CUSTOMER CARE, SERVICE QUALITY AND CUSTOMER SATISFACTION IN POST

BANK, HOUSING FINANCE BANK; IN KAMPALA

BY:

TAMALE ABDUL KHARIM

&

TWINOMUGISHA FRANCIS

LIST OF ACRONYMS

ATM Automation Teller MachineBOU Bank of UgandaDFCU Development Finance Company

UgandaSPSS Statistical Package for

Social ScientistsUK United KingdomUSE Uganda Stock Exchange

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DEFINITION OF KEY TERMS

Customer Care; Customer care can be defined as any good/service

rendered to a customer in the process of selling a product or

service.

Service Quality; Refers to the effectively and efficiently

way of delivering a service so as to satisfaction and delight

customer.

Customer Perception; Is a marketing concept that encompasses

a customer's impression, awareness and/or consciousness about a

company or its offerings? Customer perception is typically

affected by advertising, reviews, public relations, social media,

personal experiences and other channels.

Customer Satisfaction; Customer satisfaction is a

general/overall judgment that a customer makes after consuming a

product or a service.  Customer satisfaction is a psychological

state (feeling) appearing after buying and consuming a product or

service.

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iv

ABSTRACT

The study focused on Customer Care, Service Quality and Customer

Satisfaction in two Commercial banks in Uganda. The objectives of

the study aimed at establishing the relationship between Customer

Care and Customer Satisfaction, Customer Care and Service

Quality, Customer Perception and Customer Satisfaction, and

studying the factor structure of Customer Care, Service Quality,

Customer Perception and Customer Satisfaction in two commercial

banks in Uganda; Post Bank and Housing Finance Bank.

The research design was a cross sectional which comprised of both

qualitative and quantitative approaches conducted to collect

information from the targeted population totaling of 160

respondents. Proportionate stratified random sampling was used to

select the sample of 132 bank staff members and customers in two

commercial banks. Data was analyzed using descriptive analysis

option of SPSS version (11.0), and was then presented using

Pearson’s correlation, multiple regression and factor analysis

statistical techniques to determine the magnitude of the

relationship and prediction for Customer Care, Service Quality

Customer Perception and Customer Satisfaction respectively

The major findings of the study were as follows: there was a

significant positive correlation between Customer Care, Service

Quality, Customer Perception and Customer Satisfaction in

Commercial Banks in Uganda. The regression analysis indicated

v

that the variables accounted for 39.5% of the variance in of

customer satisfaction in commercial banks. The study report

finally gives some conclusions and recommendations. For instance,

Uganda, like any form of business organization, in today’s

dynamic financial landscape should focus on good service quality

and customer care in terms of the employees, physical evidence

and ambience to instill a higher reliability value among

customers to enhance customer satisfaction in commercial banks.

There is a need for the bank to make their services tangible

through physical facilities in order to improve on quality

services so as to satisfy their customer needs The customers need

to be closely monitored to limit gaps in service provision and

resulting falls in well-being within the bank. The banks need to

focus more on improving the infrastructure; the physical

evidence, internal environment and layout. This is due to the

fact that recently like in other services, in banking also the

internal ambience of the organization has a positive impact on

the customers.

TABLE OF CONTENTS

DECLARATION.........................................................ii

APPROVAL...........................................................iiiDEDICATION..........................................................iv

ACKNOWLEDGEMENT......................................................v

vi

LIST OF ACRONYMS....................................................viLIST OF TABLES....................................................xiii

LIST OF FIGURES....................................................xivCHAPTER ONE..........................................................1

INTRODUCTION AND BACK GROUND.........................................11.0 Introduction 1

1.1 Back ground 21.2 Statement of the Problem 3

1.3 Objectives of the study41.3.1 General Objective 4

1.3.2 Specific Objectives 41.4 Research Questions 4

1.5 Scope 51.5 Content Scope 5

1.5.1Geographical Scope 51.5.2 Time Scope 5

1.6 Significance of the Study 5CHAPTER TWO..........................................................7

LITERATURE REVIEW....................................................72.0 Introduction 7

2.1 The relationship between Customer Care and Customer Satisfaction7

2.1.1 Customer Care 72.2 The relationship between Customer Care and Service Quality 10

2.2.1 Service Quality 10

2.3 The Relationship between Customer Care, Customer Perception and Customer Satisfaction 14

2.3.1 Customer Perception 14

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2.3.2 Customer Satisfaction172.4 The Relationship between Customer Care, Service Quality, Customer Perception and Customer Satisfaction. 19CHAPER THREE........................................................21

METHODOLOGY.........................................................213.0 Introduction 21

3.1 Research Design 213.2 Study Population 21

3.3 Sample size and sampling design 223.4 Data Sources 22

3.4.1 Primary data collection 223.4.2 Secondary data collection 23

3.5.1 Questionnaire 233.5.2 Key Informative Interviews 23

3.6 Ethical Consideration 233.7 Validity and Reliability 23

3.7.1 Validity 233.7.2 Reliability 24

3.8 Data Analysis 243.9 Limitation of the Study25

CHAPTER FOUR........................................................26PRESENTATION OF STUDY FINDINGS......................................26

4.0 Introduction 264.1 Respondents’ Bio Data 26

4.1.1 Gender of respondents264.1.2 Age group of the respondents 26

4.1.3. Marital Status of the Respondents 274.1.4. Education levels of respondents. 28

4.1.5 Number of years worked in the bank by the respondents 28

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4.1.6. Number of respondent’s children294.1.7 Nature of bank account you have with the Bank 29

4.2.1The relationship between Customer Care and Customer Satisfaction30

4.2.1 The relationship between Customer Care and Service Quality 304.2.3 The relationship between Customer care, Customer Perception and Customer satisfaction 314.2.4 The relationship between Customer Care, Service Quality, Customer perception and Customer satisfaction 314.3 Regression analysis 32

4.4 Factor Loadings of Customer Care, Service Quality, Customer Perception and Customer Satisfactio 32

4.4.1 Factor analysis results: Customer Care 334.4.2 Factor Analysis Results of Service Quality 34

4.4.3 Factor Analysis Results of Customer Perception 354.4.4 Factor Analysis Results of Customer Satisfaction 36

4.5 Group discussion on the challenges customers face in the bank, relationships between independent variables and dependent variable

37CHAPTER FIVE........................................................41

INTERPRETATION OF THE FINDINGS......................................415.0 Introduction 41

5.1 Bio Data 415.1.1 Gender of the respondents 41

5.1.2 Age group of the respondents 415.1.3 Marital Status of the respondents 41

5.1.4 Education levels of respondents 425.1.5 Number of year’s respondents has worked in the bank 42

5.1.6 Number of children respondents had 424.1.7 Nature of account respondents have in the Bank 43

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5.2 The Relationship between Customer Care and Customer Satisfaction43

5.3 The Relationship between Customer Care and Service Quality 435.4 The Relationship between Customer Care, Customer Perception and Customer Satisfaction 445.5 The Relationship among Customer care, Service quality, Customer Perception and Customer satisfaction. 44CHAPTER SIX.........................................................45

CONCLUSION AND RECOMMENDATIONS......................................456.1 Introduction 45

6.1.1 Conclusion. 456.2 Recommendations 45

6.2.1 The relationship between Customer Care and Customer Satisfaction45

6.2.2 The relationship between Customer Care and Service Quality 466.2.3 The relationship between Customer Care, Customer Perception and Customer Satisfaction 476.2.4 The Relationship among Customer care, Service quality, Customer Perception and Customer satisfaction. 486.3 Suggested Areas of further research 49

REFERENCES..........................................................50APPENDICE...........................................................55

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LIST OF TABLESTable 3.1: Population size..........................................21

Table 3.2: Proportionate Stratified Random Sampling.................22

Table 4.1: Gender by respondent distribution........................26

Table 4.2 Age of the respondents....................................26

Table 4.3 Below shows marital status of Respondents.................27

Table 4.4 Below shows educational level of Respondents..............27

Table 4.5 Below shows number of years worked in the Bank by

Respondents.........................................................28

Table 4.6 Below shows the respondent’s number of children...........28

Table 4.7 Below shows the nature of bank account with the bank......29

Table 4.8 Spearman’s zero order correlation matrix..................30

Table 4.9 Below shows the regression model for Customer Care, Service

Quality Customer Perception and Customer satisfaction...............32

Table 4.10 Factor Analysis Results of Customer Care.................33

Table 4.11 Factor Loadings of Service Quality.......................34

Table 4.12 Factor Loadings of Customer Perception...................35

Table 4.13 Factor Loadings of Customer Satisfaction.................36

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LIST OF FIGURESFigure 1: Conceptual Frame Work......................................6

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CHAPTER ONE

INTRODUCTION AND BACK GROUND

1.0 IntroductionThe Ugandan banking sector is characterized as a dynamic

environment that makes it difficult for banks to grow and to

maintain their market share. The growth in the number of banks

has on one hand increased competition and on the other hand

heightened the standards that need to be met in order to gain a

competitive advantage. In addition, the competition between banks

is a premise of customers’ ever growing expectations. Customers

are now more informed and they expect their banks to meet their

needs when, how and where they want. Otherwise, there is the risk

that a bank loses market share in favor of its competitors.

Considering the above mentioned issues, one major concern of

Ugandan banks should be customer retention. Long-term

relationships between a bank and its customers, is proof of the

financial institution’s efforts to offer high quality services

that satisfy customers’ demands. Moreover, customer retention is

a necessary input for improving business performance. If they

expect their banks to meet their needs, then when, how and where

do they them want from. Otherwise, there is the risk that a bank

loses market share in favor of its competitors (Karatepe et al.,

2005, p. 373).

1

The B.O.U (Bank of Uganda 2012) reveals that the number of bank

branches in Uganda has reached 400 networks and almost 600

automated teller machines, about 38 percent of the commercial

bank branches located in Kampala with the distribution about even

in the Central, Eastern and Western parts of the country. The

Northern part of the country has about 11 percent of commercial

bank branches, largely because of several years of conflict that

severely affected economic activities in the region. Banks’

territorial expansion is a proof of their desire to be closer to

their customers and to reduce the average time a customer has to

wait for a service to be performed. Besides, territorial

expansion helps banks to be “more present” in customers’ minds

and, as a result, to be perceived as powerful institutions.

Moreover, in Uganda, many persons still do not have access to

internet, or even if they do, very few perform banking operations

via Internet Banking. In addition, there still are persons that

are reluctant to using ATMs or to paying with their cards. Thus,

the number of territorial units, their location and the comfort

inside the bank unit may be important factors in appreciating a

bank’s services quality level as well as necessary inputs to

foster penetration and increase market share.

