1.0 Background to the study.

This research work takes a look at service quality and customers

satisfaction in banking industries. In Ghana, the Standard Charted
Bank and Barclays Bank were the first banks to be established in the
country.

These banks were controlled by the foreigners in those days. Dr.

Kwame Nkrumah found it necessary that Ghana must have its own
indigenous bank which could take care of financial requirements and
transaction of the people. Since he thought a day would come that the
owners of these private banks may decide to leave and take along also
expertise.

In line with this, the Ghana Commercial Bank was established on 23

May 1983. It was sited at High Street in Accra. It was out the Ghana
Commercial Bank that the Central Bank of Ghana was also
established to take care of the printing and issuing of currency to the
Ghana Commercial Bank.

Apart from the Ghana Commercial Bank, there exist several other
banks in and other non – banking institutions most of which perform
commercial banking activities. There is very keen competition in the
banking industry.

To be able to survive the prevailing intense competition in the

banking industry, what most of the bank attempt to do is to create
convenient banking activities for their customers. Such activities
include the Automated Teller Machine (ATM), Ready Cash Service,
Money Transfers, Computer Banking, Banking Via Mobile Phone,
etc. Though these services are virtually duplicated by other banks,
what is the focus now is the quality of the service which is provided.

For this reason, most banks are now paying more to actual and
potential customers in order to sustain their business in an
environment of competition.

Though it seems that the above is a means of remaining competitive,

not all the banks emphasizes on customer satisfaction and again it is
only a few banks that have taken the trouble to develop their
Marketing Strategy with regards to how their services should be
provided to satisfy customers. The performance of the Commercial
Bank in this direction has been very credible.

1.1 Statement of the Problem

An examination of the structures in place by the Commercial Bank

appears to suggest a system of effective’s service delivery. However,
inspite of the bank performance, which is substantially credible, it is
yet beset with some problems. Some of the major problems are stated
below:

Absence of well – train and professionally qualified banking staff

Offensive and poor attitude and behavior on the banks staff in their
dealings with actual and potential customers

Inadequate facilities and equipment required to provide modern

banking services

Absence of frequent training programs for the staff to shape up their

attitude towards customers.
Unduly long processes in responding to customer’s needs.

Excessive competition from banks which perform commercial

banking services.

1.2 Research Objectives

Given the problems as stated above, the research work was

undertaken specifically to:

ª Evaluate the level of service quality and customer satisfaction at the

Ghana Commercial Bank and recommend ways of improving service
quality to management

ª Examine how the Ghana Commercial Bank goes about the

marketing of the bank services

ª Determine how customers service influence customers retention

rates

ª Evaluate the quality of staff at the bank in terms their training and
academic background.

ª Explore the staff attitude towards customers of the bank

1.3 Research Questions

With respect to the objectives set out above, the research work seeks
to address the following research questions:

Will the patronage of Commercial Bank services increase if there is

an improvement in level of customer’s services?
Will customer’s retention rates improve if the duration required for a
bank transaction is curtailed?

What will be the response of customers to improved quality of the

customers’ service?

1.4 Research Hypothesis

The hypotheses that follow were generally drawn from the research
questions above. They have been out to test in line with the research
objectives. The relevant research hypotheses are the following:

¨ The better the services, the higher the rate of customer retention for
Commercial Bank as the law demand stated.

¨ There is no significant relationship between the duration of the bank

transactions and the rate of customer retention.

1.5 Significance of the Study

The research work when completed, will give me an insight into a

practical situation. However, it will also indicate how to combat the
marketing problems the banks with regards to the level of customer’s
satisfaction. In addition, it will serve as a source of reference fo
similar research in future.

Finally, it is also intend to facilitate the effort of policy makers to

come out with policies that will embody effective customer
satisfaction strategies.

1.6 Scope of the Study

This project work will cover Ghana Commercial Bank and its
customers and non-customers within the Sekondi Takoradi
Metropolitan Assembly (S. T. M. A.) in Ghana.it will focus on
services quality and customers satisfactions.

1.7 Limitation of the Study

In carrying out the research work, the researcher encountered the

following problems:

The first problem was lack of funds for travelling, printing,

interviewing, and the source of data.

