Identification of Service Quality Dimensions Influencing Customer Satisfaction in

Kumari Bank Limited

By
Gyan Raj Rai
T.U. Registration No. 7-2-0422-0011-2013
KIST College of Management

A Summer Project Report Submitted to

Faculty of Management, Tribhuvan University

In partial fulfillment of the requirements for the degree of

Bachelor of Information Management

Kamalpokhari, Kathmandu
Nepal
September/ 2016

1
 Student Declaration

This is to certify that I have completed the summer project entitled “Identification of Service Quality
Dimensions Influencing Customer Satisfaction in Kumari Bank Limited” under the guidance of Mrs.
Junu Hada in partial fulfillment of the requirements for the degree of Bachelor of Information
Management at Faculty of Management, Tribhuvan University. This is my original work and I have
not submitted it earlier elsewhere.

Date: 2073-05-05 Signature:

Name: Gyan Raj Rai

i
 Certificate from the supervisor

This is to certify that the summer project entitled “Identification of Service Quality Dimensions
Influencing Customer Satisfaction in Kumari Bank Limited” is an academic work done by Gyan
Raj Rai submitted in the partial fulfillment of the requirements for the degree of Bachelor of
Information Management at Faculty of Management, Tribhuvan University under my guidance
and supervision. To the best of my knowledge, the information presented by him in the summer
project report has not been submitted earlier.

______________________

Signature of the supervisor

Name: Junu Hada

Designation

Date: 2073-05-05

ii
 Acknowledgement
This research would not be completed without great help and support from people who had contributed
their time in different ways to my research. First and foremost, I would like to thank my research
supervisor, Mrs. Junu Hada for providing me with constant support throughout the duration of the
project. I appreciate her effort in providing necessary guidelines and constant feedback in order to
complete this academic task in a proper way. I sincerely thank Mr. Ramesh shrestha who made all the
necessary arrangement to facilitate the completion of this academic project providing the required
guideline, support. Furthermore, I would like to thank Tribhuvan University for including the research
project in partial fulfillment of the requirement for Bachelor of Information Management. This project
has certainly helped me increase my subject matter knowledge and enhance my research conducting
skills which I believe will be of great advantage in the related field in future.

I am kindly grateful for respondents, the customers Kumari Bank Limited who spent their time to take
part during the survey giving answers to questionnaires and making helping me prepare a research of
better quality.

Last but not the least; I would like to extend my special thanks to my friends and family who directly
or indirectly provided me with advice, support and advice to accomplish my project in an efficient and
better way.

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 Executive Summary

In today’s competitive business organization, customer service is an important performance exponent

and basic differentiator of business strategies. For some customers, all the dimensions may be equally
important whereas some may give high priority to one dimension only. This research has taken
Kumari bank Ltd to survey their customers to analyze whether they are satisfied with the services
measured by the dimensions of service quality. The main objectives of this research include knowing
the key variables that leads to customer satisfaction and identifying the relationship between the
service quality dimensions and customer satisfaction and also identify the kind of moderating effect
the demographic variables have on the five dimensions of service quality and customer satisfaction.
The independent variables used in this research are the five dimensions of SERVQUAL framework
developed by Parasuraman et al. in 1988, which include tangibility, Reliability, Responsiveness,
Assurance and Empathy.

The demographics variable used in this study are the moderating variables that are expected to modify
the originally expected relationship between the independent and dependent variables. This study
intends to measure the customer satisfaction that is influenced by dimensions of service quality. Thus,
the dependent variable used is Customer satisfaction. Self-administered Questionnaire was used for
the data collection that consisted of 27 structured questions that included the 5 dimensions of service
quality and aspects of customer satisfaction properly designed in question format. Respondents were
asked to rate the importance of these elements in accordance with their satisfaction level by application
of Likert scale in the scale from1 to 5. The analysis of responses collected was done using the SPSS
software mainly by five ways: Descriptive statistics, ANOVA testing , paired- sample T test,
regression analysis and correlation analysis. It was found that the customers of Kumari bank were
satisfied with the assurance rather than other dimensions of service quality.

The demographic variables are found to have some degree of moderating effect between some service
quality dimensions and customer satisfaction. It has been found that there exist significant positive
correlations between all five service quality dimensions and customer satisfaction meaning increase or
improvement in the service quality dimension enhances customer Satisfaction in the same ratio.
Knowing how consumers perceive service quality and being able to measure service quality can
benefit management of service organizations by determining the dimensions affecting satisfaction and
working on them to enhance the satisfaction level by providing a commendable service. Kumari bank
should improve on the service provided by the staffs and train them accordingly to provide prompt and
promising service to its customers to keep them happy and satisfied.

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 Table of Contents
Declaration ......................................................................................................................... i

Certificate from the supervisor………………………………………………….………ii

Acknowledgement.............................................................................................................. iii

Executive summary ............................................................................................................iv

Table of contents ……………………………………………………………….……….v

List of tables …………..…..................................................................................................vii

List of figure………………………………………………………………….…………viii

Abbreviations ………………………………………………………………….………...ix

Chapter 1: Introduction ........................................................................................................1

1.1 overview of kumari bank limited ................................................................................ 1

1.2. Statement of problem ................................................................................................... 2

1.3 objective of the study……………………………………………….……….……….3

1.4 Significance of the Research ………………………………………..……….……….3

1.5 Organization of the study ………………………………………….……...…………..3

Chapter 2: Review of literature……………………………………..…….…………5

2.1 Theoretical Review………………………………………………..…..………...….…5

2.2 Review of major literature ………………………………………….……...………….6

2.3 Conceptual framework…………………………………………………..…….………8

2.4 Research Hypothesis ………………………………………………….…..……..9\

Chapter 3 : Research Methodology ………………………………………………….…..…………….10

3.1: Research design ………………………………………………………………………………….……..…………….10

3.2: Sampling techniques ………………………………………………………………….10

3.3 Data collection method………………………………………………..……………….10

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3.3.1. Sources of data…………………………………………………..………………..10

