SERVICE QUALITY GAP IN NIGERIAN BANKING SECTOR
This study is motivated by a desire to examine service quality gap in the Nigerian banking sector. In light of the empirical review and other discussions, a number of questions arose as to whether there is relationship between banks services quality and customer satisfaction. The population of this study constitutes banks quoted in the Nigeria Stock Exchange. Questionnaire was administered to some selected staff of the sampled banks operating in Nigeria. Data was collected and analyzed using the simple percentage, descriptive statistics and chi-square statistical tool. This study revealed among other things that there is a significant relationship between reliability and service quality gap in the Nigeria banking sector. It is recommended that the reliability factor is a positive factor for banks. They should position themselves in the market on the basis of this dimension and promote themselves aggressively. This will not only help them survive the present onslaught from competitors, but also be competitive in the market. The banking sector should be improved in such point of view.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background to the Study
Statement of the Research Problem
Objectives of the Study
Scope of the Study
Significance of the Study
CHAPTER TWO: LITERATURE REVIEW
Service Quality Using Importance-Performance Measurement
The Service Quality (Servqual) Model
Criticisms of Servqual
Service Quality in the Banking Sector
Customer Satisfaction and Customer Loyalty
CHAPTER THREE: METHODOLOGY
The Population and Sample
Data Collection Method
Sources of Data
The Research Instrument
Data Analysis Method
CHAPTER FOUR: PRESENTATION OF DATA AND ANALYSIS
4.2 Descriptive Statistics
4.3 Test of Hypothesis
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
Summary of Findings
BACKGROUND TO THE STUDY
Customers today are more concerned about experiencing high quality services while banking. The expectation is not just receiving an investment or financing offer from the bank in form a commodity. They rather expect the bank to have personality of its own with wider recognition, which delivers services in an atmosphere with entertainment and fun. In the banking sector, the quality of service is turning out as an important differentiator among the rivals (Roy, Vaijayanthi and Shreenivasan, 2011).
Look-alike product offerings which are similarly priced have become the product characteristics from most of Banks these days. In today’s fiercely competitive marketable, the clear market winners will be the ones who provide excellent service quality. This would ensure bank’s wellbeing by bring more new customers with an implication of more business from existing customers and in turn fewer lost customers, resulting in more protection from price competition and fewer mistakes that often compel repackaging the prevailing goods/services (Albrecjt & 1985).
Service quality is an approach to manage business processes in order to ensure full satisfaction of the customers which will help to increase competitiveness and effectiveness of the industry. Quality in service is very important especially for the growth and development of service business enterprises (Powell, 1995). It works as an antecedent of customer satisfaction (Ruyter and Bloemer, 1995). With the increase of the importance of service sector in the economy of Bangladesh, the measurement of service quality became important. ISO standards are one of the measurement tools of service quality, where quality is defined as the totality of features and characteristics of a product, process or service (Islam & Ahmed, 2005). Banks is consequently put into lot of pressures due towards increase in global competition. Different strategies are formulated to retain the customer and the key of it is to increase the service quality level.
Typically, customers perceive very little difference in the banking products offered by banks dealing in services as any new offering is quickly matched by competitors. Parasuraman et. Al (1985) and Zeithaml et., al (1990) noted that the key strategy for the success and survival of any business institution is the deliverance of quality services to customers. They quality of services offered will determine customer satisfaction and attitudinal loyalty (Ravichandran et al. 2010). The inter relationships of variables defining the antecedents and also the consequences of customers satisfaction have been studied extensively in the consumer research literature (e.g., Anderson and Sullivan 1993; Cronin and Taylor 1992 and Wilton 1988; Westerbrook 1982; Yi 1990). However, there appears to be conflicting evidence as to the nature of the linkage between the antecedents and consequences of satisfaction.
STATEMENT OF THE RESEARCH PROBLEM
Banks face tremendous competition within the industry. Their competition mainly based on service pattern, service quality, and customers’ expectation. Many banks are far from the advantageous position because scrawny ability to identifying the gaps between the customer expectations and perception of service bank. If they are not able to identify that gaps effectively service organization will not sustained in the stiff competition.
Against this backdrop, the following research questions are raised:
Is there positive relationship between banks services quality and customer satisfaction?
Is there a significant relationship between reliability and customer loyalty?
Does perceived service quality of bank have a positive effect on customer involvement?
OBJECTIVES OF THE STUDY
The objective of this study is to examine the impact of service quality gap in Nigerian Banking Sector.
The specific objectives are:
To determine if there is a positive relationship between banks service quality and customer satisfaction.
To verify if there is a significant relationship between reliability and customers loyalty.
To ascertain if the perceived service quality of bank have a positive effect on customer involvement.
The hypotheses of this study are:
Ho: There is no positive relationship between banks service quality and customer satisfaction.
H1: There is a positive relationship between banks service quality and customer satisfaction.
Ho: There is no significant relationship between reliability and customer loyalty
H1: There is a significant relationship between reliability and customer loyalty
Ho: The perceived service quality of bank does not have a positive effect on customer involvement.
H1: The perceived service quality of bank have a positive effect on customer involvement.
SCOPE OF THE STUDY
The research study focuses on Service Quality Gap in Nigerian Banking Sector.
The population of the study consists of all the 260 quoted companies in the Nigeria Stock Exchange, while 10 quoted companies is randomly selected as the sample size.
The time frame of this study is five (5) years i.e. (2007-2011).
Geographically, the study will be specifically be restricted to Benin City, Edo State.
SIGNIFICANCE OF THE STUDY
It is expected that this study would consolidate existing literature on the issues surrounding service quality gap in Nigerian Banking Sector. The study would also facilitate the examination of the effects of service quality gap in Nigerian Banking Sector. Furthermore, given the empirical nature of the study, the outcome of this study would and policy makers and regulatory bodies in economic modeling and policy simulation with respect to the selected variables examined in the study.
The result of the study would be of benefits to government, investors and corporations in examining the effectiveness of the service quality gap in Nigerian Banking Sector.
It will also be useful in stimulating public discourse given the dearth of empirical researchers in this area from emerging economies like Nigeria. Finally, it would also add to the available literature on the area of study while also providing a platform for other researchers who may want to further this study.
Islam, N. & Ahmed, E. (2005), “A Measurement of Customer Service Quality of Banks in Dhaka City of Bangladesh”, South Asian Journal of Management http://findarticles.com/p/articles/mi_qa5483/ is_200501/ai_n21375939.Visit date: 13Jan, 2011.
Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985), “A Conceptual Model of Service Quality and its Implication”, Journal of Marketing, Vol. 49, Fall, pp. 41-50.
Powell, T.C. (1995), “Total Quality Management as Competitive Advantage: A Review and Empirical Study”, Strategic Management Journal, Vol. 16, pp. 15-37.
Ravichandran, K. Prabhakaran, S. and Kumar, S.A. (2010), “Application of Servqual Model on Measuring Service Quality: A Bayesian Approach”, Enterprise Risk Management, Vol. 1, No. 1, pp. E9.
Roy, R. Vaijayanthi, P. and Shreenivasan, K.A. (2011), Service Quality Gap of Foreign Banks in India using PZB Service, International Conference on Software and Computer Application, 9:142-146.
Ruyter, K.D. and Bloemer, J. (1995), “Integrating Service Quality and Satisfaction: Paying in the Neck, or Marketing Op
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