Effect Of Service Quality On Customer Satisfaction: The Case Of Cooperative Bank Of Oromia In Ambo Town, West Shoa Zone, Oromia Regional State, Ethiopia

Abstract

The main purpose of this study is to identify the effect of service quality on customer satisfaction in Cooperative bank of Oromia Ambo branch and oddo liban branch. Convenience sampling technique was used to select the sample size and a sample of 202 bank customers are taken to undertake the study and Out of these distributed questioners 182 questionnaires were returned. For the purpose of the study primary data were collected using likert scale based questionnaire. The data collected from the questionnaire were analyzed using statistical tools such as mean, correlation, and regression analysis via SPSS (version. 20). Descriptive analysis also indicates that customers were moderately satisfied with the reliability dimensions of service quality followed by responsiveness and empathy. However, there are problems that hinder the effectiveness of service delivery in the bank like power fluctuation, network connection problem, mismatch of the number service providers with the customers, shortage of working hours and lack of customer waiting hall. The finding from the correlation result shows that there is a positive and significant relationship between the service quality dimensions and customer satisfaction. The Pearson’s correlation indicates that the highest relationship is found between responsiveness followed by tangibility and assurance, and customer satisfaction. In addition the three service quality dimensions responsiveness, assurance, tangibility, has positive and significant effect on customer satisfaction at the bank. However, the rest two dimensions empathy and reliability have no effect on customer satisfaction. Service qualities also have positive and significant effect on customer satisfaction. Based on these, the researcher forwards some recommendations that the bank should work more on the two service quality dimension (reliability and empathy) to enhance customer satisfaction to the bank’s management and suggestions for other researchers. Finally, the researcher forwarded some recommendations for the management of the bank.