AN ASSESSMENT ON THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION: THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

Abstract Today competition is not only rife, but growing more intense constantly. However, companies need to start paying keen attention to their competitors; they must understand their customers. Banking sector are suffering from competition. They have to believe customers as core concept of their business; customer satisfaction is what guarantees the future of banking services and it is achievable by taking up their services and customers’ needs. In other words, service quality is typically defined in terms of consumer satisfaction. The purpose of this study was assessing the relationship between service quality and customer satisfaction at Commercial Bank of EthiopiaMehal Ketemabranch using a model that describes various dimensions of service quality. To this purpose the researcher was studied the service quality of the banking using SERVQUAL model. Convenience sampling technique was used in the study. The methodology was based on primary data collected through a well-structured questionnaire administered on a sample size of 200 respondents randomly selected from Commercial Bank of EthiopiaMehal Ketema branch. In order to assess the Relationship between Service Quality and Customer Satisfaction in relation to the quality of service, five attributes were used for a better understanding of the relationship between the Attributes and Customer Satisfaction, by focusing on the retail banking industry of Commercial Bank of EthiopiaMehal Ketema branch. The study respondents were account holders of the selected branch of Commercial Bank of Ethiopiawhich is Mehal Ketema. The collected data has been analyzed with the help of tools like SPSS, Descriptive Statistics, Correlation and Regression Analysis. The results shows that the most important service quality attribute on Customer Satisfaction was responsiveness, as it is perceived as a dominant service quality. The results reveal that the service quality dimensions i.e. Tangibility, Responsiveness, Empathy, Reliability and Assurance are positively and significantly related with the customers overall satisfaction. This finding reinforces the need for the bank to place an emphasis on the underlying dimensions of service quality, especially on responsiveness and better to start with improving service quality in order to raise overall customer satisfaction.