The Effect of service Quality on Customer Satisfaction: in the Case of Ethiopian Electric Utility

Abstract

Companies in various service industries have to be able to measure the actual service quality in order to take any corrective measures in relation to improving both the technical and functional qualities, such as by introducing new and innovative product/service features, revisiting the established relationship, etc. Thus, this study aimed to examine the extent to which EEU’s service quality was geared towards customer satisfaction using the SERVQUAL model. Data were collected from 363 customers of Ethiopian Electric Utility (EEU) through questionnaire that developed based on SERVQUAL model, pilot tested and distributed. Stratified, purposive and simple random sampling techniques were employed to select sample respondents. Using a mixed research approach and explanatory research design, the study found that the mean score of quality dimensions for reliability (2.73), assurance (2.65), tangibility (2.59), empathy (2.71), and responsiveness (2.80) found that there is low service quality standard of EEU in all factors. In addition, it revealed that was a linear relationship between reliability and customer satisfaction (.597), assurance and customer satisfaction (.546), tangibility and customer satisfaction (.512), empathy and customer satisfaction (.640), and between responsiveness and customer satisfaction (.608) at 0.01 level (2-tailed) significant level. Further, it found that reliability (.000), responsiveness (.000), empathy (.000), tangibility (.011), and assurance (.015) has a significant effect on customer satisfaction. Findings show that EEU customers expect more than what they perceive therefore EEU must strive hard to improve all the service quality dimensions for improved customer satisfaction. Customer satisfaction strategy will help companies to compare their performances against customer standards against internal processes, power utility industry benchmarks and identify opportunities for improvement.