1.

0 INTRODUCTION

Customer service is the provision of service to customers before, during and after a purchase.
Everyone in the organisation is providing one or all of these- perhaps they recognise which ones
perhaps not. Kurtenbach (2000) explains that those who are successful in customer service rank
their customers experience as the top priority. Ettore (2001) is of the view that, concentrating on
current customer’s information can and should be obtained to better understand their view of the
service provided. The quality of service provided determines the level of satisfaction of the
customer even though what is seen as quality by one customer may not necessarily be quality to
another.
Customer satisfaction is a measure of how products and services supplied by a company meet or
surpass customer expectation. In a competitive marketplace where a business competes for
customers, customer satisfaction is seen as a key differentiator and increasingly has become a
key element of business strategy. Customer satisfaction is an asset that should be monitored and
managed just like any physical asset. The relationship between customer service and customer
satisfaction is a vital one. In a competitive market place, understanding customer needs become
crucial, therefore companies and banks in this case, have moved from product-centric to
customer-centric positions. Customer satisfaction is influenced by the type of service provided.
Satisfaction is a challenge particularly in the bank based service as customers can easily switch
from one bank to another of a better service. Considering the high costs of acquiring new
customers and apparently, high customers turn over of many banking services. It is very
important to find out what causes customer satisfaction. (Siadat, 2008, cited Van Rie, Lijander
and Jurriens 2001).

High levels of customer satisfaction bring several positive aspects to a company; it is believed
that customer satisfaction has a positive relationship with economic profit (Anderson, Fornell,
and Lehmann, 1994). Moreover, it will lower customer’s price sensitivity (Fornell, 1992), and
contribute to the creation of loyal customers, which in turn implies a stable future cash-flow
(Matzler et al., 1996). Any organization that has satisfied customers is bound to increase
customer base and hence profitability. Satisfied customers may sell your organization either
consciously or unconsciously. It is therefore important that service industries provide quality
service to customers so as to satisfy them, make them loyal and retain them at the end. Fidelity
bank, has customer service as one of the pillars on which the bank operates and this research
seeks to find out whether the service being provided meets customer expectations and whether
customers are being satisfied by those services and also which other ways the service can be
improved so as to satisfy the customers.

2.0 RESEARCH CONTEXT: BACKGROUND

MCB is one of the leading banks in Mauritius in terms of Profits and Customers .MCB proposes
many remote channels to its customers in terms of ATM, KIOST and Internet Banking facilities.
Financial firms have to ensure they provide quality services to achieve customer satisfaction and
hence the MCB also aspires to improve its service quality. However, at the end of month the
bank premises are overcrowded in terms of transactions. Customers spend most of their time in
queue resulting in frustration amongst customers and hence numerous complaints are being
received. The MCB has understood that it needs to understand customer expectations clearly and
compare them with the customer perceptions to understand the areas in which it needs to
improve. Siddiqui and Sharma (2010) also claimed that the provision of quality services would
result in customer satisfaction. Sadek et al. (2010) highlighted that the financial services sector is
now more customer-oriented and quite challenging to meet customer needs. The researcher also
explained that customer satisfaction and service quality are two related constructs. Agbor (2011)
stated that customer satisfaction and service quality are two important areas that have to be
provided with considerable attention so as to ensure competitiveness.

3.0 PROBLEM STATEMENT

The MCB has received a huge number of complaints from its clients in relation to its service

quality. Customers seem rather dissatisfied with the services and some of them are even

switching to other banks since the latter are providing similar products and services and

competition in the sector is rising. Customers have complained about numerous aspects of

service quality in the firm. In order to optimize its profits and differentiate itself from

competitors, the MCB needs to evaluate service quality and its impact on customer satisfaction.
The study will identify the gaps between customer perceptions and customer expectation which

would enable the researcher to formulate solutions to handle the problem and decrease customer

complaints while obtaining customer satisfaction.

4.0 RESEARCH AIM

The aim of this study is to evaluate the effectiveness of customer service on customer satisfaction
at the Mauritius Commercial Bank in the Southern Region.

5.0 RESEARCH OBJECTIVES

 To assess whether gaps exist in service quality pertaining to the customer service at the
MCB.
 To assess the effectiveness of online services.
 To determine the impact of technological tools on customer satisfaction at the MCB.

 To verify whether customer demographics have an impact on customer satisfaction.

 To formulate recommendations on how to improve customer satisfaction.

6.0 RESEARCH QUESTIONS

 Are there gaps in service quality pertaining to the customer service at the MCB?
 How effective are the online services?
 What is the impact of online services on customer satisfaction?
 Do customer demographics impact on customer satisfaction?
 How can customer satisfaction be improved at the MCB?

7.0 SIGNIFICANCE OF THE STUDY

MCB has customer service as one of its products, hence the need to find out whether they really
are providing that service and what ways they can improve so as to have competitive advantage
over rivals in the market.
This work will therefore provide information regarding excellent customer service and its effects
on customer satisfaction in the Mauritian context. This piece will be available to the bank being
researched for the management to know the perception of their customers on services being
provided to them and to help improve on service quality.

