SERVICE QUALITY DELIVERY AND CUSTOMER SATISFACTION: PERCEPTION OF CUSTOMERS OF LOWER PRA RURAL BANK, TAKORADI

ABSTRACT
The banking system has seen various degrees of innovations in recent times. These have been as result of new technologies, economic uncertainties, fierce competition, more demanding customers and the changing climate which lead to an unprecedented set of challenges. Increased product varieties, diffusion and competition couple with highly enlightened consumers require that bank marketers solicit views on how their units meet customer satisfaction. The study examined service delivery and customer satisfaction at Lower Pra Rural Bank in Takoradi. The quantitative research design was employed. Stratified random sampling method was used to sample a total of 285 respondents from the two branches of the bank. Data obtained from respondents were coded and analyzed using descriptive statistics such as frequencies, percentages, means and standard deviation. Questionnaires were employed in the collection of data to address the research objectives. The study discovered clients’ wants employees of the bank to inform clients as to when service will be performed and also demand Lower Pra Rural Bank to have more convenient branches i.e. sub branches, outlets and further operate in extended hours to all its customers without the customers spending much time in queues. It further found that majority of the customers are very loyal to Lower Pra Rural Bank Limited. The study therefore recommends that management of the Lower Pra Rural Bank Ltd in Takoradi should liaise with stakeholders to put up more branches in its catchment areas to ease the congestion at the current banking halls.


CHAPTER ONE
INTRODUCTION
In the banking sector, perceived service quality has remained a very essential part of the customer’s experience. As a result of this, most banks assess their service quality on a regular basis, in order to enhance customer satisfaction. As indicated by Swar and Sahoo (2012), customers are satisfied when firms are able to deliver services that meet the expectations of the customers. High perceived quality therefore, leads to a more satisfied customer. Some studies have pointed out that, customer satisfaction is highly dependent on service quality. Service quality is a very influential variable in customer satisfaction, and thus very crucial for banking sector to maintain and improve their market share.

The study therefore presents the background to the study, which provides the rationale and motivation for undertaking the study. The problem statement which also presents the gap in literature which the study seeks to fill. Objectives of the study, research questions are also presented in the chapter. The scope, significance and limitations are also presented. The chapter concludes with the organisation of the rest of the research work.

Background to the Study
The banking system has seen various degrees of innovations in recent times. These have been as result of new technologies, economic uncertainties, fierce competition, more demanding customers and the changing climate which lead to an unprecedented set of challenges. Increased product varieties, diffusion and competition couple with highly enlightened consumers require that bank marketer solicits views on how their units meet customer satisfaction. Due to the above most firms especially banks must provide excellent services in order to meet the dynamic banking needs of their customers. In order to maximize customer satisfaction, rural banks alike must look at the quality of their service.

Rural banking in Ghana today is revolutionizing to embrace the needs of customers in their strategic orientation. Beside their dominance in the rural areas under their catchment areas, rural banks are now in major cities that are within the mandated 40 kilometre radius. The banks are opening more mobilization centre in urban areas. However, the challenge is that as rural economies undergo fundamental change, so does the universal banks. Banking deregulation in recent years has encouraged the evolution of new financial institutions and nationwide branching of existing ones (Addeah, 2001). The larger financial institutions by virtue of their flexible policy regulations are extending their services and products from the cities into these towns and semi-urban centres competing with the rural and community banks. It is thus a common activity to witness the rural communities flooded with commercial banking and micro financing institutions (Bank of Ghana [BoG], 2011). To raise funds to fulfill their mandate of meeting financial needs of the rural communities, rural and community banks have to re-strategise and expand into the economically vibrant areas.

However, unlike the universal banks which have the freedom to raise equity capital and open branches without constraints, rural banks are constrained by two main factors: It is permitted to operate within forty kilometers radius from its head office and equity capital can only be sourced from its shareholders mainly from its catchment area (Association of Rural Banks [ARB], 2002). These characteristics place restriction on the competitiveness of rural banks in the financial services sector.

Many rural and community banks therefore find themselves disadvantaged by the recent economic and financial change as well as deregulations in the other financial institutions. This policy restriction poses as a regulatory burden on the banks making it difficult for them to compete with the other financial institutions. The above demands that, the rural banks improved the quality of service delivery in order to attract and satisfy the banking needs of their customers.

Satisfied customers become royal and provide sustained revenue for the rural banks (Swar & Sahoo, 2012). Satisfied customers also attract potential clients into rural banks. To these effects all organization strive for customer satisfaction. High patronage of services depends on the satisfaction customers derive from a service. Sales are directly related to customer satisfaction as increase in sales requires improvement in the quality of service delivery; as this will encourage continuous patronage.

Generally, it is believed that services which continuously and consistently delight customers make them happy and satisfied. In such situation, they become loyal customers and will continue to demand the service which in turn will result in profit and growth of an organization. As a consequence, there is a shift in quality focus from the original producers’ point of view, which goes under different names such as “service-based quality” (Garvin, 1984), “objective and subjective quality” (Summers, 2005), and “operations management quality” (Steenkamp, 1990) towards the customers’ base quality, recognizing quality as a subjective matter (Summers, 2005).

Subjective quality has received much preference and attention, especially in free-market economies (Kondo, 2000), so as to win customers.

But, customer satisfaction in dynamic owing to the unpredictable nature of clients. What satisfied a customer yesterday may seize to become a tool for satisfaction tomorrow. There is therefore the need for rural banks to determine the relationship between the quality of service delivery and customer satisfaction. According to Saravan and Rao (2007), service quality remain critical in the service industry, as businesses strive to maintain a competitive advantage in the marketplace and achieve customer satisfaction. The financial services, particularly banks, compete in the marketplace with generally undifferentiated products; therefore service quality becomes a primary competitive weapon (Stafford, 1996). Literature has proven that providing quality service delivery to customers retains them, attracts new ones, enhances corporate image, lead to positive referral by word of mouth, and above all guarantees survival and profitability (Negi, 2009; Ladhari, 2009).

Despite the criticality of service quality to businesses, measuring service quality poses difficulties to service providers, because of the unique characteristics of services: intangibility, heterogeneity, inseparability and perishability (Bateson, 1985; Douglas & Connor, 2003). In view of this, services require a distinct framework for quality clarification and measurement. Among the prominent frameworks, SERVQUAL model developed by Parasuraman et al (1985, 1988) is most preferred and widely used model for measuring service quality in the service industry.

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Item Type: Ghanaian Postgraduate Material  |  Attribute: 90 pages  |  Chapters: 1-5
Format: MS Word  |  Price: GH50  |  Delivery: Within 30Mins.
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