University of Gondar Institutional Repository

University of Gondar

College Business and Economics

Department of Marketing Management

The Effect of Service Quality on Customer Satisfaction in Gondar

Zuria Woreda, Maksegnit Municipality

By

Alebachew Addis

June 2021

Gondar, Ethiopia


College of Business and Economics


The Effect of Service Quality on Customer Satisfaction in Gondar Zuria

Woreda, Maksegnit Municipality

A Thesis Submitted to Department of Marketing Management in

University of Gondar for Partial Fulfilment of the Requirements for the

Degree of Master in Marketing Management

By:

Alebachew Addis

Principal Advisor: Fantaye Kassa (Dr)

Co-advisor: Endris Nuru (Dr)

June 2021

Gondar, Ethiopia

Declaration

I, the undersigned, declare that, this study “The Effect of Service Quality on Customer

Satisfaction in Gondar Zuria Woreda, Maksegnit Municipality” is my original work and

has not been presented for a Degree in any other University, and that all the sources of

materials used for the study have been duly acknowledged.

Declared by:

Name: Alebachew Addis

Signature: ________________

Date: _________________

Certificate

This is to certify that Alebachew Addis has carried out his research work on the topic entitled

“The Effect of Service Quality on Customer Satisfaction in Gondar Zuria Woreda,

Maksegnit Municipality” This work was completed under our guidance in partial

fulfillment for the degree of Master of Marketing Management. In our view, the work is an

original effort of the candidate and all the materials used for the thesis has been dully

acknowledged.

Fantaye Kassa (Dr) ____________________ __________________________

Principaladvisor Signature Date

Endris Nuru (Dr) _____________________ _________________________

Co-advisor Signature Date

Approval

This is to certify that the thesis prepared by Alebachew Addis “The Effect of Service

Quality on Customer Satisfaction in Gondar Zuria Woreda, Maksegnit

Municipality”and submitted in partial fulfillment of the requirements for the Degree of

Master of Marketing Management complies with the regulations of the University of Gondar,

and meets the accepted standards with respect to originality and quality.

The Board of Examiners:

1. _____________________________ _________________ _________________

Advisor Signature Date

2. _____________________________ _________________ _________________

Internal Examiner Signature Date

3. _____________________________ _________________ _________________

External Examiner Signature Date

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Acknowledgments

First, and for most I would like to thank the almighty God for being my guiding light and

strength throughout my life without whom the completion of this paper wouldn't have been

possible.

Secondly I express my heartfelt thanks and appreciation to my advisors, Principal advisor:

Fantaye Kassa ( Dr ) and Co-advisor:Endris Nuru ( Dr ) especially for their critical comments

and insightful feedback as the research work was on progress. They are really great in

directing my study, giving me with keen advice throughout all the times of doing this

research.

Thirdly I would also like to sincerely pass my deepest thanks to all participants of this

research who were generously sparing their time in providing me with valuable and insightful

information relevant to the study. They have deserved special place in the progress of this

research for their keen collaborations.

Finally, I would like to pass my thanks to all members of my family and friends who had

always been at my side while I was doing this research work.

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Table of contents

Declaration ............................................................................................................................................... i

Certificate ................................................................................................................................................ ii

Approval ................................................................................................................................................ iii

Acknowledgments .................................................................................................................................... i

List of Tables .......................................................................................................................................... iv

List of Figures ........................................................................................................................................ iv

Abstract ................................................................................................................................................... v

Chapter One ............................................................................................................................................ 1

1. Introduction ..................................................................................................................................... 1

1.1. Background of the Study .............................................................................................................. 1

1.2. Statement of the Problem ........................................................................................................... 4

1.3. Research Questions ..................................................................................................................... 6

1.4. Objectives of the Study ................................................................................................................ 6

1.4.1. General Objective ................................................................................................................. 6

1.4.2. Specific Objectives ............................................................................................................... 6

1.5 .Significance of the Study .............................................................................................................. 7

1.6. Scope of the Study .................................................................................................................. 7

1.7Organization of the Study .............................................................................................................. 8

Chapter Two............................................................................................................................................ 9

2. Review of Related Literature .......................................................................................................... 9

2.1. Theoretical Review ....................................................................................................................... 9

2.1.1. Definitions and Concepts of Service ..................................................................................... 9

2.1.2 Service Quality ..................................................................................................................... 11

2.1.3. Service Quality Dimensions ............................................................................................... 14

2.1.4. Customer Satisfaction ........................................................................................................ 18

2.1.5. Service Quality and Customer Satisfaction ......................................................................... 19

2.2. Empirical Review ........................................................................................................................ 21

2.3. Conceptual Model ...................................................................................................................... 22

Chapter Three........................................................................................................................................ 24

3. Research Methodology ................................................................................................................. 24

3.1. Research Approach .................................................................................................................... 24

3.2. Research Design ......................................................................................................................... 24

3.3. Target Population....................................................................................................................... 25

3.4. Sample Determination and Sampling Techniques ..................................................................... 25

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3.5. Data Collection Instruments and Procedure .............................................................................. 26

3.5.1. Data Collection Instruments ................................................................................................ 26

3.5.2. Data Collection Procedure .................................................................................................. 27

3.6. Validity and Reliability of Instruments ....................................................................................... 28

3.6.1. Validity of Instruments ....................................................................................................... 28

3.6.2. Reliability of Instruments .................................................................................................... 28

3.7. Variables of the Study ................................................................................................................ 30

3.7.1. Dependent variable ............................................................................................................. 30

3.7.2. Independent Variables......................................................................................................... 30

3.8. Data Analysis Method ................................................................................................................ 31

3.9. Ethical Considerations ................................................................................................................ 31

Chapter Four ......................................................................................................................................... 32

4. Data Analysis and Discussion ........................................................................................................... 32

4.1 Demographic Characteristics of the Respondents ...................................................................... 32

4.2. Service Quality Dimensions ........................................................................................................ 33

4.3. Correlation Analysis ................................................................................................................... 40

4.4. Regression Analysis .................................................................................................................... 41

4.4.1. Assumptions’ Test............................................................................................................... 41

4.4.2. Multiple Regression Analysis ............................................................................................. 42

Chapter Five .......................................................................................................................................... 46

Summary, Conclusion and Recommendation ....................................................................................... 46

5.1. Summary of the Major Findings ................................................................................................. 46

5.2. Conclusion .................................................................................................................................. 47

5.3. Recommendation ....................................................................................................................... 48

5.4. Suggestion for Further Study ..................................................................................................... 49

References ............................................................................................................................................. 50

Appendix-I ............................................................................................................................................ 55

Appendix-II ........................................................................................................................................... 58

Appendix III .......................................................................................................................................... 60

APPENDIX IV...................................................................................................................................... 67

APPENDIX V ....................................................................................................................................... 68

Appendix VI-1 ...................................................................................................................................... 69

Charts .................................................................................................................................................... 69

Appendix-IV-2 ...................................................................................................................................... 71

Appendix-IV-3 ...................................................................................................................................... 72

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List of Tables Table-3-1: Reliability Coefficients of the Instruments....................................................... 26

Table-3.2: Response Rate of the Questionnaires................................................................ 27

Table-4.1: Demographic Characteristics of the Respondents............................................. 29

Table-4.2: Descriptive Statistics of Reliability................................................................... 31

Table-4.3: Descriptive Statistics of Responsiveness........................................................... 32

Table-4.4: Descriptive Statistics of Tangibility................................................................... 33

Table-4.5: Descriptive Statistics of Assurance................................................................... 34

Table-4.6: Descriptive Statistics of Empathy..................................................................... 35

Table-4.7: Descriptive Statistics of Satisfaction................................................................ 36

Table-4.8: Relationship of Service Quality Dimensions and Customer Satisfaction........ 37

Table-4.9: Multiple Regressions of Service Quality on Customer Satisfaction................ 39

Table-4.10: Hypothesis Testing......................................................................................... 40

List of Figures

Figure-1: Service Quality and Customer Satisfaction.......................................................... 20

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Abstract

The purpose of this study is investigating the effect of services quality on customer

satisfaction. Against this purpose, the study used a descriptive and explanatory design to

realize the intended objectives. Gondar Zuria woreda was selected using purposive sampling

method based on which the municipality in Maksegnit was included in the study. There were

71586 residents in Maksegnit that live in three kebeles. According to the statistical data

obtained from the information desk of the municipality in Maksegnit town, there have been

2415 customers who visited the municipality as of September 2020 and it wasa total

population of the study. Taking this as a base data, sample size of the study was 343. Samples

were selected and included in the study using convenience sampling technique to administer

the questionnaires to the respondents. Data to the study were collected using questionnaires.

In this study, customer satisfaction as a dependent variable against five dimensions of service

quality (customer satisfaction) and independent variables (the five dimensions of service

quality) as independent variables were investigated.So, data were analyzed through a

Statistical Package for Social Science (SPSS) usingsuch statistical tools as descriptive

analysis, correlation and multiple regression analysis techniques. The results of the

descriptive statistical analysis indicated the low level of all the service quality dimensions

and customers were not satisfied with service quality of the municipality. The correlation

result shows that there is positive and significant relationship between reliability,

responsiveness, tangibility, assurance and empathy and customer satisfaction. Similarly, the

multiple regression results showed that all the five service quality dimensions have positive

and significant impact on customer satisfaction. In this study all the hypotheses were

accepted. Therefore, high quality service is an increasingly important weapon to maintain

higher service quality and higher customer satisfaction. Therefore, Maksegnit municipality

should influence service quality dimensions as a way of ensuring customers’ satisfaction.

Key Words: Customer Satisfaction, Tangibility, Reliability, Responsiveness, Assurance,

Empathy

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Chapter One

1. Introduction

This chapter presents an overview of the entire study. It includes the background of the study,

statement of the problem, objective of the study, research questions, significance of the study,

operational definition, delimitations of the study and limitation of the study and organization

of the study.

1.1. Background of the Study

Both concepts of customer satisfaction and servicequality have increasingly become

important issues in research (Audrey, 2003). From the beginning of the “customer service

revolution” as given in the works of Ron and Dick (1989) almost 30 years ago, a body of

business research has focused on customer satisfaction. Business consultants and

corporations have worked to identify characteristics of organizations that consistently please

their customers, to develop tools for monitoring customer satisfaction, and to build

continuous, quality improvement systems that respond to consumer feedback (Centre for

Study of Social Policy, 2007). Although much of the research has been conducted by and for

the corporate world, customer service and satisfaction is not limited to the private sector.

Publicly funded organizations in the business world provide growing body of experience and

study. Increasingly, federal, state and local government agencies are attempting to gauge their

performance and the effect on those they directly serve. Throughout the public sector,

initiatives have elevated customer service and satisfaction to new priorities. Businesses

monitor customer satisfaction to determine how to increase customer base, loyalty, profits,

and survival. Exemplary businesses work to make their customers happy and see customer

satisfaction as the key to survival. Customersatisfaction in turn hinges on the quality and

effects of their experiences and the goods or services they receive (Centre for Study of Social

Policy, 2007).

Conceptualizing customer satisfaction has been widely debated as organizations increasingly

attempt to measure it. It can however be experienced in a variety of situations and connected

to both goods and services. It is a highly personal assessment that is greatly affected by

customer expectations. Satisfaction also is based on the customer’s experience of both

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contact with the organization (the “moment of truth” as it is called in business literature) and

personal outcomes (Centre for Study of Social Policy, 2007).

Some researchers define a satisfied customer within the private sector as “one who receives

significant added value” to his/her bottom line, a definition that may apply just as well to

public services (Hanan and Karp,1989).Customer satisfaction differs depending on the

situation and the product or service. A customer may be satisfied with a product or service, an

experience, a purchase decision, a salesperson, store, service provider, or an attribute or any

of these (Padilla, 1996).Some researchers completely avoid “satisfaction” as a measurement

objective because it is “too fuzzy an idea to serve as a meaningful

benchmark”(Wreden,2004). Instead, they focus on the customer’s entire experience with an

organization or service contact and the detailed assessment of that experience. For example,

reporting methods developed for health care patient surveys often ask customers to rate their

providers and experiences in response to detailed questions such as, “How well did your

physicians keep you informed?” These surveys provide “actionable” data that reveal obvious

steps for improvement (Maniema,2005). Some definitions are based on the observation that

customer satisfaction or dissatisfaction results from either the confirmation or

disconfirmation of individual expectations regarding a service or product.

In the public sector, customer satisfaction is often linked to both the personal interaction with

the service provider and the outcomes experienced by service users. This concept addresses

three aspects of customer satisfaction. The first is satisfaction with client-worker interaction

whether in-person, by phone, or by mail; the second is satisfaction with the support payment

(e.g., its accuracy and timeliness); and the third is satisfaction with the effect of support

enforcement (Hutten and Cox,1989).

Research identifies many characteristics that are associated with service quality. Business

researchers Schneider and Bowen (1995) assert that “service organizations must meet three

key customer needs to deliver service excellence:”security, esteem, and justice. Research

identifies an array of service quality factors that are important for customers, including:

timeliness and convenience, personalattention, reliability and dependability, employee

competence and professionalism,empathy,responsiveness,assurance,availability, and

tangibles such as physical facilities and equipment and the appearance of the personnel.

