the business. In order to remain competitive in
the market place, banks need to identify their customers’ needs which in turn will help
them to ensure a high market share and substantial return (Khalil, 2010). One of the
major ways a service firm can differentiate it is by delivering consistently higher quality
than its competitors do. Like manufacturers, most service industries have now joined the
customer driven quality movement. And like product marketers, service providers need to
identify what target customers expect concerning service quality (Kotler and Armstrong,
2006).

Research has identified a core set of attributes and actions of successful customer service
organizations within the market economy. Regardless of whether these organizations
provide goods or services, they recognize that satisfied customers are the key to their
success. Achieving high levels of customer satisfaction requires that organizations
continually monitor and examine the experiences, opinions, and suggestions of their
customers and people who are potential customers. Improving service quality to meet
customers’ standards is an ongoing part of doing business.

Service industries are playing an increasingly important role in the overall economy of
many nations. In today’s world of global competition, rendering quality service is a key
for survival and success, and many experts agree that the most powerful competitive

4
trend currently shaping marketing and business strategy is service quality (Zeithaml et.
al., 1996). Customer satisfaction and service quality are inter-related. The higher the
service quality, the higher is the customer satisfaction. Thus, competitive advantage
through high quality service is an increasingly important weapon to survive (Munusamy
et al., 2010).

Over the past years, several studies have been conducted to analyze the relationship
between service quality and customer’s satisfaction in different countries including
Ethiopia (Wondwesen, 2018; Simon, 2016; Gebremedhn, 2014; Hawary et al. 2011;
Munusamy et al., 2010). Regardless of the different service quality performance
measures used in previous studies, many of the studies have demonstrated the importance
of service quality for ensuring customer satisfaction and operational performance.

Even with the increased attention paid to service quality, much of the theoretical/
empirical researches regarding the effect of service quality on customer satisfaction were
either largely based on the gap between management’s perceptions of customer
expectations and the firm’s service quality specifications, or did not consider service
quality and customer satisfaction from perspectives of public and private-owned banks.
As a result, there is a huge gap in our understanding of the role of service quality on
customer’s satisfaction. In addition, the previous studies conducted in different areas can
serve as references rather than used for making a judgment, as the institutional, economic
and socio-cultural factors may differ from time to time or from one sector to another,
which may affect the link between service quality and customer’s satisfaction (Kaufmann
and Carter, 2016).

Currently, there are many government and private banks operating in Ethiopia to serve
customers. Even though all banks provide the same types of services, they do not provide
the same quality of services. Furthermore, customers, who are living in today competitive
marketing environment, are more aware of alternatives which increase their expectations
of service they wish for. Therefore, it is essential to measure and compare the service
quality performance of public and private banks. Moreover, efforts to achieve
generalization of the causal relationship between service quality and customer

5
satisfaction calls for empirical validation in diverse social, cultural and economic
environments. In view of this, this study assessed and compared the current state of
service quality performance of public and private banks located in Jimma Town, namely,
CBE and AIB from customers’ satisfaction point of view.

1.3 Objectives

1.3.1 General Objective

The general objective of the study was to point out the role of service quality on
customers’ satisfaction of public and private-owned banks, with special reference to CBE
and AIB in Jimma Town

1.3.2 Specific Objectives

[

 To examine the gap between customers’ expectations and their perceptions of service
quality performance of the target banks.
 To determine the level of service quality gap between the selected banks based on the
five service quality dimensions.
 To examine the casual relationship between service quality dimensions and customers
satisfaction

1.4 Research Hypothesis

This study was carried out with the following hypothesis.

 Ha: There is a positive relationship between service quality and customers’

satisfaction

The main hypothesis has the following sub-hypotheses:

 Ha1: There is a positive relationship between tangibility dimension of service

quality and customers’ satisfaction in CBE and AIB
 Ha2: There is a positive relationship between reliability service quality dimension
and customers’ satisfaction in CBE and AIB

6
  Ha3: There is a positive relationship between responsiveness service quality
dimension and customers’ satisfaction in CBE and AIB
 Ha4: There is a positive relationship between assurance service quality dimension
and customers’ satisfaction in CBE and AIB
 Ha5: There is a positive relationship between empathy service quality dimension
and customers’ satisfaction in CBE and AIB

1.5 Significance of the Study

It is important to measure and evaluate the service quality performance of commercial

banks and then compare the findings in order to help the respective bank’s professionals
in setting effective service quality strategy. This in turn enables them to adjust themselves
to changes in marketing environment currently taking place in the banking industry.

From this study, Commercial Bank of Ethiopia and Awash International Bank as well as
other banks will benefited by identifying the service quality which provides high
customer satisfaction, the service provider will enhance its competitive position in the
banking sector and it becomes profitable. In addition to this, it helps for future
researchers who have willingness as a reference to conduct a comprehensive study related
to this study. The result of this research also helpful for the management of the two banks
to better understand what these dimensions mean to the customers and what customers
expect and perceive to be quality, and helps to revise, redesign or continue its service
operations and tailor them to meet the perceptions and expectations’ of their customers.

Furthermore, this study contributes to the already existing studies examining service
quality and customer satisfaction in banking industry in general using the SERVQUAL
model and also provides empirical results that could guide management dealing with
bank activities to take corrective actions that lead to growth in the banking industry.

1.6 Scope of the Study

Though there are many public and private banks operating in the country, the study was
limited to selected banks of CBE and AIB that are found in Jimma Town and holding
relatively higher number of customers.

7
Among the services rendered in each bank, the study focused only on saving accounts
which holds major customers of the banks, and on banking service quality and overall
customer satisfaction. The comparative study between Commercial Bank of Ethiopia and
Awash International Bank was also geographically limited to Jimma Town. The
conceptual scope of this study is the SERVQUAL model which was used to asses
customer expectation and their perception towards service quality delivered by the
selected banks. Even though there are basically five different service quality gaps
according to Parasuraman et al. (1985), this study focused only on gap five, that is the
difference between customers’ perception and expectation. In this gap: Reliability,
Responsiveness, Tangibles, Assurance, and Empathy dimensions of the SERVQUAL are
treated. The methodological scope of this study was delimited to cross-sectional survey
method which collects the relevant data at a point in time, and employed non-
probability/convenience sampling technique in the selection of bank customers.

1.7 Limitation of the Study

The study only covered CBE and AIB in Jimma Town among several of the banks in the
country. Hence, the study is limited spatially as well as focused only on Comparative
study of service quality of selected banks in Jimma Town, and can therefore not be
considered as a representative of the whole service quality of banks; that is the
generalization of the findings and the conclusions drawn will be limited to banks of
Jimma town branches. Non-probability; convenience sampling technique was applied in
the selection of banks’ customers thus; it has its own limitations. In addition, feedback
from respondents was also another constraint due to lack of time, resulting in the case of
unanswered and semi-answered questionnaires.

1.8 Organization of the Paper

The paper is organized into three chapters. The first chapter deals with introductory part
consisting of introduction/background of the study, statement of the problem, objectives
of the study, scope of the study and its significance. The second chapter provides review
of literatures related to the study. In this chapter various theoretical concepts and
empirical literatures that relates with service quality and customers’ satisfaction is

8
discussed. The third chapter presents the methodology of the study. It covers research
design, sampling design, types and sources of data, data collection instrument design,
research variables, method of data analysis and ethical considerations.

9
 CHAPTER TWO

2. REVIEW OF RELATED LITERATURE

This chapter covers the literature reviewed of theoretical, empirical and conceptual
framework which serves as evidence of the Variables of the study - Service Quality and
Customer Satisfaction. Definitions of service, quality, customer satisfaction, the concept
of service quality, gap model of service quality and the relationship between service
quality and customer satisfaction are briefly highlighted.

2.1 Theoretical Review

2.1.1 Concept of Service Quality

Quality of service is a construction, which has generated considerable interest and

discussion in the literature of service marketing because of difficulties both in identifying
and measuring it, without general agreement. As a result, several researchers are branded
as 'superb' and 'individual' as an operating and measuring term (Obanaya, 2019). There
are different definitions of service quality in the literature. According to Parasuraman et
al., 1985 cited in the work of Hakim (2019), service quality is regarded as the disparity
between what customers expect from a service and what they get.

In today's dynamic world, service quality is viewed as a tool for surviving and
competing. Service quality is particularly important in the banking industry because it
ensures a high degree of customer satisfaction, and as a result, it has become a more
important means of obtaining a competitive advantage. Service quality plays a major role
in capturing customers' interest by achieving the satisfaction and loyalty of customer,
particularly in the context of financial institutions in Nigeria. As consumers have
tremendous possibilities, customers would not be loyal to the company if they are not
adequately happy with the service provider and will become their rivals. To keep
customers satisfied and loyal, the organization's service quality must be prioritized
because it has a significant influence on customer satisfaction and loyalty. Service quality
is described as a service provider's overall evaluation of its performance to the general

10
expectations of customers on how businesses in that industry operate. This means that
service quality is the contrast in what customers perceive or expect from service
organizations. Simply put, service quality assesses how well a service provider meets the
needs of the customer.

2.1.2 Measures of Service Quality

In the literature, there have been several components used in measuring service quality by
researchers. The components differ from one researcher to the other. For example, an
early study by Parasuraman et al (1991) come up with ten dimensions of service quality
that include access, communication, competence, credibility, courtesy, security,
tangibles, responsiveness, reliability, and understanding the customer. Sangjae and Kun
(2020) put forth six different dimensions of service quality which involve: ease of use,
usefulness, reliability, system security, empathy, and responsiveness. However, in recent
times most scholars have made use of five major components to stand as the dimension
for service quality. These dimensions are reliability, responsiveness, assurance, empathy,
and tangibles. These dimensions are successfully integrated into service quality aspects,
implying that consumers' preferences and service providers' perceptions are
interconnected. Gogoi and Jyoti (2020) elaborated on the use of SERVQUAL (service
quality), developed using both qualitative and quantitative research by Parasuraman et al.
(1985, 1988, and 1994) to measure service quality.

SERVQUAL identifies service gaps and measures strengths and weaknesses in service
delivery using five dimensions of service quality to access the level of service quality
along each dimension. These measures are

Reliability: The ability to provide the promised service dependably and accurately.
Customers expect the services providers to have the ability to perform the desired
service dependably, accurately and consistently. This involves keeping the service
promise and the reputation.
Responsiveness: The willingness to help customers and provide prompt service.
Keeping customers waiting, particularly for no apparent reason, creates
unnecessary negative perceptions of quality. In the event of service failure, the

11
ability to recover quickly with professionalism can create very positive perceptions
of quality.
Assurance: The knowledge and courtesy of employees and their ability to inspire
trust and confidence. The assurance dimension includes competence to perform the
service, politeness and respect for the customer, and effective communication with
the customers.
Empathy: The provision of caring, individualized attention the organization
provides its customers. Empathy includes approachability, sense of security, and
the effort to understand the customer’s needs.
Tangibility: The appearance of physical facilities, equipment, personnel, and
communication materials. The condition of the physical surrounds is tangible
evidence of the care and attention to details exhibited by the service providers.

2.1.3 Concept of Customer Satisfaction

The satisfaction of customers means the extent to which an organization's customers

repeatedly identify with the products and services of an organization. Customer
satisfaction is a metric for determining how satisfied consumers are with a company's
goods, services, and functionality. Customer satisfaction data, such as surveys and
ratings, may assist a business in determining how to develop or adjust its goods and
services to retain its customers. The importance of customer satisfaction and loyalty is
undeniable. Customer retention is far superior to new customer acquisition. As a result,
an organization needs to retain its customers. Hence, the organization must seek what
pleases the customer and ensure that they make them happy (Al Annan et al, 2020). The
satisfaction of a customer can be seen in various ways. For example, It is a
communication concept that describes how a company's goods or services meet or
surpass the needs of its customers. It is often described as fulfilling the customer's needs,
wants, and wishes throughout a product or service's life cycle.

12
2.1.4 Theories of Service Quality

This section of the dissertation discusses some of the theoretical foundations on which
this study is based. The section below introduces two theories; the resource-based view
and strategic group theory.

The Resource-Based Theory

The resource-based approach (RBV) of the organization, following the efforts of

university researchers and entrepreneurs such as Birger et al (1997), is a method for
gaining competitive advantage during the 1980s and 1990s. The key concept of this
theory is that the organization should look instead at resources and opportunities within
its scope to gain a market niche or to gain a new edge against rivalry and threats.
According to RBV, it is much easier to capitalize on potential opportunities by using
existing capabilities and expertise rather than trying to learn new skills, qualities, or roles
for each opportunity that may arise. The RBV model's key emphasis is on these tools,
with proponents claiming that they should be prioritized in the creation of organizational
strategy. There are two key categories of assets within the framework of the RBV
models, which accountants and financial experts know about and discussed in the
literature. These are the Tangible assets and the Intangible asset. The tangible assets are
regarded as physical objects such as property, land, goods, and money, for example.
These are commodities that can usually be purchased easily on the market and therefore
provide little competitive advantage because other organizations can quickly obtain the
same assets as they want. The intangible asset or the immaterial asset refers to objects
and ideas without physical value but held by the company

Strategic Group Theory: A customer-oriented view

The basic premise of strategic group theory is that most industries are not homogeneous,
but consist of different groups of firms—each group with different resources—that
follow similar strategies. The purpose of this stream of research is to examine the validity
of their existence by testing whether there are significant performance differences among
the groups (Barney and Hoskisson, 1990). Barney and Hoskisson (1990) take the position
that strategic group research has not demonstrated the existence of strategic groups, or

13
their relationship to firm performance. Leask (2007) also suggests that the link between
performance and strategic group membership has yet to be established. There are several
reasons behind the generally disappointing results of strategic-group research (Thomas
and Venkatraman, 1988; Barney and Hoskisson, 1990; Leask, 2007).