It will also benefit other business service providers to make informed decisions as far as service
is concerned. Educational institutions, corporate entities, business policy makers and other
researchers will also benefit from this research in making informed decisions when it comes to
quality customer service to satisfy the customers.
2.0 LITERATURE REVIEW

This section presents the theoretical concepts and literature relating to service quality in the
banking sector, the model of service quality gap and the SERVQUAL instrument used to
measure service quality.

Customer service is the provision of service to customers before, during and after a purchase. It
also means serving the customer, and involves all contact with the customer, be it face-to-face, or
indirect contact (i.e. dealing with complaint letters)

According to Ghimire (2012), customer satisfaction has been defined as the degree of correlation
between the assumptions of customers and their feelings. In simpler terms, customer satisfaction
may be evaluated through an assessment of the differences between the assumed service quality f
customers and their expected service quality level. Benett and Barkensio (2005) point out that
customer satisfaction is heavily dependent on the dimensions of service quality such as tangibles,
assurance, empathy, reliability and responsiveness. Additionally, there are other elements which
impact on customer satisfaction such as the facilities and communication amongst others as per
Benett and Barkensio (2005).

As per Ghimire (2012), the five service quality dimensions such as tangibles, empathy,
assurance, responsiveness and reliability influence the perceived service quality and all these
factors also influence the price. It also demonstrates that besides the five dimensions, situational
and personal factors also impact on customer satisfaction. This is why customer satisfaction is
also being assessed in this study at the MCB.

The concept of customer satisfaction was introduced by Kotler (2007). Since then, several other
researchers have tried to investigate the concept. Vanacore and Etro (2002) define customer
satisfaction as the assessment of customers pertaining to the offerings of a firm. On the other
hand, Zeithaml and Bitner (2003), claim that service quality can be assessed through customer
satisfaction and customer dissatisfaction. The same researchers also asserted that when
considerable gaps occur between perceptions and expectations of customers with respect to the
service quality level, customers are quite unhappy. The primary customer satisfaction
antecedents include disconfirmation, expectations and perceived quality level.
SERVICE QUALITY (EXPECTATIONS AND PERCEPTIONS)

Forozia et al. (2013) claim that companies have to provide high quality of services to customers.
Customer satisfaction is an important concept in the civil service. Numerous researchers have
attempted to define the term ‘service’ as per the area in which it is being used. Kotler and Keller
(2009) define it as “any intangible act or performance that one party offers to another that does
not result in the ownership of anything.” Hence, a service is an intangible offer that is made to
clients in exchange of money. On the other hand, Kotler et al. (2002) describe quality as the
ability of a complete set of characteristics and feature of a firm’s offerings to satisfy the needs of
customers. Hence, it can be assumed that quality and value are related and may result in
customer satisfaction or dissatisfaction (Bowen & David, 2005).

According to Zeithaml et al. (1990), service quality is the degree to which the perceptions of
customers meet or exceed customer expectations. Parasuraman (1988) described service quality
as the gap between customer expectations and perceptions regarding the service offered by a
firm. He also claimed that it is essential to provide high quality of services to gain customer
satisfaction. The three main terms have been defined and it has been spelt out that customer
satisfaction and service quality are related.

Bowen and David (2005) asserted that the SERVQUAL tool is the most popular and relevant tool
to assess service quality. This model was created by Parasuraman et al. (1985) and the
researchers condensed 97 attributes into 10 dimensions which were found to impact on service
quality as per Kumar et al. (2009). They also stated that these dimensions may be employed to
measure customer perceptions and expectations. The next section now explains the SERVQUAL
model which will be used in this study.

2.3 SERVQUAL MODEL

The SERVQUAL framework, also known as the gap model, remains one of the most appropriate
techniques employed to assess service quality. As per Eshghi et al. (2008), the SERVQUAL tool
is considered to be the most consistent and reliable tool. Jain et al. (2004) assert that when the
perceived or experienced service is unable to meet the expectations of customers, it implies that
the latter are not as satisfied with the quality of service. In the contrary case, when the perceived
service meets customer expectations, it may be held that customers are satisfied. Hence, as per
the researchers, one may conclude that the SERVQUAL scale is appropriate for measuring
service quality from customer perspectives and this is why it has been used to assess the service
quality level at the MCB.

The 10 dimensions of service quality which were identified by Parasuraman et al. (1988) were
the following:

 Tangibles: Tangibles relate to the appearance of employees and physical facilities which
help to deliver the service. They also include accommodation, equipments and uniforms
of staff members.
 Reliability refers to the ability of firms in providing the promised service to clients.
 Responsiveness is about the agreeableness and readiness of staff members of respond to
customer queries and help them in an effective and pleasant manner.
 Competence refers of the abilities of employees in executing the services.
 Courtesy is about the thoughtfulness, respect and politeness of staff members in handling
and dealing with clients.