Again, some Management staff were reluctant to release information

that would have facilitated the researcher effort.

1.8 Organization of Study

The research work consist of five chapters, these are chapter one,
containing the background of the study, statement of the problem,
research objectives, research questions, research hypothesis,
significance of the study, scope of the study, limitation of the study
and the organization of the study.

Chapter two examines relevant related literature. The research

methodology is the focus of chapter three.

Chapter four consists of data presentation and analysis and the final
chapter which is chapter five, discusses the summary of the findings,
conclusions, and recommendation.

CHAPTER TWO
LITERATURE REVIEW

2.1 Introduction

This chapter presents a review of literature, which related to the

research work as documented by authorities’ on services quality and
customer satisfaction.

It will cover the definitions of service, characteristics of service,

classification of services, the scope of services, service quality, the
need for service quality, benefits of services quality and definitions of
customer satisfaction. It will also take into a look at major themes in
the financial services sector.

2.1 Definitions of Service

According to Phillip Kotler et al (1999), service is any activity or

benefit that one party can offer t another that is essentially intangible
and may not result in the ownership of anything.

Cannon (1998), viewed services as those separately identified,

essentially intangible activities which provide want satisfaction and
which are not necessarily tied to the sales of a product or another
service.

In the option of Etzel, Walker, and Stanton (1997), service are the
identifiable, intangible activities that are the main object of a
transaction designed to provide want satisfaction to customers.

Jobber (2001), viewed a service as any deed, performance or effort

carried out for the customer.
According to Palmer (2000), services are products which are
essentially intangible and cannot be owned.

McCarthy and Perreault (1993), defined service as a deed performed

by one party for another.

From the definitions as presented by the various authorities, it is clear

that they all emphasis that service is essentially intangible. This
means that a service cannot be seen physical but the customer
experiences it.

The idea of service therefore is focused on the intangibility element

and which essentially provides want satisfaction to the customer.

2.2 Characteristics of Service

Kotler et al (1999), stated that a service has four major characteristics

that greatly affect the design of marketing programs for it. These
characteristics are as following:

Intangibility: A service is intangible and cannot be seen, tasted,

felt, heard or smelled before it is bought. For example, a person
receiving a haircut cannot see the result before purchase.

Inseparability: Services are produced and consumed at the same

time. For instance, as it is in car hiring. The person rendering the
service becomes part of the service as how he does it affect the quality
of the service.

Heterogeneity of Variability: Services are highly variable

as they depend on who provides them and when and where they are
provided. For examples, although branches of a particular bank may
be selling and delivering the same service, the quality may not be
uniform or homogenous from branch to branch

Perishability or Fluctuating Demand: Services are

highly perishable since they cannot be stored. For example, hours
when cashiers are idle at the bank cannot be used to expand service on
a busy day when long queues are formed.

2.3 Classification of Service

In the option of Churchill and Peter (1995), service can be classified

in several ways. These include the way the service is delivered, the
type of organization providing the service and the type of customers
they target.

Means of Delivering the Service: this may be equipment

based. In other words, services may be delivered primarily by
equipment, as in the case of movies theatres and airlines or they may
be delivered primarily by people, as in the case of janitorial service
and accounting.

The means of delivery influence where quality is most at stake in the

product mix. For equipment based service, Marketers must be
concerned that the equipment is of good enough quality to meet
customers need.

They must ensure that the employees who keep the equipment
operating or come into contact with users are skilled and interested in
meeting customer needs. Thus, the quality of computer programming
service depends on both the user and the programmers themselves.
Type of Providers: This is another way of classifying service
and it is in term of the kind of organization providing them. Service
providers may include businesses, government and non-government
or not-for-profit making organizations. Business organizations offer
goods and services in order to earn a profit.

Government organization also provides service; include mass

transport, state lotteries and the military.

The not-for-profit making organizations also use marketing to help

them identify needs and target services build support for causes and
solicit contributions.

The Purchase Decision for Service: This describe the

way in which consumers and organization buyers arrive at their
purchasing decision.

