SERVICE QUALITY AND CUSTOMER SATISFACTION: PERCEPTION OF CUSTOMERS OF ZENITH BANK ACHIMOTA BRANCH ACCRA

ABSTRACT

The study sought to examine the effects of service quality on customer satisfaction at Zenith bank Achimota branch Accra Ghana. The study adopted the quantitative research design and data collection was made with the random sampling technique. The study adopted the random sampling technique and in all three hundred and twenty customers of the bank was sampled for the study with the use of structured questionnaires as the research instrument. The findings of the study revealed that the customers were satisfied with the quality of service delivery by the bank. The customers irrespective of their gender, age, and educational level attributed equal level of satisfaction to the quality of service delivered by the bank. When regression analysis was applied to investigate the effects of service quality dimensions on customers’ satisfaction, it was reflected in the results that reliability, responsiveness, assurance, empathy and tangible all have a positive and significant effect on customers’ satisfaction. However, empathy and tangible have the highest positive and significant effect on the customers’ satisfaction. Therefore, increasing service quality level increases customers’ satisfaction. Based on the findings and conclusions of the study, the following recommendations are made:As Zenith bank have strengths in some dimensions of service quality (empathy and tangible) as identified in the research it is recommended to the bank to continue developing these dimensions and consider them as competitive weapons in influencing customer satisfaction. The assurance and reliability dimensions in service quality were identified as main factors that least affects customers’ satisfaction therefore the study recommend to the bank to focus on these.

CHAPTER ONE

INTRODUCTION

Background to the Study

In today’s highly competitive global environment, quality of services is an essential element for enhancing customer satisfaction (Khan, 2014). These are important factors in improving the performance of banks and in determining their success, i.e. better profitability and a bigger market share (Khan, 2014). Efficient banking system greatly influences the growth of the Ghanaian economy in different sectors. Furthermore, practitioners in the banking sector face many complex challenges in the global market. It is important for banks to better understand the changing customer requirements and adopt the latest service quality system to compete more effectively with global organizations (Lau, Cheung, Lam & Chu, 2013). Moreover, service sector such as banks have the responsibility to provide the best services to their customers in order to have sustainable competitive advantages. Due to the critical quality of service demanded by customers, it is difficult for banks to meet the demands of their customers in relation to their satisfaction.

According to Panda, (2003), the success of a service provider depends on the high quality relationship with customers who determine customer satisfaction (Lymperopoulos, Chaniotakisand & Soureli, 2006). Armstrong (2002) posit that service quality play an important role in shaping customer satisfaction. The more quality products and services provided by the company is perceived by the customer satisfaction will be higher (Armstrong, 2002). Bloemer, De Ruyter and Peeters (1998) in their study showed a variable effect Service Quality on Customer Satisfaction. Cronin, Brady, and Hult (2000) describe the research results found that there was no direct effect between service quality on customer satisfaction in the service of six companies studied.

As opined by Davoudian (2010), any organization cannot achieve success without regard to the customers’ needs and demands and their satisfaction. Superior service quality enables companies to distinct from themselves competitors, obtained sustainable competitive advantage, and improve their functionality. Superior quality and effects provided by organizations provide customer satisfaction. Customer satisfaction is marker quality of marketing decisions (Chit, 2013).

According to Asubonteng, McCleary and Swan (1996), due to intense competition and the hostility of environmental factors, service quality has become a cornerstone marketing strategy for companies particularly banks. This highlights how important improving service quality is to organisations for their survival and growth since it could help them tackle these challenges they face in the competitive markets. This means that service-based companies are compelled to provide excellent services to their customers in order to have a sustainable competitive advantage. There is however, a need for these organisations to understand what service quality is in order to attain the demands of their customers.

The premise of “service quality” as a tool for gaining competitive advantage and lead in a market-driven system has been well recognized by the financial institutions. However in current highly competitive corporate environment it has become increasingly important to not only become the market leader but also to maintain that top position (Zeithaml & Bitner, 1996).

Researchers all over the globe claim that offering quality services give a sustainable competitive advantage to any business. It enables them to fulfil not only the present needs of their customers satisfactorily but also to anticipate their future needs. This ability to anticipate the future needs of customers allows them to delight their customers through quality services on consistent basis. Subsequently it enhances customer satisfaction and customer loyalty level towards these organizations (Naik, Gantasala & Prabhakar, 2010).

Even though Chit, (2013) observes that there is no consensus about conceptualizing and measuring (perceived) service quality, it has been suggested that service quality is “the consumer’s judgment about the overall excellence or superiority of a service”, or in other words, the brand’s image. Perceived quality provides value to customers by providing them with a reason to buy and by differentiating the brand from competing brands. It is envisaged that customers’ perception of quality will be associated with their brand loyalty. Customer is likely to perceive the brand as offering superior quality will become more brand loyal. Bolton and Drew (1991) suggested that service quality has significant effects on customer loyalty.

Lymperopoulos, Chaniotakisand and Soureli (2006) were among others who pointed out that there is a positive relationship between perceived service quality and repurchase intention, recommendation and resistance to better alternatives, which can be interpreted as customer loyalty. Service quality is decomposed into its five components (tangibility, reliability, responsiveness, assurance and empathy), hypotheses involving perceived quality have also been divided to show the relationship between each component with other customer-based brand equity variables. In addition, customer satisfaction always follow the service quality as one of the most frequently used variables to measure the success of marketing (Wen, Lan and Cheng, 2005). The aim of this research is to analyse and explain the effects of service quality on customer satisfaction of Zenith Bank Achimota branch.

Statement of the Problem

Although much empirical evidence could be found in the literature worldwide investigating the relationship between service quality and customer satisfaction this domain has not been much considered in the Ghanaian context. A lot of research on service quality and its association with customer satisfaction has been conducted in developed countries but not in developing countries. With customers’ increasing power, banks face a huge challenge to build a better service quality strategy to meet the demands of the customers. According to Wang, Lo and Hui (2003), up to 70% of organizations do not understand how service quality creates value in their customer base. Because of this lack of understanding, organizations have failed to develop good service quality strategies for their maximum benefit. This high rate of failure has provoked experts and researchers to dig into the causes of this problem.

The banking sector now faces stiff interbank competition in providing customer service, giving special facilities and ensuring customer satisfaction. At present, the banking sector of Ghana plays very important role in economic development and increasing GDP of the country as it is a basement of the money and capital market. For sustainable development of this sector mainly depends on the trust and loyalty of the customer to the server bank and quality customer service and better customer relationship. The purpose of this study is to assess the effects of service quality on customer satisfaction in Ghana.

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Item Type: Ghanaian Topic  |  Size: 79 pages  |  Chapters: 1-5

Format: MS Word  |  Delivery: Within 30Mins.

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