3.3.2. Questionnaire design ……………………………………………….….…………11

3.3.3. Instrument and Scale …………………………………………………..…………11

3.3.4. Data Collection Strategy…………………………………………………..…..…..12

3.4. Data Analysis ………………………………………….…………………………....12

Chapter 4: Data Presentation and Analysis………………….…… ………...…….13

4.1 Data presentation and analysis…………………………………………….……….13

4.1.1 Preliminary Customer Data Presentation……………………………………..…..13

4.1.2: Descriptive statistics ……………………….…………………………..…..……..18

4.1.3 ANOVA Testing……………………………………………………….…….……..18

4.1.4: Pair sample T Test ……………………………………………….……….……….22

4.1.5 Regression Analysis ………………………………………………….…….………23

4.1.6 Correlation Analysis…………………………………………….…………..………24

Chapter 5 Summary and conclusion…………………………….…….…...……..25

5.1: Summary and discussions……………………………………….…..……..………..25

5.2 Conclusion……………………………….…………………………….……...………26

5.3. Implications……………………………………………………………….………….26

5.4. Limitations………………………………………………………………….…..……..27

References…………………………………………………………………..………28

Annex I…………………………………………………………………….….….…29

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Questionnaire Survey………………………………………………………………………31

List of Tables

Table 1: Age of the respondents………………………………………………….…….13

Table 2: Gender of the respondents…………………………………………….……….14

Table 3: Education level of the respondents…………………………………….………15

Table 4: Table 4: Occupation of the respondents…………..……………………….….16

Table 5: income level of respondents……………………………………..……………..17

Table 6: descriptive statistics…………………………………………………………….18

Table 7: ANOVA testing for age……………………………………………..…………18

Table 8: ANOVA testing for gender………………………………………..……….…19

Table 9: ANOVA testing for education………………………………..……...…….…..20

Table 10: ANOVA occupation…………………………………………………..………21

Table 11: Paired-samples T Test…………………………………….…..……..22

Table 12: regression analysis……………………………………………………………..23

Table 13: correlation analysis……………………………………………………..…….24

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 List of Figures

Figure 1: Conceptual framework of service quality dimension and customer behavior….8

Fig 2: pie chart for the age of respondent…………………………………………….…13

Fig 3: pie Chart for the gender of the respondent………………………………………..14

Fig4: Pie chart for the current education of respondents……………………………..….15

Fig 5: Pie chart for the current occupation of respondents…………………….…….…..16

Fig 6: pie chart for the respondents………………………………………………………17

viii
 Abbreviations
SQ= service quality

SPSS: Statistical Package for Social Sciences

Tangi= mean of tangibility

Reliab= mean of reliability

Resp= mean of responsiveness

Assurance= mean of assurance

Empathy= mean of empathy

CustomerSatisf= mean of customer satisfaction

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 Chapter 1: Introduction

1.1 Background of the study

Commercial bank is a service providing organization that is basically involved in accepting deposit
from those who have surplus and lending to those who are in need of fund. Apart from this traditional
function of accepting deposit and lending, commercial banks today are offering variety other banking
services. Commercial banks are providing both funded and non funded facilities. Funded facilities
includes extending various types of credit facilities like short term middle term long term loans, hire
purchase loan, mortgage loan and overdraft facilities etc while non funded facilities include letter of
credit , guarantee, advising, consulting etc. Along with this, banks are making continuous effort to
provide new services and facilities adjusting the latest technologies. At present, almost all commercial
banks are providing facilities like e-banking, SMS banking, ATM, debit card credit card etc. Along
with this, banks are also getting tied up with the insurance companies and remittance businesses to
provide better services.

With the growing banking sector in Nepal, competition has risen sharply. Numbers of commercial
banks are competing to provide variety of services. Banks today are improving their service quality to
do profitable business and ensure the long term survival of their banking business. Not only this, to be
globally competitive, commercial banks are trying to improve their service quality that exceeds
customer’s expectation. Today commercial banks are adopting quality service as a strategy for a
successful business. However the determinations of service quality are complicated with the dynamic
business environment.

Overview of Kumari Bank Limited

Different commercial banks are operating in Nepal at present. Among the commercial banks, Kumari
Bank Ltd is the fifteenth commercial bank of Nepal which has established to provide banking facility
to general people of Nepal. This bank came into operation in 2001. It is one of the leading commercial
bank in Nepal at present. It has over 150 thousands of satisfied customers. Currently it has 8 branches
in Kathmandu valley and 28 outside the valley. Main office is located in Putalisadak, Kathmandu. It
provides various types of financial function. The major function of Kumari bank are accepting deposit,

1
granting loan and providing agency functions like Paying NTC Bills, ADSL Bill, Phone Bill collecting
cheque and draft, paying customer’s insurance premium etc.

Kumari bank Ltd make profits by taking small, short-term, relatively liquid deposit and transforming
these into larger, longer maturity loans. This process of asset transformation generates net income for
the commercial bank. Notice that many commercial banks do investment banking business although
the latter is not considered the main business area. It makes money by lending money at rates higher
than the cost of the money they lend. More specifically, banks collect interest on loans and interest
payments from the debt securities they own, and pay interest on deposits, CDs, and short-term
borrowings. The difference is known as the “spread” or the net interest income, and when that net
interest income is divided by the bank’s earning assets, it is known as the net interest margin.

Kumari bank has also started remit facility named as Kumari Remit. It is a state of art web-based
technology oriented to Money Transfer product brought by Bank Limited (KBL), a leading bank of
Nepal. Kumari Remit is leading in field of money transfer business with few years of customized
services delivery experience at present. Kumari Remit has the largest networks covering all major
cities, towns and villages of the country and is capable of paying at more than 1000 locations across
Nepal.”Kumari Remit” is secured by electronic digital certificate through main web domain
https://www.kumariremit.com. After installation of electronic digital certificate, one can access for
ensuring prompt execution of the remittance.

1.2 Statement of the problem

Customer satisfaction is a key issue in banking business. For a profitable and long run business, banks
must ensure that their customers are satisfied. Customers usually decide to get service from only those
banks which can provide them better service in relation to other banks. Customer quickly switches
banks when they feel unsatisfied with the service provided by the bank or when their needs are unmet.
Along with this, customers tend to switch banks when their taste and preference are changed.