Research shows that these characteristics also apply to citizen satisfaction with public service

quality. Timely service is an especially strong determinant of quality across different types of

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public services. Fairness and outcomes are additional factors important to public service

customers (Osborne and Peter, 2001).

Public sector quality improvement initiatives are on the rise worldwide as contracting and

private service provision has become more common. At the same time, European researcher,

Pillinger (2005) notes that consumer demand for more transparent, equitable, and consumer-

oriented services has produced a quality gap: a gulf in perceptions of quality and the impact

of services on the end user. She calls for rethinking quality initiatives to interlink quality

improvement with user involvement and participation and with social equality and inclusion

(Pillinger (2005). The experiences of successful businesses both support this perspective and

offer experiences, tools and lessons for putting customers first.

Customer Satisfaction and Service Quality are leading components in the system of external

relations of each organization, as today they largely determine its competitiveness. The desire

to manage relationships with customers leads to the fact that organizations are starting to pay

attention to the development and implementation of service standards (Mike, 2001). Many

industries are paying greater attention to customer satisfaction and service quality, for reasons

such as increased deregulation and competition (Abdissa, 2019). Satisfaction from service

quality is frequently evaluated in terms of functional quality and technical quality (Gronroos,

1984). Regularly, customers do not have lot information about the technical phases of a

service; therefore, functional quality becomes the main aspect from which to form

perceptions of quality of service. Service quality may be described as customer perception of

how well a service assembles or go over’s their expectations. Service quality can be

determined in terms of customer expectation, customer perception, and customer attitude and

customer satisfaction(Mohammad, Abdullah and Rahman, 2011)

Service organizations range in size from huge international corporations like airlines,

banking, insurance, telecommunications, hotel chains, and freight transportation to a vast

array of locally owned and operated small businesses, including restaurants, laundries, taxis,

optometrists, and numerous business-to-business services (Abdissa, 2019). At the same time,

municipalities must balance the revenue they received with the high cost of providing more

efficient services demanded by the citizen. Customer satisfaction and service quality are

important concepts to academic researchers studying consumer evaluations and to

practitioners as a means of creating competitive advantages and customer loyalty

(Mohammad, Abdullah and Rahman, 2011)

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Cities are important role players in service delivery. They are required by law to find

innovative methods to involve communities in all their affairs. The mandate of a

municipality, according to the Constitution, is to ensure that the service deliveries for which it

is responsible satisfy citizens’ basic needs. These include water supply, sewerage collection

and disposal; refuse removal, electric municipality and gas supply, health services, roads and

storm water drainage, street lighting, and municipal parks and recreation (Boshoff &

Mazibuko, 2008 cited in Abdissa, 2019).

With the increase of the importance of service sector in Ethiopian economy, the

measurements of service quality become important. Many studies indicate that there are links

between customer satisfaction and service quality. In order to meet customer demand, many

companies need to better serve their customers. Better quality of service can usually get a

higher market share and better returns (Sousa & Voss. (2006).Providing high service quality

and generating customer satisfaction are significant mattes and challenge meeting the current

service industry (Wicks & Roethlein, 2009),Thus, this study attempts to investigate the effect

of services quality on customer satisfaction in Maksegnit Municipality

1.2. Statement of the Problem

The delivery of consistent service quality is arguably the most vital factors that contribute to

the establishment of credibility and reputation of the organizations in the eyes of the public

(Sachdev and Verna, 2004).Studies show that outstanding customer service organizations

focus on a clear goal, satisfying the customer and design everything else with that aim in

mind. From the top-down, these organizations act to provide positive customer experiences.

The focus on complete customer satisfaction permeates the organization(Centre for Study of

Social Policy, 2007).

Public services organizations specifically at local government level are not immune to the

pressures to improve the quality of their services on a continuous basis. Municipal authorities

for example, face more daunting tasks than those in the private sector in their efforts to

maintain citizen satisfaction. However, there are influences on the public organizations some

of which arise within from local authorities’ genuine desire of improving the quality of

5

services provided to the community while others are imposed or forced either by public

initiatives due to an increase in consumers’ awareness of their rights (Vazquez,

Gutierrez&Garcia, 2005 cited in Abdissa, 2019).

Despite services are large in the world economies, public organizations’ practices of quality

service delivery are less developed when compared to those in the manufacturing industry.

Service organizations are lagging in the effective use of Total Quality Management (TQM)

practices(Yasin, Alvin, Knut&Zimmer, 2004 cited in Zahari, et al, 2008).Studies have been

done in different service sectors in using SERVQUAL to examine service quality. An initial

application of SERVQUAL in the airline industry was provided by Flick and Ritchie (1991)

that illustrate how the measurement approach can be useful in comparing different

components of a larger service sector in the case of tourism industry (Zahari, et al, 2008).In

developing a modified version of SERVQUAL, Pakdil and Ayden, 2007 cited in Abdissa

(2019)extended the original service quality dimensions to include issues of image, flight

experience and availability of interchange, with airline passengers tending to rate

responsiveness as the most important service dimension. Zisis, Garefalakis and Sariannidis

(2009) used the model to determine customer satisfaction through perceived quality in

Telecommunication industry and found out that reliability, empathy and network quality

proved to significantly effective in contributing to overall service quality and overall

customer satisfaction with mobile services.

In the context of Ethiopia, Gebregziabher(2015) examined the service quality and customers’

satisfaction on three-star hotels in Addis Ababa and stated that the combination of tangibility,

reliability, responsiveness, confidence and communication together has significant and

positive effect on customer satisfaction.Andargie (2013) studied foreign customer satisfaction

in Sheraton Addis and Hilton five star intercontinental hotels and reported that the customers

aren’t satisfied and a gap in their expectation and perception in all service quality dimensions.

A study by Zeleke (2012) on the impact of service quality on customer satisfaction at

National Alcohol and Liquor Factory showed that the five service quality dimensions brought

an impact on customer satisfaction was significant in all factors of service quality.

As noted by Frederick and Kumar (2000) despite customer satisfaction has raised concerns in

the contact center industry; empirical studies have mostly been conducted on staff

dissatisfaction. Studying the effect of service quality with service quality dimensions into

account on customer satisfaction is signifies important in the study area. Hence, this study

6

focuses on assessing the effect of service quality on customer satisfaction in the municipality

of Maksegnit in Gondar Zuria woreda of Central Gondar.

1.3. Research Questions

The researcher tried to answer the following research questions.

1. What is the level of service quality and customer satisfaction in the municipality of

Maksegnit?

2. Is there any relationship between service quality dimensions ( tangibility, reliability,

responsiveness, assurance, and empathy ) and customer satisfaction?

3. What is the effect of service quality (tangibility, reliability, responsiveness, assurance,

and empathy) on customer satisfaction?

4. What is the most influential service quality dimension on customer satisfaction?

1.4. Objectives of the Study

1.4.1. General Objective The general objective of this study is investigating the effect of services quality on customer

satisfaction in Maksegnit municipality in Gondar Zuria woreda of Central Gondar

Administrative Zoneof The Amhara National Regional State.

1.4.2. Specific Objectives Thisstudy also has the following specific objectives.

1. To determine the effect of responsiveness on customer satisfaction

2. To determine the effect of assurance on customer satisfaction

3. To determine the effect of tangibility on customer satisfaction

4. To determine the effect of reliability on customer satisfaction

5. To determine the effect of Empathy on customer satisfaction

6. To reveal the most influential dimensions of service quality on customers’ satisfaction

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1.5 .Significance of the Study

Since the study aims at investigating the effect of service quality on customer satisfaction, it

renders some benefits. To the municipality: The study can provide an organization with an

information on the existing customer behaviour which helps to respond in unique and

creative ways to the evolving needs and constantly shifting expectations of its customers

towards a lasting competitive advantage. It also helps the municipality to establish a clear

vision of what superior service is, communicate that vision to employees at every level, and

ensure that service quality is personally and positively important to everyone in the

organization.

To policy makers and the management: The study can provide policy makers and the

management with useful information that can help them devise means of supporting sectors

establish concrete standards of service quality and regularly measure themselves against

those standards towards maximizing their customer satisfaction by providing quality service

for customers

To researchers: The study may add a body of knowledge that indicate more other researchers

to engage in the same issue or other issues of concern in service delivery so that it is essential

for interested researchers in the field who want to undertake further studies related to services

of public organizations.

1.6. Scope of the Study

This study was undertaken in Central Gondar administrative zone focusing on the

municipality in Maksegnit town. Quality service and customersatisfactions in the context of

the municipality may touch several dimensions that could be too broad for this specific study.

In order to make the study manageable, special emphasis was given only on the effects of

service quality dimensions reliability, responsiveness, tangibility, assurance, and empathy) on

customers’ satisfaction in the municipality based on data from current customers.

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1.7 Organization of the Study

The thesis is organized into five chapters. The first chapter introduces about the study and

deals with background of the study, statement of the study, research questions, objectives of

the study, significance of the study, scope of the study, and definition of key terms. The

second chapter focuses on the review of some literature to establish theoretical, conceptual

and empirical framework of the study. The third chapter presents the methodology that

includes the research design, sampling size and sampling technique, source of data and data

collection methods, and data analysis techniques. The fourth chapter deals with data analysis

and result discussion. Chapter five finally addresses conclusions and recommendation.

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Chapter Two

2. Review of Related Literature

Chapter two focuses on the review of the related literature intended to provide theoretical

bases, conceptual framework and empirical findings to the study in accordance with the

research problem. Accordingly, it focuses on concepts of service, service quality, and the

dimensions of service quality, customer satisfaction, and service quality model

2.1. Theoretical Review

2.1.1. Definitions and Concepts of Service According to Kotler and Armstrong (2012), a service can be defined as economic activities

that produce time, place, form, or psychological utilities. Service as additionally explained by

the writers is any activity or benefit that is essentially intangible and does not result in

ownership of anything. The production of a service may or may not be tied to a physical

product. Service by Conwell, 1984 cited in Messay (2012) is also defined as those activities

that are separately identifiable and can provide satisfaction and are not necessarily tied to the

sale of a product or another service.

The American Society for Marketing defines service as activities or benefits that are offered

for sale or that are offered for being related to a particular product. Kotler (2003) defined

service as 'any behaviour or act based on a contact between two parties: the provider and the

receiver, and the essence of this reciprocal process in intangible. Lovelock et al. (2001)looked

at service as a set of economic activities that provide time, location form and psychological

benefits. Beer (2003) defined service as a set of characteristics and overall properties of the

service which aim to satisfy the clients and meet their needs.

Service has several different determinants from product such as high intangibility, cannot be

seen, and cannot be touched, smelled or even tasted but only can be felt by experiencing the

service itself. Hence, services are more challenging to be visualized by the service provider

and customer and it is difficult for the customer to express their confidence of the service

unless they experience the service by themselves by comparing standard and perceptions of

result performance (Sara et al., 2008). Services could not be owned like product but only

rented by the customer. Due to these determinants, services also involved tangibility features

10

such as facilities, service personnel and service ambient that help the service providers to

perform their service (Sara et al., 2008).

Physical quality relates to the tangible aspects of a service (Zeithaml et al., 1996). In a

nutshell, service not only involves intangibility aspects but also by the tangible aspects to

help the service provider to perform their work. Manufacturing or automobile industry or

even small and medium industries for example, may have to produce a good quality product

in order to have a good expectations from customers and the same goes to service oriented

business where they need to provide a good service quality in term of many aspects such as

service provider itself, facilities, service ambient or environment, technology and many other

aspects in order to attract customer to use the services offered and make them satisfied or

maybe more than satisfied with the service provided (Siddiqi, 2011).

Many service firms/organizations have become successful by identifying a previously

unrecognized or unsatisfied customer needs and wants. Services as described by Messay

(2012) are identifiable, intangible activities that are the main object of a transaction designed

to provide want satisfaction to customers. He further stated that the travel, hospitals, finance,

entertainment, health care communications, utilities and professional services fields are prime

example. Recognizing the importance of marketing, many of these industries and

organizations within them are now adding marketing-related personnel. According to Kotler

and Armstrong (2012) explained more about services as they are growing ever faster in the

world economy, marketing up a quarter of the value of all international trade. A service is an

act or performance that one partly can offer to another that is essentially intangible and

doesn’t result in the ownership of a thing. Its production may or may not be tied to a physical

product.

According to Bitner et al. (1993) service has four characteristics as intangibility,

inseparability, heterogeneity and perishes ability. Concerning intangibility of services, it was

Regan (1963) introduced the idea of services being activities, benefits or satisfactions which

are offered for sale or provided in connection with the sale of goods. The degree of

intangibility has been suggested as a means of differentiating tangible products with services.

Most of the time, services are explained as being intangible since their outcome is considered

to be an action rather than a physical product highlight the fact that the degree of tangibility

has implications for the ease with which consumers can evaluate services and products

(Zeithaml et al. 1985).About inseparability of services, inseparability is taken to show the

11

simultaneous delivery and consumption of services and it is believed to enable consumers to

affect or shape the performance and quality of the service (Zeithaml et al. 1985).