Customers perceive little difference between banking products

(Ravichandran et al., 2010; Neilson and Chadha, 2008) and hence

banks face the risk of losing customers in favour of competitors

who may copy an offer easily. Under these circumstances, the

competitive environment in which Ugandan banks act, force them to2

consider quality a critical aspect for their success. Services

quality results in customer satisfaction which ‘leads to market

share and profits’ (Burch, Rogers et al., 1995, p. 1) and to

loyalty which is a must for long-term relationships between

customers and banks. It is therefore necessary to continuously

define the determinants of customer satisfaction, which of them

have a greater impact, and then to decide whether improvements

need to be made in order to increase their quality level or not.

Bearing in mind for Uganda it is expected that bank customers

value interpersonal relationships with bank employees. Thus,

human aspects are probable to have a greater impact on customer

satisfaction than physical evidence elements and processes

(expressed in terms of convenience and efficiency).

1.1 Back groundCustomer care is a customer service that seeks to acquire new

customers, provide superior customer satisfaction and build

customer loyalty, Eihtamal (2000). Customer care services can

also be defined as a process that starts right from targeting

customers through market segmenting to ensure that a customer is

satisfied to undertake related purchase, Ballinne (2007).

Customer care services play an important role in an organization

ability to generate income and revenue and are one of the

elements of the product mix (Balerman, 2005).

Service quality is a concept that has aroused considerable

interest and debate in the research literature because of the

3

difficulties in both defining it and measuring it with no overall

consensus emerging on either (Wisniewski, 2001). Quality

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). Firms with high service quality pose a challenge to other

firms. Many scholars and service marketers have explored

consumers’ cognitive and affective responses to the perception of

service attributes in order to benefit by providing what

consumers need in an effective and efficient manner.

Organizations can business excellence through quality control in

services (Shahin, 2010). The quality of services offered will

determine customer satisfaction and attitudinal loyalty

(Ravichandran et al. 2010).

Customer satisfaction is an evaluative process, it is defined as

“… a judgment that a product of service feature, or the product

or service itself, provided (or is providing) a pleasurable level

of consumption related fulfillment, including levels of under or

over fulfillment” (Swaid 2007; Hom 2002). Customer satisfaction

is “captured as positive feeling (satisfaction), indifference or

negative feelings (dissatisfaction)” (Bhattacherjee, 2001) cited

by (Swaid 2007). It is a short-term attitude that can readily

change given a constellation of circumstances. Therefore,

satisfaction is not a static idea and it changes as soon as a

client finds a better deal that meets his expectations. In this

perspective, firms must focus on customer satisfaction, studying

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and determining as soon as possible the customer satisfaction

level, to adjust the product to customer needs. Indeed, customer

satisfaction has great significance for the future of an

institution and it is seen as a basis for securing market

position and achieving other objectives of the institution

(Koraus, 2002).

1.2 Statement of the ProblemCustomer care, service qualities are vital components for both

initial and ongoing development of customer satisfaction in the

banking sector in the world and Uganda in particular (Nanziri,

2011). Bangladesh especially Private Commercial Banks have tried

to ensure provision of customer cares service, giving special

facilities and ensuring customer satisfaction (Ataur, 2011). And

in Uganda, Banks like Stanbic bank, Bank of Africa, Post Bank,

House Finance Bank, Centenary Bank and DFCU are striving to

satisfy their customers and have put in place easier banking

services by introducing internet banking, electronic banking,

installed ATMs with Luganda instruction, front desks for

inquiries and issue bank statement at end of the month to update

customers about their monthly transaction so to promote accuracy,

flexibility.

Despite all the above, there is apparent decline in customer

satisfaction in banks being observed by the increasing number of

customer complaints as evidenced in sustainability and black

economic empowerment report 2005.The number of complaints in 2004

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were (11,183) and (27,260) in 2005 as a result of poor customer

care services quality like break down of ATM machine, lack of

empathy, un reliability offered by the banks and standing in line

for a long time in the banks which is non-productive and a sheer

waste of time resulting in frustration, demoralization and

incredibly expensive, Satendra (2011). What is more, each of the

clients who recall such experiences, verify to the fact that the

waiting-line experience in a service facility significantly

affects their overall perceptions of the quality of service

provided in the banks, Maister (2005).

The purpose of this study was to investigate Customer Care,

Service Quality, Perception and customer satisfaction of

commercial bank in Uganda.

1.3 Objectives of the study

1.3.1 General ObjectiveTo examine the relationship between Customer Care, Service

Quality, Perception and Customer Satisfaction in the Banking

sector of Uganda.

1.3.2 Specific Objectives i) To examine the relationship between Customer Care and Customer

Satisfaction.

ii) To establish the relationship between Customer Care and

Service Quality.

iii) To assess the relationship between Customer Perception and

Customer Satisfaction.

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iv) To study the factor structure of Customer Care, Service

Quality, Customer Perception and Customer Satisfaction.

1.4 Research Questions i) What is the relationship between Customer Care and Customer

Satisfaction?

ii) What is the relationship between Customer Care and Service

Quality?

iii) What is the relationship between Customer Perception and

Customer Satisfaction?

iv) What is the factor structure of Customer Care, Service

Quality, Customer Perception and Customer Satisfaction?

1.5 Scope

1.5 Content ScopeThe study focused on customer care, service quality as

independent variables, Customer Perception as the intervening

variable and customer satisfaction as the dependent variable in

the Ugandan banking industry.

1.5.1Geographical ScopeThe study was carried out from banks around Kampala in particular

Post Bank Uganda located along Jinja road in Kampala and Housing

finance located along Kampala road. The researcher chose these

banks because he is familiar with them and therefore, access to

the necessary information/ data was easy for the researcher.

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1.5.2 Time ScopeThe study covered the period of review from 2008 – 2011 and

collection of data from commercial banks will run from July -

September 2012.

1.6 Significance of the Study i) The study has provided an understanding of customer care

service quality and customer satisfaction in commercial banks in

Uganda; and their implications to financial performance, which

information is required by researchers, consultants and

academicians.

ii) The study has benefited policy makers/Government as it will

expose the challenges of customer care service quality in

commercial banks in Uganda hence forming a basis for future

planning.

iii) The study has benefited the banking industry in coming up

with capacity building mechanisms to help practioneers overcome

the barriers that impede better service quality delivery to

customers in commercial banks in Uganda.

Figure 1: Conceptual Frame Work8

Description of the model

The conceptual framework explains the underlying process, which

is applied to guide this study. Parasuraman et al., (1988), used

the SERVQUAL model with five dimensions; Tangibles, Reliability,

Responsiveness, Assurance and empathy, representing service

quality and customer satisfaction. Mbonigaba (1995) used four

dimensions (communication, courtesy competence and credibility)

to measure customer care and customer satisfaction. Nanziri

Betty, (2011) Quality services and customer satisfaction

considered four dimensions (commitment, loyalty retention and

recommendation of service).

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Customer Care

CommunicationCourtesyCompetenceCredibility

Service Quality

Tangibles

Reliability

Assurance

Empathy

Responsiveness

Customer Satisfaction

CommitmentLoyaltyRetentionRecommendation of service

Customer Perception

AttitudeBehaviourAwareness

Impression

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction This chapter reviews the existing literature put forward by

different scholars and personalities on customer care, service

quality and customer satisfaction as well as the relationship

among the three variables.

2.1 The relationship between Customer Care and Customer Satisfaction

2.1.1 Customer Care Kotler (1998) described customer care as a service in any

activity or benefit that one party can offer to another that is

essentially intangible and does not result in the ownership of

anything. According to Ngahu (2001), customer care can be defined

as any good service rendered to a customer in the process of

selling a product or service. Ngahu further explains customer

care as the “activities” which are offered to sale or are

provided in connection with the sale of goods.

According to Balunywa (1995), any service rendered to a customer

is the one referred to as customer care. Indeed so many scholars

have attempted to describe customer care but the gist of the

whole concept of customer care from such definition above is that

any one in business must not only concentrate on the product he

or she is offering, but must accompany it with great service to

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the targeted customers. Balunywa observed that the concept of

customer care is still new and most managers are yet to embrace

it.

Mbonigaba (1995) wrote that there is need to make customers

satisfied since they help business earn. In most offices,

customer care starts with the front office clerks. The

secretaries at the front office should be made to appreciate the

importance of customer care because this is the best chance for

any business to create the first impression of good service to

its customers. Kotler (1998) observed that customer satisfaction

depends on the extent to which customer’s expectations about the

services are fulfilled and these expectations are not static.

Kotler further noted that good customer service among other

things entails keeping the promises made to customers, and not

guaranteeing things that cannot be possible given the nature of

the operating environment. To provide an excellent service to

customers, the organization should deliver beyond the

expectations of the customers.

Santon (1999) argues that, to provide good customer services, the

organization in designing must focus wholly on the customer. This

brings us to who actually is the customer. A customer is an

individual or organization that makes a purchase decision.

Drucker (1994) identifies customer creation as one of the major

objectives of the business. Without a customer, other components

of organization will not be viable for long. Organizations

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therefore design customer care programs seeking to acquire new

customers, provide superior customer satisfaction and build

customer loyalty.

The determinants of Customer Care include Competence,

communication and credibility as explained below.

CompetenceThis was defined by Francis (1996) as the possession of the

required skill and knowledge performs a service. It involves

research capacity, knowledge and skills of operational support

staff. Competence is the skill, expertise and professionalism

with which the services are executed. According to Robert (1997),

competence includes the carrying out of correct procedures,

correct execution of customer instruction, degree of product and

service knowledge exhibited by contact staff, rendering of sound

advice and the general ability to do a good job.

CommunicationRobert (1997) described communication as the ability a service to

communicate with a customer in the away he/ she will understand.

It includes the clarity, completeness, and accuracy of both

verbal and written information to customer and the ability to

listen and understand the customer. According to Ntayi, (1999),

Communication means keeping customer informed in the language

they can understand and listen to them. It may mean the company

going that extra mile to adjust its language for different

customers, availability of inquiries desk, informing of account

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changes, and clarity of staff answers and ease of understanding

letters are great consideration to effective communication

(Galloway, 1994). In Uganda, as far as retail banking is

concerned, banks like Stanbic bank, Bank of Africa, Centenary and

DFCU installed ATMs with Luganda instructions; they all have

front desks for inquiries and issue bank statements at end of the

month to update customers about their monthly transactions.

CredibilityCredibility involves trustworthiness, believability and honesty.

It’s about having the customers best interests at heart,

contributing to credibility is a company name, reputation and

privacy discussions (Francis 1996). Balunywa (1995) highlights

that credibility mean trust, assurance, integrity and security.

Say what you mean and mean what say. This is more important in

retail banking, an instruction that handles the payment system

keeps customer’s money.

The Justification for Customer Care and Customer Satisfaction is

as here render;

Customer Care as a means of Customer Satisfaction Growth of business in most service industries is built up on a

reputation for providing customer satisfaction through a good

standard of attention and case. This is closely associated with

exercising fiduciary responsibilities. Maintaining good standards

of customer care is as fundamental to marketing as the

development and launch of a new product or service. But

unfortunately, providing a high standard of customer care cannot13

be qualified vary basically. As a result, it is often regarded as

an operation rather than marketing function.

