It is the performance of service that creates true customers: customers who buy more and who influence others to buy .However, Nigerian Banks have been found to be characterized by poor service quality. This study was therefore carried to examine the relationship between service quality and customer satisfaction. Two hypotheses were formulated in this study and appropriate statistical techniques employed to test the hypotheses were multiple regression and correlation. The study reveals that service quality has significant effect on customer satisfaction. The result also show that there is a relationship between gender and customer service. Conclusion was drawn and it was recommended based on the findings of the study that the banks should focus more on their customers rather than on the products and services, which they sell because customers are the true business of every compan

Ogunnaike, O.O.

Olaleke, O

Covenant University Repository

P a g e  |2      Vol. 10 Issue 3 (Ver  1.0)  June 2010 Global Journal of Management and Business Research   GJMBR Classification (FOR) M14 D12 150501 150313 150299 Assessing The Relationship Between Service Quality And Customer Satisfaction; Evidence From Nigerian Banking Industry  Ogunnaike1 Olaleke O2Abstract- It is the performance of service that creates true customers: customers who buy more and who influence others to buy .However, Nigerian Banks have been found to be characterized by poor service quality. This study was therefore carried to examine the relationship between service quality and customer satisfaction. Two hypotheses were formulated in this study and appropriate statistical techniques employed to test the hypotheses were multiple regression and correlation. The study reveals that service quality has significant effect on customer satisfaction. The result  also show that there is a relationship between gender and customer service. Conclusion was drawn and it was recommended based on the findings of the study that the banks should focus more on their customers rather than on the products and services, which they sell because customers are the true business of every company. Keywords:-Customer Se rvice, Customer Satisfaction, Service Quality, prompt service and Banking. I. INTRODUCTION he days of a customer adopting one product or company for life are long gone. With easy access and global competitiveness, customers are often swayed by advertising and a chance at a ―better deal.‖ Quality levels and features between competing brands and organizations are often comparable. The thing that separates competitors is their level of service. It is not unusual for customers to switch back and forth between products or organizations simply because of pricing, a bad first impression from the organization or lack of quality service. This is sometimes referred to as service churn. (Lucas, 2005) Satisfaction is the customer‘s evaluation of a product or service in terms of whether that product or service has met their needs and expectations. (Zeithaml and Bitner, 2003) Happy and satisfied customers behave in a positive manner. They will buy a lot from you and will give you a large share of their business. Customer satisfaction is derived largely from the quality and reliability of your products and services. (Curry and Curry, 2000) However, almost every Nigerian bank encounters similar problems in meeting customer‘s expectation of services and customer satisfaction. For example, the issue of money transfer in banks is one major problem that customers of certain banks have been made to experience. In most cases  _____________________________  About1-Department Of Business Studies Covenant University, Km 10 Idiroko Road, OtaOgun State (E-Mail- Sweetleke2000@Yahoo.Co.Uk)  the customer hardly receives the payment of the money transferred into his account immediately.  The long queues and huge crowds in the banking halls can be highly devastating and discouraging most times, especially when the weekend is near. Most times, this long queues are as a result of the breakdown of the computers used by these cashiers, sometimes it occurs as a result of the cashiers, pushing duty to one another, as to who is to attend to the customers or not.  According to Lucas, (2005), customer service is the ability of knowledgeable, capable, and enthusiastic employees to deliver products and services to their internal and external customers in a manner that satisfies identified and unidentified needs and ultimately results in positive word-of- mouth publicity and return business. II. OBJECTIVE OF THE STUDY It is as a result of all these problems identified above that this study is being embarked upon to examine the effect of service quality on customer satisfaction The researcher also seeks to analyze the relationship between gender and customer satisfaction.  