Regarding heterogeneity of services, heterogeneity reveals the degree of high variability in

service delivery. This is a particular problem for services with high labour involvement, as

the service performance is delivered by different people involved in the service provision and

the performance of people can vary from day to day and also from person to person. Besides,

it offers the opportunity to provide high degree of flexibility and customization of the service

and this can be used as a benefit and point of differentiation. The notion of perish ability of

services reflects that services cannot be stored and carried forward to a future time period and

suggest that services are time dependent and time important which make them very

perishable. The issue of perish ability is primarily the concern of the service producer and

that the consumer only becomes aware of the issue when there is insufficient supply and they

have to wait for the service (Bitner et al.,1993).

2.1.2 Service Quality Defining quality may depend on the purpose and whom for one talk about. Quality may not

be defined satisfactorily. Hence, different scientists define it differently. Quality is fitness for

use. Quality is conformance to requirements. Quality is a system of means to economically

produce goods or services which satisfy customers’ requirements (Juan, 1974, Crosby, 1979,

Japanese Industrial Standards Committee, 1981 in Zeithaml et al. 1985). Although there is a

lot of rhetoric around the concept in defining quality, according to the American society for

quality control, quality is the totality of features and characteristics of a product or service

that bear on its ability to satisfy stated or implied needs.

There are many researchers who have defined service quality in different ways. Among these

are found the definition given by Bitner, Booms and Mohr. According to Bitner, Booms and

Mohr (1994) service is defined as the quality that the consumer’s overall impression of the

relative inferiority/superiority of the organization and its services. While other researchers

(e.g. Cronin and Taylor, 1992) view service quality as a form of attitude representing a long-

run overall evaluation, Parasuraman, Zeithaml and Berry (1985) view service quality as a

function of the differences between expectation and performance along the quality

dimensions. This has appeared to be consistent with Roest and Peters (1997) definition that

service quality is a relativistic and cognitive discrepancy between experience-based norms

and performances concerning service benefits. A review on the service marketing literature

12

indicates that there are mainly two types of service quality conceptualizations: Nordic and

American (Vijayadurai, 2008).

The Nordic approach proposes that a customer’s overall perception of service quality consists

of functional and technical quality, with technical quality being what customers get after the

service delivery process in buyer-seller interactions and functional quality is the interaction

between employees and customers during the service encounter (Gronroos, 2001). The

American approach proposes that service quality consists of reliability, responsiveness,

empathy, assurances, and tangibles dimension (Zeithaml et al., 1996). This model, based on

expectancy- disconfirmation theory, views that service qualityis a gap between customers’

perceptions and expectations of service performance.

Hence quality is an integral part of business. Smith, (1997) in his study of Malcolm Bald

ridge National Quality Award reports in US 2003 defines quality as listening to customers

and delivering what they expect. Quality according to Professor Bill Evans asked. A hundred

definitions could be elaborated, but the only one right answer is that quality is what the

customer says it is. Service quality is seen as the gap between the consumers’ expectations

and perceptions, that is, the quality of a service will be rated high when the service delivered

exceeds the consumers’ expectations and will be rated low when it falls short of customers’

expectations. If the performance exceeds expectations, the customer is highly satisfied.

One of the major ways to differentiate a service firm is to consistently deliver higher quality

service than competitors (Kotler, Wong, Saunders and Armstrong, 2005).The key target is to

meet or exceed customers’ quality expectations. Their expectations are formed by their past

experience, word of mouth and service firm advertising. The customers choose providers on

this basis, after receiving the service; they compare the perceived with the expected service.

Various studies of excellently managed service companies show that they share a number of

common practices with respect to service quality. These include: A history of top

management to quality, the setting of high standards, systems for monitoring service

performance, and satisfying the employees as well as customers (Ntaayi, 1998 cited in

Ladhari,2008).Business researchers Schneider and Bowen (1995) assert that service

organizations must meet three key customer needs to deliver service excellence security,

esteem, and justice(Schneider and Bowen, 1995). Research identifies an array of service

quality factors that are important for customers, including: timeliness and convenience,

personalattention, reliability and dependability, employee competence and

13

professionalism,empathy,responsiveness,assurance,availability, and tangibles such as

physical facilities and equipment and the appearance of the personnel.

In public service quality, timely service is an especially strong determinant of quality across

different types of public services. Fairness and outcomes are additional factors important to

public service customers (Osborne and Peter, 2001). Public sector quality improvement

initiatives are on the rise worldwide as contracting and private service provision has become

more common. At the same time, European researcher Pillinger (2005) notes that consumer

demand for more transparent, equitable, and consumer-oriented services have produced a

quality gap: a gulf in perceptions of quality and the impact of services on the end user. She

calls for rethinking quality initiatives to interlink quality improvement with user involvement

and participation and with social equality and inclusion (Pillinger (2005).The experiences of

successful businesses both support this perspective and offer experiences, tools and lessons

for putting customers first.

Service quality is a concept that has attracted considerable interest and debate in the

marketing literature because of the difficulties in both defining it and measuring it with no

consensus emerging on either (Mike,2001). One that is commonly used defines service

quality as the ability of the organization to meet or exceed customer expectations. It is the

result of the comparison between customers’ expectations about a service and their

perception of the way the service has been performed (Zeithaml, Parasuraman and Berry,

1990). If expectations are greater than performance, then perceived quality is less than

satisfactory and hence customer dissatisfaction occurs. Most of the recent work on service

quality in marketing can be credited to the pioneering and continuing work of Parasuraman,

Berry & Zeithaml (1988). In a seminal research study, Zeithaml, Parasuraman and Berry

(1990)identified ten dimensions of service quality based upon a series of focus group studies

including reliability, responsiveness, communication, credibility, security, competence,

courtesy, understanding, and access.

Effective service delivery is an important means for organizations to gain a competitive edge

in today’s service economy (Parasuraman, Zeithaml, & Berry, 1988). Service quality is

generally recognized as a critical success factor in a firm’s endeavours to differentiate itself

from its competitors; and a great deal of research has addressed various aspects of service

quality. Various studies have revealed over the years that good service quality leads to the

retention of existing customers and the attraction of new ones, reduced costs, an

14

enhancedcorporate image, positive word-of-mouth recommendation, and, ultimately,

enhanced profitability (Lee et al., 2008; Park et al., 2005 ).

2.1.3. Service Quality Dimensions Receiving a high level of service is important to customers but understanding how to measure

and evaluate the service quality received is challenging. A reliable measure of service quality

is critical for identifying the aspects of service needing performance improvement, measuring

the degree of improvement needed on each aspect and evaluating the impact of improvement

efforts (Zeithaml et al., 2008).

From that initial research, Parasuraman et al. (1988) developed a service quality instrument

consisted of 22 pairs of statements, which measure customer expectations and perceptions of

service delivered on a seven- or nine-point Likert scale. For each pair of statements, the gap

difference between the two scores is calculated. The idea is that the service is good if

perceptions meet or exceed expectations and problematic if perceptions fall below

expectations. The scale combined ten components into five generic dimensions of service

quality which provides a basic skeleton which can be adapted or supplemented to fit the

characteristics or specific research needs of a particular organization. These dimensions

capture the facets of all ten originally conceptualized dimensions regardless of service

industries (Zeithaml et al., 1990) and they are given below. These five dimensions have

become dominant within service quality research and will be listed and briefly described in

the following.

Tangibility

Tangibles refers to the appearance of physical facilities, equipment, personnel and

communication materials in the service process, such as cleanliness, appearance of staff and

appropriate technical equipment for support and entertainment. The definition of tangibility is

the appearance of physical facilities, equipment, personnel and communication materials

(Santos, 2002 cited in Abdissa, 2019).

Elements of tangibles are used in varying degrees to project an image that will find favor with

consumers. Tangibles will be of particular significance where the customer’s physical

presence at a service facility is necessary for consumption to occur, e.g. hair salon, hotel, and

night club. Tangibility provides physical representations or images of the service being

offered by the organization that customers, particularly new customers, will use to evaluate

15

quality. Service organizations often use tangibles to enhance their image, provide continuity

and signal quality to their respective customers.

In contrast, organizations that do not pay attention to tangibility dimension of the service

quality strategy can confuse and even destroy a good strategy and frustrate their respective

customers (Wilson et al, 2008). According to the author in fact, service intangibility may be

difficult for customers to understand. Owing to the intangible nature of services, it is often

difficult for customers to understand and evaluate services and, therefore, customers often

rely on the tangible evidence that surrounds the service in forming evaluations which is

therefore requiring service providing organizations to carefully give due attention to this

service quality dimension(Jamal & Anastasiadou, 2009 cited in Abdissa, 2019).

The tangibility dimension compares customer expectations to customer perceptions regarding

the organization’s ability to manage its tangibles. Comparing the perception scores to the

expectation scores provides a numerical variable that indicates the tangibles gap (Bateson,

Hoffman, 2011)

Reliability

Reliability as one dimension of service quality is the ability to perform the promised service

dependably and accurately. Reliability as a service quality factor has a significant role of

determining customers’ retention as it focuses on consistent and reliable delivery. For

example the consistency in meeting promises communicated and the completion of tasks on-

time. It is regarded as the most important determinant of perceptions of service quality. This

dimension is particularly crucial for services such as railways, buses, banks, building

societies, insurance companies, delivery services and trade services, e.g. plumbers, carpet

fitters, car repair.

The reliability dimension of service quality refers to the ability of service organizations to

perform the promised service dependably and accurately, and thus reflects the consistency

and dependability of an organization’s performance (Rodriquez, Bonar &Sac chi, 2011).

Wilson et al (2008) state reliability that the organization delivers on its promises about

service delivery, service provision and problem resolution. Even though unreliable service

providers are extremely frustrating for customers, a disturbing number of organizations still

fail to keep their promises regarding service delivery. In many instances, the customer is

ready to spend money if only the service provider will show up and conduct the transaction as

16

promised (Bateson & Hoffman, 2011). Reliability is consistently the most important

determinant of perceptions of service quality (Wilson, et al, 2008).

Responsiveness

Responsiveness as a service quality dimension refers to general willingness to help customers

and provide prompt service, which refers to the ability of responding to individual customer

requirements and showing sincere interest in problem solving. Responsiveness is the

willingness to help customers and to provide prompts service. This dimension emphasizes

attentiveness and promptness in dealing with customer requests, questions, complaints and

problems.

Responsiveness also captures the notion of flexibility and the ability to customize the service

to customer needs. It further deals with the creation of a welcoming organizational climate

that is showing customers a will to solve their problems and to get their needs accomplished.

It is characteristically more concerned with dealing on customers’ needs. Regarding this, the

organization must view all the processes of service delivery in light of customers’ needs and

the handling of requests from the customer’s point of view rather than from the

organization’s point of view (Wilson, et al, 2008).

Responsiveness reflects a service organization’s commitment to provide services in a timely

manner quickly and adequately As such, the responsiveness dimension focuses on concerns

of the willingness and readiness to provide a service ethically, timely as we as completely.

Occasionally, customers may encounter a situation in which employees are engaged in their

own conversations with one another while ignoring the needs of the customer (Bateson,

Hoffman, 2011).Responsiveness as a major service quality dimension generally shows the

willingness to help customers and to provide prompt service. The responsiveness service

quality dimension is particularly prevalent where customers have requests, questions,

complaints and problems.

Assurance

Assurance as one important dimension of service quality includes the competence and

courtesy of employees and their ability to convey trust and credibility. Assurance refers to the

employees’ knowledge and courtesy, and the ability of the service to inspire trust and

confidence. This service quality dimension may be of particular concern for customers of

health, financial and legal services. The dimension would include staff training in competent

17

and courteous charisma among employees and the feeling of safety in the transactions with

the customers.

The assurance dimension of service quality addresses the competence of the organization, the

courtesy it extends to its customers and the security of its operations (Jamal and

Anastasiadou, 2009). They define assurance as one service quality dimension as employees’

knowledge and courtesy, and the ability of the organization and its employees to inspire trust

and confidence.

As far as assurance is concerned, Bateson & Hoffman (2011)add that competence pertains to

the organization’s knowledge and skills in performing the promised service and refers to how

the organization’s employees interact with the customer and the customer’s possessions.

Wilson et al. (2008) warn that this dimension is likely to be particularly important for

services that customers perceive as high risk or for services that customers feel uncertain

about their ability to evaluate the outcomes.

Empathy

Empathy: Encompasses the access to customers, communication to customers and

understanding of customers resulting in individualized attention to customers. It denotes the

caring, individualized attention the service provides its customers. Small service companies

are better placed for treating customers as individuals than their larger, invariably

standardized counterparts. However, relationship marketing is designed to offer a more

individualistic approach for customers of large organizations.

Bateson & Hoffman (2011)define empathy as the caring and individualized attention that the

organization provides its customers. They explain that empathy is the ability to experience

another’s feelings as one’s own. According to Wilson et al. (2008), the essence of empathy is

conveying, through personalized or customized service, that the customers are unique and

special and that their needs are understood.

