WOLKITE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

ASSESSMENT OF SERVICE QUALITY ON CUSTOMER SATISFACTION

(A CASE OF COMMERCIAL BANK OF ETHIOPIA IN GUBRYE
BRANCH)

A RESEARCH PAPER SUBMITTED TO DEPARTMENT OF

MANAGEMENT FOR PARTIAL FULFILLMENT OF BA DEGREE IN
MANAGEMENT

BY: ADDISU KEREBH

ID: 0096/12
ADVISOR: FUAD HUSSEN (MBA)

APRIL, 2023
WOLKITE, ETHIOPIA
 APPROVAL SHEET

This is to certify that the thesis entitled “The effect of service equality on Customer
Satisfaction in the case of commercial bank of Ethiopia Gubrye Branch submitted in
partial fulfillment of bachelor of art degree in management and has been carried out By
Add i s u Kerebh under our supervision. Therefore, we recommend that the student has
fulfilled the requirements and hence hereby can submit the thesis to department of
management.

Advisor : Fuad Hussen (MBA) ________________ ________________

Signature Date

Examiners name

1. ____________________Signature__________________Date______________

2.______________________Signature_________________Date______________

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 Acknowledgments

Most of all I Thank the Almighty God for everything He has done for me. Then, the generous
Cooperation of many people has contributed for the success and completion of this thesis. My
special gratitude goes to my major advisor Mr Fuad. whose work principle is worth modeling
for making invaluable comments and suggestions at each stage of writing this graduation thesis.
I would also like to express my appreciations to my beloved family, Dad and Mom for their
patience, love and encouragement.I am very grateful especially to Lema, Endeshaw and all
friend’s, the right minded persons I have ever met, for their cooperation and invaluable
support during data collection and the research process. Finally I would like to extend my
thanks to the CBE Gubrye Branch manager and members for availing the necessary
information which were indispensable for the study.

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 ABSTRACT

This research has focused on to assess the effect of service equality on Customer Satisfaction in
commercial bank of Ethiopia, Gubrye branch. The study examined six factors (Reliability, Assurance,
Responsiveness, Tangibles, Empathy and Trust) influencing customer satisfaction. The general
objective of the study was to assess service quality on customer satisfaction in case of
commercial bank of Ethiopia Gubrye branch. The researcher used SERVQUAL models to see effects
of service quality on customer satisfaction in the study area. The study employed descriptive research
designs to attain its objectives. To collect necessary data, structured questionnaire and interviews was
used. The researcher used Yamane formula developed in 1967 to select sample respondents from total
population. The target population of the study is 18000 and the sample size is 100 customers.
Data requirement will be collected through collection of both primary and secondary source of
data. The research result concluded that there exists significant positive relationship between reliability,
assurance, responsiveness, empathy and tangibles and negative relationship between Trusts. Even the
study shown the positive and significance relationship between these variables, the banking industries
especially commercial bank of Ethiopia, Gubrye Branch should have to work to increase the
environments related with these variables. The bankers must give more focus on Trust variable than
another variables since the customers were not fulfilled because of trust attention is not enough in the
study area.

Key words: Service quality, customer satisfaction, Responsiveness, Reliability, Assurance,

Tangibles, Trust, Empathy.

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 Table contents
Contents page

APPROVAL SHEET ................................................................................................................................... i

Acknowledgments ...................................................................................................................................... ii
ABSTRACT ................................................................................................................................................ iii
Table contents............................................................................................................................................. iv
Abbreviation and Acronym..................................................................................................................... viii
CHAPTER ONE ......................................................................................................................................... 1
1. INTRODUCTION.................................................................................................................................. 1
1.1 Background of the study .................................................................................................................. 1
1.2 Statement of the problem ................................................................................................................. 2
1.3 Research question ............................................................................................................................. 3
1.4 Objective of the study ....................................................................................................................... 3
1.4.1 General objective........................................................................................................................ 3
1.5 Significance of the Study .................................................................................................................. 4
1.6 Scope of the study.............................................................................................................................. 4
1.7 Limitation of the study ..................................................................................................................... 4
1.8 Organization of the study ................................................................................................................. 5
CHAPTER TWO ........................................................................................................................................ 6
2. LITERATURE REVIEW ...................................................................................................................... 6
2.1Theoretical Definitions of Service ..................................................................................................... 6
2.2 Service Quality .................................................................................................................................. 6
2.3 Characteristics of Services ............................................................................................................... 7
2.3.1 Intangibility of services .............................................................................................................. 7
2.3.2 Inseparability of services ........................................................................................................... 8
2.3.3 Heterogeneity of Service ............................................................................................................ 8
2.3.4 Perish ability of Services............................................................................................................ 8
2.4 Service Quality Dimensions ............................................................................................................. 8
2.4.1 Tangibles ..................................................................................................................................... 9
2.4.2 Reliability .................................................................................................................................... 9
2.4.3 Assurance .................................................................................................................................... 9
2.4.4 Empathy ...................................................................................................................................... 9
2.4.5 Trust ............................................................................................................................................ 9

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 2.4.6 Responsiveness ......................................................................................................................... 10
2.5 Customer Satisfaction ..................................................................................................................... 10
2.5.1customer satisfaction in banking service context ................................................................... 11
2.6 Empirical framework ..................................................................................................................... 12
2.7 Conceptual framework ................................................................................................................... 13
CHAPTER THREE .................................................................................................................................. 16
3. RESEARCH METHODOLOGY ........................................................................................................ 16
3.1 Research Design .............................................................................................................................. 16
3.2 Sources of Data................................................................................................................................ 16
3.3 Target population............................................................................................................................ 16
3.4 Sample Size Determination ............................................................................................................ 16
3.5 Sampling Techniques ...................................................................................................................... 17
3.6 Methods of Data Collection ............................................................................................................ 17
3.7 Methods of Data Analysis and Presentation ................................................................................. 17
CHAPTER FOUR ..................................................................................................................................... 18
4. DATA ANALYSIS AND INTERPRETATION ................................................................................. 18
4.1. INTRODUCTION.......................................................................................................................... 18
4.2 Background Information from Respondents ............................................................................... 18
4.3. Descriptive Statistical Analysis ..................................................................................................... 20
4.3.1. Analysis of reliability variable ............................................................................................... 20
4.3.2 Analysis of assurance variable ............................................................................................. 22
4.3.3. Analysis of responsiveness variable .................................................................................... 23
4.3.4. Analysis of empathy variable .............................................................................................. 25
4.3.5. Tangibles ................................................................................................................................. 26
4.3.6. Analysis of tr u st variable..................................................................................................... 27
4.3.7. Analysis of custo mer satisfaction ........................................................................................ 29
CHAPTER FIVE ...................................................................................................................................... 32
5. SUMMARY, CONCLUSSIONS AND RECOMMENDATIONS ................................................ 32
5.1 Summary of finding ............................................................................................................................ 32
5.2 conclusions ....................................................................................................................................... 33
5.3 Recommendations ........................................................................................................................... 33
REFERENCES .......................................................................................................................................... 35
APPENDIX ................................................................................................................................................ 37

