CHAPTER ONE

INTRODUCTION

1.1. Background of the Study

Multi-channel service is the use of alternative modes of contact by customers to interact with and
obtain service from an organization. For instance, customer contact with an airline may be face
to-face through frontline employees who use technology to assist the customer (e.g. an airline
representative at the check-in counter); it may also be remote either through back-office
representatives (e.g. the airlines’ call center) or without the presence of a human representative
(e.g. Web sites and self-service kiosks Cassab & Maclachlan (2009).

Whilst largely regarded as a marketing term, multichannel is used by marketing, customer

service and customer experience professionals to describe how a brand interacts with potential
customers across numerous channels. These channels can be on or off-line, but the mandate for
businesses is to establish which channels their customers are most likely to be using and when,
and formulate their interaction strategies around whichever they deem easiest and most engaging
to use.

Improving service quality and customer satisfaction has been the major concern of organizations
in any industry for many years. In the period of globalization and continues technological
advancements, maintaining customer satisfaction is not an option, it is a must to survive the
strong competition. An organization that consistently satisfies its customers, enjoy higher
retention levels and greater profitability due to increase in customer loyalty Wicks & Roethlein
(2009). The payoff resulted from satisfying customers with improving service quality and other
marketing activities is also extensively studied and proven to be true through different marketing
researches. Cassab & Maclachlan (2009) citing the work of Fitzsimmons (2004), describes that
many organizations have become multi-channel service providers by increasing the number of
service channels available to their customers to improve the efficiency, cost-effectiveness, and
consistency of their frontline operations.

Montoya-Weiss, Voss, & Grewal (2003) and Payne & Frow (2002), describes that the various
channels are the means of contact allowing service providers to forge stronger links with their

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customers to offer better satisfaction and thus to promote their retention. In this multi-channel
interaction context, they are witnessing a change in customer behavior caused by the combined
use of the channels offered by a single service provider.

Sousa and Voss (2006) describes that multi-channel setting introduces a set of complexities that
call for a broader conceptualization of service quality, recognizing that customer experience is
formed across all moments of contact with the firm through several channels.

Although many scholars and researchers’ attempt to explain and measure customer satisfaction,
there still does not appear to be a consensus regarding its definition Giese & Cote (2000).
Customer satisfaction is an experience-based assessment made by the customer of how far
his/her own expectations about the individual characteristics or the overall functionality of the
services obtained from the provider have been fulfilled Bruhn (2003). According to Gyasi and
Azumah (2009) satisfaction is the process of customer overall subjective evaluation of the
product/service quality against his/her expectation or desires over a time. Customer satisfaction
can also be defined as a customer’s overall evaluation of the performance of an offering to date.
This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide
range of product and service categories Gustafsson, Johns, & Roos (2005).

There are many factors which determine customer satisfaction level of a specific organization.
Service quality in addition to other elements such as product quality, price and others, determine
customer satisfaction Wilson et al. (2008). Many other literatures and studies also supports that
service quality influences the level of customer satisfaction. Rust and Oliver (1994) stated that
quality is one dimension on which satisfaction is based. According to Shemwell, Yavas and
Bilgin (1998), in today’s world of intense competition, the key to sustainable competitive
advantage lies in delivering high quality service that will in turn result in satisfied customers.
When considering the service sector, service quality has been proven to be the best determinant
of customer satisfaction. There is also much evidence in the literature to the fact that customer
satisfaction is principally driven by service quality of a firm from the perspective of its
customers Bitner, Boom and Mohr (1994) and Anderson, Fornell and Lehmann (1994) also point
out that the relationship between customer satisfaction and service quality by stating that
improved service quality will result in a satisfied customer.

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Service quality is the delivery of excellent or superior service relative to customer expectations
Zeithaml and Bitner (1996). Service quality is recognized as a multi-dimensional construct.
Many researchers try to identify different dimensions that construct quality of service. Among
those the SERVQUAL model constructed by Parasuraman et al. (1988) is most popular. It
features five dimensions: tangibles, reliability, responsiveness, empathy and assurance. The
tangibles dimension is related to the physical environment aspect of the service provider, the
reliability dimension relates to the service outcome aspect and the remaining responsiveness,
empathy and assurance represents aspects of interaction quality between the service provider and
the customer.

Increasingly, studies are showing in a multi-channel context, customer experience is formed

through all moments of contact Sousa & Voss (2006). By using at least two channels in their
service relationships with the service firm, multi-channel customers may base their service
quality perceptions and their satisfaction not only on one channel but on all of them as well
Sousa & Voss (2006), Montoya-Weiss, Voss, & Grewal, 2003, Van Birgelen et al. (2006). Sousa
and Voss (2006) defined multi-channel service quality as ‘the quality of the overall service
experienced by a customer, encompassing all the existing physical and virtual components’. Van
Birgelen et al. (2006) showed that an online channel has a complementary effect on the
traditional physical channel (face-to-face interaction with contact personnel).

Scullion and Nicholas (2001) describes e-services as “Web based services or e-services offer
customers a panoply of benefits such as enhanced control, ease of use, and reduced transaction
charges and Unsal and Movassaghi, (2001) and Zeithaml (2002) also states that online services
have grown rapidly and have emerged as the leading edge of the service industry.

Cassab & Maclachlan (2009) suggest that the design of the multi-channel service interface needs
to be part of a customer-focused strategy. Customer evaluations of the service interface help to
explain changes in relational variables (e.g. trust) that are crucial to drive affective commitment
and enhance customer loyalty. But most importantly, the impact of the service interface is not
restricted to customers who may be considered loyal by virtue of a service agreement or
membership in a loyalty program. They have shown that the impact of multi-channel service is
strong for both members and non-members of an airline frequent flyer program as well as for
wireless customers with or without a fixed-term service agreement.

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The study conducted by Cassab & Maclachlan (2009) also indicates that multi-channel service
strategies are relevant to other organizations that have deployed different modes of contact with
their customers. Their study also suggests that a single channel view of service may not be
sufficient to ensure a flowing conversation with customers. For example, most modern channels
such as online, mobile, and kiosks empower customers to serve themselves. With less face-to
face interaction, customer feedback may be more difficult to obtain and inconsistencies may
remain un noticed. This can be alleviated through a progressive introduction of services in new
channels and the provision of more information to consumers through touch points that help
clarify the consumer’s role in the service delivery process.