2.4 Scope of Service

The wide range of services marketed by profit –making firms is

reflected in the following classification by industry:

v Housing Rentals of hotels, motels, apartment house and farms

v Household operations like utilities, house repairs, repairs of

equipment in the house, land scalping and household cleaning.

v Recreation and entertainment such as theatres, spectator sports,

amusement parks, rental and repairs of equipment used to participate
in recreation and entertainment activities.

v Personal care such as laundry, dry cleaning, beauty care

v Medical and other health care including all medical services, dental
nursing, hospitalization, optometry, and other health care

v Private education like vocational school, nursery schools and some

continuing education programs.

v Business and other professional services such as legal, accountancy,

and management consulting.

v Insurance, banking and other financial services such as personal and

business insurance, credit and loan services and investment

v Transport including flight and passenger services

v Communication as in telephone and computer and copying services.

2.5 Service Quality

Johansson (1997), spelt out that the intangibility of service is typically

assumed to make consumers evaluations of quality more difficult than
for tangible products. This views based on the natural hesitation of
people to evaluate things they cannot touch. The intangibility of
services make them much more subjective product. Quality is a matter
of how we feel and of our particular taste. This dependence on
subjective feelings means that what is perceived as high quality
service may differ between individuals.

2.6 The Need for Service Quality

Ennew, Watkins and Wright (1993), mentions that the need for service
quality is driven by customers, employees and a changing business
environment. Customers, be the individuals, households or
organizations are increasingly aware of alternatives of the financial
services on offer, provider organizations and also of rising standard
for service. Consequently, expectations rise and consumers become
more critical of quality of service received and so companies can be
complacent.

Furthermore, knowledge of the cost and benefits of keeping existing

customers relative to attracting new ones draws companies’ attentions
to looking after present customers, responding to their needs and
problem developing long-term relationships.

2.7 Benefits of services Quality

Without the focus on service quality, financial service organizations

may face complaints from customers. Further, a proportion of
dissatisfied customers will complain and tell a number of others,
generally it is stated that, if a financial company gives a service to one
customer, it gain three, and loses nine when give poor service to one
customer, hence it is better to gains three than looing nine, generating
adverse word of monthly publicity and some may switch to
companies. However, with focus on service quality, an organization
can expect a number of benefits.

Customer loyalty through satisfaction increased business and this may

lead to attract new customers; hence customer retention is more cost
effective than trying to attract new customers.

Customer satisfaction lead to increase in opportunities for cross-

selling, comprehensive and up to date service knowledge and sales
techniques among employee, combined with developing relationships.
Good service quality enhance corporate image and may provide
insulation from price competition.

2.8 Definitions of Customer Satisfaction

Customer Satisfaction is to degree at which the product or services

rich the standard of the buyer in his or her expectations. It deals with
what people called as surprise quotient. This is to extend at which
firms give out unexpected technical characteristics or personal service
to a customer.

The above definition talks about the degree at which a firms

performance or it goods and services rich the standard expectation of
the customer requirements.

2.9 Themes in the Financial Services Sector

The fact that a service is intangible means that people who supply the
service, the process by which it is supplied and the associated
physical evidence will be the key factors in creating satisfaction. The
heterogeneity features of a services required that considerable
emphasis is attach to the service providers and the process to ensure
customer satisfaction

2.10 Understanding the Service Environment

The economic competitive, regulatory, social and technological

elements generally affect the marketing of goods and services.
However, there are a few special considerations that apply only to
service as the following section points out:
Economic Element: as national and global economies grow
more complex the demand for services continues to increase. For
examples, a manufacturing firm that wants to expand its market by
selling in other countries may need the services of international
freight handlers, export consultants, translators and government
lobbyists.

Competitive Element: Service providers can find themselves

competing with companies that are outside the service sector. A
common source of competition is from goods. Movies theatres
compete with VCRs for consumer’s entertainments budget.

Regulatory Element: Internationals marketers have to observe

laws in each of the countries in which they operate. Services
providers are particularly affected by regulation because governments
regulate many services to ensure consistency and reliability. The
regulation can be as simple as licensing services providers or as
invasive as controlling prices and professional practices throughout an
entire industry e.g. insurances.

