1.

Introduction
1.1. Background of the study
1.2. Statement of the problem
1.3. Objectives of the study
1.3.1. General objective
1.3.2. Specific objectives
1.4. Operational definition of the variables
1.5. Scope of the study
1.6. Significance of the study
1.7. Limitations of the study

2. Theoretical Framework
2.1. Discussion about the availability of literature
2.2. Brief discussion of the analytical framework

3. Research Design and Methodology

3.1. Discuss the sources of data (whether it is primary or secondary or both)
3.2. If primary, then description of the target population (type and size of the
population)
3.3. Explain if there is a need for sampling
3.4. If there is a need for sampling, discuss the sample size and sampling
technique/s
3.5. Data collection technique
3.6. Data preparation, presentation and analysis technique

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1. Introduction

Telecom services in the globe are the best tool to get along with fast growing technologies and
economic activities. Customers of telecom services need to get timely and fast services to stay at
the completion in the business. Here comes the concept of satisfaction. Customer satisfaction has
been studied in different directions, from measurement to its
relationships with other business aspects. Some researchers such as (Levy, 2009; NBRI, 2009)
have provided possible means of measuring customer satisfaction. Meanwhile other
authors like Wilson et al. (2008) demonstrated some determinants of customer
satisfaction to be product and service quality, price, personal and situational factors
(Wilson et el., 2008, p. 79-80). But in this specific study, I will try to identify the impact of
quality of service, usage price, and customer service on customers’ satisfaction.

It is important to analyze the impact of proving quality of service, network coverage, usage price,
customer service, availing different packages etc. to ensure that broadband data users receive the
greatest benefits from the telecom services. These factors directly influence on service users
satisfaction.

Therefore the concern of this study is to asses satisfaction of large scale enterprises towards ethio
telecom’s services. In addition the study provides the company with information regarding
customer satisfaction that will help in company’s strategic planning formulation and for the
betterment of the overall customer handling techniques. Having this general objective the study
will employ qualitative data collection methods to address the issue if satisfaction. The study is
limited to Dire Dawa city administration and as it is not achievable to address all ethio telecom’s
within this specific research large scale enterprises are the focus.

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1.1. Background of the organization
Telecommunication service was introduced first in Ethiopia during 1894 when the construction
of the telephone line from Harar to the capital city, Addis Ababa (Finfinnee), was started. Later,
in 1932, Ethiopia become a member of the international telecommunication union (ITU)
immediately before the Italian invasion of 1935 and radio communication was introduced
following the establishment of radio circuit links with Djibouti, Aden, Cairo and London. The
companies was placed under the auspices of the ministry of post, telephone and telegraph (PTT)
and then reorganized as imperial board of telecommunications of Ethiopia On November 1996
the telecommunications sectors was restructured and two separate independent entities namely
the Ethiopian Telecommunications authority (ETA) and the Ethiopian Telecommunication
Corporation. The corporation in 1996 has enhanced the development of telecom infrastructures
and quantity of service in both Rural and urban areas in the most efficient and timely manner.
Ethiopian government has decided to focus on the improvement of telecommunication services,
considering them as a key lever in development of Ethiopian. Then ethio-telecom is born in
November 2010 from this ambition of supporting the steady growth of the country (company
phone directory, 2015).

Ethiopia telecommunication sector policy is rooted in Council of Ministers’ regulation No.

10/1996 that empowers the incumbent operator to retain a monopoly status. At the time the
Ethiopian Telecommunications Corporation receives a monopoly license from the regulator, the
Ethiopian Telecommunications Agency (ETA) in an exchange for efficiency and quality of
service requirements and infrastructure expansion targets. Previously the targets are set by the
ETC itself and approved by its influential Board of Directors and the regulator. In the
absence of other public policies or programs on telecommunications,
the ETC’s own strategic plan serves as the only tool against which the
performance of the telecommunications sector could be measured. But now days, a monopoly
government telecom company ethio telecom (born in Nov 2010), set its target depending on the
country’s five (5) year development plan GTP. The Government gives due attention and
commitment for the development of the telecom sector. For example, currently it finalize the first
telecom expansion program (TEP1), through vendor financing, by expanding telecommunication
infrastructure and service delivery in order to foster socio-economic development of the nation
and as well to reach telecom services for rural and remote areas of the Country. This will

3
 increase the number of telecom service subscribers and level of penetration, which is an
opportunity for ethio telecom. TEP2 will implement in the near future (ethio telecom public doc,
www.ethiotelecom.et) to make the country’s network coverage 95%.