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List of Table

Table 4.1: Demographic profile for Customers .......................................................................................... 19

Table 4.2: Reliability variable analysis ....................................................................................................... 20
Table 4.3: Analysis of assurance variable ................................................................................................... 22
Table 4.4: Analysis of responsiveness variable .......................................................................................... 23
Table 4.5: Analysis of empathy variable .................................................................................................... 25
Table 4.6: Analysis of Tangibles variable .................................................................................................. 26
Table 4.7: Analysis of Trust variable .......................................................................................................... 27
Table 4.8: Analysis of customer satisfaction .............................................................................................. 29

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List of Fig ure
Figure 1: Conceptual Framework the study ................................................................................................ 15

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Abbreviation and Acronym

ATM: Automated Teller Machine

CBE: Commercial Bank of Ethiopia

SERVQUAL: Service Quality

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 CHAPTER ONE

1. INTRODUCTION
1.1 Background of the study
Bank is a customer-oriented services industry. A bank depends upon the customers for their
survival in the market. The customer is the focus and customer services are the differentiating
factors (Ghafari, et al., 2011). A bank can differentiate itself from competitors by providing high
quality customer service (Das, 2012). But, for existence and survival of any organization the way
customers handled and treated matter a lot. 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.

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
(Agarwal, 2009).

Service quality it may be technical or functional. This refers to the relatively quantifiable aspect
of service deliver, because it can be easily measure by both customer and supplier. It forms an
important to bases for judging service quality (Parimer and Cole, 1995).

Customer satisfaction is the extent to which a product perceived performance matches a buyer
expectation. If the product performance falls short of expectation of the buyer will be satisfied
ordering hated. Today customer face arranges of choice in product and service as we choice in
the bases of their perception. Quality service value company need to understand the determinant
of customer usual and the difference between total customer value and total cost (Kotler, 2004).

Customer satisfaction is considered as important in defining organizational performance.

Customer satisfaction is critical, because it is a key to business success of any banking
institution. In the competition where organizations will be, take competitive advantage through
the human factor and customers (Singh et al, 2011).

Business environmental developed and free trade of global competition is increasing with
exploding. Because of these reasons, to stay in a competitive environment and deliver acceptable
financial managers must know to handle changes which un expected by cementing on customer’s
satisfaction (Nessecmetal, 2011).

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Banking system occupies an important place in a nation’s economy. It plays a vital role in
accelerating the rate of economic growth by mobilizing the existing or potential savings and by
making the disbursement of credit to commercial undertaking and priority areas. Banking
industry is marked by aggressive competition and ever-changing customer demands. As a result,
banks need to adopt themselves to the changing environment. It is essential for the banks to
adopt appropriate various strategies to merge as the preferred bank of customers. Timely
introduction of various products to suit the diverse needs of customers is a functional necessity to
the banks. Technology gives the cutting edge to come out with customer centric products and
delivery channels in time (Biju K, D.Devandhiran&Sreehari R. 2012).Therefore this study is
accompanied to assess the service quality on customer satisfaction in case of commercial bank of
Ethiopia in Gubrye branch.

1.2 Statement of the problem

Satisfying customers is the first major mission and drive of any business organization. It is when
customers are satisfied the organizations achieves higher sales, profit and market share and vice
versa. Customer satisfaction also leads organization gain loyalty and achieves the desired
objectives. Therefore, it is essential for organizations to satisfy their customer’s promptly so that
they can achieve what they plan. Banks as a business organization should provide a great care for
its customers‟ to attract, retain and gain their loyalty. Nevertheless, banks found in our country
(Ethiopia) have little care about their customers.

This leads them to use more obsolete and traditional technologies that cause dissatisfaction and
switching among customers. This means the banks are not satisfying their customers enough due
to many factors in which using traditional technologies is among them. Levesque and McDougall
(1996)have confirmed and reinforced the notion that consistent poor customer experience as a
result of poor service quality leads to a decrease in the levels of customer satisfaction and the
chances of further willingness to recommend the service (i.e., word-of-mouth advertising or
referrals) is narrowed.

There are situations where account holders of CBE attempted to withdraw cash via ATM
(automatic teller machine) but the machine didn’t distribute the requested amount of cash due to
system failure, yet their accounts are debited, longer waiting time for transaction processing and

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requests, lack fast and effective complaints resolution. Poor service delivery often led to
disagreement and conflict between banks and their customers (Ebiringa, 2011).

Most of bank institutions are having the problems related to service quality on customer
satisfaction and in this case different researchers have been tried to find out solutions for those
problems, but still now they are not solved. Therefore the researcher motivated to conduct in this
area to fill the research gap of the study on creating good service quality for customer
satisfaction. So this study will bridges the gap by assessing the effects of service quality on
customer satisfaction by identifying basic drawbacks & constraints at the Gubrye branch.
Therefore, the purpose of this study is to examine the effect of service quality on customer
satisfaction by using SERVQUAL dimensions

1.3 Research question

Based on the problem analysis and the above explanation about service quality and customer’s
satisfaction, at the end the study will answer the following basic questions:

1. Is the bank provides quality service by considering tangibility, responsiveness, reliability,

assurance, and empathy to its customers?

2. In what way do consumers observe the service quality of the bank?

3. What is the level of satisfaction customers drive from CBE Gubrye Branch?

4. What is the impact of service quality on customer satisfaction?

1.4 Objective of the study

1.4.1 General objective
The general objective of this research project is to examine the effect of service quality on
Customer Satisfaction in Commercial Bank of Ethiopia Gubrye Branch.

1.4.2 Specific objective

The specific objectives of this study are the following:

1 To examine the effect of service Empathy, tangibility, responsiveness, reliability and assurance
on customer satisfaction at Commercial Bank of Ethiopia Gubrye Branch.

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2 To assess customer’s observation toward the service quality.

3 To determine the impact of service quality on customer satisfaction in the bank.

4 To examine the customer satisfaction level in CBE Gubrye branch.

1.5 Significance of the Study

This study have greatly important to the bank to assess whether focusing on service quality enhance the
level of customer satisfaction and identifies the position of service quality at the bank. Moreover, the
study would have the following significances:

 It identified the issues related to the application of service quality and provides feedback to
managers.
 It identified the gap between what customer thinks about customer satisfaction and what actual
customer satisfaction look likes in the bank.
 Result of this research would be used as a base point for further studies in the related issues.

 This study would benefit to the Governments, banking industry and researchers who will conduct
another research in bank industry.

1.6 Scope of the study

This study was undertaken to evaluate service quality on customer satisfaction in CBE Gubrye branch.
Therefore, Because of time and resources at hand the study was delimited to only CBE G ubrye branch.
Moreover, the result will not be extended to other branches of CBE. The study was delimited to six
factors affecting service quality and customer satisfaction. This study was also delimited to 100
respondents. The study was conducted in time between Decembers up to June.

