i

FACTORS AFFECTING CUSTOMERS’

SATISFACTION IN EXPRESS COURIER
SERVICE COMPANIES

(THE CASE OF EXPRESS ETHIOPIA)

(A Thesis Submitted to the school of Graduate Studies of Addis Ababa

University in Partial Fulfillment of the Requirements for the Award of
Degree of Masters of Arts in Marketing Management)

By: Tsigereda Tsehaye

Advisor: Girma Tegene (Asst. Professor)

Addis Ababa
JUNE, 2015

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 FACTORS AFFECTING
CUSTOMERS’ SATISFACTION IN
EXPRESS COURIER SERVICE
COMPANIES

ii
 Declaration

I declare that the research entitled with “Factors Affecting Customers’

Satisfaction in Express Courier Service Companies (The Case of DHL
Express Ethiopia) is my original work and has not been presented in Addis
Ababa University or any other University, and that all sources of material used
for the research have been duly acknowledged.

Tsigereda Tsehaye Signature _______________

(The Researcher) Date: ___________________

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 Letter of Certification

This is to certify that Tsigereda Tsehaye Asgedom has carried out her
thesis on the topic entitled ““Factors Affecting Customers’ Satisfaction in
Express Courier Service Companies (The Case of DHL Express Ethiopia)”. This

work is original in nature and is suitable for submission for the award of
Masters of Marketing Management.

Girma Tegene (Asst. Professor)

(Thesis Advisor)

ii
Factors Affecting Customers’ Satisfaction in
Express Courier Service Companies

(The Case of Express Ethiopia)

By: Tsigereda Tsheaye

Approved by Examiners

_________________________

External Examiner Name Signature

__________________________

Internal Examiner Name Signature

iii
 TABLE OF CONTENT

DECLARATION ....................................................................................................................... i

TABLE OF CONTENT .......................................................................................................... ii

ACKNOWLEDGMENTS .......................................................................................................v

ACRONYMS ............................................................................................................................ vi

LIST OF TABLES ................................................................................................................. vii

LIST OF FIGURE................................................................................................................. viii

LIST OF APPENDICES ........................................................................................................ ix

ABSTRACT .................................................................................................................................x

CHAPTER ONE...................................................................................................................1
1. INTRODUCTION..............................................................................................................1

1.1 Background of the study................................................................................. 1

1.2 Statement of the problem................................................................................ 4

1.3 Research Questions ........................................................................................ 5

1.4 Objectives ....................................................................................................... 6

1.4.1 Specific objectives ...................................................................................... 6

1.4.2 Hypothesis of the study............................................................................... 6
1.5 Definition of Terms ........................................................................................ 7

1.5.1 Operational Definition ................................................................................ 7

1.6 Significance of the study ................................................................................ 8

1.7 Scope of the Study .......................................................................................... 8

1.8 Organization of the study ............................................................................... 9

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CHAPTER TWO ...............................................................................................................10
2. REVIEW OF RELATED LITERATURES ..................................................... 10

2.1 Theoretical Review ............................................................................................. 10

2.2.1What is service? ............................................................................................... 10

2.2.2 Nature and characteristics of a service ............................................................ 11

2.2.3 Service Dimensions ......................................................................................... 13

2.2.4 Evaluation and Measurement of Services ....................................................... 14

2.5 What is Express Services? ............................................................................ 15

2.5.1 DHL Express............................................................................................. 16

2.6 Empirical Review .................................................................................................... 18

2.6.1 Customer satisfaction ............................................................................................. 18

2.6.2 Outcomes of the customer satisfaction .................................................................. 19

2.6.3 Factors affecting Customer Satisfaction ................................................................ 19

2.9 Conceptual Frame Work........................................................................................ 24

CHAPTER THREE ..........................................................................................................27

3. RESEARCH METHODOLOGY ......................................................................... 27

3.1. Research Design ................................................................................................ 27

3.2. Study design and conceptual framework ...................................................... 27

3.3. Source/Target Population ............................................................................. 27

3.4. Sample size determination ............................................................................ 28

3.5. Sampling Method ......................................................................................... 28

3.6. Method of Data Collection and quality control Process ............................... 30

3.7. Method of Data Analysis and Presentation of Results ................................. 30

3.8. Ethical Issue.................................................................................................. 31

3.9. Reliability and Validity Analysis ................................................................. 31

3.10. Measurement of Reliability .......................................................................... 32

3.11. Normality test ............................................................................................... 33

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CHAPTER FOUR ....................................................................................................................... 34
4.ANALYSES OF THE DATA AND INTERPRETATION……………………………...34

4.1. Descriptive Analysis ......................................................................................... 34

4.2. The Magnitude of Customer Satisfaction ..................................................... 38

4.2.1. Operational Performance .......................................................................... 40

4.2.2. Relational Performance............................................................................. 42
4.2.3. Organization Image................................................................................... 43
4.2.4. Cost Performance ...................................................................................... 44
4.3. Factor Analysis ............................................................................................. 45

4.3.1. Exploratory Factor Analysis ..................................................................... 45

4.3.2. Principal Component Analysis- Operational Performance Attributes ...... 46
4.4. Correlation Analysis ..................................................................................... 52

4.5. Regression Analysis ..................................................................................... 52

4.6. Hypothesis Testing ....................................................................................... 56

4.7 Independent T-Test ...................................................................................... 58

CHAPTER FIVE ...............................................................................................................60

5. SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS .............60

5.1 SUMMARY OF FINDINGS ............................................................................ 60

5.2. Conclusion .................................................................................................... 61

5.3. Limitation of the study ................................................................................. 62

5.4. Further area of research ................................................................................ 63

5.5. Recommendation .......................................................................................... 63

REFERENCE ...........................................................................................................................66

APPENDICES ..........................................................................................................................70

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 ACKNOWLEDGMENTS

It is with great pleasure and deepest gratitude I praise the Almighty Lord for his
grace, courage and support in every aspect of my life. I wish to express my
sincere gratitude to my thesis advisor, Girma Tegene (Asst. Professor) for his
guidance.

My truthful appreciation goes to my mom the strongest women in my life who

had been there encouraging and assisting me in every steep.

A special appreciation to all those who have taken part in this survey for
answering the questions for the study, as without them the required information
would never been attained.

My heartfelt gratitude goes to Dr.Tewodros Mesfin, Dawit Abebe, Tamerat

Abeje, Bessie Terefe, and Gemechis Teferi for investing their valuable time in
assisting me as well as providing crucial information, relevant documents and
References.

I would also like to thank the management and staff of DHL for all the help they
have maid.

Finally, I would like to acknowledge my special friends, my brothers and my

sister for being there for me in the whole process of my study. May God Bless
you all!

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 ACRONYMS

CP:- Cost Performance

CS:- Customer satisfaction
DHL :- Dalsey, Hillblom and Lynn
OI:- Organization Image
OP:- Operational performance
RP:- Relational Performance

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 LIST OF TABLES
TABLE 3.2 OVERALL RELIABILITY TEST ............................................................. 31
TABLE 3.3 RELIABILITY STATISTICS .................................................................... 32
TABLE 3.4 NORMALITY TEST .................................................................................. 33
TABLE 4.1 PROFILE OF INDIVIDUAL CUSTOMER RESPONDENTS ................. 35
TABLE 4.2 SERVICE POINTES USAGE RATE ......................................................... 36
TABLE 4.3 THE IMPORTANCE OF USING EXPRESS SERVICE ........................... 36
TABLE 4.4 WHAT DO CUSTOMERS SEND USING EXPRESS SERVICE?........... 37
TABLE 4.5 IMPORTANT FEATURE IN USING EXPRESS SERVICE .................... 38
TABLE 4.6 INTENDED TO SUGGEST FRIENDS/FAMILIES TO USE THE
EXPRESS PROVIDER ............................................................................................ 38
TABLE 4.7 INTENTION TO CONTINUE DOING BUSINESS WITH THE EXPRESS
PROVIDER .............................................................................................................. 39
TABLE 4.8 SATISFACTION WITH THE OVERALL SERVICE OF THE
ORGANIZATION ................................................................................................... 40
TABLE 4.8.1 DESCRIPTIVE STATISTICS ................................................................. 40
TABLE 4.9 CUSTOMERS SATISFACTION WITH OPERATIONAL FACTORS .... 41
TABLE 4.10 RELATIONAL PERFORMANCE....................................................... 42
TABLE 4.11 ORGANIZATIONAL IMAGE ................................................................. 43
TABLE 4.12 COST PERFORMANCE .......................................................................... 44
TABLE 4.14: FACTOR LOADINGS AND SCALE RELIABILITIES FOR
OPERATIONAL PERFORMANCE ....................................................................... 47
TABLE 4.15: FACTOR LOADINGS AND SCALE RELIABILITIES FOR
RELATIONAL PERFORMANCE, ORGANIZATION IMAGE AND COST
PERFORMANCE .................................................................................................... 48
TABLE 4.17 SERVICE DIMENSIONS AND CUSTOMERS SATISFACTION ........ 52
TABLE 4.18 ANOVA TABLE ..................................................................................... 54
TABLE 4.19 REGRESSIONS FOR CUSTOMER SATISFACTION ........................... 54
TABLE 4.21 INDEPENDENT SAMPLES TEST ......................................................... 58
TABLE 4.22 MEAN SATISFACTION LEVEL OF INDIVIDUAL AND
ORGANIZATIONAL CUSTOMERS ..................................................................... 59

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 LIST OF FIGURE
FIGURE 2.1 NATURE AND CHARACTERISTICS OF SERVICE ........................... 12

FIGURE2.2CONCEPTUALFRAMEWORK .............................................................. 26

viii
 LIST OF APPENDICES
APPENDIX 1: ENGLISH VERSION OF THE QUESTIONNAIRE............................70
APPENDIX 2: AMHARIC VERSION OF THE QUESTIONNAIRE...........................75
APPENDIX 3: FACTOR ANALYSIS OUTPUT…………….......................................81
APPENDIX 4: CORRELATION OUTPUT...................................................................88
APPENDIX 5: REGRESSION OUTPUT......................................................................89
APPENDIX 6: T-TEST OUTPUT..................................................................................91
APPENDIX 7: CROSS TABULATION OUTPUT........................................................93

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 Abstract
This research focused on factors that affect customer satisfaction determinants of
express service user’s specifically the case of DHL Ethiopia. Express firms are
playing a dominant role in many aspects. Despite the economic and social
benefit of the express service to Ethiopian economy and market, there is no much
research regarding the satisfaction of customers with the Express Services and
factors affecting customers’ satisfaction in this sector.Factors examined are
operational performance, relational performance, organization image and cost
performance. All responses were collected by using questionnaire through
probability and non-probability sampling (n=385). Data was analysed to obtain
descriptive statistics, comparing mean analysis (i.e. independent t-test) and other
analyses (i.e. correlation and regression analysis). According to the study
findings, two factors: organizational image and relational performance were
identified as critical factors that contribute to the overall satisfaction of DHL
Ethiopia customers .However, the influences of operational performance have no
major significant effect on over all customers satisfaction of DHL express
Ethiopia customers in Addis Ababa .The Finding of the study also shows that
there is a significance difference between organizational customers and
individual customers satisfaction level with regard to organization image and
relational performance . Therefore the management of the company would make
investments that enhance the image of the company in order to make customers
satisfied.

Keywords: customer satisfaction, express service, operational

performance, relational performance, cost performance, organization
image, service point

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 CHAPTER ONE

1. INTRODUCTION
The introduction chapter explains the purpose of this research. It introduces readers to
the study of factors that affect customer satisfaction towards DHL express Ethiopia, in
Addis Ababa. It consists of the background of the study, statement of the problem,
objectives of the study, research questions, research hypothesis, and significance of the
study, scope of the study, and limitation and delimitations of the study.

1.1 Background of the study

Customer’s satisfaction is one of the most important aspects of both public and private
sectors. In marketing, satisfaction of customer is one of the key factors to keep
customer. (Golchinfar, 2007).Generally speaking a satisfied customer is more likely to
come back again to obtain the product or service that is found and provided
satisfactorily.

In order to cope with the current competitive market situation, companies need to make
sure that they are meeting or exceeding the requirements and wishes of their customers.
When these requirements and wishes are met, customers are satisfied. This is why
customer satisfaction is one of the operational objectives for many companies. If a
company is not aware of the factors that contribute to the level of satisfaction, it is
difficult for it to improve in the areas that are most important to their customers
(Juvonen, 2010). Organizations are building to respond the needs of their environment.
One of the most important environmental factors is customer. If organizations can
satisfy customers and maintain or improve their satisfaction, they will be successful
accordingly. Therefore, developed organizations always look for assuring customers
satisfaction (Khodakhah, 2013).

Both public and private sectors have increasingly given significant higher attention to
the concept of customer’s satisfaction. Many of these institutions provide growing
attention towards examining the level of satisfaction of their customers on their product
and service.

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Customer’s satisfaction is a function of various factors that leaves positive, negative or
no impression to a client. This in turn contributes towards determining the likelihood of
coming back for the product and service. Customer satisfaction is the sources of long-
term relationship between a company and a customer. Thus, it is vital for a company
study customers satisfaction by focusing on determinants. (Hanif etal, 2010).

Given the vital role of customer satisfaction, it is not surprising that a variety of
research has been devoted to investigating the determinants of satisfaction (Churchill
and Surprenant, 1982; Oliver, 1980; Barsky, 1995; Zeithaml and Bitner, 2003).
Satisfaction can be determined by subjective (e. g. customer needs, and emotions) and
objective factors (e. g. product and service features).

With regard to the Express industry, different studies have been conducted to examine
attributes that users may find important regarding customer satisfaction. (Li 2006) used
availability of service, responsiveness of service, reliability of service, completeness of
service, and professionalism of service as measure variables. Likewise, (Merriden
1999) noted that the six service quality indicators of TNT Express (UK) services were
reliability, price, professionalism of staff, and range of service, tracking/POD/claims,
and Invoicing/credit. And (Al Karim 2014) summarized these factors as Operational
performance, relational performance, cost performance, and organization image
which this study considers as a conceptual model since it is the recent one in the
industry.

Studies show that customer satisfaction may have direct and indirect impact on business
results. Anderson et al. (1994), Yeung et al. (2002), and Luo and Homburg (2007)
concluded that customer satisfaction positively affects business profitability.

Among services that require the satisfaction of customers express service is one. It is
vital to satisfy customers in order to ensure profitability and maintain a higher standard
and acceptance. Express service refers to the delivery of document and product from
one entity (Sender) to another entity (Receiver) through an established legal express
service providing organization. The receiver pays for the service rendered by the
company according to a certain established price.

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Express delivery services differ from the ordinary mail delivery services provided by
the postal system, in terms of the values it adds such as (1) door-to-door service, (2)
convenient timings of pickups and deliveries, (3) guaranteed time-bound delivery, (4)
reliability of service, (5) safety and security of consignments, (6) track and trace
facilities for visibility of consignments during shipping, (7) proof of delivery, and (8)
24/7 call centre facilities for handling queries.

In Ethiopia, there are eight registered express service providers: Namely, DHL World
Wide Express Ethiopia Plc., H Mayler Plc. (UPS),Pan Africa Express PLC
(FedEx),Royal X Courier (Royal express), Flybridge Executive Service (ICCS), Intra
City Delivery Plc. (TNT),AL-Musiki International Express Plc. (Aramex),and Inter
Africa Logistics. These companies provide service for individuals and organizations
within locally and internationally.

DHL Ethiopia is selected for this study as it is the only International Company
registered and/or represented in Ethiopia (Ministry of Communication and Information
Technology) as opposed to the rest which are under Private Limited Companies
(Agents). It is considered indicated as Market leader in the Industry. (Fortune May 19,
2013 [Vol 13, No 681].Therefore this study will attempt to investigate the factors that
affect customer satisfaction in DHL express Ethiopia.

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 1.2 Statement of the problem
Previous studies indicate that there are many factors that affect customer satisfaction.
Such factors include friendly employees, courteous employees, knowledgeable
employees, helpful employees, accuracy of billing, billing timeliness, competitive
pricing, service quality, good value, billing clarity and quick service (Hokanson, 1995)
.In addition (Li et al., 2006) labeled service professionalism, reliability, and price as the
most important customer satisfaction factors on parcels delivery services, more over
(vijay m. kumbhar
2011) stated, perceived value, brand perception, cost effectiveness, easy to use,
convenience, problem handling, security/assurance and responsiveness are important
factors in customers satisfaction.

According to Hoyer and Maclnnis (2001), customers that are not satisfied may decide to
stop patronizing a business to purchase goods and services, they may complain to a
third party or the business organization and even return the goods, and they may also
give negative word of mouth. Satisfying customers is of great importance because it
helps in intention to repurchase and at the same time, the main reason why customers
stop to purchase is because they are not satisfied.