III. THE SIGNIFICANCE OF THE STUDY In Nigeria, not much attention is given to the notion of providing consumers with quality service and satisfaction hence, some banks render weak services and thereby taking customers for granted. However, with the advent of self – service technologies in business and globalization communications, as well as development in information technology including internet, Nigerian consumers will come to know their rights and take necessary actions against companies that infringe upon their rights. This type of study is therefore very necessary to enlighten Nigerian bankers so that they can know how to render effective services that will satisfy their customers Although many scholars have ascertained the fact that customer service has positive effect on satisfaction but very few have been to explore and  highlight the variables that constitute customer service in the Nigerian banking industry IV. SCOPE OF STUDY This study focuses on the effect of customer service on customer satisfaction. The respondents in respect of this study are the customers and individuals that patronize some three selected banks at Ota, Ogun state. T Global Journal of Management and Business Research Vol. 10 Issue 3 (Ver  1.0)  June 2010        P a g e | 3  V. LIMITATION OF THE STUDY This study was geographically limited to Covenant University Community and its environs at Ota, Ogun state. The purposive sampling technique was used because the study was limited to patrons of some three selected Banks located within the geographical area. VI. LITERATURE REVIEW With the fast pace of modern-day living, utilization of services has increased tremendously. Marketing practitioners and researchers, likewise, increased their activity momentum in this area of business. However, despite this fast pace and resultant enrichment of service literature, the issue of perceived service quality remains elusive (Parasuraman, Zeithaml, and Berry 1985; Smith 1999).  A review of literature reveals that major efforts have been anchored in the perspectives of Gronroos (1982) and Parasuraman, Zeithaml and Berry (1988). Gronroos Nordic perspective (1982, 1984) viewed service quality in global terms of functional and technical quality. In contrast, the American perspective of Parasuraman, Zeithaml and Berry (1988) zeros in reliability, responsiveness, empathy, assurances, and tangibles, all related to or dependent upon the service encounter process. Carman (1999) found that since service quality evaluations are highly complex processes, they could be expected to be at several levels of abstraction. Service quality construct confirms to the structure of a third-order factor model that ties service quality perceptions to distinct and actionable dimensions (Brady and Cronin. Jnr, 2001). Parasuraman et al, (1988) who came up with the SERVQUAL model also known as the Gaps model, defines quality as the difference between customer‘s expectation and their perception of the service delivered. The SERVQUAL instrument provides a method of measuring service quality. It is the most frequently used measure of service quality (Mattson, 1994) and is based on five service quality dimensions (tangibles, reliability, responsiveness, assurance and empathy). Service quality is the result of human interaction between the service provider and the customer. (Liu, 2005). The relationship between service quality and customer satisfaction has received considerable academic attention in the past few years. . Many researchers have operationalized customer satisfaction by using a single term scale and many others have used multiple item scales. Service quality and customer satisfaction has been investigated, and results have shown that the two constructs are indeed independent, but are closely related, implying that an increase in one is likely to lead to an increase in the other (Sureshchandar, Chandrasekharan and Anantharaman, 2002).  According to Zeithaml and Bitner (2003), satisfaction and service quality are fundamentally different in terms of their underlying causes and outcomes. Although they have certain things in common, satisfaction is generally viewed as a broader concept, whereas service quality assessment focuses specifically on dimensions of service. Service quality is a component of customer satisfaction.  Service quality is a focused evaluation that reflects the customer‘s perception of elements of service such as interaction quality, physical environment quality, and outcome quality. These elements are in turn evaluated based on specific quality dimensions: reliability, responsiveness, assurance, empathy and tangibles. Satisfaction, on the other hand, is more inclusive: it is influenced by perceptions of service quality, product quality, and price so well so situational factors and personal factors. According to Parasuraman, Zeithaml and Berry (1988), five principal dimensions that customers use to judge service quality include- reliability, responsiveness, assurance, empathy, and tangibles as shown below;. Reliability: the ability to perform the promised services both dependably and accurately. Reliable service performed is a customer expectation and means that the service is accomplished on time, in the same manner, and without errors every time. Responsiveness: the willingness to help customers and to provide prompt service. Keeping customers waiting