Empathetic firms have not lost touch with what it is like to be a customer of their own

organization. Assuch, the organization understands customers‟ needs and makes their

services accessible to their customers. In contrast, organizations that do not provide the

requested individualized attention totheir customers and offer, for example, operating hours

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convenient for the organization and not its customers, fail to demonstrate empathetic

behaviour(Bateson, Hoffman, 2011)

2.1.4. Customer Satisfaction Customer satisfaction has been recognized as one of the most important elements of

contemporary marketing thought, particularly in the case of service sectors and one of the

main goals in marketing (Centre for the Study of Social Policy (2007).Customer satisfaction

currently is emphasized more as one of the most important factor of organizations towards

success including service organizations. Because satisfied customers tend to maintain their

consumption pattern or consume more of the same product or service, customer satisfaction

has become an important indicator of the future behaviour. According to Zeithaml et al.

(2008), customer satisfaction is a broad concept, whereas service quality focuses specifically

on the dimensions of services and, therefore, perceived service quality is a component of

customer satisfaction.

The definition of customer satisfaction has been widely debated as organizations increasingly

attempt to measure it. Customer satisfaction can be experienced in a variety of situations and

connected to both goods and services. It is a highly personal assessment that is greatly

affected by customer expectations. Satisfaction also is based on the customer’s experience of

both contact with the organization (the “moment of truth “as it is called in business literature)

and personal outcomes. Some researchers define satisfied customer within the private sector

as “one who receives significant added value “to his/her bottom line, a definition that may

apply just as well to public services (Hanan and Peter, 1989).

Customer satisfaction differs depending on the situation and the product or service. A

customer may be satisfied with a product or service, an experience, a purchase decision, a

salesperson, store, service provider, or an attribute or any of these (Padilla, 1996).Some

researchers completely avoid “satisfaction” as a measurement objective because itis “too

fuzzy an idea to serve as a meaningful benchmark (Wreden 2004).

Instead, they focus on the customer’s entire experience with an organization or service

contact and the detailed assessment of that experience. For example, reporting methods

developed for health care patient surveys often ask customers to rate their providers and

experiences in response to detailed questions such as, “How well did your physicians keep

19

you informed?”These surveys provide “actionable” data that reveal obvious steps for

improvement. Customer satisfaction is a highly personal assessment that is greatly influenced

by individual expectations.

Some definitions are based on the observation that customer satisfaction or dissatisfaction

results from either the confirmation or disconfirmation of individual expectations regarding a

service or product. To avoid difficulties stemming from the kaleidoscope of customer

expectations and differences, some experts urge companies to concentrate on a goal that’s

more closely linked to customer equity.

Instead of asking whether customers are satisfied, they encourage companies to determine

how customers hold them accountable (Wreden, 2004).In the public sector, the definition of

customer satisfaction is often linked to both the personal interaction with the service provider

and the outcomes experienced by service users. The definition by Hutten and Cox (1998)

addresses three aspects of customer satisfaction: satisfaction with client-worker interaction,

whether in-person, by phone, or by mail; satisfaction with the support payment (e.g., its

accuracy and timeliness); and satisfaction with the effect of child support enforcement on the

child (Hutten and Cox, 1998).

2.1.5. Service Quality and Customer Satisfaction

Much debate have been done on the association between service quality and customers

satisfaction and much confusions have been assigned to the interrelatedness of service quality

and satisfaction and in what sense the concepts differ from each other. In simple terms quality

refers to some attributes about what are offered by organizations whereas concepts regarding

satisfaction or dissatisfaction refer to a customer’s emotive reaction to the services being

offered (Saha& Theingi, 2009). In this logic they are separate, where quality is something the

company is responsible for and satisfaction is an experience in the customer’s domain.

However, the concepts are clearly related since we might use customer reaction

(satisfaction/dissatisfaction) as means of evaluating whether the right quality has been

delivered.

Parasuraman et al. (1985) conceptualized perceived service quality as a totality evaluation of

a service-process, whereas satisfaction is a transaction-specific evaluation. In other words,

they posited that incidents of satisfaction altogether result in perceptions of the service

20

quality. In contrast to this perspective, Cronin & Taylor (1992) argues that perceived service

quality is an antecedent of customer satisfaction. In this optic, the concept of customer

satisfaction is conceived of as a result of service quality in such orders as service quality –

satisfaction - purchase intention.

Oliver (1997) reported that service quality is a casual antecedent of customer satisfaction, due

to the fact that service quality is viewed at transactional level and satisfaction is viewed to be

an attitude. Zeithaml et al. (2009) reported that the service quality divisions are related to

overall service quality and or customer satisfaction. Fornell et al. (1996) expressed that

satisfaction is a consequence of service quality.

To achieve a high level of customer satisfaction, most researchers suggest that a high level of

service quality should be delivered by the service provider as service quality is normally

considered an antecedent of customer satisfaction (Anderson et al., 1994; Cronin and Taylor,

1992). However, the exact relationship between satisfaction and service quality has been

described as a complex issue, characterized by debate regarding the distinction between the

two constructs and the casual direction of their relationship (Cronin et al., 2005).

Parasuraman, Zeithaml, and Berry (1994) concluded that the confusion surrounding the

distinction between the two constructs was partly attributed to practitioners and the popular

press using the terms interchangeable, which make theoretical distinctions difficult. Cronin

and Taylor (1992) asserted that consumer satisfaction appeared to exert a stronger influence

on purchase intention than service quality, and concluded that the strategic emphasis of

service organizations should focus on total customer satisfaction programs. The authors

reasoned that consumers may not buy the highest quality service because of factors such as

convenience, price, or availability and that these constructs may enhance satisfaction while

not actually affecting consumers’ perceptions of service quality.

However, Bitner and Hubert (1994) determined that service encounter satisfaction was quite

distinct from overall satisfaction and perceived quality. The authors concluded thatthe

constructs exhibited independence. Despite the strong correlations between service quality

and customer satisfaction in their study, Bitner and Hubert (1994) determined that the two

constructs exhibited independence and concluded that they were in fact different constructs,

at least from the customer’s point of view. Anderson et al. (1994) had endeavoured to clarify

the specification and nature of the service quality and satisfaction constructs and found

21

empirical support for the conceptualization that service quality was an antecedent of the super

ordinate satisfaction construct. In addition, the authors found that explained a greater portion

of the variance in consumers ‘purchase intentions than service quality.

2.2. Empirical Review

Several studies related to service quality and customer satisfaction in different organizational

contexts were conducted by different researchers. The relationship between customer

satisfaction and service quality has received a good deal of attention in the literature of

Bolton and Drew; 1994 as cited inIacobucci et al (1995).

In their study, service quality is a global judgment, or attitude, relating to the superiority of

the service whereas satisfaction is related to a specific transaction. Satisfaction is a post

consumption experience which compares perceived quality with expected quality. The key

difference between service quality and customer satisfaction is that quality relates to

managerial delivery of service while satisfaction reflects customers' experience of service.

There is also a lot of argument regarding whether customer satisfaction is the antecedent of

service quality or the outcome of service quality. Initially, scholars take the position that

satisfaction is an antecedent of service quality since to reach an overall attitude (service

quality) implies an accumulation of satisfactory encounters (Bolton & Drew, 1991 cited in

Iacobucci et al, 1995). However, other scholars take the opposite view that service quality is

the antecedent of customer satisfaction (Cronin & Taylor, 1992).

Empirical research by Cronin & Taylor, (1992) showed that service quality has a significant

effect on customer satisfaction. Similarly, recent studies by Gonzalez & Brea, 2005; and

Echini, 2004 cited in Million (2017) using recursive structural models provided empirical

support that service quality results in customer satisfaction. Customer satisfaction is a broader

concept than service quality which focuses specifically on the dimensions of service as

indicated in (Zeithamlet al.2006).On the relationship between customer satisfaction and

service quality, research was conducted in a bank in Tehran, Iran by Osman; et.al (2010)

cited in Abdissa, 2017 and revealed that service quality would be one of the determinants of

satisfaction. The finding explained that nearly 43 percent of customer’s satisfaction changes

are explained by service quality. On the relationship between service quality, satisfaction and

22

perceived value among customers in Nauru Municipality, Kenya, Daniel (2012) concluded

that service quality and customer satisfaction were positively and significantly associated

indicating 19.8% of the variance in customer satisfaction can be predicted by the service

quality offered by the municipality.

In Ethiopia, a study was conducted by Messay (2012) on the relationship between bank

service quality and customer satisfaction. The researcher concluded that all service quality

dimensions are positively correlated with customer satisfaction indicating 90.7% of the

variance in customer satisfaction can be predicted by the service quality offered by the

private banks. In addition, results of this research show that there is a positive significant

relationship between customer satisfaction and loyalty and explain 62% of the variance.

Potluri and Mangnale (2010) conducted an empirical study to find out the satisfaction level of

ETC customers using the following parameters: service interaction, service delivery process,

customer compliant handling procedure and its outcome and the overall customer satisfaction

level. The findings of their analysis showed that 41% customers of ETC were dissatisfied

with employees‟ interaction skills. Furthermore, another 47% of the customers were also

disappointed with customer service delivery system and 70% customers were not pleased

with the Complaint Handling Procedure and its outcome. And 57% of the customers

expressed overall dissatisfaction on the services provided by ETC.

2.3. Conceptual Model

The conceptual framework indicates the crucial process, which is useful to show the direction

of the study. Thus, the purpose of this study is to examine how tangibility, reliability,

responsiveness, assurance, and empathy of services which are the independent variables can

bring effect on the dependent variables, customer satisfaction at the municipality. Based on

the above literature review the following conceptual framework is developed.

23

Independent Variable Dependent Variable

Figure-1: Service Quality and Customer Satisfaction

Source: The Researchers’ Own Design

Proposing the aforementioned model, this paper is built on the critical examination of the

service quality literature review with particular regard to service quality dimensions and

customer satisfaction including empirical work and conceptual gaps. It is argued that service

quality has a positive effect on customers’ satisfaction among several businesses. The

majority of the discussed literature review has indicated that well-designed and managed

service quality leads to customers’ satisfaction.

Accordingly, within the municipality of Maksegnit, this paper proposes that the relationship

between the service quality and customers’ satisfaction can be studied through examining the

relationship between the service quality dimensions (Tangibility, reliability, responsiveness,

assurance and empathy) and customer satisfaction. Building on this argument, the existence

of these dimensions will positively affect customers’ satisfaction. Consequently, it can be

hypothesised that:

H1: Tangibility has significant and positive effect on customers’ satisfaction.

H2: Reliability has significant and positive effect on customers’ satisfaction.

H3: Responsiveness has significant and positive effect on customers’ satisfaction.

H4: Assurance has significant and positive effect on customers’ satisfaction.

H5: Empathy has significant and positive effect on customers’ satisfaction.

Service Quality

Dimesnsions

- Tangibility

- Reliability

- Responsiveness

- Assurance

- Empathy

Customer

Satisfaction

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Chapter Three

3. Research Methodology

Chapter three focuses on the research methodology and shows all the research

methods/techniques that were used to conduct the study. Accordingly, it presents the research

the research approach, the research design, the study sample and sampling techniques,

sources of data, the instruments that were utilized in collecting data, the procedure of data

collection, and data analysis techniques.

3.1. Research Approach

According to Kothari (2004) research approaches are plans and the procedures for research

that span the steps from broad assumptions to detailed methods of data collection, analysis,

and interpretation. Research approaches are mainly three qualitative, quantitative and mixed.

The selection of a research approach among others is based on the nature of the research

problem being addressed. Accordingly, this research was conducted using a quantitative

research approach as it examined and measured the relationship between service quality

dimensions (reliability, responsiveness, tangibility, assurance and empathy) and customer

satisfaction in Maksegnit municipality. Kothari (2004) states that quantitative approach is the

most appropriate when the purpose of an investigation is to describe the degree of

relationship which exists between variables. The research approach involves the generation of

data in quantitative form which can be subjected to rigorous quantitative analysis in a formal

and rigid ways.

3.2. Research Design

A research design is the arrangement of conditions for collection and analysis of data on an

identified problem in a manner that combines relevance to the research purpose with

economy in procedure. In fact, the research design is the conceptual structure within which

research is conducted; it constitutes the blueprint for the collection, measurement and

analysis of data(Kothari, 2004). Accordingly, the study followed a descriptive research

25

design as it sought to describe in detail the existing state of service quality with due attention

to reliability, responsiveness, tangibility, assurance and empathy dimensions and

customersatisfaction in Maksegnit municipality. Thus, descriptive statistics such as

frequency, percentage, mean and standard deviations were used to assess service quality and

measure customer satisfaction.

This study was also designed to investigate the relationships between the dependent variable

(customer satisfaction) and the independent variables (tangibility, reliability, responsiveness,

assurance and empathy). A descriptive research according to Rose (2005) is used to obtain

information concerning the current status of the phenomena to describe "what exists" with

respect to variables or conditions in a situation. The methods involved range from the survey

which describes the status quo, the correlation study which investigates the relationship

between variables, to developmental studies which seek to determine changes over time.

3.3. Target Population

A population is the group of people whom the study is about. Thus the target population

consists of all the people to whom the survey’s findings to be applied or generalized (Kothari,

2004). The population of this study were the residents that live in Maksegnit town and used

the municipality. As the information from the public relation office of the town indicated, the

total population of the town was 71586. Out of this number, according to the statistical data

obtained from the information desk of the municipality, there were 2415 customers who

visited the municipality as of September 2020 GC. Hence, the target population of the study

accounted for 2415.