Banking industry in Nepal is very competitive at presents. Banks are offering variety of financial
product and services to its customers. With the technological advancement banks are coming with the

new products and services like ATM, Debit Card, Credit Card, Visa card, SMS banking, E-banking
etc. Banks are focusing more on the service dimensions to satisfy their customers. Hence in this

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 regard, this study aims to find out various dimension of service quality of Kumari bank Ltd on
customer’s satisfaction. To be more specific this study attempt to answer following questions:

 Are the key factors that lead to customer satisfaction in Kumari Bank Limited?
 Is there any relationship between the service quality dimensions and customer satisfaction level
at Kumari Bank Limited
 Which dimension of service quality is viewed as the most desired by the customers of Kumari Bank
Limited?

1.3 Objective of the study

The study has been conducted with a primary objective of identifying key service quality dimensions
affecting customer satisfaction in Kumari Bank Limited. The major objectives of this study are:

 To identify the major service quality dimensions that affects customer satisfaction in Kumari Bank
Limited.
 To examine the relationship between various service quality factors and level of customer satisfaction
in Kumari Bank Limited.

1.4 Significance of the Research

So far, no research has been done in Kathmandu to know about the impact of service quality in
customer satisfaction of Kumari bank Limited. This research aims to study the effect of service quality
of Kumari bank on the customer satisfaction and perception. The results of this research will be helpful
for managers to understand what service quality dimensions influencing customer satisfaction what
strategies should be adopted for making better quality of service on customer in future. Also, this
research will serve the needs for future research to gain an in-depth knowledge that contributes to
managerial implications and to other researchers as well.

1.5 Organization of the study

Chapter 1: This chapter deals with the introduction of the research topic including the background of
the study, statement of the problem, objective of the study and significance of the study

3
Chapter 2: This chapter intends to provide the literature review related to the topic and tries to relate
different concepts and ideas related to the research from different perspective describing how variables
used for his study have been defined previously by other researchers. This chapter also includes the
theoretical framework.

Chapter 3: This chapter describes about the research methodology and strategy used to fulfill the
research objectives. This section includes the research design, sampling design, and data collection
method and data collection strategy.

Chapter 4: This chapter sets analysis of the data collection from the field to be used for the findings in
the research. It covers quantitative and qualitative data analysis method for the research analysis.

Chapter 5: This chapter t includes the findings of the study from the primary and secondary data. It
also includes the reasons for the outcomes seen as well the implications that can be observed by those
situations and further sets the base for other researches. The latter part of the research contains
references and the appendices for additional perusal.

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 Chapter 2: Review of literature

2.5 Theoretical Review

a) Service quality :

Service quality (SQ) is a comparison of expectation (E) about a service with performance (p) SQ=P-Q
.A business with high service quality will meet customer needs whilst remaining economically
competitive. Improve service quality may increase economic competitiveness. The aim may be
achieved by understanding and improving operational processes; identifying problems quickly and
systematically; establishing valid and reliable service performance measures and measuring customer
satisfaction and other performance outcomes.

b) Customer satisfaction:

Customer satisfaction become a popular topic in marketing during the 1980s and is a debated topic
during both business expansions and recessions. Most discussions on customer satisfaction involve
customer expectation of the service delivery, actual delivery of the customer experience, and
expectations that are either exceeded or unmet. If expectations are exceeded, positive disconfirmation
results, while a negative disconfirmation results when customer experience is poorer than expected. In
worlds of intense competition, the key to sustainable competitive advantages lies in delivering high
quality service that will in turn result in satisfied customers (Shemwell et al, 1998). Kolter and
Armstrong (1999) defined the customer satisfaction as the customer’s perception that compares their
pre-purchase expectations with post purchase perception. Oliver (1997), p. 13) defines satisfaction as
“the consumer’s fulfillment response”, a post consumption judgment by the consumer that a service
pleasing level of consumption-related fulfillment including under or over-fulfillment. Oliver (1981)
point of view customer satisfaction is the evaluation a customer makes to a certain exchange, which
reflects the relation of the customer of the customer’s expectation and their real perception to products
and services they receive.

2.2: Review of major literature

Number of study has been conducted so for in different context at different time period on this topic so
far. The major literatures found in this area are as follows:

5
 Crosby (1981) defined Quality as consistency with fixed specifications and this agrees with karim’s
definition (1996), who defined Quality as anything that accords with the characteristics of the product
to meet the external client’s needs. In addition, the product quality differs from that of a service as the
earlier is tangible, whereas the latter is intangible. Service is also defined differently. The American
society for marketing, for example, defines service as activities or benefits that are offered for sale or
that are offered for being related to a particular product. Kotler (2003), defined services as ‘any
behavior or act based on a contact between two parties: the provider and the receiver, and the essence
of this reciprocal process in intangible. Hakesver (200) looked at service as a set of economic activities
that provide time, location form and psychological benefits. Beer (2003) defined service as a set of
characteristics and overall properties of the service which aim to satisfy the clients and meet their
needs. Mohamed& Shirley (2009) emphasized that banks have to care a but the quality of their
services since this quality is considered the essence or core of strategic competition. Walfriedetl al.
(2000) defined service as a set of characteristics that meet the client’s needs, strengthen the links
between the organization and them, and enhance the clients’ value as well. Huseyin,et Al. (2005)
believes that good knowledge of the characteristics and advantages of service quality on the part of
banks do contribute for their success and their persistence in the international banking competitive
environment. Form these definitions we conclude that the quality of banking service is an integrative
assessment of the services offered to the external client, for this clients are considered to be
independent individuals with various requirements on the basis of which services are provided, based
on certain specification. This requires that banks have to carefully select creative employees with high
qualifications and capabilities. Parasurama Zeltham, I & Berry that there exist ten criteria and
dimensions through which service quality can be assessed.