The importance of using customer feedback to listen to, and resolve negative feedback
is well established in customer service literature. For example, a customer service
survey of US consumers in banking, cable, retail and telecommunications industries
found that over 75% of consumers will tell friends and family about negative
experiences (The Customer Communicator [TCC] 2004). In addition, 85% of
dissatisfied customers will switch providers because of negative customer service
experiences (TCC). This finding is similar to Whiteley (1991), who stated survey
research indicates that 60% to 90% of unhappy but non-complaining customers would
switch companies. In contrast, companies which listen and resolve customer
complaints, receive 82% repeat business from such customers (Whiteley, 1991). He
believes the application of customer satisfaction survey data to listen and resolve
problems is important to most organizations.

4
These days, due to the globalization and Addis Ababa becoming the capital city of
Africa made a lot of organization to reside in Ethiopia. This in turn requires continues
interaction to various national and international organization. To this end, express
companies are of a paramount importance. This implies customers of Express Service
providing companies range from individuals to business organizations, multinational
companies, diplomatic entities and also governmental organizations. Then What these
customers are sending through these express service providing companies are highly
crucial in a way that they are; confidential, urgent or time sensitive, irreplaceable, high
value and so on. Despite the economic and social benefit of the express service to
Ethiopian economy and market, there is no much research regarding the satisfaction of
customers with the Express Services and factors affecting customers’ satisfaction in this
sector.

Preliminary observation of the industry revealed the existence of incidents causing

customers dissatisfaction which might be linked to higher prices, poor customer
handling, and inconvenient service facility. Meanwhile, it is observed that Customers
keep switching from one service provider to another due to the failure to meet
customer’s need. Due to these facts it’s essential to study factors affecting customers’
satisfaction in Express Service providing companies to identify their limitations, devise
a strategy to overcome identified problems thereby creating a favorable and satisfactory
environment for existing customers and attract additional customers to the portfolio.

1.3 Research Questions

In line with the stated problems the following research questions were raised and
answered.

The research questions are:-

 What are the factors that affect customer satisfaction?

 To what extents are customers of DHL Ethiopia satisfied by service rendered?
 What is the relationship among the different factors that affect customer
satisfaction?
 Which factor has the most influencing impact on the satisfaction of different
customer groups?

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 1.4 Objectives
The general objective of this study is to assess factors that affect customer satisfaction
regarding DHL express service in Addis Ababa.

1.4.1 Specific objectives

The specific objectives of the study are:

 To assess level of DHL customer satisfaction in Addis Ababa

 To determine major factor that influence customer satisfaction in DHL express
Ethiopia.
 To determine the relationship among factors that affect customer satisfaction.
 To examine the satisfaction level of individual and organizational average
satisfaction level in relation to the proposed model.

1.4.2 Hypothesis of the study

Four hypotheses are formulated based on the conceptual framework and they are shown
as follows:
H1 Operational performance has a significant relationship with customer satisfaction.
H2 Relational Performance has a significant relationship with customer satisfaction.
H3 Cost Performance has a significant relationship with customer satisfaction.
H4 Organization Image has a significant relationship with customer satisfaction.

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 1.5 Definition of Terms
1.5.1 Operational Definition

Customer satisfaction :- is an important factor in future tendency to make a purchase,

also sometimes satisfied customers talks probably enthusiastically about their positive
experience, or their buying, or use of a particular service with other people, this will
lead to positive advertising (Delafrooz, Taleghani, Taghineghad, Nademi, 2013).

Express courier service: - It is a basic industry in modern society, which will put
information, goods delivery, capital circulation and cultural transmission and other
functions together, associated with production, circulation, consumption, investment
and finance and other fields (Chunyan Yu, 2014).

Operational performance: - is referred to resource availability because it is a common

valuation area for service performance (Leenders et al., 2002).

Relational performance: - a capability of a company employee’s relationship with

his/her customers (Chen et al. 2004).

Cost performance: - the difference between the worth that customers expect to derive
from the company and value created in their transaction (Chen et al. 2008).

Organization image: - as an awareness of a company reflected in the consumer

remembrance (Keller 1993).

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 1.6 Significance of the study
This specific research is vital to identify factors affecting customer satisfaction of DHL
in Addis Ababa, measure the level of satisfaction of customers and forward workable
recommendation to enhance the service delivery of the organization and boost customer
satisfaction. It will also contribute to the existing knowledge in the area.

There are many studies conducted in the area of customer satisfaction in various service
sectors. Yet, it is hardly possible to find customer’s satisfaction research specifically on
express service providing organizations at large.
This study provides the following benefits:
 Findings shall be used as a stepping stone for improvement of express service.
 Provides comparative advantage to DHL over other express service providing
organizations by identifying specific needs of customers.
 The finding may also be considered as important addition to the existing
knowledge and literature.
 Use as an input for further organizational restructuring, strategic planning and
operation practices.

1.7 Scope of the Study

Currently, DHL Ethiopia has branch offices all over Ethiopia. In order to undertake a
complete evaluation and judgment on the level of satisfaction of customer requires a
wider investigation. However, due to finance, time and manageability, the researcher
limits this research in a manageable size. Therefore; the study is limited to discover the
current level of satisfaction of outgoing express service customers of DHL Ethiopia in
Adds Ababa focusing on its own service pointes and selected agent offices.

The variables that affect customer satisfaction are different and be categorised based on
the nature of the business which may have direct or indirect impact on customer
satisfaction. Considering this fact this research is restricted to customer satisfaction
variables that are tested by previous studies and modified to the industry which includes
Operational performance, Relational performance, cost performance, organization
image.

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 1.8 Organization of the study
The study is organized in to five major Chapters. The first chapter is an introductory
part which contains background of the study, research problem, research questions, and
objective of the study and significance of the study, Scope of the study, limitation of the
study and organization of the study.

The second chapter includes literature review comprising major theoretical discussions,
review of research on similar topic and all the materials conferred.

The third chapter describes the research methodology in details. Chapter four is
concerned with results and discussions. Finally, chapter five brings an end to this study
with summary of the research findings, conclusion and possible suggestion or
recommendations.
.

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 CHAPTER TWO
2. REVIEW OF RELATED LITERATURES
Chapter overview
This chapter provides an insight to readers about the theoretical view of the topics under
study. In line with objective of the study, the chapter covers topics related to customers’
satisfaction, factors found to be important in influencing customers’ satisfaction.
Factors discussed are operational performance, relational performance, and cost
performance and organization image. Furthermore, the conceptual framework of the
study is presented at the end of this chapter.

2.1 Theoretical Review

2.2.1What is service?
For (Kotler, 2000) a service is any act or performance that one party can offer to another
that is essentially intangible and does not result in the ownership of anything. Its
production may or may not be tied to a physical product.

There are many different definitions of services in literature. Definitions of services

focused on the difference between products and services but the purpose of both are
same, to satisfy human needs and wants as explained by (Raza, Siddiquei, Awan &
Bukhari, 2012, p. 789).

Gronross (1983) defines service as: “An activity or series of activities of more or less
intangibles nature that normally, but not necessarily, take place in interaction between
the customer and service employees and/or physical resources or goods and /or systems
of service provider, which are provided as solutions to customer’s problems”.

Businesses offer products for sale to customers but selling a combination of products
and services. Sometimes services constitute a big percent of total value of the product.
For instance, service is an activity or series of activities, take place in interactions
between the customer and the service employees or physical resources or goods or
systems of the service provider, which are provider as solutions to customer problems
(Gronroos, 1990, p.27).

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2.2.2 Nature and characteristics of a service

Service has four different kinds of characteristics: they are intangibility, inseparability,
variability and perishability. (See figure 1)

Intangibility
Service intangibility means that services cannot be seen, tasted, felt, heard or smelled
before they are bought. The service provider’s task is to make the service tangible in
one or more ways and to send the right signals about quality. One analyst calls this
“evidence Management” in which the service organization presents its customers with
organized, honest evidence of its capabilities (Kotler & Armstrong 2008). Intangibility:
the mother of all unique differences (Vochen Wirtz,Patricia Chew,Christopher
Lovelock,2012).

Inseparability
Service inseparability means that services cannot be separated from their providers,
whether the providers are people or machines. Because the customer is also present as
the service is produced, provider-customer interaction is a special feature of services
marketing; both the provider and the customer affect the service outcome (Kotler &
Armstrong 2008). This interaction between customer and service provider defines a
critical incident. Critical incidents represent the greatest opportunity for both gains and
losses in regard to customer satisfaction and retention (Vochen Wirtz etal, 2012).

Variability

Service variability means that the quality of services depends on who provides them as
well as when, where, and how they are provided (Kotler & Armstrong 2008).

11
Perishability

Service perishability means that they cannot be saved, their unused capacity cannot be
reserved, and they cannot be inventoried. The inability to inventory creates profound
difficulties for marketing services. Most services are consumed at the point of
production so, when and where the customer consumes the products are important in
understanding consumer behavior (Vochen Wirtz etal, 2012).

Perishability is not a problem when demand for a service is steady, but fluctuating
demand can cause problems. Services are intangible, inseparable, variable, and
perishable. Each characteristic poses challenges and requires certain strategies.
Marketers must find ways to give tangibility to intangibles, to increase the productivity
of service providers, to increase and standardize the quality of the service provided, and
to match the supply of services during peak and nonpeak periods with market demand.
Because services are generally high in experience and credence qualities, there is more
risk in their purchase. The service organization therefore faces three tasks in marketing:

It must differentiate its offer, delivery, or image.

It must manage service quality in order to meet or exceed customers’ expectations and,
It must manage worker productivity by getting its employees to work more skilfully,
increasing the quantity of service by surrendering some quality, industrializing the service,
inventing new product solutions, designing more effective services, presenting customers
with incentives to substitute their own labor for company labor, or using technology to save
time and money.
Intangibility
Services cannot be seen,
tasted, felt, heard or
smelled before purchase
Variability
Quality of services
Inseparability depends on who
Services cannot be provides them and
separated from their Services when, where, and how
providers

Perishability
Services cannot be stored
for later sale or use

Figure 2.1 Nature and characteristics of a service

12
2.2.3 Service Dimensions
Services have multi-dimensional features: the following are some of these dimensions
(Gilmore, 2003).

Technical dimensions: These are the “what‟ or the instrumental dimensions of service
delivery. These relate to the more tangible aspects involved in the service package. For
example, the hotel customer will expect a comfortable room to sleep in; the restaurant
customer will expect a meal to eat. The technical outcome of a service experience is
what the customer receives as a result of his or her interactions with a service firm and it
is only one aspect of the overall service delivery. As services are produced through
interaction with consumers the quality of technical dimensions alone will not complete
the total service experience. Other dimensions such as how the service is delivered are
also important.

Functional dimensions: These are the ‘’how‟ dimensions of service delivery. The
accessibility of a service, the appearance of the service delivery staff, how they behave
and what they say will determine very on how the service is delivered. Other consumers
experiencing the service at the same time can influence these dimensions. So the service
process or the ‘how’ of service delivery can be different from one experience to the next
however it is very important in a consumer’s overall assessment of a service.

Tangible dimensions: Relate to the more concrete evidence of a service actually taking
place. Tangible dimensions include the physical evidence of the service. It includes the
service environment, the appearance of the service personnel, the equipment and
facilities used to carry out the service and any other physical representations of the
service, such as an airline ticket or a plastic credit card.

Intangible dimensions: These are commonly the core aspects of the service, the actual
process, deed, act, performance central to the service delivery. It includes any aspect
that contributes to how the customer is treated and processed through the service
delivery.

Reliability: The consistency of service performance and dependability. It includes the

requirement of a firm to perform the service right first time (having “zero defect).

13
Responsiveness: concerns the willingness and readiness of staff to deliver the service
and respond to customers’ requirements. It involves calling customers back promptly
when promised, and giving prompt service.

Security: It relates to how secure, free from danger, risk or doubt consumers feel during
interaction with the service. In a service setting this will impact upon both physical
safety and financial confidentiality.

2.2.4 Evaluation and Measurement of Services

In relation to Service management and delivery, there are two different perspectives:
one is the perspective of the consumer and the other is the perspective of the service
organization or management. Services are often evaluated from the consumers’
perspective in terms of their expectations, perceptions and overall satisfaction with a
service. However, from a managerial perspective, services are more likely to be
assessed in terms of how efficiently customers are served and moved through the
service process, how they are managed, and how competently service staffs deliver the
service. These different perspectives will influence how services are evaluated, what is
evaluated, how they are evaluated and when and by whom the assessment is made
(Gilmore, 2003)

Measuring Services

Before trying to measure Services it’s necessary to consider the different features of
Services. Services have specific characteristics as compared to goods, they are
multidimensional and complex. Measurements need to take account of the service
process, they need to measure both tangible and intangible aspects of services and they
should take account of the specific context in which a service occurs.

Measurements that take account of the service process

As services are processes, measurements need to take account of the complete service
process. Such type of measurements need to address all stages in the service experience,
the pre , during and post-service experience of the customer and, where the design of a
service is linked to technology, if appropriate to that specific service.The points of
interaction may include designs that range from minimal to high contact between
customer, front office and back office staff.

14
Technology is now a necessary ingredient for service quality in many industries such as
the airline and financial services. It is widely used in service delivery and is becoming
more sophisticated in all service environments. Hence, technology needs to be seen as
integral to the service situations, not only for information processing but also in
facilitating the entire service process.

Methods to measure tangible and intangible aspects

Customers have both instrumental and psychological expectations about a product or

service performance. Customers‟ expectations are related to both quantifiable hard
dimensions, and qualitative soft dimensions. The scope of these dimensions ranges from
the hard to the soft one. Hard dimensions are tangible, relatively easy to measure and
evaluate aspects such as physical surroundings whereas soft dimensions are intangible,
more difficult to measure and evaluate aspects such as the degree of courtesy and
consideration experienced by the customer. To improve the overall quality of marketing
in any given service settings, a focus on both tangible and intangible aspects of service
offerings is very important to all stakeholders.

2.5 What is Express Services?

Express Service is an organization which offers special deliveries of packages, money,
documents or information. Express service can be called as Courier Services. It
usually boasts faster delivery times than any alternative method of transporting
documents, and many services in the modern world rely on them. The idea of couriers
and a courier service has been around almost as long as civilization, with rulers in
antiquity using couriers as a means to make new laws and edicts known throughout
their lands. In the modern age of international business, the courier service has become
a keystone of enterprise, even as emerging technologies such as the fax machine and
Internet have rendered them less useful in some areas.
(http://www.wisegeek.com/wat is a courier service.htm)

Express Service, an important part of the postal service, has become a sunrise industry
and represents the modern logistics industry and modern service industry.

15
It is a basic industry in modern society, which will put information, goods delivery,
capital circulation and cultural transmission and other functions together, associated
with production, circulation, consumption, investment and finance and other fields.
(Chunyan Yu, 2014).

Express delivery services focus more on speed, safety and accuracy. (Hanzheng Zhu,
2010). Express delivery handles both documents (correspondence, business
communications, bills, tenders, brochures, catalogues, manuals, annual reports, financial
statements, insurance policies, Certificates, etc.) and non-documents (books, CDs,
electronic items, credit/debit/ATM cards, samples, gifts, spare parts, and other
merchandise). Usually, express deliveries services are characterized by high-value, low
volume shipments of a critical, time-sensitive, and perishable nature, and hence are
considered as premium services vis-à-vis ordinary mail delivery services.

Data show that international air cargo, which also includes express deliveries, accounts
for 5% by volume, but 35-40% by value of total international shipments via all modes
(Oxford Economic Forecasting, 2009). The express industry simplifies and speeds the
process of transporting goods. It organises collection, usually at the end of the business
day, allows the sender access to information on the progress of shipments from pick-up
to delivery and provides proof of delivery. (Oxford Economic Forecasting, 2005)

2.5.1 DHL Express

DHL Express is a logistics division within Deutche Post DHL, the world’s leading mail
and logistics groups. DHL Express Operates in over 220 countries, with 100,000
employees and 2, 6 million customers (DPDHL Annual report 2012). DHL Express
operates the bulk of their deliveries within their own airplanes operated by their own
airline European Air Transport (EAT). (DHL. 2013.)

DHL was originally founded 1969 in San Francisco, California. The company got the
name DHL from the surnames of the founders, Dalsey, Hillblom and Lynn. In the early
years DHL expanded rapidly from just delivering documents to shipping of small
parcels. It was also dominatingly expanding its wings to global markets and regions
aggressively. Deutche Post acquired 75 % of DHL International’s shares in 2002 at that
time DHL already served 220 countries, with 71,000 employees.
16
Changing the colors and re-branding all of the group logistics under DHL brand at
2003, after this DHL Express has been working as separate business unit under Deutsce
Post DHL group. (DHL. 2013).

The company expanded its service throughout the world by the late 1970s. The
company was primarily interested in offshore and inter-continental deliveries, but the
success of FedEx prompted their own inter-US expansion starting in 1983.

DHL aggressively expanded to countries that could not be served by any other delivery
service, including the Eastern Bloc, Vietnam and the People's Republic of China.
In 1998, Deutsche Post began to acquire shares in DHL, finally reached majority
ownership in 2001, and completed the purchase in 2002. Deutsche Post then effectively
absorbed DHL into its Express division while expanding the use of the DHL brand to
other Deutsche Post divisions, business units and subsidiaries.

