A Dissertation Submitted in Partial Fulfillment of the Requirements for the
Degree of Master of Business Administration (MBA-CM) of
Mzumbe University
It is the desire for every business or organisation in today’s competitive market to
make sure they offer maximum satisfaction to their customers so as to survive in the
competitive environment, since delivering customer satisfaction has been the first
priority of every business management. Bank operators have been increasing in
number from time to time focusing on meeting the needs and wants of customers
delivering satisfaction more than their competitors and finally being able to retain and
attain new customers. This will not only increase their profit but also ensure their
survival in the competitive environment.
The aim of this study was to assess the service quality on customer loyalty towards
banking industry whereas, the specific objectives of the study were, to determine the
relationship between service quality and customer loyalty, to assess the relationship
between customer loyalty and customer satisfaction, and to assess the relationship
between service quality and customer satisfaction in the banking industry.
The study design was descriptive in nature whereas, a total of 130 respondents who
visit the branch for bank services participated in the study. The reliability and validity
of the study were tested using Cronbach‟s alpha test. Both descriptive and inferential
analyses were conducted to analyze the data obtained. Pearson correlation and
multiple linear regressions were also conducted so as to determine the significant
relationship that exists between the dependent and independent variables. The
research regression equation was also formulated after conducting the analysis.
The findings show that there is a relationship between the service quality and
customer loyalty.
From the service quality dimensions of reliability, competence, image, functional and
credibility, the results show that these five had a direct impact on customer loyalty
while empathy, tangibility assurance, and courtesy did not have a direct impact instead
through customer satisfaction as a mediator variable.
The study recommends that telecommunication network operators need to put much
focus on understanding what their customers expect from them based on all the five
dimensions of service quality and delivery these expectations accordingly so as to be
able to meet their customers’‟ satisfaction.