 Reliability: the ability of an organization to accurately achieve its services in the proper time and
according to the promises it has made to its clients.
 Responsiveness: the tendency and willingness of the providers to help clients and satisfy their needs,
immediately reply to their inquires, and solve their problem as quickly as possible.
 Competence: having adequate skills and knowledge that enable the employees to perform their jobs
properly.
 Accessibility: providing easy access to a service in terms of location and through services provided via
the telephone, the internet, or any other means of communication.
 Courtesy: treating clients respectfully in a polite friendly manner, understanding their feelings, and
answering their phone calls gently.

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 Communication: this occurs through gentlemanly listening to the client conveying information to them
clearly and facilitating external communication with workers.
 Creditability: this can be achieved through full trust and confidence in the service provider as well as
his honesty and straight forwardness.
 Security : this depends on whether the service is free from risks and hazards, defects or doubts to that
it provides bodily safety, financial security as well as privacy to pinpoint the customer’s needs as well
as understanding their individual problems.
 Tangibility: this includes physical aspects connected with service such as instruments and equipment,
persons, physical facilities like buildings and nice decoration and other observable service facilities.

The above-mentioned ten dimensions have been integrated into only five ones. Researchers agreed on
the fact that these dimensions are appropriate ones which help reveal the customer’s expectations and
perception. This new model is called ‘Servqual’. This compound word consists of the two words
‘Service’ and ‘Quality’, these five dimensions include:

 Tangibility: this includes physical facilities, equipment, and the physical appearance of on employee.
 Reliability: this refers to the ability to provide the exact required service according to given
specifications and conditions.
 Responsiveness: the inclination and willingness of the employees to serve customers quickly and
properly.
 Assurance: feelings of trust and confidence in dealing with the organization. This reflects the worker’s
knowledge and experience and their ability to build self-confidence as well as confidence in the
customers themselves.
 Empathy: understanding the customer’s personal needs, taking care of them individually and showing
them all sorts of sympathy and affection, looking at them as close friends and distinguished clients.

2.3 Conceptual framework

The figure below shows the different independent variable, which affect the dependent variable i.e
customer satisfaction to Kumari bank Ltd. The independent variables used in the conceptual

7
framework are the five dimensions of SERVQUAL framework developed by Parasuraman et Al. in
1988. The five dimensions of service quality include tangibility, Reliability, Responsiveness,
Assurance and Empathy. They are independent as they are not influenced by any other Variables under
study. They however, influence the dependent variable and changes in these variables affect the
dependent variable.

Moderating variables have a strong contingent effect on the dependent and independent relationship.
The demographics variable used in this study are the moderating variables that are expected to modify
the originally expected relationship between the independent and dependent variables.

The dependent variable used is customer satisfaction. Customer satisfaction depends upon the
independent variables used and this research attempts to determine the degree of relationship between
them.
Consumer demographic (age,
Income, Occupation, Education)
Tangibility

Reliability
Customer
Satisfaction
Responsivenes Moderating
s Variable
Assurance

Empathy

Independent variable Dependent Variable

Figure 1: Conceptual framework of service quality dimension and customer behavior.

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2.4: Research Hypothesis

Hypotheses:

1. There is significant relationship between Tangibility and customer satisfaction.

2. There is significant relationship between Reliability and customer satisfaction.

3. There is significant relationship between Responsiveness and customer satisfaction.

4. There is significant relationship between Assurance and customer satisfaction.

5. There is significant relationship between Empathy and customer satisfaction.

6. Demographic variables have moderating effect on the relationship between the five dimensions of
service quality and customer satisfaction.

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 Chapter 3: Research Methodology

3.1: Research design

This research is descriptive, which elaborates the topic and describes characteristics of a phenomenon
or situation in its current state, namely customer satisfaction in Kumari bank Ltd. The research sought-
after to indentify relevant attributes or dimensions affecting customer satisfaction to answer what and
how questions. Quantitative strategy was used in this research not only to describe the various
attributes of the SERVQUAL model and their importance to customers but also why they consider
these attributes to be important to them. Quantitative strategy was used because the findings could be
generalized to the particular context in which our study is conducted. Cross-Sectional research design
was used in this research collecting the data at a single point in time. This design considers more than
one case because it is interested in the association between cases, at a single point in time meaning
data are collected on variables simultaneously.

3.2: Sampling techniques

To collect enough data to test hypotheses, a survey was conducted to collect data from sample. Due to
the limitation of time and resource the 60 questionnaire were distributed to all possible respondents of
Kumari bank Ltd in Kathmandu equal numbers of customers were asked to fill the questionnaire for
each chosen branch. Subjects were asked to assess their perceptions of various items representing
service quality and customer satisfaction .Assessments were based on A Five-point Likert-scale
ranging from “strongly disagree (1) to “strongly agree (5) was used to measure the 27 items. The data
collection resulted in 60 answers from customers. A total of 60 of these questionnaires were completed
and used in the data analysis representing a response rate of 100 percent.

3.3 Data collection method

3.3.1. Sources of data

Both the Primary and Secondary sources of data were used in this research. Primary source of data
collection was done through self-administered questionnaire and the observation. Whereas the
Secondary source of data collection was done through the related research topics, journals, articles,

10
internet, related books etc. Both the method has had equal role in the completion of this project work
and this report.

3.3.2. Questionnaire design

Self-administered Questionnaire was used for the data collection that consisted of 27 structured
questions (close ended). For the sake of confidentiality, respondents were not asked to reveal their
personal information except for age, gender, education, occupation and income level. Questions used
were brief and comprehensive that included the 5 dimensions of service quality and aspects of
customer satisfaction properly designed in question format. Respondents were asked to rate the
importance of these elements in accordance with their satisfaction level by application of Likert-scale
in the scale from1 to 5 (5 = strongly agree 1= strongly disagree).

3.3.3. Instrument and Scale

The aim of this research was to examine the level of service quality as perceived by customers of
Kumari bank limited working in Kathmandu and its effect customer satisfaction. The questionnaire
survey was the main form of data collection. The survey instrument developed in this study consisted
of three major sections. The first section contains questions about personal profiles of the respondents
including age, gender, educational level, occupation and income level. The second section comprises
five constructs measuring of SERVQUAL as proposed by Parasuraman et al. (1988). And the third
section comprises 6 items that measure Customer satisfaction adapted from Walfried et al. (2000).

