Effects of services marketing mix on customer satisfaction and loyalty in commercial bank of ethiopia: evidence from hawassa district, Ethiopia

The main objective of the study was to examine the effect of service marketing mix on customer satisfaction and the effect of customer satisfaction on customers’ loyalty at Commercial Bank of Ethiopia branches located in Hawassa District. The study was heavily dependent upon primary data collected from the sample customers. A sample of 400 customers from 10 randomly selected branches was contacted for the survey purpose. Nonetheless, 340 customers have responded completely on the questions. Survey questionnaire was used as tool for data collection. Both descriptive and inferential statistics were used for data analysis. The findings of the study show that although customers have positive perception towards service mixes of the Commercial Bank of Ethiopia, they were highly satisfied on the people and physical evidence attributes than other mixes. Further the result of regression analysis shows that people and physical evidence as independent variables have significant positive relationship with customer satisfaction. Product as major service mix of the bank doesn’t satisfy the customers as per their expectations. Further, customer satisfaction as an independent variable does have strong effect on customer loyalty. This indicates that highly satisfied customers seem to be repeated customers of the Commercial Bank of Ethiopia. Generally it can be concluded that despite the banks effort to manage its services marketing mixes, it contributes moderately for customer satisfaction. Based on the findings, it is recommended that Commercial Bank of Ethiopia need to give due importance to new product development, promotional strategies and appropriate pricing for lending.