First is the absence of a theoretical framework to determine what strategic variables to

include in the analysis. Second, there has generally been little effort to determine the
relative importance of different variables. Third, there is a lack of an effort toward
making competitive strategy operational by building on a theoretical work, such as,
Porter’s (1980) generic strategies, or Miles and Snow’s (1978) typology. Fourth, the
question of defining what an industry is has not received much attention. Fifth, there is
the use of cluster analysis techniques in a manner that leaves a lot to be desired. The
problems surrounding the use of cluster analysis in SM have already been discussed in
considerable depth (Barney and Hoskisson, 1990; Ketchen and Shook, 1996; Leask,
2007). Thus, the author believes it is not necessary to explore this matter any further

2.1.5 Concept of Customer Satisfaction

Sivesan (2012), Customer satisfaction is the feeling or attitude of a customer

towards a product or service after it has been used. Customer satisfaction is defined
as an overall emotional response to an entire service experience for a specific
service encounter after purchasing consumption (Oliver, 1997). Hansemark and
Albinson (2004) also defined as an overall customer attitude towards a service
provider, or an emotional reaction to the difference between what customers
anticipate and what they receive, regarding the fulfillment of some needs, goals or
desire. In general, satisfaction is a person’s feelings of pleasure or disappointment
that result from comparing a products perceived performance (or outcome) to
expectations. If the performance falls short of expectations, the customer is
dissatisfied. If performance matches expectations, the customer is satisfied; if it
exceeds expectations, the customer is highly satisfied or delighted.

Khalid et al. (2011) pointed out that customer satisfaction and retention are critical
factors for retail banks, and they investigated that the major determinants of

14
customer satisfaction. Such as service quality, service features, situational factors
and customer compliant handling. And they also suggested that, if customers
perceive that they are obtaining additional benefits from their relationship with
employees of the sector their satisfaction level with the service provider will
increase.

Customer satisfaction is actually a term most widely used in the business and
commerce industry. It is a business term explaining about a measurement of the
kind of products and services provided by a company to meet its customer’s
expectation. To some, this may be seen as the company’s key performance
indicator (KPI). In a competitive marketplace where businesses compete for
customers, customer satisfaction is seen as a key differentiator and increasingly has
become a key element of business strategy (Munusamy et al., 2010; Chinwuba,
Egene, 2013). Consumer satisfaction is the most efficient and least expensive
source of market communication because consumers who are satisfied with a
product or service will be more likely to disseminate their favorable experience to
others (Omar et al. 2009).

The goal for every company should be to make its customers satisfied. Satisfied
customers will come again and might stay as customers for a longer period of time.
It is clear that if the company can make the customer satisfied, the customer will
come back again and the customers might also tell to some of their friends about
the good service they got. So through satisfied customers it is possible to save in
marketing expenses. The services provided to customer will reflect the bank’s
image. Research has shown a higher percentile of customers who retain certain
bank services because of the good services provided. In other words, one of the
factors that boost the market shares is by improving the quality of the provided
services (Razak et al., 2013).

2.1.6 Theories of Customer Satisfaction

According to Mill (2002), two theories best explain customer satisfaction. They are the
disconfirmation paradigm and expectancy-value concept.

15
Disconfirmation Paradigm Theory

Disconfirmation hypothesis shows that clients contrast another help insight and a
standard they have created. Their conviction about the help is controlled by how well it
compares this norm. Under the disconfirmation worldview, clients make buys dependent
on their assumptions, perspectives, and aims. Afterward, during or after utilization, view
of execution happens as clients assess the experience. The cycle is finished when clients
contrast the real help execution and their pre-experience standard or assumption. The
outcome is affirmation, fulfillment, or disappointment. There are four parts to this
worldview: assumptions, seen execution, disconfirmation, fulfillment. The degree of
assumptions addresses pre-utilization assumption. Execution alludes to the client's
impression of administration. Disconfirmation results in case there is a disparity among
assumptions and execution. At long last, fulfillment is dictated by joining the fulfillment
results for the different traits of the assistance.

Expectancy-value theory

The expectancy-value theory was first developed by John William Atkinson and later
expanded by Jacquelynne Eccles and her associates. The theory assumes that customers
often make some judgment about a product, its benefits, and the likely outcomes of using
the product. People will learn to perform the behavior that they expect will lead to
positive outcomes. Their overall attitude is a function of beliefs about an object’s
attributes and the strength of these beliefs. The relationship has been summarized as
follows: Q = Ii (Pi – Ei) Where Q is the overall quality; I is the importance of service
attribute I. the sum is over the number of service attributes; P is the perception; E is
expectation

2.1.7 Service Quality Models

As stated earlier service quality has been defined differently by different people and there
is no consensus as to what the actual definition is. We have adopted the definition by
Parasuraman et al. (1988), which defines service quality as the discrepancy between a
customers’ expectation of a service and the customers’ perception of the service offering.
Measuring service quality has been one of the most recurrent topics in management

16
literature, Parasuraman et al., (1988), Gronroos, (1984), Cronin et al., (1992). This is
because of the need to develop valid instruments for the systematic evaluation of firms’
performance from the customer point of view; and the association between perceived
service quality and other key organizational outcomes, Cronin et al., (2010, p.93), which
has led to the development of models for measuring service quality. Gilbert et al., (2004,
p.372- 273) reviewed the various ways service quality can be measured. They include;

The expectancy-disconfirmation approach which is associated with the identifying of

customer expectation versus what they actually experienced. It focuses on the comparison
of the service performance with the customer’s expectations. The customer’s
expectations could be assessed after the service encounter by asking him/her to recall
them.

Performance-only approach merely assesses service quality by merely asking

customers about their level of satisfaction with various service features following a
service encounter.

Technical and functional dichotomy approaches identify two service components that
lead to customer satisfaction namely, the technical quality of the product which is based
on product characteristics such as durability, security, physical features while functional
quality is concerned with the relationships between service provider and customer such as
courtesy, speed of delivery, helpfulness.

Service quality versus service satisfaction approach which mainly focuses on two
service components that are interrelated; the transition-specific assessment which
evaluates specific features of quality and the overall assessment which evaluates overall
quality. This approach links perceived quality at the time of the service encounter or
immediately after it and overall satisfaction with the service. Perceived quality is based
on attributes of the service over which the company has control and it is a measure of the
customer’s assessments of the service’s value without comparison to customer’s
expectation.

Attribute importance approach focuses on the relative weight on the importance the
customer places on attributes found to be linked with service satisfaction.

17
Parasuraman et al., 1985, (p.41-50) developed a conceptual model of service quality
where they identified five gaps that could impact the customer’s evaluation of service
quality in four different industries (retail banking, credit card, securities brokerage and
product repair and maintenance).

Gap 1 (The knowledge gap): The gap between customers’ expectation and management
perceptions. The difference between what service providers believe customers expect and
customers’ actual needs and expectations. Major reasons for this gap are lack of
marketing research orientation evidenced by insufficient marketing research, inadequate
use of research findings, and lack of interaction between management and customers.

Gap 2 (The standard gap): The gap between management’s perceptions of customer
expectations and the firm’s service quality specifications. The difference between
managements’ perceptions of customer expectations and the quality standards established
for service delivery. Management might correctly perceive the customers’ wants but not
set quality standards clearly.

Gap 3 (The delivery gap): The gap between service quality specifications and service
delivery. The difference between specified service delivery standards and the actual
service provided. In general, this gap appears when employees are unable and /or
unwilling to perform the service at the desired level. Various reasons are: role ambiguity,
role conflict, poor employee-job fit, inappropriate supervisory control systems leading to
inappropriate evaluation/compensation system, lack of perceived control on the part of
employees and lack of team work.

Gap 4 (The communication gap): The difference between what a firm promises about a
service and what it actually delivers is described as Gap 4. The main factors contribute to
this gap are inadequate communication among operations, marketing, and human
resources as well as across branches; and also propensity to over-promise in
communications.

Gap 5 (The service gap): The gap between perceived service and expected service. The
difference between what customers expect to receive service and their actual perceptions
of the delivered services. Gaps 1 through 4 contribute to the emergence of gap 5.

18
2.1.8 Measuring Service Quality Using SERVQUAL Model

Measuring service quality is quite different from measuring product quality because
service is an experience. To date, probably the most significant contribution toward the
development of a quantitative yardstick for assessing a firm's service quality is the work
conducted by (Parasuraman et al., 1985, 1988, 1991). They developed a measuring
instrument called SERVQUAL, to measure customer perceptions of service quality by
using five major dimensions of service quality based on the gap model. It is widely
accepted and tested model to measure the quality of services (Bennington and Cummane,
1998).

The central idea in this model is that service quality is a function of the difference scores
or gaps between expectations and perceptions. An important advantage of the
SERVQUAL methodology is that it has been proven valid and reliable across a large
range of service contexts. SERVQUAL has been used to measure service quality by
collecting information on both the perceptions and expectations of customers. This model
has been widely adopted by both managers (Parasuraman et al., 1985, 1988, 1991) and
academics (Babakus and Boller, 1992; Cronin and Taylor, 1992) to evaluate customer
perceptions of service quality for a variety of services.

SERVQUAL was developed to measure the gap between customers’ expectations and
perceptions by using five service quality dimensions to examine service quality
performance of any organization. It has been one of the most important contributions to
the quality field in the services industry over the last decade and forms the central part of
the gap model for measuring customer focused quality (Parasuraman et al., 1985, 1988,
1991). As suggested by these famous scholars in the area, customers routinely use these
five dimensions as a way of evaluating service quality and for each dimension of service
quality SERVQUAL measures both the expectation and perception of the service.

Although SERVQUAL has been widely used to measure service quality across industries,
no two providers of service are alike. Therefore, we can use SERVQUAL to serve only
as a frame work. Despite the criticism of SERVQUAL, no viable measurement
techniques or approaches have been put forward as serious alternatives. On the other

19
hand, SERVQUAL remains the most widely applied measure of service quality by
academics and practitioners. The 5th Gap, the difference between customers’ perceptions
of what a service should deliver and how well that service meets idealized expectations is
the conceptual basis for SERVQUAL. Parasuraman et al. (1985; 1988; 1991) designed
SERVQUAL as a generic instrument that could be slightly modified for use in any
particular service industry. It is the most popular method for the measurement of the 5th
Gap.

2.1.9 Customers’ Expectations Compared to Perceptions

Gronroos (1982) has proposed that customer’s perception of service quality is based on
the comparison of their expectations (what they feel service providers should offer) with
their perceptions of the performance of the service provider. Parasuraman et al., (1988,
p.17) point out that expectation is viewed differently in both satisfaction literature and
service quality literature.

In satisfaction literature, expectations are considered as ‘predictions’ by customers about

what is likely to happen during a particular transaction while in service quality literature,
they are viewed as desires or wants of customers, that is, what they feel a service provider
‘should’ offer rather than ‘would’ offer. For this study, expectations define as desires or
wants of customers because this allows us to know exactly what service providers show
offer and this is based on based past experience and information received (Douglas and
Connor, 2003, p.167). It is important to understand and measure customer’s expectations
in order to identify any gaps in delivering services with quality that could ensure
satisfaction, Negi, (2009). Perceptions of customers are based solely on what they receive
from the service encounter (Douglas and Connor, 2003, p.167).

The study is mainly based on this discrepancy of expected service and perceived service
from the customer’s perspective. This is in order to obtain a better knowledge of how
customers perceive service quality in TTCL. We are not focusing on the 1st four gaps
because they are mainly focused on the company’s perspective even though they have an
impact on the way customers perceive service quality in TTCL and thus help in closing
the gap which arises from the difference between customer’s expectation and perception

20
of service quality dimensions. Parasuraman et al., (1985, p.47) identified 10 determinants
used in evaluating service quality; reliability, responsiveness, competence, access,
courtesy, communication, credibility, security, understanding the customer, and tangibles.
Most of these determinants of service quality require the customer to have had some
experience in order to evaluate their level of service quality ranging from ideal quality to
completely unacceptable quality. They further linked service quality to satisfaction by
pointing out that when expected service is greater than perceive service, perceived quality
is less than satisfactory and will tend towards totally unacceptable quality; when expected
service equals perceived service, and perceived quality is satisfactory; when expected
service is less than perceived service, perceived quality is more than satisfactory and will
tend towards ideal quality (Parasuraman et al., 1985).

2.20 Factors that Affect Customer Satisfaction

Matzler et al. (2002) classify factors that affect customers’ satisfaction into three factor
structures; i) Basic factors: these are the minimum requirements that are required in a
product to prevent the customer from being dissatisfied. They do not necessarily cause
satisfaction but lead to dissatisfaction if absent. These are those factors that lead to the
fulfillment of the basic requirement for which the product is produced. These constitute
the basic attributes of the product or service. They thus have a low impact on satisfaction
even though they are a prerequisite for satisfaction. In a nutshell competence and
accessibility; ii) Performance factors: these are the factors that lead to satisfaction if
fulfilled and can lead to dissatisfaction if not fulfilled. These include reliability and
friendliness, iii) Excitement factors: these are factors that increase customers’ satisfaction
if fulfilled but does not cause dissatisfaction if not fulfilled which include project
management.

2.21 Relationship between Service Quality and Customer Satisfaction

According to Sureshchandar et al. (2002), customer satisfaction should be seen as a

multi-dimensional construct just as service quality meaning it can occur at multi levels in
an organization and that it should be operational zed along the same factors on which
service quality is operational zed.

21
Parasuraman et al. (1985) suggested that when perceived service quality is high, then it
will lead to increase in customer satisfaction. He supports that fact that service quality
leads to customer satisfaction and this is in line with Saravana and Rao, (2007) and Lee et
al., (2000, p.226) who acknowledge that customer satisfaction is based upon the level of
service quality provided by the service provider. Fen and Lian, (2005) found that both
service quality and customer satisfaction have a positive effect on customer’s re-
patronage intentions showing that both service quality and customer satisfaction have a
crucial role to play in the success and survival of any business in the competitive market.
This study proved a close link between service quality and customer satisfaction. Su et
al., (2002) carried a study to find out the link between service quality and customer
satisfaction, from their study, they came up with the conclusion that, there exist a great
dependency between both constructs and that an increase in one is likely to lead to an
increase in another. Also, they pointed out that service quality is more abstract than
customer satisfaction because, customer satisfaction reflects the customer’s feelings
about many encounters and experiences with service firm while service quality may be
affected by perceptions of value (benefit relative to cost) or by the experiences of others
that may not be as good

Studies suggest that there is a positive relationship between service quality and the
satisfaction of customers (Omar, 2009). And other researchers suggested that there
is a positive relationship between service quality, retention and future intention of
customers (Ahmad et al., 2011; Jajaee and Ahmad, 2012). Naeem and Saift (2009)
found that customer satisfaction is the outcome of high service quality within the
banking sector.