1.2. Statement of the Problem

Ethio Telecom is a state-owned operator in Ethiopia and engaged in selling of different product
and services portfolios like, SIM cards like 2G, 3G, 4G or LTE, 5G and VC cards, EVD, CUG
Service, Fixed line, ADSL, VPN Services, SMS, Data Roaming and financial services like tele
birr. Channel or an online channel for example: Barnes & Vidgen (2002), Parasuraman,
Zeithaml, & Malhotra, (2005), Wolfinbarger & Gilly (2003) and Yoo & Donthu (2001). Few
studies Montoya-Weiss et al. (2003) and Sousa & Voss (2006) have examined service quality
and customer satisfaction in a multi-channel context considering all channels used by the
customers. Furthermore, these studies conducted in competitive market environment where
customers are the ultimate beneficiaries of the competition. However, this is not the case in the
monopoly market environment like Ethiopian telecom sector.

Moreover, these researches have been conducted on selected sectors like banks and insurance
companies found in European, USA and few African countries perspective. However, to the best
knowledge of the researcher, there is no comprehensive study conducted to measure customer
satisfaction in mobile service identifying multi-channel service gaps and modeling satisfaction
through quality dimensions both physical and virtual in ethio telecom sector.).

For service companies, providing services through Internet-based channels, in addition to their
traditional channels, has become a standard. This has led the customers to increasingly adopt a
multi-channel behavior Marianne and Philippe (2013). In a multi-channel context, service
providers may reach customers using a mix of channels: offices, retail outlets, telephone, call

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centers, website, etc. considered as a means of communication through which a service is
delivered to the customer, these channels can be grouped on a continuum from the most physical
interface to the most virtual interface Payne & Flow (2004) and Sousa & Voss (2006). Thus,
achieving and maintaining service quality is regarded as essential strategy for the successful
provision of overall customer satisfaction and customer retention. Therefore, measuring service
quality is the fundamental in developing a customer-oriented strategy that ensures the long-term
survival of the firm. Keeping in mind the financial and other constraints, it is essential that
expectations are properly understood and measured from the customer’s perspective to identify
any gap(s) in service quality. In previous studies, customer satisfaction appeared to be influenced
by the quality of all the channels used by the customers. In this context, there is a need for a
better understanding of the multi-channel customers in terms of perceived service quality and
evaluation of satisfaction in Ethiopian telecom industry. Therefore, the current study will focus
on examining customer satisfaction of existing mobile users in a multi-channel context
considering all channels used by the customers of ethio telecom.

1.3. Research Questions

1.3.1. Main Research Question

Based on the statement of problem above, the main research question is stated as follows:

• Does multi-channel (physical and virtual) service quality affect customer’s satisfaction?

1.3.2. Sub-research Questions

The research questions will be answered after data analyses are: -

I. How do the Physical service qualities influence overall ethio telecom mobile service customer
satisfaction?

II. How do the Virtual service qualities influence overall ethio telecom mobile service customer
satisfaction?

III. What are the factors of Multi-channel integration quality that effect the overall ethio telecom
mobile service customer satisfaction?

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1.4. Objectives of the Study

1.4.1 General objective of the study

The general objective of this study is to identify the effect of multi-channel service quality on
Mobile Customers Satisfaction in the case of ethio telecom.

1.4.2 Specific Objectives of the study-

I. To ascertain, the influence of Physical service qualities in overall ethio telecom’s mobile
service customer satisfaction.

II. To ascertain, the influence of Virtual service qualities in overall ethio telecom’s mobile
service customer satisfaction.

III. To identify the factors of Multi-channel integration quality that effects the overall ethio
telecom mobile service customer satisfaction.

1.5. Significance of the Study

Today’s service giving organizations are applying multi-channel service counter to deliver better
service to their customers this approach brings greater performance implications and developing
the image of the company. Studying the multi-channel service quality effect on customer’s
satisfaction delivers the below listed significant: First, to identify and understand customers’
requirements in relation to mobile services of ethio telecom. Next, Ethio telecom can be
benefited from the findings of the study as it provides a clue to aware of customer dissatisfaction
drivers in its service provisions. Third, it is important for business policy makers in Ethiopia as it
give them an insight how to improve the telecom services. And finally, it contributes on the
already existing knowledge on the field of multichannel service delivery with a theoretical
significance for further researchers, academician, and marketing researchers as an input to test a
theory and as an initial to see multi-channel service delivery on the cases of Ethiopia using these
and other new dimensions.

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1.6 Scope of the Study

Currently, Ethio telecom giving services for all over Ethiopia, according to its customers’ needs.
Having about seventy million customers in Ethiopia, the study will focus on all active mobile
customers in Addis Ababa and out of Addis Ababa.

The constructs, physical service quality, virtual service quality, and satisfaction, has measured
using an existing scale. For multi-channel integration quality, the researcher used to construct
measurement scale by following the recommendations of Churchill (1979), Gerbing and
Anderson (1988), Yang and Fang (2004) and Marianne and Jean (2013). The measurement of
physical service quality using three dimensions (reliability or core service, relational dimension,
and tangibles). This scale, applied to telecom sector, incorporates the main dimensions and items
of the SERVQUAL scale. The second part is concerned the measurement of virtual service
quality using 3 dimensions adopted from Marianne and Jean (2013): ease of use, information
quality, site design, and security.

1.7 Limitations of the Study

The limitations of the study will be including:

 The inadequacy of relevant studies on the subject matter especially in Ethiopian

telecommunication sector.
 Customer satisfaction is affected with so many factors like price, product quality, trouble
handling and others, but in this research, the researcher will be focused on service quality
dimensions both physical and virtual.

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1.8 Organization of the Study

The research paper report will be covered with five chapters. Below are the main important
points that are included in each chapter. Chapter one explained the research background,
statement of the problem, research questions, objectives, significance, scope, limitations and
organizations of the study. Chapter two includes the related theoretical and empirical literatures
of other researchers specifically on multi-channel service quality, conceptual framework and
definition of terms.

Chapter three incorporates design of the research, data types and sources, population of the
study, sample size and determination, sampling technique, data gathering instruments, data
analysis technique and ethical consideration as well as validity and reliability. Chapter four
addresses results of the study, and chapter five includes conclusion, recommendations and
implication for future research.