Fostering Customer opinions as a means of CustomerSatisfaction

Customers are the lifeblood of any business. Customer care

therefore is paramount. The ways in which services to publish can

be improved are numerous and organizations should incur

considerable expense researching then servicing image and

reputation. The public relations department at an organization

usually has the main task of ensuring that the mainstream

marketing efforts are fully supported through winning the esteem

of customers and the public at large. Without a good reputation

for understanding customer problems and requirements, an

organization will lose existing customers and fail to attract at

least its market share of new business. Customers who are not

given an opportunity to business can do damage to the

organization by the word of mouth, because of influence they have

on the existing potential customers. A complaints department is

essential for the success in any service business responsive to

complaints and diligent in finding out facts (Davidson, 1978).

Customer Care as a means of business survivalBusiness survival is the continued existence, sustenance and

growth of business entity. Organizational survival calls for

innovation managerial skills in the exertion of the various

business activities/ functions in a competitive environment. It’s

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through such skills that an organization can adapt to its

competencies and eventually out rival its potential and actual

competitors. In the provision of products and services, it is

usual for both the seller and the buyer to come into contact.

It’s during this contact that clients form their impression of

the quality of services that the organization is delivering. This

may be termed as the “moment of truth” (could1984 and Zemke 1985)

the contact with the customer puts the organization to test its

performance, quality of the product and service and the results

of the test are positive to the organization which offers a high

standard customer care services.

2.2 The relationship between Customer Care and Service Quality

2.2.1 Service Quality Service quality is considered an important tool for a firm’s

struggle to differentiate itself from its competitors (Ladhari,

2008, p.172). The relevance of service quality to companies is

emphasized here especially the fact that it offers a competitive

advantage to companies that strive to improve it and hence bring

customer satisfaction.

Service quality has received a great deal of attention from both

academicians and practitioners (Negi, 2009) and services

marketing literature service quality is defined as the overall

assessment of a service by the customer (Eshghi et al., 2008,

p.121). Ghylin et al., (2008, p.76) points out that, by defining

service quality, companies will be able to deliver services with

15

higher quality level presumably resulting in increased customer

satisfaction. Understanding service quality must involve

acknowledging the characteristics of service which are

intangibility, heterogeneity and inseparability, (Parasuraman et

al., 2004, p.42); (Ladhari, 2008, p.172). In that way, service

quality would be easily measured.

According to Zeithaml and Parasuraman, (2004), the measurement of

service quality should be done with the purpose to identify the

gaps between expectations and perceptions or the shortfalls in

customers’ perceptions of services’ performance. In this respect

they developed the SERVQUAL model, an approach that supposes the

measurement of expectations and perceptions on five dimensions as

follows: Assurance, Empathy, Reliability, Responsiveness and

Tangibles. The SERVQUAL model is ‘probably the best-known,

universal scale designed to measure the perceived service

quality’ (Bahia and Nantel, 2000, p. 84). Another model that has

been proved valuable, although not applied at the same extent as

SERVQUAL, is Technical/Functional Quality model. According to

Grönroos, technical quality refers to the outcome, to what is

being offered while functional quality considers the way a

service is provided (Lassar, Manolis et al., 2000)

Douglas & Connor (2003, p.165-166), emphasis that the consumer

who has developed heightened perception of quality has become

more demanding and less tolerant of assumed shortfalls in service

quality and identify the intangible elements (inseparability,

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heterogeneity and perishability) of a service as the critical

determinants of service quality perceived by a customer. It is

very vital to note here that, service quality is not only

assessed as the end results but also on how it is delivered

during service process and its ultimate effect on consumer’s

perceptions (Douglas & Connor, 2003, p.166).

To sum up, we must add that most of the quality dimensions in all

cases refer to personnel attributes and to interpersonal

interaction. This could be explained by the fact that most often

cannot be entirely separated from the provider and hence

customers find themselves in the same place with a firm’s

employees. Therefore, ‘the nature of the interaction between

service providers and customers (i.e. functional quality) are key

contributors to customers’ evaluations of the overall service

offering’ (Eisingerich and Bell, 2008, p. 257) and thus, bank

service quality (considering the customer-bank relation within

territorial units) can be assessed in terms of direct contact

with personnel, processes (expressed through convenience and

efficiency) and physical evidence.

Classification of service quality has been addressed by a number

of scholars. Lehtinen (1982), identified three (3) dimensions of

physical quality, corporate quality and interactive quality,

Perasuraman et al (1985) identified the following determinants;

reliability, tangibles, assurance, empathy and responsiveness

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Responsiveness This is the willingness to provide help and prompt service to

customer (Parasuraman et al, 1999). Responsiveness concerns the

willingness or readiness of employees to provide a service in

such away as; mailing a transaction slip immediately, speed on

mortgage conformation, updating accounts promptly (Francis,

1996). Responsiveness has been shown to an important factor

Aukiran (1994), suggest that efforts to increase speed of

processing information and a customer is likely to a positive

effect on customer satisfaction in retail banking. Balunywa,

(1995) emphasizes that when a customer has a need, meet it, be

easy accessible available to customer.

Reliability of Service deliveryThis refers to the processes, procedures and systems that would

make service delivery a seamless experience (Sarashchandar et al,

2002). It highlighted whether the service delivery process wads

standardized, streamlined and simplified, so customers could

receive the service without any problem. The structured aspects

of service delivery processes have not ever been adequately

studied (Sarashchandar et al, 2002). In literature there were few

marketing scholars who have tried to focus on the importance of

the structural content of service delivery in service quality

evaluation ( Dauaher and Mattson, 1998).T his structural content

of the service delivery process is considered important in

service quality evaluation ( Dauaher and Mattson,1998).

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Tangibles of ServicesThey are one of few dimensions that have been consistently used

by different researchers (Bahia and Nantel, 2000). However

tangibles refer to physical facets of service facility equipment,

machinery signage, communication material (Bahia and Nantel,

Parasuraman et al, 1985).It included the physical evidence of

service except the personal appearance of staff which was

included in human element dimension, employees and customers are

usually influenced by the tangible facets of service in

physiological, psychological, emotional and cognitive ways

( Bitner, 1992). The intangible aspects of the staff customer

interface have a considerable influence both negative and

positive in the service quality (Johnston, 1995). Tangibles are

associated with the impact on the customer’s inferences about

what service should be like and therefore will influence the

evaluation of service quality (Parasuraman et al, 1993).

Customer’s perception of tangibles was generally considered

important in the case of the banks than others.

Trying to justify Customer Care and Service Quality, Bara (2001)

says that the only reason for businesses to exist is to serve a

customer. A customer is a person who enables people to earn a

living and also enables government to exist and function.

Therefore, there is need to have quality customer service to

satisfy the customers. Quality customer care is associated with

an attitude; a way of thinking and a philosophy of doing business

that emphasize a strong commitment and sincere dedication to

19

satisfying customers. (Ngahu2001) advocates for making customer

satisfaction a priority of the company. It calls for the adoption

of a customer orientation Ngahu (2001) and Balunywa (1995) agree

that, the main reason customers choose one product over another

is probably because it better meets their need in such a way as

ease of use, service, or ability to do what it promises to do.

Ngahu (2001) further noted that another reason to become customer

driven is to build market share. Research shows that you cannot

maintain market share with unique features alone, as your

competitors will imitate you. Sustainable market share growth is

achieved through loyal customer and excellent service. To be

customer driven means to position customers at the heart of your

operations and to let their needs guide all your decisions,

policies and strategies.

According to Zike (2001), in his study of what makes a company

excellent, he interviewed 43 high performing companies. He wanted

to find out what makes them so successful in an increasingly

changing environment where many companies are facing closure. He

found out that all high performing companies share a set of basic

operating principles, some of which emphasized customer driven

service. He found out that excellent companies provide

unparalleled customer service, quality and reliability. Moreover,

they exhibit a strong commitment to customer satisfaction and

tend to stick to the business they know.

20

Customer orientation is reflected in the quality that customers

get at all levels of the company (Ekpei 2001).Customer care helps

to enhance the corporate image, customer relations, operational

efficiency, competitive advantage and profitability. Moreover, it

enables to cope with a rapidly changing environment and highly

demanding customers. These are realized because the company that

is customer oriented emphasizes the provision of what customers’

need that is quality and efficiency in service.

According to Mulwana (2002), in paper presentation at Uganda

manufacturer’s seminar, he noted that customer service is a major

tool for market penetration. Mulwana like Balunywa (1995) noted

that businesses always look forward to win, to increase their

turnover every other time and that this necessitates basic

strategies that can attract and retain customers and the major

tool is high quality customer services. Mulwana emphasized that

high quality customer care delights and satisfies customers and

the biggest benefit is that it creates loyal customers. Mulwana

therefore noted that the process of customer care means

delivering quality service that can satisfy the customer.

However, companies often fail to recognize the importance of

staff care, who are also company customers (Balunywa1995).

Balunywa identified two types of customers who enjoy the

organizations services that is, the external people who buy from

the business and those internal to the organization, who are the

employees, those that can make things happen in the organization

21

and deal with the external ones. Balunywa called the first type

“kings” and the second type as “royalty”. He said that the

winning organizations are characterized by a committed customer

base, healthy profits and happy people. Balunywa further noted

that customers are likely to receive good service if the staffs

delivering them are happy with their work. Employers who treat

their staff like kings are more likely to have a motivated and

committed workforce that is interested and willing to deliver

quality service.

2.3 The Relationship between Customer Care, Customer Perception and Customer Satisfaction

2.3.1 Customer PerceptionCustomers’ perceptions are formed subsequent to their experience

of the services received from an organization. Furthermore, the

level of previous customer experience with certain services that

serve by other firms can impact on customers’ perception of

service quality. Researchers believe that perception and

expectation are strong relative concepts (Mersha, 1992; Avkiran,

1994). Customers’ perceptions results from how customers

recognize service quality; customers’ expectations however can be

shaped through the influence of other people.

Perception as a dynamic variable occurs at different stages of

the purchasing process experienced before purchase, at the moment

of purchase, at the time of use, and after use. For each stage

the valuation made may be different (Gardial, Clemons, Woodruff,

22

Schumann, and Burns, 1994). Recently, perceived value has been of

growing interest among marketing researchers who have been

examining the relationships among perceived value, customer

satisfaction, and behavioral intentions, as one of the most

influential measures of customer satisfaction and behavioral

intentions, whereas it has not been given much attention in the

tourism literature (Patrick and Backman, 2002). Perceived value

not only affects customer choice behavior at the pre purchase

stage but also influences satisfaction and intentions to

recommend and repurchase at the post purchase stage (Parasuraman

and Grewal, 2000).