In marketing literature, Service Quality and Customer Satisfaction have been

conceptualized as a distinct, but closely related constructs (Siddiqi, 2011).
Parasuraman et al. (1988) defined service quality and customer satisfaction as
“service quality is a global judgment, or attitude, relating to the superiority of the
service, whereas satisfaction is related to a specific transaction”. Jamal and Naser
(2003) stated that service quality is the antecedent of customer satisfaction.
However, they found that there is no important relationship between customer

22
satisfaction and tangible aspects of service environment.

2.2 Review of Empirical Studies

Yonatan (2010) assessed customers’ perception of service quality in the banking sector in
Ethiopia. The findings revealed that customers’ expectations are not met in most banks,
and among the five dimensions of service quality tangible and responsiveness have
higher gap scores at three private banks (United, Oromia and Dashen banks).

Another study conducted on the topic “Impact of service quality on customer satisfaction
at the public owned National Alcohol and Liquor Factory in Addis Ababa” states that the
impact of five service quality dimensions on customer satisfaction was significant in all
factors of service quality. The research findings also indicated that there is a significant
positive relationship between the five dimensions of service quality (assurance,
responsiveness , tangibility, empathy and reliability) and customer satisfaction, with the
highest correlation was between empathy and customer satisfaction whereas the weakest
is between reliability and customer satisfaction (Tibebe, 2012). Furthermore, Tigineh et
al. (2012) assessed perceived service quality in Ethiopian retail banks. The findings
indicated that perceived service quality falls short of customer expectations in all the five
dimensions of service quality, with the largest perception-expectation gap observed for
the empathy dimension.

Haq and Bakhtiar Muhammad (2012) conducted a study with the objective of comparing
customer satisfaction between private and public banks in Pakistan. In their findings
private bank customers were more satisfied with their bank because of their multiple
branches at convenient locations and technology (like check deposit machines, utility bill
accepting machines etc.) which were not even seen in public sector banks and in terms of
customer care.

Endalkachew Abebe (2013) assessed the impact of core banking and service quality on
customer satisfaction in CBE, Bishoftu Branch. The result of this study showed that,
there was significant relationship between all service quality dimension and customer
satisfaction in CBE.

23
Saghier and Nathan (2013) investigated quality perception of bank customers in Egypt.
The findings of this research indicated that customer satisfaction in the Egyptian banking
services is significantly affected by Reliability, Empathy, Assurance and Responsiveness,
while the effect of service tangibility was not significant on customer satisfaction.

Moreover, in Pakistan a study was carried out by Qadri (2015) with the objective of
understanding the existing gap between expectation and perception among the public and
private banks’ customers. The findings of the study showed that there is very huge
service quality gap with regards to service quality dimensions.

In Nepale the study made by Kumer (2018) on the topic “Measuring Service Quality and
Customer Satisfaction: Empirical Evidence from Nepalese Commercial Banking Sector”.
The result revealed that the entire service quality dimensions (i.e. tangibles, reliability,
responsiveness, assurance and empathy) are important for forming customer satisfaction
of commercial banks in Nepal and Customer satisfaction is also highly affected by
service quality.

2.3 Research Gaps

Drawing from the empirical literature reviewed in this study. It is worthy to note that
several studies in the literature only focused on one financial institution or the other,
thereby making it difficult to compare their findings with other banks. The resulting
implication of such studies may be misleading as what happens in one bank may differ
from another. Hence, this study bridges this gap by looking at both the Commercial Bank
of Ethiopia and Awash International Bank, which are two of the major players in the
Ethiopian Financial Institution to make a comparison and have a robust finding.

In addition, most of the previous empirical works in the literature focused on the impact
of service quality on customer satisfaction. However, these studies have not been able to
combine the situation of service quality effect on customer satisfaction and perception
and expectation. Moreover, most studies in the literature did not use the SERVQUAL
model but rather the performance to assess service quality. Therefore, using the
SERVQUAL model would be a contribution to existing research on TTCL. This is the
research gap and in order to fill the gap, this study attempts to measure service quality

24
and customer satisfaction using the SERVQUAL model from the customer’s perspective
in order to know their perceptions

2.4 Conceptual Framework

Although there are alternative models have been proposed for the measurement of service
quality, SERVQUAL scale has been widely used by researchers and practitioners to
measure service quality. Here the independent variables are the SERVQUAL dimensions:
Tangibles, Responsiveness, Reliability, Assurance and Empathy and customer
satisfaction is the dependent variable that the study measure with the independent
variables. Therefore, this model has been used as a reference point for this study to
develop hypothesis test.

25
 CHAPTER THREE
3. RESEARCH DESIGN AND METHODOLOGY
This chapter describes the research methodology adopted to serve the objectives of the
study, and also deals about the research design, research approach and sampling
techniques, data collection procedures and the method of data analysis. The methodology
that was used to meet the objectives of the study has been briefly discussed in this
chapter.

3.1Description of the Study Area

This study was conducted in selected branches of Commercial Bank of Ethiopia (CBE)
and Awash International Bank (AIB) in Jimma town. Jimma town is located at about 353
km to Southwest of Addis Ababa. The town serves as a commercial center for the
Southwestern part of the country. Jimma town has a total of 14 banks (i. e., one
public/CBE and 13 private banks) as of January 2023 (www.combanketh.et). From these
banks, the researcher purposively selected two banks based on the large number of
customers they hold (i. e., CBE and AIB). CBE has more than 780 branches all over the
country, of these 17 branches of the bank found in Jimma town as of January 2023. AIB
has more than 120 branches all around Ethiopia, of these; 9 branches are located in
Jimma town (www.combanketh.et).

3.2 Research Design

To achieve the objectives of the study, the research used both descriptive and explanatory
research designs. The main objective of the descriptive research design is to analyze the
opinions of customers regarding their satisfaction and service quality levels in the
banking sectors, specifically between CBE and AIB in Jimma town, while the
explanatory research design helps to see the relationships between the independent
variables (service quality dimensions) and the dependent variable (customer satisfaction).

26
3.3 Research Approach
Broadly speaking, there are three main domains of research approaches frequently
observed in the literature and these include qualitative, quantitative and mixed research
approaches (Adams, 2007). In this study, the researcher used mixed approach (i. e. both
qualitative and quantitative approaches) gather information that is not available from
document records and make conclusions about the determinants of service quality that
affect service quality and to prioritize the SERVQUAL dimensions in each service sector
based on perceptions and expectations of the respondents. The overall goal of mixed
research approach, of combining qualitative and quantitative research components, is to
expand and strengthen the study’s conclusions and, therefore, contribute to the published
literature by generating knowledge and testing hypothesis with data collected during the
study (Johnson and Christensen, 2017).

3.4Type and Source of Data

According to Catherine (2007), data may be collected either from primary or secondary
sources. In this study both primary and secondary data were collected from different
sources. Primary data were collected using standard self-administered and close ended
questionnaires. The primary sources of this data for this study were customers of the six
selected branches in Jimma Town. To get accurate information questionnaires were
distributed and collected from the target group by the researcher himself.

Secondary data were also used for supporting the study and to get the findings of other
researchers in the topic. Sources of the secondary data included books, articles, journals,
website and annual reports of the banks. In addition, reports from previous researches
were used to obtain relevant empirical findings that can be applied in order to have a
better understanding of the service quality construct and how the SERVQUAL model can
be used to measure it.

3.5 Target Population

According to Zikumund (2003) the target population is defined as the entire group a
researcher is interested in. In each banks, there are three different types of accounts.

27
These are: demand deposit account (a current or checking account), special-demand
deposit account (non-interest-bearing account) and savings account (interest-bearing
deposit). Among the CBE and AIB branches operating in Jimma town, the researcher
purposively selected three branches from each bank based on their large number of
customers. The selected branches together render all banking services for more than
300,000 customers who are currently holding saving accounts in Jimma town (CBE and
AIB Jimma District Report, 2023). Hence, the 300,000 customers were considered as the
target population for this study as described in the table below.

Table 1 Number of customers holding saving accounts in the selected branches in

Jimma Town
S. N Name of Selected Branches Number of Saving Customers
Male Female Total
1 Jimma Main Branch* 78750 26250 105000
2 Hirmata Branch* 48750 16250 65000
3 Jiren Branch* 33750 11250 45000
4 Jimma Branch 34256 11419 45675
5 Shenen-Gibe Branch 14759 4920 19679
6 Jiren Branch 14735 4912 19646
Total 225,000 75,000 300,000
Source: Data from banks, 2023. * represents branches of CBE

3.6 Sampling Design and Sampling Techniques

3.6.1 Sample Size Determination

In order to determine the sample size from the target population of 300,000 customers of
the selected branches; the researcher used a simplified formula described by Yamane
(1967) to calculate the optimum sample size at 95% confidence level as shown below.

n=

28
Where, n is the sample size required, N is the total population size (i.e., 300,000) and e is
the level of precision.

300,000
The total sample size needed for this study was n = = 400
1+ 300,000 ( 0.05 ) 2

Since the number of customer in each sample branches is not the same, this needs to be
proportionate for each of the selected branches.

Hence, to further select proportional number of respondents from each branch, the
following formula was used:

n∗N !
n !=
N
Where,

n!= Required sample size for each branch

n = total number of sample
N= total number of target population
N! = total number of target population in each branch

Table 2 Distribution of sample size among the selected branches

Name of the selected Total no. of saving Proportional

banks/branches account holders sample size
Commercial Bank of Ethiopia
Jimma Main Branch 105,000 140
Hirmata Branch 65,000 87
Jiren Branch 45,000 60
Awash International Bank
Jimma Branch 45,675 61
Shenen-Gibe Branch 19,679 26
Jiren Branch 19,646 26
Total 300,000 400
Source: Own computation, 2023

3.6.2 Sampling Techniques

29
In this study, the researcher used purposive (non-probability) sampling technique in
selecting the six branches (i. e., three from each bank) based on their relatively larger
number of customers holding active saving accounts. Proportionate sampling technique
was used to determine proportional sample size for each of the six selected branches. The
researcher decided to employ convenience sampling technique in selecting respondents.
The idea behind the use of this sampling technique was because it is actually impossible
to carry out a probability sampling as there will no point in time during which all
customers are available and it may not be possible to contact everyone within the
scheduled time.

3.7 Methods of Data Collection

The primary data were collected using a survey questionnaire prepared both in English
and Amharic languages. The researcher distributed the close-ended self-administered
questionnaire to sample respondents as the measuring instrument. The standard
questionnaire was prepared using the service quality model originally developed by
Parsuraman et al. (1991). The instrument was developed by modifying the 22 pairs Likert
scales by adding ―convenience of branch location to the list of elements included in the
tangibles dimension. The modified SERVQUAL model which is assumed to contain the
five dimensions namely tangibility, reliability, responsiveness, assurance and empathy
with 23 statements was used to assess the quality of services in five-point likert scales
ranging from one to five; where 1 represents strongly disagree, 2 disagree, 3 neutral , 4
agree, and 5 represents strongly agree. The level of customer satisfaction also measured
similarly using a five point Likert scale as described above.

The questionnaire contains three parts: The first section is about the general information
of respondents, the second section was designed to measure the customers’ expectation
and perception about the bank’s service delivery system, and the last part examined
respondents about their level of satisfaction. ―The Likert scale method is preferred to
make questions interesting to respondents and thereby enhance their cooperation
(Robinson Colin, 2002).

30
3.8 Research Variables
In accordance with the developed conceptual framework of this study, service quality and
customer satisfaction are the two basic concepts which guided he whole study. This
framework has been developed based on the SERVQUAL model. SERVQUAL Model
comprises with basically five dimensions such as Reliability, Responsiveness, Assurance,
Empathy and Tangible. These dimensions represent how customers organize information
about service quality in their mind and how customers could judge satisfaction using
these five SERVQUAL dimensions. For this study, the researcher identified the
following independent and dependent variables based on a general overview of the
relevant literatures, especially the work of Parasuraman et al. (1985).

Independent Variables
Service Quality: Is the independent variable. As mentioned earlier Service quality is
generally perceived to be a tool that can be used to create a competitive advantage and
further it can be define as ―the consumers’ overall impression of the relative
inferiority/superiority of the organization and its service. The most common definition of
service quality is the discrepancy between consumer’s expectations and perceptions of
the service received. Accordingly, service quality is defined as how well the delivered
service level matches customer’s expectation. Service quality also involves the degree of
customer satisfaction attained by business organization while meeting the needs and
expectations of the customers. The five dimensions of the SERVQUAL model (i. e.,
tangibility, reliability, responsiveness, assurance and empathy) were used for this study
(Parasuraman et al., 1985).

Dependent Variable

Customer Satisfaction: In accordance with the conceptual framework, Customer

satisfaction becomes the dependent variable, because it depends on the service quality.
Customer satisfaction measures how well a company's products or services meet or
exceed customer expectations. These expectations often reflect many aspects of the

31
company's business activities including the actual product, service, and how the company
operates in the global environment (Clemes, 2008).

3.9 Reliability and Validity of Instrument

Reliability estimates the consistency of the measurement or more simply, the degree to
which an instrument measures the same way each time it is used under the same
conditions with the same subjects. The most common technique used in literatures to
assess the scale‘s reliability and stability is the use of the Cronbach Alpha Statistics
(Sekaran, 2003). In order to test the reliability of the instrument the researcher used
Cronbach‘s Alpha values of multi-item scale. Alpha normally has values between 0 and
1; the higher the value the greater the internal consistency of the scale. Scales were
considered reliable if their Cronbach alpha value reached at least 0.70 as suggested by
Andy Field.

Table 3 Summary of Reliability test result

SERVQUAL Dimension No. of Cronbach’s Alpha Cronbach’s Alpha

attributes for expectation for perception
Tangibility 5 .839 .770
Reliability 5 .859 .830
Responsiveness 4 .881 .775
Assurance 4 .867 .817
Empathy 5 .911 .850
Customer Satisfaction 5 .790
Source: SPSS reliability test result output, 2023

As shown above in Table 3, the summary of Cronbach's Alpha coefficient value for the
variables ranged from 0.770 to 0.911, which means that Cronbach's Alpha coefficient
value is acceptable and reliable.