Ethio-telecom has played great role in fostering the growth and prosperity of the economy of
Ethiopia by making communication faster than before. It delivers voice, data and multimedia
communications for the people of Ethiopia. Even though it is crucial for development it has got
sorts of problems nowadays. Although customer service in ethio telecom has shown some
improvements. And it is observable that ethio telecom faces different problems which in turn
may cause customers dissatisfaction. From different services given by ethiotelecom, broadband
internet service is also one source its customer dissatisfaction.

The Internet has revolutionized the communications world like nothing before. The invention of
the telegraph, telephone, radio, and computer set the stage for this unprecedented integration of
capabilities. The Internet is at once a world-wide broadcasting capability, a mechanism for
information dissemination, and a medium for collaboration and interaction between individuals
and their computers, mobile phones, tablets… without regard for geographic location. The
Internet represents one of the most successful examples of the benefits of sustained investment
and commitment to research and development of information infrastructure. Beginning with the
early research in packet switching, the government, industry and academia have been partners in
evolving and deploying this exciting new technology.

1.2. Statement of the problem

Every Enterprise have their own goals (profit or other purpose) that must be fulfilled. To fulfill
those goals enterprises’ uses different kinds of technologies, techniques & strategies. The reason
why my research focus on enterprise customers is, they have decisive role in our country
economic growth, financial movement (domestic & foreign) and in all business sector. The truth
is all enterprises work & businesses are totally dependent on these broad band internet. To fulfill
their goals, proper internet service must acquire to accomplish their tasks. Emerging technologies
have changed the banking industry from paper and branch based banks to “digitized and
networked’’ banking services. Unlike before, broadband internet is cheap and it makes the

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transfer of data easy and fast. Technology has changed the accounting and management system
of all banks. And it is now changing the way how banks are delivering services to their
customers. The growing availability of broadband Internet access is enhancing business growth
opportunities and driving a range of new applications from movies on demand to remote medical
services (Reuters, 2002). At the same time, the Internet has fundamentally altered the nature of
global markets as it enables people to connect to other networks, people, and businesses, free
from the limitations of time and space (Sprano & Zakak, 2000). In fact, the diffusion of such an
infrastructure is now strategically important for individual countries as it carries the potential to
significantly contribute to a country‘s economic wealth in the emerging age of electronic
commerce (e-commerce) (Garfield & Watson, 1998; Oxley & Yeung, 2001). Essentially, the
broadband Internet readiness of a country affects its ability to compete globally and internally
among enterprises. Nevertheless, Ethio-telecom as a monopoly internet service dealer must think
twice to satisfy his customers need without interruption of the service with a maximum quality.
When we say satisfaction, what is our base to judge & measure satisfaction?

Researches in Ethiopia focusing on satisfaction of ethiotelecom broadband data service showed

that for example Mr. Astateke Alamerew & Mr. Thomas Hailu have a gap of demographic
coverage because they are concentrated in Addis Ababa only and my research try to cover
regional demography especially in Dire Dawa administration.

1.3. Objectives of the study

1.3.1. General objective
The overall objective of the study is to assess satisfaction towards services rendered by Ethio-
telecom to large scale enterprise customers

1.3.2. Specific objectives

The specific objectives of this study are

1 - To identify scope and services provided to large scale enterprises by Ethio-telecom

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 2 - To assess desires of large scale enterprises towards Ethio-telecom services
3 - To examine gaps between the service provider, Ethio-telecom and customer satisfaction

1.4 Research Design and Methodology

So as to achieve the above stated objectives, both primary and secondary data sources are going to
be utilized. From the secondary data sources books, journals, websites, magazines, annual reports,
articles and other related literature will be assessed. As this study’s objectives need deep and insight
analysis qualitative approach is more fitted from primary data sources. “ A qualitative approach
allows informants of a researcher to express themselves in the most natural way as it gives them the
opportunity to voice their opinions and views in the way they wish (GoodkindandDeacon2004).