The questionnaire used was the standard questionnaire used by the research study “Using the
SERVQUAL Model to assess Service Quality and Customer Satisfaction”, an Empirical study of
grocery stores in Umea by the authors Changing Nde Daniel and Lukong Paul Berinyuy. That research
had used the statements developed by Parasuraman et al., (1988) rephrasing the statements tope
context relevant so as to maintain validity. The questionnaires was tried and tested to identify whether
the questionnaire was able to capture the required data as expected by the researchers. (Daniel &
Berinyuy, Using the SERVQUAL model to assess Service Quality and Customer Satisfaction (2010).
Rephrasing the original questionnaire to some degree, the questionnaire has been designed for this
study.

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3.3.4. Data Collection Strategy

The questionnaire distributed to only those participants who were eligible to be the customers of
Kumari bank Ltd and whose responses could be analyzed to reach to the findings of this research.

3.4. Data Analysis

The responses collected from the respondents were tabulated (entered) into SPSS software and further
analysis was done using the SPSS software. The data analysis was done mainly by five ways:
Descriptive statistics, paired- sample T test, ANOVA testing , regression analysis and correlation
analysis.

12
 Chapter 4: Data Presentation and Analysis

4.1 Data presentation and analysis

This part presents the analysis and presentation of primary data obtained for the study. The data have
been collected by using the questionnaire survey method and result obtained have been presented in
the form of graphs and tables. The details have been presented below.

4.1.1 Preliminary Customer Data Presentation

Table 1: Age of the respondents

Cumulative
Age range Frequency Percent Valid Percent Percent
less than 19 5 8.333333 8.33 8.34
between 20-
30 29 48.33333 49 56.67
between 30-
40 15 25 25 81.67
above 40 11 18.33333 18.33 100
Total 60 100 100

Fig 2: pie chart for the age of respondent

less tan 19
above 40 8%
18%
less tan 19
between 20-30
between 30-40 between 30-40
between 20-30
25%
49% above 40

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The sample respondent consist of mostly age group 20-30 having 49%. And the age between 30-40
representing 25%, age more than 40 representing 18% and age less than 20 represented by 8% only.

Table 2: Gender of the respondents

Gender:

Gender Gender
Frequency Percentage valid percentage cumulative %
male 29 48.33333333 48.33% 48.33%
female 31 51.66666667 51.67% 100.00%
Total 60 100

Fig 3: pie Chart for the gender of the respondent

Gender

male male
female
48%
52% female

The sample of respondent consisted 52% female and 48% male.

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Table 3: Education level of the respondents

Education level Frequency Percent Valid Percent Cumulative Percent

Up to SLC 5 8.333333 8 8
Intermediate 13 21.66667 22 30
bachelor degree 30 50 50 80
master degree and above 12 20 20 100
Total 60 100 100

Education level

Up to SLC
master degree 8%
and above
Up to SLC
20% Intermediate
22% Intermediate
bachelor degree
master degree and above
bachelor
degree
50%

Fig4: Pie chart for the current education of respondents

The education level of sample of respondent consisted mostly holding bachelor’s degree representing
50%. 12% of respondents belonged to intermediate level while

10% were of the educational level of masters and above.

15
Table 4: Table 4: Occupation of the respondents

Occupation Frequency Percent Valid Percent Cumulative Percent

Business person 11 18.33333 18 18
student 20 33.33333 34 52
job holder 21 35 35 87
House wife 6 10 10 97
others 2 3.333333 3 100
total 60 100 100

Occupation

others
House wife3% Business person
10% 18%
Business person
student
job holder
job holder House wife
35% student others
34%

Fig 5: Pie chart for the current occupation of respondents

The respondents were mainly job holder representing 35%. The student represented 34%, business
person represented 18%, the house wife represented by 10% and respondents were not justify
represented only 3% .

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Table 5: income level of respondents

Income level Frequency Percent Valid Percent Cumulative Percent

Below Rs 20,000 22 36.66667 36 36

Rs 20,000-Rs 30,000 9 15 15 51
RS 30,000- RS 40,000 7 11.66667 11 62
Rs 40,000- Rs 50,000 4 6.666667 7 69
Rs 50,000-RS 60,000 6 10 10 79
Rs 60,000- Rs 80,000 4 6.666667 7 86
Rs 80,000-Rs 100,000 4 6.666667 7 93
Rs 100,000 above 4 6.666667 7 100
total 60

income level
Rs 100,000 above
Rs 80,000-Rs
7%
100,000
7%
Rs 60,000- Rs
80,000
7% Below Rs 20,000
Rs 20,000-Rs 30,000

Below Rs 20,000 RS 30,000- RS 40,000

Rs 50,000-RS 36% Rs 40,000- Rs 50,000
60,000
Rs 50,000-RS 60,000
10%
Rs 60,000- Rs 80,000
Rs 80,000-Rs 100,000

Rs Rs 100,000 above
RS 30,000- RS Rs 20,000-Rs
40,000- 40,000 30,000
Rs 50,000 11% 15%
7%

Fig 6: pie chart for the respondents

17
In above figure mostly respondent were income level below Rs 20,000 representing 36%, income level
between Rs 20,000-Rs 30,000 representing 15%, between Rs 30,000- Rs 40,000 representing 11%,
between Rs 50,000- Rs 60,000 representing 10%, and between Rs 40,000- Rs 50,000, Rs 60,0000- Rs
80,000, Rs 80,000 – Rs 100,000, and above 100,000 represented by 7% , 7%,7% and 7% respectively.