Validity according to Adams et al. (2007) refers to the strength of our conclusions,
inferences or propositions. It involves the degree to which you are measuring what you
are supposed to, more simply, the accuracy of your measurement. To raise the validity of
the research, questionnaires were distributed and collected by the researcher himself in
order to maintain its validity. Validity of research tool has three components, such as

32
construct validity, content validity and internal validity. Of all three types of validity, this
study used construct validity which deals with the consistency of the questions with the
responses intended. This validity is assured by structuring the questionnaire according to
the specific objectives. The critical requirement to achieve validity is to measure the
constructed data to ensure free from measurement error (Mat Roni, 2014). Therefore, the
constructed data in the questionnaire were valid that proved by the reliability test result
with insignificant (less than .3) measurement error.

3.10 Method of Data Analysis

Data analysis involved both descriptive and inferential statistics. The data collected
through questionnaire were analyzed, processed and interpreted according to the nature of
data. Statistical Package for Social Science (SPSS) software version 21 was employed to
analyze and present the data through these statistical tools, namely descriptive,
correlation and multiple linear regression analysis.

Descriptive Analysis

The descriptive statistical results were presented using tables, frequency distributions and
Percentages to give a condensed picture of the data. This was achieved through summary
of statistics, which includes the means and standard deviations values which are
computed for each variable in this study. The gap score for each dimension with respect
to each bank was calculated by subtracting the expectation score from the perception
score. A negative service quality gap indicates that respondents’ expectations are greater
than their perceptions. A comparative study between the two banks was conducted by
subtracting the expectations mean score from the perception mean score with respect to
the five service quality dimensions. Based on the obtained mean score differences for
each dimension, the level of service quality performance of each bank was compared by
using the following SERVQUAL gap model of Parasuraman et al. (1985; 1988; 1991).

33
Where, P = Perception score, E = Expectation score, Ai = Attribute number and n = it
can be number of respondents/ attributes in a dimension/ dimensions depending on the
level of gap to be measured.

The SERVQUAL gaps can be calculated at three levels as follows: The first step in the
assessment of service quality is the calculation of the SERVQUAL (SQ) scores of the
matching pairs of expectations (E) and perceptions (P) for each respondent and each
statement: The second step is to total up the scores obtained in step (1) for each
dimension and then divide by the number of statements in the corresponding dimension.
Finally the overall SQ can be obtained by taking the average SQ of each of the five
dimensions. Therefore, by using SERVQUAL model, service providers can obtain an
indication of the level of quality of their service provision, and highlight areas requiring
improvement.

Correlation Analysis

In this study Pearson’s correlation coefficients were used to determine the degree of
relationships between service quality dimensions (Tangible, reliability, responsiveness,
assurance, and empathy) and customer satisfaction as described by Field (2013)

Multiple Linear Regression Analysis

For the purpose of investigating the cause-effect relationship between service quality and
customers’ satisfaction, the researcher used a multiple regression analysis. Multiple linear
regression analysis is a statistical technique used to test the influence of two or more
independent variables on a dependent variable (Wooldridge, 2015); hence this particular
type of regression was used for predicting the values of the dependent variable (i.e.,
customers’ satisfaction) given the set of the independent variables (i.e., service quality
dimensions).

In brief, the effect of service quality dimensions on customers’ satisfaction of the selected
branches was tested using the following regression model:

Y = β0 + β1X1 + β2X2+ β3X3+ β4X4 + β5X5 + Ɛ

Where,

34
  Y is the dependent variable- customer satisfaction

 Β0 is the intercept term- it is the average value of Y when the stated independent
variables are set equal to zero.

 Tangible = X1, Reliability = X2, Responsiveness = X3, Assurance = X4 and

Empathy = X5 are the independent variables (i. e., service quality dimensions).

 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 variable.

 Ɛ is the random error term

Multiple Linear Regression Assumptions Tests

Before applying multiple linear regression analysis for testing the effect of service quality
dimensions on customers’ satisfaction; the following tests were conducted in order to
ensure the appropriateness of data to the basic assumptions of regression analysis:

First, multiple linear regression requires the relationship between the independent and
dependent variables to be linear. It can best be tested with scatter plots.

Second, multiple linear regression analysis requires that the errors between the observed
and predicted values (i.e., the residuals of the regression) should be normally distributed.
It can be checked by looking at a histogram or a Q-Q-Plot.

Third, multiple linear regression assumes that there is no multicollinearity in the data.
Multicollinearity occurs when the independent variables are highly correlated with each
other. Multicollinearity may be checked using Variance Inflation Factor (VIF) – The
VIFs of the linear regression indicates the degree that the variances in the regression
estimates are increased due to multicollinearity. VIF values higher than 10 indicate the
presence of a multicollinearity problem. All statistical analyses will be carried out using
the SPSS computer program (Statistical Package for Social Sciences v21).

3.11 Ethical Consideration

35
The researcher obtained the consent of the selected branches for the study. Respondents
were informed about the purpose of data collection, analysis and the covenant to maintain
privacy of their responses.

CHAPTER 4

4. RESULTS AND DISCUSSIONS

This chapter presents and discusses the major findings of the study. The first part
describes the respondents’ socio-demographic profiles, descriptive and comparative
analysis of service quality gaps of the selected banks. The second part deals with
correlation and regression analysis between service quality dimensions and customers’
satisfaction. The last part presents the major challenges and prospects of improving
service quality and customers’ satisfaction. In this study, a total of 400 questionnaires
were distributed to customers of the selected CBI and AIB branches in Jimma town, and
390 (97%) questionnaires were returned. Therefore, the analysis was done based on the
data obtained from 390 respondents.

4.1 Respondents’ Background Information

The table (Table 4) below shows the detail characteristics of the respondents. As it can be
observed from Table 4, the sample respondents consisted of 214 (54.9%) males and 176
(45.1%) females. Indeed, the lower number of females participated in this study could be
related to the lower proportion of female customers in the Ethiopian banking sector as a
whole.
With regard to age of the respondents, more of the customers 276(70.8%) are the age
between 30-50 years, other customers 102(26.7%) are between 18-29 and the rest
12(3.1%) are above 50 years old. This result may also indicate that this questionnaire was
responded by adult and matured bank customers.

In case of educational qualification, customers who hold first degree and above 228 (58.5
%) are participated more than other categories of diploma 100 (25.6%), Certificate 37

36
(9.5%) and 9-12 grade 25 (6.4%). This indicates that most of the bank’s customers are
educated and have a good understanding of quality banking service so that they can easily
understand and properly respond this questionnaire

Table 4 Characteristics of the respondents

Demographic factors Frequency Percentage (%)

Gender
Male 214 54.9
Female 176 45.1
Total 390 100
Age group
18-29 102 26.2
30-39 182 46.7
40-50 94 24.1
Above 50 12 3.1
Total 390 100
Education level
9-12 25 6.4
Certificate 37 9.5
Diploma 100 25.6
1st Degree and above 228 58.5
Total 390 100
Length of years since a
customer of the bank
1-3 years 80 20.5
4-7 years 226 57.9
8-11 years 42 10.8
More than 11 years 42 10.8
Total 390 100
Frequency of using the
bank’s service
Weekly 92 23.6
More than once per week 99 25.4
Monthly 86 22.1
Twice per month 90 23.1
Yearly 23 5.9
Total 390 100
Source: Own survey, 2023

37
In order to understand the customers’ experience with the banking service the responses
collected and presented in the above table. It can be noted 226 (57.9%) of the respondents
have used the bank services between 4-7 years and 80(20.5%), 42 (10.8%) and 42
(10.8%) have used the branch between 1to 3 years, 8 to11 years and for more than 11
years respectively. Thus, from the above data it can be seen that majorities of the
customers 310 (79.6%) are using the bank services for more than four years so that they
had provided more experience and idea concerning the quality of services given by the
banks.

Finally, the above table showed how frequent customers have used the bank services. It
can be noted that 99 (25.4%) of the whole customers have used the bank for more than
once per week, 92 (23.6%) once per week, 90 (23.1%) twice per month, 86 (22.1%) once
per month and 23 (5.9%) uses the bank service once per year. This result indicates that,
most customers 281 (72%) have frequently visited the bank more than once per month so
that they could observe a lot of actions in the bank’s services.

4.2 Descriptive Analysis of Service Quality Gap

4.2.1. Total Gap Analysis of Both Banks

This study used SERVQUAL model to measure the customers’ expectation and
perception of banking services provided by CBE and AIB in Jimma town. In this model
there are five service quality dimensions and a total of 23 questions associated with
service quality. These five dimensions are: Tangibility, Reliability, Responsiveness,
Assurance and Empathy that were tested using data collected from the customers of the
two selected banks (CBE and AIB) found in Jimma Town. The following tables give
summary of the descriptive measures of the above five dimensions of service quality.

38
Tangibility

Table 5: Gap score in relation to tangibility dimension of both sample banks (n=390)

Customers’ Customers’
SERVQUAL

Gap (P-
expectations Perceptions
Attributes N (E) (P)

E)*
Mean SD Mean SD
1
The bank maintains modern 390 4.83 .472 3.09 .861 -1.74
looking equipment
2 Physical facilities at the 390 4.58 .598 3.08 .861 -1.50
bank are visually appealing
3 Well dressed and neat 390 4.50 .586 3.92 .715 -0.58
Tangibility

appearance of employees
4 Materials associated with 390 4.67 .568 3.32 .898 -1.35
the service are visually
appealing
5 The bank has branches at 390 4.84 .404 3.11 .864 -1.73
convenient location to its
customers
Mean of Tangibility 4.68 .345 3.30 .536 -1.38
*E = Expectation, P = Perception, Source: Own survey, 2023

As shown in the above table (Table 5), tangibility has a mean service quality gap score of
(-1.38). Among all the attributes “modern looking equipment” and “convenience location
of the branches” has relatively high gap score than other attributes, each scoring -1.74
and -1.73 respectively. However, the bank has comparatively lower gap in relation to
“Materials associated with the service are visually appealing” and “Physical facilities at
the bank are visually appealing” and “” with a score of -1.35 and -1.50 respectively. On
the other hand, the lowest gap score (-0.58) was observed in relation to “Well dressed and
neat appearance of employees”. Overall, the results indicated a negative difference

39
between customers’ perceptions and expectations with respect to the tangibility service
quality dimension, which implies that the overall service quality performance related to
tangibility dimension is below customers’ expectations. In line with the findings of this
study, Wisniewski (2001) carried out a study to assess customer satisfaction within the
public sector across a range of Scottish Councils services, and the analysis of gap scores
revealed that tangibles had negative gaps which indicate that customer expectations were
not met.

Reliability

Table 6: Gap score in relation to reliability dimensions of both sample banks

(n=390)

Customers’ Customers’
SERVQUAL

Gap (P-
expectations Perceptions
Attributes N (E) (P)

E)*
Mean SD Mean SD
1
Staffs keeping promise 390 4.71 .547 3.44 1.001 -1.27
2
Bank shows a sincere 390 4.74 .477 3.27 .883 -1.47
interest in solving
Reliability

customers’ problems.
3 Bank performs its services 390 4.76 .548 3.33 .927 -1.43
right the first time.
4 Bank delivers all its services 390 4.70 .595 3.31 .887 -1.39
within the promised time.
5 Bank insists on error- free 390 4.66 .657 3.61 .907 -1.05
(accurate) records.
Mean of Reliability 4.71 .438 3.39 .768 -1.32
*E = Expectation, P = Perception, Source: Own survey, 2023

Customers’ expectations and perceptions on the reliability service quality dimension of

the selected banks were also examined based on the above five attributes as shown above
(Table 6). The mean score for customers’ expectations ranged from 4.66 to 4.76, while
the mean score for customers’ perception ranged from 3.31 to 3.61. Overall, in all the
statements included in the reliability dimension customers’ expectations exceeded their
perceptions of the service quality at the studied banks, with average gap score of -1.32
(Table 6). Considering the gap score for each attribute, the highest gap score was

40
observed with respect to “sincere interest in solving customers’ problems”, followed by
“performs its services right the first time”, and the lowest gap score was recorded in
relation to “insists on error- free (accurate) records”. These results suggest that the ability
of the banks to perform the desired service dependably, accurately and consistently is
below customers’ expectation. This shows that the banks are not keeping the service
promise and reputation on this particular dimension (i. e., reliability). Similarly, Agus et
al. (2007) carried out research to identify management and customer perceptions of
service quality practices in the Malaysian Public sector, and the analysis of gap scores
revealed that reliability had negative gaps which indicate that customer expectations were
not met.

Responsiveness

Table 7: Gap score in relation to responsiveness dimension of both sample banks

(n=390)

Customers’ Customers’
SERVQUAL

Gap (P-
expectations Perceptions
Attributes N (E) (P)

E)*
Mean SD Mean SD
1
Staff telling customers 390 4.66 .625 3.40 .981 -1.26
Responsiveness

exactly when services will

be performed.
2 Staffs provide prompt 390 4.76 .437 3.14 .865 -1.62
services to their customers.
3 Employees are always 390 4.71 .524 3.31 .951 -1.40
willing to help customers.
4 Staffs are never being too 390 4.67 .562 3.16 .903 -1.50
busy to respond to
customers' requests.
Mean of Responsiveness 4.70 .438 3.25 .722 -1.44
*E = Expectation, P = Perception, Source: Own survey, 2023

As shown in the above table (Table 7) customers’ expectations and perceptions were also
evaluated based on four attributes of the Responsiveness service quality dimension.
Accordingly, the mean score for customers ‘perceptions ranged from 3.14 to 3.40 and
that of customers’ expectations ranged from 4.66 to 4.76, altogether resulting in overall

41
service quality gap of (-1.44). Among all items under the responsiveness dimension,
“Staffs provide prompt services to their customers”, “Staffs are never being too busy to
respond to customers' requests”, “willingness of employees to help customers” and “Staff
telling customers exactly when services will be performed” have shown the highest to
lowest service quality gap scores in order of -1.62 ,-1.50, -1.40 and -1.26 respectively
(Table 7).