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Theoretical Review

Cassab & Maclachlan (2009) defines multi-channel service as the use of alternative modes of
contact by customers to interact with and obtain service from an organization. For instance,
customer contact with an airline may be face-to-face through frontline employees who use
technology to assist the customer (e.g. an airline representative at the check-in counter); it may
also be remote either through back-office representatives (e.g. the airlines’ call center) or without
the presence of a human representative (e.g. Web sites and self-service kiosks). Marianne and
Philippe (2013) stated that “Multi-channel distribution context is a characteristic of many service
industries, including financial services. Physical distribution channels (such as a branch or retail
outlet), telephone, automatic teller machines (ATMs), internet, today, enable service firms and
their customers to interact. Cassab & Maclachlan (2009) in their articles by citing the work of
Fitzsimmons (2004), also reported that “Driven to generate value-in-use, many organizations
have become multi-channel service providers by increasing the number of service channels
available to their customers to improve the efficiency, cost-effectiveness, and consistency of their
frontline operations.

Montoya-Weiss, Voss, & Grewal (2003) and Payne & Frow (2002), describes that the various
channels are the means of contact allowing service providers to forge stronger links with their
customers to offer better satisfaction and thus to promote their retention. In this multi-channel
interaction context, they are witnessing a change in customer behavior caused by the combined
use of the channels offered by a single service provider.

Sousa and Voss (2006) underlined as multi-channel setting introduces a set of complexities that
call for a broader conceptualization of service quality, recognizing that customer experience is
formed across all moments of contact with the firm through several channels. Marianne and
Philippe (2013) further clarified that in a service marketing field, service quality and customer
satisfaction have been widely studied. Most of these researches have adopted a single-channel
mindset Sousa & Voss (2006), focusing almost exclusively on the relationship between service
quality and customer satisfaction in a physical channel or an online channel (for example:

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Parasuraman, Zeithaml, & Malhotra (2005), Wolfinbarger & Gilly (2003), Yoo & Donthu
(2001). Few studies see Montoya-Weiss et al. (2003), Sousa & Voss (2006) and Van Birgelen,
De Jong and De Ruyter (2006) have examined service quality and customer satisfaction in a
multi-channel context considering all channels used by the customers. In these studies, customer
satisfaction appeared to be influenced by the quality of all the channels used by the customers. In
this context, there is a need for a better understanding of the multi-channel customers in terms of
perceived service quality and evaluation of satisfaction.

Scullion and Nicholas (2001) describes e-services as “Web based services or e-services offer
customers a panoply of benefits such as enhanced control, ease of use, and reduced transaction
charges and Unsal and Movassaghi (2001) and Zeithaml (2002) also states that online services
have grown rapidly and emerged as the leading edge of the service industry.

2.1.1. Multi-channel service quality and customer satisfaction

Marianne and Philippe (2013) stated in their article by citing the work of different authors that,
perceived service quality and overall customer satisfaction are two concepts which have been the
subject of many studies in service marketing. Several definitions that can be selected depending
on the level of analysis or the level of customer assessment emerge from the literature. In a
transactional perspective, satisfaction is an immediate post purchases evaluative judgment or an
effective reaction to the most recent transactional experience with the firm Garbarino & Johnson
(1999). Transactional quality is the current customer perception of a good or a service Ngobo,
(1997). In a global or relational perspective, satisfaction is an overall evaluation based on the
total purchase and consumption experience with a good or service over time Anderson, Fornell,
& Lehmann (1994) or a cumulative sum of experiences Garbarino & Johnson (1999). As for
overall service quality, it is a customer global impression of the superiority/inferiority of the
company and its services Ngobo (1997).

Marianne and Philippe (2013) in their article also describes that many studies have shown that
perceived service quality is an antecedent of satisfaction see Cronin & Taylor (1992) and
therefore the positive influence of perceived service quality on global satisfaction Anderson,
Eugene, & Sullivan (1993), Churchill & Surprenant (1982), Cronin & Taylor (1992), Llosa
(1996), Oliver (1993) and Rust & Oliver (1994). However, most researchers have investigated

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service quality and its link with customer satisfaction in both environments taking them
separately: traditional physical environment and virtual environment.

Increasingly, studies are showing in a multi-channel context, customer experience is formed

through all moments of contact Sousa & Voss (2006). By using at least two channels in their
service relationships with the service firm, multi-channel customers may base their service
quality perceptions and their satisfaction not only on one channel but on all of them as well
Sousa & Voss (2006), Montoya-Weiss, Voss, & Grewal (2003) and Van Birgelen et al. (2006).
Sousa and Voss (2006) also defined multi-channel service quality as, the quality of the overall
service experienced by a customer, encompassing all the existing physical and virtual
components. Van Birgelen et al. (2006) showed that an online channel has a complementary
effect on the traditional physical channel (face-to-face interaction with contact personnel).

2.1.2. Customer evaluations of multi-channel service

Peppard (2000) describes that, customer relationship management studies suggest that
integrating the customer data collected systematically by different areas of the organization will
result in a more complete view of the customer and therefore a better customer experience. Thus,
it appears that data integration is important for multi-channel service.

Cassab & Maclachlan (2009) also clarifies that the preliminary insights into operational
measures of multi-channel service come from the service marketing literature, particularly the
broad concept of service quality that has been studied extensively in the last two decades since
the publication of the seminal work of Gronroos (1984) and the first development of the
SERVQUAL instrument of Parasuraman et al. (1988). Gronroos (1984) conceptualized two
service quality dimensions: functional and technical. Functional quality represents how the
service is delivered (i.e. customer perceptions of the interactions that take place during the
service encounter), and technical quality reflects the outcome of the service (i.e. what the
customer receives in the service encounter). Recently, marketing researchers have explored the
role of technology in the functional quality dimension of service by studying interactions with
customers through web sites and other forms of technology-based self-service.