After choosing the approach to the study, it is very important to identify the methods of data
collection to get the appropriate information regarding each objective. Hence, the following
methods of data collection are believed to be appropriate for this study:

Purposive sampling: it is a type of sampling which have got preselected criteria relevant to a
particular research question. Ethio-telecom is huge company providing different kinds of services
for different customers since I cannot address all of them within this single study given the time and
other resources constraints, I focus on large scale enterprises and based on broadband data users.

In-depth interview: An in-depth interview is an open ended, discovery oriented method to obtain
detailed information about a topic from informants. Since the study focus on satisfaction,
respondents must feel free to talk and in-depth interview, I believe will comfort them.

Focus Group Discussions (FGD): FGDs are going to take place in different level with different
issues to discuss about. There will be three sessions of FGDs. The grouping will be according to the
job status of participants and organization they came from. There will be not less than two hours
discussions with each session.

Semi structured interview: semi structure interviews will be employed with Ethio telecom’s
officers to gain sufficient data about the services they are providing for large scale enterprises.

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1.5. Scope of the study
This study is going to be conducted in Dire Dawa city administration. Even if Ethio-telecom is
providing wide and diversified services, Satisfaction of large scale companies towards Ethio-
telecom services is going to be the core point of the whole study.

1.6. Significance of the study

The output of this study contributes to knowledge and literature in the subject is under
investigation. It is useful as a source of reference to researchers, academics, students, policy
makers, marketing professionals and other stakeholders interested in at what extent quality
service delivery, usage price and customer service is impacting on Customer Satisfaction in the
business world in developing country like Ethiopia. To the management of Ethio telecom, the
findings and results in this study provides a more reliable scientific measure and perspective for
describing and evaluating the level of their customer satisfaction with the services they deliver.
Therefore providing the empirical support for management strategic decisions in several critical
areas of their operations, and above all, provide a justifiably valid and reliable guide to designing
workable service delivery improvement strategies for creating and delivering customer value,
achieving customer satisfaction, building long-term mutually beneficial relationship with
profitable customers and achieve sustainable business growth in Ethiopia. To policy makers like
government agencies such as the Ministry of Information and Communications and Telecom
Board of Directors, the finding and results of this study provides insights and a more reliable
guide to monitoring the impact of the operations of ethio telecom. It also serves as a yardstick for
measuring partly their respective policy goals and objectives. .

2. Literature Review

2. 1Theoretical Framework

2.1.1 Defining Customers

According to www.dictionary.reference.com (2011), a customer is a person who purchases

goods or services from another; buyer; patron; or a person one has to deal with. Rust et.al.,(2000)
opined that the term customer “is commonly used to refer to end-users of a product”. A customer

7
refers to individuals or households that purchase goods and services generated within the
economy. Smith (1997) indicated that historically, the word customer is derived from "custom,"
meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit
to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep
his or her "custom," meaning expected purchases in the future. Hayes (1997) revealed that
customer is a generic term referring to anybody who receives a service or product from some
other person or group of people. Customer needs may be defined as the goods or services a
customer requires to achieve specific goals. Different needs are of varying importance to the
customer. Customer expectations are influenced by cultural values, advertising, marketing, and
other communications, both with the supplier and with other sources. Both customer needs and
expectations may be determined through interviews, surveys, conversations, data mining or other
methods of collecting information. Customers at times do not have a clear understanding of their
needs. Assisting in determining needs can be a valuable service to the customer. In the process,
expectations may be set or adjusted to correspond to known product capabilities or service. It is
important to identify the types of customer surveyed when reporting customer satisfaction
results. In this study the customers of concern are the individual consumers/users of broadband
internet service directly or indirectly from the service provider ethio telecom.

2.1.2 Types of Customers

Hunter, (2010) stated that in retail, the idea of focusing on the best current customers should be
seen as an on-going opportunity. To better understand the rationale behind this theory and to face
the challenge of building customer loyalty, there is the need to break down shoppers into five
main types:

 Loyal Customers: They represent no more than 20 percent of our customer base, but make up
more than 50 percent of our sales. These people are the ones who can and should influence ones
buying and merchandising decisions. Nothing will make a Loyal Customer feel better than
soliciting their input and showing them how much their views are value.
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 Discount Customers: They shop our stores frequently, but make their decisions based on the
size of our mark downs. Price/discount seecker.
 Impulse Customers: They do not have a particular item at the top of their “To Do” list, but
come into the store on a whim. They will purchase what seems good at the time.
 Need-Based Customers: They have a specific intention to buy a particular type of item.
 Wandering Customers: They have no specific need or desire in mind when they come into
the store. Rather, they want a sense of experience and/or community.

