IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR AWARD OF MASTER’S DEGREE IN MASTERS OF BUSINESS ADMINISTRATION (MBA)

Abstract

Service quality in relation to customer loyalty is one of the interesting research topic areas in business strategy and marketing disciplines in the last few decades. The main objective of this study is to find out the effect of service quality on customer loyalty mediated by customer satisfaction at Commercial Bank of Ethiopia. The study employs quantitative research design and method. A survey was conducted to collect data from customers using quantitative methods through questionnaire. The target populations for this study were account holding customers within seven branches under Arbaminch town at Commercial Bank of Ethiopia (CBE), from which a sample size of 398 respondents were selected by using judgmental sampling technique proportionally based on customer size of branches. Data analysis was performed by using both descriptive and inferential analysis. Except responsiveness all the dimensions of service quality have a significant and positive effect on customer satisfaction. Except reliability and responsiveness all have significant and positive effect on customer loyalty. When it comes to mediation, customer satisfaction partially mediates reliability and empathy to customer loyalty relationship. The findings indicate that overall respondents evaluate the bank positively, but still there are rooms for improvements. The researcher recommended that Commercial Bank of Ethiopia managers better to emphasize to reliability (i.e. being dependable in their service delivery and offer uninterrupted services) assurance and empathy of the service quality dimensions in maintaining and keeping the customers satisfied & become loyal to the bank. And also the researcher recommended to keep office equipment’s clean and attractive since assurance is one of quality service dimension that affect service quality