Comparative Study of Service Quality of Public and Private Banks from Customers' Perspectives: The Case of Banks in Ambo
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Date
2010-01
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Addis Ababa University
Abstract
The major objectives of this study were: (a) to examine the gap between customers'
expectations and their actual perceptions of service quality performance of commercial
banks operating in Ambo town, (b) to examine and compare the service quality gap
scores across these commercial banks, and (c) to identifY the service quality dimension
M that customers of each bank favor mos/. A questionnaire used for this investigation is
limited to a sample of 325 re5pondents residing in Ambo town. The sampling procedure
used was non-probability convenient sampling The measurements used were based on
widely accepted SERVQUAL model. A descriptive statistics analysis (mean and paired ttest)
was used 10 see the gap between customers ' perceptions and their actual
expectations of their respective banks. The study shows that all banks in Ambo have not
met the service expectations of the customers because; there is a significant gap between
the perceptions and expectations of banks' customers. Among the five dimensions of
service quality, the highest negative gap score belongs to re5jJonsiveness, though
customers rated re5jJonsiveness as the most importanl service allribute of all the five
service quality dimensions. Further, the study also found that the lowest negative gap
score is examined in Awash international bank which indicates that the service quality
pelformance of this bank is beller Ihan Ihal of other two banks, CBE and CBO Hence,
customers of AlB were relatively sati~fied with the overall service quality performance of
their bank. Given today 's competitive banking marketing environment in the country, the
researcher believes that it is appropriate for the management of the all commercial
banks to seriously examine their corporate quality programs and customer service
system. In addition, they must also consider that their pelformance measures now have to
place a value on beller responsiveness to customer needs. These measures and changes
can be expensive in terms of employee time and effort, but the management of these banks
needs to find ways to overcome these hurdles, otherwise the increasing competition Fom
non-bank financial institution may shrink their market shares. Therefore, all commercial
banks need to belfer understand their customers and continuously measure and evaluate
their service quality performance in order to improve their service quality based on
customers' perceptions.
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Keywords
Public and Private Banks from Customers'