Today, DHL Express shares its well-known DHL brand with other Deutsche Post
business units such as DHL Global Forwarding & Freight and DHL Supply. In 1886
DHL starts services to the Cook Islands, Eritrea, Ethiopia, Reunion Island, Gambia,
Lesotho, Tahiti, Madagascar, Mali, Uganda and Zambia. In Addis Ababa the company
has got three Branch offices namely Legehar, Addis Ababa University and Head office
service pointes. In addition it also operates through twenty five agents. Five of these
agents are operating under the National Oil Corporation (NOC).The rest are distributed
among different business companies.

17
2.6 Empirical Review
2.6.1 Customer satisfaction

Customer satisfaction is the fundamental to the marketing concept (Kurniawan, 2010, p.

83). Customer satisfaction is a vital concept in a business, which identity’s that the
product or service which supplied to customers is how much satisfying them (Naveed,
Akhtar, Rehman Cheema, 2012, p.64). Different authors use different criteria, elements,
characteristics when discussing about customer satisfaction. Generally, customer
satisfaction, by a definition is a positive feeling experienced by an individual after using
a good or a service (Delafrooz, Taleghani, Taghineghad, Nademi, 2013, p.115).
Moreover, customer satisfaction is an important factor in future tendency to make a
purchase, also sometimes satisfied customers talks probably enthusiastically about their
positive experience, or their buying, or use of a particular service with other people, this
will lead to positive advertising (Delafrooz, Taleghani, Taghineghad, Nademi, 2013,
p.115), (Mistry, 2013, p. 133). Customer satisfaction provides a link between purchase
and post-purchase phenomena in terms of attitude change and repeat purchase (Lau,
Cheung, Lam, Chu, 2013, p. 268). On the other hand, businesses if they want to protect
or gain market shares, they will need to overcome competitors by offering high quality
product or service to ensure customer satisfaction, furthermore customer’s feelings and
beliefs affect their satisfaction level.
Businesses with a strong customer service emphasis frequently gather customer
satisfaction survey data and utilize research findings to improve service delivery. The
Baldrige National Quality Program stresses the importance of customer driven
excellence in organizations (Baldrige, 2002). Reducing defects, (Baldrige) errors,
complaints, and root causes of customer dissatisfaction are critical to customer service
delivery and discoverable through customer satisfaction research. Baldrige assesses
how organizations ensure that data measurements capture actionable information that
can predict customer loyalty. Baldrige (2002) assesses how organizations follow-up
customer feedback, and encourages management by factual data that measures
performance, products, service, and customer satisfaction. Reliable data should be used
to analyze trends, cause and effect relationships, decision-making, and to promote
organizational learning (Baldrige). Finally, if customers are satisfied by services, the
result is that, they will be loyal on business and it could also mean higher profits and
higher market share for business (Al Karim, Chowdhury, 2014, p. 3, 4).
18
2.6.2 Outcomes of the customer satisfaction
There are different results which are occurs due to customers satisfaction such like
loyalty and word of mouth.

Loyalty
Customer loyalty is the behaviour of the customer towards purchase the same product or
services from the same supplier or same service provider which lead to the customers
towards satisfaction. And the offering different packages to the customers lead the
customer satisfaction and build loyalty. (Sabir Ghafoor, Hafeez, Akhtar & Rehman (2014)

Word of Mouth
Word of mouth is the term defined as the informal way to communication with the
friends or service provider about the product or service. Positive word of mouth can
build the strong relationship between potential customer and providers as well as it play
the important role in the promotion of the product and develop positive image in the
society. (Day, 1977). So positive word of mouth is directly influence the customer
satisfaction because it is related loyalty of existing customers as well as the new
arrivals. (Hennig-Thurau, T., Gwinner, K.P. and Gremier, D.D. (2002),

2.6.3 Factors affecting Customer Satisfaction

Usually a product or service is described in terms of several dimensions or
characteristics. For example, after receiving a service, it might be described by the
service provider as fast, always available when needed, and polite. These descriptions
represent three different aspects of the service: responsiveness, availability, and
professionalism, respectively [Hayes, 1992]. These are a subset of all possible
dimensions by which the service can be described. The composite of all possible
dimensions describes the entire product or service. We can regard customer
requirements as those characteristics of the product or service that represent important
dimensions. They are the dimensions on which customers base their opinion about the
product or service. The purpose of determining customer requirements is to establish a
comprehensive list of all the important quality dimensions that describe the service or
product.

19
It is important to understand the quality dimensions so that we will know how
customers define the quality of the service or product.
Only by understanding the quality dimensions will we be able to develop measures to
assess these quality dimensions [Chakrapanni, 1998].

Although there may be some standard quality dimensions that generalize across many
products or services, some dimensions will apply only to specific types of products or
services. Quality dimensions applicable to many service organizations include
availability, responsiveness, convenience, and timeliness (Kennedy and Young, 1989).
These quality dimensions seem applicable to many service industries, such as the
banking, hotel, and hospital industries. This list of quality dimensions, however, is not
comprehensive for each of these industries. The hospital industry might include
additional quality dimensions such as quality of food and quality of care. Similarly,
other industries may possess quality dimensions that uniquely define their services and
products. It is important that each company identify all quality dimensions to ensure
understanding of the definition of quality for its products or services. Analyzing the
services or products will provide a comprehensive picture of these dimensions. The list
of dimensions can be generated in various ways, using different sources of information.
One important way is to investigate literature (such as a scientific, professional, and
trade journals) that discusses specific industries. These publications might provide
dimensions of the service or product.
Researchers (Parasuraman, Zeithaml, and Berry, 1985) have concluded that service
quality can be described on the basis of 10 dimensions. They are tangibles, reliability,
responsiveness, competence, courtesy, credibility, security, access, communication, and
understanding the customer. Attempts to measure these 10 dimensions, however,
reveals that customers can only distinguish between five dimensions (Parasuraman,
Zeithaml, and Berry, 1988).It is indicated that the original 10 dimensions overlap each
other considerably. The five dimensions of service quality are tangibles, reliability.
Statement should include an action verb describing a specific behaviour of the service
provider or product. The latter statement should include a specific adjective reflecting
the content of the dimensions [Hayes, 1998]. Example statements that contain both
specific behaviour and specific adjectives are listed below. These statements were
generated using definitions presented by Kennedy and Young (1989).

20
Availability of support
1. Could get help from the staff when I needed.
2. The staff was always available to help.
3. Could contact the staff at any time I needed.
4. The staff was there when needed.
5. Could arrange convenient meeting times with the staff.

Responsiveness of support
1. They were quick to respond when I asked for help.
2. They immediately helped me when I needed help.
3. Waited a short period of time to get help after I asked for it.

Timeliness of support
1. They completed the job when expected.
2. They met my deadline(s).
3. They finished their responsibilities within the stated time frame.
4. The project was completed on time.

Completeness of support
1. They ensured that every aspect of the job was completed.
2. They completed everything they said they would do.
3. They were there to provide help from the beginning to the end of the project.

Professionalism of support
1. The staff members conducted themselves in a professional manner.
2. The staff listened to me.
3. The staff was courteous.
4. The staff cared about what I had to say.

Overall satisfaction with support

1. The quality of the way the staff treated me was high.
2. The way the staff treated me met my needs.
3. The way the staff treated me met my expectations.
4. Am happy with the way the staff treated me.
5. I am satisfied with the way the staff treated me.

21
 Overall satisfaction with product
1. The quality of the final job they provided was high.
2. The job met my expectations.
3. I am satisfied with the job the staff provided.

These statements should reflect instances of performance by the staff or product that
customers can assess. It is important that the list include all possible examples for a
Reproduced with particular dimension. This list of examples reflects the content of the
dimensions, so if the list is deficient, a complete understanding of each dimension will
also be deficient. Each dimension should include four or five statements.
After generating the list of statements, an additional step may be taken to combine some
quality dimensions that seem redundant. Some of the statements may overlap
considerably and may not warrant separate dimensions. The two steps in this process
(generating dimensions and developing specific examples), although presented as
independent of each other, are sometimes done simultaneously.

By literature reviewing [Desarbo, 1988; Duray, et al., 1999; Ferreira, 1996; frzier, 1996;
Hutchew, 1989; Swan and Bowers, 1998], the comprehensive list of customer
satisfaction dimensions and factors for service are as follows.

 Service promptness  People that are easy to deal with

 Courtesy of staff  I receive the support I need from my
 Responsiveness ABC field engineer to resolve any
 Understanding of the customer’s Support staff that solves problems
problems quickly problems
 Overall customer service  Ethical
 Helpfulness  Dishonesty
 Friendliness  Support staffs which gives you a hard
 Provides poor support time
 Very talented professionals  Staff which is interested in your
 All the necessary resources to service comments and suggestions
you  Phone calls returned quickly
 A very valuable service resource  People answering the phone are polite
 Competent  People on the answering the phone are
 Unprofessional cheerful
22
 Knowledgeable operators  Unwilling to go the extra mile for its
 Listening to the customer customers
 Attentive to customer complaints  Ignores customer suggestions
 Close to its customers  Impossible to get satisfaction unless
you go to the top

 In tune with the needs of its clients

 Prompt in dealing with customer
complaints
 Efficient
 Easy to get information on the phone
 Poor customer phone support
 People who answer the phone have
clear, easy to hear voices
 It takes a long time to reach the right
person on the phone
 You are often put on hold for a long
time
 Telephone support personnel who do
not seem to have time for you
 Attention to detail
 Helpfulness
 Available support offerings fit your
needs
 Phone support quality overall
 Ease of gaining access to support
 Time to reach technical personnel
 Effectiveness of answers/workarounds
 Access to technical support

More concisely, factors of customer satisfaction are as follows [Moad, 1995; Morash and
Ozment, 1996; Morpace International, Inc., and Cambridge Systematics, Inc., 1999; Murdick,
etal. 1990].
 Reliability involves consistency of performance and dependability Responsiveness
concerns the willingness or readiness of employees to provide service. It also involves
timeliness of service.

 Competence means possession of the required skills and knowledge to perform the
service.

 Access involves approachability and ease of contact.

 Courtesy involves politeness, respect, consideration, and friendliness of contact
personnel.
 Communication means keeping customers informed in language they can understand
and listening to them. It may mean that the company has to adjust its language for
different consumers— increasing the level of sophistication with a well-educated
customer and speaking simply and plainly with a novice.
 Credibility involves trustworthiness, believability, and honesty. It involves having the
customer’s best interests at heart.
23
  Security is the freedom from danger, risk, or doubt.
 Understanding/knowing
 Tangible includes the physical environment and representations of the service.
[Goff, 1974; Guy, 1989; Gray, 1990; Lam, et al., 1999; Ogden, et al., 1996; Parks, 2000;
Wells, 1989], Availability of service, Responsiveness of service and Reliability of service.
As stated above the factors that affect customer satisfaction are too many and usually tide to
the SERVQUAL but this research proposed the following factors as the critical factors of
customer satisfaction in express delivery service by Al Karim, Chowdhury in 2014 since it is a
recent one and addressed mainly the express industry.

2.9 Conceptual Frame Work

It is important to utilize how customers hold businesses accountable (The Customer
Communicator, 2004). For some customers, quality counts. For others, it is on timely delivery,
while other customers expect immediate customer support. Knowing how an organizations’
customers hold them accountable helps the organization to focus on vital accountability issues
to keep them happy. Service quality is the function of customer’s expectations and perception
about the service and associated with customer levels of satisfaction and intention to
repatronize the service (Rajeswari, Sunmista, 2011, p.2). Quality and customer satisfaction
have long been recognized as playing a crucial role for success and survival in today's
competitive market (Al Karim, Chowdhury, 2014, p.4).

OPERATIONAL PERFORMANCE

Flynn et al. (1995) [11] defined operational performance as a combination of several

performance factors. It is measured by effectiveness, efficiency and accountability such as
productivity, service quality, and supervisory compliance. The operational performance is also
referred to resource availability because it is a common valuation area for service performance
(Leenders et al., 2002 [21]). Chelariu et al. (2014) [5] stated that the operational performance
was the most dominant performance in the logistics task.

24
B. RELATIONAL PERFORMANCE

Chen et al. (2004) [6] defined relational performance as a capability of a company employee’s
relationship with his/her customers such as the acceptance of short-term or long-term
relationship and communication. Chelariu et al. (2014) [5] defined that the relational
performance can be measured by value and strength of the relationship between a company
and its customers.

C. COST PERFORMANCE

Chen et al. (2008) [7] defined cost performance as the difference between the worth that
customers expect to derive from the company and value created in their transaction. They also
compared the cost performance of one company with another. Cost performance can be
measured by return on investment, gross margin and financial expenses (Scarlat et al., 2010
[26]). Also, Chelariu et al. (2014) [5] stated that cost performance can be defined as
performance measures used to evaluate the degree to which a company offers or obtains
economic value to its customers.

D. ORGANIZATION IMAGE

Keller (1993) [18] defined organization image as an awareness of a company reflected in the
consumer remembrance. Gronroos (1990) [14] concluded that the organization image is
related to value, standardized quality, satisfaction, and loyalty. There are other definitions of
image described in marketing and psychological literature. For example, the image can be
defined as a subjective awareness (Boulding, 1956 [4]), a characteristic (Hirschman et al.,
1978 [16]), or a mix of product characteristics that differ from the physical product, however;
it was recognized with the product (Erickson et al., 1984 [10]). Gronroos (1984) [13]
mentioned that image was the most important factor to service companies measured by
customer’s valuation on the perceived service experiences. Although an organization image is
intangible, improving it can help management increase competitive advantage of the company
(Nguyen and LeBlanc, 1998 [22]).

25
To sum up Customer’s satisfaction has a pivotal role for success of a company. Various
factors such as relational performance, cost performance, organizational image and operational
performance are significant factors to achieve satisfaction. Customer’s satisfaction in turn
leads to the establishment of strong customer bases which are trustworthy, price tolerant, and
loyal.

Therefore, building customer relationship is a backbone for all organizations in general, and
companies in service industries in particular. Due to this fact customer satisfaction has been
part and parcel and/or mainstreamed core process of an organization to achieve good
reputation ensuring more profit.

Figure 2.2 conceptual Framework

Operational
Performance
(OP)

Relational
Performance
(RP) Customer
Satisfaction
(CS)

Cost Performance
(CP)

Organizational Image
(OI)

Source: (2014) Tanyaporn Kaniganat, and Sirion Chaipoopirutana

26
 CHAPTER THREE
3. RESEARCH METHODOLOGY

This chapter presents a detail discussion about the type of research methodology and methods
that are employed in this research. The first section highlights an outline of the study design.
This is followed by the instruments development, survey pilot tests and survey administration
procedures. The third section contains a description of the sample and the data collection
procedures while the last section presents the statistical methods which are used to analyze the
data.

3.1. Research Design

The purpose of this study is to investigate those factors that can influence customer
satisfaction in DHL Express Ethiopia. The chosen research approach is quantitative in its
nature, and the quantitative method was used to assess determinant factors that affect
customer satisfaction. While descriptive statistics were used to describe the characteristics of
the respondents.

3.2. Study design and conceptual framework

The study employs cross-sectional design through quantitative data collection. A quantitative
questionnaire is used to assess the magnitude of customer satisfaction and associated factors.
The selection of the explanatory variables (see Conceptual framework (Figure 2) is based on
their theoretical and empirical importance, as reported in the literature.

3.3. Source/Target Population

The target populations are clients who received DHL service in Addis Ababa. The source
population representing target populations in this study are Clients who received DHL service
during study period.

27
 3.4. Sample size determination

Since the customers of DHL express Ethiopia range from individual to diplomatic entities it is
very much difficult to get the list and address of the customer due to confidentiality. In other
words, the sample frame was not an accessible one and the population is unknown. In such
cases, for populations that is large, as per (corbetta, 2003) to yield a representative sample for
proportions. Which is valid where S is the sample size, Z2 is the abscissa of the normal curve
that cuts off an area α at the tails (1 – α equals the desired confidence level, e.g., 95%), e is the
desired level of precision. P=.5 is the maximum variability that the estimated proportion
attribute in the population, and q is 1-p (1-.5 =.5). The value for Z is found in statistical tables
which contain the area under the normal curve. The resulting sample in this study will be
determined as follows:

= =385 respondents

3.5. Sampling Method

To select study subjects for quantitative methods both probability and non-probability
sampling techniques were applied. According to Sekaran there are two major types of
sampling designs: probability and non-probability sampling. In probability sampling, the
elements in the population have some known chance or probability of being selected as
sample subjects. In non-probability sampling, the elements do not have a known or
predetermined chance of being selected as subjects. (Sekaran, 2003).

Stratified proportional sampling system was employed in order to reach at customers.

(Sekaran, et. al, 2003). As per Naresh K. Malhotra (1996) The elements within a stratum
should be as homogeneous as possible, but the elements in different strata should be as
heterogeneous as possible.

28
The auther states that the stratification variables should also be closely related to the
characteristic of interest. In this study a proportional stratified sampling was employed. In
the process, the size of the sample drawn from each stratum is proportionate to the relative
size of that stratum in the total population as shown below.