The definitions have similarities and differences which are

mainly seen in the linking of customer value to some service. The

perspective of customer value involves a tradeoff between what

the customer receives and what they give up to acquire the

product (Hellier et al., 2003). On the other hand, customer value

takes the perspective of an organization’s customers by

considering what they want and believe that they can get from

buying and using a product or service (Woodruff, 1997). Initial

conceptualizations of value in the marketing literature were

mainly price based. For example, Thaler (1985) argued that

consumers’ value perceptions are “the result of a comparison

between various price structures, including advertised selling

price, advertised reference price and internal reference price.”

Monroe (1990) proposed that perceived overall value is “a

weighted sum of acquisition (maximum price and actual selling23

price) and transaction value (gap between the reference price and

actual price of product).” Lovelock (2000) defined it as “a

trade-off between perceived benefits and perceived costs.” Recent

research studies suggest that perceived value may be a better

predictor of repurchase intentions than either satisfaction or

quality. As the market place offers a variety of products with

ranging quality and price levels, consumers are becoming more

careful in spending their money on high value products. Moreover,

perceived value seems to drive their future behaviors such as

repurchase intent and word of mouth referrals (Brandy and Cronin,

2001).

Understanding the behavioral intentions of customers after

experiencing services is important because they are seen as a

prime determinant of a firm’s long term financial. Behavioral

intention performance and is considered a major source of

competitive advantage (Lan et al., 2004). Thus, behavioral

intentions are important indicators of customers’ future

behaviors, trigger future behaviors (Ajzen and Fishbein, 1980)

and defined as “a deeply held commitment to repurchase or re-

patronize a preferred product or service in the future” (Oliver,

1997). Many studies have examined the antecedents of repeat

purchase intentions. Thus, understanding the determinants of

customer retention can facilitate management’s focus on the major

factors leading to customer intentions. Quality, perceived value,

and satisfaction all have been shown to be good predictor of

behavioral intentions (Patrick, 2004) 24

Boulding et al. (1993) used repurchase intention and word of

mouth to evaluate consumer’s post purchase intentions. Repurchase

intention is the process of an individual purchasing goods or

services from the same firm (Hellier, Geursen, Carr and Rickard,

2003) and the reason for repurchase is primarily based on past

purchase experience. Word of mouth is a process in which

consumers who have used a certain product or service pass their

experiences through word of mouth to consumers planning to

purchase the product or service (Westbrook, 1987). Favorable

behavioral intentions encompass three dimensions which are, word

of mouth, purchase intentions and price insensitivity, and they

combine to form customer loyalty (Olsen, 2007). Meanwhile, Ha and

Jang (2010) focused on revisit intentions (hedonic value and

utilitarian value), word of mouth, and willingness to recommend

as specific forms of behavioral in a Korean restaurant.

Behavioral intentions represent as customer’s loyalty which is an

important goal for a company’s long term sustainability.

Retaining existing customers usually has a much lower associated

cost than winning new ones. Furthermore, loyal customers are more

likely to recommend friends, relatives or other potential

customers to a service by acting as free word of mouth

advertising agents (Shormaker and Lewis, 1999).

Behavioral intentions can be defined and assessed by both

attitudinal and behavioral measure. The attitudinal measure

25

refers to a specific desire to continue a relationship with a

service provider while the behavioral perspective refers to the

concept of repeat patronage (Oliver, 1999). The author also

indicated that customers can develop an attitude based on prior

information without actual experience, so they frequently

increase biases for or against providers based on the provider’s

image in the marketplace. This attitude is strongly related to

the customers’ intentions to re-patronize the service and to be

engaged in word of mouth behaviors. Similarly, as the degree of

destination intention is frequently reflected in tourists’

intentions to revisit the destination, it impacts upon their

willingness to recommend it (Chen and Tsai, 2008).

2.3.2 Customer SatisfactionAccording to existing definitions and approaches, customer

satisfaction can be analyzed as a general/overall judgment that a

customer makes after consuming a product or a service.  Customer

satisfaction is perceived as “psychological state (feeling)

appearing after buying and consuming a product or service …”

(Merouane 2008/2009). Thus, customer satisfaction reflects “a

pleasure resulting to product’s consumption, including under or

over fulfilment level” (Hom, 2002).  According to Olivier’s

argument   , customer satisfaction does not mean only positive

feeling, it could also lead to a negative or neutral feeling

withdrew from consuming a product or a service. Briefly,

“customer satisfaction is captured as positive feeling

(satisfaction), indifference (neutral), or negative feelings

26

(dissatisfaction)” (Bhattacherjee 2001) cited by (Swaid and

Wigand 2007, Hom 2002).

When approaching customer satisfaction as a feeling, it is

important to note that it is mostly influenced by the customer’s

experience with the firm and product. In this perspective,

customer satisfaction is conceived as “the emotional state that

occurs as a result of a customer’s interactions with the firm

over time” Verhoef (2003, 32). In fact, customers are usually

comparing the product received from the firm to their own

expectations over time. If the product fulfils and performs the

customer’s expectations, customer seems satisfied. Briefly,

customer’s satisfaction is analyzed as a confirmation or not of

customer expectations (Conchon et al. 2006).

Giese & Cote, (2000, p.15) clearly state that there is not

generic definition of customer satisfaction and after carrying a

study on various definitions on satisfaction they came up with

the following definition, “customer satisfaction is identified by a response

(cognitive or affective) that pertains to a particular focus (i.e. a purchase experience

and/or the associated product) and occurs at a certain time (i.e. post-purchase, post

consumption)”. From this definition, is it clear that the

consumer’s satisfaction is determined for his/her shopping

experience in the grocery store and this is supported by Cicerone

et al., (2009, p.28) and Sureshchander et al., (2002, p.364) who

believe customers’ level of satisfaction is determined by their

27

cumulative experiences at all of their points of contact with a

supplier organization.

According to Wicks & Roethlein, (2009, p.89), customer

satisfaction can be formed through an affective evaluation

process and this affective evaluation is done following the

purchase experience by the consumer. Organisations that

consistently satisfy their customers enjoy higher retention

levels and greater profitability due to increased customers’

loyalty, Wicks & Roethlein, (2009, p.83). This is why it is vital

to keep consumers satisfied and this can be done in different

ways and one way is by trying to know their expectations and

perceptions of services offered by service providers. In this

way, service quality could be assessed and thereby evaluating

customer satisfaction.

In our study, we use customers to evaluate service quality by

considering several important quality attributes in co and we

think firms must take improvement actions on the attributes that

have a lower satisfaction level. This means customer satisfaction

will be considered on specific dimensions of service quality and

customer cares in order to identify which aspects customers are

satisfied with.

The importance of Customer Satisfaction in firms: retention and

loyalty can be discussed below; Loyalty and retention are often

analyzed as direct consequences of customer satisfaction. The two

terms express “the attachment a customer feels for a company’s

28

people, products, and services. A  loyal customer is  someone who

makes regular purchases, purchases across product and service

lines, refers others,  demonstrates an  immunity to the pull of

the competition” Griffin (1995) cited by  ( Churchill 2002) . 

Financial and marketing studies have supposed that satisfied

customers constitute an important asset of firm.  Even if there

is not much empirical evidence, it seems that customer

satisfaction will enhance both customer loyalty and retention

through repeated purchases, less price sensitivity and costs

reduction.

In fact,  when   customers are  satisfied , they become more

loyal and will  increase their level of purchasing from the firm

over time (Verhoef 2003, 33) directly,  they will  also

recommend other customers   to consume the  firm’s products and

services . Thus, “the positive word of mouth that satisfied

customers generate influences other consumers’ future purchases”

( Gruca and Lopo 2005, 116).  Satisfied customers are also

expected to be “less likely to defect to competing products as a

result of lower prices” (Fornell et al. 1996). For this

reason,    “greater customer satisfaction may enable firm to

charge higher prices or at least to better resist downward

pressure on prices” (Anderson 1996 , Narayandas 1998) . Briefly ,

“ a satisfied customer reacts less sensitively to price changes

and is prepared to pay a higher price for a service that

corresponds to their requirements and conceived ideas” ( Korauš

2002, Anderson et al .2004 , 172).

29

When discussing the determinants of Customer Satisfaction, Togo

through the transformation, Lévesque (1996), identified the

drivers of customer satisfaction in retail banking to be

performance, loyalty, location, skilled employees and competitive

interest to deliver these benefits on an ongoing basic to its

existing clientele will impact on customer satisfaction.

Location

Understanding location are the customer benefits of convenience

and accessibility which are enabling factors that make it easy

for the customers to do business with the bank.

Performance

Performance yields clean and convincing directions for designing

service offerings staff development programmers and customer

complaint management systems (Levesque and Gordon, 1996). Doing

it right the first time and ensuring successful problem recovery

results in to reliability, competitive and shows that employees

are willing and ready to provide a service.

Loyalty

Eugene et al; (2000) suggested that loyalty is a deeply held

commitment to rebuy or repatronise a preferred product or service

consistently in the future despite situational influences.

According to Bloemer (1998) intangible attributes such as

reliability, competence, credibility and efficiency place a major

role in building and maintaining loyalty thus a great intent to

repurchase and likelihood of recommending the bank to others.

30

2.4 The Relationship between Customer Care, Service Quality, Customer Perception and Customer Satisfaction.

Mbonigaba (1995) wrote that there is need to make customers

satisfied since they help business to earn. In most offices,

customer care starts with the front office clerks. The

secretaries at the front office should be made to appreciate the

importance of customer care because this is the best chance for

any business to create the first impression of good service to

its customers.

Poon (1993) contends that there is need for loyalty for

customers, quality labor and ensure services are consistently

good. Keeping customers satisfied and happen through quality will

keep them coming back rather than leaving. Whereas Medilk (1992)

argues that the customer assesses quality by his or her

perceptions of the way in which services or facilities are

provided. Thus means that quality concerns visitor expectation of

services and what is received and delivered. A bad customer

service experience is used as an example of common customer

service error hence customer turnover

Parasuraman et al., (1985) suggested that when perceived service

quality is high, then it will lead to increase in customer

satisfaction. He supports that fact that service quality leads to

customer satisfaction and this is in line with Saravana & Rao,

(2007, p.436) and Lee et al., (2000, p.226) who acknowledge that

31

customer satisfaction is based upon the level of service quality

provided by the service provider.

Fen & Lian, (2005, p.59-60) found that both service quality and

customer satisfaction have a positive effect on customer’s re-

patronage intentions showing that both service quality and

customer satisfaction have a crucial role to play in the success

and survival of any business in the competitive market. This

study proved a close link between service quality and customer

satisfaction.

A consumer will decide to purchase or use of a service if he/she

perceives that the service helps enhance his/her personal

values .The sequence of values – attitude – behavior is also

applied to post-purchase behavior, i.e. customer satisfaction. -

specific evaluation (Pham Ngoc Thuy and Le Nguyen Hau, 2010.)

Customer satisfaction towards a service is an emotional feeling

after using the service which is transaction

32

CHAPER THREE

METHODOLOGY

3.0 IntroductionThis chapter presents the methods employed in data collection and

analysis. It described the research design, study population,

sampling method, sample size, data collection tools, and data

processing and analysis.

