DETERMINANTS OF SERVICE QUALITY AND THEIR IMPACT ON CUSTOMER SATISFACTION: THE CASE OF COMMERCIAL BANK OF ETHIOPIA (Selected Branches in Addis Ababa)

Abstract

The general objective of this study is to identify the determinants of service quality and their impact on customer satisfaction. The outcome of study will enhance the Bank‟s competitive position in the banking industry and ensure its survival. Convenient sampling technique was employed in the study with Statistical Package for Social Scientist (SPSS) used in the analysis. In this research, the SERVQUAL instrument developed by Parasuraman (1985), has been applied in designing the questionnaire by using five dimensions of service quality: tangibility, reliability, responsiveness, assurance, and empathy. Questionnaires are distributed to 400 customers of the twenty three selected branches in Addis Ababa area. The questionnaire aimed to determine the level of customers‟ expectation and perception towards the service quality of the bank. The results revealed that the assurance, responsiveness and empathy dimensions raised the highest level of expectation, whereas the, assurance, empathy and responsiveness dimensions fulfilled the highest level of perception. The findings showed that the dimensions of service quality such as tangibility, reliability, responsiveness, assurance, and empathy are positively correlated to customer satisfaction. Data collected from respondents are analyzed by using descriptive, correlation, and regression analysis. It can be concluded from the analysis that customers were satisfied with service delivery of CBE.