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For instance, Zeithaml et al. (2002) found that routine issues for service delivered through web
sites include privacy/security, web site design, efficiency, and ease of use. These studies suggest
that customer evaluations of the multi-channel service interface should focus on the functional
quality dimension of service, include integration as an underlying factor, and align in meaning
with the SERVQUAL dimensions. Thus, a useful approach to measurement is that of Brady and
Cronin’s (2001) hierarchical model of three primary dimensions of service quality (i.e.
interaction, environment, and outcome), each with three sub dimensions, where the original
SERVQUAL factors are repositioned as modifiers of all nine sub dimensions in the model.
Particularly relevant to the current study is the interaction quality dimension in (Brady and
Cronin 2001), built on the functional quality dimension proposed by Gronroos (1984), although
it does not include elements related to the automated service encounter as suggested by Meuter et
al. (2000) and Zeithaml et al. (2002). Given that multi-channel service involves different modes
of customer contact in relation to technology Froehle and Roth (2004), customers are expected to
evaluate the functional quality of service provider and technologies, as well as the integration
between service provider and technology across channels. Such integration is likely to be
determined by the accuracy of information exchanged with the customer through different
channels. This could be reflected, for instance, in a consistent response to a query posed through
different channels, or an interaction through one channel that considers past interactions through
other channels.

2.1.3. Service Quality

Service quality is a concept that has aroused considerable interest and debate in the research
literature because of the difficulties in both defining it and measuring it with no consensus
emerging on either Wisniewski (2001). Service quality has been increasingly recognized as a
critical factor in the success of any business Parasuraman, Zeithaml & Berry (1988). Ladhari
(2009) also supported the role of service quality and stated that it is considered as an important
tool for a firm’s struggle to differentiate itself from its competitors Ladhari (2009).

Service quality is defined by many researchers through time. Parasuraman, Zeithaml & Berry
(1985) defined service quality as “a function of the differences between expectation and
performance along the quality dimensions‟. Roest and Pieters (1997) also provide the same

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definition that service quality is a relativistic and cognitive discrepancy between experiencebased
norms and performances concerning service benefits.

Another definition of service quality is by Bitner, Booms and Mohr (1994), they stated service
quality as the consumer’s overall impression of the relative inferiority/superiority of the
organization and its services. Cronin and Taylor (1994) viewed service quality as a form of
attitude representing a long-run overall evaluation.

To conceptualize service quality (by taking in to account all the aspects of customer perceived
service quality, including those already addressed in the existing instruments and those that are
left out in the empirical service quality literature), Sureshchander et al. (2002) cited in Dehghan,
(2006) identified five factors of service quality as critical from the customers‟ point of view.
These factors are:

1. Core service or service product;

2. Human element of service delivery;

3. Systematization of service delivery: non-human element;

4. Tangibles of service – services capers;

5. Social responsibility.

2.1.4. Traditional/physical Service Quality Dimensions

Yang and Fang (2004), both researchers are discussed and elaborated the concept of traditional
service quality dimensions as online customers still demand many services available through
traditional channels even if they choose pure internet-based suppliers with basic customer
services. Numerous studies have also sought to uncover the global attributes of services that
contribute most significantly to relevant quality assessments in the traditional service
environment e.g. Hedvall and Paltschik (1989), Kettinger and Lee (1997), Parasuraman et al.
(1985, 1988), Paulin and Perrien, (1996), Pitt et al. (1999) and Sasser et al. (1978). Among them,
two exploratory studies are regarded as the most appropriate frameworks for the current research.
Parasuraman et al.’s (1985) reveals ten detailed dimensions through focus group studies:
tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy,

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understanding the customer, and access. Later, these ten dimensions were further purified and
distilled to five: tangibles, reliability, responsibility, assurance, and empathy, which constitute
the base of a global measurement for service quality, SERVQUAL Parasuraman et al. (1988).
Another useful study conducted by Johnston (1995) provides 18 service dimensions and their
definitions: access, aesthetics, attentiveness, availability, care, cleanliness/tidiness, comfort,
commitment, communication, competence, courtesy, flexibility, friendliness, functionality,
integrity, reliability, responsiveness, and security. These two studies offer particularly robust
service quality dimensions for measuring traditional services and could serve as a good starting
point for the current exploratory research.

2.1.5. Virtual Service Quality Dimensions

Yang and Fang (2004), also deeply studied the online service quality aspects by reviewing the
work of different researchers. They categorize the extant research on online service quality into
studies focusing on: online retailing services e.g. Wolfinbarger and Gilly (2002). For more
comprehensive review, Zeithaml et al. (2002) and Yang and Jun (2002). Web site design quality
and narrowly defined online services other than retailing (e.g. portal services, online travel
services). These studies reflect various aspects of online service quality, which facilitate the
development of the coding scheme in their study. Drawing upon the traditional SERVQUAL

Scale, Zeithaml et al. (2001, 2002) have developed e-SERVQUAL for measuring e-service
quality. In a series of focus group interviews, Zeithaml et al. (2001) have identified eleven
dimensions of online service quality: access, ease of navigation, efficiency flexibility, reliability,
personalization, security/privacy, responsiveness, assurance/trust, site aesthetics, and price
knowledge. The further comparison of e-service quality and traditional service quality indicates
that consumers use some common dimensions such as reliability, responsiveness, access, and
assurance to evaluate both traditional service quality and e-service quality.

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2.1.6. Customer Care Support

Christan and Emmanuel (2016), describes the concept of customer care support as Customer care
support can be defined in terms of management of customer complaints or how queries about a
company service are treated. Albrecht and Zemke (1985) stated that between 54 and 70 percent
of customer who make complaints regarding a company service offering will no doubt repeat the
purchase of its product/service if their complaint was resolved. That the percentage will increase
to 95% if the customer feels that the complaints were timely resolved. Customers whose
complaints were satisfactory resolve will tell an average of five people about the treatment they
received. Hart, Hasket and Sasser (1990) indicate that when a service provider has agreed to
assume responsibility to customer’s complaints and resolve same, the customer’s tendency to
hold fast to that company’s service would be very high. McNeal (1994) reveals that about 5
percent of a company’s customers who were dissatisfied with the management of their
complaints easily tell their friends and associates about their experience vis-a-vis their services.
Thus, service provider ought to have knowledge or at a regular interval determine how well their
customers are treated. Ovenden (1995) argued that companies need to know how well their
customers are treated. That customer hardly complains, but when they do, it might be too late to
retain such customers. In a related development, Levesque and McDougall (1996) stated that if
customer complaint is not satisfactory handled, it influences the customer’s attitude towards the
service providers, even though the study did not lend credence to the hypothesis that good
customer complain management leads to increase customer’s satisfaction. That satisfactory
problem recovery leads to an equal level of customer satisfaction as if a problem had not
occurred.