1.7 Limitation of the study

The main limitation of this study was constraints of resources and time, unwillingness to give response
from customer and access to feasible information. The researcher also lacks of experience, since it was
the first time for the researcher to conduct the research. The assessment was done only in Gubrye
branches of CBE. Thus, it is difficult to conclude that the findings of the Banking Industry of the
Ethiopia. Unavailability of sufficient and well documented secondary data also has decreased the
accuracy of the findings.

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1.8 Organization of the study
The study has five chapters.

Chapter one: includes background of the study, statement of the problem, research question and
objectives of the study, significance of the study, scope, limitations and organization of the paper
of the study.

Chapter two: includes review of related literature. In this chapter, theoretical and empirical
foundations of the study are presented.

Chapter three: encompasses research design and methodology which includes description of the
study area, sampling, data collection and data analysis methods.

Chapter four: deals with results and discussion of the study.

Chapter five: presents the summary of findings, conclusions and recommendation of the study.

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 CHAPTER TWO

2. LITERATURE REVIEW
2.1Theoretical Definitions of Service
According to Phillip Kotler et al (1997), service is any activity or benefit that one party can offer
to another that is essentially intangible and may not result in the ownership of anything. Cannon
(1998), viewed services as those separately identified, essentially intangible activities which
provide want satisfaction and which are not necessarily tied to the sales of a product or another
service. In the context of Etzel, Walker, and Stanton (1997), service are the identifiable,
intangible activities that are the main object of a transaction designed to provide want
satisfaction to customers. Jobber (2001) viewed a service as any deed, performance or effort
carried out for the customer. According to Palmer (2000), services are products which are
essentially intangible and cannot be owned. McCarthy and Perreault (1993), define service as a
deed performed by one party for another. From the definitions as presented by the various
authorities, it is clear that they all emphasis that service is essentially intangible. This means that
a service cannot be seen physical, but the customer experiences it. The idea of service therefore
is focused on the intangibility element and which essentially provides want satisfaction to the
customer.

2.2 Service Quality

Quality research in the goods sector was established long before. It was established in the
service sector (Gummesson, 1991).Bandyopadhyay 2003, pp.187-188) claimed that quality in goods
sectors is commonly defined as the product’s fitness for its intended use which mean how well product
meet the needs and the expectations of its customer.

Garvin (1983) referred to the production-oriented quality approaches as objective quality.

Clemes, Gan and Kao (2007) However, understanding quality in the good sector is inadequate
for understanding service quality because of the fundamental difference between the two terms
(Parasuraman, et al, 1985) (Parasuraman, et,1985, pp.42 Suggest that service quality is
performance based rather than object therefore precise manufacturing specifications concerning
uniform quality can rarely best.

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Hong and Goo argued (2004) Service quality is more difficult for consumers to evaluate than
product quality: this is due to lack tangible evidence associated with the service in the past
decades. Researches (Carman 1990: 1990 Garvin 1983: Parasuraman et al, 1985.1988) have
defended and measured service quality by examining the attributes of service quality, while
others (Bitner and Hubbert 1994: Iacobacci. Greystone and Ostrom, 1994: Oliver, 1993 and
desarbo 1988: ParasuramanZeithaml, and Berry, 1994: focused on the application in services to
conceptualize the relationship between service quality and customer satisfaction. Therefore, a
combination of the service quality and customer satisfaction literature has formed the foundation
of service quality theory (Clemse et al 2007: Parasuraman et al, 1985).

Service quality is the customer’s overall impression of the relative infection or superiority of the
organization and its services (Hubert and Bitner, 1994).Gronroos (1984) identified service
quality as the evaluation process outcome. In which the customers are involved and where a
certain experience is always compared to the perceived service received “service quality is not
objectively measure according to some technical stands but is subject felt by customers and
measured relative to customer determined standards (kwortnik, 2005).

Berry et al., (1990) also defined service quality as the discrepancy between customer
expectations or desire and their perception.

2.3 Characteristics of Services

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

2.3.1 Intangibility of services

Regan (1963) introduced the idea of services being activities, benefits or satisfaction which are
offered for sale or are provided in connection with the sale of goods the degree of intangibility
has been suggested as a means of differentiating tangible products with services (Levit, 1981).
Most of the time, services are explained ad being intangible since their outcome is considered to
be an action rather than a physical product (Johns 1999). (Darby and karni 1973 and
Zeithaml1981) highlight the fact that the degree of tangibility has implication for the ease
intangibility cannot be used to differentia clearly services with products. (Bowen 1990 and

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Wyckham, Fitroy and Mandry 1975 suggest that the intangible tangible concept is difficult for
people to grasp. Bowen (1990)” provides empirical evidence to support this view.

2.3.2 Inseparability of services

Inseparability is taken to reflect the simultaneous delivery and consumption of services (Regan
1963: Wyckham et al 1975: Donnelly 1976: Gronoroos 1978: Zeithamal 1981 Carman and
Langeard 1980: Zethaml et al., 1985: Bowen 1990 and Onkvisit and Shaw 1991). It is believed
to enable consumers to affect or shape the performance and quality of the service (Gronoroos,
1978 Zeithamal, 1981).

2.3.3 Heterogeneity of Service

Heterogeneity “reflects the potential for high variability in service delivery” (Zeithaml et al
1985). This is a particular problem for service with high labor content. As the service
performance is delivered different people and the performance of people can vary from day to
day (Rathmell, 1966: Carman and Langeard, 1980: Zeithamal 1985 Onkivistansshaw, 1991
onkvisit and Shaw (1991) consider “heterogeneity to offer the opportunity to provide a degree of
flexibility and customization of the service. Wyckham et al. (1975) suggest, “Heterogeneity can
be introduced as a benefit and point of differentiation.”

2.3.4 Perish ability of Services

In general, services cannot be stored and carried forward to a future time (Rathmell, 1966)
Donnelly, 1976: and Zeithaml et al., 1985 as citied in Wolak et al., 1998). Onkvisit and Shaw
(1991) suggest that “services are time dependent” and “time important” which make them very
perishable.” Hartman and linger (1993) claim that the “issue of perishability is primarily the
concern of the service producer” and that the consumer only becomes aware of the issue when
there is insufficient supply and they have to wait for the service.”

2.4 Service Quality Dimensions

Initially, Parasuraman et.al (1985) in their focus group study developed sixs dimensions of
service quality. These were Reliability, responsiveness empathy, assurance, trust and tangibles.
Service’s unique characteristics of intangibility, heterogeneity, and inseparability lead them to
possess highly levels of experience and credence properties. Which in turn make them more
difficult to evaluate than tangible goods (Bitner 1990: Zeithaml 1981).

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2.4.1 Tangibles
Those things which have a physical existence and can be seen and touched. In
context of service quality, tangible can be referred to as Information and
Communications Technology (ICT) equipment, physical facilities and their
appearance (ambience, lighting, air-conditioning, seating arrangement); and lastly
but not least, the services Providing personnel of the organization (Blery et al.,
2009). These tangibles are deployed, in random integration, by any organization to
render services to its customers who in turn assess the quality and usability of these
tangibles.