3.4. Sample Determination and Sampling Techniques

Sampling technique is the way of drawing inference about a population without studying the

entire population under study (Creswell, 2009).The sampling unit of this study was customers

live in Maksegnit and visited the municipality. The sample frame for this study was therefore

2415 customers who visited the municipality. Taking this as a base data, sample size of the

study was first determined using a mathematical formula provided by Yamane (1887). The

formula is given as follows.

26

n =N

1 + N(e)2

Where:

n -Is the sample size,

N- Is the total population size, and

e- Is the level of sampling error = (0.05)

Out of the total of 2415 customers who received service from the municipality, 343 sample

size of the study was determined. Having determined sample size of the study, samples were

selected and included in the study using convenience or opportunity sampling technique to

administer the questionnaires to the respondents. Here, an important criterion of sample

selection is the researcher’s convenience. Members of the target population are selected for

the purpose of the study if they meet certain practical criteria such as geographical proximity,

availability at a certain time and easy accessibility. This was so the rationale of using this

sampling technique as it was best technique of getting the participants when they come to the

municipality for service due to the fact that it was impossible to contact everyone who might

be sampled.

3.5. Data Collection Instruments and Procedure

3.5.1. Data Collection Instruments The study used both primary and secondary source of data. Primary data offers tailored and

original information while secondary data gives opportunity to support and check the primarily

collected data with already existed information. Secondary data to the study were collected from

sources like books, research papers, journals and websites that were already existed. The

primary data were obtained from the municipality’s customers through questionnaire having

closed-ended items.

Structured questionnaires were prepared to collect the primary data from the respondents

included in the study sample. The questionnaires contained two major parts that were about

demographic data and about the study. The first part that was about personal information of

the respondents mainly involved questions on gender, age educational level and experience of

using the municipality.

27

The second part was about the main study and further delineated into two sections that were

about service quality dimensions and customer satisfaction. Hence, the first section was

designed to measure the level of service quality delivered by the municipality against five

dimensions such as reliability, responsiveness, tangibility, assurance and empathy. The

questionnaire contained items on the demographic data of the respondents a total of 22

closed-ended items of which 5 items described reliability dimension, 4 items described

responsiveness dimension, 4 items described tangibility dimension, 4 items described

assurance dimension and 5 items described empathy dimension.

Each of the item in the questionnaire in this section was measured using a 5-point Likert scale

of agreement or disagreement (5-Strongly agree, 4-Agree, 3-Undecided, 2-Disagree, and 1-

Strongly disagree, neither agree nor disagree, and agree strongly agree). The third part was

about customers’ satisfaction on the quality of services provided by the municipality and

contained 5 closed-ended items in accordance with each of the five service quality

dimensions. Each of the item in this part of the questionnaire was measured using a 5-point

Likert scale of being satisfied or not (5-Strongly satisfied, 4-Satisfied, 3-Nuetral 2-

Dissatisfied, and 1-Strongly dissatisfied).The questionnaires contained closed ended items

which the respondents could easily understand.

3.5.2. Data Collection Procedure

The study used both primary and secondary sources of data to analyze the problem. To do so,

it began with the review of secondary data in developing a detailed theoretical, conceptual

and empirical framework of the study. Having the literature reviewed, a survey questionnaire

was prepared as the main primary data gathering instrument for this study. Primary data are

described as those items that are original to the problem as it is necessary in order to get

relevant, original and reliable first-hand information to analyze and determine about the

problem under study. Questionnaires are also the major tool of capture the primary data

because of its advantages over the other methods and its efficiency or ability to capture more

information from the source (Kothari, 2004).Thus, a survey questionnaire was prepared in

English as the main primary data gathering instrument for this study. Then, the English

version questionnaire was translated into Amharic using simple and clear language in

manners understandable for the respondents. Through this, the primary data were collected

through the questionnaires distributed to the samples. To assure the quality of data, high

28

emphasis was given right from the beginning in designing data collection instruments for its

simplicity. As a result, considerations were given to reliability, validity and pilot testing.

3.6. Validity and Reliability of Instruments

3.6.1. Validity of Instruments Different measures were taken to verify validity of the instruments. Validity is one major

criterion to evaluate a research instruments. A questionnaire was designed to measure the

effect of service quality on customer satisfaction that was organized under the five quality

dimensions.

According to Kothari (2004), in terms of measurement procedures, validity is the ability of an

instrument to measure what it is designed to measure and does so correctly and accurately.

Validity determines whether the research truly measures what it intends to measure or how

truthful the research results are. The major ones were face and content validity. Through face

validity, first, the questionnaire was prepared taking high care into consideration. Primarily, it

was prepared in English and submitted for comment for professionals in the field. Moreover,

the instrument was submitted to advisors for more critical comments before its actual

administration to collect data. In view of content validity, it was checked and verified

whether all the relevant contents were addressed in the questionnaire. Then, the instrument

was translated into Amharic to make items clearer and easily understandable for all the

research participants.

3.6.2. Reliability of Instruments Reliability is the other major criteria for evaluating the research instruments. Reliability

measures the internal consistency of the instruments. According to Bhattacherjee (2012)

internal consistency reliability is a measure of consistency between different items of the

same construct. The study used a multiple item measurement scale for which internal

consistency method was applied. Thus Cronbach alpha was used to measure reliability of the

instruments

Accordingly, Cronbach alpha with acceptable cut off points 0.7 demonstrate that the

instruments for all the service quality dimensions are internally consistent. The reliability test

for the instruments used for the study was conducted using SPSS and the results shows that

the items used were reliable.

29

According to Sekaran and Boogie (2010), in general, reliability coefficients if found less than

0.60 are considered to be under privileged, those in the 0.70 range are considered as

conventional, and those over 0.80 are considered as good. In other words, the closer

Cronbach alpha coefficient is to 1, the higher the internal consistency reliability. The

reliability coefficients of the five service quality dimensions of the study were shown below

in Table 3.1

Table-3.1 Reliability Coefficients the Instruments

No Variables Reliability No of Items

1 Reliability dimension .749 5

2 Responsiveness dimension .740 4

3 Tangibility dimension .801 4

4 Assurance dimension .758 4

5 Empathy dimension .760 5

6 Customer satisfaction .734 5

Table-3.1 above reported the reliability coefficient of the instrument pertained to the five

service quality dimensions and customer satisfaction. The reliability coefficient (Cronbach

alpha) was used to test the self-designed and administered questionnaire to make sure the test

on the grouped items is regular and constant.

As can be seen from the table shown above, the reliability of the instruments were tested and

verified using Cronbach alpha, where the more the alpha coefficients closer to 1, the more

they are considered to be reliable and the higher the internal consistency reliability (Abidin

and Dawd, 2012).

The alpha coefficients for this study were all above 0.749 which ensured reliability of the

instruments. As the above table shows, the alpha value of reliability dimension is .738, the

alpha value of responsiveness dimension is .740, the alpha value for tangibility dimension is

30

.801, the alpha value for assurance dimension is .758, the alpha value of empathy dimension

is .760, and the alpha value of customer satisfaction is 0.734. In this research all the

dependent variable and the independent variables met the requirement.

3.7. Variables of the Study

In this study, customer satisfaction as a dependent variable was measured against the five

service quality dimensions. These variables were reliability, responsiveness, tangibility,

assurance and empathy. The description of both the dependent and the independent variables

were discussed below.

3.7.1. Dependent variable Under this study, the dependent variable was customer satisfaction. This variable was

investigated whether it was affected by the independent variables in the case of the sampled

municipality. The dependent variable is a variable that is affected by other (independent)

variables (Neumann, 2007).

3.7.2. Independent Variables The independent variables are the cause variables or the one that identifies forces or

conditions that acts on something else (Neumann, 2007). In this study, the service quality of

the sampled municipality was the independent variable with due regard to reliability,

responsiveness, tangibility, assurance and empathy.

Table-3.2: Response Rate of the Questionnaires

Rate Number of Distributed

Questionnaires (343)

Percent

Completed 343 100.0%

Not completed 0 0.0%

Total 343 100.0%

Source: Questionnaire (2021)

31

Table 3.2 displays the response rate of the questionnaires after they were filled by customers

of Maksegnit municipality. As can be seen from the table, a total of 334 questionnaires were

administered to the customers included in the study sample of which all (343) the

questionnaires were filled and returned back to the researcher. This was so the basis for the

analysis and interpretation of the effect of service quality dimensions on customer satisfaction

in Maksegnit municipality.

3.8. Data Analysis Method

Data to the study were collected through questionnaires from 343 valid respondents on the

quality service dimensions and customer satisfaction. The collected data were checked and

edited for their correctness and completeness. Then, they were changed and interpreted into

meaningful information, figure and statement.

Data analysis was performed using a Statistical Package for Social Science (SPSS) software

version 20. Hence, the demographic characteristics of the respondents such as sex, age,

educational status and numbers of visiting times to the municipality per year were analyzed

using frequency and percentage analysis technique. The level of service quality dimensions

(reliability, responsiveness, tangibility, assurance and empathy) and customer satisfaction

were analysed descriptively using mean values and standard deviation values. Pearson

correlation coefficients were used to determine the relationships between service quality

dimension (tangible, reliability, responsiveness, assurance, empathy) and customer

satisfaction. As a predictive analysis, multiple linear regressions was used to explain the

relationship between the dependent variable and the independent variables as shown in the

mathematical representation below

Y =β0 +β1X1 + β2X2 + β 3X3 + β 4X4 + β5X5

Where: Y was the dependent variable (customer satisfaction); X was dimensions of service

quality as it was explained by (X1 = Tangibility; X2 =Reliability; X3 = Responsiveness =X4

= Assurance; X5 = Empathy) and β0 was the constant (Y intercept) while β was the

coefficient of the predictors.

3.9. Ethical Considerations

Since the researcher used data from customers which were collected through questionnaire,

permission was obtained from the customers. To maintain the confidentiality of the

information provided by the respondents, the respondents were instructed not to write their

32

names on the questionnaire and assured of that the responses were used only for academic

purpose and kept confidential. Brief description of the central objectives or purpose of the

study and the potential benefit of the research outcome to respondents and the municipality

were clearly given in the introductory part of the questionnaire so as to motivate them and

participate in the study and provide relevant information about the company under study.

Finally, respondents were included in the study based on their free will.

Chapter Four

4. Data Analysis and Discussion

This chapter focuses on the analysis of data collected from the respondents using

questionnaires and the discussion made on the findings of the study in relation to the effect of

service quality dimensions on customer satisfaction in the case of Maksegnit municipality.

The findings of the study were, therefore analyzed based on the specific objectives and

hypotheses of the study.

4.1 Demographic Characteristics of the Respondents

The following table shows the demographic characteristics of the sampled respondents with

respect to customers of Maksegnit municipality and who filled the questionnaires. Their

characteristics were analyzed in terms of sex, age, educational status and how often they

visited the municipality in a year as it is presented in Table-4.1 below.

Table-4.1. Demographic Characteristics of the Respondents

Variable Characteristics Frequency Percent

Sex Male 202 58.9

Female 141 41.1

Total 343 100.0

Age Below 25 years 27 7.9

26 – 35 81 23.6

36 – 45 120 35.0

46 – 55 69 20.1

Above 55 years 46 13.4

Total 343 100.0

Education Read and write 25 7.3

Primary 77 22.4

Secondary 129 37.6

33

Diploma 60 17.5

Degree 39 11.4

Above Degree 13 3.8

Total 343 100.0

Visiting time Less than 1 year 88 25.7

1 - 5 years 157 45.8

6 - 10 years 81 23.6

More than 10 years 17 5.0

Total 343 100.0


As can be seen from item one in Table-4.1, 202 (58.9%) of the respondents were males and

the remaining 141 (41.1%) were females which indicate the dominancy of male among the

users in the municipality customers. As far as age of respondents is concerned, 7.9 % of the

respondents aged below 25 years, 23.6% were in the age range of 25-35 years, 35.0 % of the

respondents were in the range of 36-45 years, 20.1 % of the respondents were in the age

range of 46-55 years and13.4 % of the respondents were above 55 years old. With regard to

educational background, 7.3 % of the respondents can read and right, 22.4% of the

respondents had primary education, 37.6% had secondary level education, 17.5% of the

respondents were diploma holders, 11.4% of the respondents were degree holders and 3.8 %

of the respondents had educational level more than degree. This implies that majority of the

respondents have the educational readiness that could enable them to answer the questions

they are asked on the quality of the services they received. As far as how often the

respondents visited the municipality was concerned, 25.7% of the respondents visited the

municipality less than 2 times a year, 45.8% visited 2 – 5 times a year, 23.6% of the

respondents visited the municipality 6 – 10 times a year and 5.0% of the respondents visited

the municipality more than 10 times a year. This shows that the respondents have the

experience to provide the responses on the quality of services they received. The data

collected from these respondents was so the basis for the analysis and interpretation of the

effect of service quality dimensions on customer satisfaction.