The above results indicated that the overall service quality performance related to
responsiveness is below customers’ expectations. This implies that employees of the
selected banks are not providing prompt service as expected by customers, employees are
not willing to respond the question of the customers as expected, employees are not
always willing to help customers and employees are not telling the exact time when they
perform the service to their customers as expected by customers, keeping customers
waiting, particularly for no apparent reason, altogether created unnecessary negative
perceptions of quality by the customers. The present findings are in agreement with
previous research outcomes. For instance, Nigist (2017) assessed the satisfaction level of
customers in private Banks, and it was found that customers were not satisfied in
employees’ understanding towards the needs and wants of clients, convenient operating
hour, individualized attention to solve client's problem and safety that the company has
for its customers

Assurance

Table 8: Gap score in relation to assurance dimension of both sample banks (n=390)

Customers’ Customers’
SERVQUAL

Gap (P-

expectation Perceptions
Attributes N (E) (P)
E)*

Mean SD Mean SD
1 Behavior of employees 390 4.66 .753 3.55 .816 -1.11
instills confidence in
customers.
2 Customers feel safe in their 390 4.74 .516 3.75 .820 -1.00
transactions.
3 Staffs consistently courteous 390 4.70 .620 3.47 .797 -1.23

42
 A / polite/ with customers.
ss 4 Staffs have adequate 390 4.62 .743 3.65 .805 -0.97
ur knowledge to answer
an customers’ questions.
ce Mean of Assurance 4.68 .549 3.60 .558 -1.07
*E = Expectation, P = Perception, Source: Own survey, 2023

Customers’ expectations and perceptions on the assurance dimension of the banks were
assessed based on four attributes as shown in the above table (Table 8). In terms of
assurance dimension, the mean score for perceptions ranged from (mean 3.47 to 3.75)
and expectations (mean 4.62 to 4.74) and the mean service quality gap score for this
dimension is -1.07. Among the entire attributes, “Staffs consistently courteous / polite/
with customers” and “Behavior of employees instills confidence in customers” has
comparatively higher gap scores than other attributes, each scoring -1.23 and -1.11,
respectively (Table 8). However, the banks have somehow lower gap score in relation to
“Customers feel safe in their transactions” and “knowledge of employees to answer
customers’ question” with a score of -1.00 and -0.97 respectively.

Generally, the negative difference between perceptions and expectations of the customers
with respect to assurance suggests that the overall service quality performance of the
banks with regard to the assurance dimension is below customers’ expectations. This
shows that, customers perceived employees engaged in the banks are too busy to respond
to their customers at service center, and hence employees are required to manage and
committed in their personal obligation towards customers. Anderson (2015) also
measured the quality of service provided by a public university health clinic. Using 15
statements representing the five-dimensions of SERVQUAL (Parasuraman et al., 1988),
she assessed the quality of service provided by the clinic at the University of Houston
Health Center. She reported that patients were found to be generally dissatisfied with the
five dimensions of SERVQUAL, and the highest dissatisfaction was felt with assurance.

43
Empathy

Table 9: Gap score in relation to empathy dimension of both sample banks (n=390)

Customers’ Customers’
SERVQUAL

Gap (P-
expectation Perceptions
Attributes N (E) (P)

E)*
Mean SD Mean SD
1
Banks giving customers 390 4.63 .665 3.34 .929 -1.29
individual attention
2 Banks have convenient 390 4.70 .595 3.30 .808 -1.40
operating hours to all their
customers.
Empathy

3 Staffs giving customers 390 4.58 .650 3.23 .897 -1.35

personal attention
4 Bank giving its customers’ 390 4.63 .719 3.21 .966 -1.42
best interest at heart.
5 Staffs understand the 390 4.63 .614 3.19 .949 -1.44
specific needs of their
customers.
Mean of Empathy 4.63 .438 3.25 .703 -1.38
*E = Expectation, P = Perception, Source: Own survey, 2023

Lastly, customers were requested to respond to five questions to ascertain their level of
expectations and perceptions on the empathy dimension of service quality. As shown
above (Table 9), the mean score for empathy perceptions ranged from (mean 3.19 to
3.34) and expectations ranged from (mean 4.58 to 4.70). Overall, a negative difference
between the customers’ expectations and perceptions (mean gap score of -1.38) on the
dimension of empathy was noted. In this dimension, the widest gap (-1.44) was found in
the item “Staffs understand the specific needs of their customers”. The next big gap
observed in this dimension is “having convenient operating hours to all their customers”
and “having its customers ‘best interest at heart” each scored service quality gap of (-1.40

44
and -1.42); which shows the banks don not consider the specific needs of customers,
convenient operating hours and best interest of the customer. Donnelly et al. (2006)
carried out a study to explore the application of SERVQUAL approach to access the
quality of service of Strathclyde Police in Scotland. The survey captures customers’
expectations of an excellent police service and compares these with their perceptions of
the service delivered by Strathclyde Police. It was found that customer expectations were
actually exceeded the service provided by police in terms of assurance service quality
dimension.

Looking at the individual service quality dimensions, the highest gap score was pertaining
to responsiveness (-1.44) followed by tangibility and empathy dimensions (-1.38), while
the lowest gap score was observed in relation to assurance (-1.07). Considering both
banks and the mean gap score of the above five dimensions of service quality, the overall
Gap 5 score of all dimensions of the banks is (-1.32). These findings indicate that
customers of the banks expect better quality of service, but the actual service provided by
the banks is below their expectations. This result indicates that customers of CBE & AIB
did not believe their perception meets with their expectation. It should be underscored
that all of them show negative gaps indicating the two banks have lots of work to do for
improving the quality of services provided and hence satisfy their customers and survive
in the very competitive market situation. The present findings corroborated a number of
previously reported evidences (Wondwesen, 2018; Simon, 2016; Gebremedhn, 2014;
Hawary et al. 2011; Munusamy et al., 2010).

4.2.2. Service Quality Gaps Analysis of each Studied Bank

This part summarizes the difference between mean score of customers ‘perceptions (P)
and customers ‘expectations (E) that is service quality gap (P-E) based on the five service
quality dimensions (Tangibility, Reliability, Responsiveness, Assurance and Empathy)
for each of the two sample banks (i. e., separately for CBE and AIB).

45
4.2.2.1 Gap Analysis of Commercial Bank of Ethiopia (CBE)

Table 10: The gaps between customers’ expectations and perceptions of CBE
(n=287)
Customers’ Customers’

Gap (P-
expectation Perceptions (P)
Service Quality N (E)

E)*
No Dimensions (SERVQUAL)
Mean SD Mean SD
1 Tangibility 287 4.64 .367 3.38 .555 -1.26
2 Reliability 287 4.65 .498 3.46 .734 -1.19
3 Responsiveness 287 4.64 .493 3.32 .681 -1.32
4 Assurance 287 4.59 .661 3.75 .550 -0.84
5 Empathy 287 4.59 .465 3.30 .692 -1.29
Overall mean score of all 4.62 0.497 3.44 0.64 -1.18
attributes
*E = Expectation, P = Perception, Source: Own survey, 2023

As shown above (Table 10) the highest service quality gap score was found in relation to
responsiveness (-1.32), while the lowest was recorded for assurance (-0.84). Considering
all of the above analysis for the five dimensions, we can conclude that customers’
perceptions fall short of their expectations (i. e., a negative mean gap score of -1.18;
Table 10). In other words, the level of service quality that the customers receive from
CBE is below their expectation, i.e., there is negative disconfirmation. Based on the
results, CBE has been perceived to be performing poorly.

46
4.2.2.1 Gap Analysis of Awash International Bank (AIB)

Table 11: The gaps between customers’ expectations and perceptions of AIB
(n=113)
Customers’ Customers’
expectation Perceptions (P)

Gap (P-
Service Quality N (E)
No Dimensions

E)*
(SERVQUAL)
Mean SD Mean SD
1 Tangibility 113 4.73 .30801 3.32 .38496 -1.41
2 Reliability 113 4.74 .47771 3.54 .75921 -1.20
3 Responsiveness 113 4.75 .36386 3.45 .68550 -1.30
4 Assurance 113 4.77 .47805 3.55 .46599 -1.22
5 Empathy 113 4.67 .44182 3.45 .63098 -1.22
Overall mean score of all 4.73 0.41389 3.46 0.58533 -1.27
attributes
*E = Expectation, P = Perception, Source: Own survey, 2023

The above table illustrates that the highest service quality gap on the tangibility
dimension score (-1.41) and the least gap on the reliability dimension score (-1.20).
Similarly, considering all of the above analysis for the five dimensions, we can also
conclude that customers’ expectations are not met (i. e., a negative mean gap score of -
1.27; Table 11).

Identifying any existing service quality gaps will help the banking sector to develop
necessary strategies to narrow and close them. Therefore, the above results revealed that
the banking service provided by both CBE and AIB does not match with the customers’
expectations in all service quality dimensions as the gap shows negative disconfirmation.
In view of this, the researcher suggests that generally working to improve these service
quality dimensions will contribute to customer satisfaction, however CBE should give
much attention with respect to providing training for employees engaged in front line in

47
order to improving the complaint handling skill of employees at the service centers (i.e.,
responsiveness). This will help to provide quick response to customers instead of
swelling each and every complaint to other parts of the company by employees at the
service center. On the other hand, this suggests that AIB should make the necessary
investments to improve its tangibility dimension such as, the appearance of the company’
s physical facilities, modern looking equipment, appearance of employees and materials
associated with the service. This is consistent with Kumar et al. (2010) who found that
customers’ expectations and perceptions of service quality don not meet both in
Conventional and Islamic Banks in different parts of Malaysia

4.2.3 Comparative Analysis of the Two Banks Service Quality Performance

(CBE and AIB)

This section briefly presents the gap scores for the expected and perceived level of
service quality for each bank by grouping all attributes into five service quality
dimensions, and for each of the service quality dimensions the average difference (gap)
between E and P (SQ = P - E) measures the service quality of each bank.

Table 12: Comparison of Service quality gap between CBE and AIB

“CBE” Service “AIB” Service Overall

SERVQUAL Quality Gap Quality Gap Service
Dimensions (P-E)* (P-E)* Quality Gap
(P-E)*
1 Tangibility -1.26 -1.41 -1.34
2 Reliability -1.19 -1.20 -1.20
3 Responsiveness -1.32 -1.30 -1.31
4 Assurance -0.84 -1.22 -1.03
5 Empathy -1.29 -1.22 -1.26
Average -1.18 -1.27 -1.23
*E = Expectation, P = Perception, Source: Own survey, 2023

As depicted in the above table (Table 12), the overall performance as perceived by
customers (P) was below their expectations (E) across all service quality dimensions for
both banks. It is worthwhile to note that the gap score for the target banks on the average
was (-1.23), which indicates that all customers generally rated the banks' performance
bellow their expectations, implying that there is a significant gap between customers’

48
perceptions and their expectations. Previous empirical findings also indicated that
perceived service quality falls short of customer expectations in all the five dimensions of
service quality (Qadrii, 2015; Yonatan, 2010; Tigineh et al. 2012). Even though the
largest and smallest gap scores reported by these studies are not similar with our current
results, the findings of the present study confirm the overall perceived service quality is
below customers’ expectations.

One of the objectives of this study was to compare whether there exists a difference in
customers’ perception of service quality provided by Commercial Bank of Ethiopia
(CBE) and Awash International Bank (AIB). Hence, the above table also presents a
comparative analysis of perception-expectation gap between the two banks based on
customers’ survey. Overall, a negative value for both banks indicate shortfall in service
quality. However, the mean gap score of AIB (-1.27; Table 11) is relatively higher than
the mean gap score of CBE (-1.18). As it can also be observed from the above table, AIB
has the highest gap for the dimension Tangibility (-1.41), indicating the customers are not
getting what they expect regarding this dimension at AIB. On the other hand,
responsiveness has relatively high gap score at CBE (-1.32), which shows that CBE is
less responsive to customers’ request compared to AIB.

CBE has also better ability to convey trust and confidence with its employee ‘s
knowledge and courtesy with a relatively lower mean gap score in assurance dimension (-
0.84) compared to AIB (-1.22). In contrast, CBE has a relatively higher negative mean
score gap for empathy dimension when compared to AIB (-1.29 vs -1.22), suggesting that
CBE lacks caring, and individualized attention for its customers. Overall, these findings
indicate that CBE is comparatively rated over lower gap mean score (-1.18) compared to
AIB (-1.27), which implies CBE is better in-service quality performance than AIB. This
is consistent with Gebremedhin (2017) who found different service quality performance
between public and private banks in Ethiopia. Yonatan (2010) also assessed customers’
perception of service quality in the banking sector in Ethiopia. The findings revealed that
customers’ expectations are not met in most banks, and among the five dimensions of
service quality tangible and responsiveness have higher gap scores at three private banks
(United, Oromia and Dashen banks).

49
Furthermore, Haq and Bakhtiar Muhammad (2012) conducted a study with the objective
of comparing customer satisfaction between private and public banks in Pakistan. In their
findings public bank customers were more satisfied with their bank because of their
multiple branches at convenient locations and technology (like check deposit machines,
utility bill accepting machines etc.) which were not even seen in public sector banks and
in terms of customer care.

4.3 Correlation Analysis between Service Quality Dimensions and

Customer Satisfaction
A correlation coefficient is a very useful means to summarize the relationship between
two variables (Field, 2005). A correlation analysis with Pearson´s correlation coefficient
(r) was conducted among all variables in this study to explore the relationships between
the variables. Values of Pearson ‘s correlation coefficient are always between -1 and +1.
The direction of the dependent variable's change depends on the sign of the coefficient. If
the coefficient is a positive number, then the dependent variable will move in the same
direction as the independent variable; if the coefficient is negative, then the dependent
variable will move in the opposite direction of the independent variable (Field, 2013). For
instances, a correlation coefficient of +1 indicates that two variables are perfectly related
in a positive sense; a correlation coefficient of -1 indicates that two variables are perfectly
related in a negative sense, and a correlation coefficient of 0 indicates that there is no
linear relationship between the two variables.

In this study, both the direction and degree of relationship between service quality
dimensions and customer satisfaction was assessed using Pearson’s correlation analysis,
and significance of correlation coefficients (r) were tested using two-tailed test of
statistical significance at 5% level of significance and 95% confidence interval. The table
below (Table 13) presents the results of the correlation analysis for all variables
considered in this study.