2.4.2 Reliability
Reliability means the ability of a service provider to provide the committed
services truth fully and consistently (Blery et al., 2009). Customers want trustable
services on which they can rely.
2.4.3 Assurance
Assurance is developed by the level of knowledge and courtesy displayed by the
employees in rendering the services and their ability to instill trust and confidence
in customer (Blery et al., 2009).
2.4.4 Empathy
Empathy means taking care of the customers by giving attention at individual level
to them (Blery et al., 2009). It involves giving ears to their problems and
effectively addressing their concerns and demands.
2.4.5 Trust
Trust is defined as a belief or conviction about the other party’s intentions within the relationship
(Taleghani et. al., 2011). Thus, trust plays a major role in separating purely economic actions
from those that have a social nature such as with professional services. Good relationships and
trust are built over time, with give and take on both sides, and not too much pressure (Rigby et.
al, 2003). We conceptualize trust as existing when one party has confidence in an existing

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partner’s reliability and integrity (Morgan and Hunt 1994). Trust can lead to commitment, which
can in turn lead to long-term cooperation between the two sides involved in a relationship (Hunt
and Morgan, 1994). 17 Trust is the “cornerstone” of long-term relationships (Jusˇcˇius and
Grigaite, 2011). Trust is ". . . a willingness to rely on an exchange partner in whom one has
confidence" A betrayal of this trust by the supplier or service provider could lead to defection
(Ndubisi and Wah, 2005). It means taking mutually agreed words as fact and reducing one’s
perception of the likelihood that either party will act opportunistically (Leung et al, 2005). Trust
is defined as a belief or conviction about the other party’s intentions within the relationship. In
the context of relationship marketing, trusts defined as the dimension of a business relationship
that determines the level to which each party feels they can rely on the integrity of the promise
offered by the other (Chattananon&Trimetsoontorn, 2009).

2.4.6 Responsiveness
Responsiveness are reflects of the willingness to help customers and provide
prompt service.
2.5 Customer Satisfaction
According to Rouse (2008), customer satisfaction is a degree of satisfaction
provided by the goods or services of a company as measured by the number of
repeat customers or how service meets the customer’s expectation. Triplett (2007)
further suggests that service quality has become an important topic because of its
apparent relationship to costs, profitability, customer satisfaction, customer
retention and positive word of mouth and it is widely considered as a driver of
corporate marketing and financial performance. In our study, we are more
interested in service quality and customer satisfaction.

Several authors have defined customer satisfaction in various ways:

 According to Kotler (2000). Satisfaction is a person’s feeling of pleasure or

disappointment resulting from comparing a product has perceived performance (or
outcome) in relation his or her expectation.

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  Gaither (1999) defines customer satisfaction as the determination of customer
requirements and demonstrated success in meeting them.
 Kotler (2006) again defined customer’s satisfaction by giving details on the attributes of a
highly satisfied customer. According to him a highly satisfied customer, stay loyal,
longer and busy more as the company introduces new products and upgrades existing
products: talks favorably about the company and its products. Pays less attention to
competing brands and is less sensitive to price. Offers service or products ideas to the
company and costs less to serve him than new customers do because transactions are
routine.
 Satisfaction is merely the result of things not going wrong; satisfying the needs and
desires of consumers. (Bestefiled, 1994).
 Satisfaction is a person’s feeling of pleasure or disappointment result from comparing a
products performance (outcome) in relation to his or her expectation (Kotlerkeller, 2006,
144).
 Customer satisfaction is a psychological concept that involves the feeling of wellbeing
and pleasures that results from obtaining what one hopes for and expects. From an
appealing products and/ service (WTO, 1985).
 Kotler and Armstrong (2001) in their principles of marketing, define customer
satisfaction as the extent to which products perceived performance match a buyer’s
expectations.

2.5.1customer satisfaction in banking service context

In contrast to products, customers are not able to evaluate services before the service
process takes place. The interaction with the service provider and the customers, these called
service encounter, is the key in the evaluation of service performance (Gil, 2008). During
these encounters, the customer is able to get an impression of the way the company provides
its services. His/her service experience is defined by the interaction with the organization, the
processes and the employees. Accordingly, customer satisfaction is built upon the basis of
service encounters.

Service providers have significant opportunities to manage the interactions that together form
the experience (Wirtz, 1994). They can design and the interactive production process; select,

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train and manage service employees; design and maintain the service environment;
selectively target, socialize and educate customers. In banking services, satisfaction is usually
conceptualized as a multidimensional construct (Manrai, L.A., Manrai, A.K., 2007). The list
of bank service attributes used for the measurement of satisfaction comprises elements like:
appearance of the facility, attitude and behavior of staff, decor and atmosphere, business
hours, interest rate, waiting time. Bank customers may regard some of these elements as
being not equally important as the others.

2.6 Empirical framework

A. Distinction between Service quality and Customer satisfaction

The literature on services has made a distinction between service quality and customer
satisfaction (Bitner, 1990; Bolton & Drew, 1991; Parasuraman et al., 1988 as cited in Harr,
2008). This differentiation is important for firms to concentrate on enhancing their capability
to satisfy customers through providing high service quality. The position of scholars
characterized by Parasuraman et al., (1988), is that “service quality involves an attitude and is
an evaluation over several service encounters overtime”.

It is also “thought to be an overall assessment about a service category or an organization”

(Parasuramanetal., 1988). “In support of this, respondents in Parasuramanet al., (1988) s
study demonstrated satisfaction with specific service encounters but were not happy with the
service quality of the firm. “conversely, recent thoughts on customer satisfaction is
summarized in the following definition of satisfaction by Oliver (1981) as “a psychological
state resulting when the emotion surrounding disconfirmed expectations is coupled with the
consumer’s prior feelings about the consumption experience”. Moreover, Oliver (1981)
distinguished customer satisfaction from service quality in his definition of attitude as “the
consumer’s relatively enduring affective orientation for a product, store, or process while
satisfactions the emotional reaction following a disconfirmation experience which acts on the
base attitude level and is consumption specific” (Oliver, 1981, p. 42).

Therefore, service quality is “more stable and is situational oriented” (Oliver, 1981, p. 42).
According to Zeithaml et al., (2006), Customer satisfaction “is a broader concept than service

12
quality which focuses specifically on dimensions of service.’’

B.Relation between service quality and customer satisfaction

Parasuramanet.al (1985) and Zeithaml et., al (1990) noted that the key strategy for the success
and survival of any business institution is the deliverance of quality services to customers.

The quality of services offered will determine customer satisfaction and attitudinal loyalty
(Ravichandran et al. 2010).Parasuraman,A.,ZeithmaI,V.A., &Berry,L.L.(1988) found that
the performance of the service provider on core and relational dimensions of services was an
important driver for customer satisfaction in retail banking. According to S. SIVESAN 2012,
there is positive linear relationship between the service quality and customer satisfaction.

