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The research will examine the impact of service quality on customer loyalty. Given the limited size of the market and the increasing number of banks operating in the sector, aggressive competition is common place. The banking products proposed are similar with marginally different pricing while service level varies between banks based on their customer base, physical presence across the island and self-service platforms. Service quality is believed to be the main determinant of customer satisfaction which has a direct impact on customer loyalty.

The increasing number of educated and informed customers is influencing their capacity to bargain their loyalty for better services and advantages. The increased in the number of service related complaints received in-branch and on social Medias indicate the sensitivity of customers to service quality. The customer is at the heart of the banking business and banks are very attentive to their needs. At MCB, a number of initiatives have been put into place to improve service quality in view to increase customer satisfaction and thus retaining its customers.

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The cost of acquiring a new customer is higher than the cost of retaining an existing customer. Thus, the research investigates how clients are being served and to what extent they are satisfied with the MCB level of service at Flacq branch and consequently brings into light the connection between Service Quality and client loyalty which may have been overlooked at the MCB. It further brings forward which service dimensions impact the loyalty of customers.

4. AIM OF THE STUDY

The aim of this study is to investigate the impact of service quality on customer loyalty at Mauritius Commercial Bank

? The aim of the study refers to the desired outcomes, or the general intentions of the research, which ‘paint a picture’ of your study.It should emphasize what is to be accomplished and reflect the aspirations and expectations of the research topic.
? Your aim must be clear, unambiguous and concise and indicate what you intend to achieve with the research regarding the research problem/ opportunity. The aim should consist of three parts: What is being studied, how it is being studied and why it is being studied. Once again, the aim needs to flow logically from the problem statement.
? This usually starts with: “The aim of this study is……”
5. RESEARCH OBJECTIVES

• To determine the current level of service quality at Mauritius Commercial Bank Limited;
• To establish how service quality dimensions affect customers’ loyalty at Mauritius Commercial Bank Limited; and
• To formulate recommendations in order to improve the overall service quality for enhanced customer loyalty at Mauritius Commercial Bank Limited.

6. RESEARCH QUESTIONS
• What is the current level of service quality at Mauritius Commercial Bank Limited?
• How do the service quality dimensions affect customers’ loyalty at Mauritius Commercial Bank Limited?
• What recommendations can be made to improve the overall service quality for enhanced customer loyalty at Mauritius Commercial Bank Limited?

7. SIGNIFICANCE OF THE STUDY

The banking sector in Mauritius is characterised by a high degree of competition with increased competitive offers from commercial banks based on price and product differentiation strategies as well as new entrants like insurance and leasing companies offering financial solutions which were until recently provided by banks alone. The slow erosion of MCB market share over the years raises the question of customer loyalty which was perceived two decades ago as being stable and secured. Thus, a clearer understanding of customer loyalty will enable the bank to better improve its quality standard with particular attention to those service dimensions which directly impact customer loyalty.
A number of surveys has been undertaken to assess customers’ satisfaction with regards to service quality at the MCB but no prior study examining the impact of service quality on customer loyalty has been carried out. The importance of this study is the emphasis placed on understanding customers’ expectations and needs in view of developing appropriate strategies to strengthen the bank’s relationship with its customers while improving its service quality standard for increased customer loyalty.
The study will represent an opportunity for the MCB retail strategic office as it will help to align business processes, product development, pricing policy and service quality with those dimensions which positively influence customer loyalty.
From a marketing perspective the study which focuses on nurturing customer loyalty will help in the promotion of the MCB brand as the number of loyal customer increases over time. The brand image will further strengthen the leadership position of the bank.
The study will provide critical information and insights to the management of the branch as it will identify areas of weaknesses and strengths in its approach to service quality. The allocation of resources at different customer touch points together with specific training to front liners and the formulation of key performance indicators will flow from the outcome of this study.
The MCB has pioneered most of the innovations in the local banking sector so far and the endeavour of this study to understand the relationship between service quality and customer loyalty will not only benefits the MCB Flacq branch but also the whole retail network. Through market intelligence the retail banking industry may use the findings of this study and hence help in taking the industry to new heights with regards to quality service and customer retention.
Lastly, the study will be of particular interests to academics who may use the analytical tools utilised in this research to further understand the dynamics of customer loyalty in the financial sector and beyond.

8. LITERATURE REVIEW

Introduction

Service quality
Definitions of service quality hold that this is the result of the comparison that customers make between their expectations about a service and their perception of the way the service has been performed (Lehtinen ; Lehtinen, 1982; Lewis ; Booms, 1983, Gronroos, 1984; Parasuraman et al., 1985; 1988; Caruana, 2002).
Service quality refers to an overall impression of the judgement made by the customer concerning the service provided by a company (Hussain et al., 2015; Wang, 2010). Increased global competition has led to many ways in which organisations seek to maintain competitive advantage. One of the strategies is to deliver high-quality service unmatched by competitors (Hu et al., 2009; Hussain et al., 2015; Kim, 2011; Wu et al., 2015; Zameer et al., 2015). Service quality has been defined by the practitioners in terms of key dimensions that customers use while evaluating the services (Lewis and Booms, 1983). The service quality literature has also highlighted that service quality can also be treated as a second order construct consisting of interaction, physical environment and outcome quality (Brady and Cronin, 2001).