 Credibility relates to the trustworthiness and honesty of the service providers.

 Security is mostly about the extent to which clients feel secure at a firm.

 Access refers to the accessibility of the firm.

 Communication is about the manner in which staff members interact with clients. They
need to employ proper communication channels and tools.

 Understanding clients relates to efforts put in by the firm to comprehend customer needs.

The SERVQUAL model that was developed initially consisted of 22 pairs of items measured on
a point Likert Scale as has been used in this study. The questionnaire consists of one section
which measures customer perceptions while the other measures customer expectations (Kyo,
2003). Nevertheless, research in this field later unveiled that the 10 dimensions were inter-related
and therefore condensed into five dimensions as described below (Kyo, 2003):
  Tangibility: This dimension relates to the equipments, appearance of personnel and
physical facilities.
 Reliability: Reliability is about the ability of staff members in executing and carrying out
the promised service in an accurate and reliable way.
 Responsiveness: It is about the willingness of employees in assisting customers and
provided prompt services.
 Assurance: The fifth dimension relates to the knowledge and courtesy of employees and
their capacity to gain customer trust and confidence.
 Empathy: It relates to personalized and individualised services being provided to clients.

As per Laroche et al. (2004), the overall perceived quality construct is formed by the aggregated
sum of differences of the dimensions mentioned above between customer expectations and
customer perceptions. Zeithaml et al. (2006) assert that “service quality is a focused evaluation
that reflects the customer’s perception of reliability, assurance, responsiveness, empathy, and
tangibles.” It was also added that the most essential dimension in several sectors has been
observed to be reliability.

Nevertheless, Laroche et al. (2004) claim that there is a need to add more elements to the
expectations of the service in relation to the functional and technical dimensions since clients
assess services as per their functional dimensions, that is when, who and how they are delivered,
and the technical dimensions, that is, what has to be delivered.

However, the SERVPERF model was created by Cronin and Taylor (1992) as they thought that
the SERVQUAL model has some drawbacks. They claimed that the latter model could result in
confusions. Hence, expectations was replaced by performance in their study and implied that
greater perceived performance could result in higher service quality. Nevertheless, since
consumer behaviour keeps evolving and changing, it has not been made clear which of the two
tools is most appropriate to assess service quality (Jain et al., 2004).

Moreover, Laroche et al. (2004:32) attempted to investigate the post encounter expectations of
customer via a research to determine “the existence of hypothesized functional and technical
dimensions of should and will expectations and determined the casual relationships between two
types of expectations and hypothesized dimensions.” This study was carried out in the airline
industry and the functional and technical dimensions of service quality were used to assess
service quality. They noted that the SERVQUAL model is the most relevant for some sectors
while it could be irrelevant for others. Since, most researchers claim that the SERVQUAL
dimensions are most appropriate, this study will employ this tool to measure service quality.

2.4 CUSTOMER SATISFACTION BASED ON THE FIVE ATTRIBUTES OF

SERVQUAL

As stated earlier, the five SERVQUAL dimensions impact significantly on customer satisfaction
as per Cronin et al. (2000). The researchers also concluded that the reliability dimension is a
main key that attract and satisfied customers in the public sector. The researchers also claimed
that customers only consider the other SERVQUAL dimensions if they firm has been able to
fulfil the reliability dimension at first.

Given that competition is increasing at a rapid pace, it is important to provide quality services to
clients. Balachandran (2005) purports that customer satisfaction may be negatively or positively
impacted by the degree of service quality. Hence, the MCB has to be able to meet customer
expectations and provide services at a good standard to as to enhance organisational
performance, customer satisfaction and the attractiveness of the firm.

It is a necessity to maintain high service quality levels and in order to achieve customer
satisfaction, companies have to provide considerable attention to their degree of service quality
as per Al-Hawari and Ward (2006). Hence, the MCB has to place emphasis on the attention and
resources required to ensure that the service quality exceed customer expectations. It takes a lot
of effort to develop customer loyalty and the service quality has to be excellent. Wolfinbarger
and Gilly (2003) found that customer loyalty and customer satisfaction are positively impacted
by service quality. This claim has been supported by Al-Hawari and Ward (2006) who discovered
same during the course of their study. They claimed that when customer satisfaction is achieved,
the organisation’s performance also improves.

Chang and San (2005) also discovered that a positive relationship exists between customer
retention, customer loyalty, customer satisfaction, profitability and service quality. They also
found that all firms have to focus on the five dimensions so as to obtain customer dimensions
and they are all equally important. Furthermore, Vimi and Mohd (2008) also claimed to have
found a positive relationship between the SERVQUAL dimensions and customer satisfaction and
added that organisational performance can improve when the firm’s performance on the 5
dimensions improve. Hence, it is important that the MCB ensures it is meeting expectations of
customers on the 5 dimensions in order to achieve satisfaction. In case a gap exists between
customer perceptions and expectations, the MCB has to bridge it to attract more clients and
retain the existing ones (Gilbert & Wong, 2002).