4.1.2: Descriptive statistics

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Tangi 60 1.75 5.00 3.7958 .75562
Reliab 60 2.25 5.00 3.9625 .69931
Resp 60 1.00 5.00 3.9375 .73159
Assurance 60 1.75 5.00 4.1042 .59356
Empathy 60 2.00 5.00 3.8917 .73121
CustomerSatisf 60 2.00 5.00 4.0389 .68283
Valid N 60
(listwise)

Table 6: descriptive statistics

Table 6 reflects the descriptive statistics of the dimensions of service quality that affect the customer
satisfaction of Kumari bank Limited. The highest score mean of assurance (4.1042) dimensions
indicates that the customers of Kumari bank satisfied with this dimension assurance rather than other
dimensions and vice versa.

4.1.3 ANOVA Testing

Table 7: ANOVA testing for age

ANOVA

Sum of Squares df Mean Square F Sig.

Tangi Between Groups .478 3 .159 .268 .848

Within Groups 33.209 56 .593

Total 33.686 59
Reliab Between Groups 1.219 3 .406 .823 .486
Within Groups 27.634 56 .493
Total 28.853 59

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Resp Between Groups .431 3 .144 .259 .855
Within Groups 31.147 56 .556
Total 31.578 59
Assurance Between Groups .031 3 .010 .028 .994
Within Groups 20.756 56 .371
Total 20.786 59
Empathy Between Groups 3.675 3 1.225 2.461 .072
Within Groups 27.871 56 .498
Total 31.546 59
CustomerSatisf Between Groups .187 3 .062 .127 .943

Within Groups 27.323 56 .488

Total 27.509 59

Table 7 shows that there is significant relationship between tangibility and age with the significance
value of 0.848. This value indicates that with the change in age, the idea of tangibility too changes that
determines satisfaction. Also, it is found that there is high significant relationship between assurance
and age with the significance level of 0.994. This value indicates that with the change in age, the idea
of assurance too changes that determines satisfaction. . Similarly, reliability has less significance level
which is less than 0.5 so, there is significance difference between reliability and age, therefore, we
must accept alternative hypothesis.

Table 8: ANOVA testing for gender

ANOVA

Sum of Squares df Mean Square F Sig.

Tangi Between Groups .012 1 .012 .020 .887

Within Groups 33.675 58 .581

Total 33.686 59
Reliab Between Groups .447 1 .447 .912 .343
Within Groups 28.406 58 .490
Total 28.853 59
Resp Between Groups .002 1 .002 .004 .948
Within Groups 31.576 58 .544
Total 31.578 59
Assurance Between Groups .209 1 .209 .590 .446
Within Groups 20.577 58 .355
Total 20.786 59

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Empathy Between Groups .753 1 .753 1.418 .239
Within Groups 30.793 58 .531
Total 31.546 59
CustomerSatisf Between Groups .124 1 .124 .262 .611

Within Groups 27.386 58 .472

Total 27.509 59

Above table 10 shows that is high significance relationship between responsiveness and gender with
the significance value of 0.948. This value indicates that male and female perceive similarly towards
the responsiveness that determines satisfaction.

Assurance, Empathy, and reliability have significance value 0.446, 0.239 and 0.343 respectively, so
there is significance difference among them and gender. This value indicates that male and female
have different idea regarding responsiveness that determines satisfaction

Table 9: ANOVA testing for education

ANOVA

Sum of Squares df Mean Square F Sig.

Tangi Between Groups .157 3 .052 .087 .967

Within Groups 33.530 56 .599

Total 33.686 59
Reliab Between Groups 1.485 3 .495 1.013 .394
Within Groups 27.368 56 .489
Total 28.853 59
Resp Between Groups .452 3 .151 .271 .846
Within Groups 31.127 56 .556
Total 31.578 59
Assurance Between Groups .102 3 .034 .092 .964
Within Groups 20.684 56 .369
Total 20.786 59
Empathy Between Groups 3.553 3 1.184 2.369 .080
Within Groups 27.993 56 .500
Total 31.546 59
CustomerSatisf Between Groups 1.335 3 .445 .952 .422

Within Groups 26.174 56 .467

Total 27.509 59

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Above table 11 shows that highly significant relationship exists between the education level and
tangibility with the significance value of 0.967, indicating that education level leads to similar in
perception towards tangibility that determines satisfaction. Also, it has been found that there exists
significant relationship between responsiveness, assurance and empathy and education, with
Significance value of 0.846, 0.964 and 0.080 respectively. Similarly, reliability and customer
satisfaction have less significance or there is significance difference between them and education, so
we must accept alternative hypothesis, it indicates difference level of education people perceive
differently towards to this dimension.

Table 10: ANOVA occupation

ANOVA

Sum of Squares df Mean Square F Sig.

Tangi Between Groups 1.759 4 .440 .758 .557

Within Groups 31.927 55 .580

Total 33.686 59
Reliab Between Groups 1.407 4 .352 .705 .592
Within Groups 27.446 55 .499
Total 28.853 59
Resp Between Groups .527 4 .132 .233 .918
Within Groups 31.051 55 .565
Total 31.578 59
Assurance Between Groups .696 4 .174 .476 .753
Within Groups 20.090 55 .365
Total 20.786 59
Empathy Between Groups .231 4 .058 .101 .982
Within Groups 31.315 55 .569
Total 31.546 59
CustomerSatisf Between Groups 3.744 4 .936 2.166 .085

Within Groups 23.765 55 .432

Total 27.509 59

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Table 12: shows that occupation and all dimension of service quality have no significance differences,
so we accept null hypothesis. There significance value is greater than 0.5 so all occupation have
similar view of point towards the dimension.