According to 2014 DHL registration databases, It was estimated that from March 1, 2014 to
March 31, 2014 a total of 4330 clients received services. The same average monthly
customers were expected for the year 2015 to take service from all twenty eight DHL service
points (3 DHL service points, 5 NOC DHL service points and 20 DHL agents’ service points).
To select the service area (location) was given consideration and since the number of
customers served in different service points differ the study took all the three DHL service
points and using lottery method randomly selected two from NOC DHL points and five
service points from agents service pointes to accommodate all representative samples from all
location then employed convenience sampling to select customers.

Accordingly in the table below, the proportion of service pointes that are of head office and
agents service points are shown below. The ratio was taken from the ratio of service offered
by agents to the average monthly number of service offered then, proportional percentage also
applied to sample data as per the following table.

Table 3.1: Sampling Proportion

Selected least of DHL service pointes and agents service pointes
Sample
S.No Branch Name Of Service Pointes Location Population Proportionality
size
DHL worldwide Express Ethiopia plc
1 Megenagna 383 115 30%
(Head office )
2 DHL LA Gare DHL leghar 378 80 21%
Inside AAU Sidist kilo
3 AAU DHL 410 25 6%
campass
4 DHL - NOC - CMC CMC 400 20 5%
NOC
5 DHL - NOC - Kera kera 400 20 5%
6 TK - DHL Bole brige 410 25 6%
7 Sarbet DHL Sarbet 410 25 6%
8 Agents Urjiti Private Ltd. Piassa 410 25 6%
9 Tana DHL Merkato 410 25 6%
10 Kality DHL Kality 410 25 6%
Total 4021 385 100%
Source: Own Survey Data (2015)
29
 3.6. Method of Data Collection and quality control Process
To assess customer satisfaction and determinant factors, structured questionnaire was
developed for quantitative study which gives better privacy to the respondents while giving
information regarding the subject. The questionnaire mainly employed a 5 points Likert scale
rating technique starting from 1= “strongly disagree” to 5= “Strongly Agree”. It is a widely
used rating scale which requires the respondents to indicate a degree of agreement or
disagreement with each series of statements or questions (Albaum, 1997). This rating scale is
easy to construct and administer and respondents readily understand how to use the scale.
(Malhotra and Birks, 2003, pp.305). Moreover the questionnaire is tested for making it
feasible to implement and capture all the necessary information to make analysis (Annex 1).
And it is translated to Amharic language. (Annex 2)

Primary data is collected from representatives of the target population by the researcher. The
self-administered questioner had been provided for customers after receiving the service
during exit to every third customer starting from 3.00 am up to 1.00 pm.

3.7. Method of Data Analysis and Presentation of Results

All statistical procedures were conducted using Statistical Package for Social Science (SPSS)
version 20.0 software for Windows which has been used by researchers widely (Zikmund,
2003). And relevant data analysis needed to answer the research questions was carried out.
Prior to analysis, the data was adjusted for omissions, legibility, and consistency.

The data analysis was made by using both descriptive and inferential statistics. Descriptive
statistics was used to summarize and present the data. In addition to this, Pearson correlation
coefficient was used to show the interdependence between the independent and dependent
variables.

With regard to inferential statistics, regression analysis was used to test the significance
contribution of each independent variable to the dependent variable customer satisfaction.
Moreover, independent sample T-test was used to see the mean difference among
organizational customers and individual customer’s in satisfaction level in relation to the
associated model.

30
 3.8. Ethical Issue
As having no total harm to the study subjects but assesses the benefit and loss experienced by
study subjects, further as an idea generation tool from experience of service providers, In this
study, extraction of information from its study subjects will be on a voluntary basis.
Moreover, verbal consent will be obtained before data collection from study unit. Once again
study subjects will be fully authorized to withdraw from the study at any time of their
involvement. Confidentiality indeed will be maintained through removing of identifiers of the
study participants early during the process of data collection.

3.9. Reliability and Validity Analysis

In order to test the internal consistency of variables in the research instrument Cronbachs
alpha coefficient was calculated. As Zikmund, Babin and Griffin (2010) states scales with
coefficient alpha between 0.6 and 0.7 indicates fair reliability. Overall, the internal reliability
coefficients for the entire constructs are moderate strong to very strong as all alpha
coefficients are more than 0.7. Thus, the internal reliability test indicates that all of the
measures adopted have internal consistency reliability. The internal reliability test of
operational performance, relational performance, organizational image, customer satisfaction
are above 0.7, and for cost performance it is above 0.6 which is acceptable as the minimum
level of 0.6 for further analysis. Thus, it can be conclude that all the items that are used to
measure the constructs are stable and consistent. In conclusion, the relationships among the
items are reliable for further analysis.

In order to ensure the quality of this research design content and construct validity of the study
was checked. The content validity was verified by the advisor of this research, who was
looking into the appropriateness of questions and the scales of measurement.

Table 3.2 Overall Reliability Test

Reliability Statistics

Cronbach's Alpha N of Items

.932 38

Source: Own Survey Data (2015)

31
 3.10. Measurement of Reliability
The scales of the model used were tested and found to be acceptable i.e. coefficient α for each
scale were found reliable where Cronbachs alpha of constructs were greater than 0.6,revealing
satisfactory reliability as all items are developed based on theories and literature.

Table 3.3 Reliability Statistics

Scale Statistics

Std.
Alpha Mean Variance N of Items
Deviation
Dimensions
Operational Performance 0,888 71,64 110,439 10,509 17
Relational Performance 0,776 18,56 15,027 3,877 5
Organization Image 0,829 36,36 24,415 4,941 9
Cost Performance 0,681 12,21 9,042 3,007 4
Satisfaction level 8,872 11.06 7.603 2.757. 3
Source: Own Survey Data (2015)

Validity refers to the degree to which evidence supports the inferences made from scores
derived from measures, or the degree to which the scale measures what it is designed to
measure [Hayes, 1997]. There are two most common types of validity: content validity, and
construct validity.

Content validity refers to a judgment of the extent, which a scale measures the concept that it
was designed to measure, based on the content of the item [Litwin, 1995], Content validity is
determined by examining the best-accepted measures. The content validity depends on how
well the measurement items used in the study cover the content domain of the variable
measured in the study [Saraph et al., 1989, Nunnally, 1967]. For this research the data
collection instrument was based upon the instrument used in previous research [Bingguang Li,
2002, 2006], the questions in the questionnaire were adopted from the published definitions of
the factors in this research.

32
 3.11. Normality test

Paurov Shakula (2009) stated that less difference between the median and mean shows the
normality of the data. Accordingly, as shown in table 3.4 the difference between the mean and
median is low. According to Hair J.B (2010) when kurtosis divided by skewness if the result
lies plus or minus of 2.58, then the data is assumed normal. Similarly, the data also met this
criterion so that regression analysis can be run in order to observe the impact of the model
dimension up the customer satisfaction level.

Table 3.4 Normality test

Statistics

Overall Operational Relational Organization Cost

satisfaction Performance performance image performance
Valid 352 342 352 308 312
N
Missing 1 11 1 45 41
Mean 3.56 3.8077 3.7125 4.0404 3.0529
Median 4.00 3.8235 3.8000 4.1111 3.0000
Mode 4 3.59 4.00 4.11 2.50
Skewness -.468 -.971 -.504 -1.008 .295
Std. Error of
.130 .132 .130 .139 .138
Skewness
Kurtosis -.811 4.487 .682 2.408 .667
Std. Error of Kurtosis .259 .263 .259 .277 .275
Source: Own Survey Data (2015)

3.12. Multicolinearity test

According to (Ho, et., al, 2006) multicolinearity refers to the situation in which the
independent or predictor variables are highly correlated. Looking into the table in annex 5 of
regression coefficients, it can be seen that multicolinearity is not a problem. That is, all
tolerance values are above .10 and Variance Inflation factor (VIF), which is computed as
“1/tolerance” is less than 10, even very small. Thus, it is possible to construct (formulate) a
regression model.

33
 Chapter Four

4. Analyses of the data and interpretation

4.1. Descriptive Analysis
In this chapter, the results of the study are presented and discussed in line with the specific
objectives of the assessment. Collected data was analyzed to determine how the samples
respond to the service under Investigation. Out of a total of 385 questionnaires distributed to
customers who have at least used express service once, 363 questionnaires were returned and
During data editing, the collected questionnaires were checked for errors and 8 incomplete
questionnaires were identified and discarded. The demographic characteristics of respondents
on the various parameters like Gender, Age, Education level, Occupation, Location are
represented as follows:

Respondents for this study comprised of 180 Individual and 172 Organizational customers,
which represent 128 male and 52 female for individual customers. Demographically, higher
proportion of individual study subjects age group were either 18-29 (51.1%) or 30-49 (47.8%)
although there are few numbers of study subjects who are above 50 years of age 2 (1.1%).
Educationally, about 18 (10.0 %) individual clients were able to complete secondary
education, 102 (56.7%) of the participants were awarded diploma and first degree and about
60 (33.3%) were awarded masters and above. Majority (59.10 %) of individual clients who are
employee of private business, government employee take a share of 13.6 %, NGO is around
14.8 %, Student is around 6.8 % and the rest 5.7% of individual clients are unemployed.
Around 38 (23.5 %) of individual study subjects have a household income between 2500-4500
Ethiopian Birr, 80 individuals received monthly income 4501-10,000 birr, 26 individuals
received monthly income 10,001-15,000 and 18 are above 15,000 birr. About 14(8.4%) of
institutional study subjects were government organizations, 30 (18.1 %) were Non-
Governmental organizations, the majority 116 (69.9%) were commercial organizations and
the rest 6(3.6%) are from Diplomatic agencies. From the above description, express service
is mostly used by commercial and non-governmental organizations.

34
Table 4.1 Profile of Individual Customer Respondents

characteristics Number Percent

Male 128 34.9

Sex
Female 52 14.8
18 – 29 92 26.1
30 – 49 86 24.4
Age group
over 50 2 6

Secondary school 18 5.1

Education Diploma and above 102 29.0
Master’sDegree& Above 60 17.1
Private business 104 29.5
Government employee 24 6.8

Occupation NGO 26 7.4

Student 12 3.4
Unemployed 10 2.8

2500- 4500 38 10.8

Income 4501 – 10,000 80 22.7

10,001 – 15,000 26 7.4
above 15,000 18 5.1
Governmental 14 8.4
Non-Governmental 30 18.1
Institution Type
Commercial 116 69.9
Diplomatic 6 3.9
Source: Own Survey Data (2015)

35
From the table below its witnessed that About 112 (31.7 %) clients received service from
Head Office, 76 (21.5%) from Leghar Service Point, 38 (10.8 %) from NOC Service Point, 38
(10.8 %) from Addis Ababa University Service Point and 24 (6.8%) from Agents Service
Point 102 (28.9%).From this it can be concluded most of the customers receive the services
directly from DHL service points”.

Table 4.2 service pointes usage rate

Service Points Frequency Percent

Head office 112 31,8
Leghar Service point 76 21,6
NOC service point 38 10,8

Addis Ababa University service point 24 6,8

Agents service point 102 29
Total 352 100
Source: Own Survey Data (2015)

According to the table below , 44.3 % of the respondents believe express services is very
important for their operation 44.9 % stated that express services is important for their
operation while the rest 9,1 % and 1.7 % believe it is Insignificant and Not important at all
respectively.

Table 4.3 the importance of using express service

Characteristics Frequency Percent

Very Important 156 44,3

Important 158 44,9
Insignificant 32 9,1
Not important at all 6 1,7
Total 352 100
Source: Own Survey Data (2015)

“This table shows express service is playing a dominant role in every aspect since almost
all respondents stated it is very important. While, insignificant number of customers
decline its value.”
36
In the table below from the total respondents, 84.7 % use express service to send document,
26.1.% use the service to send materials while the rest 11.4 % use it to send sample products.
“From this it can be concluded that most customers use express service to send
document”.

Table 4.4 what do customers send using express service?

Characteristics Frequency Percent

Document
NO 54 15,3
YES 298 84,7
Total 352 100
Merchandise Frequency Percent
NO 260 73,9
YES 92 26,1
Total 352 100
Sample Frequency Percent
NO 312 88,6
Yes 40 11,4
Total 352 100
Source: Own Survey Data (2015)

According to the statistical distribution of the following table, 45.5 % of the respondents focus
on the reliability of the service, while the other 34.7 % emphasizes on the speed, 10.8% give
consideration to Convenience, and the smallest ratio 6.8 % give attention to the price of the
service. “The below description lead most respondent would prefer the express service to
have a reliability , Whereas the speed of the service is the next sensitive issue for the
customer in addition to its convenience and price, this shows that express service
providing firms should give considerable attention to properly coordinate its reliability
with speed of delivery.

37
Table 4.5 Important Feature in using Express Service

Characteristics Frequency Percent

Price 24 6,8
Reliability 160 45,5
Convenience 38 10,8
Speed 122 34,7
Total 344 97,7
System 8 2,3
352 100
Source: Own Survey Data (2015)

4.2. The Magnitude of Customer Satisfaction

Customer service proves to be one of the most important factors governing business. Today
business organizations are more customers focused than ever before since customer
satisfaction is a competitive advantage which is sustainable over the long term. To assess the
intention of customers about their future action customer’s willingness to encourage family
members, friends and other relatives to use DHL service was assessed. Therefore 23.9 % of
customers strongly agree and 41.5 % agree to encourage their relative to use DHL express
service. While only 1.1 % strongly disagree, 7.4 % disagree and the rest 32% has neutral
felling to encourage their relatives/friends to use DHL expresses service. It shows that some
customers of DHL Ethiopia are somehow willing to recommend the service provider to
others but since most of the customers fall in the neutral spectrum the organization
should devise a strategy to make customers advocates of the business.

Table 4.6 intended to suggest friends/families to use the express provider

Dimension Frequency Percent

Strongly Disagree 4 1,1
Disagree 26 7,4
Neutral 92 26,1
Agree 146 41,5
Strongly Agree 84 23,9
Total 352 100,0
Source: Own Survey Data (2015)

38
And those customers who are asked if they are going to continue doing business with the
organisation 78 (22.2%) strongly agree and 138 (39.2%) agree to continue doing business with
DHL. However 100 (28.4 %) neutral, 20(7.9%) Disagree and 8(3.2%) are Strongly Disagree
of continuing business with DHL.

Table 4.7 Intention to continue doing business with the express provider

Dimension Frequency Percent

Strongly Disagree 8 2,3

Disagree 28 8,0
Neutral 100 28,4
Agree 138 39,2
Strongly Agree 78 22,2
Total 352 100,0
Source: Own Survey Data (2015)

Moreover , The result from table 4.8 indicated that; 126 respondents (35.8 %) were satisfied
on the service of DHL, 84 of them (23.9 %) were strongly satisfied and 66 (18.8 %) of the
respondents were dissatisfied with the service while only 3.4% of them were very dissatisfied.
And the rest 60 (17.0%) had neutral felling towards the service. Studies on customer
satisfaction with services have traditionally measured using single item measures. In this
study, customer satisfaction was measured using one item that captures overall satisfaction on
service offered by DHL express Ethiopia. It was measured using a five - point likert scale (1-
Strongly Disagree to 5- Strongly Agree).

As shown in Table 4.8.1 mean score value (3.56) on single item measure of overall
customer satisfaction on DHL express Ethiopia service, which indicates customers
overall satisfaction was below the average, which indicate customers are somehow
satisfied with DHL express service.