50
Table 13 Correlation matrix between the dependent and independent variables
considering both sample banks

Assurance
Reliability

Responsiv

satisfactio
Customer
Tangibilit

Empathy
eness

n
y
Tangibility 1.00
Reliability .57** 1.00
Responsivenes .57** .77** 1.00
s
Assurance .49** .60** .61** 1.00
Empathy .57** .70** .69** .61** 1.00
Customer .54** .67** .67** .56** .66** 1.00
satisfaction
** Correlation coefficient (r) is significant at α = 0.05. Source: Own survey result, 2023

Based on the output obtained from the SPSS, we can say that tangibility and customer
satisfaction (r = 0.54**, p < 0.05), reliability and customer satisfaction (r =0.67**, P <
0.05), responsiveness and customer satisfaction (r = 0.67**, P < 0.05), assurance and
customer satisfaction (r = 0.56**, p< 0.05), empathy and customer Satisfaction (r =
0.66**, P < 0.05) are positively correlated. From the results it can be noted that
reliability and responsiveness are highly correlated to customer satisfaction (0.67)
followed by empathy (0.66), assurance (0.56) and tangibility (0.54), respectively. Even
though the magnitude of correlations is not similar, overall, the results of correlation
analysis proved that there is a positive and strong significance relationship between all
service quality dimensions (tangibility, reliability, responsiveness, assurance and
empathy) and customer satisfaction. In accordance with the results of this study, previous
studies have also described that there is a significant and positive relationship between
the five dimensions of service quality and customer satisfaction (Shrestha, 2018; Tibebe
Zeleke, 2012; Endalkachew Abebe, 2013).

4.4 Multiple Linear Regression Analysis

51
Multiple linear regression analysis was employed to examine effects of service quality
dimensions (i. e., independent variables) on customer satisfaction (i. e., dependent
variable). It is a constructive statistical technique that can be used to analyze the
association between a single dependent and several independent variables (Hair et al.,
1998).

4.4.1 Testing the basic assumptions of multiple linear regression model

Before applying multiple linear regression analysis for testing the effects of service
quality dimensions on customer satisfaction; the following assumptions of regression
analysis (i.e., linearity, normality, multi-collinearity, and homoscedasticity) were tested
using appropriate test statistics to obtain unbiased and accurate estimates for the
parameters.

Assumption of Linearity Test

The first assumption of multiple linear regression analysis is that there is a linear
relationship between the dependent variable (which is customer satisfaction) and each of
the independent variables (Tangibility, Reliability, Responsiveness, Assurance, and
Empathy). This set of assumption can be examined simply by plotting scatterplots of the
relationship between each explanatory variable and the outcome variable (Taylor, 2020).
It is important to check that each scatterplot is exhibiting a linear relationship between
variables (perhaps adding a regression line to help you with this). Alternatively, you can
just check the scatterplot of the actual outcome variable against the predicted outcome.
The term residual considered is the difference between outliers and influential cases a bit
further. Looking at the scatterplots below (Figure 2), the graph indicates that the residuals
are normally distributed. Non-normal if points substantially deviate from the diagonal
line. As a result there is no linearity problem between these variables as depicted in the
figure below.

52
Figure 2: Regression Model Assumption of Linearity Test. Source: Own survey result,
2023

Assumption of Normality Test

In statistics, normality tests are used to determine if a data set is well-modeled by a

normal distribution and to compute how likely it is for a random variable underlying the
data set to be normally distributed (Stoltzfus, 2011). Multiple linear regression analysis
requires that the errors between observed and predicted values (i.e., the residuals of the
regression) should be normally distributed. This assumption can be checked by looking at
a bell-shaped histogram. So, for this study the dependent variable is normally distributed
for each value of the independent variables as depicted in the figure below (Figure 3).

53
Figure 3: Regression Model Assumption of Normality Test. Source: Own survey
result, 2023

Multicollinearity Test
Multicollinearity is a statistical problem which occurs when the explanatory variables
(independent variables) are much more correlated with each other (Hair et al., 1998). It
means when the strong correlation among predicators and the existence of r value greater
than 0.80, tolerance value below 0.10, and Variance Inflation Factor (VIF) greater than
10 in the correlation matrix (Field, 2013). Tolerance in this case defined as a statistical
tool which used to indicate the variability of the specified independent variables from
other independent variables in the model (Pallant, 2007).

Based on the collinearity test results shown in the table below (Table 14), the tolerance
and variance inflation factor (VIF) are greater than 0.1 and less than 10 respectively. This
suggests there is no multi-collinearity problem since the tolerance level, and VIF value
indicates that there are no multicollinearity problems in this study.

54
Table 14 Multicollinearity test of independent variables
Collinearity Statistics
Variables Tolerance VIF
Tangibility .590 1.696
Reliability .339 2.952
Responsiveness .341 2.928
Assurance .534 1.871
Empathy .405 2.468
Source: Own survey result, 2023

Assumption of Homoscedasticity Test

Homoscedasticity assumption elaborates that the variance of the residuals about the
predicted dependent variables scores should be the same for all predicted scores. Error
variance is assumed to be the same across all values of other variable. As it can be seen
from graph, the dots are scattered evenly, which could be the indication of a homogeneity
assumption (Mat Roni, 2014). It should also be checked that residuals do not vary
systematically with the predicted values by plotting the residuals against the values
predicted by the regression model

Figure 4: Homoscedasticity Assumption of Multiple Linear Regression Analysis.

Source: Own survey result, 2023

55
Look at the figure above (Figure 4), the data points appeared fairly randomly distributed
with a fairly even spread of residuals at all predicted values. Furthermore, in the above
figure the data points seem to funnel towards both the negative of the x-axis, and also
toward the positive of x-axis indicating that there is equal variability in the residuals at
higher predicted values and at lower predicted values. This suggests that our model is
equally accurate in estimating both lower values and higher values.

4.4.2 Multiple Linear Regression Analysis

The regression results explore the necessary indicators of customer satisfaction using the
variables included in the model (Hair et al., 1998). Based on the tables below the
appropriate statistics and indicators of the variables were explored.

Table 15: Model Summary

Adjusted R Std. Error of
Model R R Square Square the Estimate Durbin-Watson

1 .747a .559 .553 .40321 1.801

Predictors: (Constant), Empathy, Tangibility, Assurance, Responsiveness, Reliability

Dependent Variable: Customer satisfaction
Source: SPSS data output, 2023

As it can be seen from the above table (Table 15), the overall contribution of the
independent variables (tangibility, reliability, responsiveness, empathy and assurance) to
the dependent variable (customer satisfaction) accounted for 55.3% (Adjusted R 2=0.553)
of the total variation in customer satisfaction. In other word, that 55.3% of the variation
in customer satisfaction was explained by the service quality dimensions such as
tangibility, reliability, responsiveness, assurance, and empathy across both CBE and AIB
in Jimma town. The remaining 44.7 % of variation can be explained by other factors that
were not included in the model.

56
Table 16 ANOVA table ANOVAb
Sum of Mean
Model Squares df Square F Sig.
1 Regression 79.055 5 15.811 97.253 .000b
Residual 62.429 384 .163
Total 141.484 389
a. Dependent Variable: Customer Satisfaction
b. Predictors: (Constant), Empathy, Tangibles, Assurance, Responsiveness,
Reliability. Source: Own survey result, 2023

Based on the ANOVA table above (Table 16); the significance of the model was assessed
using the value of F-statistics (F = 97.253 and Sig. is .000). As it can be seen the
significance value is 0.000 which is less than 0.05 thus the model is statistically
significant which indicates that service quality dimensions have significant impact on
customer satisfaction of the selected banks. So, it becomes at the best fit of the model to
predict the customer service satisfaction at banks.

Overall Regression Results

Multiple regression analysis was employed to test the hypotheses. It is a useful technique
that can be used to analyze the relationship between a single dependent variable and
several independent variables (Hair et al., 1998). Multiple linear regression analysis was
used in this study to investigate the relationship between the five independent variables
(service quality dimensions) and the dependent variable (customer satisfaction). The
unstandardized version of the beta coefficients is used to determine the relative predictive
power of the independent variables. Garson (2008) pointed out that the unstandardized
beta coefficients are useful when the focus is on understanding the direct impact of an
independent variable on the dependent variable. Therefore, these regression coefficients
can be used to evaluate the strength of the relationship between the independent variables
and the dependent variable.

57
Table 17 Regression Analysis between Service Quality Dimensions and Customer
Satisfaction

Model Unstandardized Standardized t-value Sig.

Coefficients Coefficients

Beta Std. Error Beta

1 (Constant) .770 .151 5.106 .000
Tangibility .126 .049 .113 2.564 .011
Reliability .165 .046 .210 3.604 .003
Responsiveness .179 .048 .215 3.700 .000
Assurance .108 .050 .100 2.154 .023
Empathy .205 .046 .239 4.494 .000
a. Dependent Variable: Customer Satisfaction mean
Source: SPSS data output, 2023

The proposed research framework contains five service quality dimensions (tangibility,
reliability, responsiveness, empathy and assurance) and customer satisfaction. The results
show that the regression coefficient is positive (β = .770) and significant (p < 0.05; Table
17). Hence, the hypothesis that, there is a positive relationship between service quality
and customers’ satisfaction was supported. Thus, the independent variables (Tangibility,
Reliability, Responsiveness, Assurance, and Empathy) have positive effects in predicting
the dependent variable (customer satisfaction). Therefore, any increase in the independent
variables lead to increase in the dependent variable. The observations that service quality
has significant effect on customer satisfaction are in line with previous studies, such as
Simon (2016), Hawary et al. (2011) and Munusamy et al. (2010) who found that banking
service quality had a significant impact on customers’ satisfaction. Likewise, this result is
consistent with prior literatures (Shrestha, 2018; Tibebe, 2012; Mesay Sata, 2012;
Endalkachew, 2013). Furthermore, the effects of each of the five dimensions of service
quality on customers’ satisfaction of the selected branches of CBE and AIBA were
together tested and discussed in the following sub-sections.

58
4.4.2.1 The Effect of Service Tangibility on Customer Satisfaction

Table 17 shows a positive and significant (β = .126, p < 0.05) effect of tangibility on
customers’ satisfaction of the selected banks. This indicates that tangibility is a
significant determinant of customer satisfaction across both CBE and AIB. This finding
is supported by Kassa (2012), who found that tangibility has a positive effect on customer
satisfaction. This finding is also supported by other authors (Hawary et al., 2011;
Munusamy et al., 2010). In contrast, Malik et al. (2011) reported that tangibility has no
contribution to customer satisfaction

4.4.2.2 The Effect of Service Reliability on Customer Satisfaction

Table 17 shows a positive and significant (β = .210, p < 0.05) effect of reliability on
customers’ satisfaction. This indicates that reliability is a significant determinant of
customer satisfaction across both CBE and AIB. This result is also supported by Kassa
(2012), Hawary et al. (2011) and Malik et al. (2011). On the other hand, Munusamy et al.
(2010) reported that reliability has a negative effect on customer satisfaction. These
contradicting results could be due to differences in service provisions and banking
efficiencies between organizations.

4.4.2.3 The Effect of Service Responsiveness on Customer Satisfaction

Table 17 shows a positive and significant (β = .215, p < 0.05) effect of responsiveness on
customers’ satisfaction. This indicates that responsiveness is a significant determinant of
customer satisfaction across both CBE and AIB. This finding is consistent with the
results of Mohammad and Alhamadani (2011), who found that responsiveness, has a
positive and significant effect on customer satisfaction. In contrast, Kassa (2012) reported
that responsiveness has a negative and non-significant effect on customer satisfaction

4.4.2.4 The Effect of Service Assurance on Customer Satisfaction

Table 17 shows a positive and significant (β = .100, p < 0.05) effect of assurance on
customers’ satisfaction. This indicates that assurance is a significant determinant of
customer satisfaction across both CBE and AIB. This result is supported by Malik et al.
(2011), Hawary et al. (2011) and Kassa (2012). However, this finding is in contrary to the

59
result of Idowu and Fadiya (2015) who reported assurance has a negative and
insignificant effect on customer satisfaction.

4.4.2.5 The Effect of Service Empathy on Customer Satisfaction

Table 17 showed a positive and significant (β = .239, p < 0.05) effect of empathy on
customer satisfaction. This indicates that empathy is a significant determinant of
customer satisfaction across both CBE and AIB. Similarly, Simon (2016), and
Mohammad and Alhamadani (2011) reported that empathy has a positive and significant
effect on customer satisfaction. However, Munusamy et al. (2010) found that empathy
has a negative effect on customer satisfaction

Overall, from the findings of this study it can be concluded that all of the service quality
dimensions included in this study have positive and significant effects on customer
satisfaction. The findings of this research show that five dimensions of SERVQUAL are
positively related to the service quality perception of customers in CBE and AIB in
Jimma town. These results indicate that the banks’ customers view service quality as an
important antecedent of their satisfaction. The findings indicate that the customers
perceive the service quality as a basic service expectation and will not bear the extra cost
for this criterion. In this research, the positive connection between service quality and
customer satisfaction is also consistent with previous studies (e.g., González et al., 2007;
Gallarza-Granizo et al., 2020; Cai et al., 2021). Thus, service quality plays a key role in
satisfying customers. Moreover, the findings indicate that out of the five service quality
dimensions, three dimensions (empathy, responsiveness and reliability) have the
strongest positive effects on customers’ satisfactions of both banks

60
 CHAPTER FIVE

5. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

This chapter provides the summary of major findings, conclusions of the study and
recommendations. The other topic included here is suggestions for future research
directions.

5.1 Summary of the Major Findings

One of the objectives of this study was to assess customer perception and expectation and
identifying the gap score between perception and expectation in CBE and AIB using
modified SERVQUAL dimensions with 23 statements developed by Parasuraman et al
(1988). Based on the result obtained from the respondents of the banks, the highest
perception of service quality provided by CBE was recorded by assurance (3.75),
followed by reliability (3.46), tangibility (3.38), responsiveness (3.32) and empathy
(3.30) in descending order. In addition, based on the results obtained from the
respondents’ of AIB the highest perception of service quality provided by the bank was
recorded by assurance (3.55), followed by reliability (3.54), responsiveness (3.45),
empathy (3.45) and tangibility (3.32).

From the gap analysis, responsiveness has the highest gap score with a value of -1.32 for
CBE which shows CBE is less responsive for customers’ request compared to other
dimensions or this proved that they are not ready to help customers and deliver a prompt
service to their customers. In case of AIB, the tangibility dimension of the bank was
found to have the highest gap score (-1.41), while the tangibility gap score for CBE was
relatively lower (-1.26), suggesting that CBE has better position regarding the appearance
of physical facilities, equipment, personnel, and communication materials when
compared to AIB. In addition, CBE has a lower gap score with respect to assurance
dimension (-0.84) compared to the value (-1.22) obtained from AIB, which implies that
the knowledge and consideration of the CBE employees and their ability to inspire trust
and confidence among customers is better than that of AIB. Overall, comparing the two

61
banks based on their mean SERVQUAL gap score indicates, CBE is comparatively rated
lower mean gap score (-1.18) than AIB (-1.27).