4.2. Service Quality Dimensions

A descriptive statistical data analysis technique was used to know the level of service quality

dimensions (tangible, reliability, responsiveness, assurance, empathy) and customer

satisfaction using mean and standard deviation values. To do so mean value and standard

deviation were used to analyze them. The mean value represents the average score of all

34

responses and standard deviation shows the dispersion of the responses from their grand

mean. This means that the dispersion of the responses given by the respondents from their

grand mean value was measured by the standard deviation. Thus, on average, the standard

deviation shows how far the score of each item is located from its grand mean being

indicating whether it has smaller or higher variation. Small value of standard deviation shows

uniformity of responses. Interpretation of the mean scores was described as provided by

Zaidatol & Bagheri (2009) where the mean value below 3.39 is described as low, between

3.40 – 3.79 is described as moderate and above 3.80 is described as high.

Table-4.2. Descriptive Statistics of Reliability

No Reliability Mean Standard

Deviation

1 When the organization promises to deliver within a given

time, it does so 2.75 1.243

2 The organization services are always available as and when

required by the customer 2.67 1.262

3 The employees show sincere in solving customers’ concern 2.84 1.215

4 The organization able to perform the service right first time 2.77 1.283

5 The organization maintains error free customers’ records 2.71 1.288

Grand Mean 2.74 0.934


Sample = 343

The reliability service quality dimension was investigated against five items. The result in

Table-4.2shows that the respondents rated all the reliability dimensions with the grand mean

and standard deviation values of 2.74 and .934 respectively. The dispersion of the responses

about their grand mean value 2.74 was measured by SD of .934. That is, on average, each

item score is located at a distance of .934 units from the grand mean of 2.74 which indicated

a small degree of scatter and uniformity in the mean score and the grand mean. This could be

regarded as a higher representative of the description of the scores. Accordingly, there seems

an overall disagreement among the customers on the reliability dimension as the mean values

for all items were found below the mean value of 3.39 indicating low level. This shows that

there is a higher gap between the questions and their responses.

35

As can be seen from item two in the table, whether the organization services are always

available as and when required by the customer was rated by the respondents with a mean

value of 2.67; whether the organization maintains error free customers’ records under item

five was rated by a mean value of 2.71; item one in relation to when the organization

promises to deliver within a given time, it does so was rated by a mean value of 2.75; whether

the employees show sincere in solving customers’ concern in item four was rated by a mean

value of 2.77;and whether the organization able to perform the service right first time under

item three was rated by a mean value of 2.84.This implies that there existsan overall low level

of the reliability service quality which could be generalized that majority of the customers

were dissatisfied in the municipality.

Table-4.3. Descriptive Statistics of Responsiveness

No Responsiveness Mean Standard

Deviation

1 Employees are happy and willing to serve customers 2.70 1.016

2 Employees tell customers exactly when services will be

performed 2.65 2.493

3 The management are accessible, listen and provide prompt

and honest responses to customers inquiries 2.72 2.078

4 The employees are not too busy to respond to user requests 2.63 2.457



Sample = 343

Table-4.3 discloses the results on the responsiveness dimension of service quality.

Concerning this, the respondents rated all the items with the grand mean (2.67) and the

standard deviation (0.914). The dispersion of the responses from their grand mean (2.67) was

measured by SD of (0.914). That is, on average, each item score is located at a distance of

0.914 units from the grand mean value of 2.67. This shows a small degree of scatter and a

greater degree of uniformity in the mean scores and the grand mean. So the grand mean could

be representative of description of the scores. Accordingly, there seems to be an overall

disagreement among the customers on this dimension since all the items were rated by the

respondents below the mean value of 3.39 indicating a gap between the questions and their

responses.

36

Item four in the above table that describes whether the employees are not too busy to respond

to user requests was rated by the respondents with a mean value of 2.63;the responsiveness

dimension under item two that describes whether employees tell customers exactly when

services will be performed was rated by a mean value of 2.65; whether employees are happy

and willing to serve customers under item one was rated by a mean value of 2.70; and item

three in relation to whether the management are accessible, listen and provide prompt and

honest responses to customers’ inquiries was rated by a mean value of 2.72 all of which were

rated below the mean value of 3.39. This implies an overall low level of service quality

concerning the responsiveness dimension in the municipality. Thus, it could be generalized

that the respective customers were dissatisfied with the anticipated attributes of

responsiveness in the municipality.

Table-4.4. Descriptive Statistics of Tangibility

No Tangibility Mean Standard

Deviation

1 The company has visually appealing physical facilities 2.89 1.244

2 The employees are well dressed and neat in appearance 3.01 1.228

3 The material associated with the service are visually

appealing 2.84 1.250

4 Up-to-date equipments 2.87 1.243



Sample = 343

As far as the service quality of tangibility dimension was concerned, a grand mean value less

the minimum expected mean value (3.39) was found. The resultin Table-4.4 shows that, the

respondents rated all the tangibility dimensions with the grand mean of 2.90and standard

deviation values of 0.967. The dispersion of the responses about their grand mean value 2.90

was measured by SD of .967. That is, on average, each item score is located at a distance of

.967 units from the grand mean of 2.90. It indicated a greater degree of uniformity in the

mean score and the grand mean since the degree of scatter was very small which so could be

regarded as a higher representative of description of the scores. Regarding this, there seems

an overall dissatisfaction among the customers on the tangibility dimensions.

37

As can be seen from Table-4.4, the tangibility dimension under item three that describes

whether “the material associated with the service are visually appealing” was rated by the

respondents with a mean value of 2.84 and standard deviation of 1.250; and the tangibility

dimension under item four that describes whether there are “Up-to-date equipments” was

rated with a mean value of 2.87 and standard deviation of 1.243below the mean value of

3.39.Moreover, the dimension under item one that describes whether the company has

visually appealing physical facilities was rated by a mean value of 2.89 and standard

deviation of 1.244; and item two in relation to whether the employees are well dressed and

neat in appearance was rated by a mean value of 3.01 and standard deviation of 1.228. The

result overall shows a low level of service quality concerning the tangibility dimension in the

municipality which could therefore be interpreted that majority of the respective customers

were dissatisfied with the existing service quality of the tangibility dimension in the

investigated municipality.

Table-4.5. Descriptive Statistics of Assurance

No Assurance Mean Standard

Deviation

1 The support staff have the required skills to resolve problems

and answer questions 2.90 1.311

2 Employees make customers feel safe in the service delivery 2.68 1.290

3 The employee is consistently courteous to the customers

interest 2.55 1.181

4 The employees instil confidence in customers 2.72 1.189



Sample = 343

Table-4.5showsrespondents’ dissatisfaction of the assurance dimension with a grand mean of

2.71and standard deviation of 0.950 below the mean value of 3.39. The dispersion of the

responses from their grand mean (2.71) was measured by SD of 0.950 which means that, on

average, each item score is located at a distance of 0.950units from the grand mean of 2.71.

From this, a small degree of scatter and a greater degree of uniformity in the mean score and

the grand mean was shown so that the grand mean could be regarded as a representative of

description of the scores. As can be seen from table, the mean values for all the dimensions of

38

assurance below 3.39 were fell in the low category level depicting a gap between the

questions and their responses.

The assurance dimension that describes whether “the employee is consistently courteous to

the customers’ interest” under item three was rated by the respondents with a mean value of

2.55; item two in relation to whether the employees make customers feel safe in their service

delivery was rated by a mean value of 2.68; item four that describes whether “the employees

instil confidence in customers” was rated by a mean value of 2.72; and item one that

describes whether the support staff has the required skills to resolve problems and answer

questions was rated by a mean value of 2.90indicating below the mean value of 3.39.These

findings show disagreement responses of the respondents against the items of the assurance

dimension. This implies that anexisting overall level of the service quality of the assurance

dimension in the investigated municipality was low. Thus, it could be generalized that the

respective customers of the municipality were not satisfied with the service quality of the

assurance dimension.

Table-4.6. Descriptive Statistics of Empathy

No Empathy Mean Standard

Deviation

1 The staff know what customers needs are 2.43 1.187

2 The employees give customers individual attention 2.50 1.105

3 The employees are committed to ethics and promote ethical

behaviour in the workplace 2.68 1.243

4 Services are adjusted to suit individual customer needs 2.64 1.115

5 The operating hour are convenient to all customers 2.78 1.240



Sample = 343

The final service quality dimension investigated in this study was the empathy dimension. As

shown in Table-4.6, the respondents rated all the empathy dimensions with the grand mean of

2.61and standard deviation values of 0.868. This is indicating on average that each item score

is located at a distance of .868units from the grand mean of 2.61 with small degree of scatter

39

and greater degree of uniformity reflecting in the grand mean as a higher representative of

description of the scores. Overall, the finding shows that there seems a disagreement among

the customers on the empathy dimensions as the mean values against all empathy dimension

items were rated below the mean value of 3.39 mean. This shows that there is a higher gap

between the questions and their responses.

The empathy dimension under item one in relation to whether the staff know what customers’

needs are concerned was rated by a mean value of 2.43; item two that describes whether “the

employees give customers individual attention” was rated by a mean value of 2.50; the item

under four in relation to whether services are adjusted to suit individual customer needs was

rated by a mean value of 2.64; the empathy dimension under item three that describes

whether “the employees are committed to ethics and promote ethical behaviour in the

workplace” was rated by a mean value of 2.68; and the item under five in relation to the

operating hour are convenient to all customers was rated by a mean value of 2.78.These

results show that all the empathy service quality dimensions were rated below the mean value

of 3.39 and found in the low category level.

Table-4.7. Descriptive Statistics of Satisfaction

No Satisfaction Mean Standard

Deviation

1 I am satisfied with the municipality service providers 2.51 1.226

2 I am satisfied with the respectful behaviour of the

municipality staff 2.64 1.321

3 I am satisfied with the communicative ability of employees

of the municipality 2.55 1.193

4 I am satisfied with the performance of employees of the

municipality 2.71 1.378

5 I am satisfied with the various range of services of the

municipality 2.61 1.366



Sample = 343

The descriptive statistics was also performed to investigate the overall level of customers’

satisfaction on the service quality dimensions. Table-4.7 discloses the study results that the

40

respondents rated all satisfaction items on the five service quality dimensions with the grand

mean of 2.60and standard deviation values of .687. The dispersion of the responses about

their grand mean value 2.60 was measured by SD of .687. That is, on average, each item

score is located at a distance of .687 units from the grand mean of 2.60. The degree of scatter

was very small. This indicated a greater degree of uniformity in the mean score and the grand

mean could be regarded as a higher representative of description of the scores. Accordingly,

there seems to be an overall dissatisfaction among the customers on the service quality

dimensions. As can be seen from table 4.7, the mean values for satisfaction questions were all

fell in the low category level since they were all rated below the mean value of 3.39 and these

results show a higher gap between the questions and their responses. Customers generally felt

dissatisfied with the municipality employees’ service provider with the mean value of 2.51

under item one; with the communicative ability of employees of the municipality with the

mean value of 2.55 under item three; with the various range of services of the municipality by

a mean value of 2.61 under item five; with the respectful behaviour of the municipality staff

by a mean value of 2.64 under item two; and with the performance of employees of the

municipality as indicated by the mean value of 2.71 under item four. These mean values of

customer satisfaction regarding service quality dimensions are low that show a gap between

what they should be and what they actually are.

4.3. Correlation Analysis

To explore the interrelationship between service quality dimensions and customer

satisfaction, Pearson correlation coefficient was performed. When the value of the correlation

is 1 or-1, a perfectly linear positive or negative relationship exists and when the value of

correlation is 0, there is no relationship (Vignaswaran, 2005). In this study the correlation

between the variables is computed based on that: if the value of the correlation coefficient is

0.00 - 0.30, the relationship between the variables will be very low; if the value of correlation

coefficient is 0.30 - 0.50, the relationship between the variables will be low; if the value of

correlation coefficient is 0.50 - 0.70, the relationship between the variables will be high; and

if the value of correlation coefficient is 0.70 – 1.00, the relationship between the variables

will be very high (Vignaswaran, 2005).

41

Table-4.8. The Relationship of Service Quality Dimensions and Customer Satisfaction

Variables Satisfaction

Reliability

Pearson Correlation 651**

Sig. (2-tailed) .000

N 343

Responsiveness

Pearson Correlation .627**


N 343

Tangibility



N 343

Assurance



N 343

Empathy



N 343

Correlation is significant at the 0.01 level (2-tailed)


As can be seen from Table-4.9, all the service quality dimensions are statistically significant

and the results showed positive relationships between the dimensions and customer

satisfaction. The value of a correlation coefficient .760**; .651**; .640**; .627**; and .551**;

showed a significant positive relationship between the independent variables (tangibility,

reliability, assurance, responsiveness and empathy) and the dependent variable (customer

satisfaction) respectively. In relative term, tangibility has the strongest association with

customers’ satisfaction when empathy has the lowest association.