Theories of satisfaction
1. The expectation theory
The expectation-based approach says that satisfaction judgments are a positive function of
consumer pre-purchase beliefs about the overall performance or attribute levels of a product,
La Tour and Peat (1979). Expectations provide a standard or frame of reference against which
satisfaction judgments are made. If expectations are met, it leads to satisfaction. Dissatisfaction
results if expectations are not met and complaining behavior follows. Expectations have been
defined as the consumer’s pre-purchase predictions, of what the product performance will be,
Day (1983).
Miller (1977) has suggested that four types of expectations could form the basis for comparison.
They are:
1. The ideal/desirable performance
2. The Equitable or deserved performance
3. The minimum tolerable performance and
4. The expected performance.
Many researchers support the expectation theory, for they feel that consumer choice is guided
either explicitly or implicitly towards choice of objects on the basis of anticipated performance
or expectations.
1. Ideal/desirable performance (what the product or service can be): This standard represents
the optimal service performance a consumer would hope for.
2. Equitable or deserved performance (what the product or service should be): This standard
represents the level of performance the consumer ought to receive, given apperceived return of
costs.

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3. Minimum tolerable performance (what the product must be): The service should at least
meet a certain minimal tolerable performance guidelines, La Tour and Peat (1979).
4. Expected performance (what the product or service will be): A service’s most likely
performance is presented by this standard. It is the most used pre-consumption standard in
consumer satisfaction/dissatisfaction research, Oliver (1980); Oliver and Linda (1981).

Developments in consumer satisfaction/dissatisfaction (CS/D) theory:

The topic of CS/D has become one of the most studied issues in the field of consumer behavior.
In general, researchers agree that the concept of consumer satisfaction/dissatisfaction refers to an
emotional response to an evaluation of a product, store, or service consumption experience, Day
(1977); Dube and Schmitt (1983); Hunt (1983); Hunt (1983); Westbrook (1988); Woodruff,
Cadotte, and Jenkins (1979). Satisfaction can be thought of as a feeling of "delight" and
dissatisfaction as a feeling of "disappointment", Oliver and DeSarbo (1979).

Customer satisfaction:
It is a vague and precise concept and the actual expression of the state of satisfaction varies from
one person to another and from product/service to product/service. The status of satisfaction
relies on many variables of psychological and physical aspects which correlate with satisfaction
behavior such as return and recommended rate. The level of satisfaction varies based on the
customer’s option and other products against which the customer compares with the firm’s
product.
As satisfaction is a psychological state, proper care must be taken in the process of quantitative
measurement, even though lot of research has been done on this topic, this is of very recent
development. In the work done by Berry, Brodeur during 1990-98, defined customer satisfaction
as ‘Quality Values’ that influence the behavior of satisfaction and again in 2002 Berry expanded
the research and named it as ten dimensions of satisfaction.
The ten domains of satisfaction are:
1. Quality
2. Value

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3. Timeliness
4. Efficiency
5. Ease of Access
6. Environment
7. Inter departmental work
8. Front line Service Behaviors
9. Commitment to the Customer and
10. Innovation.
The above factors emphasis on, continuous improvement and organizational change
measurement and are used for the development of the structure for satisfaction measurement as
an integrated model. The contributions made by Pasaruraman, Zeithaml and Berry(1985) during
1985-88 provide the base for the measurement of customer satisfaction with a service using the
gap model, i.e., the gap between the customer’s expectations and their perception or experience
of the service. This helps the measurer with the gap in the satisfaction which is objective and
quantitative in nature. Cronin and Taylor proposed the confirmation/disconfirmation theory of
combining the gap as two different measures into one measure of performance.
Grabrand described customer satisfaction as it is equal to perception of performance divided by
expectation of performance. According to various definitions of quality, the core interpretation of
quality is “Customer’s expressed and implied requirements are met fully”
According to ISO, 1994 Quality is “the totality of features and characteristics of a product or
service that bears on its ability to meet a stated or implied need”.
User based approach:
User based approach believes that quality is how best the products or service satisfy the customer
preferences. Quality is compared with the maximum satisfaction in this approach.
This approach is more of subjective and demand oriented nature. Different customers have
different needs, wants and desires. Thus, this approach is useful to identify their satisfactory
levels based on their requirements.
Service Quality:
Service Quality is considered to be an important and scorching topic in the present competitive
business world. Service quality is a measure of how well the service level delivered matches