2.7 Conceptual framework

Service Quality is a vital antecedent of customer's satisfaction (Cronin and Taylor, 1992).In
turn customer satisfaction is believed to affect post-purchase, perception, and future decisions.
Following from the literature review done above, the relationship between service quality
variables and customer satisfaction can be show as following. In this conceptual
model the Six Service quality dimensions have been selected form the study conducted by
Parasuramanet al., (1985) conducted research on different service organization (Bank, Hotel,
Electrical Corporation, Hospital, Transportation) by using ten service quality dimensions
(tangibility, reliability, responsiveness, communication, access, competence, courtesy,
credibility, security, and knowledge). Later Parasuraman et al., (1985) conducted research
and then the ten dimensions were further purified and developed into five dimensions
(tangibility, reliability, responsiveness, assurance and empathy).

The reason behind purified the ten dimensions into five dimensions was the appropriateness
of each service quality dimensions to different service organizations for example security
dimension is appropriate for transportation, credibility dimension is appropriate for hotel.
Therefore, this convinced me to use Parasuraman et al., (1988) ‟s model. On the other hand,
the conceptual model that is intended to show the relationship between Service quality and
customer satisfaction is developed by the researcher from different findings.

13
BijuK,D.Devandhiran&Sreehari R. (2012), on their research identified seven (7) core
banking factor that can be used as parameter to conduct research on Service quality.
Therefore, the researcher will employs these factors to conduct this research.

14
Based on the above literature review the following conceptual framework is developed

Figure 1: Conceptual Framework the study

Independent variables Dependent variable

Tangibility

Reliability

Assurance

Customer Satisfaction

Responsiveness

Empathy

Trust

Figure 2.1 Conceptual framework (Source: Own survey, 2023)

15
 CHAPTER THREE

3. RESEARCH METHODOLOGY
3.1 Research Design

The study was focusd on the assessment of service quality on customer satisfaction in case of commercial
bank of Ethiopia in Gubrye branch. In order to achieve objectives of the study; the required data need to
be relevant and reliable. The study involved both qualitative and quantitative approaches of data
collection there by involving descriptive survey design, which could assist the study clearly explaining
and describing the state of affairs in the study area.

3.2 Sources of Data

For this study, the main sources of data were both primary and secondary sources. Primary data was
collected from primary sources. The main primary source of this study which is quantitative in its nature
was collected from the customers of Commercial bank of Gubrye branch. The data was collected from
selected sample respondents using questionnaire methods as data collection instruments. Secondary data
which is qualitative in its nature was collected from secondary sources such as published journals, article,
books, and written documents through reviewing.

3.3 Target population

Target populations of the study were customers and manager of commercial bank of Ethiopia in
Gubrye branch, and the total number of customers has 18000 and one manager.

3.4 Sample Size Determination

From the total population of 18000 (eighteen thousand) customers, the researcher was deriving
100(hundred) customers as a sample by using Yamane (1967) formula.

n= N/1+N (e) 2

n= 18000/1+18000 (0.1)2 Where n= sample size

N= Total population size

18000/1+180 e= Acceptable level of error (0.1)

16
18000/181

99.45 Approximately 100

Thus, the researcher took 100 customers as a sample.

3.5 Sampling Techniques

The researcher was used connivance sampling techniques of non-probability sampling. This is so
because it provides the opportunities for the researcher to take those who are willing and able to
respond properly.

3.6 Methods of Data Collection

The researcher obtained data through questionnaire and interview. Questionnaires consists close-
ended and the questions consisting two parts; service quality questionnaire and customer
satisfaction questionnaire, those were given to the customers of commercial bank of Ethiopia
Gubrye branch, whereas the interview have been conducted with the manager of the
organization.

3.7 Methods of Data Analysis and Presentation

After the relevant data was collected the researcher processed the data through tabulating and
percentage, and the processed data have been analyzed through descriptive analysis techniques.
Then the data was interpreted, and finally, based on the findings, the recommendation has been
given.

17
 CHAPTER FOUR

4. DATA ANALYSIS AND INTERPRETATION

4.1. INTRODUCTION
This chapter presents the data analysis and the discussion of research findings.It also
presents the result of interview questions conducted with the manager of the bank. Both
background and general information gathered from respondents is analyzed in this section. The
collected data from the sample population of Gubrye branch of commercial bank of
Ethiopia was screened and evaluated to achieve the objectives of the study.

A total of 100 questionnaires were distributed for customers of CBE Gubrye branch in
Ethiopia out of which 9 0 were collected. However, only 9 0 questionnaires were
usable to the research which made the response rate 90%.Under this study,90
respondents were involved and out of these 10 questionnaires were not completely filled
due to incomplete data and these were rejected. Therefore, the study takes 8 0
questionnaires as valid input for the analysis. The general information includes:
Gender and age group of the respondents, educational background and type
occupations. The demographics feature of the respondents is illustrated in the following
table.

4.2 Background Information from Respondents

This section shows the background information of the respondents. The section includes the
demographic profile such as sex, age, educational background and occupation of the
respondents.

18
Table 4.1: Demographic profile for Customers

No Item Item Frequency Percent

1 Sex Male 52 65

Female 28 35

Total 80 100

2 Age 18-30 19 24

31-45 38 47

46-60 14 18

Above 61 9 11

Total 80 100

3 Education Illiterate 0 0

1-10 18 23

11-12 26 33

Diploma 22 27

Degree and Above 14 17

Total 80 100

4 Occupation Student 36 45

Self-employed 10 13

Government employed 13 16

Unemployed 21 26

Total 80 100

Source: own Survey, 2023

19
As it can be seen from Table 4.1, the information of personal characteristics of the
respondents was given. As sex variable is concerned, 52 (65%) were males, whereas 28
(35%) were females. This implies that most of the respondents who participated in this study
were males.

As far as the age is concerned in table 4.1, most of respondents 38 (47%) fall with the
age range between 31-45 years, 19(24%) falls between 18-31, & 14(18%) fall between
46-60, 9 (11%) above 61 years. This implies that, most of respondents were found
in the most valuable age for the purpose age of this study.

As far as the educational level of the respondents is concerned,18(23%) of the customers are in
grade of 1-10, 22(27%) Diploma holders,26(33%) of customers are in grade 11-12 and 14
(17%) degree and above. This implies that, most of respondents who have been participated in
the study were educated peoples. As a result, they can give rational and highly considered
responses to the study.

Item 4 of the above table indicates that 36(45%) of the respondents are students, 10(13%) of the
respondents are self-employed, 13(16%) of the customers are government employee, and the
remaining 21(26%) of the respondents are unemployed. This shows that the majority of CBE
Gubrye Branch customers are students.

4.3. Descriptive Statistical Analysis

4.3.1. Analysis of reliability variable
Table 4.2: Reliability variable analysis

Items
Alternatives

SDA DA N A SA Total

% % % % %

Banks fulfill its promise at the time 4.5 10.2 19 47.3 19 100
Indicated

20
Bank show a keen interest in solving your 9 11.2 21 49.3 9.7 100
Problems

Bank insists on error free record 12.5 7.1 13.6 42 24.8 100

Banks perform the service exactly at the 8.3 12 17 48 14.7 100

First time
Avareg 8.6 10.1 17.7 46.7 17 100

Source: own Survey, 2023

In table 4.2, with the first item, the respondents were asked whether or not Banks fulfill
its promise at the time indicated. The result of study showed that most of respondents
47.3% were agreed with the statement provided because of in the study area, that banks
fulfill its promise at the time indicated.