2.1.7. Service Quality Models

I. Nordic Service Quality Model

Early conceptualization of service quality was formed by Gronroos (1984), he defined service
quality by technical or outcome (what consumer receive) and functional or process related (how
consumer receive the service) dimensions Gronroos (1984). Image build up by technical and
functional quality and effect of some other factors (marketing communication, word of mouth,
tradition, ideology, customer needs and pricing). Nordic model is based on disconfirmation

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paradigm by comparing perceived performance and expected service. This was the first attempt
to measure quality of service. Gronroos model was general and without offering any technique
on measuring technical and functional quality. Rust & Oliver (1994) tried to refine the Nordic
model by the three-component model. They suggest three components: service product (i.e.,
technical quality), service delivery (i.e., functional quality), and service environment but they did
not test their model and just a few supports have been found.

II. GAP Service Quality Model

This model developed by Parasuraman, Zeithalm and Berry in (1985) identifies five different
gaps. According to Parasuraman, Zeithalm and Berry, a gap is the difference, imbalance or
disparity which is determined to exist between customer’s perception of the firm performance
and their prior expectation. Service Quality (SQ) perceived by customers is therefore because of
a comparison of Customers Expectation (E) of services that the organization should offer versus
their perception of the performance (P) delivered by the service organization. Service Quality
(SQ) = Customer’s perception (P) –Customer’s Expectations (E) Management of service quality
largely focuses on managing the gaps between expectations and perceptions of customer.

Gap 1: Gap between consumer expectation and management perception: This gap arises when
the management or service provider does not correctly perceive what the customer wants or
needs. I.e. Difference between consumers’ expectation and managements’ perceptions of those
expectations.

Gap 2: Gap between management’s perceptions of consumer’s expectation and service quality
specification: This is when the management or service provider might correctly perceive what
the customer wants but may not set a performance standard. i.e. improper service-quality
standards.

Gap 3: Gap between service quality specifications and service actually delivered. i.e. the service
performance gap. This gap may arise in situations pertaining to the service personnel.

Gap 4: Gap between service delivery and external communication: Consumer expectations are
highly influenced by statements made by company representatives and advertisements. The gap
arises when these assumed expectations are not fulfilled at the time of delivery of the service.

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Gap 5: Gap between expected service and experienced service: This gap arises when the
consumer misinterprets the service quality. This gap depends on size and direction of the four
gaps associated with the delivery of service quality on the marketer’s side.

III. SERVQUAL Model

The concept was conceptualized and proposed by Parasuraman, Zeithaml and Berry (1985) and
then further developed for the next eight years by the same researchers. Many other researchers
have used the SERVQUAL dimensions as the basis for their research, and consequently
SERVQUAL has undoubtedly had a major impact on the business and academic communities.
SERVQUAL comprises 22 items (Likert-type) with five dimensions namely- tangibles,
reliability, responsiveness, assurance and empathy. Each item in SERVQUAL instrument is of
two types. One to measure expectations about firms in general within an industry and the other
measures perceptions regarding the company whose service is being assessed. The quality gap
(Q) is calculated by subtracting the expectation (E) from the perception (P) value i.e. P-E= Q.
Summation of all the Q values provides an overall quality rating which is an indicator of relative
importance of the service quality dimensions that influence customers‟ overall quality
perceptions. Parasuraman, Zeithaml and Berry (1988) suggested that SERVQUAL may be used
to: track service quality trends over time; compare branches of the organization; compare an
organization with its competitors; and categorize customers into perceived quality segments
based on their individual SERVQUAL scores.

The original SERVQUAL instrument, proposed by Parasuraman, Zeithaml and Berry (1985),
identified ten components of service quality. Later, in a further study, those ten components were
merged into five dissimilar dimensions viz. reliability (5 items) which is the ability to perform
the service in an accurate and in dependable manner; tangibles (4 items) which refers to the
appearance of physical factors such as equipment, facilities and personnel; empathy (5 items)
which involves providing individual attention and care to customers; responsiveness (4 items) is
the willingness to provide help and prompt service to customers; and finally assurance (4 items)
refers to the knowledge and courtesy of employees and their ability to convey trust and
confidence.

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IV. SERVPERF Service Quality Model

Cronin and Taylor (1992) investigated the conceptualization and measurement of service quality
and its relationship with consumer satisfaction and purchase intentions. The SERVPERF model
was carved out of SERVQUAL model, which was originally developed by Parasuraman,
Zeithaml and Berry in (1985). It measures service quality by using the perceptions of customers.
Cronin and Taylor (1992) compared computed difference scores with perception to conclude that
perceptions only are better predictor of service quality and therefore expectations should not be
included as suggested by SERVQUAL.

They argued on the framework of Parasuraman et al. (1985), with respect to conceptualization
and measurement of service quality and developed performance only measurement of service
quality called SERVPERF by illustrating that service quality is a form of consumer attitude and
the performance only measure of service quality is an enhanced means of measuring service
quality. They argued that SERVQUAL confounds satisfaction and attitude. They stated that
service quality can be conceptualized as “similar to an attitude” and can be operationalized by
the adequacy-importance model. They maintained that Performance instead of “Performance
Expectation” determines service quality.

The SERVPERF scale is found to be superior not only as the efficient scale but also more
efficient in reducing the number of items to be measured by 50% Hartline & Ferrell (1996),
Babakus and Boller (1992), Bolton and Drew (1991) cited in Mesay (2012). According to Cronin
and Taylor (1992), their performance based SERVPERF scale is a better method of measuring
service quality. They claim that this scale’s reliability ranges between 0.884 and 0.964,
depending on the industry type, and exhibits both convergent and discriminant validity Mesay
(2012).

2.1.8. Customer Satisfaction

Customer satisfaction has been a subject of great interest for organizations and numbers of
marketing researches, because customers are key stakeholders in organizations and their
satisfaction is a priority for sustainable growth. Kotler (1997) stated that, in an increasingly
competitive environment companies must be customer oriented and the underpinning of the

18 | P a g e
marketing concept is that identification and satisfaction of customer needs leads to improved
customer retention Day (1994).

There is no globally accepted single definition for customer satisfaction. As Giese and Cote
(2000) stated, despite extensive research in the years since Cardozo’s (1965) classic article,
researchers have yet to develop a consensual definition of consumer satisfaction. Oliver (1997)
cited in Giese & Cote (2002) addresses this definitional issue by paraphrasing the emotion
literature, noting that "everyone knows what satisfaction is until asked to give a definition. Then
it seems, nobody knows". Different authors and researchers of marketing and other disciplines
tried to define customer satisfaction on their own way through time.