11
consumer expectations (Lewis and Booms, 1983). The organizations are trying to achieve
customer satisfaction and customer loyalty through improved service quality.
Service quality refers to an approach shaped by an enduring overall assessment of a firm’s
performance. Service quality can be a way of achieving success among competing services, Jhon
E.G (1995).
Since service is an intangible good, the only way to understand and administer service quality is
by studying how a customer perceives it. The service quality is measured by measuring the
expectations of the customer before the receipt of the service and his perception i.e. his
experience after the receipt of the service. The difference between the expectations and
experience or the gap between the two is the measure of the service quality. The narrow is the
gap, the better is the service quality and the more the gap the worse is the service quality.
Thus, a firm is successful if the gap is narrow as it is meeting the customer’s expectations to a
larger extent.
Measurement of Service Quality:
According to Parasuraman, Zeithaml and Berry, service quality is equal to the difference
between the perception and expectations.
Service Quality = Perception minus Expectations.
They proposed that the customer while going into a service transaction he has certain specific
expectations and this he compares it with the actual experience or perception after he receives

Service quality and customer satisfaction:

Customer satisfaction is defined as "the number of customers or percentage of total customers,
whose reported experience with a firm, its products, or its services (ratings) exceeds specified
satisfaction goals, Jhon (2003).
Satisfaction is the customer’s fulfillment response. It is a judgment that a product or service
feature, or the product or service itself, provides a pleasurable level of consumption-related
Fulfillment, R.L oliver (1997).
The above definition can be understood in a less technical way as satisfaction is the customer’s
evaluation of a product or service in terms of whether the product or service reaches the needs
and expectations of the customer.

12
In addition to a sense of fulfillment in the knowledge that one’s needs have been met,
satisfaction can also be related to other type of feelings, depending on the particular context or
type of service, E. Arnould, L. Price and G. Zinkha (2001).

Attitude and satisfaction

Hence, Zeithaml and Bitner, (1996) define service quality as the way in which the whole service
experience is performed. Their model of customer perceptions of quality and customer
satisfaction hypothesized that satisfaction is more of an attitude and this attitude would influence
perceptions of service quality, which in turn would influence purchase intentions (service quality
leads to satisfaction and eventually purchase intentions). Failure to provide reliable service may
result in customer dissatisfaction and possible defection.

Alternative definitions of Satisfaction:

*Normative Deficit Definition: - Compares actual outcomes to those that are culturally
acceptable
*Equity Definition: - Compares gains in a social exchange-if the gain is unequal, the loser is
dissatisfied.
*Normative Standard Definition: - Expectations are based on what the customer believes he
should receive. Dissatisfaction occurs when the actual outcome is different from the expected
standard.
*Procedural Fairness Definition:- Satisfaction is a function of the consumer’s belief that he was
treated fairly.

2.1.3 Concept of Customer Satisfaction

The notion of customer satisfaction is part of a wider focus on building total customer value,
which can be defined as: “the perceived monetary value of the bundle of economic, functional
and psychological benefits customers expect from a given market offering” (Kotler & Keller,
2009). Zeithaml and Bitner (2000), define customer satisfaction as follows: “Satisfaction is the
customer evaluation of a product or service in terms of whether that product or service has met
their needs and expectations. According to Hoyer and MaClnnis (1997), consumers measure
their experiences of a product or service after acquisition, consumption and disposition.
13
Customer satisfaction / dissatisfaction require experience with the product which depends on the
quality and value of the service (Anderson et al., 1994). Any discrepancy may cause
disconfirmation (Hoyer et al, 1997), thus, failure to meet the needs and expectations is assumed
to result in dissatisfaction with the product or service”. Hoyer and MaClnnis (1997), argued that
a favorable