In the light of the second item, the respondents were asked whether or not banks show a keen
interest in solving your problems. The result of study showed that most of respondents49.3%
were agreed with the statement provided because of in the study area, banks show a keen
interest in solving customers’ problems.

As third item in the table is concerned, the respondents were asked whether or not
banks bank insist an error free record. The result of study showed that most of
respondents 42% were agreed with the statement provided because of in the study area;
bank insists an error free record.

As far as the fourth item in the table 4.2 is concerned, the respondents were asked whether or
not bank perform theservice exactly at the first time. The result of study showed that most of
respondents48% were agreed with the statement provided because of in the study area; banks
perform the service exactly on time.

The result of study indicating that most of respondents 46.7% were agreed with the
statements provided because of in the study area; bank fulfills the items related with
reliability.

21
4.3.2 Analysis of assurance variable
Table 4.3: Analysis of assurance variable

Items
Alternatives

SDA DA N A SA Total

% % % % %

Bank’s staff behavior instills confidence in 13 10 22 41 14 100

me

I feel safe in my transaction with the bank 6.5 12.5 22 47 12 100

Bank’s staff are courteous with me 9.2 10 19 50.1 11.7 100

Bank’s staff have the knowledge to answer 10.2 20.3 46 9 100

all my question 14.5
I feel safe in my transaction with the bank 4 10.5 12.5 56 17 100

Average 9.3 8.5 19.2 48 12.4 100

Source: own Survey, 2023

In table 4.3, with the first item, the respondents were asked whether or not Bank’s staff
behavior instills confidence in them. The result of study showed that most of respondents
41% were agreed with the statement provided. This implies that Bank’s staff behavior instills
confidence in them.

In light of second items the respondents were asked whether or not they feel safe in their
transaction with the bank. The result of study showed that most of respondents 47% were
agreed with the statement provided because of in the study area, consumers feel safe in their
transaction with the bank. As the third item in the table is concerned, the respondents were asked
whether or not Bank’s staffs are courteous with them. The result of study showed that most of
respondents 50.1% were agreed with the item provided because of in the study area, bank’s
staffs are courteous with the consumers.

In the view of the fourth item in the table, the respondents were asked whether or not

22
Bank’s staff have the knowledge to answer all questions. The result of study shown that
most of respondents 46%were agreed with the statement provided because of in the study
area; banks ’staff have the knowledge to answer all questions of their customers. As far as
fifth item in the table is concerned, the respondents were asked whether or they feel safe in
their transaction with the bank. The result of study indicating that 56% of respondents were
agreed with the statement provided because of in the study area, consumers feel safe in
their transaction with bank.

The result of study indicating that most of respondents 48% were agreed with the
statements provided because of in the study area; bank fulfills the items related with
assurance variable.

4.3.3. Analysis of responsiveness variable

Table 4.4: Analysis of responsiveness variable

Items
Alternatives

SDA DA N A SA Total

% % % % %

Bank’s staff tell you exactly the time the 4.2 2.22 23.6 48.6 1.4 100
service will be performed

Bank’s staff give your services 16.7 19.4 9.7 51.4 2.8 100
prompt

Bank’s staff always willing to assist you 2.8 15.3 26.4 50.2 5.7 100

Banks staff are not too busy to respond to 2.75 18.1 23.6 58.3 4.2 100
my question

Bank’s staff tell you exactly the time the 5.6 18.1 22.2 51 4.1 100
service will be performed

Average 6.11 17.6 21.1 51.9 3.64 100

Source: own Survey, 2023

23
In table 4.5, with the first item, the respondents were asked whether or not Bank’s staff
tell them exactly the time the service will be performed. The result of study showed
most of respondents 48.6% were agreed with the statement provided because of in the
study area, Bank’s staff tell them exactly the time the service will be performed.

In light of second items the respondents were asked whether or not bank’s staff give to the
respondents prompt services. The result of study showed that most of respondents 47% were
agreed with the statement provided because of in the study area, bank’s staff give to the
respondents prompt services.

As the third item in the table is concerned, the respondents were asked whether or not bank’s
staff always willing to assist the customers. The result of study showed that most of
respondents 50.1% were agreed with the item provided because of in the study area bank’s
staff always willing to assist you.

In the view of the fourth item in the table, the respondents were asked whether or not banks
staff are not too busy to respond to the question of respondents. The result of study shown
that most of respondents 58.3%were agreed with the statement provided because of in the
study area, banks staff are not too busy to respond the question of respondents.

As far as fifth item in the table is concerned, the respondents were asked whether or
not bank’s staff tell to the customers exactly the time the service will be performed. The
results of study showed that most of respondents 51% were agreed with the statement
provided because of in the study area, bank’s staff to the customers exactly the time the
service will be performed.

The result of study indicating that most of respondents 51.9% was agreed with the
statements provided because of in the study area; bank fulfills the items related with
responsiveness variable.

24
4.3.4. Analysis of empathy variable
Table 4.5: Analysis of empathy variable

Items
Alternatives

SDA DA N A SA Total

% % % % %

Banks give me individual attention 7.5 22.1 5 41 24.4 100

Bank operating hours convenient to me 5 32 15.9 40.1 7 100

The bank has my interest at heart 9 2 16 49.5 23.5 100

Bank’s staff understand my specific needs 12 19 7.2 50 11.8 100

Average 8.4 18.8 11 45.2 16.1 100

Source: own Survey, 2023

In the table 4.6 with the first item, the respondents were asked whether or not Banks
give them individual attention. The result of study showed that 41% were agreed with
the statement provided because of in the study area, Banks give customers individual
attention.

In the light of the second item, the respondents were asked whether or not Bank
operatinghours convenient to them. The result of study showed 40.1% was agreed with the
item because of in the study area Bank operating hour is convenient to the customers.

In the view of the third item in the table, the respondents were asked whether or not the bank
has my interest at heart. The result of study showed that most of respondents 50% were
agreed with the statement provided because of in the study area; the bank has customers’
interest at heart. As the fourth item in the table is concerned, the respondents were asked
whether or not bank’s staff understand their specific needs. The result of study showed that
most of respondents 50% were agreed with the statement provided because of in the study
area; bank’s staffs understand specific needs of customers.

25
The result of study indicating that most of respondents45.1% were agreed with the
items provided regarding to empathy variable.

4.3.5. Tangibles
Table 4.6: Analysis of Tangibles variable

Items
Alternatives

SDA DA N A SA Total

% % % % %

The bank's employees have a neat & 3.7 15 14.5 52.9 13.9 100

professional appearance

Material associated with the service 7.5 13.2 10 58.5 10.8 100
like pamphlets; statements are visually

appealing at the bank

Bank physical facilities visually nice 5.5 12.5 14.7 48.2 19.1 100

Banks has modern equipment & tools 6.9 18.5 26.4 47.2 1.4 100

Average 5.9 14.8 16.4 52 11.3 100

Source: own Survey, 2023

In the table 4.7, with the first item, the respondents were asked whether or not the
bank's employees have a neat & professional appearance. The result of study showed
that most of respondents 52.9% were agreed with the statement provided because of in
the study area; the bank's employees have a neat & professional appearance.