Customer Satisfaction
Customer satisfaction refers to the state of a customer when the actual performance of a product meets its expected performance (Gustafsson et al., 2006).
Customer satisfaction is closely related and often confused with service quality. It represents an immediate response or emotional reaction to consumption (Hussain et al., 2015; Kim, 2011). As such, customer satisfaction can be described as an overall emotional response towards the customer’s experience after the purchase and consumption of a product/service (Eid, 2015). It is a customer’s feeling of pleasure or disappointment due to a comparison of the product’s perceived performance to expectations (Tarus and Rabach, 2013). Satisfaction is closely related to service quality (Jabnoun and Khalifa, 2005), which is of importance in the financial services industry, as customers primarily buy promises that their funds and welfare will be looked after in the best possible manner, and their perception about the fulfillment of these promises leads to long-term association between customer and financial services provider (Harrison, 2003). Regarding the banking sector, Ladhari et al. (2011) defined customer satisfaction as the total evaluation of the overall level of services provided. It is thought that satisfaction is likely to increase customer loyalty (Vesel and Zabkar, 2009; Akhter et al., 2011) and according to the service?profit chain and other studies, it is suggested that satisfied customers result in better financial performance (Bernhardt et al., 2000; Chi and Gursoy, 2009; Fathollahzadeh et al., 2011). The literature documents customer satisfaction as the most dominant indicator of CL (Hoq and Amin, 2009). A satisfied customer’s opinion of a service provider can stimulate him or her to make repeat purchases from the same service provider and even suggest this service provider to other clients as well (Lam et al., 2004). Customer satisfaction, CL, and SQ are the most important factors for successful business environments, especially for service providers (Zeithaml et al., 1996). The literature constantly supports that customer satisfaction is a key indicator of CL in the service industry (Eshghi et al., 2007). Ehigie (2006) suggests that there is a significant positive relationship between customer satisfaction and customer loyalty/retention. As such, customer satisfaction in this research is acting as a mediator between service quality and customer loyalty.

Customer Loyalty
Consumer loyalty is in essence, a customer’s faithfulness to a particular service or brand (Amin, 2016; Gorondutse et al., 2014) and the connection which a customer has with a brand. Customers maintain a series of loyalties to the organisations and their level of faithfulness with companies also determines their purchasing behaviour.
Loyalty can be measured with both attitudinal and behavioural items (Jacoby and Kyner, 1973; Dick and Basu, 1994; Fathollahzadeh et al., 2011; Akhter et al., 2011). Attitudinal measurements, due to the fact that they reflect the psychological and emotional attachment to loyalty, are used in order to understand the cognitive elements that underlie purchasing motives and future actions (Bowen and Chen, 2001; Fathollahzadeh et al., 2011). They are viewed to add some degree of value to the product or service (Wu, 2011a). Behavioural measurements, on the other hand, focus on the customer’s purchasing history (Vesel and Zabkar, 2009; Fathollahzadeh et al., 2011) and have been measured by the repetitive purchasing behaviour that a customer shows towards a product or service (Wu, 2011a). Loyal customers are very important for the survival of any business (Ganguli and Roy, 2011) due to their relationship with the company’s market share and profitability (Tsoukatos and Rand, 2006). Customer loyalty is becoming more important in financial sectors especially after deregulations have given customers more flexibility to choose their financial services (Levesque and McDougall, 1996).
Loyalty regarding the banking sector is defined as the customer’s repeated patronage of a certain bank over a long period of time (Ladhari et al., 2011). Loyal customers are characterised by repetitive purchasing of products and services, recommending the company to others, defending it against bad comments by strongly supporting their choices (Akhter et al., 2011).

Relationship between Service quality and Customer Loyalty
The financial services industry is changing rapidly in the UAE due to technology, governmental deregulation, and the increasing sophistication of customer needs. Service quality has become a very important topic within the banking industry across the globe. Banks that offer a distinguished level of service have a competitive edge. Many researchers have demonstrated a valid and strong link between higher quality service and desired marketing outcomes, such as higher revenue, customer satisfaction, and loyalty (Abdullah et al., 2011; Al-hawari et al., 2009).
SQ has remained central to product value since the inception of the term. Today, customers demand high-quality products and services, which make it imperative for industries to enhance the quality measures manifested in various facets of products (Zineldin, 2006). Studies on customer satisfaction and the loyalty of banking customers have acknowledged that satisfaction, market situation, service reliability, responsiveness, and tangibility determine satisfaction, which affect loyalty and willingness to pay more for services (Pont and McQuilken, 2005). Zineldin (2006) argued that SQ significantly influences CL in most service-based organizations.
Sufficient evidence is available to embark on an exploration of the role of SQ in predicting CL (Bloemer et al., 1999). Confirming other studies, Lewis and Soureli (2006) also reported the positive impact of SQ on CL in the banking industry. Lin and Sun (2009) reconfirmed the same findings in an online banking context.
Choudhury (2013) indicated that the higher the level of services quality the companies might offer the more favorable customers behavioral intentions can be achieved. The positive behavioral intentions include saying positive thing about the company to others, recommending the company to others, encouraging others to do business with the company, doing more business with the company, and considering the company the first choice. The relationship between perceived service quality and customer loyalty has been theoretically and empirically confirmed in the literature on the services industry, including banks (Al-hawari et al., 2009).