outcome means they are satisfied whilst an unfavorable outcome results in dissatisfaction. The
conceptual relationship between customer satisfaction and service quality has generated mixed
results among researchers. Anderson et al. (1994) point out a distinction between customer
satisfaction and future experience a customer gets when he comes into contact with a product or
service and value received. Recent studies have also pointed out that service quality is an
antecedent of customer satisfaction (Anderson & Sullivan, 1993; Cronin & Taylor, 1992). There
is however, consensus that further studies would have to be done on this issue. Satisfaction is
based on the customer’s previous experiences with the service provider, advice of friends and
associates, competitors offering and information from marketers (Kotler, 1997). It has also been
argued that satisfaction/dissatisfaction with a product or pleasure will lead to satisfaction. In
contrast, negative emotions such as grief, sadness, distress, sorrow, regret, disappointment,
anger, agitation, will engender dissatisfaction (Zeithaml & Bitner, 2000; Hoyer & MaClnnis,
1997). Services are influenced by customers’ state of mind and emotions. Positive feelings such
as happiness, excitement,

According to Lovelock & Wirtz (2007), customer satisfaction is a term that has received
considerable attention and interest among scholars and practitioners perhaps because of its
importance as a key element in business strategy, and goal for all business activities especially in
today’s competitive market. Kotler & Keller (2006 p.144) defined satisfaction as a person’s
feeling of pleasure or disappointment resulting from comparing a product’s performance
(outcome) in relation to his or her expectation.

Gerpott et al. (2001) demonstrated that customer satisfaction is measured by a customer’s

estimated experience of the extent to which a service provider’s services fulfill his or her
expectations. Oliver (1992), posits that a customer’s post-purchase evaluation and effective

14
response to the overall product or service experience. Zineldin (2000), proved that a number of
benefits are associated with customer satisfaction. According to him, a satisfied customer is less
price sensitive, buys additional products and is less influenced by competitors and stays loyal
longer. Bruhn (2003) explained customer satisfaction as an experienced-based assessment made
by the customer of how far his own expectations about the individual characteristics or the
overall functionality of the services obtained from the provider have been fulfilled. According to
Cronin & Taylor (1992), satisfaction can be related to attribute-specific and overall performance.
It is attribute-specific where it relates to a specific product or service. Again, customer
satisfaction can also be related to the overall performance of the product or service of an
organization. With mobile telecommunication for example, one may attribute satisfaction to
mobile internet, quality picture, voice quality etc. Nyer (2000) studied the relationship between
customer complaints and customer satisfaction and came to the conclusion that encouraging
customers to complain increased their satisfaction, and this was especially the case of dissatisfied
customers.

The concept of customer satisfaction can either be classified as been objective or subjective.
According to Pizam & Ellis (1999), the concept of customer satisfaction is perceived by a
minority of researchers to be subjective in expectations but objective in the perceptions of the
product attributes, or outcome. Klaus (1985) has therefore defined customer satisfaction as the
customer’s subjective evaluation of a consumption experience based on some relationship
between the customer’s perceptions and objective attributes of the product. Satisfaction is
viewed by recent studies as the outcome or end result during the process of consumption of a
product or a service. Customer satisfaction may also be classified as transactional or cumulative.
The transactional perspective is based on a one time, specific post-purchase evaluative judgment
of a service encounter (Oliver, 1977). Satisfaction has been conceptualized as a process by early
definitions and this view has dominated much school of thoughts. From the above definitions, it
can be deduced that ‘satisfaction’ is a complex term in the field of marketing because customers
have varied needs and expectations of a particular product and therefore has his or her own
definition for it. In other words customer satisfaction is multi-dimensional. According to
Surenshchandar et al (2002), the object of customer satisfaction may be varied and can be related
to different dimensions of multiple experiences with product or service providers. Berkman and
Gilson (1986) stated that customer satisfaction is recognized as being of great importance to all

15
commercial organizations because of its influence on repeat purchase behavior and word-of-
mouth recommendations In general terms; customer satisfaction is seen as the essential
determinant of business success (Moore et al., 1998). On the other hand, as competition has
increased, customer satisfaction has been identified as a determinant of market share, return on
investment and cost reduction (Burch et al., 1995). Nauman (1995) referred to several studies
that had found that it costs about five times as much in time, money and resources, to attract a
new customer as it do to retain an existing customer. This creates the challenge of maintaining
high levels of service, awareness of customer expectations and improvement in services and
products. Satisfaction reinforces positive attitudes toward the product/service, leading to a
greater likelihood that the same product/service will be purchased again and that dissatisfaction
leads to negative product/service attitudes and lessens the likelihood of using the same
product/service again (Assael, 1987).