4.4. Regression Analysis

4.4.1. Assumptions’ Test

42

Before running the regression, assumptions of the study were analyzed. The first assumption

was related to multicolinearity which is a condition when there a high correlation of the

independent variables and if tolerance values are above 0.1 and variance inflation factor,

which is 1 tolerance is less than 10, therefore in this study, it has been shown that there was

no multicolinearity problem to run the regression (sAppendix-V-2).Related to linearity, it

was assumed that the relationship between the dependent and each independent variable

should be linear(Malhotra et al. 2007). The scatter plot of standardized residuals as can be

seen (Appendix-VI-2) did not show systematic pattern in this study. Moreover, normality of

the error term is observed on the normal probability plots of the residuals. Normal

distribution makes a straight diagonal line against which the plotted residuals are compared.

As can be seen from (Appendix-VI-2), the normality probability plots were used to assess

normality and they have approximately a straight line which determined normal distribution

(Hair, et al 1998).Besides, homoscedasticity of the error terms is the other assumption and it

is a situation where the variance of distribution of the dependent variable should be constant

for all values of the independent variable (Hair, et al, 1998). In the scattered residual plots of

this study as can be seen in (Appendix-VI-3) satisfied the assumption for homoscedasticity of

the error terms.

4.4.2. Multiple Regression Analysis Multiple regressions are the most common and widely used to analyze the relationship

between a single continues dependent variable and multiple continues categorical

independent variable (George et al, 2003). In this study multiple regression analysis was

employed to examine the effect of service quality dimensions (reliability, responsiveness,

tangibility, assurance and empathy) on customer satisfaction. Accordingly, it is computed

using the following formula:

Y=β0+β1X1+β2X2+β3X3+β4X4+β5X5+e

Where:Y = is dependent variable (customer satisfaction)

β0 = is constant

ß = is the coefficient of the respective independent variable

X = is independent variable

Hence, based on the finding of the multiple regressions, the linear equation can be stated as:

Customer Satisfaction = -.362+.266 (Reliability) +.178 (Responsiveness) +.323 (Tangibility)

+.180 (Assurance) +.156 (Empathy) +e.In this study, multiple regressions are used to

43

identify the dominant service quality dimension from among the five(Reliability;

Responsiveness; Tangibility; Assurance and Empathy) that have a strong relationship with

customer satisfaction and how the dependent variable is explained by the independent

variable.

The following Table-4.9 shows that both R Square and adjusted R Square measure fitness of

the model. This is the proportion of the variation in dependent variable explained by the

model. Since adjusted R Square is the modification for the limitation of R Square, the value

of the adjusted R2 is considered to measure the fitness of the model. Here, the squared

multiple correlation coefficients (R2 = .760) tells the level of 76% variance in the dependent

variable that is explained by the model.

Table-4.9. Multiple Regressions of Service Quality Dimensions on Customer

Satisfaction

Summary of Service Quality Dimensions on Customer Satisfaction

Model R R Square Adjusted R

Square

Standard Error of

the Estimate

1 .872 .760 .756 .442

Coefficients

Un-standardized

Coefficients

Standardized

Coefficients

T Sig

Model B Std. Error Beta

1

(Constant) -.362 .098 -3.706 .000

Reliability .266 .033 .278 8.737 .000

Responsiveness .178 .031 .185 5.567 .000

Tangibility .323 .036 .339 8.852 .000

Assurance .180 .032 .192 5.613 .000

Empathy .156 .030 .151 4.875 .000

a. Dependent Variable: Customer Satisfaction

b. Independent Variable (Constant) (Reliability; Responsiveness; Tangibility; Assurance and

Empathy)

Table-4.9 shows the standardized beta coefficient which tells the unique contribution of each

factor to the model. A high beta value and a small p value (p < .05) indicate the predictor

variable has made a significance statistical contribution to the model. A small beta value and

a high p value (p > .05) indicate the predictor variable has little or no significant contribution

to the model (George et al, 2003).

44

The results indicate that reliability; responsiveness; tangibility; assurance and empathy

dimensions with the value of .278; .185; .339; .192; and .151 respectively have a significant

influence on customers’ satisfaction at 95% confidence level where p-value < .05that

indicates the model is significant at p < .01.

The result of this study overall indicates all the predictor variables or service quality

dimensions (reliability, responsiveness, tangibility, assurance and empathy) have a

statistically significant contribution in combination to influence customers’ satisfaction of

which however tangibility is the strongest. Therefore, service quality has a positive and

significant effect on customer satisfaction.

As far as testing of the research hypotheses was concerned, the results indicate that the

relationship between service quality dimensions and customer satisfaction is positive and

statistically significant. As the result from the multiple regressions indicates the service

quality dimensions separately have different significant levels.

Among the five service quality dimensions investigated in this study, the tangibility

dimension with ß=.339, P = .000 < 0.01 is the strongest predictor of overall satisfaction. The

second strongest predictor is the reliability dimension with ß=.278, P = .000 < 0.01 followed

by assurance withß=.192, P = .000 < 0.01; responsiveness empathy withß=.185, P = .000 <

0.01 and empathyß=.151, P = .000 < 0.01 in the municipality. The hypothesis testing is

summarized as shown in the Table-4.11 below.

Table-4.10. Hypothesis Testing

Hypothesis Statements Results Decision

H1 Tangibility has significant and

positive effect on customers’

satisfaction.

ß= 339, P = .000 < 0.01 Accepted

H2 Reliability has significant and


satisfaction.

ß=.278, P = .000 < 0.01 Accepted

H3 Responsiveness has significant and ß=.192, P = .000 < 0.01 Accepted

45


satisfaction.

H4 Assurance has significant and


satisfaction.

ß=.185, P = .000 < 0.01. Accepted

H5 Empathy has significant and positive

effect on customers’ satisfaction.

ß=.151, P = .000 < 0.01 Accepted

Table-4.10 above shows that the service quality dimensions (the five variables) that were

tested by correlation statistical tests in this study. The five service quality dimensions have

strong and positive relationship with customer satisfaction implying that they all are

significant in influencing customer satisfaction. Therefore, the five hypotheses that assumed

earlier to accomplishing the study were accepted.

46

Chapter Five

Summary, Conclusion and Recommendation

This chapter focuses on the major findings of the study, the major conclusions drawn from

the study results and recommendations of the study forwarded with the major implications for

further research.

5.1. Summary of the Major Findings

The aim of the study was to identify the effects of service quality on customer satisfaction of

Maksegnit municipality. In conducting this study, the required data is obtained through self

administered structured questionnaires. To determine the sample size from the total

population of the study, the researcher used formula based-sample size determination. To

select respondents, convenience sampling technique was adopted. The service quality was

measured against five service quality dimensions (tangibles, reliability, responsiveness,

assurance and empathy). Both the service quality dimensions and customer satisfaction were

measured using a five point Likert scale. A total of 343 questionnaires were distributed to the

sampled customers all of which were returned and analyzed using a statistical package for

social science (SPSS). In the analysis descriptive statistics, correlation analysis and multiple

regression analysis were performed.

47

The descriptive finding of the study indicated a low level of service quality of all the five

dimensions as they were found between a grand mean value of 2.61 and 2.90 below the

minimum expected mean value of 3.39 between. Accordingly, the tangibility service quality

dimension has relatively the highest mean value of 2.90 and the empathy service quality

dimension on the other hand has a lowest mean value of 2.61. As far as their satisfaction was

concerned, the sampled customers rated it with the mean value of 2.60.

The result from the correlation analysis showed that all the service quality dimensions are

statistically significant at P < 0.01 and have positive relationship with customer satisfaction.

The result of the multiple regression analysis also indicates that all the predictor variables

(reliability, responsiveness, tangibility, assurance and empathy)in combination make a

statistically significant contribution to influence customer

Overall, the adjusted R2

of 0.760 indicates 76% of the variance in customer satisfaction can

be predicted by the service quality offered by the branch municipality showing that the

service quality has a positive and significant effect on customer satisfaction in Maksegnit

municipality. The result from the multiple regressions further indicates that among the five

service quality dimensions investigated in this study, the tangibility dimension with ß=.323, P

= .000 < 0.01 is the strongest predictor of overall satisfaction in the municipality. The

hypothesis testing finally indicates that all the hypotheses developed earlier in this study were

accepted. Hence, reliability, responsiveness, tangibility, assurance and empathy dimensions

all have significant and positive effect on customers’ satisfaction.

5.2. Conclusion

The main purpose of this study was to investigate the effect of service quality on customer

satisfaction, the case of Maksegnit municipality. The findings from the descriptive analysis

showed the low level of service quality against the five dimensions of reliability,

responsiveness, tangibility, assurance and empathy in the municipality. The findings showed

customers were not pleased over poor service currently being offered by the municipality

which so indicated a low ability of the municipality to provide service at the designed and

promised time. Overall, the service quality has a low mean value which shows a gap with

what it should be.

48

Besides, the correlation result shows that there is positive and significant relationship

between all the service quality dimensions (reliability, responsiveness, tangibility, assurance

and empathy) and customer satisfaction. In conclusion, this means that delivering a service with

high quality will lead to a higher customer satisfaction. Furthermore, the multiple regression

results showed that all the five service quality dimensions (reliability, responsiveness,

tangibility, assurance and empathy) have positive and significant impact on customer

satisfaction. This implies that a high quality service is an increasingly important tool of

realizing higher customer satisfaction. Therefore, Maksegnit municipality should strive to

influence quality service as a way of ensuring its customers feel satisfied through service

offerings they expect.

5.3. Recommendation

Based on the major findings and conclusion of the study, the following recommendations

were forwarded;

Municipality managers should be aware that among the various dimensions of service

quality, tangibility was particularly significant in fostering satisfaction for the

customers of Maksegnit municipality. Tangibility plays a key role in providing

physical representations or images of the service that customers use to evaluate

quality. Neglecting to pay attention to tangibility dimension can confuse and even

destroy a good strategy. The municipality managers thus should use tangibles to

enhance its image, provide continuity and signal quality to customers.

In addition, the satisfaction of customers was significantly influenced by the

reliability, assurance and responsiveness dimensions. It is apparent that Maksegnit

municipality should strive to perform the promised service dependably and accurately

in reflecting consistency. Being unreliable causes an extreme state of frustration for

customers. Thus, municipality managers should know that reliability is consistently

the most important determinant of perceptions of service quality. The staff in the

municipality should be skied in resolving problems and answer questions.

Municipality managers should also be attentive and responsive to help customers and

to provide prompt service. Municipality personnel should deal with customers’

requests, questions, complaints and problems. Lack of attention to this dimension can

cause confusions for customers which ultimately influence perception. Municipality

managers and personnel must view the process of service delivery and the handling of

49

requests from the customer’s point of view rather than from the organization’s point

of view.

Generally, Maksegnit municipality management should keep track of the changes in

perceptions and expectations of their customers. As indicated above, tangibility was

the most important driver of service quality whereas according to the literature review

reliability was the most important driver of service quality. These findings therefore

indicate that the management needs to keep abreast with the changes in perceptions

and expectations. This will enable Maksegnit municipality to leverage on those key

aspects that drive customer satisfaction and build loyalty.

5.4. Suggestion for Further Study

The present study was conducted only on the municipality in Maksegnit in Gondar Zuria

woreda of Central Gondar Administration. There are however, several public service

organizations in the woreda. Future studies should consider these public organizations that

provide service in the woreda. As this study analyzed only the relationship between service

quality and customer satisfaction, future researchers may include other factors that can have a

big impact on customer satisfaction and do a survey.

50

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Appendices

Appendix-I


College of Business and Economics


Questionnair distributed for customers

The Effect of Service Quality on Customer Satisfaction:

(The Case of Maksegnit Municipality)

Dear respondents;

I would like to thank you in advance for taking your time to fill out this questionnaire as your

input will be a key in developing my research on the effects of service quality of Maksegnit

Municipality on customer satisfaction. The purpose of this survey is to make a partial

fulfillment of the requirements for the Masters of art degree in Marketing Management in

Gondar University. The questionnaire has three major parts. Part one deals with the

background of the respondent, part two deals with service quality items to be measured by the

level of customer satisfaction and part three is all about the overall satisfaction level of the

customers. Pplease, you don’t need to write your name so you are kindly requested to fill all

questions completely.Thank you again.

56

Instructions: For each of the following items/questions, circle the letter that holds your

answer or use a tick mark to indicate the letter of your choice

Part I: Background Information

No Items Alternative Response Options

1 Sex: A. Male B. Female

2 Age: A 18 -25 B. 26 -35

C. 36 -45 D. 46 – 55

E. Over 55

3 Educational level A. Illiterate B. Read and write

C. Primary (1-8) D. Secondary (9-12)

E. 10/12+CertificateF. Diploma

G. Degree and Above

4 How long have you

been a customer?