Social Element: Social forces can play a big role in service

marketing. To start with the public’s acceptance, skepticism or
rejection of a profession affects demand.

Technological Element: Companies that provides these

services have responded to changes in their technological
environment. Advancement in science and technology create many
opportunities to improve services quality and productivity.

CHAPTER THREE
METHODOLOGY

3.0 Population

The research deals with management, staff and customers of the

Ghana Commercial Bank in Takoradi.

3.1 Sample and Sampling Procedures

Out of the target population five management, five staffs, other five
members of the staff and forty customers and non-customers were
chosen to constitute the sample for the research work.

The simple random sampling techniques were used by the researcher

in selecting the sample from the target population. This method of
sampling were used because it provided all the management staff
supporting staff and customers, as defined population element, an
equal chance of being selected as study subjects

3.2 Research Instruments

For the purpose or the merits of this research work questionnaire and
interviews were used. A questionnaire is a list of highly structured
questions written and handed over or mailed to respondents to provide
relevant answers or solution to the questions. An interview is
structured or unstructured way of obtaining information on a focused
content.

The two types of questionnaire were used by the researcher. These are
the open-ended and close ended type of questions.

Open-ended and close-ended type questions

Open-ended questions do not limit the respondents to select answers
from a range of alternative’s or simple answer categories for each
question but to represent their own subjective news about issues
freely. This allowed respondents to provide answer to own way or
opinions freely.

Closed-ended questions provide a way of alternatives or simple

answer categories for respondents to make a choice from. This
provide an easy basis to analysis responses from respondents.

3.3 Procedure for Data Collection

A combination of both primary and secondary methods of collecting

data was used.

Primary or original data was collected by the researcher from the field
personally for the purpose of the research work. It was carried out
mainly through the use of questionnaire and interviews to obtain
original data for the purpose of answering the research questions or
problems.

Secondary data was used to ensure completeness of the research

work. It involved the consultation and use of articles from the Daily
newspapers, management’s reports and from the internet.

The secondary data was to supplement the information and

explanations which the source could not provide for the research
work.

3.4 Methods of Data Analysis

For the purpose of analysis data as a way of comparing, contrasting
and describing such data, descriptive statistics was used.

The data collect was enhanced pictorially in their presentation with

the aid of tables, chart and graphs.

CHAPTER FOUR

DATA PRESENTATION AND RESULT ANALYSIS

4.0 Introduction

This chapter shows the presentations and analysis of data collect from
questionnaire administered to get sample opinions of management
staff, staffs who work in the company. Customers who patronize the
service of the company and non-customers who are potential
customers.

Fifty (50) questionnaires went out. Twenty (20) questionnaires went

to customers, another twenty (20) went to non-customers and ten (10)
questionnaires went to both management staff and staff respectively
all in the Sekondi Takoradi Metropolitan Assembly (S.T. M. A.)

The analysis and presentation of data collected is a true reflection of

management staff, staff, customers and non-customers. The analysis is
been presented in form of charts tables and graphs.

Table 1: Summary of questionnaire administered

and collected.

Group Number Number Percentage

 Issued Collected (%)

Management
Staf 5 5 100

Staf 5 5 100

Customers 20 10 50

Non-
customers 20 10 50

Total 50 30 60

The above table indicate the number of questionnaire administered

and retrieved from management staff, staff, customers and non-
customers.

Out of the fifty (50)questionnaires issued sixty percent (60%) were

collected back.

Figure I the statistical analysis of questionnaire

administered and collected.

This figure shows the statistical graphs chart of the questionnaire

design for the research work.

4.1 Profile of Respondents

Table 2: Sex and Age Distribution of respondents

Ages
(Years) Sex

Mal Fema
e le

18 - 28 8 4

28 - 38 6 3

38 - 48 4 2

48 - 58 2 1

58+ - -

Total 20 20

Source: Field Survey

Table two (2) shows the number of males and females who were
service questionnaire in various age groups.

Out of the thirty (30) questionnaires return to us twenty (20)

respondents constituting sixty – six point seven percent (66.7%) were
males and ten (10) respondents representing. Thirty-three point three
percent (33.3%) were female from the various age groups.

