Project Materials


Customer satisfaction and service quality in SMEs in Benin City

Customer satisfaction and service quality in SMEs in Benin City



Customer satisfaction and service quality are crucial components in tackling global concerns, such as customer satisfaction and service quality. Service quality promotes customer satisfaction due to the fact that when consumers receive outstanding service, their requirements and expectations are met; as a result, customer satisfaction increases and the company’s image is enhanced, eliciting favorable reactions from potential customers. Despite this interest, little empirical study has been conducted on the relationship-marketing techniques of small and medium-sized enterprises (SMEs), particularly those in developing nations. This study aims to evaluate the relationship between service quality and customer happiness in Benin.



1.1 Background of the study

Despite the benefits that can result from ensuring customer happiness, some researchers (Harwood and Garry, 2006) believe that contemporary research has mostly focused on customer relationships in large organizations. There is a dearth of empirical research regarding customer satisfaction in small and medium-sized businesses (Simpson et al., 2006). In addition, the majority of prior discussions have centered on western cultural (Yau et al., 2000). Consequently, customer satisfaction generated in the western world may not necessarily apply to Small and Medium-Sized Businesses (SMEs) in other sociocultural contexts.

In the majority of emerging nations, small and medium-sized enterprises are capable of increasing economic growth and creating jobs. In Nigeria, SMEs contribute around 30% of the country’s Gross Domestic Product (GDP) and generate 250,000 employment annually. Small and medium-sized enterprises are the primary source of new jobs in the country and the largest contributor to income production, especially among the poor (Small and Medium Enterprises, Business Guide, 2008). SMEs must be handled efficiently if they are to contribute to the expansion of national economies. Therefore, it is essential for researchers and policymakers to have a comprehensive understanding of the marketing operations of SMEs. This will promote the management of diagrams to enhance client satisfaction, enabling SMEs to successfully create good buyer relationships (Boag and Dastmalchian, 1988 as cited in Davis, 1997, p.32). Despite the fact that small and medium-sized enterprises (SMEs) have been seen as the backbone of job creation and technical advancement in Nigeria, the sector has experienced a fair share of neglect, with unfavorable effects 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 the following as the fundamental problems of SMEs, which are alternatively not insurmountable: low degree of entrepreneurial skills, poor administration practices, restricted access to cash and capital markets, and low equity participation from the promoters as a result of insufficient person power. Despite these efforts, there is limited understanding of how service quality contributes to customer satisfaction in SMEs; hence, there is a need for this study to determine Service quality as a catalyst for customer satisfaction in SMEs in order to better tailor stimulation programs to address SME competence needs. (1997, Storey).

1.2 Statement of the problem

Unquestionably, the ability to create and successfully bring invention to market will be a major factor in determining the global competitiveness of nations during the next decade. Policymakers are becoming increasingly conscious that innovative activity is the primary driver of economic progress and prosperity, as well as a potential role in addressing global difficulties in commercial and academic areas. Even nations that have usually eschewed active industrial policy in recent years are increasingly searching for new methods to improve the climate for innovation in order to increase productivity and growth. For instance, the United States developed the “Innovate America” approach. In addition to the quick gains in scientific discoveries and in general, customer satisfaction is driving the rate of innovation. Consequently, this is the purpose of this study. SMBs have been confronted with rising competitiveness and persistent price pressures. In order to survive and increase their profitability in the face of intense competition, small and medium-sized enterprises (SMEs) have been exploring for novel strategies on a global scale. Over the past ten years, numerous marketing strategies have been developed in response to these shifts. Achieving customer happiness has received the most attention from both academic scholars and practitioners (Wang, 2006). As the corporate climate has become more dynamic and customers have become more demanding, companies have shifted their focus to RM in order to remain competitive (Boyd et al., 2002).

1.3 Objective of the study

The purpose of this study is to evaluate service quality and customer satisfaction in Benin’s SME sector. The particular aims are;

Determine if service quality has any effect on customer satisfaction in Benin City SME’s.
To determine how the service quality of Benin’s SMEs can be enhanced.
To determine the significance of customer satisfaction in Benin City SME.

1.4 Research question

Does service quality influence customer satisfaction in Benin’s SME sector?
Does the quality of services in Benin’s SMBs improve?
Does the importance of customer satisfaction in Benin City SMBs exist?

1.5 Research Hypotheses

The researcher formulated the following research hypotheses for the successful completion of the study:

In Benin City’s SMEs, service quality has little effect on customer satisfaction.

H1: service quality influences customer satisfaction in Benin’s SMEs.

H02: the quality of services may not improve in Benin City’s SMEs

H2: Benin City’s SME service quality might be improved

H03: there is no value placed on customer satisfaction in Benin City SMBs.

H3: the significance of customer satisfaction in Benin City SMBs


1.6 Significance of the research

This study aims to inform the general public, small and medium-sized enterprises (SMEs), and the government about service quality and customer satisfaction in Benin’s SMEs. It is intended to make the SME aware of the necessity to include their consumers in order to provide them with the satisfaction they require. In addition, the purpose of the study is to inform small and medium-sized enterprises (SMEs) that the service quality they provide to their clients might have an impact on their loyalty. However, the purpose of this study is to inform the government that they may assist in reducing customer service quality through SME. This study will be of great assistance to other researchers who wish to learn more about this subject, and it can also be utilized by non-researchers to enhance their own work. This study contributes to the body of knowledge and may serve as a guide for future work or research.


1.7 Scope of the research

The study’s scope includes work on service quality and customer satisfaction in Benin’s SMBs. The study will be limited to a subset of Benin city’s SMEs.

1.8 Limitations of the research

Financial limitation – Inadequate funds tend to impede the researcher’s efficiency in locating relevant resources, literature, or information and in collecting data (internet, questionnaire and interview).

Due to time constraints, the researcher will conduct this study alongside other academic duties. This will consequently reduce the time spent conducting research.

Insufficient research materials are provided to the researcher, consequently limiting the scope of the investigation.

1.9 Definition of Terms

Service quality, in its modern conception, is a comparison of perceived expectations of a service with perceived performance, giving birth to the equation: (perceived expectations perceived performance)

Customer satisfaction is described as a measurement that determines how satisfied a company’s consumers are with its products, services, and capabilities. Customer satisfaction data, such as surveys and ratings, can assist a business in determining how to enhance or modify its products and services.

SME: Small and medium-sized enterprises or small and medium-sized businesses are organizations with fewer than a specified number of employees.


Customer satisfaction and service quality in SMEs in Benin City



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