Oliver (1997) stated that customer satisfaction is the consumer's fulfillment response. It is a
judgment that a product or service feature, or the product or service itself, provided (or is
providing) a pleasurable level of consumption-related fulfillment, including levels of under- or
over fulfillment. On other definition from Oliver (1997) is that customer satisfaction is as an
overall emotional response to an entire service experience for a specific service encounter after
purchasing consumption. Halstead, Hartman, and Schmidt (1994) defined customer satisfaction
as a transaction-specific affective response resulting from the customer’s comparison of product
performance to some pre-purchase standard. Satisfaction can also be a person’s feelings of
pleasure or disappointment that results from comparing a product’s perceived performance or
outcome with their expectations Kotler & Keller (2009).

Customer satisfaction is defined by one author as “the consumer’s response to the evaluation of
the perceived discrepancy between prior expectations and the actual performance of the product
or service as perceived after its consumption” Tse & Wilton (1988) hence considering
satisfaction as an overall post-purchase evaluation by the consumer”. Fornell (1992). (Gustafson
2005) also defines customer satisfaction as a customer’s overall evaluation of the performance of
an offering to date. This overall satisfaction has a strong positive effect on customer loyalty
intentions across a wide range of product and service categories.

Gibson (2005) put forward that satisfied customers are likely to become loyal customers and that
means that they are also likely to spread positive word of mouth. Duodu and Amankwah (2011)
stated that, according to research, a very satisfied customer is nearly six times more likely to be

19 | P a g e
loyal and to re-purchase and recommend a product/service to family and friends than a customer
who is just satisfied. It is again believed that satisfied customers tell five other people about their
good treatment, and that five-percent increase in loyalty can increase profits by 25% - 85%.
Conversely, the average customer with a problem eventually tells eight (8) to ten (10) other
people, Duodu & Amankwah (2011). Other studies also share this concept, a satisfied customer
is six times more likely to repurchase a product and share his/her experience with five or six
other people Grönroos (2000) and Zairi (2000) further unsatisfied customer can banish more
business from the organization than ten highly satisfied customers do Mohsan (2011). Once
again, it’s possible to conclude that customer satisfaction is a key to sustainable growth and
survival in competitive market environment.

2.2. Empirical Review

Several studies related to service quality and customer satisfaction with ethio telecom and the
previous Ethiopian Telecommunications Corporation (ETC) services were conducted by
different researchers. Potluri and Mangnale (2010) conducted an empirical study to find out the
satisfaction level of ETC customers using the following parameters: service interaction, service
delivery process, customer compliant handling procedure and its outcome and the overall
customer satisfaction level. The findings of their analysis showed that 41% customers of ETC
were dissatisfied with employees‟ interaction skills. Furthermore, another 47% of the customers
were also disappointed with customer service delivery system and 70% customers were not
pleased with the Complaint Handling Procedure and its outcome. And 57% of the customers
expressed overall dissatisfaction on the services provided by ETC.

Cassab & Maclachlan (2009) suggest that the design of the multi-channel service interface needs
to be part of a customer-focused strategy. Customer evaluations of the service interface help to
explain changes in relational variables (e.g. trust) that are crucial to drive affective commitment
and enhance customer loyalty. But most importantly, the impact of the service interface is not
restricted to customers who may be considered loyal by a service agreement or membership in a
loyalty program. They have shown that the impact of multi-channel service is strong for both
members and non-members of an airline frequent flyer program as well as for wireless customers
with or without a fixed-term service agreement.

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2.3. Conceptual Framework

The conceptual framework explains the underlying process, which is applied to guide this study.
As discussed above. The SERVIQUAL model is suitable for measuring service quality and
customer satisfaction in telecom services using the service quality dimensions. The researcher
has used the same dimensions to measure both service quality and customer satisfaction because
we assume both are related Parasuraman et al. (1988).

The service quality dimensions i.e. Reliability the ability to perform service dependably and
accurately in a constant manner. This dimension of service quality evaluates the promise of
service and its execution from customers’ point of View. AlnaserIn A. et al. (2014) citied
Bekhet and Al-alak (2011) that numerous studies have been conducted in the field of e-service
quality. The advent of the internet in spread of information and communication technology (ICT)
has encouraged researchers to investigate the impact of ICT on the delivery of e-service in such a
way as to create satisfaction among customers who favor such services.

Multi-Channel Service Interface

Physical channel service quality Virtual channel service quality

Tangibility Ease of use

Reliability
Information quality
Customer satisfaction
Responsiveness
Security

Assurance

Empathy

A Conceptual Framework of the study, adapted from Churchill (1979), Gerbing and Anderson
(1988), Yang, Z. and Fang, X. (2004), Parasuramam et al. (1988) and modified by the researcher.

21 | P a g e
2.4 Definition of Terms

2.4.1 Conceptual Definition of Terms

Assurance: The knowledge and courtesy of employees and their ability to convey trust and
confidence Parasuramam et al. (1985).

Customer Satisfaction: Can be defined as a person’s feelings of pleasure or disappointment that

results from comparing a product’s perceived performance or outcome with their expectations
Kotler & Keller (2009).

Direct Channel: Refers for the distribution of products, information and promotional benefits
without an intermediary Jobber and Lancaster (2003).

Ease of use: Is the most talked about and least-understood aspect of software design
([Link]

Empathy: The provision of caring, individualized attention to customers Parasuramam et al.

(1985).

External Distributor: Shall mean legal entity or a natural person trader authorized to sell and
distribute ethio telecom products through its distribution chain ethio telecom product and service
distribution agreement (2016).

Indirect Channel: It is a kind of a distribution network of independent intermediaries, such as;

brokers, agents, wholesalers, retailers to sell their products effectively to other channel members
and/or ultimately to the end users Stern and El-Ansary (1977).

Information Quality: Is the quality of the content of information systems.

([Link]

Multi-channel Service: It is a distribution strategy using two or more marketing channels to

reach customer segments in one market area Kotler and Keller (2016).

Reliability: The ability to perform the promised service dependably and accurately
Parasuramam et al. (1985).

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Responsiveness: The willingness to help customers and to provide prompts service
Parasuramam et al. (1985).

Security: The state of being free from danger or threat, a thing deposited or pledged as a
guarantee of the fulfillment of an undertaking. ([Link]

Service Quality: defined as “a function of the differences between expectation and performance
along the quality dimensions‟. Parasuraman, Zeithaml & Berry (1985).