39
Table 4.8 satisfaction with the overall service of the organization
Overall satisfaction level

Dimension Frequency Percent

Strongly Disagree 16 4,5

Disagree 66 18,8
Neutral 60 17,0
Agree 126 35,8
Strongly Agree 84 23,9
Total 352 100,0

Table 4.8.1 Descriptive Statistics

Std.
N Minimum Maximum Mean Deviation
Std.
Statistic Statistic Statistic Statistic Statistic
Error
Overall satisfaction on the
352 1 5 3,56 ,063 1,173
service
Valid N (leastwise) 352
Source: Own Survey Data (2015)

4.2.1. Operational Performance

This section is intended to show the result of relationship among customer satisfaction from
operational performance in order to answer the research questions, See Table 4.9 below. The
empirical results found that (60.9 %), of customers were satisfied on organization internet
service, Delivery items on time(62.6%), Representatives (service personnel’s)
availability(59.4%), Packages sent without damage(59.4%), Fairness of Waiting time(64.5%),
Provision of Timely assistance(62%), Contact personnel Responsiveness to enquiries(58.9%),
Well handling of objection or complain(63.9), Excellent speed of delivery(63.2), Getting a
pick-up and delivery service after order (63.6 %) and Delivering package without lost(66.3% ).
From the below table it can be concluded that speed of delivery items is the most
important factor for gaining customer satisfaction in relation of operational
performance since 64.8% customers agreed on the speed of delivery.
The following table shows the association between Customer satisfaction and operational
performance indicators.
40
 Table 4.9 Customers Satisfaction with Operational Factors
Customer Satisfaction
Strongly Satisfied or Not Satisfied or
dissatisfied Neutral feeling
Operational Performance Count Row N % Count Row N %
Service procedures and instructions are Agree 114 55.9% 90 44.1%
clearly communicated at time of service Disagree 20 45.5% 24 54.5%
Phone service is available Agree 110 56.1% 86 43.9%
Disagree 28 50.0% 28 50.0%
Internet service is available Agree 78 60.9% 50 39.1%
Disagree 58 47.5% 64 52.5%
Delivery is on time Agree 114 64.8% 68 37.4%
Disagree 24 34.3% 46 65.7%
Representatives (service personnel’s) are Agree 114 59.4% 78 40.6%
available Disagree 24 41.4% 34 58.6%
Packages are sent without damage Agree 116 61.7% 72 38.3%
Disagree 22 35.5% 40 64.5%
Opening (working) hours are convenient Agree 108 56.8% 82 43.2%
Disagree 30 48.4% 32 51.6%
Waiting time is explained Agree 92 56.8% 70 43.2%
Disagree 46 51.1% 44 48.9%
Waiting time is fair Agree 98 64.5% 54 35.5%
Disagree 40 40.0% 60 60.0%
Timely assistance is provided Agree 88 62.0% 54 38.0%
Disagree 50 45.5% 60 54.5%
Contact personnel’s are Responsive to Agree 112 58.9% 78 41.1%
enquiries
Disagree 26 41.9% 36 58.1%
Information is Confidential Agree 104 55.9% 82 44.1%
Disagree 34 51.5% 32 48.5%
the efficiency of the people that serve you Agree 102 56.7% 78 43.3%
or that you deal with is Excellent Disagree 36 50.0% 36 50.0%

your objection or complain is handled Agree 78 63.0% 44 36.1%

well Disagree 60 46.2% 70 53.8%
you get a follow up report on the Agree 96 58.5% 68 41.5%
consignment you have sent Disagree 42 47.7% 46 52.3%
the location of the facility is convenient
Agree 100 54.9% 82 45.1%
Disagree 38 54.3% 32 45.7%
The speed of delivery is Excellent Agree 120 63.2% 70 36.8%
Disagree 18 29.0% 44 71.0%
When you place an order you get a pick- Agree 84 63.6% 48 36.4%
up and delivery service Disagree 54 45.0% 66 55.0%
Package were never lost Agree 106 66.3% 54 33.8%
Disagree 32 34.8% 60 65.2%
Source: Own Survey Data (2015)
41
 4.2.2. Relational Performance

This section is intended to show the result of relationship among customer satisfaction and
relational performance in order to give a preliminary answer to the research questions, See
Table 4.10 below. The results in the table support Relational performance are highly
associated with customer satisfaction. The percentage in the results found positive
relationship among knowledgeable employee, communication skill of the people, return of
phone calls on time and getting an immediate attendance would subsequently contribute to
customer satisfaction in relational performance. Form this it can be decided that being served
by a knowledgeable employee is the most important factor for gaining customer
satisfaction in relation to relational performance since it has the highest percentage from
the other factors .The following table shows the association between Customer satisfaction
and specific relational performance factors.

Table 4.10 Relational Performance

Customer Satisfaction
Strongly Satisfied Strongly Satisfied
or Satisfied or Satisfied
Row N
Relational Performance Count % Count Row N %
The sales staffs are Friendly Agree 100 54.3% 84 45.7%
Disagree 38 55.9% 30 44.1%
Representatives (service Agree 100 56.5% 80 43.5%
personnel’s) are knowledgeable Disagree 102 72.90% 34 50.0%

Phone calls are returned on time Agree 94 70.1% 40 29.9%

Disagree 44 37.3% 74 62.7%
you get attended immediately Agree 102 72.9% 38 27.1%
when you walk in to the reception Disagree 36 32.1% 76 67.9%
The communication skill of the Agree 102 57.8% 86 42.2%
people that served is Excellent 70
Disagree 20 41.7% 28 58.3%

Source: Own Survey Data (2015)

42
 4.2.3. Organization Image

This section is intended to show the result of relationship among customer satisfaction in
relation with organizational image. Organization image was measured by customer’s valuation
on the perceived service experiences. The percentage in the descriptive found positive
response among trustfulness of organization’s service performance, Provision of diversity of
Service, Providing service using update Technology i.e. (Tracking system) and performing of
the promised services dependably and accurately. From the below table it can be concluded
that provision of service using update Technology is the most important factor for
gaining customer satisfaction in relation to Organizational Image.

Table 4.11 Organizational Image

Customer Satisfaction
Strongly Satisfied Strongly Satisfied
or Satisfied or Satisfied
Row N Row N
Organizational Image Count % Count %
The organization is trustful in its Agree 116 58.3% 90 41.7%
service performance Disagree 12 33.3% 24 66.7%
As compared to other similar Agree 110 53.4% 96 46.6%
businesses, the organization is more Disagree 28 60.9% 18 39.1%
popular and has positive perception
in terms of its overall aspects of
operations.
The organization provided diversity Agree 100 69.3% 44 30.6%
of Service Disagree 38 35.2% 70 64.8%
The organization provides service Agree 104 69.4% 46 30.7%
using update Technology i.e. Disagree 34 33.3% 68 66.7%
(Tracking system )
This service provider performs the Agree 90 60.8% 58 39.2%
promised services dependably and Disagree 18 29.0% 44 71.0%
accurately
The office equipment’s, vehicles, Agree 118 56.2% 92 43.8%
motor cycles and the facility itself Disagree 18 45.0% 22 55.0%
demonstrates the capacity of the
company
The facility layout is Clean and Agree 108 56.3% 84 43.8%
attractive Disagree 30 50.0% 30 50.0%
Source: Own Survey Data (2015)

43
 4.2.4. Cost Performance

Cost performance can be defined as performance measures used to evaluate the degree to
which a company offers or obtains economic value to its customers. As it is clear from the
table, each and every cost performance factor is significantly related to Customer satisfaction.
The empirical results also found significant positive relationship among Price compatibility
with the service, price fairness as compared with other similar businesses, flexibility of
payment and credit term and Credit services provision for buying. From the below table it
can be concluded that fairness of price is the most important factor for gaining customer
satisfaction. The following table shows the association between Customer satisfaction and
specific Cost performance factors.

Table 4.12 Cost Performance

Customer Satisfaction
Strongly Satisfied or Strongly Satisfied
Satisfied or Satisfied
Row N
Cost Performance Count Row N % Count %
Price is compatible with the service Agree 66 75.0% 22 25.0%
Disagree 72 43.9% 92 56.1%
price is fare as compared with other Agree 52 92.9% 4 7.1%
similar businesses Disagree 86 43.9% 110 56.1%
The payment and credit term of this Agree 52 78.8% 14 21.2%
company is flexible (For Disagree 70 43.2% 92 56.8%
organizational Customers )
Credit term is important in your Agree 62 75.6% 20 24.4%
buying decision(For organizational Disagree 60 41.1% 86 58.9%
Customers )
Source: Own Survey Data (2015)

44
 4.3. Factor Analysis
4.3.1. Exploratory Factor Analysis

Factor analysis was used to reduce the attributes of the independent variables in to smaller sets
of underlying factors (dimensions). This helped to detect the presence of meaningful patterns
among the original variables and to extract the main service factors. Principal components
analysis with VARIMAX rotation was employed to identify the factors capable of yielding the
most interpretable results, separately for the independent variable used in the study as shown
below.

Exploratory Factor Analysis (EFA) has been applied to measure the construct validity of data
collection instrument, as directed by DeVellis (1991). Accordingly, Principal Component
Analysis (PCA) approach was used to obtain the factors capable of yielding the most
interpretable results, separately for the independent variable used in the study. Moreover, the
suitability of data for exploratory factor analysis was tested by applying Barlett’s test and
Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy.

As a rule of thumb, it is considered that a KMO value greater than 0.50 shows acceptable
sampling adequacy, greater than 0.70 and 0.80 shows good and very good sampling adequacy
respectively, whereas above 0.90 shows excellent sampling adequacy. Bartlett’s test of
spherecity examines the existence of relationship between items and follows Chi-square
distribution. Larger value of Bartlett’s test indicates greater likelihood the correlation matrix is
not an identity matrix and null hypothesis would be rejected (Sergeesh, Anusree & Mohapatra,
2014). Therefore, Barlett’s test of sphericity was employed to test the inter-correlations, and
KMO measure of sampling adequacy was used to ensure that the variables were grouped
appropriately.
Table 4.13: KMO and Bartlett’s test of Spherecity

Bartlett’s test of Spherecity

Construct KMO Degree of Freedom
(Chi-square)
Operational performance 0.856 171 2490,989

Relational performance 0.694 6 606,240

Organizational Image 0,761 36 1070,775

Cost performance 0,578 6 298,845

Source: Own Survey Data (2015)
45
Table 4.13 presented with the results of the KMO and Barlett’s test of spherecity pertaining to
the study constructs. Accordingly, the KMO measure of sampling adequacy for Operational
Performance items was calculated as 0.856. Since the KMO score was above 0.8, the variables
were interrelated and share common factors. Moreover, Barlett’s test of spherecity (chi-
square= 2490,989, p<0.001) indicated that correlations between items were large enough to
accommodate PCA. In a nutshell, the two tests results revealed that factor analysis was
feasible and the data were suitable for factor analysis.

In addition, there appeared to be relatively higher (0.5 and above) KMO values along with
significant Barlett’s test statistics, which asked to proceed with separate factor analysis for the
remaining constructs. (See Table 4.13).

4.3.2. Principal Component Analysis- Operational Performance Attributes

Principal Components Analysis (PCA) with varimax rotation and Kaiser normalization, was
carried out to factor analyzed 40 attributes (see Annex-3), to identify the underlying
dimensions that describe the variance in the attributes. In this way, 38 items (out of 40) were
found to be loaded in four dimensions (eigenvalues greater than or equal to 1), with above 0.5
factor loadings. (see Table 4.14). Therefore, all the items loaded in to four factors were
retained, and the remaining two items pertaining to (Internet service availability and get a
pick-up and delivery service were excluded since they have a value less than the minimum
acceptable value of 0.5 (Malhotra, 2004)

In addition to high loading values, the factors also proved to be highly internally consistent.
The reliability of the factors was tested by computing Cronbach (alpha) coefficients, whereby
a value of 0.70 was believed to be considering a construct/dimension as reliable as Tewodros
(2015) mentioned (Nunnaily, 1978). The overall scale reliability was appeared to be having a
value 0.932 (see Table 4.14).

46
 Table 4.14: Factor loadings and scale reliabilities for operational performance

Reliability
Factor
Factor 1. Operational Performance Communalities (Cronbach
loading
alpha)
Service procedures and instructions are clearly
1 ,671 ,491
communicated at time of service

2 Phone service is available ,622 ,633

3 Delivery is on time ,729 ,651

4 Representatives (service personnel’s) are available ,641 ,487

5 Packages are sent without damage ,656 ,465

6 Opening (working) hours are convenient ,546 ,472

7 Waiting time is explained ,637 ,723
8 Waiting time is fair ,711 ,735
0,888
9 Timely assistance is provided ,643 ,683

10 Contact personnel’s are Responsive to enquiries ,604 ,522

11 Information is Confidential ,599 ,527

the efficiency of the people that serve you or that you
12 ,532 ,543
deal with is Excellent

13 your objection or complain is handled well ,614 ,436

you get a follow up report on the consignment you
14 ,530 ,545
have sent
15 the location of the facility is convenient ,546 ,682
16 The speed of delivery is Excellent ,637 ,442
17 Package were never lost ,572 ,640
Source: Own Survey Data (2015)

47
 Factor 1 consisted of items related to operational performance which includes nineteen
factors, out of which seventeen were loaded above the minimum acceptable value of 0.5
(Malhotra, 2004, hence considered to be having acceptable construct validity (see Table 4.14).
However, the item related to Delivery on time was appeared to be having the highest factor
loading in this dimension of Operational Performance.

Another exploratory factor analysis was conducted with the other factors , to identify their
underlying factors/constructs In line to this, by using PCA with varimax rotation, eighteen
items were analyzed (Table 4.15). For the above and the below factors respondents were
requested to indicate their level of agreement/disagreement with the items on a 5 point Likert-
type scale (labelled 1-Strongly Disagree, 2-Disagree, 3-Neutral, 4-Agree, and 5-Strongly
Agree).

Table 4.15: Factor loadings and scale reliabilities for Relational Performance,
Organization Image and Cost Performance
Reliability
Factor
Factor 2. Relational Performance Communality (Cronbach
loading
alpha)
1 The sales staffs are Friendly ,710 ,789
2 Representatives (service personnel’s) are knowledgeable ,809 ,813
3 Phone calls are returned on time ,727 ,742
you get attended immediately when you walk in to the ,662 ,830 0,776
4
reception
The communication skill of the people that served is ,766 ,591
5
Excellent
Factor 3. Organization Image
1 The organization is trustful in its service performance ,624 ,413
As compared to other similar businesses, the organization
2 is more popular and has positive perception in terms of its ,641 ,653
overall aspects of operations.
3 The organization provided diversity of Service ,676 ,676
The organization provides service using update
4 ,682 ,571
Technology i.e. (Tracking system )
This service provider performs the promised services 0,829
5 ,744 ,558
dependably and accurately
The office equipment’s, vehicles, motor cycles and the
6 ,506 ,506
facility itself demonstrates the capacity of the company
7 The facility layout is Clean and attractive ,696 ,812
the facility layout in relation to the service that it provides
8 ,727 ,641
is convenient
the people that served you demonstrate the service
9 ,683 ,466
capability of the company
48
Factor 4. Cost Performance
1 Price is compatible with the service ,700 ,858
2 price is fare as compared with other similar businesses ,828 ,806
The payment and credit term of this company is flexible ,715 ,711
3 0,681
(For organizational Customers )
Credit term is important in your buying decision(For ,613 ,787
4
organizational Customers )
Source: Own Survey Data (2015)

Factor 2 was appeared to be having five items pertaining to Relational Performance to the
customer satisfaction of DHL Ethiopia. It included the items like sales staff’s friendliness,
service personnel’s knowledgeableness, return of phone calls on time, prompt services, and
communication skill of service personnel’s. All the items representing Relational Performance
to the customer satisfaction were found to be having factor loadings well above 0.662 hence
were considered to be the part of given construct. However, the highest factor loading (0.809)
was observed for the item related to personnel’s knowledge.

Factor 3 consisted of eight items related to Organization Image: as it can be seen from the
above table all items were found to be well above 0.56 on factor loadings, whereas the loading
of the item related to service provider performance of the promised services dependably and
accurately (0.744) was found to be the highest. Additionally, the dimension was found to be
having Cronbach alpha value of 0.776 (Table 4.15), much above the 0.70 level, hence,
considered to be reliable.

Factor 4 was appeared to be having four items pertaining to reasonable price and credit terms.
All the items representing cost performance were found to be having factor loadings well
above 0.6. This indicated that the items have desired construct validity to use as a measure of
cost performance. However, the highest factor loading (0.828) was observed for the item
stating price is fair as compared with other similar businesses.

49
 4.4. Correlation Analysis
This study employs the correlation analysis, which investigates the strength of relationships
between the studied variables. Pearson correlation analysis was used to provide evidence of
convergent validity. Correlations are perhaps the most basic and most useful measure of
association between two or more variables (Marczyk, Dematteo and Festinger, 2005). General
guidelines correlations of 0.10 to 0.30 are considered small, correlations of 0.30 to 0.70 are
considered moderate correlations of 0.70 to 0.90 are considered large, and correlations of 0.90
to 1.00 are considered very large.

In order to determine the most influencing factor in overall customer satisfaction towards
DHL Ethiopia, relationship between all variables was determined through correlation analysis
before proceeding to regression analysis. Table 4.9 depicts the r value for the relationship
between independent variables (i.e. Operational Performance, Relational Performance,
Organization Image, Cost Performance) and dependent variable i.e. customer
satisfaction of DHL Ethiopia.

And the result in the correlation analysis shows that all independent variables have a positive
and significant relationship with the dependent variable. Besides among each other as it can be
seen in table 4.16. A further look into each factor indicates that factors influencing customer
satisfaction towards DHL Ethiopia customers can be described as important determinant
factor to moderately determinant factor. I.e. organization image and customer satisfaction had
a high correlation of (r=0.591), this finding is in line with the finding of Hishamuddin
Ismail,& Nor Asiah Abdullah,( 2001),who asserted that a higher level of customer satisfaction
leads to a favourable customer assessment of corporate image. Followed by Operational
Performance (r=0.559), Cost Performance (r=0.526), and Relational Performance (r=0.490).
The same result is obtained on Tanyaporn & Sirion (2014).