4.1.4: Pair sample T Test

Table 11: Paired-samples T Test

Paired Samples Test

Paired Differences
95% Confidence
Std. Interval of the
Deviatio Std. Error Difference Sig. (2-
Mean n Mean Lower Upper t df tailed)
Pair 1 Tangi - Reliab - .58343 .07532 - -.01595 -2.213 59 .031
.16667 .31738
Pair 2 Resp - Assurance - .57058 .07366 - -.01927 -2.263 59 .027
.16667 .31406
Pair 3 Empathy - - .72461 .09355 - -.02531 -2.272 59 .027
Assurance .21250 .39969
Pair 4 Tangi - Resp - .72976 .09421 - .04685 -1.504 59 .138
.14167 .33018
Pair 5 Reliab - - .72976 .09421 - .04685 -1.504 59 .138
Assurance .14167 .33018
Pair 6 Reliab - Empathy .07083 .87223 .11260 - .29615 .629 59 .532
.15449
Pair 7 Tangi - Empathy - .87223 .11260 - .12949 -.851 59 .398
.09583 .32115
Pair 8 Resp - Empathy .04583 .83551 .10786 - .26167 .425 59 .672
.17000

Above table shows P value which is less than 0.5 refers significance difference between two variables
that means customer percept in these variables is differently. Therefore we accept alternative
hypothesis. Similarly if P value is greater than 0.5 then there is no significance difference between

22
both variables. It represents the customer perception on the variable s are similarly. Therefore we
accept null hypothesis.

According to above table customer perceive reliability and assurance are similarly, also responsibility
and empathy, because P value is 0.532 and 0.672 respectively which are greater than 0.5.

4.1.5 Regression Analysis

Table 12: regression analysis

Coefficientsa
Model Standardized
Unstandardized Coefficients Coefficients
B Std. Error Beta t Sig.
1 (Constant) 1.201 .609 1.973 .054
Tangi .006 .140 .006 .041 .968
Reliab .072 .157 .074 .458 .649
Resp .097 .156 .104 .619 .539
Assurance .149 .172 .130 .865 .391
Empathy .397 .115 .427 3.451 .001
a. Dependent Variable: SQ

From above table the P value of tangibility, reliability and responsiveness are 0.968, 0.649 and 0.539
receptively, these are greater than 0.5, so there is no significance difference with service quality.
Therefore we accept null hypothesis. These three variables contribute to service quality. Similarly, P
value of assurance and empathy is less than 0.5 which shows significance difference with service
quality, so we accept alternative hypothesis.

23
4.1.6 Correlation Analysis

Table 13: correlation analysis

Correlations
Assuran
Tangi Reliab Resp ce Empathy SQ
** ** * *
Tangi Pearson Correlation 1 .681 .519 .313 .312 .285*
Sig. (2-tailed) .000 .000 .015 .015 .027
N 60 60 60 60 60 60
Reliab Pearson Correlation .681** 1 .588** .372** .257* .298*
Sig. (2-tailed) .000 .000 .003 .047 .021
N 60 60 60 60 60 60
** ** ** **
Resp Pearson Correlation .519 .588 1 .647 .348 .384**
Sig. (2-tailed) .000 .000 .000 .007 .002
N 60 60 60 60 60 60
* ** ** **
Assurance Pearson Correlation .313 .372 .647 1 .417 .405**
Sig. (2-tailed) .015 .003 .000 .001 .001
N 60 60 60 60 60 60
* * ** **
Empathy Pearson Correlation .312 .257 .348 .417 1 .539**
Sig. (2-tailed) .015 .047 .007 .001 .000
N 60 60 60 60 60 60
SQ Pearson Correlation .285* .298* .384** .405** .539** 1
Sig. (2-tailed) .027 .021 .002 .001 .000
N 60 60 60 60 60 60
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
When we increase tangibility by 1 then also increase in reliability by 0.681, responsiveness by
0.519, assurance by 0.313, empathy by 0.312 and service quality bye 0.285 respectively. And
so on.

24
 Chapter 5 Summary and conclusion

5.1: Summary and discussions

On the basis of the responses collected and the analysis done with those data, this study has come up
with different results. There were not many variations in age as most of the respondents were of age
group 20-30 while the ratio of male to female was almost 50-50. The respondents were mostly students
obtaining bachelors degree.The SERVQUAL model provided a satisfactory level of overall reliability
of 0.913, which is almost same to Parasurman et al. (1988) study on SERVQUAL but assurance did
not show enough reliability in this study meaning some items were not cohesive in forming some
dimensions.

The average mean score of assurance was found to be highest with the mean value of 4. 1042, among
other service quality dimension. This value indicated that the customers of Kumri bank limited are
satisfied with the assurance element. Majority of the customers found the assurance appearance
feelings of trust and confidence in dealing with the organization. . However, they are not completely
satisfied with assurance and there are some customers who do not agree to it as well. Thus, there is still
the workers' knowledge and experience and their ability to build self-confidence as well as confidence
in the customers themselves not satisfactory. Kumari bank to work and enhance its assurance.
Tangibility has the lowest mean average of 3.7958 among other dimensions, which indicates that
customers feel that Kumari bank does not properly maintain physical appearance. Majority of the
customers are not happy with the service provided by the staffs and they have shown their
disagreement that the staffs in Kumari bank give prompt service to customers and are never too busy
to respond to customers and that they are always willing to help them. This is something that Kumari
bank should really consider while providing service to Kumari bank besides providing assurance. This
has led the overall customer satisfaction to be of average level.

The one-way Anova testing with age revealed that with the change in age, the idea of tangibility,
responsiveness, assurance, and empathy too changes that determines customer satisfaction. This
showed that the age had moderating effect on these dimension leading to customer satisfaction. Gender
was found to have moderating effect on the significance relationship between tangibility,
responsiveness and customer satisfaction meaning male and female have similar idea regarding these
dimension that determines satisfaction. The study also revealed that with the difference in the level of
education, the idea of assurance, responsiveness, tangibility and empathy too changes that determine
customer satisfaction are showing the moderating effect of education between them leading to

25
customer satisfaction. Also, Occupation was found to have moderating effect on the significance
relationship between all dimensions such as tangibility, reliability, responsiveness, empathy, assurance
and customer satisfaction. Because they have significance value greater than 0.5. Finding of paired
sample T test, the reliability and empathy have no significance difference. The regression analysis
obtained tangibility; reliability and responsiveness are significance relationship with service quality.
The findings of correlation Analysis revealed that there exists significant positive correlation between
all five dimensions taken as independent variables and the dependent variable of the study. This
indicates that increasing the quality of each of the dimensions independently can enhance the level of
customer satisfaction.