particularly for no apparent reason creates unnecessary negative perceptions of quality. If a service failure occurs, the ability to recover quickly and with professionalism can create very positive perceptions of quality. Assurance: the knowledge and courtesy of employees so well so their ability to convey trust and confidence. The assurance dimension includes the following features: competence to perform the service, politeness and respect for the customer, effective communication with the customer, and the general attitude that the server has the customer‘s best interests at heart. Empathy: the provision of caring, individualized attention to customers. Empathy includes the following features: approachability, sensitivity and effort to understand the customer‘s needs. Tangibles: the appearance of physical facilities, equipment, personnel, and communication materials. The condition of the physical surroundings is tangible evidence of the care and attentions to detail that are exhibited by the service provider. This assessment dimension also can extend to the conduct of other customers in the service VII. RESEARCH HYPOTHESES In other to achieve the objectives of this study the alternative form of the two hypotheses tested are as follows;. H1: There is a relationship between service quality and customer satisfaction.  H2: There is relationship between customer gender and customer satisfaction.  VIII.  PARTICIPANTS AND SAMPLING TECHNIQUE This study adopted a survey research design in which the purposive sampling technique was used to select 98 participants. Their ages ranged from 18-65 yrs. A total of 110 copies of questionnaire were randomly distributed to the patrons (customers) of these three selected banks. Out of P a g e  |4      Vol. 10 Issue 3 (Ver  1.0)  June 2010 Global Journal of Management and Business Research   this number, 98 copies of the questionnaire were successfully retrieved, of which they were all good enough for analyses. This accounted for 89% of the total distributed questionnaires. Table 1 presents the distribution and response rates and as well as the eventual number rate used for the analyses. 41 (41.8%) of the respondents were males, while 57 (58.2%) were females. A further breakdown of the respondents showed that 85 (86.7%) indicated that they were single, while 12 (12.2%) were married and 1 (1.0%) is divorced  Table 1: Response Rate of Questionnaires Administered  Source: Researcher’s Survey Findings (2009) IX. MEASURES The major source of data used in carrying out this research work is the primary and secondary source. The primary data was a more reliable source in this study which includes the use of questionnaire; the secondary data includes journals, library textbooks and non-governmental publications that were used in this study. It was a 14-item questionnaire with a five- point-rating format. Upon administration of the questionnaires to the respondents, we recorded a reliability co-efficient alpha value 0.88. Confirmatory factor analysis (CFA) reveals that there are four major factors that constitute service quality  in Nigerian Banking Industry. The data collected on the two hypotheses and research question were analysed using multiple regression and correlation statistical techniques. X. RESULTS The multiple regression and correlation statistical techniques were used to test the significance or otherwise of the two hypotheses postulated. This was carried out using the statistical package for social sciences. In table 2, the first hypothesis was tested using the multiple regression in respect of the impact of service quality on customer satisfaction. The results as shown below indicated that service quality contributed significantly to customer satisfaction at significant level of 0.0001   Table 2: Multiple Regression Table  In table 3 below, the second hypothesis was tested using the correlation method for the relationship between customer gender and customer satisfaction. The significant level of 0.045 indicated that there is a relationship between customer gender and customer satisfaction.    Table 3: Correlation Table ANOVAb65.058 4 16.265 42.691 .000a35.431 93 .381100.490 97RegressionResidualTotalModel1Sum ofSquares df Mean Square F Sig.Predictors:  (Constant), the employ ees are polite and f riendly ., the bank of f ersprompt serv ices to their customers. , the bank renders ef fectiv e customer serv ice.,employees are willing to listen to the complaints.a. Dependent Variable: i am generally  satisf ied with their banking.b. Correlations1.000 -.203*. .04598 98-.203* 1.000.045 .98 98Pearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)Ni am generally  satisf iedwith their banking.sex of  respondenti am generallysatisf ied withtheir banking.sex ofrespondentCorrelation is signif icant at the 0.05 lev el (2-tailed).