In the view of the second item in the table here above, the respondents were asked whether

26
or not material associated with the service like pamphlets; statements are visually
appealing at the bank. The results of the study showed that respondents 58.5% were
agreed with the statement provide because of in the study area material associated with
the service like pamphlets; statements are visually appealing at the bank.

In the light of the third item in the table above, the respondents were asked whether or
notbank physical facilities visually nice. The results of study show that most of
respondents48.2% was agreed with the item provided because of in the study area, bank
physical facilities visually nice. As the fourth item in the table here above is concerned, the
respondents were asked whether or not banks have modern equipment & tools. The result of
study show that most of respondents 47.2% were agreed with the item provided because of in
the study area, banks have modern equipment & tools.

The result of study indicating that most of respondents52% were agreed with the statements
provided regarding to Tangible’s variable.

4.3.6. Analysis of tr u st variable

Table 4.7: Analysis of Trust variable

Items
Alternatives

SDA DA N A SA Total

% % % % %

Bank provide needed service on time 13 40.8 19 14 13.2 100

Bank is trustworthy to show different 8 56.5 12 10 13.5 100

transactions
Bank provides all your needs quickly 13 42 10.3 17.3 2.4 100

Bank is okay to handle your materials 14 47.3 12 9 17.7 100

when you go to them to get their services

Average 12 58.4 17.8 11.8 11.7 100

Source: own Survey, 2023

27
As the first item in the table 4.8 is concerned here above, the respondents were asked
whether or not bank provide needed service on time or not. The results of study show
that most of respondents 40.8% were disagreed with the item provided because of in
the study area, bank do not provide the needed service on time.

In the light of the second item in the table here above, the respondents were asked whether or
not bank is trustworthy to show different transaction. The result of study show that most of
respondents 56.5% were disagreed with the statement provided because of in the study area;
bank is not trustworthy to show different transactions

As the view of the third item on the table, the respondents were asked whether or no banks
provide all their needs quickly. The results of study show that most of respondents 42% were
disagreed with the statement provided because of in the study area, bank do not provide all
their needs quickly.

As the fourth item in the table 4.8 is concerned here above, the respondents were
asked whether or not bank is okay to handle your materials when you go to them to
get their services. The results of study show that most of respondents 47.3% were
disagreed with the item provided because of in the study area bank is not okay to
handle materials of customers when they go to them to get their services.

The result of study indicating that most of respondents58.4% were disagreed with the
statements provided regarding to trust variable, because of in the study area, the bank is
not fulfilling the items related with trust variable.

28
4.3.7. Analysis of custo mer satisfaction
Table 4.8: Analysis of customer satisfaction

Items
Alternatives

SDA DA N A SA Total

% % % % %

I am satisfied with the banks complete 6.9 16 20.8 45.8 9.7 100
range of service

I am satisfied with the performance of the 12.5 20.8 29.2 34.7 2.8 100
employees of this bank.

I am satisfied of being a client of this bank 20.9 12.3 26.4 37.5 2.7 100
I am satisfied with the bank employee 1.35 13.9 25 47.1 18.1 100
professional competence s
I am satisfied with the quick service of this 1.4 23.6 27.8 41.6 5.6 100
bank.

I am satisfied with the respectful behavior 1.5 11.1 30.6 38.9 18.2 100
of employees

General Satisfaction towards service 2.8 5.4 22.2 40.2 29.2 100
quality of this bank.

Average 6.8 24.1 26 41 12 100

Source: own Survey, 2023

In the table 4.9, in the view of the first item, the respondents were asked whether or not
they are satisfied with the banks complete range of service. The results of study show
that most of respondents45.8%was agreed with the statement provided because of in the
study area; customers are satisfied with the banks complete range of service.

In the view of the second item in the table 4.9, the respondents were asked whether or not

they are satisfied with the performance of the employees of this bank. The results of

29
study show that most of respondents 34.7% were agreed with the statement provided
because of in the study area; customers are satisfied with the performance of the
employees of this bank.

According to the third item in the table, the respondents were asked whether or not they are
satisfied of being a client of this bank. The result of study show the customers satisfied of being
a that most of respondents 37.5% were agreed with the statement provided because of in the
study client of this bank.

As the fourth item in the table is concerned, the respondents were asked whether or not
they are satisfied with the bank employees‟ professional competence. The result off study
show that most of respondents 47.1% were agreed with the item provided because of
in the study area; customers are satisfied with the bank employees‟ professional
competence.

In case of fifth item in the table, the respondents were asked whether or not they are satisfied
with the quick service of this bank. The show that most of respondents 41.6% were agreed
with the item provided because of in the study area; customers are satisfied with the quick
service of this bank.

As the sixth item in the table is concerned, the respondents were asked whether or not they
are satisfied with the respectful behavior of employees. The result of study show that most
of respondents 38.9% were agreed with the statement provided because of in the study area,
customers satisfied with the respectful behavior of employees.

As the seventh item in the table 4.19 is concerned in the table, the respondents were asked
general Satisfaction towards service quality of this bank. The results of study show that most
of respondents 40.2% were agreed with the statement provided because of in the study area,
customers have general Satisfaction towards service quality of this bank.

The result of study indicating that most of respondents41% were agreed with the statements
provided because of the bank fulfills the items related with dependent variable, which is
customer satisfaction.

30
Analysis of the result of Interview questions

The researcher conducted the interview with manager of CBE-Gubrye branch to get additional
data for the study. The following section shows the analysis of the information gained through
interview with manager of the bank.

1. What mechanisms do you have for delivering quality service?

 CBE-birr
 E-payment
 ATM machine
 Mobile banking
 Internet banking
 Introduction of technologically advanced tools and so on.

2. Do you think the current mechanisms are prorating for quality service on customer
satisfaction?

 The above mechanisms are necessary to expand the branches of CBE in different areas in
order to provide access for the customers to get various service of the bank.

3. Remain the present service quality delivering mechanisms essential in the future?

 Yes, since such mechanisms support our long term intention including the vision of the
organization, and it is long term designed mechanism based on the current technological
development of a country.

4. Which of the criticisms directly related to management problem?

 Problem happened by giving a loan advance.

 And most of them are external factors like connection problem of ATM.

5. Which of the complaints are directly related to customer’s problem?

 Lack of awareness of customers

 Network interruption
 Problem happened by giving a loan advance.

31
 CHAPTER FIVE

5. SUMMARY, CONCLUSSIONS AND RECOMMENDATIONS

5.1 Summary of finding

This chapter deals with the summary of findings, conclusions drawn from the findings and
the recommendations forwarded for improvement in services delivery process of Gubrye branch
under study.The main purpose of this study was to assess service quality on customer
satisfaction in case of CBE Gubrye branch. The data were obtained through questionnaires from
customers of the bank. The result of this study shows that, most of the respondents are satisfied
and have a good image towards the service quality delivered by the commercial bank of
Ethiopia.

