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Service quality and customer satisfaction in SMEs in Benin city



1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study







3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis



4.1 Introductions

4.2 Data analysis


5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation



Service quality and customer satisfaction is an important ingredient in addressing global challenges, such as customer satisfaction and service quality. Service quality influences customer satisfaction because with an excellent service provided to the customers, their needs and expectations are met and as a result it improves customer satisfaction and helps create a good image of the company and bring positive reactions to potential customers mind. Despite this attention, little empirical research has been performed about relationship-marketing practices among SMEs, especially those in developing countries. This study is intended to investigate the effects of service quality on customer satisfaction in Benin city.

Chapter one


1.1Background of the study

Despite the benefits that can arise from making sure purchaser satisfaction, numerous researchers (Harwood and Garry, 2006) have a look at that modern day research has basically centered in purchaser relationship in large firms. There is a shortage of empirical studies about the customer satisfaction in small and medium sized companies (Simpson et al., 2006). Furthermore, most of the preceding debates have been in the context of western subculture (Yau et al., 2000). Consequently, customer satisfaction fashioned developed by the way of the western world may not necessarily follow to Small and Medium Enterprises (SMEs) in different socio-cultural contexts

In most developing countries, SMEs are ability of accelerating monetary growth and producing employment. In Nigeria, SMEs create 250,000 jobs per year and contribute to approximately 30% of the Gross Domestic Product (GDP) of the country. They are the vendor of new jobs in the country and they make a predominant contribution to income generation, especially particularly among the poor (Small and Medium Enterprises), Business Guide, 2008). SMEs have to be efficiently managed if they are make contribution to the growth of national economies. It is consequently crucial for researchers and policy makers to understand the marketing operations of SMEs in great detail. This will foster the diagram management to decorate client satisfaction to enable SMEs succeed in developing good purchaser relationships (Boag and Dastmalchian, 1988 as cited in Davis, 1997, p.32). In spite of the fact that SMEs have been viewed as the bulwark for employment generation and technological development in Nigeria, the area  however has had its very own fair share of overlook with concomitant unsavoury impacts on the economy. In a seminar titled “Career Crisis and Financial Distress- The Way Out”, the General Manager of Enterprise and Financial Support Company Limited, Mr. Oluseyi Oluboba, identified in his paper the following as the fundamental problems of SMEs, which are alternatively not insurmountable: low degree of entrepreneurial skills, poor administration practices, constrained access to cash and capital markets, low equity participation from the promoters because of inadequate personal savings due to their level of poverty and low return on investment, inadequate equity capital, poor infrastructural facilities, high rate of enterprise mortality, shortages of skilled manpower, multiplicity of regulatory agencies and overbearing operating environment, societal and attitudinal problems, integrity and transparency problems, restricted market access, lack of skills in international trade; bureaucracy, lack of access to information given that it is costly, time consuming and complicated at times. Despite these efforts, there is only scarce knowledge of how service quality contributes to customer satisfaction in SMES thus need for this study to find out Service quality as a catalyst for customer satisfaction in SMEs with better understanding of the relationship between the two for better tailor stimulation programs to target SME competence needs (Storey, 1997)

1.2 Statement of the problem

Undoubtedly the capability to innovate and to bring innovation successfully to the market will be a crucial determinant of the global competitiveness of nations over the coming decade. There is growing awareness among policymakers that innovative activity is the main driver of economic progress and well-being as well as a potential factor in meeting global challenges in domains such as business and academic sectors. Even countries that have generally refrained from active industrial policy in recent years now seek new ways to improve the environment for innovation in order to boost productivity and growth. The United States, for example, came forward with the “Innovate America “strategy. In addition to the rapid advances in scientific discovery and in general-purpose the accelerating pace of innovation is being driven by customer satisfaction. This is therefore the reason for this study. SMEs have faced increased competition and continuous price pressures. Globally, SMEs have been searching for new ways of surviving and increasing their profitability amidst this competition. To cope with these changes, a range of marketing approaches have been developed over the past decade. Of these, attaining customer satisfaction has attracted the greatest attention from both academic scholars (Wang, 2006) and practitioners. Since the business environment is more dynamic now and customers are more demanding, firms have turned their attention towards RM in order to remain competitive (Boyd et al., 2002).

1.3 Objective of the study

The objective of the study is to assess the service quality and customer satisfaction in SMEs in Benin city. The specific objectives are;

  1. To ascertain whether service quality have any effect on customer satisfaction in SMEs in Benin city
  2. To examine which quality of services may be improved in SMEs in Benin city
  3. To ascertain the importance of customer satisfaction in SMEs in Benin city

1.4 Research question

  1. Does service quality have any effect on customer satisfaction in SMEs in Benin city?
  2. Does quality of services improve in SMEs in Benin city?
  3. Is there any importance of customer satisfaction in SMEs in Benin city?

1.5 Research hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: service quality has no effect on customer satisfaction in SMEs in Benin city.

H1: service quality has effect on customer satisfaction in SMEs in Benin city.

 H02: quality of services may not be improved in SMEs in Benin city

 H2: quality of services may be improved in SMEs in Benin city

H03: there is no importance of customer satisfaction in SMEs in Benin city

H3: there is importance of customer satisfaction in SMEs in Benin city

1.6 Significance of the study

This study is meant to educate the general public, SMEs and the government on service quality and customer satisfaction in SMEs in Benin city. It is meant to bring to the knowledge of the SME on the need to carry their customers along in other to grant them the needed satisfaction they require. In addition, the study is meant to inform the SME, that many service quality on their customers can affect their patronage. However, this study is meant to bring to the knowledge of the government that they can through the SME help curtail these service quality on customers. This study will be of immense benefit to other researchers who intend to know more on this topic and can also be used by non-researchers to build more on their work. This study contributes to knowledge and could serve as a guide for other work or study.

 1.7 Scope of the study

The scope of the study covets work on service quality and customer satisfaction in SMEs in Benin city. The study will be limited to selected SMEs in Benin city

1.7 Limitation of the study

Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study

1.9 Definition of terms

Service quality: Service quality, in its contemporary conceptualization, is a comparison of perceived expectations of a service with perceived performance, giving rise to the equation

Customer satisfaction: Customer satisfaction is defined as a measurement that determines how happy customers are with a company’s products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services.

SME: Small and medium-sized enterprises or small and medium-sized businesses are businesses whose personnel numbers fall below certain limits.


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