EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN CASE OF ADDIS ABABA CITY ADMINSTRATION DRIVERS& VEHICLES LICENSING AND CONTROL AUTHORITY

Abstract

The purpose of this study is to examine the effect of service quality on customer satisfaction in case of Addis Ababa Driver & Vehicle Licensing and Control authority customers in Addis Ababa. The design of study was explanatory in nature. Primary data and secondary data were used in this study. Since the total populations of customers were not known, the researcher used convenience-sampling techniques for the study. Conveniently, the student researcher conducted the research by taking the sample determination method developed by Cochran (1983), according to the method Out of one hundred seventy-two (172) questionnaires distributed to customer respondents one hundred thirty-two (132) were returned (accepted).The findings of the study indicated that five service quality dimensions were positively related to overall service quality and are indeed drivers of service quality which in turn has an impact on customer satisfaction. The study findings also indicated that all the standardized coefficients relating the service quality dimensions to overall service quality and to customer satisfaction have the expected positive sign and are statistically significant. The impact of five service quality dimensions on customer satisfaction was significant in all factors of service quality. More specifically, customers indicated high satisfaction with the five dimensions of service quality examined in the study (Reliability, Responsiveness, Empathy, Assurance, and Tangibles). In this regard it was interesting to note that the dimension of responsiveness and empathy had the lowest mean ratings; however, the correlation between assurance and customer satisfaction was the highest, which implies that improvement in employee’s assurance is an important issue that requires attention. The research also concluded that service quality can be used to predict customer satisfaction and service quality account for 83.1% of the variability in customer satisfaction.