3.1 Research DesignThe study design used cross- sectional research design both

qualitative and quantitative approaches were employed to gain an

in-depth understanding on the effect of customer care service

quality and customer satisfaction in the Ugandan banking

industry.

3.2 Study PopulationThe population comprised of staff members and clients of Post

Bank Uganda and Housing Finance bank. The target population

comprised of 40 operational staff and 25 managerial staff and 95

customers from the two different banks, all totaling to 160

people. The managerial staff was involved because it is the

planning body of the organizations and the operational staff

being the implementers. Then customers were involved because they

are the reasons as to why the businesses exist. Customer care

33

policies are basically established by the managerial body and

generally utilized by the operational staff.

Table: 3. 1: Population size

Post Bank

Uganda

Housing Financial

Bank

Total

Bank Staff 30 35 65

Bank

Customers

45 50 95

160

Source: primary data

3.3 Sample size and sampling designA sample size of 76 customers, 56 bank staff members were used as

determined from Krejcie and Morgan (1970) table. Proportionate

stratified random sampling was used to select the sample of 132

respondents in two commercial banks as shown in Table 2 below.

34

Table: 3. 2: Proportionate Stratified Random Sampling

Bank/ Stratum No. of staff

banks

Sample

Size

No. of

customers

Sam

ple

SizePost Bank Uganda

30 2

7

45

34

Housing Financial

bank

35 2

9

50

42

Total

65 5

6

95

76

Source: primary data

3.4 Data Sources

3.4.1 Primary data collection The primary data collection explored the originality of data

through gathering information relevant to the study. Primary data

was obtained from respondents from commercial in Uganda. By use

of the questionnaires and interview manuals, the research

gathered data from the respondents which in fact were the primary

concern of this survey design approach.

3.4.2 Secondary data collection Secondary data collection explored the supplementary to the above

method where data was obtained especially from Annual Reports

were sourced from Bank of Uganda’s Library. The Institute of

Banker’s Library, ICPAU- Library and Commercial Banks in Uganda

commercial, dissertations, text books, the internet and other

35

materials (such as journals, news papers,) was found useful to

the study.

3.5 Research instruments

3.5.1 Questionnaire Questionnaire was chosen because of its ability to reduce any

bias and the collection of authentic data important for data

analysis. The researcher used both closed ended and open-ended

questionnaires aiming at testing the effects of Customer Care,

Service Qaulity and Customer Perception and Customer Satisfaction

in commercial banks in Uganda. Observations and Beliefs also

sought to a five-point Likert Scale, five being the highest (Tull

and Hawkins, 1993).

3.5.2 Key Informative Interviews Structured questions and open ended statements were used by the

researcher in trying to interview key customers and bank staff of

commercial banks in Uganda.

3.6 Ethical ConsiderationBefore embarking on the data collection process, the researcher

obtained an introductory letter from Cavendish University. This

letter was then presented to the Banks of concern. After getting

the clearance from the Bank’s human resource managers, the

researcher obtained the knowledgeable consent from the

respondents and informed them about the purpose of the study. The

data was aggregated to avoid having data being related to an

individual and the questionnaires were destroyed after data

analysis.

36

3.7 Validity and Reliability

3.7.1 ValidityTo ensure the validity and reliability of the instrument, the

researcher employed expert judgment method. After constructing

the questionnaire, the researcher contacted experts in this area

to go through it to ensure that the instrument is clear,

relevant, specific and logically arranged. Also a pre-test was

conducted in order to test and improve on the reliability and

validity of the instrument.

A formula for Lawshe was used to measure the validity of

research, as indicated below:

CVR = (n - N/2)/ (N/2)

CVR= Content Validity Ratio, n= number of respondents indicating

“essential”, N total number of respondents

3.7.2 ReliabilityInter-rater reliability was employed. Here research assistants

used to do content analysis for the researcher. To calculate this

kind of reliability, the researcher reported the percentage of

agreement on the same subject between his raters and that of the

assistants. However, half of the test, instrument, or survey, was

used to analyze half as if it was the whole thing. Then

comparisons of these results were taken with the overall

analysis.

Cronbach method was used to measure the validity of research

using alpha option in a numerical coefficient of reliability.

37

Computation of alpha was based on the reliability of a test

relative to other tests with same number of items, and measuring

the same construct of interest. Alpha coefficient ranges in value

from 0 to 1 was used to describe the reliability of factors

extracted from the study (that is, questions with two possible

answers) and/or multi-point formatted questionnaires or scales

(that is, rating scale: I = strongly agree, 5 = strongly

disagree). The higher the score, the more reliable the generated

scale. 0.5 was used for acceptability of reliability coefficient.

3.8 Data AnalysisThe data was collected from the field coded, edited and analyzed

using descriptive analysis options of SPSS version 11.0. The data

was then presented using Pearson’s correlation’s statistical

techniques which were used to test and establish whether there

exists a relationship between Customer Care, Service Quality,

Customer Perception and Customer Satisfaction while multiple

regression analysis was used to test the potential predictors of

the dependent variable.

3.9 Limitation of the Study i) Confidentiality and data sensitivity: some respondents

declined to give information for fear of releasing personal and

confidential information.

38

ii) Time constraints: The problem arose from the respondents who

don’t have the researcher’s time to attend to interviews and

even fill in the questionnaires. This led to limited

information from the respondent.

iii) Some respondents were unable to complete the questionnaire

by themselves because of failure to interpret the questions.

The researcher mitigated this by appointing research

assistants who administered some questionnaires.

Despite the above challenges, information was gathered after

convincing the respondents that it would be purely used for

academic research for the Masters of Business Administration.

39

CHAPTER FOUR

PRESENTATION OF STUDY FINDINGS

4.0 IntroductionThis chapter of the research report presents the findings based

on the objectives of the study; relationship between customer

care and customer satisfaction; the relationship between service

quality and customer care; relationship between service quality

and customer satisfaction. The chapter contains bio data of the

samples, relationship between variables, and regression analysis

and factor structure of all variables.

4.1 Respondents’ Bio Data

4.1.1 Gender of respondentsThe results in the table below 4.1 show the gender distribution

of the respondents.

Table 4.1: Gender by respondent distribution

Gender Frequency Percent/% Male 69 52.27 Female 63 47.73 Total 132 100.0Source: primary data

40

Table above 4.1 shows the gender demographics of the study. Total

of 132 respondents, 52.27% of the participants were males and

47.73% of the respondents were females respectively.

4.1.2 Age group of the respondentsThe table below 4.2 shows the age of Respondents

Table 4.2 Age of the respondents

Age Frequency Percent/% 18-25 31 23.48 26-35 44 33.33 36-45 34 25 46+ 23 17.42 Total 132 100.0Source: primary data

Table above 4.2 shows the age group of respondents who

participated in the study. Total of 132 respondents, 33.33% of

the participants belonged in the age group between 26-30, 25% of

the participants belonged in the age group of 36-45, 23.48% of

the participants followed in the age group of 18-25% and 17.42%

of the participants followed in the age group of 46+.

4.1.3. Marital Status of the RespondentsThe table below 4.3 shows marital status of respondents

41

Table 4.3 below shows marital status of Respondents

Marital status Frequency Percent/%

Married 70 53.03 Single 62 46.97 Total 132 100.0

Source: primary data

Table above 4.3 shows the marital status of the respondents who

participated in the study. Total of 132 participants, 53.03% of

the participants were married and 46.97% of the respondents were

single.

4.1.4. Education levels of respondents.The table below 4.4 shows educational levels of the respondents.Table 4.4 below shows educational level of Respondents

Education levels Frequenc

y

Percent/%

Primary level 3 2.27 High school level 15 11.36 Diploma 39 29.55 Graduate 51 38.64 Post graduate 24 18.18 Total 132 100.0Source: primary data

42

The Table above 4.4 shows education levels of respondents who

participated in the study. Total 132 participants, 38.64% of the

respondents were degree holders, 29.55% of the respondents were

diploma grandaunts, 18.18% of the participants were post

graduate, 11.36% of the participants were high school graduates

and 2.27% of the participants were primary graduates

respectively.

4.1.5 Number of years worked in the bank by the respondentsThe table below 4.5 shows number of years worked in the bank byrespondentsTable 4.5 below shows number of years worked in the Bank by Respondents

Length of the

service

Frequency Percent/%

0-3 21 37.5 4-6 17 30.36

7-10 11 19.64

11+ 7 12.5 Total 56 100.0Source: primary data

Table above 4.5 shows the respondents’ number of years worked in

the bank who participated in the study. Total of 56 respondents,

37.5% of the participants have worked in the bank in the range of

0-3, 30.36% of the participants have worked in the bank in the

range of 4-6, 19.64% of the respondents have worked in the bank

in the range of 7-10 and 12.5% of the respondents have worked in

the bank in the period of 11+ respectively

43

4.1.6. Number of respondent’s childrenThe table below 4.6 shows possession of children group byrespondents.Table 4.6 below shows the respondent’s number of children

Number of respondents children Fre

quency

Percent%

None

27

20.45

1–3

45

34.09

4-7

39

29.55

8+

21

15.91

Total

132

100.0

Source: primary data

The table above 4.6 shows the number of children respondents have

who participated in the study. Total of 132 participants, 34.09%

of the respondents had children in the range of 1-3, 29.55% of

the participants had children in the range of 4-7, 20.45% of the

participants had none and 15.91% of the respondents had number of

children 8+.

4.1.7 Nature of bank account you have with the BankTable below shows 4.6 the nature of bank account respondents havewith the bank

44

Table 4.7 below shows the nature of bank account with the bank

Nature of Account Frequency Percent %Savings 33 43.42Current 21 27.63Fixed 13 17.11Current & Savings 9 11.84Total 76 100.0Source; primary data

The table above 4.7 shows the nature of accounts respondents have

in the bank who participated in the study. Total of 76

participants, 43.42% of the respondents had savings account,

27.63% of the participants had current account, 17.11% of the

participants had fixed account and 11.84% of the respondents had

current and savings account

4.2 Relationship between Study Variables

Spearman correlation coefficient was used to determine the degree

of relationship between the study variables as shown in the table

2 below.

Table 4.8 Spearman’s zero order correlation matrix

45

1 2 3 4

Customer Care(1) 1.000

Service Quality(2) .418** 1.000

Customer Perception(3) .572** .465** 1.000

Customer Satisfaction(4) .592** .459** .468** 1.000

**. Correlation is significant at the .01 level (2-tailed).

Source: primary data

4.2.1The relationship between Customer Care and Customer SatisfactionTable above 4.8 showed a significant positive relationship

between Customer Care and Customer Satisfaction (r= 0.592, P-

value < 0.01). This implied that Customer Care in terms of

Communication, Competence, and Credibility enhanced Customer

Satisfaction in Commercial Banks.

