ABSTRACT In any business-to-customer (B2C) type ofenvironment, satisfying a customer is the ultimate goal and objective.

More often than not, it can be quite an issue. This is perhaps due to the fact that organizations sometimes do not really understand of what actually goes on in a customer's mind. As such, this predicament has provided as a challenging task to most business conglomerates that places strong emphasis on customer relations. Although many researches and studies were conducted on the actual working of the customer's mind, till today it is a still a mystery. Therefore, this research focused on the measurement of customer satisfaction through delivery of service quality of Service Counter staff of Commercial Banks in Penang, Malaysia. A quantitative research was used to study the relationship between service quality dimensions and customer satisfaction. Assurance has positive relationship but it has no significant effect on customer satisfaction. Reliability has negative relationship but it has no significant effect on customer satisfaction. Tangibles have positive relationship and have significant impact on customer satisfaction. Empathy has positive relationship but it has no significant effect on customer satisfaction. Responsiveness has positive relationship but no significant impact on customer satisfaction. The study highlights implications for marketers in banking industry for improvement in delivery of service quality. CHAPTER 1- INTRODUCTION Service organizations play an important role for developing countries like Malaysia. Therefore, it must be good quality and competitive organization in maintaining customer satisfaction and further needs to improve the effectiveness and efficiency of the organization. At the same time, as we all know that the requirements and higher customer expectations, it is different from the past (Rogerio & Zulema, 2002). This is a very great challenge to all sectors. Banking business is now driven with the introduction of new products / services and processes which are facilitated through ongoing technological advancements. In such a scenario the expectations of customers also shift to a higher platform and is usually perceived against the backdrop of the experiences gained while dealing with competitors. The gap in customer expectations many a times results in complaints and the same can be said to be inevitable, as in any service industry. To retain as also increase customer base it is absolutely essential that the bank instills confidence in its customers through satisfactory explanations and resolution of complaints and at the same time use complaints as a feed back mechanism for bringing about improvement in services. The banking sector at present has put a benchmark index that determines the performance of Customer Service in the organization. It is also consistent with the requirements of the Bank that all institutions must be able to respond positively to a more competitive among the financial liberalization and technological revolution by offering an innovative range of products that range and improve the quality of customer service on an ongoing basis. (Tan Sri Dato 'Dr Zeti Akhtar Azizi, 2005). The banking sector also needs quality personnel and competency. Having employees like them to provide high quality products and services is critical to build consumer confidence and good relationship, drive customer satisfaction and enhance the reputation of previous research studies, (Ndubisi & Tam, 2005) has stated 'bind' the customer is as important as when they lose will harm the institution. This will lead to a decline in revenue, increased costs to attract new customers, a bad reputation when the customer is not satisfied the problem will spread to other customers and a decline in employee retention (Colgate & Norris, 2001). 1.1 PROBLEM STATEMENT

The trend of world markets has changed noticeably from agricultural to service markets (Asian Development Outlook, 2007). All of the service businesses are trying their best to improve their service quality in order to make customers satisfied with their services. Banks now focus more on the quality standards in order to meet the basic needs and expectations of the customers. Once customers requirements are clearly identified and understood, banks are more likely to anticipate and fulfill their customers needs and wants (Juwaheer & Ross, 2003). In the banking sector, the first place of destination by the customer is at the Customer Service Counter (Customer Service). Here, various questions, problems and complaints filed by customers. At the bank, customer service counter is the most important because this is where the Customer Relations Assistant job set to any direction so that customers, whether customers want to continue the operation of the counter, self-service terminals, counters open accounts, loans or financial adviser or directly to managers to make a complaint. Service quality was determined as the subjective comparison that customers make between their expectations about a service and the perception of the way the service has been run. Parasuraman (1985) defined service quality as ;a function of the differences between expectation and performance along ten major dimensions. In later research, Parasuraman (1988) revised and defined the service quality in terms of five dimensions: tangibility, reliability, responsiveness, assurance, and empathy. In the banking industry, most researchers are interested in maximizing customer Satisfaction. Hernon & Whitwan (2001) defined customer satisfaction as a measure of how the customer perceives service delivery. Liu (2000) stated, for example, that customer satisfaction is a function of service performance relative to the customer expectation. For this reason, it is important to understand how customer expectation is formed in order to identify the factors of service satisfaction. As Reisig & Chandek (2001) discussed the fact that different customers have different expectations, based on their knowledge of a product or service. This can be implied that a customer may estimate what the service performance will be or may think what the performance ought to be. If the service performance meets or exceeds customers& expectation, the customers will be satisfied. On the other hand, customers are more likely to be dissatisfied if the service performance is less than what they have expected. A greater number of satisfied customers will make the bank business more successful and more profitable. Previous research explored customer satisfaction regarding the service quality of all areas in the bank so that the bank can assess the customer perception. This study identified five factors of service quality by focusing on the Service Counter staff (including Customer Service Counter), and explored the customers expectations and perception levels of these services at Commercial Banks in Penang, Malaysia. The results of this quantitative assessment of service quality might provide some insights into how customers rate the overall service quality and assessed customers satisfactions at Commercial Banks in Penang, Malaysia. Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. The study is intended to identify customer satisfaction and retention is critical for retail banks, and

investigates the major determinants of customer satisfaction and future intentions in the retail bank sector. Identifies the determinants which include service quality dimensions (e.g. getting it right the first time), service features (e.g. competitive interest rates), service problems, service recovery and products used.