INVESTIGATION OF CUSTOMERS PERCEPTION OF SERVICE QUALITY IN FINANCIAL INSTITUTION

CHAPTER ONE

1.0     INTRODUCTION        

1.1     BACKGROUND OF THE STUDY 

1.2     STATEMENT OF THE PROBLEM

1.3     OBJECTIVES OF THE STUDY     

1.4     RESEARCH QUESTIONS

1.5     RESEARCH HYPOTHESIS

1.6     SIGNIFICANCE OF THE STUDY

1.7     SCOPE OF THE STUDY

1.8     DELIMITATION OF THE STUDY

1.9     DEFINITION OF TERMS     

CHAPTER TWO

2.0     LITERATURE REVIEW

2.1     CUSTOMER PERCEPTION

2.2     SERVICE QUALITY

2.3     CHARACTERISTICS OF SERVICE

2.3     DIMENSIONS OF SERVICE QUALITY

2.4     MEASUREMENT OF SERVICE QUALITY

2.5     MEASUREMENT OF QUALITY AND THE RELEVANCE OF THE CUSTOMER

2.6     SERVQUAL IN BANKING SECTOR

2.7     RELATIONSHIP BETWEEN BANKING SERVICE QUALITY, FINANCIAL BENEFITS, SOCIAL BONDING AND CUSTOMER SATISFACTION

2.8     THEORETICAL FRAMEWORK

2.9     EMPIRICAL FRAMEWORK

CHAPTER THREE

3.0     RESEARCH METHODOLOGY

3.1     RESEARCH DESIGN

3.2     AREA OF STUDY

3.3     POPULATION OF THE STUDY

3.4     RESEARCH SAMPLE AND SAMPLING TECHNIQUE

3.5     INSTRUMENT FOR DATA COLLECTION

3.6     VALIDITY OF THE INSTRUMENT

3.7     METHOD OF DATA COLLECTION

3.8     METHOD OF DATA ANALYSIS

CHAPTER FOUR

4.0     DATA ANALYSIS AND PRESENTATION

CHAPTER FIVE

5.0     SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION5.1     SUMMARY

5.2     CONCLUSION

5.3     RECOMMENDATIONS

REFRENCE

CHAPTER ONE

INTRODUCTION

1.1            Background to the Study

The issue of service quality has become critical to efforts geared towards maintaining competitive advantage. Since financial institutions such as banks compete in the market place with generally undifferentiated products, service quality becomes a primary competitive weapon (Stafford, 1996). Technological changes are causing many banks to rethink their strategies with respect to the services offered to both commercial and individual customers. Bennett and Higgins (1993) have argued that banks that excel in quality service can have a distinct marketing edge since improved levels of service quality are related to higher revenues, increased cross-sell ratios and higher customer retention. The era when the banking industry was erroneously perceived as a sellers’ market is long gone. The banking sector experienced a “boom” in the 1980s because of liberalization and low entry requirements by the regulatory authorities as well as the high premiums that could be derived from trading in foreign exchange (round tripping).

One of the ways through which banks can meet the expectations of their customers is by continually striving to provide quality service. The average Nigerian bank customer is more enlightened today than perhaps ten years ago. He/she wants more value for money and believes that that value can be found next door. Because of the relatively high incidence of poverty of 54% (CBN, 2009), many Nigerian bank customers tend to be price-sensitive. Many banks subscribe to the fact that high customer satisfaction will lead to greater customer loyalty (Yi, 1991; Anderson and Sullivan, 1993) which in turn, leads to future financial gains. Consequently, many organizations that have embraced a culture of providing superior service quality have been found to be market leaders in terms of sales as well as customer loyalty and retention (Anderson and Sullivan, 1993).

Service quality, especially in the banking sector, has been a popular research topic. Gefen (2000) defined service quality as “the subjective comparison that customers make between the quality of the service that they want to receive and what they actually get.” Sudesh (2007) reported that the poor service quality in public sector banks is mainly due to deficiency in tangibility, as well as a lack of responsiveness and empathy. On the other hand, private sector banks were found to be more refined in this regard. Overall, foreign banks were relatively close to their customers’ expectations in term of the various dimensions of service quality. Furthermore, the study revealed the presence of service quality variations across demographic variables. It suggests that bank management should pay attention to potential failure points and respond to customer problems (Sudesh, 2007). Banks should pay attention to service quality to increase customers’ loyalty to the company, willingness to pay, customer commitment, and customer trust (Hazra and Srivastava, 2009). Therefore, there is a need to emphasize the understanding of multidimensional constructs of service quality and its implications in a competitive environment. A satisfied customer does not necessarily become loyal, while customers may maintain a relationship with a company despite being dissatisfied (Matos et al., 2013).

Cowling at al (1995) in developing countries service quality also used to evaluate a financial institution by looking its performance. So they explain on the basis of customer expectation due to the performance and the perception of the service received that is very important because the financial institution are not matured enough in Africa compared to Europe hence through that gap can be identified. Chaoprasert and Elsey, (2004) show how it is important for the banks to focus on service quality as a main tools to attack a competitor because people can compare the quality and choose the best.

1.2     Statement of the Problem

Within the last two decades, service quality has increasingly become the main thrust among efforts aimed at promoting competitive advantage especially in the service industry. The key to success in winning the global competition in future is to have quality service. Any effort geared toward promoting and maintaining quality must therefore start with mechanisms in place to encourage feedback on corporate performance which can provide the basis for determining future response as they impact on service quality. This exercise will give insight into the parameters of customer satisfaction. This vital information will enable the organization develop programs to build satisfaction among the customers and promote customer loyalty in the process. The customers’ requirements must be translated and quantified into measurable targets. As Lord William Thomson Kelvin (1824-1907) has argued, “if you cannot measure it, you cannot improve it”. This study sought to assess customer perceptions about the quality of service in

1.3     Objective of the Study

The main objective of this study is to investigate customer perception of service quality in Diamond Bank, specifically the study intends to:

1.     Find out the perception of customers on service quality in Diamond bank

2.     Analyze the factors that influence service quality in Diamond bank

3.     To examine the factors which facilitate good perception to the customer.

1.4     Research Question

1.     What is the perception of customers on service quality in Diamond bank?

2.     What are the factor that influence service quality in Diamond bank?

3.     What are the factors which facilitate good perception to the customer?

1.5     Research Hypothesis

Ho: there is no significant factor that influence service quality in Diamond bank

Hi: there is significant factor that influence service quality in Diamond bank

1.6     Significance of the Study

The findings of this study will provide bank managers, academics and other decision makers with insight into the perceptions and expectations of customers on overall service quality. The priorities in which service objectives are emphasized by customers shall help other practitioners in redesigning their own service systems. The study shall further focus the need for in depth case studies of individual banking institutions to better understand service delivery in individual firms. This research will also benefit researcher by serving as a guide and reference point for other research.

1.7     Scope of the Study

This research will examine service quality and customer perception, this research will be conducted in a branch of Diamond Bank in Ado-Odo Otta, Ogun State.

1.8     Delimitation of the Study

Finance for the general research work will be a challenge during the course of study. Correspondents also might not be able to complete or willing to submit the questionnaires given to them.

However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.

1.9     Definition of Terms