The correlation results imply that reliability and responsiveness are highly correlated to
customer satisfaction, which is followed by empathy. Even though the degree of
relationship is not similar, the overall results of the correlation analysis proved that there
is a positive and significant relationship between all service quality dimensions
(tangibility, reliability, responsiveness, assurance and empathy) and with customer
satisfaction.

The multiple regression analysis results also revealed a positive and significant regression
coefficient, implying that the service quality dimensions considered here have significant
impact on customers’ satisfaction of the selected banks, altogether explaining 55% of the
total variation in customer satisfaction of the selected banks. Moreover, the findings
indicate that out of the five service quality dimensions, three dimensions (empathy,
responsiveness and reliability) have the strongest positive effects on customers’
satisfactions of both banks suggesting that these dimensions are the most important
factors affecting customer satisfaction, and hence deserve due attention for improving the
quality of services provided by the banks.

5.2. Conclusions
Based on the results of this study, the SERVQUAL gap scores for the studied banks are
negative and associated with high standard deviation for each dimension/ attribute, which
indicates that the negative scores for each dimension/attribute could potentially be even
higher. The results also revealed that customers’ perceptions were consistently lower than
their expectations and both banks are not able to meet customers’ expectations. This
indicates that customers were not satisfied with current level of service quality
performance of their banks. Hence, the researcher concludes that employees and
managers of the banks might lack interest or knowledge to serve customers, and hence
they should make great efforts to understand their customers’ specific needs.

From the results of the analysis, the level of customer perception in tangibility and
assurance dimensions, CBE has relatively delivered better service quality compared to

62
AIB. While the rest three dimensions of service quality received higher perception in
AIB. Therefore, we can conclude that there is a variation in service quality between
public and private banks in delivering their products and services to their customers.
However, with regard to the overall mean gap score, CBE has rather smaller gap and
better performance than AIB; thus it is an indication of relatively better customer
satisfaction towards the public bank. In both banks, the largest service quality gap
between customers’ expectation and perception were found in the responsiveness
dimension. That is, customers expect their bank employees to be competent, courteous,
and polite, to provide prompt service and to be always willing to help them.

Moreover, investigating the influence of each dimension of service quality on customers’

behavioral intentions should provide a better understanding of the drivers of customer
satisfaction and also help to specify measures, control and improve customer perceived
service quality. Hence, to gain competitive advantages in the fast-changing banking
industry in Ethiopia, it is crucial for both banks to understand in-depth what customers
perceive to be the key dimensions of service quality and what impacts the identified
dimensions have on customers’ intentions? In this study, among the service quality
dimensions responsiveness and empathy have the strongest effect, and hence considered
the most important dimensions at the two banks in determining a quality banking service
and its impact on customer satisfaction.

5.3 Recommendations
With the recent establishment of several new banks in Ethiopia, the banking industry in
the country is undergoing dynamic expansion. It is imperative for banks to continuously
monitor their level of service delivery, changing customer profiles and the drivers of
satisfaction in order to retain their current customers and also to attract new ones.
Because, delivering high quality services that met customers’ expectations is vital for
banks to compete efficiently and effectively with their competitors. Based on the analysis
of the findings of this study, the following recommendations are proposed to improve
service quality at the two banks:

63
Recommendation for the two banks in common: The SERVQUAL gap scores for both
banks show a negative gap in all dimensions implying that the customers’ perceptions fall
short of their expectations; In order to close these gaps, the staff and management of the
banks should consider the following points:

Hiring qualified staff is vital in order to deliver quality service. For this reason, the
banks should consider not only the technical qualification of the applicants but also their
personality and attitude in interacting with customers i.e., hire self-motivated,
enthusiastic employees who will like to deal with customer and will try to solve customer
complaints and other issues in an efficient and effective manner

Training is considered to be essential for improving quality. Therefore, the banks should
develop training programs to improve the Staff ‘s skill, friendliness and courtesy.

Banks should strive to acquire latest technological capacity that will enable them to
provide a wide array of banking services promptly and efficiently to their customers, such
as installing ATMs, and POS-machine at various accessible locations.

Empowerment of front-line staff should be fundamental for achieving and improving

the level of service quality. Therefore, the banks should empower front-line workers to
address customer concerns and motivate them based on their performance.

Management commitment to quality improvement is crucial since management is

primary driver for quality improvement initiatives.

Improved communication flow would enable staff to deliver what customers expect
more promptly and to provide information to management about customers’ expectations
so that necessary changes would be made frequently.

Regular research should also be conducted to find out customer expectations about
various service aspects. As customer expectation and satisfaction are not static figures,
regular research at sufficient intervals should be conducted.

Specific Recommendations for CBE

Based on the survey result, CBE should work to improve responsiveness. The willingness
to help customers and to provide prompt service should be improved by giving

64
continuous training to staff with relation to responsiveness dimension. The bank should
minimize the gap in this area by improving responsiveness to customer requests,
questions, complaints and problems and by recruiting qualified staff.

The bank should work hard on relationship and marketing to improve the customer
service skill of employees including, caring for the customers and giving individualized
attention to customers. Providing proper training in this area is also critical as well.
Specific Recommendations for AIB

AIB should make the necessary investments to improve its tangibles such as, the
appearance of the company’s physical facilities and updating its equipment. The bank
should also locate its branches at sites that are convenient to customers.

Furthermore, to improve the responsiveness dimension of AIB ‘s service quality and to

narrow the gap between perceptions and expectations, a training initiative should also be
undertaken focusing on fast response from employees to customers' requests, fast redress
of complaints, prompt service from the employees, and willingness of the employees to
help customers.

5.4. Suggestions for Future Research Directions

The researcher encourages further researches to extend the results of this study and
improve the results by minimizing the limitation of the current study. Therefore, the
researcher suggests the following future research areas:

 Even though there are basically five different service quality gaps according to
Parasuraman et al. (1985), this study focuses only on gap five, So the researcher
recommends for future researchers to considering the remaining service quality gaps.

 The study employed cross sectional survey method which collected the relevant data
at a point in time. Hence, the results may differ if conducted in time-series link across
variables. Thus, further researches should be conducted employing time-series
method.

 The scope of the present study was also geographically limited to Jimma town; thus,
further studies should expand this scope by incorporating several of the branches in

65
the public and private banks to make generalizations applicable to the country as a
whole. The current study also relied primarily on a questionnaire to gather relevant
information. This instrument is not bias-free; and hence future studies can use other
methods to fully explain the phenomenon under review.

66
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 APPENDIX

APPENDIX_I

Questionnaire

JIMMA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT
Dear respondents

My name is Yitbarek Tekuamand I am conducting a study on Service Quality and

Customers’ Satisfaction: A Comparative Study Between Public and Private Banks: The
Case of Commercial Bank of Ethiopia and Awash International Bank in Jimma
Townfor the partial fulfillment of MSc degree in business administration in Jimma
University, college of business and economics department of management. I would like to
extend my deep appreciation to your willingness and cooperation in undertaking this valuable
research. Taking part in this study you will contribute towards alleviating the problem of the
banking industry in Ethiopia. I kindly request your cooperation to fill and respond truthfully
for the asked Questions. Finally, I would like to appreciate and thank you in advance for your
dedication, time and genuine response to the questions.

Note:

1. No need of writing your name ( ምስምዎን መግለፅ አያስፈልግም).

2. Please circle a latter for an alternative you think is right (እባክዎ ትክክል ነዉ
የሚሉትን መልስ ብቻ ያክብቡ)

Part I: General information ( ጠቅላላ መረጃ)

1.1. Gender (ፆታ)

71
A. Male (ወንድ) B. Female (ሴት)

1.2 Age group ( የእድሜ ክልል)

A. Below 18 (ከአስራ ስምነት አመት በታች) D. 40-50 ( ከአርባ እስከ ሃምሳ)

B. 18-29 (ከአስራ ስምት እስከ ሃያ ዘኝ) E. Above 50 years ( ከሃምሳ አመት በላይ)

C. 30-39 (ከሰላሳ እስከ ሰላሳ ዘጠኝ)

1.3 Educational Qualification (የትምህርት ደረጃ)

A.1-8 (ከ 1 ኛ እስከ 8 ኛ) D. Diploma (ዲፕሎማ)

B. 9-12(ከ 9 ኛ እስከ 12 ኛ) E. First degree and above (የመጀመሪያ ዲግሪ እና

ከዚያ በላ)

C. Certificate (ሰርተፊኬት) F. Other(ሌላ)(Specify)

1.4. Length of years as a customer of your bank. (በባንኩ በደንበኝነት የቆበት የጊዜ
መጠን)

A. Less than 1 year (ከ አንድ አመት በታች) D. 8-11 years (ከ ስምንት እስከ አስራ
አንድ አመት)
B. 1-3 years (ከ አንድ እስከ ሶስት አመት) E. More than 11 years (ከ አስራ
አንድ አመት በላይ)

C. 4-7 years (ከ አራት እስከ ሰባት አመት)

1.5. How Sequent do you use the bank’s serve ice? (በአማካየይ የባንኩን በምን ያህል
ጊዜ ይጠቀማሉ)

A. Once per week (በሳምንት አንድ ጊዜ) D. Twice per month

(በወር ሁለት ጊዜ)

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 B. More than once per week (በሳምንት ከአንድ ጊዜ በላ) E. Once per year
(በአመት አንድ ጊዜ)

C. Once per Month (በወር አንድ ጊዜ)

Part II: Service Quality (PER EQUAL) Questionere (የአገልግሎት ጥራት

መጠይቅ)

Instructions: Dear respondents. The following set of statements relate to your

expectations & perception about bank services. For each statement Please circle
one number that you feel most appropriate feature. using the five point Likert
scale represented by number from 1 to 5 (Where Strongly disagree=1.
Disagree=2. neutral=3. Agree=4. and Strongly agree=5) for each of the
following expectation & perception score columns.

There is no right or wrong answers. All I am interested in is a number that best

shows your expectations &perceptions regarding the banks’ service quality.

(ዉድ ተሳታፊዎች የሚከተሉት ነጥቦች እርሶ ከባንክ የሚጠብቁትን እና ያገኙትን የአገልግሎት

አይነት የጥራት ደረጃ የሚጠይቁ ናቸዉ፡፡ እባኮትን ለእያያንዳንዱ ነጥብ የሚሹትን እና
የተጠቀሙትን የአገልግሎት አይነት የጥራት ደረጃን በተመለከተ የእርሶን የእርሶን ትክክለኛ ምላሽ
በመምረጥ አንዱን ቁጥር ያክብቡ ፡፡ ይኃም ፣ በጭራሽ አልሽማማም=1 ፣ አልሽማማም=2፣
ምንም ማለት አልችልም =3፣ እስማማለሁ=4 እና በጣም እስማማለሁ=5፡፡)

E= Expectation P= Perception

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Service Quality Dimensions

( በጭራሽ አልስማማም )

Disagree ( አልስማማም )
(የአገልግሎትጥአቅጣጫዎ)
Statement for customers’ expectation & perception regarding the service of the bank.

Strongly Disagree

Neutral( ምንም ማለት

( በጣም እስማማለው )
( የባንክ አገልግሎትን በተመለከተ ደንበኞች የሚጠብቁት እና ያገኙት የአገልግሎት ዓይነት/ደረጃ)

Agree (እስማማለው)
Strongly Agree
S.N ( ተ.ቁ )

አልችልም )
Expectation Score (ከጥሩ ባንክ የሚጠብቁት የአገልግሎት አይነት /ደረጃ
E1 An excellent bank should maintain modern equipment/Technology/ (E-Banking, ATM Service, Internet 1 2 3 4 5
Banking, Mobile Banking, POS Machine, etc.( ጥሩ ባንክ ዘመናዊ የሆኑ የመገልገያ ቁሳቁሶች (ኤሌክትሮኒክስ፣
ኤቲኤም፣ኢንተርኔት፣ሞባይል ባንኪንግ፣ ፖስማሽን፣ ወዘተ)
E2 The physical facilities at excellent banks should be visually appealing/ attractive/, 1 2 3 4 5
Convenient waiting in the line conditions like sitting, parking, television, newspapers, etc .( የጥሩ ባንክ
መገልገያ ዕቃዎች (ቴሌቪዥን፣ጋዜጣ፣መቀመጫ፣መኪና ማቆሚያ፣ወዘተ) ምቹና እይታን የሚስቡ መሆን አለባቸው)
E3 Employees of excellent bank should be well dressed and neat-appearing (የጥሩ ባንክ ሰራተኞች ስርአቱን የጠበቀና 1 2 3 4 5
ንጹህ የሆነ አለባበስ መከተል አለባቸው)
E4 1 2 3 4 5
(ተጠባጭነትን በተመለከተ)

Materials associated with the service(such as pamphlets, statements, different formats & etc.( ጥሩ በሆነ ባንክ
ውስጥ ከአገልግሎት ጋር የሚያዙ እቃዎች ወይም ሰነዶች(በራሪ ወረቀቶች፣ስቴትመንቶችና የተለያዩ ፎርማቶች) ምቹና
ለአይን ማራኪ መሆን ይኖርበታል)
Tangibles

E5 Excellent bank should be at convenient location to its customers. (ጥሩ የሆነ ባንክ ለደንበኞቹ አገልግሎት ምቹ በሆነ 1 2 3 4 5
ቦታ ላይ ቅርንጫፍ ሊኖረው ይገባል)
Perception /Actual/Score ( በደንበኝነቶ ያገኙት የአገልግሎት ዓይነት/ደረጃ)
P1 The bank has all the necessarily modern equipment/ Technology/ (E-Banking, ATM Service, Internet banking, 1 2 3 4 5
Mobile banking, POS Machine, etc. ( ባንኩ ዘመናዊ የሆኑ የመገልገያ
ቁሳቁሶች(ኤሎክትሮኒክስ፣ኤቲኤም፣ኢንተርኔት፣ሞባይል ባንኪንግ፣ ፖስማሽን፣ ወዘተ አማልታል)
P2 The banks physical facilities are visually appealing/attractive/, convenient waiting in the line conditions like
sitting, parking, television, newspapers, etc. ( የባንኩ የመገልገያ እቃዎች(ቴሌቪዥን፣ ጋዜጣ፣መቀመጫ፣ መኪና
ማቆሚያ፣ ወዘተ) ምቹና እይታን የሚስቡ ናቸው)