Tangibles: The appearance of physical facilities, equipment, personnel and communication

materials Parasuramam et al. (1985).

2.4.2 Operational Definition of Terms

Products and Services: shall mean any goods and services of ethio telecom including SIM
Cards (GSM,1X, 2G,3G,4G & 5G), voucher Cards (scratch card or Electronic Air time/E-top up/
Yimulu service) and EV-DO, Cell phone, Fixed Line Apparatus GSM / CDMA Mobile handsets,
EVDO which are made available for sale through the Distributor and own outlets.

Scratch (Voucher) Cards: Shall mean the cards carrying a concealed code and containing
certain amount of prepayment denominated in Ethiopian birr. The concealed code becomes
visible by scratching off ethio telecom product and service distribution agreement as well as
company documents (2016).

SIM Card: Shall mean the microchip card which, if inserted in a handset, ensures access to
Services and allows identification of the network user for GSM, CDMA and WCDMA networks
(ethio telecom product and service distribution agreement as well as company documents, 2016).

Yimulu service (E-Top-Up): shall mean an electronic top up system that provides real time top
up of prepaid mobile air time at the point of sale. ethio telecom product and service distribution
agreement, (2016).

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 CHAPTER THREE

RESEARCH METHODOLOGY

INTRODUCTION

This chapter explores research design and methodology to examine the research model and
hypotheses will be developed. It covers design of the study, research approach, data types and
sources, population of the study, sampling size determination, data gathering instruments, data
analysis techniques, ethical considerations as finally, validity and reliability.

3.1 Research Design

Research design as per Burns & Bush (2002) can be used for three purposes. These are
descriptive, exploratory, and explanatory. Causal research primarily explains why events occur
by defining the cause-and-effect relationships amongst variables and suitable when the research
problem is already well documented Zikmund (2003). Descriptive research “paint a picture”
using words or numbers and present a profile, a classification of types, or an outline of steps to
answer questions such as who, when, where and how Neuman 2006). While exploratory studies
are common in the initial stages to gain a better understanding of the problem with in-depth
investigation by breaking down a broad problem into smaller and well-defined sub-problems.

Accordingly, the study will be used a casual research design since causal studies helps the
researcher to seek to discover the effect that a variable(s) has on another (or others) or why
certain outcomes are obtained. Furthermore, the concept of causality is grounded in the logic of
hypothesis testing, which, in turn, produces inductive conclusions though such conclusions are
probabilistic and thus can never be demonstrated with certainty Cooper (2014).

3.2 Research Approach

Researchers will apply two types of approaches, namely qualitative and quantitative approach
Saunders [Link] (2007). Most researchers argued that the best method to use for a study depends
on the purpose of the research, researcher data and the accompanying research questions. This
study will use a quantitative research approach and data would be analyzed qualitatively.

24 | P a g e
3.3. Data Types and Data Sources

There are two types of data, namely primary and secondary data. Researcher might use either
both or one of the types of data depends on the research type and data collect by researcher
Saunders [Link] (2007). For this study purpose, primary data will be collected through standardize
questionnaire. Primary data will be originated by a researcher for the specific purpose of
addressing the problem at hand Malhotra and Birks (2006). Since the researcher use quantitative
research approach, primary data of this research is quantitative data type. Quantitative approach
develops techniques that can produce quantitative data (i.e., data in the form of numbers)
Neuman (2007). The researcher use quantitative data for assessing the effect of multi-channel
service quality on mobile customer’s satisfaction by doing statistical analysis.

According to Malhotra and Birks (2006) analysis of available secondary data is an essential step
in the problem definition process and understands the background of the research topic.
Researcher will be used secondary data from journals, company publication and other publicized
documents. According to Adams et al. (2007) secondary data is data collected by someone else
and there is a great deal available to researcher from books, libraries and on the web. The
secondary data will be used as reference and guide the focus of clarify research question. The
researcher collects primary data through questionnaire from Ethio-Telecom’s, mobiles customers
around Addis Ababa. The questionnaire developed by previous researchers on the subject
modified and used considering the appropriateness from the actual situation of the study area in a
way to enhance validity after an extensive review of the literature. The questions will have target
on soliciting responses related to many of the most pressing issues will be identified in the
literature to develop theoretical constructs concerning multi-channel service quality and
customer’s satisfaction.

3.4. Population of the Study

The target population in this study will be ethio telecom’s active mobile customers both
Residential and Enterprise who visit ethio telecom shops and use other channels (994 contact
center, web sites, self-service platform etc.) for after sales services.

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3.5. Sample Size Determination

The sample size determination is a scientific task that should be performed with proper care.
Currently, ethio telecom has more than 64 million mobile customers and around 29 million are
active customers who currently using the service. Among 29 million, around 3.7 million
customers are found in Addis Ababa. As Bartlet J. et al. (2011) states about sample size
determination, there are different kinds of sample size determination considering the type of data
is it is categorical or continuous. Accordingly, this research will use categorical data and the
population is more than 10,000. Then, the appropriate same size will be 370. Accordingly,
Respondents of the study will be contacted personally by the researcher and collaborators and
will be asked to identify the service quality expected from the best cellular service provider
based on the modified item list, delivered by ethio telecom.

3.6. Data Gathering Instruments

Regardless of data collection procedure, both data sources (i.e., Primary and Secondary) will be
utilized to get valuable information regarding the multi-channel service quality and actual
satisfaction of customers.

3.7. Data Analysis Technique

As the data collection method is quantitative and interprets qualitatively, the data will be
analyzed through it. The data analysis will be processed by IBM SPSS statistics (statistical
Package for social scientists) software which is purposefully prepared for helping the finding
using statistical analysis.

A reliability checks for internal consistency of variables also will be performed using Cronbach
alpha statistics. After validity test and data collection, the collected data will be analyzed, and the
final report will be produced through frequency, percentage, comparison of mean, mode,
standard deviation, ANOVA, correlation and multiple stepwise regression method, using the
software is called statistical package for social sciences (SPSS). In addition to SPSS, graphs,
tabular explanations, charts and pie will be used to present the result.