5.2 Conclusion

The results from the study shows that the research objectives have been met and the research questions
have been answered and the alternate hypothesis created for the study are all accepted. It has been
found that there exists significant positive correlation between the five dimensions of Service quality;
Tangibility, Reliability, Responsiveness, Assurance, empathy which are the independent variables
under study and Customer satisfaction, the dependent variable under study. Increase in the value or
quality of these dimensions can make the customers happy and increase their satisfaction towards

Kumari bank. The service provided by the staff greatly determines how the customers feel. Due to
poor service provided by the staff of Kumari bank the customers are not quite satisfied. Thus, Kumari
bank need to work on these dimensions and focus mainly on its staff, train them and keep them
motivated to provide better and qualitative service to its customers to make the existing customers
happy and satisfied, earn new customers, retain them and build customer loyalty. Evidence from the
study in general show that, grocery stores have to improve performance on all the dimensions of
service quality in order to increase customer satisfaction since consumers expect more than what is
been offered . This will enable them maintain high level of competitiveness in this rapidly changing
highly competitive environment where keeping customers satisfied has become one of the core aspect
the business should focus on to stand out in the long run.

5.3. Implications

The study on factors influencing the service quality has a great implication in today’s business world
where there has been visible growth of service sector. The motivation behind this study is to discover
how perceive service quality and how appropriate the SERVQUAL model in the connection of Kumari

26
bank by utilizing its measurements to service quality. Knowing how consumers perceive service
quality and being able to measure service quality can benefit management of service organizations by
determining the dimensions affecting satisfaction and working on them to enhance the satisfaction
level by providing a commendable service.

According to this study, respondents are not happy with the “responsiveness” dimension of service
quality at Kumari bank. Thus, the management should consider this aspect and improve on areas
affecting this dimension to provide better service and make its customers happy and satisfied. General
implications to service providers of Kumari bank is that they ought to concentrate on all dimensions of
service quality and endeavor endeavors to enhance them with a specific end goal to have better
execution that would prompt higher level of service quality and client fulfillment.

5.4. Limitations

There are certain limitations while conducting this study that should be addressed. Firstly, because this
research has used the non-probability sampling technique, the results obtained from this study cannot
be generalized to a wide range of similar situations.

Also, the outlet of Kumari bank Limited are located at different locations in Kathmandu as well as in
others district so there was a limitation of geographical extension as the data collected does not
represent the total population. The survey was conducted only on 60 respondents so it would be
difficult to generalize the findings. Also due to academic schedule there was limited time frame to
complete this research. There may be probability of error in responses due to unavoidable factors such
as ignorance, hesitations and misinterpretations. Also, the major percentage of respondents consists of
students holding mostly bachelor’s degree of education level and thus, the study cannot be generalized
for all kinds of customers.

27
 References

Baker, j., Grewal, D., & Parasuraman, A. (2003). The influence of store environment on quality
inferences and store image.

Brysland, A., & Curry, A. (2001). Service improvements in public services using SERVQUAL.
Managing Service Quality: An International Journal, 11.

Daniel, C. N., & Berinyuy, L. P. (2010). Using the SERVQUAL Model to assess Service Quality and
Customer Satisfaction. Umea. .

Kotler, p. (1973). Atmospherics as a marketing tool. journal of Retailing, 49.

Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A Conceptual Model of Service Quality and
Its Implications for Future Research. The Journal of Marketing, 49.

28
 Annex I

Questionnaire Survey

Dear sir/madam

I am a student of Kist College undertaking a research work in order to meet the partial requirement of
Bachelor of Information Management of Tribhuvan University. I would like to request you to fill up
the following questionnaire for the same purpose. The information provided will be used at aggregate
level and kept confidential.

Age:

1. Less than 19 2. Between 20-30 3. Between 30-40 4. Above 40

Gender: 1. Male 2. Female

Education: 1. Up to SLC 2. Intermediate 3. Bachelor degree

4. Master degree and above

Occupation: 1. Business Person 2.Sudent 3. Job holder 4. House wife

5. Others

Income Level per month:

1. Below Rs 20,000.
2. Rs 30,000 -Rs 40,000.
3. Rs 40,000 -Rs 60,000.
4. Rs 60,000- Rs 80,000.
5. Rs 80,000 –RS 100,000 and above

1 Please rate your feeling about Kumari Bank Ltd. For each statement, please show the extent to which
you believe Kumari Bank Ltd has the feature described by the statement. five-point scale running 1
(“strongly disagree”) to 5("strongly agree").i.e.

Strongly disagree Somewhat Neither agree nor nor Somewhat Agree Strongly
1 disagree 2 disagree 3 4 Agree 5
2 3 5

29
S.N Questions 1 2 3 4 5

1 Good decoration inside the bank

2 Good sitting facility for waiting inside the bank
3 Neat dress and appearance of the employees
4 Convenient location of the branch from home
5 Availability of the employees at respective counters
6 Availability of top officials in case of need
7 Lack of mistakes and error-free records
8 Employees show sincere interest in solving customers' problems
9 Fast responses from employees t customer’s requests
10 Prompt service from the employees
11 Willingness of the employees to help customers
12 Fast transactions(opening of new accounts, deposits, drafts, cheque clearance
etc)
13 Politeness of counter employees and branch manager
14 Safety inside the bank and confidentiality in transactions
15 Trustworthiness of employees
16 Knowledge of employees to handle customers' questions
17 Employees give priority to customers' interests
18 Employees take care to explain the banking rules to the customers
19 I believe that the general service of Kumari bank is high
20 Overall I believe the service quality of Kumari bank is excellent
21 The quality of Kumari bank services is generally high
22 I am satisfied with the service of Kumari bank
23 I am pleased to bank with Kumari bank
24 My favorable bank is Kumari bank
25 I feel pleasant when banking with Kumari Bank
26 I like the Kumari bank very much
27 I am delighted with the services of Kumari bank
2. In your opinion what are the other factors that helps to keep the customer satisfied in Kumari Bank
Limited…

30
………………………………………………………………………………………………..

3. In your opinion what should Kumari Bank do in order to increase its service
qualities…………………………

Once again I would like to thank you for your kind cooperation.

31
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