In conclusion more than female responded to the questions.

4.2 Presentation and Analysis of Respondents

Response

A summary of some of the questionnaire that were

given to management staff.

How relevant is customer service to your bank?

Table 3:

Number of Percentage
Response Respondent (%)

Relevant - -

Very
Relevant 5 100

Fairly
Relevant - -

Total 5 100

Figure II
From the table and graph charts above point out that five (5)
respondent representing hundred percent (100%) of management staff
said customer service is very relevant to the bank.

This conclude that management see that importance of customer

service in the institution.

Does management see good customer service as

a way of relating customers?

Table 4.

Respo Number of Percentage

nse Respondent (%)

Yes 5 100

No - -

Total 5 100

The above illustration from the shows that five (5) respondent
constituting hundred percent (100%) of management indicate that
some measures are there to improve quality of service and customer
satisfaction.

This implies that the banks must improve upon the quality of their
services to satisfied its customers, as shown in the graph chart Figure
III below.
Figure III

A summary of some of the questionnaire that were

given to staff.

Do you see service quality as a way of attracting

customers?

Respo Number of Percentage

nse Respondent (%)

Yes 5 100

No - -

Total 5 100

FIGURE IV

The table and the figure shows that five (5) respondent constituting
hundred percent (100%) of staff said service quality is a way of
attracting customers.

How often do you come into contact with

customer?

Table 7.

Response Number of Percentage

 Respondent (%)

Once a Week

Twice a Week 2 40

Throughout the
Week 3 60

Total 5 100

From the table two (2) respondent constituting forty percent (40%)
come into contact with customers twice a week and three (3)
respondent representing sixty percent (60%) come into with
customers throughout the week.

This indicates that the staff in the bank often sees the customers
frequently. This information can presented in a simple bar chart below
in Figure V

Figure V: Simple Bar Chart Showing How Staf

Come into Contact with Customers.

Do you encounter some difficulties when dealing

with customers?

Table 8

Respo Number of Percentage

nse Respondent (%)

Yes 5 100

No

Total 5 100

The above table point out that five (5) respondent representing
hundred percent (100%) of staff said they have problems when
transacting business with the customers. This implies that dealing
with customers involves some difficulties.

A summary of some of the questionnaire that were

given to customers.

Are you satisfied with the level of services

provided by the bank?

Table 9

Respo Number of Percentage

nse Respondent (%)

Yes 3 30

No 7 70
Total 10 100

It can be observed from the table above that out of ten (10)
respondents representing hundred percent (100%), three (3)
respondent constituting thirty percent (30%) said they are satisfied
with the level of service provided by the bank, seven (7) respondents
representing seventy percent (70%) said they are not satisfied with the
level of service provided by Ghana Commercial Bank.

This indicates that more of customers are not satisfied with the service
of the bank. The reason has been that they spend a lot of time in
saving and withdrawing money from the bank.

This information can be presented in a form of simple bar chart.

Figure VI: Simple Bar Chart Representing

Consumer Perception about the Service of Ghana
Commercial Bank.

Do you have plans of shifting your customer ship

to another bank, because of your think their
service are not to your expectation?

Respo Number of Percentage

nse Respondent (%)

Yes 7 70

No 3 30
Total 10 100

With reference to the above table there is evidence that seven (7)
respondents constituting seventy (70%) have in mind to shift their
customership to another bank. The three (3) respondents constituting
thirty percent (30%) still want to be with the bank.

In conclusion more people will like to shift their customership to

another bank because they think the service deliver by the bank are
not to their expectation.

This information can be presented in a simple bar chart.

Figure VII. Simple bar chart indicating how

customers plans of shifting their customership to
another bank.

How long have you saved with the bank?

Table 11

From the table above it is realize that, out of the total of ten
respondents, who answered the questionnaire five (5) respondents
constituting fifty percent (50%) have saved there, between the periods
of 0 – 2 years. The next two (2) respondents constituting twenty
percent (20%) have saved there between the periods of two to four
years.
It implies that only seven of the respondents of the ten have saved
with the bank between the periods of zero to four years. This indicates
that most of respondents are not satisfied with the service at the bank
and will like to shift to another bank within the subsequent years.

