CHAPTER ONE 1.0 INTRODUCTION 1.1 Background of the Study The Tanzanian banking industry has undergone many changes in terms of service delivery with the aim of improving the quality of customer service. The past few years have also seen a phenomenal growth in the Tanzania banking sector which has led to intense competition among the industry players. The Tanzania Banking Survey (2009) has shown that the traditional banks are losing out as competition in the industry deepens, triggered by aggressive new entrants (New generation banks). The survey, based on the financial results of banks last year revealed a squeeze in profit across board with the big banks being the major losers, although it said performance in the industry on the whole was creditable. The phenomenal growth in the sector has called for a new approach to quality service to build strong customer relationship where the banks extend their strategic focus to largely concentrate on the customer as the driver of business. Effective service quality management therefore has become a key driver to sustenance and growth of every player in the industry. The concept of quality, efficiency, productivity, growth and survival pose a greater challenge for the survival and growth of all corporate bodies. Customer quality service has its origin in the basic paradigm of marketing i.e. to satisfy customers with the best possible alternative in the market through a relational exchange process (Anderson 1993). They further said that quality management goes beyond the et al., transactional exchange and enables the marketer to-estimate the customer’s
CHAPTER ONE 1.0 INTRODUCTION 1.1 Background of the Study The Tanzanian banking industry has undergone many changes in terms of service delivery with the aim of improving the quality of customer service. The past few years have also seen a phenomenal growth in the Tanzania banking sector which has led to intense competition among the industry players. The Tanzania Banking Survey (2009) has shown that the traditional banks are losing out as competition in the industry deepens, triggered by aggressive new entrants (New generation banks). The survey, based on the financial results of banks last year revealed a squeeze in profit across board with the big banks being the major losers, although it said performance in the industry on the whole was creditable. The phenomenal growth in the sector has called for a new approach to quality service to build strong customer relationship where the banks extend their strategic focus to largely concentrate on the customer as the driver of business. Effective service quality management therefore has become a key driver to sustenance and growth of every player in the industry. The concept of quality, efficiency, productivity, growth and survival pose a greater challenge for the survival and growth of all corporate bodies. Customer quality service has its origin in the basic paradigm of marketing i.e. to satisfy customers with the best possible alternative in the market through a relational exchange process (Anderson et al., 1993). They further said that quality management goes beyond the transactional exchange and enables the marketer to-estimate the customer’s