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3.8 Ethical Considerations

To keep the confidentiality of the data that will be given by respondents, the respondents could
not require writing their names and assured that their responses will be treated in strict
confidentiality. The purpose of the study and a reasonably expected possible benefit to the
respondents and ethio telecom will be disclosed in the introductory part of the questionnaire.
Furthermore, the researcher will try to avoid misleading or deceptive statements to be
incorporated in the study. Lastly, the questionnaires will be distributed only to voluntary
participants.

3.9 Validity and Reliability

The reliabilities of multi-channel service quality on mobile customer’s satisfaction will assess
with Cronbach’s Alpha (α), it is the most common measure of scale reliability Field (2006).
According to Neuman (2007), Cronbach’s Alpha used to assess uni-dimensionality. Alpha
ranges from a maximum of 1.0 for a perfect score to minimum of zero, good measure of the
alpha should be 0.70 or higher.

Use of multiple indicators of a variable is used to increasing reliability; two or more of indicators
of the same construct are better than one Neuman (2007). The researcher use 8 well design and
theoretically construct indicators at each of dependent and independent variables.

Statistical validity also used to measure the validity of the research through use of correct
statistical procedure and instruments Neuman (2007). To insure the validity of the study, the
researcher has collected quantitative data using survey questionnaire and analysis the data using
correct statistical instruments like descriptive statistics, inferential statistics, correlation and
regression analysis to see the relationship of the variable and reach concrete conclusion.

According to Adams et al. (2007) internal validity is used to assure the research validity. To
threat the internal validity of this research, questioners will be distributed within same period and
collected within short reasonable period, and reasonable sample will be taken from the
population and questionnaires randomly distribute to participant. In addition to this, the
researcher receives comment from the advisor and other expertise on the questionnaire and
overall research methodology.

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QUALITY: CONCEPTUAL APPROACH: Journal of Advanced Social Research Vol. 4 No.4,
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Christan, A. and Emmanuel, E. (2016), “An Assessment of Customer Satisfaction with GSM
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Appendices:

a. Budget plan

No Items Quantity(unit) Amount in birr

1 Equipment 1 1000

2 Stationery 5 500

3 Materials 10 1000

4 Secretarial 3 450

5 Travel 2 400

6 photocopying 100 400

7 printing and binding 100 500

Total amount 221 4250

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 b. Time plan

No Description Period of time in months

February March April May June
1 Research thesis
will be submitted
to the respective
advisor
2 Here is the period
that the thesis will
be viewed by
advisor and
returned to the
researcher.
3 Period of the
thesis correction,
that commented
by respective
advisor
4 Thesis
submission after
it corrected by the
researcher.
5 In this month it
will be that, the
thesis again
reviewed by
respective advisor
and returned to
the researcher for
the last
submission.

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ANNEX: QUESTIONNAIRE

MEKANE YESUS MANAGEMENT AND LEADERSHIP COLLEGE

Dear Respondents

My name is Adugna abera, I am studying MBA at Mekane Yesus Management and Leadership
college. Next to this, i would like to thank you for your time to fill the below questionnaire for
that, I am conducting research on the effect of multi-channel service quality on mobile customers
satisfaction in the case of ethio telecom. Hence, I am looking for your cooperation politely.

Instructions:

1. No need to write your name

2. Rate your survey by using tick sign (✓).

Part I Demographic Information

1. Sex: Male Female

2. Age: Below 25 25-35 36 – 45 46 – 55 Above 55

3. Academic qualification: High school complete Diploma BA Degree

Masters Degrees Doctorate Degree

4. How long have you been a customer of ethio telecom?

Less than 1 year 1 – 5 Years 6 – 10 Years More than 10 Years

Part II Multi-Channel Service Quality Measurement

Please, rate the items in the instrument based on a five (5) point scale (1=Strongly Disagree,

2=Disagree, 3=Neutral, 4=Agree and 5=Strongly Agree).

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No Measurement items of the Strongly disagree neutral agree Strongly
constructs (Physical Service disagree agree
Quality)

Reliability component
1 The service provided in multi-
channel gives you confidence
2 There are always adequate number
of ethio telecom employees to
respond to your needs
3 Ethio Telecom employees deliver
services right the first time (error
free service)
4 Ethio telecom provides multi-
channel services that are always
Consistent
Responsiveness component

1 Employees in the point of sales

tell you exactly when the
services will
be performed
2 Ethio Telecom employees
provide multi-channel
distribution services on time
3 Ethio Telecom employees pay
attention to your personal needs
4 Ethio Telecom employees are
always willing and never too busy
to help
5 Ethio Telecom employees
understand customers’ needs
Assurance component

1 Ethio Telecom employees are

professional and well trained
2 The behavior of ethio telecom
employees on multi-channel
services instills confidence in
you
3 Ethio Telecom employees
have the necessary knowledge
to deal with customer inquiry
and needs
4 Ethio Telecom employees are
always polite

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5 Ethio Telecom honors its
commitment towards the
promised multichannel
services experience.
Empathy Component

1 You feel safe in your

transactions with the point of
sales
2 Ethio Telecom employees
always give you individual
attention
3 Ethio Telecom employees put
channel users’ needs first
4 Ethio Telecom employees
understand specific user needs
Tangibles Component

1 Ethio telecom
multi-channel
service are
supported by
modern and
technologically
advanced
systems
2 Ethio multi-
channel
service
delivery are
comfortable
3 Ethio telecom
multi-channel
service are up
to date and
entertaining
4 The services
provided on
ethio telecom
multi-channel
service meet
customers’
needs
5 The quality
and number
of ethio
telecom

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 multi-channel
services are
satisfactory
6 Ethio telecom
employees
are well
dresses and
neat
Security of virtual channel (self-service, websites. Online supports chat rooms)

1 I feel confident
about the
security (self-
service,
website)
2 I feel safe in
my
transactions
using virtual
channel (self-
service,
Website)
3 My private and
financial data
seem well
protected

Ease of use virtual channel

1 The virtual
channel (self-
service,
website) are
simple to use

2 This virtual
channel
makes it easy
to find the
information I
need

3 It is easy to use
the virtual
channels (self-
service,
[Link])
Information Quality

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1 The virtual
channels
provide
useful
information

2 This virtual
channel
meets my
information
needs

3 Information
at the virtual
channels are
well updated
Customer Satisfaction

1 I am totally
satisfied with
quality of ET
multi-channel
services

2 I had a
satisfying
experience
with ET
multi-channel
services

3 Overall, ethio
telecom
multi-channel
services
quality
provides a
very
Satisfying
experience.

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