Figure VIII Simple Bar Chart Indications

A summary of questionnaire that were given to non –

customers.

How would you compare Ghana Commercial Bank

with other Banks in terms of competence?

Table 13

It can be seen from the table above that out of the ten (10)
respondents representing hundred percent, two (2) representing
twenty percent (20%) connected to very good, two (2) respondents
representing twenty percent (20%) connected to with Good. Five (5)
respondents representing fifty percent (50%) connected competence
with Average, one (1) respondent representing ten percent (10%)
connected competence with poor.

This indicates that more people connected competence of Ghana

Commercial Bank with Average. This information can be presented in
a form of a pie chart.

Figure VIIX. Pie chart showing potential

customers perception about the competence of
Ghana Commercial Bank.
Do you think the services of the bank are good
enough for you to save?

Table 13

Respo Number of Percentage

nse Respondent (%)

Yes 4 40

No 6 60

Total 10 100

It can be observed from the table that out of ten respondent

representing hundred percent (100%), four (4) respondents
representing forty percent (40%) said they may like to save with the
bank. Six (6) respondents representing sixty percent (60%) said they
may not like to save with the bank.

This implies that more people do not want to transact business with
the bank.

This information can be presented in a form of simple bar chart.

Figure 6. Simple Bar Chart showing customers

perception if they will like to save with the bank

CHAPTER FIVE
SUMMARY, CONCLUSIONS, AND
RECOMMENDATIONS

5.0 Introduction

This chapter presents summary of the research work. Its covers the
major findings, conclusions arrived at and the recommendations
made.

5.1 Summary

The research work was a descriptive study, which examined service

quality and customer satisfaction in banking industries.

Essentially, its purpose were to evaluate the level of service quality

and customer satisfaction at the Ghana Commercial Bank and
recommend ways to improving service quality to management,
determine how customers service influence customer retention rates,
explore staff attitude towards customers of the bank, examine how the
commercial bank goes about the marketing of bank services and
evaluate the quality of staff at the bank in terms of training and
academic background.

The subjects of the study were fifty with regard to the sample simple
random sampling was used to ensure that the respondents selected for
the research work constitute the various elements of the study
population.

Some of the respondents were interview whiles others were required

to answer both open-ended and close- ended questions which related
to the research topic, objective and hypotheses.
Descriptive statistics such as percentages, and proportions were used
to analysis the data gathered.

5.2 Findings

The major findings are summarized below:

ª More males than females to the questionnaire and generally most of

the respondents were in their youthful age.

ª It was realized that the bank has a poor image in the eyes of the
public

ª Respondents in their response were negative with respect to the level

of satisfaction they derive from the service provided by the Ghana
Commercial Bank

ª Another observation made from the study indicates that most of the
customers are likely to shift their customer ship to another banks.

ª It was also discovered that customers spend a lot of time in saving

and withdrawing money from the bank.

ª It was realized from the research that service quality and customer
satisfaction is the prime objective of the bank but how to approach it
was a problem

ª It was also found that there is high illiteracy rate among the
customers of the bank.

5.3 Conclusions
The finding from the study led the researcher to conclude that there
was a relationship between the quality of service provision and the
rate of customer retention. This position was established through the
respondents’ response that they will shift their customer ship to other
bank if the services of the bank were not improved.

The second hypotheses were also confirmed. Respondents’ responses

revealed that there was no relationship between the duration going
through a bank transaction and the rate of customer retention. This
was realized from the respondent’s response that customers spend a
lot of time when transacting business with the bank.

5.4 Recommendation

Based on the results from the study and conclusions drawn from it,
the following recommendations are spelt out:

The researcher recommends that the Ghana Commercials Bank

redesigns its programs to enhance the quality of service delivery.

Due to the generally poor image the bank has, it needs to embark on
an intensive awareness programs such as event sponsorship, which is
also a good public relations tool. Through this the bank will become
more involved with the public.

The bank has to shorten its procedures with regards to transactions so

that the time for going through bank one off transaction will be
reduced.

The bank should also educate its customers about some of the
ideologies of the bank to enable them understand certain principles.
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