A. Less than 1 year B. 1-5 years

C. 6-10 years D. More than 10 years

Part II: Service Quality Questions

Please rate each statement by using a tick mark in accordance with the choice that holds your

answer on a five point Likert scale questions where 5-Strongly Agree (SA); 4-Agree (A); 3-

Neutral (N); 2-Disagree (D) and 1-Strongly Disagree (SD)

No Reliability SA A N D SD

1 When the organization promises to deliver within a given

time, it does so

2 The organization services are always available as and

when required by the customer

3 The employees show sincere in solving customers’

concern

4 The organization able to perform the service right first

time

5 The organization maintains error free customers’ records

Responsiveness

6 Employees are happy and willing to serve customers

7 Employees tell customers exactly when services will be

performed

8 The management are accessible, listen and provide prompt

and honest responses to customers inquiries

9 The employees are not too busy to respond to user

requests

Tangibility

10 The company has visually appealing physical facilities

57

11 The employees are well dressed and neat in appearance

12 The material associated with the service are visually

appealing

13 Up-to-date equipments

Assurance

14 The support staff have the required skills to resolve

problems and answer questions

15 The employees make customers feel safe in their service

delivery

16 The employee is consistently courteous to the customers

interest

17 The employees instil confidence in customers

Empathy

18 The staff know what customers needs are

19 The employees give customers individual attention

20 The employees are committed to ethics and promote

ethical behaviour in the workplace

21 Services are adjusted to suit individual customer needs

22 The operating hour are convenient to all customers

Part III: Customer Satisfaction

Please rate each statement by using a tick mark in accordance with the choice that holds your

answer on a five point Likert scale questions where 5-Strongly Satisfied (SS); 4-Satisfied (S);

3-Neutral (N); 2-Disatisfied (D) and 1-Strongly Dissatisfied (SD)

No Customer Satisfaction SS S N D SD

1 I am satisfied with the municipality employees service

provider

2 I am satisfied with the respectful behaviour of the

municipality staff

3 I am satisfied with the communicative ability of

employees of the municipality

4 I am satisfied with the performance of employees of the

municipality

5 I am satisfied with the various range of services of the

municipality

58

Appendix-II

የየየየየየየየየየየ

የየየየየየየየየየየየየየየየየ

የየየየየየየየየየየየየየየየ

ለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

(ለለለለለለለለለለለለለለለለለለለ)

የየየየየየየ

ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ


ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ


ለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለለለለለለለለለለለለለለለለለለለ


ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

59

የየየየ-1የ


ለለለለለለለለለለለለለለለለለለለ

የየየየየየ: የየየየየየየየየየየየየ

የ.የ የየየየየ የየየየየየየየ

1 ለለ: ለ. ለለለለ. ለለ

2 ለለለ: ለ. 18 -25 ለ. 26 -35

ለ. 36 -45 ለ. 46 – 55

ለ. ለ55 ለለለ

3 ለለለለለለለለለ ለ. ለለለለለለ. ለለለለለለለለ

ለ. ለለለለለለለ (1-8) ለ. ለለለለለለለ (9-12)

ለ. 10/12+ለለለለለለለ. ለለለለ

ለ. ለለለለለለለ

4 ለለለለለለለለለለለለለለለ? A. ለለለለለለለለለለለ. 1-5 ለለለ

ለ. 6-10 ለለለለ. ለለለለለለለለለለ

የየየየየየየየየየየየየየየየየየየየየየየየየየየየ


ለለለለለለለለለለለለለለለለለ 5-ለለለለለለለለለ (ለለ)ለ 4-ለለለለለለ (ለ)ለ 3-ለለለለለለለለለ

(ለ)ለ 2-ለለለለለለ (ለለ) ለለ 1-ለለለለለለለለለ (ለለ) ለለለለለለለለ

ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ”X”

ለለለለለለለለለለለለለለለለለለ

ለ.

ለ

ለለለለለለለለ 5 4 3 2 1

1 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

2 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

3 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

4 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

5 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለለለ

6 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

7 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለ



9 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለለለለለለለለ


ለ


60


13 ለለለለለለለለለለለለለለለለለለለለለለለለ



ለለለለለለለለለለለለለለለለለ


ለለለለለለለለለለ

16 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ


ለለለለ/ለለለለለለለለ



20 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

21 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

22 ለለለለለለለለለለለለለለለለለለለለለለለለ

የየየየየየየየየየየየየየየየ


ለለለለለለለለ 5-ለለለለለለለለለለ (ለለለ)ለ 4-ለለለለለለለ (ለለ)ለ 3-ለለለለለለለለለ (ለ)ለ 2-

ለለለለለለለለ (ለለ) ለለ 1-ለለለለለለለለለለለ (ለለለ) ለለለለለለለለ

ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ”X”

ለለለለለለለለለለለለለለለለለለ

ለ.

ለ

ለለለለለለለለለ 5 4 3 2 1


2 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

3 ለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለለ

ለለለ



ለለለለለለለለለለለለለለለ

Appendix III

Frequency Table

Descriptive Statistics of Service Quality Dimensions

Reliability

Reliability one

Frequency Percent Valid Percent Cumulative Percent

Valid

Strongly disagree 61 17.8 17.8 17.8

Disagree 92 26.8 26.8 44.6

Neutral 98 28.6 28.6 73.2

61

Agree 52 15.2 15.2 88.3

Strongly agree 40 11.7 11.7 100.0

Total 343 100.0 100.0

Reliability two


Valid


Disagree 124 36.2 36.2 53.4

Neutral 72 21.0 21.0 74.3

Agree 44 12.8 12.8 87.2

Strongly agree 44 12.8 12.8 100.0

Total 343 100.0 100.0

Reliability three


Valid


Disagree 89 25.9 25.9 39.9

Neutral 101 29.4 29.4 69.4

Agree 64 18.7 18.7 88.0

Strongly agree 41 12.0 12.0 100.0

Total 343 100.0 100.0

Reliability four


Valid


Disagree 110 32.1 32.1 49.0

Neutral 67 19.5 19.5 68.5

Agree 65 19.0 19.0 87.5

Strongly agree 43 12.5 12.5 100.0

Total 343 100.0 100.0

Reliability five


Valid


Disagree 101 29.4 29.4 49.0

Neutral 79 23.0 23.0 72.0

Agree 54 15.7 15.7 87.8

Strongly agree 42 12.2 12.2 100.0

Total 343 100.0 100.0

62

Responsiveness

Responsiveness one


Valid


Disagree 118 34.4 34.4 44.9

Neutral 114 33.2 33.2 78.1

Agree 60 17.5 17.5 95.6

Strongly agree 15 4.4 4.4 100.0

Total 343 100.0 100.0

Responsiveness two


Valid


Disagree 103 30.0 30.0 49.3

Neutral 114 33.2 33.2 82.5

Agree 41 12.0 12.0 94.5


Total 343 100.0 100.0

Responsiveness three


Valid


Disagree 110 32.1 32.1 43.7

Neutral 115 33.5 33.5 77.3

Agree 54 15.7 15.7 93.0


Total 343 100.0 100.0

Responsiveness four


Valid


Disagree 131 38.2 38.2 52.5

Neutral 111 32.4 32.4 84.8

Agree 36 10.5 10.5 95.3


Total 343 100.0 100.0

63

Tangibility

Tangibility one


Valid


Disagree 97 28.3 28.3 42.0

Neutral 92 26.8 26.8 68.8

Agree 60 17.5 17.5 86.3

Strongly agree 47 13.7 13.7 100.0

Total 343 100.0 100.0

Tangibility two


Valid


Disagree 100 29.2 29.2 39.1

Neutral 94 27.4 27.4 66.5

Agree 60 17.5 17.5 84.0

Strongly agree 55 16.0 16.0 100.0

Total 343 100.0 100.0

Tangibility three


Valid


Disagree 98 28.6 28.6 43.7

Neutral 91 26.5 26.5 70.3

Agree 57 16.6 16.6 86.9

Strongly agree 45 13.1 13.1 100.0

Total 343 100.0 100.0

Tangibility four


Valid


Disagree 98 28.6 28.6 42.6

Neutral 94 27.4 27.4 70.0

Agree 56 16.3 16.3 86.3

Strongly agree 47 13.7 13.7 100.0

Total 343 100.0 100.0

64

Assurance

Assurance one


Valid


Disagree 93 27.1 27.1 43.1

Neutral 79 23.0 23.0 66.2

Agree 62 18.1 18.1 84.3

Strongly agree 54 15.7 15.7 100.0

Total 343 100.0 100.0

Assurance two


Vaid


Disagree 105 30.6 30.6 51.0

Neutral 73 21.3 21.3 72.3

Agree 55 16.0 16.0 88.3

Strongly agree 40 11.7 11.7 100.0

Total 343 100.0 100.0

Assurance three


Valid


Disagree 102 29.7 29.7 51.6

Neutral 89 25.9 25.9 77.6

Agree 56 16.3 16.3 93.9


Total 343 100.0 100.0

Assurance four


Valid


Disagree 99 28.9 28.9 46.1

Neutral 87 25.4 25.4 71.4

Agree 74 21.6 21.6 93.0


Total 343 100.0 100.0

65

Empathy

Empathy one


Valid


Disagree 119 34.7 34.7 59.2

Neutral 75 21.9 21.9 81.0

Agree 40 11.7 11.7 92.7


Total 343 100.0 100.0

Empathy two


Valid


Disagree 124 36.2 36.2 55.4

Neutral 83 24.2 24.2 79.6

Agree 55 16.0 16.0 95.6


Total 343 100.0 100.0

Empathy three


Valid


Disagree 96 28.0 28.0 48.7

Nuetral 74 21.6 21.6 70.3

Agree 75 21.9 21.9 92.1


Total 343 100.0 100.0

Empathy four


Valid


Disagree 105 30.6 30.6 47.5

Neutral 101 29.4 29.4 77.0

Agree 61 17.8 17.8 94.8


Total 343 100.0 100.0

Empathy five

66


Valid


Disagree 101 29.4 29.4 46.4

Neutral 79 23.0 23.0 69.4

Agree 70 20.4 20.4 89.8

Strongly agree 35 10.2 10.2 100.0

Total 343 100.0 100.0

Satisfaction

Satisfaction one


Valid


Disagree 108 31.5 31.5 55.1

Neutral 81 23.6 23.6 78.7

Agree 43 12.5 12.5 91.3


Total 343 100.0 100.0

Satisfaction two


Valid


Disagree 126 36.7 36.7 56.6

Neutral 62 18.1 18.1 74.6

Agree 35 10.2 10.2 84.8

Strongly agree 52 15.2 15.2 100.0

Total 343 100.0 100.0

Satisfaction three


Valid


Disagree 97 28.3 28.3 50.7

Neutral 101 29.4 29.4 80.2

Agree 40 11.7 11.7 91.8


Total 343 100.0 100.0

Satisfaction four


67

Valid


Disagree 122 35.6 35.6 56.3

Neutral 42 12.2 12.2 68.5

Agree 53 15.5 15.5 84.0

Strongly agree 55 16.0 16.0 100.0

Total 343 100.0 100.0

Satisfaction five


Valid


Disagree 111 32.4 32.4 56.6

Neutral 60 17.5 17.5 74.1

Agree 36 10.5 10.5 84.5

Strongly agree 53 15.5 15.5 100.0

Total 343 100.0 100.0

APPENDIX IV

RESULTS OF CORRELATIONS

Correlations

Satisfaction Reliability Responsiven

ess

Tangibility Assurance Empathy

Satisfaction

Pearson Correlation 1 .651** .627** .760** .640** .551**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 343 343 343 343 343 343

Reliability

Pearson Correlation .651** 1 .406** .490** .391** .377**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 343 343 343 343 343 343

68

Responsiven

ess

Pearson Correlation .627** .406** 1 .546** .457** .378**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 343 343 343 343 343 343

Tangibility

Pearson Correlation .760** .490** .546** 1 .595** .463**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 343 343 343 343 343 343

Assurance

Pearson Correlation .640** .391** .457** .595** 1 .355**

Sig. (2-tailed) .000 .000 .000 .000 .000

N 343 343 343 343 343 343

EMPATHY

TOTAL

Pearson Correlation .551** .377** .378** .463** .355** 1

Sig. (2-tailed) .000 .000 .000 .000 .000

N 343 343 343 343 343 343

**. Correlation is significant at the 0.01 level (2-tailed).

\

APPENDIX V

RESULTS OF REGRESSION

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .872a .760 .756 .442

a. Predictors: (Constant), Empathy, Assurance, Reliability, Responsiveness,

Tangibility

b. Dependent Variable: VAR00001

69

Coefficientsa

Model Un-standardized Coefficients Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) -.362 .098 -3.706 .000

Reliability .266 .030 .278 8.737 .000

Responsiveness .181 .032 .185 5.567 .000

Tangibility .323 .036 .339 8.852 .000

Assurance .180 .032 .192 5.613 .000

EMPATHY TOTAL .156 .032 .151 4.875 .000

a. Dependent Variable: Satisfaction

Appendix-V-2: Multicolinearity

Coefficientsa

Model Un0standardized Coefficients Standardize

d

Coefficient

s

t Sig. Collinearity Statistics

B Std. Error Beta Tolerance VIF

1

(Constant) -.362 .098

-3.706 .000

Reliability .266 .030 .278 8.737 .000 .705 1.419

Responsivenes

s .181 .032 .185 5.567 .000 .646 1.547

Tangibility .323 .036 .339 8.852 .000 .486 2.057

Assurance .180 .032 .192 5.613 .000 .611 1.636

EMPATHY

TOTAL .156 .032 .151 4.875 .000 .739 1.353

a. Dependent Variable: Satisfaction

Appendix VI-1

Charts

70

71

Appendix-IV-2

72

Appendix-IV-3

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