An International Journal of Managing Value and Supply Chains states Customer satisfaction
originates when the customer compares the actual performance of a product with expected
performance [IJMVSC, 2015]. Customer satisfaction can generate customer retention; ultimately, it
leads to increase market share with enhancement of sustainable competitive advantage [ IJMVSC,
2015]. Previous studies have reported that call quality, value added services, and customer
support provided by cellular service firm results in customer satisfaction that increases customer
loyalty [IJMVSC, 2015]. Customer satisfaction describes how customers rate a specific brand
based on the past experiences of customers with a particular brand [ IJMVSC, 2015]. Empirical
evidence suggests the positive effect of customer satisfaction can originate customer loyalty
[IJMVSC, 2015].Customized, specific, and better-tailored services that meet customer’s needs and
expectations would lead to higher level of customer satisfaction [ IJMVSC, 2015]. Corporate image
is a vital indicator that influences the perceived quality of customer, evaluates customer
satisfaction, and customer loyalty [IJMVSC, 2015].

2.2 Service Quality

The definition of quality is pervasive as it varies from persons to persons and from services to
products. Nonetheless, Crosby (1979) postulates that it is often construed to mean imprecise

16
adjectives like goodness, or luxury or shininess or weight. The quality of a product is described
and measured differently as compared to a service. While a product features of colour, texture
among others, a service is characterized by intangibility, inseparability and heterogeneity, which
makes it difficult to measure in terms of quality. Service quality is a measure of how well the
service level delivered matches consumer expectations (Lewis and Booms, 1983).

2.1.4 Attitude and satisfaction

Hence, Zeithaml and Bitner, (1996) define service quality as the way in which the whole service
experience is performed. Their model of customer perceptions of quality and customer
satisfaction hypothesized that satisfaction is more of an attitude and this attitude would influence
perceptions of service quality, which in turn would influence purchase intentions (service quality
leads to satisfaction and eventually purchase intentions). Failure to provide reliable service may
result in customer dissatisfaction and possible defection. This is based on the premise that a
satisfied customer will continue to maintain a relationship (Hallowell, 1996) and that relationship
will lead to loyalty and longevity. Zeithaml, et al., (1990) arrived at the same idea by looking at
the probable behavior of the dissatisfied customer. They maintain that a dissatisfied customer is
likely to switch to a competitor and may inform others of the bad experience.

2.1.5 Customer Satisfaction as a Process and an Outcome

One area that has received considerable debate in customer satisfaction literature is whether
customer satisfaction should be defined as an outcome or a process. Many early definitions
conceptualized satisfaction as a process which is currently the dominant view held by most
scholars (Oliver, 1980, Parasuraman et al., 1988). The process perspective presupposes that
customer satisfaction is a feeling of satisfaction that results from the process of comparing
perceived performance and one or more predictive standards, such as expectations or desires
(Khalifa & Liu 2002). This perspective is grounded in the expectancy disconfirmation theory
proposed by Richard Oliver (Oliver 1980). The customer is satisfied if the performance of
product/service is equal to his/her expectations (positive disconfirmation) and he/she is
dissatisfied if the product/service performance is perceived to be below his/her expectation
(negative disconfirmation). If expectation exceeds perceived performance, the customer is highly
satisfied. By taking satisfaction as a process these definitions do not focus on satisfaction itself
but things that cause satisfaction, the antecedents to satisfaction, which occur primarily during

17
the service delivery process (Vavra 1997). More recent studies view satisfaction as an outcome
or end result during the process of the consumption of a service; it is viewed as a post-purchase
experience (Vavra 1997). This view has its roots in motivation theories that postulate that people
are driven by the desire to satisfy their needs (Maslow, 1954) or that their behaviour is directed
at the achievement of relevant goals (Vroom, 1964). In this way satisfaction is perceived as a
goal to be achieved and can be described as consumer fulfillment response (Rust & Oliver,
1994). In the context of this study, customer satisfaction is defined from process perspective
because we believe that in Ethiopia mobile telecom market, customers‟ evaluation of mobile
telecom services takes place primarily during the service delivery process and continues, but not
just an outcome those customers strive to achieve.