This gives a preliminary indication on that all the variables are important in determining
customer satisfaction and building company image will lead to customer satisfaction since it
has a strong positive relationship with customer satisfaction. The study also proved that the
relationship between overall corporate image and customer satisfaction does exist. This result
is in line with as Hishamuddin Ismail, & Nor Asiah Abdullah, (2001), stated Grönroos (1990)
who stressed that customers’ perception of service is also affected by the corporate image.
He argued that image is of utmost importance to service firms and is to a great extent
determined by customers’ assessment of the service they received.
50
Better understanding of the component of image promises to help management to improve the
competitive performance of the firm since service is intangible and to some extent the level of
satisfaction will depend on performances as Hishamuddin Ismail,& Nor Asiah
Abdullah,(2001),stated Grönroos (1990) (Grönroos, 1984).

Operational Performance has the strongest positive relationship with Organization Image
(r=0.736). Thus high operational performance with enhanced company image will lead to
customer satisfaction. Even if, the least correlation among the variables were observed between
Cost performance and relational performance with r value (0.286), there was still a medium
relationship among these variables. And the second important positive relationship was found
between operational performance and relational performance (0.664) This finding is
supported by the study carried out S.Mothilal , Angappa Gunasekaran , S.P. Nachiappan and
Jayanth Jayaram (2012) They emphasised that express firms should strengthen their
relationship with clients as part of their growth strategy. They also stated that relational
performance will positively relate to customer satisfaction.

Table 4.16 Correlation between independent and dependent variables

Cost
Overall Operational Relational Organization
Correlation Performa
satisfaction Performance Performance Image
nce
Pearson
1 .559** .490** .591** .526**
Correlation
overall
satisfaction Sig. (2-tailed) 0 0 0 0
N 352 342 352 308 312
Pearson
.559** 1 .664** .736** .444**
Correlation
Operational
Performance Sig. (2-tailed) 0 0 0 0
N 342 342 342 298 302
Pearson
.490** .664** 1 .567** .286**
Correlation
Relational
Performance Sig. (2-tailed) 0 0 0 0
N 352 342 352 308 312
Pearson
.591** .736** .567** 1 .348**
Correlation
Organization
Image Sig. (2-tailed) 0 0 0 0
N 308 298 308 308 270
Pearson
.526** .444** .286** .348** 1
Correlation
Cost
Performance Sig. (2-tailed) 0 0 0 0
N 312 302 312 270 312
**. Correlation is significant at the 0.01 level (2-tailed). Source: Own Survey Data (2015)

51
The correlation results on Table 4.16 show the highest level of correlation coefficient of the
relationship between Organizational Image and customer satisfaction is at 0.591 which is
interpreted as a very strong positive relationship. It is also analysed that an increase in
organization image of DHL may lead to an increase in customer satisfaction. This is not a
surprising result because the corporate image is a well-known accepted by many organizations
as one of the important factors that may represent company reflections towards its
stakeholders. The lowest level of correlation coefficient of the independent factor to customer
satisfaction in relation to the other variables is the relationship between Relational
performance and customer satisfaction. The result shows the correlation level at .490 which
can be interpreted as a moderate positive relationship. To sum up on the other extreme the
relationship between the independent variables shows that there is a strong positive
relationship among operational performance and organization image which implies working
on the image of the organization will result the organization to perform .There is also a
moderate relationship between relational performance and cost performance.

4.5. Regression Analysis

In addition to the correlation analysis, the study used regression analysis to examine the
variation explained by each construct of service satisfaction level to see contribution of factors
that customers perceive to be important in affecting their satisfaction towards the service of
DHL express Ethiopia. Customer satisfaction was used as the dependent variable while
factors which are perceived to be important in describing customer satisfaction were used as
independent variables. The regression model presents how much of the variance in the
measure of customers satisfaction is explained by the underlying factors.

Table 4.17 Service dimensions and Customers Satisfaction

Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .679c ,461 ,452 ,898
Source: Own Survey Data (2015)

52
The model summary in the above table 4.17 shows that the multiple correlation coefficient
(R), using all predictors simultaneously, is 0.898 and Adjusted R square is, 461 , meaning 46
% of the variance in customer satisfaction can be predicted from the combination of Cost
Performance, Relational Performance, Organization Image, Operational Performance. And the
other variables are explained by other factors. Similarly, the ANOVA table 4.18 shows the
overall significance/acceptability of the model from a statistical perspective. As the
significance value of F statistics shows a value of 54,431 and p- value (.000), which is less
than p<0.05, the model is fit for the study . This indicates that the variation explained by the
model is not due to chance. As it is stated earlier in this chapter, this study aims to identify the
most contributing independent variables in the prediction of the dependent variable. Thus, the
strength of each predictor (independent) variable influence on the criterion (dependent)
variable can be investigated via standardized Beta coefficient.

The regression coefficient explains the average amount of change in dependent variable that
is caused by a unit of change in the independent variable. The larger value of Beta coefficient
that an independent variable has, the more support to the independent variable as the more
important determinant in predicting the dependent variable.

Compared to coefficient of determination or R-square, Adjusted R-square is more reliable in

measuring a regression models goodness of fit. The main disadvantage of using coefficient of
determination or R-square is more to do with bias of number of independent variables
included into the model, which implies that the more independent variable added into the
model, the more R-square increasing. The R-square value only indicates the variance in
overall consumer satisfaction of DHL Ethiopia.

53
Table 4.18 Anova Table
ANOVAa
Sum of
Model Squares Df Mean Square F Sig.
1 Regression 175,415 4 43,854 54,431 .000d
Residual 205,446 255 ,806
Total 380,862 259
Source: Own Survey Data (2015)

Thus the above ANOVAa table shows that F=54,431 and is statistically significant. This
indicates that the combination of four variables significantly predict customer satisfaction.
According to Table 4.19, the regression standardized coefficients for the four independent
variables, i.e. Cost Performance, Relational Performance, Organization Image, are 0.477,
0.312, and 0.651, respectively. Their ignificance levels are 0.000, 0.000, and 0.000,
respectively, which are less than 0.05. This indicates significant relationship between them
and the dependent variable (customer satisfaction) existed. While operational performance
with value (0.108) found to be insignificant.

Table 4.19 Regressions for Customer Satisfaction

Unstandardized Standardized
Model Coefficients Coefficients T Sig.
B Std. Error Beta
-2.065
(Constant) .441 -5.312 .000

Operational Performance .107 .171 .047 .626 .532

1
Relational Performance .306 .102 .184 3.005 .000
Organization Image .656 .151 .296 4.351 .000
Cost Performance .557 .080 .355 6.967 .000
Dependent Variable: You are satisfied with the overall service of the organization
Source: Own Survey Data (2015)

54
Therefore The fitted model:
Yi= -2.065 +0.306 RP + 0.656 OI + 0.557 CP
Where Yi: ith Customer satisfaction level
RP: ith Relational performance level
OI: ith Organizational Image level
CP: ith Cost performance level

As shown in Table 4.12 cost performance (B=0.557), organizational image (B=0.656), and
relational performance (B=0.306) dimensions of customer satisfaction have a significant
influence on over all service users satisfaction at 95% confidence level (p<0.05), indicating
that the highest impacting factor for the customers of DHL Ethiopia consider organizational
image, cost performance and relational performance as important factors in assessing overall
satisfaction. However; operational performance have no significant influence on overall
satisfaction (p>0.05).

The regression analysis presented in Table 4.19 shows results which cast doubt upon the
reliability of preliminary correlation analysis findings. Whereas the correlation analysis
reported a significant positive relationship among all the variables, the regression results
suggest that only three variables have significant positive relationship with customer
satisfaction.

Accordingly, priority area of service improvement shall be a focal point for DHL Ethiopian.
As not all the dimensions contribute equally to customer satisfaction. Therefore, superior
performance by DHL on organization image, cost performance, relational performance
dimensions will benefit DHL in providing greater customers overall satisfaction. While
performance improvement on operational performance may not significantly
impact/contribute overall satisfaction .Hence, more resource deployment shall be directed to
building company image and pricing and credit attributes. Generally, it can be pointed out
that, among all the four diminutions used in this study, organizational image is found to be
the crucial factor in DHL Ethiopia customers in determining customers’ satisfaction.

In particular, organization image (B=0.656), Cost performance (B=0.557), and relational

performance (B=0.306) are positively and significantly related to customer satisfaction.

55
This indicates that a one unit decrease in organizational image can result in a corresponding
decrease in customer satisfaction by 0.656 units. That is, the level of customer satisfaction is
decreased significantly following any negative perception regarding the image of the
organization.

Likewise, with a one unit increase in agreement from customers that price is unfair; they also
agreed that their level of satisfaction with the organization image reduced significantly by
0.557 units. Analysis of the standardized regression coefficients (beta) suggests that while
organizational image (B= 0.656), relational performance (B= 0.306), and cost performance
(beta = 0.557) are both strongly linked to customer satisfaction, the impact of organization
image is greater. This finding goes in line with the finding of Boohene and Agyapong (2011)

The summary of the regression results in table 4.10, 4.11& 4.12 shows that about 46 % of
variation in customer satisfaction is explained by three determinant variables which are
significant at the 0.05 level. The result shows that customer satisfaction levels are linearly
related to three determinant variables called organizational image cost performance and
relational performance. However Operational Performance removed from the model since it
has no significant contribution on improving the predicting power of customer satisfaction.
From the table 4.12 above it can be concluded that Customer satisfaction is positively and
directly associated with organizational image and relational performance. Meanwhile if the
price of the service increase customer satisfaction will decrease.

4.6. Hypothesis Testing

This section is intended to show the result of relationship among customer satisfaction from
relational performance, operational performance, cost performance, and organization image in
order to answer the research questions, See Table 20 below. To examine the relationship
between explanatory variables, Regression was used to test the hypothesis at the .05 level of
significance is used in all hypothesis testing. Four hypotheses are formulated based on the
conceptual framework and they are shown as follows:

56
 Table 4.20 Summary of the Overall Outcome of the Research Hypotheses

Description Hypothesis Result Reason

H0: There is no significant relationship
Hypothesis 1 between Operational performance and Reject Ho β =0.306,p<0.05
customer satisfaction
H1: There is significant relationship between
Operational performance and customer H1Accepted
satisfaction
H0: There is no significant relationship
Hypothesis 2 between Relational Performance and customer Accept Ho β =0.107,p>0.05
satisfaction
H1: There is significant relationship between
Relational Performance and customer Reject H1
satisfaction
H0: There is no significant relationship
Hypothesis 3 between Cost Performance and customer Reject Ho β =0.557,p<0.05
satisfaction
H1: There is significant relationship between
Cost Performance and customer satisfaction H1Accepted
H0: There is no significant relationship
Hypothesis 4 between Organization image and customer Reject Ho β =0.656,p<0.05
satisfaction
H1: There is significant relationship between H1Accepted
Organization and customer satisfaction
Source: Own Survey Data (2015)

In general as table 4.20 clearly shows, among the four factors, multiple linear regressions
(Beta coefficients) analysis revealed that, organization image is the first most significant
factor that is perceived to be important in creating customers overall satisfaction followed by
cost performance, Relational performance takes the third place in impacting customers
overall satisfaction. On the other hand, Operational performance has no significant effect on
customer satisfaction.

57
 Customer satisfaction on all over performance is explained by the significance level p>0.05.
This indicates that, customer satisfaction is not mainly tied to operational performance.

In addition to the above-mentioned factors, which have been confirmed significant through
regressions analysis, there are other factors that customers perceive to be important in forming
their satisfaction. As per different researches in different times, so many other factors can
enhance customer satisfaction on the service industry.

4.7 Independent T-Test

Table 4.21 indicated that there is a significant difference in Individual and Organizational
average customer satisfaction level in relational performance (t=4.893, (DF=244), P<000)
and Organizational image (t=2.069, (df=208), P<05). However, there is no stringing
evidence on significant difference between Individual and organizational average satisfaction
level in relation to operational and cost performance. The mean gap score satisfaction values
indicated that Individual consumers are more satisfied than organization customers in
relation to relation Performance. However organizational customers are more satisfied
than individual customers with regard to organizational image. This indicates the
organization market segment can be addressed through enhancing company image while
individual segments would be through different relationship marketing strategies.

Table 4.21 Independent Samples Test

Independent Samples Test
t-test for Equality of Means
95% Confidence
Determinant Sig. Mean Std. Error
Interval of the
Factors T Df (2- Differen Differenc
Difference
tailed) ce e
Lower Upper
Operational
Performance 1.489 347.048 .013 .14574 .05855 -.04620 .18487
Relational
Performance 4.893** 349.991 .000 .51220 .07800 .35880 .66560
Organization Image
2.069** 349.972 .039 .06933 .05874 .03058 .26091
Cost Performance
-.596 343.039 .551 -.04971 .08334 -.21364 .11422
Source: Own Survey Data (2015)

58
 Table 4.21 Independent Samples Test
Independent Samples Test
t-test for Equality of Means
Determinant Mean 95% Confidence Interval
Factors Sig. (2- Std. Error
T Df Differen of the Difference
tailed) Difference
ce Lower Upper
Operational
Performance 1.489 347.048 .013 .14574 .05855 -.04620 .18487
Relational
Performance 4.893** 349.991 .000 .51220 .07800 .35880 .66560
Organization Image
2.069** 349.972 .039 .06933 .05874 .03058 .26091
Cost Performance
-.596 343.039 .551 -.04971 .08334 -.21364 .11422
Source: Own Survey Data (2015)

Relationship among customer satisfaction and Organization type

This section is intended to show the result of relationship among customer satisfaction and
Organization type. In this study four groups of institutions were participated including
Government, NGO, Diplomatic and commercial organizations.

Table 4.22 Mean Satisfaction Level of Individual and Organizational Customers

You are satisfied with the overall service of the organization * Organization type Cross
tabulation
You are satisfied with Organization type
the overall service of Non-
the organization Governmental Commercial Diplomatic Total
Governmental
Strongly Dissatisfied 42.9% 6.7% 3.4% 0.0% 7.2%

Dissatisfied 0.0% 46.7% 19.0% 0.0% 21.7%

Neutral 0.0% 20.0% 17.2% 0.0% 15.7%

Satisfied 42.9% 13.3% 27.6% 0.0% 25.3%

Strongly Satisfied 14.3% 13.3% 32.8% 100.0% 30.1%

Total 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Own Survey Data (2015)

There is a significant relationship between customer satisfaction and organizational type.
Diplomatic organizations are highly satisfied (100%) than others. However, Government
offices are more dissatisfied (42.9%) than others. Moreover, commercial organizations are
moderately satisfied. From this it is concluded that diplomatic entitles are corporate clients to
DHL Ethiopia and the study recommends.
59
 CHAPTER FIVE

5. SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

This chapter aims to review the problem of the research and conclude the findings with regard
to the objectives of the study. Recommendation that focuses on how the problem identified
could be addressed is included in this chapter. Agenda for future researches is also included.

5.1 SUMMARY OF FINDINGS

This study primarily focused on identifying factors that affect customer’s satisfaction in
express service industry focusing on DHL Ethiopia. This will help to observe the existing
customer satisfaction level and set different strategies by the express firm on how to meet or
exceed customers’ satisfaction. According to the study findings, three factors: relational
performance, organization image and cost performance were identified as critical factors that
influence over all satisfaction of DHL Ethiopia customers. However, the influences of
organization image in their satisfaction level were more important than the other factors. This
finding is consistent with the findings of Tanyaporn & Sirion (2014). As a matter of fact,
having a well-known corporate image is one of the most important factors which help in
building company reputation. The Pearson correlation result indicates that all the independent
-variables were significantly and positively correlated with overall customer satisfaction. The
most positively correlated variable being organizational image (r=0.591) followed by
relational performance (r=0.559). There is also statistically significant relationship between
the four independent variables. The study also finds that the most important factor in
influencing customer satisfaction is organizational image.

The independent t test revealed that individuals have more satisfaction level than
organizations on the Organizational performance and Relational performance while there is no
difference between individuals and organizations satisfaction based on the organizational
image and cost performance.

60
And the multiple regression result confirmed that, the combined effect of the three dimensions
significantly influence (p<0.01) overall DHL customers satisfaction.Besides,R2 value was
found to be 0.452 which indicates that 45.2 percent of the variation in overall satisfaction of
DHL Ethiopian can be predicted by the stated model at 99% confidence level.

The study also finds out that there is a significant relationship between customer satisfaction
and organizational type. Meaning Diplomatic organizations are highly satisfied (100%) than
others. However, Government offices are more dissatisfied (42.9%) than others. Additionally,
from the descriptive statistics it’s found that most of the customers use DHL expresses to send
document. Out of the total respondents those who use express service mostly are commercial
organizations and it is found that express service is important for the business activity.

The major factors that alter the satisfaction of individual customers mainly relate to relational
performance while the factors that are mostly determinant for organizational customers are the
image of the company.

5.2. CONCLUSION
This study was initiated to investigate the factors that influence customer satisfaction in using
DHL express Ethiopia. More specifically, in this study four factors are assumed to be more
important in influencing customer’s satisfaction in express service industry.