The qualitative findings showed that, “Customer satisfaction results from

customer care so the two variables are interlinked, as a satisfied customer will always

become a reference point to other about the existing customer care services in a

certain bank because he/ she is satisfied” a female respondent from post

bank.

4.2.1 The relationship between Customer Care and Service QualityResults in table 4.8 above indicated a significant positive

relationship between Customer Care and Service Quality (r =

0.418, P-value < 0.01). This implied that Customer Care in terms

of Communication, Competence, and Credibility improved on Service

Quality in Commercial Banks.

The qualitative findings showed that, “Actually customer care is the

foundation to service quality, and without good customer care then service quality

loose value, so banks should try to make the bank a home for their customers but not a

46

secret place for loosing money and property through” a male respondent from

Post Bank

4.2.3 The relationship between Customer care, Customer Perception and Customer satisfactionThe above table 4.8 shows a significant positive relationship

between Customer Care, Customer perception and customer

satisfaction (r = 0.592, 0.468, P-value < 0.01). This implies

that Customer Care in terms of Communication, Competence, and

Credibility and Customer Perception in terms Attitude, Behavior,

Awareness and Impression improved on Customer Satisfaction in

Commercial Banks.

The qualitative findings showed that, “Customer value is a more viable

element than customer satisfaction because it includes not only the usual benefits that

most banks focus on but also a consideration of the price that the customer pays.

Customer satisfaction is merely a response to the value proposition offered in specific

products/markets” a female respondent from Housing finance.

4.2.4 The relationship between Customer Care, Service Quality, Customer perception and Customer satisfactionThe results indicate a positive relationship between Customer

Care and Customer satisfaction, (0.592**, p<.01) .additionally a

positive relationship exists between Customer Care and Service

Quality (0.418**, p<.01) and a significant positive relationship

between Customer Perception and Customer Satisfaction (0.468**,

p<.01) in Commercial Banks.

The qualitative findings showed that, “Customer Satisfaction comes from

customer care, service quality and customer perception as an emotional state involving47

customer evaluation of a service he/she has received from providers and his response

to it” a male respondent from Post bank.

4.3 Regression analysisRegression analysis was used to examine the level, to which

Customer Care, Service Quality, and Customer perception determine

customer satisfaction.

Table 4.9 Below shows the regression model for Customer Care, Service QualityCustomer Perception and Customer satisfaction

Model Unstandardize

d

coefficients

Standardize

d

coefficient

s

B Std .

Error

Beta T Sig

Constant -0.225 0.044 -5.161 0.000

Customer Care 0.774 0.077 0.633 9.989 0.000

Service quality 0.332 0.077 0.280 4.299 0.000

Customer

Perception

0.111 0.055 0.088 2.032 0.000

R- Square =0.405, Adjusted R- square = 0.395, F= 72.524, Sig = 0.000

Source: primary Data

The table above 4.9 show a linear relationship between Customer

Care, Service Quality and Customer Perception with Customer

48

Satisfaction (F = 72.524, Sig = 0.000). Customer Care, Service

Quality and Customer Perception explained 95.2% of Customer

Satisfaction in Commercial Banks. Customer Care (Beta = 0.633)

explained more to Customer Satisfaction, followed by Service

Quality (Beta = 0.280) and Customer Perception (Beta = 0.088).

This implied that increase in Customer Care, Service Quality and

Customer Perception led to increase in Customer Satisfaction in

Commercial Banks.

4.4 Factor Loadings of Customer Care, Service Quality, Customer Perception and Customer SatisfactionThis research used factor loading in order to check that how much

a variable loads into its corresponding factor. To understand how

each item is loaded into its relevant principal component we use

table 4.4 for the factor loading of each item. Straub et al

(2004) suggest us that value of each item in factor loading

should at least 0.40 into its relative principal component.

4.4.1 Factor analysis results: Customer Care

Table 4.10 Factor Analysis Results of Customer Care

Variables Competenc

e

Credibili

ty

Communicatio

n

The bank’s employees have the

politeness, respect, consideration, and

friendship when doing their job.

0.

740

49

The employees possess required skills

and knowledge to perform the service.

0

.669

The bank arrange special care to special

customer

0

.481

Are you satisfied by the employee’s

behaviour of showing consistently

courteousness towards you?

0.41

5

The bank’s employees are trust worthy,

honesty, believable, that is, have

customers’ best interest at heart.

0.52

4

Are you satisfied by the service of

handling customer’s service problems?

0.54

3

Communication; keeping customers’

information in language they can

understand.

0.451

Eigen Value

7.15

0.3

38

0.230

Variance %

79.38

4.2

3

2.88

Cumulative

79.38

83.

60

96.48

Source; primary data

Table above 4.10, shows the factor analysis results of Customer

Care variables, three factors were extracted, component one

50

explains 79.38%, the second shows 4.23%, and the third 2.88% of

the variance of Customer Care. The important factors to address

under competence are; Bank has politeness, respect,

Consideration, and friendliness when doing their job (0.740),

Bank possess required skills and knowledge to perform the service

(0.669), and Bank arrange special care to special customer

(0.481). Results in the second credibility are explained by; Are

you satisfied by the employee’s behavior of showing consistently

courteousness towards you? (0.415), the bank’s employees are

trust worthy, honesty, and believable, that is, having customer’s

best interest at heart (0.524) and Are you satisfied by the

service of handling customer’s service problems? (0.543) and

communication is explained by; the bank keeps customers

information in language they can understand (0.451).

4.4.2 Factor Analysis Results of Service QualityTable 4.11 Factor Loadings of Service Quality

Variables Reliabil

ity

Tangibl

e

Responsivene

ss

Assuranc

e

The bank has operating hours

convenient to all their

customers.

0.62

1

The bank provides it services at

the time they promise to do so

with clients.

0.50

2

Employees are well dressed and

appear neat to do business.

0.6

88

51

Employees are willing/readiness

to provide service accessibility.

Approachability and ease of

contact.

0.44

1

Customers feel safe in

transactions with Banks

0.428

Eigen Value 5.31

2

0.2

90

0.1

77

0.108

Variance % 88.5

4

4.8

3

2.9

43

1.804

Cumulative 88.5

4

93.

38

96.

32

98.12

Source; primary data

Table above 4.11, shows the factor analysis results of Service

Quality variables, four factors were extracted component one

explains (88.54%), the second shows (4.83%) , the third shows

(2.94%) and last one (1.80%) of the variance of Service Quality.

The important factors to address under reliability are; the bank

has operating hours convenient to all their customers (0.621) and

the bank provides it services at the time they promise to do so

with clients (0.502). A result in the second one is tangible and

is explained by; Employees are well dressed and appear neat to do

business (0.688).Responsiveness explained by; Employees are

willing/readiness to provide service accessibility,

approachability and ease of contact (0.441). Assurance is

52

explained by; Customers feel safe in transactions with the Bank

with (0.428).

4.4.3 Factor Analysis Results of Customer PerceptionTable 4.12 Factor Loadings of Customer Perception

Variables Awareness Behavior Intenti

on

Employees of the bank try to know what

customer needs are.

0.65

01

The Bank respects gender diversity and

special care for special people (pregnant

women, sucking mothers and disabled

personnel)

0.61

5

Employees in the bank are sympathetic and

reassuring, when customers have problems.

0.546

The bank has a good reputation, well-

trained and presentable employees

0

.623

Eigen Value 2.73

2

1.79

1

0

.540

Variance % 63.

26

45.7

9.84

Cumulative 63.

26

85.5

3

9

3.45

Source; primary data

53

Table above 4.12, shows the factor analysis results of Customer

Perception, three factors were extracted component one explains

63.26%, the second shows 45.72% and last one 9.84% of the

variance of Customer Satisfaction. The important factors to

address under Awareness are; Employees of the bank try to know

what customer needs are (0.6501) and the Bank respects gender

diversity and special care for special people (pregnant women,

sucking mothers and disabled personnel) (0.615). A result in the

second is Behavior explained by; Employees in the bank are

sympathetic and reassuring, when customers have problems (0.546).

And Intention is explained by; the bank has a good reputation,

well- trained and presentable employees (0.623).

4.4.4 Factor Analysis Results of Customer SatisfactionTable 4.13 Factor Loadings of Customer Satisfaction

Variables Commitment Loyalty Retentio

n

Factors like communication, accessibility

and location have enabled customers to do

business with the bank.

0.543

Customer psychological commitment towards

the brand

0.514

Attention is put on the customer

complaints so as to retain the existing

customers and attract new ones and

consistent quality services

0.

642

54

Recommendation of the service; quality

controls are put in place in order to

avoid unsatisfactory performance and

reflect high value so as satisfy the

customers.

0.6

76

Eigen Value 5.645 0.

652

0.4

23

Variance% 77.65 8.

75

5.8

5

Cumulative 77.65 86

.6

94.

54

Source; primary data

Table above 4.13, shows the factor analysis results of Customer

Satisfaction variables, three factors were extracted component

one explains 77.65%, the second shows 8.75% and last one 5.85% of

the variance of Customer Satisfaction. The important factors to

address under Commitment are; Factors like communication,

accessibility and location have enabled customers to do business

with the bank (0.543) and Customer psychological commitment

towards the brand (0.514) Results in the second is Royalty

explained by; Attention is put on the customer complaints so as

to retain the existing customers and attract new ones and

consistent quality services (0.642). And Retention is explained

by; Recommendation of the service; quality controls are put in

place in order to avoid unsatisfactory performance and reflect

high value so as satisfy the customers. (0.676).55

4.5 Group discussion on the challenges customers face in the bank, relationships between independent variables and dependent variableThe respondent were asked to give they view on challenges faced in the bank and relationships among variables in the study in Table 4.7

The table4.14 below shows the challenges faced in the bank and relationships among variables. Items Number of

citations byrespondents

Percent

Queuing for long hours for

services in the bank.

23

60.8

Getting access to their accounts

information in the bank.

21

39.13

Welcoming, trustworthy,

assurance and communication

customer care practices could be

good to find in the bank

27

57.58

Customer satisfaction results

from Customer Care services.

31

68.04

Customer Care and Service

Quality are interlinked so one

leads to the other.

23

61.4156

Good Services will lead to

person value perception of the

bank’s outcome to person

satisfaction.

24

56.7

Customer Satisfaction is an

outcome of Customer Care,

Service Quality and a golden

factor that can influence on

Customers that is Perceived

value.

29

66.21

# Multiple response

A majority of the respondents (60.87%) attributed to standing for

long hours for services in the bank ` and (39.13) accessing to

their accounts information in the bank out of 115 respondents.

(57.58%) participants responded that welcoming, trustworthy,

assurance and communication customer care practices could be good

to find in the bank). Upon relationships, (68.04%) responded that

customer satisfaction results from Customer Care services,

(61.41) responded that Customer Care and Service Quality are

interlinked so one leads to the other, (56.7) responded Good

Services lead to person value perception of the bank’s outcome to

person satisfaction and (66.21%) Customer Satisfaction is an

outcome of Customer Care, Service Quality and a golden factor

that can influence on Customers that is Perceived value.