Descriptive techniques were used to analyze the primary data collected structured
questionnaires from customers of Bank under investigation. This analysis showed the
significance and importance of the six variables in describing and effects of service quality on
customer satisfaction. The influencing variables except Trust were found to be significantly
influencing customer.

The study indicating that most of respondents 46.7% were agreed with the statements
provided because of in the study area; bank fulfills the items related with reliability.The
study indicating that most of respondents 48% were agreed with the statements provided
because of in the study area; bank fulfills the items related with assurance variable.The
study indicating that most of respondents 51.9% were agreed with the statements provided
because of in the study area; bank fulfills the items related with responsiveness variable

The study indicating that most of respondents 45.1% were agreed with the items provided
regarding to empathy variable.The study indicating that most of respondents 52% were
agreed with the statements provided regarding to Tangible’s variable.The study indicating
that most of respondents 58.4% were disagreed with the statements provided regarding to
trust variable, because of in the study area, the bank is not fulfilling the items related with trust
variable.

32
The study indicating that most of respondents 41% were agreed with the statements provided
because of the bank fulfills the items related with dependent variable, which is customer
satisfaction.

5.2 conclusions
The main purpose of this study is to measure the effect of service quality dimensions on
customer satisfaction in the case of CBE Gubr ye Branch.The research result concluded that
there exists significant positive relationship between reliability, assurance, responsiveness,
empathy and tangibles.However, this study concluded that there is no significant relationship
between trust and customer satisfaction. Generally, this study identified the different
influences in which each of the industry understudies has different effects to customer
satisfaction.

From the finding of this study, the researcher conclude most customers of CBE have a positive
response about their satisfaction level by the five service quality dimensions, that are tangibility,
reliability, responsiveness, assurance and empathy and have negative response about trust
dimensions.

5.3 Recommendations
This research has shown the effects of service quality on customer satisfaction in CBE
inGubrye branch. The results obtained confirm that all the service quality dimensions have a
positive effect on customer satisfaction. Based on the findings and conclusions of the study,
the following recommendations are forwarded to the management of the bank.

 The uses of appealing facility and modern or advance technologies could be

considered deficient in the case of CBE Gubrye branch. Even though reliability
dimension shows higher satisfaction result, the underwriting and claims process failed to
fulfill customer’s satisfaction that is evident in the lowest scores registered in
attributes like Settlement of claims with unnecessary delays and providing clear and
understandable policy terms.

 They should also give attention to their customers need and give the necessary
professional service to instill confidence in their customers. The dimension Empathy is

33
also with a high beta coefficient that enables us to conclude there is a significant
relationship between this dimension and customer satisfaction. In general, the
following specific empirical findings emerged from the investigation:

 The five service quality dimensions (tangibility, reliability, responsiveness, assurance

empathy and the variable have positive and significant effect on customer satisfaction.The
bankers must give more focus on Trust variable than another variables since the
customers were not satisfied because of trust attention is not enough in the study area.

T r u st ite ms t ha t the bank has to give the attention a re:

 The bank should Providing different services to customers on time.

 The bank should be Trustworthiness to show different transactions.

 Bank should Providing all needs to customers quickly.

 The bank should Being okay to handle customer materials when they go to the bankto get
different services from the bank.

In addition the bank should create some mechanism to minimize the network problem or to find
other techniques that unstop the service at the time of disconnection of the network and also
should have to eliminate the ATM problem as much as possible in order to sustain the customer
and to keep them loyal.

In general, delivering a quality service for customers have a tremendous effect on

customers’ satisfaction that in turn determines the existence and success of banks. So, it’s
mandatory that the bank should attempt to maintain consistent service quality at or
above customers’ satisfaction by examining all the service quality dimensions regularly.

34
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 Zeithaml, V.V., Bitner, M.J and gremler, D.D (2006). Services marketing; integrating
customer focus across the firm. McGraw Hill, newyourk.
 Zeithaml, V. A., Parasuraman, A., & Berry, L. (1990). ‘Delivering quality service:
Balancing Customer perceptions and expectations’. New York, NY: Free Press.

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 APPENDIX

WOLKITE UNIVERSITY
COLLEGE OF BUSSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT

Questionnaires to be filled by customer of CBE-Gubrye branch

Dear the respondents, the aim of this questionnaire is only for the academic research purpose as a
partial fulfillment in order to get BA degree in management. This questionnaire aims at assessing
effect of service quality on customer satisfaction in CBE Gubrye branch.Your cooperation is
important for finding of the study, please provide your guanine response, and, thank your
cooperation in advance!!

Instruction

No need of writing the name

Give your answer by putting X mark

Pa rt1. Demographical Information

Sex Male □ Female □

Age 18-30 □ 31-45□ 46-60□ above 61□

Education

Illiterate □ 1-10 □ 11-12 □ diploma □ Degree and above□

4. Occupation Student□ Self-employed □ Government employed □ Unemployed □

Pa rt 2. Custo mer satisfaction with rela tio n to service quality dimensions.

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Please rank your views using 1-5 on whether you are satisfied or not with the service provided
by the bank and the general environment under which it operates

1=strongly disagree 2=Disagree 3=Neutral

4=Agree 5=strongly agree

Items strongly disagree strongly agree

1 2 3 4 5
RELIABILITY

Banks fulfills its promise at the time indicated

Bank’s perform the service exactly at the first time

Bank show a keen interest in solving My problems

Bank insist on error free record

ASSURANCE

Bank’s staff behavior instills confidence in me

I feel safe in my transaction with the bank

Bank’s staff are courteous with me

Bank’s staff have the knowledge to answer all my
question
Bank’s staff behavior instills confidence in me

RESPONSIVENESS

Bank’s staff tell you exactly the time the service will
be performed
Bank’s staff give your prompt services

Bank’s staff always willing to assist my

Banks staff are not too busy to respond to my
Bank’s staff tell you exactly the time the service
will be performed
EMPATHY

Banks give me individual attention

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Bank operating hours convenient to me

The bank has my interest at heart

Bank’s staff understand my specific needs

TANGIBLES

The bank's employees have a neat & professional

appearance

Material associated with the service like

pamphlets, statements are visually appealing at the
bank

Bank physical facilities visually nice

Banks has modern equipment & tools

TRUST

Bank provide needed service on time

Bank is trustworthy to show different transactions

Bank provides all your needs quickly

Bank is okay to handle your materials when you go
to them to get their services

QUESTIONNAIRE OF CUSTOMER SATISFACTION

I am satisfied with the banks complete range of

services
I am satisfied with the performance of the employees
of this bank.
I am satisfied of being a client of this bank.
I am satisfied with the bank employees‟ professional
competence
I am satisfied with the quick service of this bank
I am satisfied with the respectful behavior of
employees
General Satisfaction towards service quality of this
bank.

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Interview Question for Manager of CBE Gubrye Branch

1. What mechanisms do you have for delivering quality service?

2. Do you think the current mechanisms are prorating for quality service on customer
satisfaction?

3. Are the current service quality delivering mechanisms necessary in the future?

4. Which of the complaints directly related to management problem?

5. Which of the complaints are directly related to customer’s problem?

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