The results of this study also show the association between almost all independent variables
and overall customer satisfaction. Furthermore, the examination of the results of regression
analysis indicated that, organizational image, cost performance and relational performance
positively affect customer’s satisfaction. From this finding, it can be concluded that
organization image is the most important element which highly influence the overall
satisfaction customers on the service of DHL Ethiopia. Nowadays, the role of organization
image has changed due to increasing computation and branding in customers decision.
Customer satisfaction is currently an issue widely mentioned in the business industry which
has increasingly become a major consideration topic for management to ensure growth of an
organization. According to the result of hypotheses testing, organization image, cost
performance and relational performance, are factors that impact to the customer satisfaction.
In addition, the relationship between organization image and customer satisfaction also has the
highest correlation coefficient at 0.591 which is analyzed as a strong positive relationship.
61
This means organization image for example physical image, reputation, company name, and
the value experienced by each person towards a company are major factor influencing
customer’s perception of satisfaction. Moreover, both operational performance and relational
performance also have positive relationship with customer satisfaction at the coefficient
correlation of 0.559 and 0.490 respectively. On the top of that Express service has important
role in all organizations and customers that this research had addressed. This makes it an
advantage for the service providing companies.

Moreover, it is very important for any business firm to assess the level of customer
satisfaction. High level of satisfaction could translate into profits whereas low level of
satisfaction means customers are more likely to shift in favour of competitors. The first main
objective of this survey was to find the level of customer satisfaction and as per the findings of
this survey; DHL express Ethiopia customers are dissatisfied.

Overall, the finding shows that the services provided are at good level however, great
improvements are needed to enhance the satisfaction level, and previous studies with different
analysis had concluded that there is positive and significance relationship between these
variables and customers satisfaction.

5.3. LIMITATION OF THE STUDY

The study design has more strengths than limitations. The presence of the utilization of mixed
methods, addressing major factors of customer satisfaction of DHL express service is vital.
Otherwise, the study has the following limitations:

 The study addressed only Addis Ababa DHL customers and cannot represent other
regions; therefore, the findings of the study will not be representative of other DHL
offices outside of Addis Ababa.
 Customers who use DHL Express for incoming services are not included.
 Only DHL were included in this study due to limitation of resource and time.
 The snapshot nature of cross-sectional studies, while convenient, does have its
downside in that it doesn't provide a good basis for establishing causality. Two distinct
variables (Outcome and Determinant) are measured at the same point in time.
Correctional analysis can say that the two are related somehow, but they cannot
positively determine if one caused the other.
62
 5.4. FURTHER AREA OF RESEARCH

Since the study only focuses in Addis Ababa another longitudinal research can be conducted
by incorporating difference branches of DHL out of Addis Ababa.
A comparative study can also be made by incorporating other firms who provide the same
service

5.5. RECOMMENDATION
In this research study, customer satisfaction had been taken into account which is a very
important element for the success of any business. This study can practically be used by
express service firms in creating customer satisfaction. Many studies show that service
attribute has varying degrees of importance for customer satisfaction. The service attributes
that directly influence customer choices are the determinant attributes that motivate customers
to repurchase and distinguish a corporation from its competitors.

Organization Image
The study showed organization image is found to be the most important attribute in
determining customer satisfaction which implies that the organization has to utilize it properly
since most customers stated that DHL organizational image and reputation is excellent in 3
variables. First, customers have trust on service provision of the company Second, they have
found that services rendered by the company have update Technology i.e. (Tracking system).
That makes customers to have confidence in the service provision, and thirdly, customers
believe the organization provides diversity of services. On the top of the above explanations
organization investment decisions image was the most important among the four factors.
Thus, when DHL makes; the highest priority should be given to the projects related to image
improvement. Since organization image contributes to customer satisfaction, it is believed
customer satisfaction contributes to customer retention; the organization image should
contribute to market share and profit.

63
The student researcher also recommends the company to reinforce both physical image and
organization reputation image. The organization image could be improved by strengthening
availability of office equipment’s, vehicles & motor cycles, cleanness and attractiveness of
facility layout. Since it is one of the way what makes organization visible and different from
competitive organizations. Moreover, it has the advantage of reminder advertising since
people will recall the company when they see a car or other materials containing the brand
name.

In today’s severe competitive markets, differentiation between organizations in terms of price,

product and/or service characteristics and the value of the delivery system is difficult. The
student researcher also recommends to positioning the organization inside the customers’
black box, i.e., customers’ mind through communication channels such as advertising,
promotion, postures, banner ads, publicity, public relations, and personnel selling. As Eman
Mohamed Abd-El-Salam, Ayman Yehia Shawky & Tawfik El-Nahas (2013), since it is the
most determinant factor for DHL express Ethiopia.

Cost performance
The second most important factor that impacts the satisfaction of DHL express Ethiopia
customers is cost performance which the student researcher would also like to suggest the
company to perform good service that is worth for customer’s payment. Based on the
collected data, many customers think that DHL express Ethiopia offers competitive price of
unit and total cost.

Relational Performance
The third factor that is impacting customers satisfaction for this service provider is relational
performance to keep this advantage in the future the staff should have a valuable knowledge
about the service under offer and a dynamic communication skills since the delivery of the
service will not only depend on the performance of the employee but also other things in the
service escape .Thus, the staff should be alert and energetic during the working hours. Lastly,
if not applied the company should give rewards to high performing employees in order to
encourage them to improve their service delivery.

64
The rewards could be souvenir gifts, public announcement in a company, monetary rewards,
bonus, or promotions. In the business of today competitive market relationships development,
maintenance and expansion helps in maintaining a company’s market position.

Numerous studies have shown that customer satisfaction is a key factor that directly impacts
customer intention to repurchase or recommend to others. Customer repurchase or word-of-
mouth behaviour increases corporate profit and market share It is found that customers of
DHL Ethiopia are not strongly satisfied which implies that if a competitor penetrates in to the
market it may take away a corporate client. It is a treating situation thinking of a strong
competitor penetrating in to the market unless and otherwise an immediate corrective measure
is taken. The study suggest that by making customers feel satisfied, by establishing good
relationship with customers through efficient customer services would lead toward brand
loyalty and simply by keeping the reliability of services a firm can establish long term
profitable relationship with customers.

65
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APPENDICES

70
 Appendix ONE
Addis Ababa University
School of commerce
Marketing Management
Dear respondents,
My name is Tsigereda Tsehaye and I am a graduate student at Addis Ababa University College
of Commerce, Department of Marketing Management. Currently I am conducting a research
study.
And this questionnaire is designed to seek information on the factors affecting customer
satisfaction in express service providing companies the case of DHL Express Ethiopia, in
partial fulfilment for the award of master of art in marketing management. The overall
objective of this questionnaire is to gather first-hand information on the aforementioned issue.
I would like to assure you that the information you are going to provide will be exclusive kept
confidential. Your contribution to this research is very greatly appreciated.
Thank you so much in advance for your cooperation!
For any further information please contact me with the following address:
Tel: +251 911 55 57 35
Email: rose.tsigereda@yahoo.com
General instruction:
Please put ( or x) Mark to indicate your preference

ANNEX I: Customer Questionnaire Tool

Assessing Client Profile & Evaluating client satisfaction
Enter Respondent Study No______________________ ( mm,yy – individual study no)
Section 1: Site Information
Name of Service Point:
1. Head office 2. Leghar service point 3. NOC service point
101.

4. Addis Ababa University service point 5. Agents service point

Section 2: Service Utilization
Which of the services did you receive from DHL?
201.
1. Document 2. Merchandise 3. Sample

How often do you use express service?

202. 1. Very Often 2. This is my first time 3. Rarely 4. Often

71
 What was the most important reason for choosing this provider for the services you received?
1 Nearby 5. Services available

203. 6. Referred to this provider

2 Low cost
7. No others providers available
3 Reputation

4 Provider or staff known to me personally

How important is Express service for your company?

204. Very Important Important Insignificant Not important at all

1. 2. 3. 4.

Which feature is the most important one for you when using express service?

205. Price Reliability Convenience Speed

1. 2. 3. 4.

Section 3: Client Profile (for individual Customers )

301. Sex: 1. Male 2. Female

Age :
302.
1. 18 – 29 2. 30 – 49 3. over 50

Educational Qualification :

303.
1. Secondary school 2 Diploma and above 3 Master’s Degree& Above

Occupation
1 Private business 2 Government employee 3 NGO
304.
4 Student 5 Unemployed

Income Band

1. 2500- 4500 2. 4501 – 10,000

305.

3. 10,001 – 15,000 4. above 15,000

72
 What is the category of your organization? (For organizational Customers )

306. 1. Governmental 2. Non-Governmental

3. Commercial 4. Diplomatic

Section 4: Determinant factors

1. Strongly disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly agree 6. NA

    
Mark a  in the appropriate box for each question below

Operational Performance 1 2 3 4 5 6
401. Service procedures and instructions are clearly communicated
at time of service
402. Phone service is available

403. Internet service is available

404. Delivery is on time

405.
Representatives (service personnel’s) are available
406.
Packages are sent without damage
407. Opening (working) hours are convenient

408. Waiting time is explained

409. Waiting time is fair

410. Timely assistance is provided

411. Contact personnel’s are Responsive to enquiries

412. Information is Confidential

413. the efficiency of the people that serve you or that you deal
with is Excellent
414. your objection or complain is handled well

415. you get a follow up report on the consignment you have sent

416. the location of the facility is convenient

417. The speed of delivery is Excellent

418. When you place an order you get a pick-up and delivery
service

73
 419. Package were never lost

Relational Performance
420. The sales staffs are Friendly

421. Representatives (service personnel’s) are knowledgeable

422. Phone calls are returned on time

423. you get attended immediately when you walk in to the

reception
424. The communication skill of the people that served is Excellent

Organization Image 1 2 3 4 5 6
425. The organization is trustful in its service performance

As compared to other similar businesses, the organization is

426. more popular and has positive perception in terms of its
overall aspects of operations.
427. The organization provided diversity of Service

428. The organization provides service using update Technology

i.e. (Tracking system )
429. This service provider performs the promised services
dependably and accurately
430. The office equipment’s, vehicles, motor cycles and the facility
itself demonstrates the capacity of the company
431. The facility layout is Clean and attractive

432. the facility layout in relation to the service that it provides is

convenient
433. the people that served you demonstrate the service capability
of the company
Cost Performance
434.
Price is compatible with the service
435.
price is fare as compared with other similar businesses
436. The payment and credit term of this company is flexible (For
organizational Customers )
437. Credit term is important in your buying decision(For
organizational Customers )
Section 5: Satisfaction
501.
I will encourage friends/families to use the express provider
502.
Intended to continue doing business with the express provider
503.
You are satisfied with the overall service of the organization
74
 Do you use another express service provider (other than DHL)?
504.
1. Yes 2. NO

If yes for the above question why do you use this other company?
Company policy of having multiple supplier
505. Cost effectiveness

To satisfy a need not addressed by the other

Availability

THANK YOU SO MUCH

75
 APPENDICES TWO
አዲስ አበባ ዩኒቨርስቲየንግድ ስራ ትምህርት ቤት
የገበያ አመራር ትምህርት ክፍል
በዲ.ኤች.ኤል.ኢትዮጵያ የደንበኞች እርካታ መለኪያ መጠይቅ

ውድ መጠይቅ መላሾች

ስሜ ጽጌሬዳ ፀሀዬ ይባላል በአዲስ አበባ ዩንቨርስቲ የንግድ ስራ ት/ት ቤት ትምህርት ክፍል
የድህረ ምረቃ ፕሮግራም ተማሪ ስሆን በአሁሉ ሰአት ለመመረቂያ ማሞያ የጥናት ፅሁፌን
በመስራት ላይ እገኛለው፡፡

ይህ የድህረ ምረቃ የመመረቂያ ጥናት ፅሁፍ በዲ.ኤች.ኤል. ኢትዮጲያ የፈጣን መልእክት

ድርጅት የደንበኞች የአገልግሎት እርካታ ላይ ተፅእኖ የሚያሳድሩ ምክኒያቶች ( ነጥቦች )ላይ
ያተኮረ ሲሆን በገበያ አመራር የድህረ ምረቃ ድግሪ ለማግኝት ቅድመ ሁኔታ ነው የዚህ
መጠይቅ ዋና አላማ በተጠቀሰው ርእስ ዙሪያ የመጀመሪያ መረጃን ማግኘት ነው፡፡የሚሰጡት
ማንኛውንም መረጃ ሚስጥርነቱ የተጠበቀ መሆኑን በትህትና እገልጻለሁ ፡፡ስለመልካም
ትብብርዋ ከልብ አመሰግናለው ፡፡

ለበለጠ መረጃ በሚቀጥለው አድራሻ ሊያናግሩኝ ይችላሉ

Tel: +251 911 55 57 35

Email - rose.tsigereda@yahoo.com
ጠቅላላ መመሪያ /መመሪያ
እባክዋን መልስዋን ይህን ምልክት (√ ወይንም x ) በማድረግ ይግለፁ

ክፍል1 :- የአድራሻ መረጃ

አገልግሎቱን ያገኙበት ቦታ
101
1. ዋናው ቢሮ 2. ለገሀር አገልግሎት መስጫ 3. NOC አገልግሎት መስጫ

4. አዲስ አበባ ዩንቨርስቲ 5. ወኪሎች አገልግሎት መስጫ

76
ክፍል 2- የአገልግሎት አጠቃቀም

201 የትኛውን አገልግሎት ተጠቀሙ

1.ዶክመንት 2. ቁሳቁስ 3. ናሙና

አገልግሎት ምን ያህል ደግመው ይጠቀማሉ

202
1. በጣም በተደጋጋሚ 2. የመጀመሪያ ጊዜ

3. አልፎ አልፎ 4. ተደጋጋሚ

203 ይህንን አገልግሎት ሰጪ ለመምረጥ የተነሳሱበት ዋናው ምክንያት

1. የቦታው ቅርበት 2. ርካሽ በመሆኑ 3.መልካም ስም ስላለው

4. አገልግሎት ሰጪው (ሠራተኛውን) በግል ማወቅ 5. የአግልግሎቱ መገኝት

6. በሌላ ሰው ጥቆማ 7. ሌላ አገልግሎት ሰጪ ባለመኖሩ

204 ለድርጅትዎ የፈጣን መልእክት አገልግሎት ምያህል አስፈላጊ ነው

1.በጣምአስፈላጊ 2.አስፈላጊ 3. አንገብጋቢያልሆነ 4. አላስፈላጊ

205 የፈጣን መልእክት አገልግሎት ሲጠቀሙ ለውሳኔ የሚረዳዎ

1. ዋጋ 2. አስተማማኝ በመሆኑ 3. በቅርብ ያለ 4. ፋጥነት

77
ክፍል 3 ፡-ጠቅላላ መረጃ(በግለሰብ ደንበኞች የሚሞላ)

301 ፆታ
1. ወንድ 2. ሴት

302 እድሜ
1. 18-29 2. 30-49 3. ከ 50 በላይ

303 የትምርት ደረጃ

1. ሀለተኛ ደረጃ 2. ዲፕሎማና ከዚያ በላይ 3. ድህረ ምረቃና ከዚያ በላይ

የስራ ሁኔታ

304 1. የግል 2. የመንግስት ሰራተኛ 3. መንግስታዊ ያልሆኑ ድርጅቶች

4. ተማሪ 5. ስራ-ፈላጊ

ወርሃዊ ገቢ በብር
305
1.2500 – 4500 2. 4501 – 10,000 3.10,001 – 15,000

4.>15,000
የድርጅቶ አይነት(በድርጅት ደንበኞች የሚሞላ)

1. የመንግስት ድርጅት 2. መንግስታዊ ያልሆነ የልማትድርጅት

306

3. የንግድ ድርጅት 4. ዲፕሎማት ድርጅት

78
ክፍል 4:- ወሳኝ ነጥቦች

1.በጣም አልስማማም 2. አልስማማም 3. እስማማለው 4. በጣም እስማማለው

   