2.1.6 Customer Satisfaction in ethio telecom Ethiopia

Customer satisfaction in ethio telecom is measured based on the service quality, price and
customer services given by the company. There are standards settle to measure customer
satisfaction. Performing the tasks/service requests by the customer at settle key performance
indicators standards by the company.

2.1.7 Measurement of Customer Satisfaction/customer satisfaction models

Companies try to maintain their loyalty with their customers by improving product and service
quality. As a result in the last decade, many national indices have been developed in order to
measure consumer satisfaction across a wide range of organizations. Thus, at the national level,
the customer satisfaction index (CSI) is used to measure companies and organizations how they
satisfy customers’ needs. The CSI’s model can be also used for comparing services and products
within an industry. Most countries have set their own customer satisfaction indices to measure
customer satisfaction and the business performance of companies and organizations.

Oh and Parks (1997) identified nine methods for measuring Customer Satisfaction, which are:
expectancy disconfirmation, assimilation or cognitive dissonance, contrast, assimilation contrast,
equity, attribution, comparison-level, generalized negativity and value-precept. Pizam & Ellis
(1999, p.327) in their work comment that “while most of these are based on cognitive
psychology, recently numerous researches have attempted to apply CS theories developed by

18
behaviorist in several areas. Out of the many theories, the most widely used is the
disconfirmation theories and customer satisfaction index.

2.2 Empirical Review

The research published by European Journals of Business and social science, (vol 2, No 7,
pp136-160, 2013) discovered that quality service has a relationship with customer satisfaction.

The importance of service quality and price in determining customer satisfaction was also
reported by Hafeez and Hasnu (2010) who investigated customer satisfaction in Pakistan.

2.3. Analytical framework

2.3.1 Service Quality Vs Satisfaction

Since customer satisfaction has been considered to be based on the customer’s
experience on a particular service encounter, (Cronin & Taylor, 1992) it is in line with
the fact that service quality is a determinant of customer satisfaction, because service
quality comes from outcome of the services from service providers in organizations.
Another author stated in his theory that “definitions of consumer satisfaction relate to a
specific transaction (the difference between predicted service and perceived service) in
contrast with ‘attitudes’, which are more enduring and less situational-oriented,”
(Lewis, 1993, p. 4-12) This is in line with the idea of Zeithaml et al (2006, p. 106-107).
Regarding the relationship between customer satisfaction and service quality, Oliver
(1993) first suggested that service quality would be antecedent to customer satisfaction
regardless of whether these constructs were cumulative or transaction-specific. Some
researchers have found empirical supports for the view of the point mentioned above
(Anderson & Sullivan, 1993; Fornell et al 1996; Spreng & Macky 1996); where
customer satisfaction came as a result of service quality. In relating customer satisfaction and
service quality, researchers have been more precise about the meaning and measurements of
satisfaction and service quality. Satisfaction and service quality have certain things in common,
but satisfaction generally is a broader concept, whereas service quality focuses specifically on
dimensions of service (Wilson.et.al.,2008,p.78).

2.3.2 Usage Price Vs Satisfaction

19
Usage price which pay for the service we get should be fair and compatible with different
countries data service provider usage fees-the best one is giving the service with the least price.
Customers in Dire Dawa experienced the service and their life is fully and partially adapted with
service. Their including the researcher is not satisfied with the price which they pay for the usage
of ethio telecom data service. The service user’s oblique to fix the time they use because of high
fee of the service. The population in Dire Dawa revenue matters this limitation also.

2.3.3 Customer Service Vs Satisfaction

Businesses use the term “customer service” so frequently that it almost seems they say it to just
say it, the times have been changing for many businesses to become more in tune with the whole
of customer satisfaction. This new paradigm encompasses a more comprehensive experience for
the customer, than the “service” part of customer service can provide. Customer satisfaction is a
compilation of the customer service, customer experience, the loyalty and the quality of your
business.

The difference between service and satisfaction is the feeling of satisfaction one experiences as a
result of the service provided. This insure that the variables such as service quality, usage price
and customer services are the basic and consequently are factors on customer satisfaction of the
service which ethio telecom is provided as a broadband internet.

20
 Impact Area of Customer Satisfaction (The Pyramid)

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