57

CHAPTER FIVE

INTERPRETATION OF THE FINDINGS

5.0 IntroductionThis chapter of the research report presents interpretation of

the study findings. It is comprised of two major sections which

include the respondents’ bio data and objectives of the study,

58

Customer Care and Customer Satisfaction, Customer Care and

Service Quality, Service Quality and Customer Satisfaction.

5.1 Bio Data

5.1.1 Gender of the respondentsThe totals of 132 respondents, 52.27% of the participants were

males and 47.73% of the respondents were females respectively.

The high percentage of male respondents was attributed to the

fact that male domination still persists in most African

countries and Uganda is not an exemption especially in commercial

banks, our study has shed some light in the improvement of women

emancipation the percentage gap is not so big as compared to the

20th century hence relative gender balance.

5.1.2 Age group of the respondentsThe totals of 132 respondents, 33.33% of the participants

belonged in the age group between 26-30, 25% of the participants

belonged in the age group of 36-45, 23.48% of the participants

followed in the age group of 18-25% and 17.42% of the

participants followed in the age group of 46+.

This distribution of respondents by age is an indication that

most of the respondents are mostly of young adult age,

independent and productive and this explains the reason as to why

the number of respondents was decreasing with the increasing age.

5.1.3 Marital Status of the respondentsThe totals of 132 respondents, 53.03% of the participants were

married and 46.97% of the participants were single. 59

This implied that most of the respondents in the study were

married who have gotten responsibility, it’s a sign of respect in

whatsoever they do and during our assignment showed high degree

of ownership.

5.1.4 Education levels of respondentsThe totals 132 respondents, 38.64% of the respondents were degree

holders, 29.55% of the were participants diploma grandaunts,

18.18% of the participants were post graduates, 11.36% of the

participants were high school graduates and 2.27% of the

participants were primary graduates respectively.

This research finding shows that most of the respondents were

educated and knowledgeable. Therefore they can read and

understand the questionnaire. This means that they were in

position to self administer the questionnaires. And this greatly

reduced the problem of ignorant respondents and language barrier

and valuable information with regards to quality service was

obtained and for bank staff, degree holders are preferred most

than those of other levels since they have basic of what it takes

and required in the banking institution.

5.1.5 Number of year’s respondents has worked in the bankThe totals of 56 respondents, 37.5% of the participants have

worked in the bank in the range of 0-3, 30% of the participants

have worked in the bank in the range of 4-6, 19.64% of the

participants have worked in the bank in the range of 7-10 and

12.5% of the participants have worked in the bank in the period

60

of 11+ respectively. This implied that participants had

experience with the banking institution.

5.1.6 Number of children respondents hadThe totals of 132respondents, 34.09% of the participants had

children in the range of 1-3, 29.55% of the participants had

children in the range of 4-7, 20.45% of the participants had none

and 15.91% of the respondents had number of children 8+.

This indicated that of the participants in the study, majority

had children in the range 1-3 followed by the range of 4-7, none

and 8+ were less implying most of the respondents feel safe

having few children which their can look after.

4.1.7 Nature of account respondents have in the BankThe totals of 76 respondents who participated in the study,

43.42% of the most of respondent hold saving account only and

27.63%, current account, 17.11% hold fixed account while 11.84%

hold both current and savings account. The 43.42% savings

accounts indicate that the holders frequently visit the bank to

transact thus understand the service quality. The low number of

fixed accounts can be associated to restricted period of time to

access money where customer cannot frequently access their money

for daily consumption.

5.2 The Relationship between Customer Care and Customer SatisfactionThere was a significant positive relationship between Customer

Care and Customer Satisfaction (r= 0.592, P-value < 0.01).

61

Customer Care results indicated a significant positive perception

across the two Commercial banks which implied that good Customer

Care in terms of Communication, Competence, and Credibility

enhance Customer Satisfaction. The findings are in line with

Jones & Suh, (2000) who found out that Customer satisfaction is

based on experience with service provider and also the outcome of

service.

5.3 The Relationship between Customer Care and Service QualityThere was a significant positive relationship between customer

care and service quality (r = 0.418, P-value < 0.01).

This implied that good customer care improved on service quality.

Customer care results indicated a significant positive relation

across the two commercial banks which implied that customer care

in terms of competence, credibility and communication enhances on

service quality. The findings are in line with Zike (2001), in

his study of what makes a company excellent, he interviewed 43

high performing companies. The study found out that all high

performing companies share a set of basic operating principles,

some of which emphasized customer driven service. It revealed

that excellent companies provide unparalleled customer service,

quality and reliability.

62

5.4 The Relationship between Customer Care, Customer Perception and Customer SatisfactionThere was a significant positive relationship between Customer

Care, Customer Perception and Customer Satisfaction (r = 0.592,

0.468, P-value < 0.01).

This implied that Customer Care in terms of Communication,

Competence, and Credibility enhance Customer Perception which

leads to Customer Satisfaction in terms of Loyalty, Retention,

Commitment and Recommendation in commercial banks. The finding is

in line with Parasuraman and Grewal, 2000) who found out that

Perceived value of customers not only affects customer choice

behavior at the pre purchase stage but also influences

satisfaction and intentions to recommend and repurchase at the

post purchase stage. Also the findings are in line with the

findings of Jones & Suh, (2000) which found out that Customer

satisfaction is based on experience with service provider and

also the outcome of service.

5.5 The Relationship among Customer care, Service quality, Customer Perception and Customer satisfaction.Customer satisfaction was significantly explained by Customer

Care, Service Quality and Customer Perception. The multiple

regression model indicated that 39.5% of customer Satisfaction of

commercial banks was contributed by Customer Care, Service

Quality and Customer Perception. Customer care (Beta = 0.633)

63

explained more to customer satisfaction, followed by service

quality (Beta = 0.280) and Customer perception (Beta = 0.088).

This implied that increase in Customer care, Service Quality and

Customer Perception led to increase in Customer Satisfaction.

Results are also consistent with Zike (2001), in his study of

what makes a company excellent, he interviewed 43 high performing

companies. The study found out that all high performing companies

share a set of basic operating principles, some of which

emphasized customer driven service. It also revealed that

excellent companies provide unparalleled customer service,

quality and reliability. And Parasuraman and Grewal, 2000, found

out that Perceived value of customers not only affects customer

choice behavior at the pre purchase stage but also influences

satisfaction and intentions to recommend and repurchase at the

post purchase stage.

5.6 Focused Group Discussions

A focus group was conducted to find out a comprehensive picture

of the customer care, service quality, customer perception and

customer satisfaction in commercial bank.

A majority of the respondents (60.87%) attributed to standing for

long hours for services in the bank ` and (39.13) accessing to

their accounts information in the bank out of 115 respondents.

The problem of standing for long hours in the bank is caused by

poor handling of customers because most of them don’t know what64

to do like proper filling of bank documents. Therefore according

to these findings, this shows that the issue goes along with

ignorance of customers of how to deal with the bank.

(57.58%) participants responded that welcoming, trustworthy,

assurance and communication customer care practices could be good

to find in the bank). Upon relationships, (68.04%) responded that

customer satisfaction results from Customer Care services,

today’s customers do not just buy core quality products or

services; they also buy a variety of added value or benefits.

This forces the service providers such as banks to adopt a market

orientation approach that identifies consumer needs and designs

new products and redesigns current ones

(61.41) responded that Customer Care and Service Quality are

interlinked so one leads to the other, the findings also show

that one of the more customers are attached to the bank and

recommends others simply because of good customer care and

service quality. (56.7) responded Good Services lead to person

value perception of the bank’s outcome to person satisfaction

thus; banks must be able to provide “up-close” personal service

for customers who come with high expectations. For customers who

value convenience most, banks must offer the latest product such

as electronic banking, touch-tone phone account access and

internet banking. Clearly, customer value can be a strong driver

of customer retention and (66.21%) Customer Satisfaction is an

65

outcome of Customer Care, Service Quality and a golden factor

that can influence on Customers that is Perceived value.

CHAPTER SIX

CONCLUSION AND RECOMMENDATIONS

6.1 IntroductionThis Chapter presents conclusion, recommendations and areas of

further research

6.1.1 Conclusion.The study on the relationship between Customer Care, Service

Quality and Customer satisfaction indicate that all the two

independent variables do contribute to customer satisfaction in

commercial banks. Therefore commercial banks operating in Uganda,

like any form of business organization, in today’s dynamic

financial landscape should focus on good service quality and

customer care in terms of the employees, physical evidence and

ambience to instill a higher reliability value among customers to

enhance customer satisfaction in commercial banks.

6.2 Recommendations.

The study on customer care, service quality and customer

satisfaction of commercial banks in Uganda was carried out. In

line with the findings and conclusions of the study the following

were recommended;

66

6.2.1 The relationship between Customer Care and Customer SatisfactionAs shown in table 4.8, there is a significant positive

relationship between customer care and customer satisfaction (r=

0.592, P-value < 0.01). This implies that Customer Care in terms

of Communication, Competence, and Credibility enhances on the

customer satisfaction.

Fen, (2005) in his study proved a close link between Customer

Care services and Customer Satisfaction.

Recommendations

From the findings on the effect of customer care on customer

satisfaction in commercial Banks which was positive.

Management need to support capacity building and

strengthening of business operations within the bank such

that customer problems are solved, service is delivery on

time, quick response to customer request, safe transactions,

personal attention and understanding the needs of the

customer.

The customers need to be closely monitored to limit gaps in

service provision and resulting falls in well-being within

the bank.

Motivation and equipping employees with enough resources

(adequate skills and knowledge) as a satisfied employee is a

satisfied customer.

Customer base in commercial banks is growing therefore it is

important to retain them with the banks. It becomes

imperative for the banks to train their employees to treat

67

the customers with empathy. This can give the required

leading edge and finally the competitive advantage over

other banks.

6.2.2 The relationship between Customer Care and Service Quality Results in table 4.8 above indicated a significant positive

relationship between customer care and service quality (r =

0.418, P-value < 0.01). This implies that service quality in

terms of Tangibles, Reliability, Assurance, Empathy, and

Responsiveness improved on customer care. Zike (2001), in his

study of what makes a company excellent; he interviewed 43 high

performing companies. He found out that all high performing

companies share a set of basic operating principles, some of

which emphasized customer driven service. He found out that

excellent companies provide unparalleled customer service,

quality and reliability

Recommendations

From the findings on the effect of customer care on service

quality which was positive, banks need to maintain customer

care practices so as to deliver quality services.

Strategically speaking, the banks should focus more on

improving the infrastructure. The infrastructure not only

involves the information technology input in the branches

but also the physical evidence, internal environment and

layout. This is due to the fact that recently like in other

68

services, in banking also the internal ambience of the

organization has a positive impact on the customers.