P3 Employees of the bank are well dressed and neat-appearing. (የባንኩ ሰራተኞች ስርአቱን የጠበቀ እና ንፁህ የሆነ 1 2 3 4 5
አለባበስ የተከተሉ ናቸው)

74
 ( በጭራሽ አልስማማም )

Disagree ( አልስማማም )
Quality Dimensions
(የአገልግሎት Service
ጥራት አቅጣጫዎች)

Strongly Disagree

Neutral( ምንም ማለት

Statement for customers’ expectation & perception regarding the service of the

( በጣም እስማማለው )
Agree (እስማማለው)
bank.
(የባንክ አገልግሎትን በተመለከተ ደንበኞች የሚጠብቁት እና ያገኙት የአገልግሎት

Strongly Agree
ዓይነት/ደረጃ)

S.N. ( ተ.ቁ )

አልችልም )
P4 Materials associated with the service (such as pamphlets, statements, different 1 2 3 4 5
formats & etc.) are visually appealing & clear at the bank) ( በባንኩ ውስጥ ከአገልግሎት
ጋር የሚያያዙ እቃዎች ወይም ሰነዶች (በራሪ ወረቀቶች፣ ስቴትመንቶችን የተለያዩ
ፎርማቶች) ምቹና ለአይን ማራኪ ናቸው )
P5 The location of the bank is convenient to you ( የባንኩ አገልገሎት መስጫ ቅርንጫፍ 1 2 3 4 5
ለእርስዎ ምቹ በሆነ ቦታ ላይ ይገኛል )
Expectation Score ( ከጥሩ ባንክ የሚጠብቁት የአገልግሎት ዓይነት/ደረጃ

E6 When an excellent bank promises to do something by a certain time, it should do so. ( 1 2 3 4 5

ጥሩ ባንክ በተወሰነ ጊዜ ውስጥ ለመፈጸም ቃል የገባውን ነገር ቃል በገባው ጊዜ ውስጥ
Reliability ( አስተማማኝነትን

መፈጸም አለበት)
E7 When customers have a problem, an excellent bank should show a sincere interest in 1 2 3 4 5
solving it. (ጥሩ ባንክ ደንበኞቹ ችግር በሚገጥማቸው ጊዜ ችግራቸውን በሙሉ ፍላጎት እና
በተመለከተ )

ተነሳሽነት ለመፍታት በቅንነት ማሳየት አለበት)

E8 Excellent banks should perform the service right the first time. (ጥሩ ባንክ አገልግሎቱን 1 2 3 4 5
ከመጀመሪያ ጀምሮ በትክክልና በተገቢው ሰአት መተግበር ይኖርበታል)

E9 An excellent bank should deliver all the services within the promised time. ( ጥሩ ባንክ 1 2 3 4 5
ሁሉንም አገልግሎቶች ቃል በገባበት ጊዜ ውስጥ መፈጸም አለበት)

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E10 Excellent banks should insist on error-free (accurate) records. ( ጥሩ ባንክ ከስህተት 1 2 3 4 5
የጸዳ ሪከርድ ላይ የተመሰረተ አገልግሎት መስጠት ይጠበቅበታል)

Perception/Actual/Score (በደንበኝነቶ ያገኙት የአገልግሎት ዓይነት/ደረጃ)

P6 When the bank promises to do something by a certain time, it does so. (ባንኩ በተወሰነ 1 2 3 4 5
ጊዜ ውስጥ ለመፈጸም ቃል የገባውን ነገር ቃል በገባው ጊዜ ውስጥ ይፈጽማል)

P7 When you have a problem the bank shows a sincere interest in solving it. (ችግርዎን 1 2 3 4 5
ለመፍታት ያለውን ሙሉ ፍላጎትና ተነሳሽነት በቅንነት ያሳያል)
P8 The bank performs the service right the first time. (ባንኩ አገልግሎቱን ከመጀመሪያ 1 2 3 4 5
ጀምሮ በትክክልና በተገቢው ሰዓት ይተገብራል)
P9 The bank delivers all the services within the promised time. ( ባንኩ ሁሉንም 1 2 3 4 5
አገልግሎቶች ቃል በገባበት ጊዜ ውስጥ ይፈጽማል)
P10 The bank insists on error-free (accurate) records. ( ባንኩ ከስህተት የጸዳ ሪከርድ ላይ 1 2 3 4 5
የተመሰረተ አገልግሎት ይሰጣል)

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 Statements for customer’s expectation & perception regarding the

(ምንም ማለት አልችልም)

service of the bank.

Disagree (አልስማማም)
Service quality

በጭራሽ አልስማማም

Agree (እስማማለሁ)
Strong disagree

በጧም እስማማለሁ
የባንክ አገልግሎትን በተመለከተ ደንበኞች የሚጠብቁት እና ያገኙት አገልግሎት

Strongly agree
dimension

S.no. ተ.ቁ
ዓይነት/ደረጃ

Neutral
Expectetion score ( ከጥሩ ባንክ የሚጠብቁት የአገልግሎት ዓየነት /ደረጃ
E11 Employees of excellent banks should tell customers exactly when service 2 3 4 5
will be performed 1
( ጥሩ ባንክ ሰራተኞች አገልግሎት ሚሰጥበትን ትክክለኛ እና ምቹ ሰዓት ለደንበኞቻቸዉ
መግለፅ አለባቸዉ)
E12 Employees of excellent banks should provide prompt service to 1 2 3 4 5
customers.
( ጥሩ የባንክ ሰራተኞች ለደንበኞቻቸዉ የተቀላጠፈ አገልግሎት መስጠት አለባቸዉ
E13 Employees of excellent banks should always be willing to help customers. 1 2 3 4 5
( ጥሩ የባንክ ሰራተኞች ደንበኞቻቸዉን ለመርዳት ሁሌም ፍቃደኞች መሆን
አለባቸዉ)
ፈጣን ምላሽን መሰስጠትን በተመለከተ

E14 Employees of excellent banks should never be too busy corresponded to 1 2 3 4 5

customer requests.
( ጥሩ የባንክ ሰራተኞች የደንበኞቸቸዉን ጥያቄ ለማስተናገድ ጊዜ ሊያጡ አይገባም)
Responsiveness

Perseption /Actual/score (በደንበኝነቶ ያገኙት የአገልግሎት አይነት)

P11 Employees of the bank tell you exactly when services will be performed 1 2 3 4 5
( የባንክ ሰራተኞች አገልግሎት የሚሰጥበትን ትክክለኛ እና ምቹ ሰዓት ለእርሶ ይገልፃሉ)
P12 Employees of the bank provide your prompt(timely) service. 1 2 3 4 5
(የባንኩ ሰራተኞች ለርሶ የተቀላጠፈ አገልግሎት ይሰጥዎታል)
P13 Employees of the bank are always willing to help you 1 2 3 4 5
( የባንኩ ሰራተኞች ሁሌም እርሶን ለመርዳት ፍቃደኞች ናቸዉ)
P14 Employees of the bank never too busy to respond to your question 1 2 3 4 5
( የባንኩ ሰራተኞች የርሶን ጥያቄ ለማስተናገድ ፍቃደኞች ናቸዉ)
Expectetion score (ከጥሩ ባንክ የሚጠብቁት የአገልግሎት አይነት / ደረጃ

77
 E15 The behavior of employees of an excellent bank should instill (create) 13 2 3 4 5
sense of confidence in customers.
( የጥሩ ባንክ ሰራተኞች ባህሪ በደንበኞች ዘንድ መተማመንን መፍጠር አለበት)
E16 Customers of extent bank should feel safe in their transactions 1 2 3 4 5
( የጥሩ ባንክ ደንበኞች ከባንኩ በሚያገኙት አገልግሎት የመተማመነን ስሜት
ሊሰማቸዉ ይገባል)
እርግጠኝነትን በተመለከተ
E17 Employees of extent bank should be consistently Courtois (polite) with 1 2 3 4 5
customers.
(የጥሩ ባነክ ሰራተኞች ሁሌም ለደንበኞቻቸዉ ትሁት መሆን አለባቸዉ)
Assurance

E18 Employees of an excellent bank should have adequate knowledge to 1 2 3 4 5

answer customers question.
( የጥሩ ባንክ ሰራተኞች የደንበኞች ጥያቄ ለመመለስ በቂ ዕዉቀት ሊኖራቸዉ ይገባል)

Strongly Disagree ( በጭራሽ

(የአገልግሎት አቅጣጫዎች)

Disagree ( አልስማማም )
Statement for customers’ expectation & perception regarding the service of

Neutral( ምንም ማለት

( በጣም እስማማለው )
the bank.

Agree(እስማማለው)
Service Quality

( የባንክ አገልግሎትን በተመለከተ ደንበኞች የሚጠብቁት እና ያገኙት የአገልግሎት

Strongly Agree
አልስማማም )
ዓይነት/ደረጃ)
Dimension

S.N. ( ተ.ቁ )

አልችልም )
Perception/Actual/Score ( በደንበኝነቶ ያገኙት የአገልግሎት ዓይነት/ደረጃ)
P1 The Behavior of employees of the bank instills (creats) confidence in you. ( 1 2 3 4 5
5 የባንኩ ሰራተኞች ባህሪይ በእርስዎ ዘንድ መተማመንን ፈጥራል)
P1 You feel safe in your transactions with the bank ( ከባንኩ በሚያገኙት አገልግሎት ላይ 1 2 3 4 5
6 የመተማመን ስሜት ይሰማዎታል)
P1 Employees of the bank consistently courteous(polite) with you ( የባንኩ 1 2 3 4 5
7 ሰራተኞች ሁሌም ለእርስዎ ትሁት ናቸው)
P1 Employees of the bank have adequate knowledge to answer your questions. ( 1 2 3 4 5
8 የባንኩ ሰራተኞች ጥያቄዎን መመለስ የሚያስችል በቂ እውቀት አላቸው)
Expectation Score ( ከጥሩ ባንክ የሚጠብቁት የአገልግሎት አይነት/ደረጃ)

78
 E1 Excellent banks should give customers individual attention. ( ጥሩ የሚባሉ 1 2 3 4 5
9
ባንኮች ለእያንዳንዱ ደንበኛ ትኩረት መስጠት አለባቸው)
E2 An excellent bank will have operating hours convenient to all their 1 2 3 4 5
0 customers. ( ጥሩ ባንክ ለሁሉም ደንበኞች ምቹ የሆነ የስራ ሰአት ሊኖረው ይገባል)

Emphathy ( ተቆርቃሪነትን በተመለከተ)

E2 An excellent bank will have employees who give customers personal 1 2 3 4 5
1 attention. ( የጥሩ ባንክ ሰራተኞች ለእያንዳንዱ ደንበኛ ትኩረት መስጠት አለባቸው)
E2 Excellent banks should have their customer’s best interest at heart. ( ጥሩ 1 2 3 4 5
2
የሚባሉ ባንኮች የደንበኞቻቸውን ልዩ ፍላጎት ከልብ መረዳት አለባቸው)
E2 Employees of excellent banks should understand the specific needs of their 1 2 3 4 5
3 customers. ( የጥሩ ባንክ ሰራተኞች የደንበኞቻቸውን ልዩ ፍላጎት መረዳት ይኖርባቸዋል)
Perception/Actual/Score ( በደንበኝነቶ ያገኙት የአገልግሎት ዓይነት/ደረጃ)
P1 The bank gives you individual attention. ( ባንኩ ለእያንዳንዱ ደንበኛ ትኩረት ይሰጣል) 1 2 3 4 5
9
P2 The bank has operating hours convenient to you. ( የባንኩ የስራ ሰዓት ለእርስዎ ምቹ 1 2 3 4 5
0 የሆነ ነው)
P2 The bank has employees who give your personal attention. ( የባንኩ ሰራተኞች 1 2 3 4 5
1 ለእያንዳንዱ ደንበኛ ትኩረት ይሰጣሉ)
P2 The bank has your best interest at heart. ( ባንኩ የእርስዎን ልዩ ፍላጎት ከልቡ ይረዳል) 1 2 3 4 5
2
P2 Employees of the bank can understand your specific needs. ( የባንኩ ሰራተኞች 1 2 3 4 5
3 የእርስዎን ልዩ ፍላጎት ይረዳሉ)

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 The following statement describes your feeling about respective bank services. Please
circle a number which best reflects your own level of satisfaction (እባክዎን አእንደ
ደንበኝነቶ ከባንኩ ያገኙትን አገልግሎት በተመለከተ የእርሶን ትክክለኛ የእርካታ ደረጃ የሚገልፀን
ቁጥር ያክብቡ

Moderat (መካከለኛ)
Customer satisfaction

Very high (በጣም

Very low (በጣም
የደንበኛ እርካታ

Low ( ዝቅተኛ)

High (ከፍተኛ)
S.NO ተ.ቁ

ዝቅተኛ )

ከፍተኛ)
1 Your level of satisfaction with the security of the bank services. 1 2 3 4 5
(በባንኩ ዋስትና ያለዉን አገልግሎት በተመለከተ የእርካታዎ ደረጃ ምን ያህል ነዉ)
You level of satisfaction with respectful behavior of the bank staff. 1 2 3 4 5
2 (በባንኩ ሰራተኞች ትሁት ባህሪን በተመለከተ የእርካታዎ ደረጃ ምን ያህል ነዉ)
Your level of satisfaction with the communicative ability of the employees of the bank. ( 1 2 3 4 5
3 በባንኩ ሰራተኞች የተግባቦት ደረጃን በተመለከተ የእርካታዎ ደረጃ ምን ያህል ነዉ)
Your level of satisfaction with the performance of the bank staff. 1 2 3 4 5
4 (በባንኩ ሰራተኞች አገልግሎት የመስጠት ብቃትን በተመለከተ የእርካታዎ ደረጃ ምን ያህል ነዉ)

Your level of satisfaction with various range of the service of the bank. 1 2 3 4 5
5 (የባንኩን ዘርፈ ብዙ አገልግሎቶች በተመለከተ የእርካታዎ ደረጃ ምን ያህል ነዉ)

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