THE EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

As the competitive environment becomes more turbulent in the banking industry, there is a need to provide quality service and ensure customer satisfaction, to increase high market share and competitive advantage. The study, therefore, was conducted to assess service quality on overall customer satisfaction in the case of the Commercial Bank of Ethiopia as target study area. In the study the five of service quality were used namely tangibility, reliability, responsiveness, assurance, and empathy and a single item was used to measure overall satisfaction. Questionnaires were distributed to customers of the bank. The samples were chosen based on systematic sampling that was found available. Primary data was collected using self administered questionnaire through survey method. To analyze the objectives, descriptive statistics, person correlation and inferential statistics. The result of the study shows that tangibility has the highest grand mean value. The effect of independent variable on reliability, tangibility, and assurance on customer satisfaction was conducted excluding empathy and responsiveness. The findings of regression analysis reveal that reliability and assurance have a significant positive relationship with customer satisfaction. Furthermore, reliability, tangibility, and assurance have a positive effect on customer satisfaction, The study suggests that the bank should devise a strategy to increase customer satisfaction by emphasizing on improving its service quality. Hence, managers of the bank can use this instrument to provide better quality services to their customers.