Respect customers by reducing on the queuing systems by

opening branches, ATMs, and introducing payments through

internet and phones.

6.2.3 The relationship between Customer Care, Customer Perception and Customer SatisfactionThe table above 4.8 shows a significant positive relationship

between service quality and customer satisfaction (r = 0.592,

0.468, P-value < 0.01). This implied that Customer Care in terms

of Communication, Competence, and Credibility enhance Customer

Perception which leads to Customer Satisfaction in terms of

Loyalty, Retention, Commitment and Recommendation in commercial

banks.

Parasuraman and Grewal, 2000) who found out that Perceived value

of customers not only affects customer choice behavior at the pre

purchase stage but also influences satisfaction and intentions to

recommend and repurchase at the post purchase stage.

Recommendations

From the findings on the effect of Customer Care and

Customer Perception on Customer satisfaction which was

positive, commercial banks need to adopt and strengthen the

communication between the management and customers in order

69

to improve on the quality service so as to satisfy their

customers’ needs.

The management needs to improve quality services so as to

satisfy customer’s needs. The bank needs to pay much

attention on the customer complaints in order satisfy the

customers’ expectation.

There is a need for the bank to make their services tangible

through physical facilities in order to improve on quality

services so as to satisfy their customer needs.

The bank should also pay attention to those customer

complaints as this would not only increase the reliability

of these banks in the minds of the customers but also the

assurance.

The growing needs of the customers are evident from the wide

array of services being offered by the banks like insurance,

mutual funds, depository services, this in turn points

towards the degree of readiness, which these banks are

demonstrating towards the customers and their needs. Besides

this, these banks should follow the strategy of

differentiation of service offers from one another.

6.2.4 The Relationship among Customer care, Service quality, Customer Perception and Customer satisfaction.Customer satisfaction was significantly explained by Customer

Care, Service Quality and Customer Perception. The multiple

regression model indicated that 39.5% of customer Satisfaction of

commercial banks was contributed by Customer Care, Service

70

Quality and Customer Perception. Customer care (Beta = 0.633)

explained more to customer satisfaction, followed by service

quality (Beta = 0.280) and Customer perception (Beta = 0.088).

This implied that increase in Customer Care, Service Quality and

Customer Perception led to increase in Customer Satisfaction.

Results are also consistent with Zike (2001), in his study of

what makes a company excellent, he interviewed 43 high performing

companies. He found out that all high performing companies share

a set of basic operating principles, some of which emphasized

customer driven service. He found out that excellent companies

provide unparalleled customer service, quality and reliability.

And Parasuraman and Grewal, 2000) who found out that Perceived

value of customers not only affects customer choice behavior at

the pre purchase stage but also influences satisfaction and

intentions to recommend and repurchase at the post purchase

stage.

Recommendations

The customers need to be closely monitored to limit gaps

in service provision and resulting falls in well-being

within the bank

The bank should pay attention to those features that

contribute to customer satisfaction such as loyalty,

retention, competitive interest rates which are rated

very little/weak.

71

Refresher training for employees in customer care, need

to put into consideration because employees are the

interface to customers service quality which influence

customer loyalty in retail banking.

6.3 Suggested Areas of further researchThe current study on customer care, service quality and customer

satisfaction was conducted on commercial banks in Uganda. The

study recommends further study on the Customer care and service

quality of commercial banks in Uganda identifying the gaps

between the customer expectations and perception of service bank.

72

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APPENDICE

Appendix I: Questionnaire

CUSTOMER QUESTIONNAIRE

Dear respondent,

81

I am pleased to inform you that you have been selected to

participate in the study intended to examine the relationship

between Customer care, Service quality and Customer satisfaction

in the banking sector of Uganda.

Please assist me in answering the questionnaire by providing the

most appropriate answer in your opinion by ticking or writing in

the given space as the case may be. I would very much appreciate

your participation in this study. This information will serve for

academic purposes. Whatever information you provide will be kept

strictly confidential.

Signature of interviewer……………………………………Date……………………...............

Part A. Demographics

Tick the applicable option

1. Name of respondent (optional)...............................................

2. Gender

1. Male [ ] 2.Female [ ]

3. Age

1. 18-25 [ ] 2. 26-35 [ ] 3. 36-45 [

] 4. 46- above [ ]

4. Marital Status

1. Single [ ] 2. Married [ ]

5. How many children do you have?

82

1. None [ ] 2. Below 1-3 [ ] 3. 3-6

[ ] 4. 7- Above [ ]

6. Educational Attainment

1. Never attended School [ ] 2.

Primary Graduate [ ]

3. High School graduate [ ]

4. Diploma [ ] 5. Graduate [ ] 6.

Post Graduate [ ]

7. Nature of account with the bank.

1. Savings account [ ] 2.Current

account [ ] 3.Fixed account [ ]

4. Current/Fixed account [ ]

Part B. Section

Dear respondent, I would like you to answer the following

questions using figures of 1 to 5 as they are credited below

1= strongly Agree,     2= Agree,       3=Neutral,     4=Disagree,     5= strongly disagree.

Customer care 1 2 3 4 5Courtesy; employees have the politeness, respect,

consideration, and friendship when doing their jobCompetence; employees possess the required skills

and knowledge to perform the serviceCredibility; employees are trust worthy, honesty,

83

believable, that is, having customers best

interest at heartCommunication; employees keep customer's

information in language they can understandBankers should give individual attention to the

customers The bank should arrange special care to special

customers Service Quality 1 2

3

4

5Tangible: employees are well dressed and appear

neat to do businessReliability; Banks provide their services at the

time they promise to do so with clients.Responsiveness; willing or readiness of employees

to provide service Accessibility; approachability

and ease of contactAssurance; customers feel safe in transactions

with the banks.Empathy; the bank should have operating hours

convenient to all their customers. Customer SatisfactionCommitment: factors like communication,

accessibility and location have enabled customers

to do business with the bank.

Loyalty; there is customer psychological

commitment towards the brandRetention; attention is put on the customer

84

complaints so as to retain the existing customers

and attract new ones and consistent quality

servicesRecommendation of the service; quality controls

are put in place in order to avoid unsatisfactory

performance and reflect high value so as satisfy

the customers. Customer PerceptionEmployees of the bank try to know what customer

needs are.The Bank respects gender diversity and special

care for special people (pregnant women, sucking

mothers and disabled personnel)Employees in the bank are sympathetic and

reassuring, when customers have problems. The bank has a good reputation, well- trained and

presentable employees

85

QUALITATIVE TOOL FOR CUSTOMERS

Is there any relationship between Customer Care and CustomerSatisfaction in the bank?

……………………………………………………………………………………………………………………………………………………………………………

…………………………………

How can you describe the kind of Customer Care practices youwould like to find in the banks?

……………………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………

How would you advice the management in the bank to improve on thequality of Customer Care practices so as to satisfy theircustomers?

……………………………………………………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………

Is there any relationship between Customer Care and ServiceQuality in banks?

……………………………………………………………………………………………………………………………………………………………………………

…………………………………

If yes, how?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

If no, how can you advise the bank to improve on the relationshipbetween Customer Care and Service Quality in the bank?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

86

Is there any relationship between Customer Care, CustomerPerception and Customer Satisfaction?

…………………………………………………………………………………………………………………....................................................................................................................................………………………………………………………………………………………………….

Is there any relationship between Customer Care, Service Quality,Customer Perception and Customer Satisfaction?

….................................................................................................................................................

….................................................................................................................................................

…................................................................................................................................................

87

STAFF QUESTIONNAIRE

Dear respondent,

I am pleased to inform you that you have been selected to

participate in the study intended to examine the relationship

between Customer care, Service quality and Customer satisfaction

in the banking sector of Uganda.

Please assist me in answering the questionnaire by providing the

most appropriate answer in your opinion by ticking or writing in

the given space as the case may be. I would very much appreciate

your participation in this study. This information will serve for

88

academic purposes. Whatever information you provide will be kept

strictly confidential.

Signature of interviewer……………………………………Date……………………...............

BACK GROUND INFORMATION

i) Level of education

a) Never attended School [ ] b) Primary Graduate

c) High School graduate [ ]

d) Diploma [ ] e) Graduate [ ]

f) Post Graduate [ ]

ii) Sex of the respondent

a) Male [ ]

b) Female [ ]

iii) Age

a) 18-25 [ ] b) 26-36 [ ] c) 37-

45 [ ] d) 46- Above [ ]

iv) Length of service (in years)…………………………………

a) 1- 3 [ ] b) 4-7 [ ] c) 8-10 [ ] d) 11+

[ ]

Dear respondent, I would like you to answer the following

questions using figures of 1 to 5 as they are credited below

1= strongly Agree,     2= Agree,       3=Neutral,     4=Disagree,     5= strongly disagree.

89

Customer Care

1

2

3

4 5

Courtesy; employees have the politeness,

respect, consideration, and friendship when

doing their job in the bank

Competence; employees possess the required

skills and knowledge to perform the service

Credibility; employees are trust worthy,

honesty, believable that is, having customers

best interest at heart

Communication; employees keep customer’s

information in language they can understand

Service Quality

1

2

3

4

5

Tangible; employees are well dressed and

appear neat to do business with customers

Reliability; Banks provide their services at

the time they promise to do so with clients.

Responsiveness; willing or readiness of

employees to provide service Accessibility;

approachability and ease of contact

Assurance; Customers feel safe in transactions

with Banks.

Empathy; Bank have operating hours convenient

90

to all their customers.

Customer satisfaction

Commitment: factors like communication,

accessibility and location have enabled

customers to do business with the bank.

Loyalty; there is customer psychological

commitment towards the brand

Retention; attention is put on the customer

complaints so as to retain the existing

customers and attract new ones and consistent

quality services

Recommendation of the service; quality controls

are put in place in order to avoid

unsatisfactory performance and reflect high

value so as satisfy the customers.

Customer Perception

Employees of the bank try to know what customer

needs are.

The Bank respects gender diversity and special

care for special people (pregnant women,

sucking mothers and disabled personnel)

Employees in the bank are sympathetic and

reassuring, when customers have problems.

The bank has a good reputation, well- trained

91

and presentable employees.

If customers are not satisfied please tick the reason why are not

satisfied

Lack of resources

Lack of knowledge to satisfy customers

There is no morale to satisfy them

It is not necessary to satisfy them

Any other reason (specify)

-----------------------------------------------------------

On average, how many customer complaints do you handle in a day?

0 – 10 b. 10 – 30

30 – 50 d. 50 and above

How long do you take to respond to your customers who present

complaints on ATM break down?

Less than 30 minutes c. 2 – 5 days

1 – 24 hrs d. 5 days and above

How do you communicate to your customer about the various

services offered by bank?

Use of radio and television

92

Through news paper

Through brochure and pamphlets/ leaflets

Through seminars

Are you concerned about the customer satisfaction to your clients

(i.e. do you consider whether they are good for your customers?

Most of the time b. sometimes c. never

93