*. Questionnaires Number Percentage Returned 98 89% Not Returned 12 11% Total 110 100% Global Journal of Management and Business Research Vol. 10 Issue 3 (Ver  1.0)  June 2010        P a g e | 5  XI. DISCUSSION OF FINDINGS The banks need to adapt more to technological advancement in order to render more effective customer service, as this would matter a great deal in its future operations. The automated teller machine services rendered by the banks have not stopped customers from demanding cash at the counter. The bank equipments and facilities installed to eliminate long queues needs to be more efficient and effective enough to ensure that customers are not inconvenienced when waiting in line This is very important because the study has revealed that a technology that is not properly integrated does not improve customer service. Management of each bank needs to adopt knowledgeable and capable employees that can ensure that customers are hardly delayed in the banks. The researcher has discovered that the degree of customer satisfaction can be determined by some identified variables. The researcher, as indicated below, developed a regression model: Y= (B0+ B1X1 +B2X2 +B3X3 +B4X4+---------------U)          Where Y= the degree of customer satisfaction                     B0= constant                     X1= prompt service                     X2=employees‘ willingness to listen to complaints                     X3= effective customer service                     X4= employees‘ politeness and friendliness                     U= slack variable A regression of the collected data shows the following coefficients Y= (0.07761 + 0.449X1- 0.01821X2 + 0.188X3 + 0.321X4 +-----------------U)                  The coefficients show that customers place highest value on prompt service, followed by   employees‘ politeness and friendliness. It is therefore necessary to put policies and structures in place in other to promote promptness of service to the employees  XII. RECOMMENDATION The banks that will thrive in the future will be those that are able to focus more on their customers, rather than on the products and services, which they sell. Banks should have the interest of their customers at heart, because customers are the true business of every company. Banks in Nigeria should not only adapt to technological advancement, but must ensure that the new employed technology makes for a prompt and a stress-free banking. There is need for each bank to apply the queuing technology to their banking system as this would help them to manage customers waiting in line, and productivity. Banks should embark on effective training and development skills that can help employees deliver prompt services to the customers.      Banks should always try to engage in overtime banking that is, working extra hours, as this would profit working class individuals who do not have the opportunity to go to the bank during their work hours. Moreover, this would profit the bank maximally, as they would increase the number of individuals that bank with them. Finally, bank operators should ensure that they avoid puffing promises that will unnecessarily raise the expectations of the customers as against the actual quality of service they are able to provide. XIII. REFERENCES Bitner, Mary Jo, Bernard, H. Booms, and Mary Stanfield Tetreault (1990), ―The Service Encounter: Diagnosing Favorable and Unfavorable Incidents‖, Journal of Marketing, Vol. 54 (January), pp. 71-84. Brady, Michael K. and J. Joseph Cronin Jr. (2001), ―Some New Thoughts on Conceptualizing Perceived Service Quality: A Hierarchical Approach‖, Journal of Marketing, Vol. 65 (July), PP. 34-49. Brown, S & Swartz, T (1989). ―A Gap Analysis of Professional Service Quality‖. Journal of Marketing, 53, 92-108. Carman, James M. (1999), ―Consumer Perception of Service Quality: An Assessment of the SERVQUAL Dimensions‖, Journal of Retailing, Vol. 66 No.1, pp. 33-55. Gronroos, Christian (1982), ―Strategic Management and Marketing in the Service Sector‖. Jelsingfors: Swedish School of Economics and Business Administration. Gronroos, Christian (1984), ―A Service Quality Model and Its Marketing Implications‖, European Journal of Marketing, Vol. 18 no. 4, pp.36-44. Meuter, Matthew L., Amy L. Ostrom I. Roundtree, and Mary Jo Bitner (2000), Self- Service Technologies: Understanding Customer Satisfaction with Technology Based Service Encounters,‖ Journal of Marketing, Vol. 64 (July), Pp. 50-64. Mouawad M & Kleiner B (1996). New Developments in Customer Service Training. Managing service quality, 6(2), 49-56. Parasuraman, A., Valerie A. Zeithaml, and Leonard Berry (1985), ―A Conceptual Model of Service Quality and its Implications for Future Research‖, Journal of Retailing, Vol. 49 (fall), pp.41-50. Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988), ―SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality‖, Journal of Retailing, Vol. 64 No. 1, pp. 12-40. Sureshchandar G, Rajendran C & Anantharaman R. (2001). A holistic model for total quality service. International Journal of service industry management, 12(2), 378-412. Zeithaml, V.A. and Bitner, M.J. (2000), Services Marketing: Integrating Customer Focus Across the Firm, ,  New York; McGraw- Hill. 

Assessing The Relationship Between Service Quality And Customer Satisfaction; Evidence From Nigerian Banking Industry

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