401 የአገልግሎት አካሄድና መመሪያ በግልፅ የተጠቀመ ነው

402 የስልክ አገልግሎት አለ

403 የኢንትርኔት አገልግሎት አለ

404 አገልግሎቱ በታቀደበት ሰአት ይሰጣል

405 አገልግሎት ሰጪ ሰራተኞች አሉ

406 የላኩት እቃ(ጥቅል) ሳይበላሽ ይላካል

407 የአገልግሎት መስጫ ሰአት አመቺ ነው

408 አገልግሎት ለማግኘት የሚጠበቅበትሰአት ( ጊዚ) በግልፅ

የጠጠቀመ ነው

409 አገልግሎት (እርዳታ) በትክክለኛው ሰአት ይሰጣል

410 አገልግሎት ለማግኝት ሚጸበቀው ሰአት 9 ጊዜ ) ተመጣጣኝ ነው

411 አገልግሎት ሰጪ ሰረተኞች ለደንኛ ጥያቄዎች አፍጣኝ ምላሽ

ይሰጣሉ
የመረጃ ሚስጥር የተጠበቀ ነው
412
79
413 አገልግሎት የሚሰጡ ሰራተኞች ብቃታቸው አስተማማኝ ነው

414 ለቅሬታ ተገቢውን ምላሽ ያገኛሉ

415 በላኩት እቃ ላይ የክትትል መረጃ ያገኛሉ

416 የአገልግሎት መስጫው ቦታ ቅርበት አለው

417 የአገልግሎት ፍጥነት አስተማማኝ ነው

418 ለጠየቁት ( ላዘዙት ) አገልግሎት ያሉበት ቦታ ድረስ መጥተው

የመውሰድና የማድረስ አገልግሎት ያገኛሉ

419 የላኩት እቃ (ጥቅል )ፈፅሞ አይጠፋም

ከሰራተኞች ጋር ያለ ግንኙነት

420 አገልጋሎት ሰጪ ሰራተኞቹ እንደ ጋደኛ ያስተናግዶዎታል

421 አገልጋሎት ሰጪ ሰራተኞቹ በቂ እውቀት አላቸው

422 የስልክ ጥሪዋቹ በሰአቱ ይመለከታል

423
አገልግሎት መስጫ ቢሮ ሲሄዱ ሰራተኞቹ በፋጥነት
ያስተናግዱዋታል

424 አገልግሎት ሰጪ ሰራተኞች ጥሩ የመግባባት ክህሎት አላቸው

80
425 አገልግሎት ሰጪ ድርጅቱ ሊተማመኑበት የሚችሉትን
አገልግሎት ይሰጣል

426 ከሌሎች ተመሳሳይ የፈጣን መልእክት አገልግሎት ሰጭ

ድርጅቶች ጋር ሲነፃፀር ድርጅቱ የታወቀና ስለ አገልግሎቱ
መልካ እሳቤ በተጠቃሚዋች ያለው ነው

427 ድርጅቱ የተለያዩ የፈጣን መልእክት አገልግሎቶችን ይሰጣል

428 ድርጅቱ ቃል በገባው መሰረት አስተማማኝና ጥራት ያለው

አገልግሎት ይሰጣል

429 አገልግሎት ሰጪ ሰረተኞች ለደንኛ ጥያቄዎች አፍጣኝ ምልሽ

ይሰጣሉ

430 የድርጅቱ ቁሳቁስ፣ ሞተር ፤ ተሸከርካሪዋች እና ምቹ ሁኔታዋች

የድጅቱን የአገልግሎት ፋጥነነትና ብቃት ያረጋግጣል

431 የአገልግሎት ቢሮዎች ንፁፁ‹ህና ሳቢ ናቸው

432 ከሚሰጠው አገልግሎት አንፃር የድርጅቱ የአገልትእና ቁሶች

ምቹ ነው

433 አገልግሎት የሚሰጡት ሰራኞች የድርጅቱን የአገልግሎት አቅም

ናብቃት ያለጋግጣሉ

ከክፍያ ጋር ግንኙነት ያላቸው ስራዎች

434 አገልግሎትና የሚከፈለው ዋጋ ተመጣጣኝ ነው

81
435 ከሌሎች ፈጣን መልእክት አገልግሎት ድርጅቶች ጋር ሲወዳደር
ዋጋው ተመጣጣኝ ነው

436 የክፋያና ዱቤ አገልግሎት እንደ ሁኔታው የሚቀይረና አመቺ

ነው ( በድርጅት ደንበኞች የሚሞላ)
የዱቤ አገልግሎት ለግዢ ውሳኔዎ በጣም አስፈላጊ ነው (
437 በድርጅት ደንበኞች የሚሞላ)

ክፍል 5 - እርካታ

501 ይህንን የፈጣን መልእክት አገልግሎት ሰጪ ድረጅት ቤታቦች

ሆኑ ጋደኞች እንዲጠቀሙ አበረታታለው

502 ከድርጅቱ ጋር ያለንን በጎ የሥራ ግንኙነት የመቀጠል ፋላጎት

አለኝ

503 ድርጅቱ በሚሰጥዎ አጠቃላይ አገልግሎቶች ደስተኛ ነዋት

504
ከ ዲ.ኤች.ኤል.የፈጣን አገልግሎት ሰጪ ውጪ ሌላ ድርጅት

ይጠቀማሉ

ለጥያቄ 504 መልስዎ አዋ ከሆነ ሌላ የፈጣን መልእክተ

አገልግሎት የሚጠቀሙት ለምንድን ነው

505
ድርጅቱ ከአንድ በላይ አገልግሎት ሰጪዋችን የሚያስጠቅም መመሪያው ስላለው

ዋጋ ስለሚቀንስ

በዲ.ኤች.ኤል.ያልተገኘ አገልግሎት ለማግኘት

ድርጅቱን በቀላሉ ማግኘት ስለሚቻል

አመሰግናለሁ!
82
APPENDIX THREE: FACTOR ANALYSIS OUTPUT

KMO and Bartlett's Test

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .578
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .856
Approx. Chi-Square 298.845
Approx. Chi-Square 2490.989
Bartlett's Test of Sphericity df 6
Bartlett's Test of Sphericity Df 171
Sig. .000
Sig. .000

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .761

Approx. Chi-Square 1070.775
KMO and Bartlett's Test
Bartlett's Test of Sphericity Df 36
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .694
Sig. .000
Approx. Chi-Square 606.240

Df 10
Bartlett's Test of Sphericity
Sig. .000

83
 Communalities

Initial Extraction
Communalities Communalities
operatinal1 1.000 .491
Initial Extraction Initial Extraction
operatinal2 1.000 .633
relatinalperformance1 1.000 .789 organizationimage1 1.000 .413
operatinal3 1.000 .580
relatinalperformance2 1.000 .813 organizationimage2 1.000 .653
operatinal4 1.000 .651
relatinalperformance3 1.000 .742 organizationimage3 1.000 .676
operatinal5 1.000 .487
relatinalperformance4 1.000 .830 organizationimage4 1.000 .571
operatinal6 1.000 .465
relatinalperformance5 1.000 .591 organizationimage5 1.000 .558
operatinal7 1.000 .472
Extraction Method: Principal Component Analysis. organizationimage6 1.000 .506
operatinal8 1.000 .723
organizationimage7 1.000 .812
operatinal9 1.000 .735
organizationimage8 1.000 .641
operatinal10 1.000 .683 Communalities
organizationimage9 1.000 .466
operatinal11 1.000 .522
Initial Extraction
operatinal12 1.000 .527 Extraction Method: Principal Component
organizationimage1 1.000 .413
operatinal13 1.000 .543 Analysis.
organizationimage2 1.000 .653
operatinal14 1.000 .436
organizationimage3 1.000 .676
operatinal15 1.000 .545
organizationimage4 1.000 .571
operatinal16 1.000 .682
organizationimage5 1.000 .558
operatinal17 1.000 .442
organizationimage6 1.000 .506
operatinal18 1.000 .408
organizationimage7 1.000 .812
operatinal19 1.000 .640
organizationimage8 1.000 .641
Extraction Method: Principal Component
organizationimage9 1.000 .466
Analysis.
Extraction Method: Principal Component
Analysis.

84
 Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 6.615 34.814 34.814 6.615 34.814 34.814 3.413 17.965 17.965

2 1.596 8.400 43.214 1.596 8.400 43.214 2.578 13.570 31.535
3 1.292 6.799 50.013 1.292 6.799 50.013 2.568 13.514 45.049
4 1.163 6.120 56.133 1.163 6.120 56.133 2.106 11.084 56.133
5 .994 5.232 61.365
6 .887 4.668 66.033
7 .781 4.110 70.143
8 .755 3.971 74.114
9 .734 3.863 77.978
10 .650 3.423 81.401
11 .610 3.211 84.611
12 .558 2.937 87.549
13 .460 2.422 89.971
14 .419 2.207 92.178
15 .346 1.821 93.999
16 .337 1.772 95.771
17 .312 1.642 97.414
18 .289 1.523 98.936
19 .202 1.064 100.000

Extraction Method: Principal Component Analysis.

85
 a
Component Matrix a
Component Matrix
Component
Component
1 2 3 4
1 2
operatinal1 .671 -.121 .146 .071
relatinalperformance1 .710 -.534
operatinal2 .622 -.446 .130 -.173
relatinalperformance2 .809 -.397
operatinal3 .430 -.310 -.481 .259
relatinalperformance3 .727 .462
operatinal4 .729 -.333 .001 -.095
relatinalperformance4 .662 .627
operatinal5 .641 -.254 -.049 .094
relatinalperformance5 .766 -.065
operatinal6 .656 -.021 .125 -.137
Extraction Method: Principal Component Analysis.
operatinal7 .546 .241 -.189 .282
a. 2 components extracted.
operatinal8 .637 .143 -.527 -.139
operatinal9 .711 -.086 -.229 -.411
operatinal10 .643 .287 -.302 -.311
operatinal11 .604 .217 .288 -.166
operatinal12 .368 .599 .103 .145
operatinal13 .532 .465 .070 .198
operatinal14 .614 -.012 .237 .050
operatinal15 .530 .071 .158 .485
operatinal16 .523 -.306 -.132 .546
operatinal17 .637 .068 .026 -.176
operatinal18 .495 .375 .146 -.026
operatinal19 .482 -.275 .572 -.067

Extraction Method: Principal Component Analysis.

a. 4 components extracted.

86
 a a
Component Matrix Component Matrix

Component Component

1 2 1 2

organizationimage1 .624 -.153 costperformance1 .700 -.607

organizationimage2 .641 -.492 costperformance2 .828 -.347

organizationimage3 .676 -.468 costperformance3 .715 .446

organizationimage4 .682 -.325 costperformance4 .613 .642

organizationimage5 .744 .067 Extraction Method: Principal Component

organizationimage6 .506 .500 Analysis.
organizationimage7 .572 .696 a. 2 components extracted.
organizationimage8 .727 .334
organizationimage9 .683 .009

Extraction Method: Principal Component

Analysis.
a. 2 components extracted.

87
 Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 2.712 54.244 54.244 2.712 54.244 54.244 2.012 40.241 40.241

2 1.053 21.059 75.303 1.053 21.059 75.303 1.753 35.062 75.303
3 .566 11.310 86.613
4 .392 7.838 94.451
5 .277 5.549 100.000

Extraction Method: Principal Component Analysis.

88
Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 3.855 42.833 42.833 3.855 42.833 42.833 2.907 32.304 32.304

2 1.441 16.014 58.847 1.441 16.014 58.847 2.389 26.543 58.847
3 .913 10.142 68.988
4 .785 8.722 77.710
5 .650 7.220 84.931
6 .476 5.286 90.216
7 .368 4.090 94.307
8 .289 3.211 97.518
9 .223 2.482 100.000

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 2.063 51.572 51.572 2.063 51.572 51.572 1.637 40.936 40.936

2 1.100 27.497 79.070 1.100 27.497 79.070 1.525 38.133 79.070
3 .507 12.668 91.738
4 .330 8.262 100.000

Extraction Method: Principal Component Analysis.

89
APPENDIX FOUR: CORRELATION OUTPUT

Correlations

satisfaction3 Operationalperfor Relationalperform Organizationimag costperformance

mane ance e
** ** ** **
Pearson Correlation 1 .559 .490 .591 .526

satisfaction3 Sig. (2-tailed) .000 .000 .000 .000

N 352 342 352 308 312

** ** ** **
Pearson Correlation .559 1 .664 .736 .444
Operationalperfo
Sig. (2-tailed) .000 .000 .000 .000
rmane
N 342 342 342 298 302
** ** ** **
Pearson Correlation .490 .664 1 .567 .286
Relationalperfor
Sig. (2-tailed) .000 .000 .000 .000
mance
N 352 342 352 308 312
** ** ** **
Pearson Correlation .591 .736 .567 1 .348
Organizationima
Sig. (2-tailed) .000 .000 .000 .000
ge
N 308 298 308 308 270
** ** ** **
Pearson Correlation .526 .444 .286 .348 1
Costperformance Sig. (2-tailed) .000 .000 .000 .000

N 312 302 312 270 312

**. Correlation is significant at the 0.01 level (2-tailed).

90
APPENDIX FIVE :REGRESSION OUTPUT

Model R R Square Adjusted R Std. Error of the Durbin-Watson

Square Estimate
a
1 .679 .461 .452 .898 2.169

a. Predictors: (Constant), costperformance, Relationalperformance, organizationimage,

operationalperformane
b. Dependent Variable: satisfaction3
a
ANOVA

Model Sum of Squares df Mean Square F Sig.

b
Regression 175.415 4 43.854 54.431 .000

1 Residual 205.446 255 .806

Total 380.862 259

a. Dependent Variable: satisfaction3

b. Predictors: (Constant), costperformance, Relationalperformance, organizationimage,
operationalperformane

91
 Coefficientsa

Model Unstandardized Coefficients Standardized T Sig. 95,0% Confidence Interval Collinearity Statistics
Coefficients for B

B Std. Error Beta Lower Bound Upper Tolerance VIF

Bound

(Constant) -2.344 .441 -5.312 .000 -3.212 -1.475

Operationalperforma
.107 .171 .047 .626 .532 -.230 .444 .378 2.643
ne

1 Relationalperforman
.306 .102 .184 3.005 .003 .106 .507 .567 1.765
ce

Organizationimage .656 .151 .296 4.351 .000 .359 .952 .458 2.186

Costperformance .557 .080 .355 6.967 .000 .400 .715 .813 1.229

a. Dependent Variable: satisfaction3

92
APPENDIX SIX: T-TEST OUTPUT

Group Statistics

customer type N Mean Std. Deviation Std. Error Mean

Individual 171 3.8786 .57143 .04370

Operationalperformane
Orgazational 171 3.7368 .54798 .04190
Individual 181 3.9613 .75575 .05617
Relationalperformance
Orgazational 171 3.4491 .70755 .05411
Individual 139 4.1143 .52355 .04441
Organizationimage
Orgazational 169 3.9796 .56339 .04334
Individual 141 3.0567 .81085 .06829
Costperformance
Orgazational 171 3.0497 .70169 .05366

93
 Levene's Test for t-test for Equality of Means
Equality of Variances

F Sig. T df Sig. (2- Mean Std. Error 95% Confidence Interval of the
tailed) Difference Difference Difference

Lower Upper

Equal variances
.173 .678 1,489 340 .020 .14173 .06054 .02264 .26081
assumed
Operationalperformane
Equal variances not 339.40
1,489 .020 .14173 .06054 .02264 .26081
assumed 5
Equal variances
.529 .467 4,889 350 .000 .51220 .07814 .35852 .66589
assumed
Relationalperformance
Equal variances not 349.97
4,893 .000 .51220 .07800 .35880 .66560
assumed 2
Equal variances
.013 .911 2,069 306 .032 .13469 .06249 .01172 .25766
assumed
Organizationimage
Equal variances not 301.44
2.171 .031 .13469 .06205 .01259 .25679
assumed 0
Equal variances
2.621 .106 .082 310 .935 .00703 .08565 -.16150 .17556
assumed
Costperformance
Equal variances not 278.75
-596 .936 .00703 .08685 -.16393 .17799
assumed 0

94
APPENDIX SEVEN: CROSS TABULATION OUTPUT

Organizationtype * satisfaction3 Crosstabulation

satisfaction3 Total
Strongly Disatisfied Neuteral Satisfied Strongly Satisfied
Disatisfies
Count 6 0 0 6 2 14

Governmental % within Organizationtype 42.9% 0.0% 0.0% 42.9% 14.3% 100.0%

% within satisfaction3 50.0% 0.0% 0.0% 14.3% 4.0% 8.4%
% of Total 3.6% 0.0% 0.0% 3.6% 1.2% 8.4%
Count 2 14 6 4 4 30
% within Organizationtype 6.7% 46.7% 20.0% 13.3% 13.3% 100.0%
Non-Governmental
% within satisfaction3 16.7% 38.9% 23.1% 9.5% 8.0% 18.1%
Organizationtype % of Total 1.2% 8.4% 3.6% 2.4% 2.4% 18.1%
Count 4 22 20 32 38 116
% within Organizationtype 3.4% 19.0% 17.2% 27.6% 32.8% 100.0%
Commercial
% within satisfaction3 33.3% 61.1% 76.9% 76.2% 76.0% 69.9%
% of Total 2.4% 13.3% 12.0% 19.3% 22.9% 69.9%
Count 0 0 0 0 6 6
% within Organizationtype 0.0% 0.0% 0.0% 0.0% 100.0% 100.0%
Diplomatic
% within satisfaction3 0.0% 0.0% 0.0% 0.0% 12.0% 3.6%
% of Total 0.0% 0.0% 0.0% 0.0% 3.6% 3.6%
Count 12 36 26 42 50 166

Total % within Organizationtype 7.2% 21.7% 15.7% 25.3% 30.1% 100.0%

% within satisfaction3 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
% of Total 7.2% 21.7% 15.7% 25.3% 30.1% 100.0%

95
 Chi-Square Tests

Value df Asymp. Sig. (2-

sided)
a
Pearson Chi-Square 63.495 12 .000
Likelihood Ratio 55.455 12 .000
Linear-by-Linear Association 17.359 1 .000
N of Valid Cases 166

a. 12 cells (60,0%) have expected count less than 5. The minimum

expected count is ,43.

96
97