Service quality dimensions

Tangibles as a SERVQUAL dimension

Reliability as a SERVQUAL dimension

Responsiveness as a SERVQUAL dimension

Empathy as a SERVQUAL dimension

Security as a SERVQUAL dimension

The purpose of a literature review in a research proposal is, first, to attempt to understand the breadth and depth of existing literature on your chosen area of research. Secondly, it is to identify gaps in this literature – gaps that you will attempt to address in your dissertation.
The literature review requires you to have done a libraryinformation search on the area you have chosen to research. You may also consultjournals, newspapers and the internet for additional information pertaining to yourresearch.

? It must become evident from the section that you have read widely.
? Make sure that the literature that you do consult and write about in your research, is
relevantto your research problem.
? You are also advised to take care with in-text references.
? Do not copy material from other authors/sources without acknowledging from whereyou have got the information, and this applies especially when you make a statementof fact.
? Prove that the dissertation will not merely duplicate past or current research.

? 5-8 pages of relevant literature must be presented.
? Current literature must be cited (not older than 5 years; except in the case of original
authors or textbooks, or if it is thoroughly justified). Information is constantly changing
and it is important that you keepabreast with current trends.

9. RESEARCH DESIGN AND METHODOLOGY

9.1 RESEARCH METHODOLOGY
Polit and Beck (2012:1) classify a research design as “the means for the researcher to answer the research question or to test the research hypothesis”. Research design details the key parts of the research study such as the samples or groups, measures, programs, etc and work together so as to address the research questions.
This study is designed to collect data to determine how service quality dimensions affect customers’ loyalty in banking industry. Different research designs are utilised for different types of research studies.

Even though there are a range of research techniques, the most commonly used are qualitative and quantitative. The terms state the means used to collect and analyse data. According to Myers (2009:8), qualitative research is an extensive work of social and cultural phenomena and concentrates on text whereas quantitative research scrutinises general moves across population and emphasises on numbers.

Qualitative data sources refer to the fieldwork, that is, participants are being interviewed by means of texts or questionnaires. It consists also of the researcher’s impressions and feedback (Myers, 2009:8). Qualitative research presents data as expressive reading with words and attempts to understand facts in “natural settings”. Myers, (2009:8) stated that quantitative research methods use questionnaires, surveys and experiments to collect data that is reworked and tabularise in statistical data. Quantitative researchers assess variables on a sample of topic and express the relationship between the variables by using statistical results such as correlations, relative frequencies, or differences between means; they focus on the testing of theory.

In general, quantitative research consists of two types: experimental or descriptive. Experimental research examines the precision of a theory by establishing if the independent variable(s) (controlled by the researcher) produces an effect on the dependent variable (the variable being measured for change). Frequently, surveys, correlation studies, and measures of experimental conclusion are evaluated to institute antecedent within a probable confidence range.

According to Creswell (2003:1), descriptive research measures the sample at a moment in time and simply describes the sample’s demography. This type of design is intended to present a representation of a situation as it naturally happens. It may be used to substantiate existing practice and make decision to build up theories. For the purpose of this study, descriptive research will be used to gather information about the evaluation of service and the impact of service quality on customer’s loyalty at MCB. It further obtains information on what service quality dimensions affect customer loyalty.
Types of Research
Quantitative data sums up all research strategies. By studying a representation of a sample of a population, it helps to establish statistically noteworthy conclusions. The population refers to the whole group which is being investigated. The population can be broad or narrow; the only thing that matters is that it consists of every individual that fits the description of the group being studied.

As it is unfeasible to take into account everybody in the population because of regular turnover and resource limitations, a representative illustration is selected from the population. The sample is rightly chosen to be statically identical to the population and conclusions so that it is incidental to the population.

These data ranges are analysed by forming simple tables or diagrams that illustrate the frequency of event by establishing statistical correlation between variables to multifarious statistical modeling (Kothari, 2004:39).

Different research strategies can be used. Case studies are a type of descriptive research which looks at individuals, a small group of people or a unit. The data is collected by inspection, contribution and a range of other methods including examining existing records, interviews and tests. On the other hand, interview is another type of research strategy which relate to a discussion with one or more people. The information gathered are recorded and subsequently examined. Interviews can be well structured or unstructured and relaxed.

Furthermore, the survey research is commonly used in social science research. It frequently gathers quantitative data. However, it may also group qualitative data through open-ended questions. Surveys are carried out on a sample of respondents from a selected population through the administration of a questionnaire. The questionnaire can be done online, face-to-face or over the telephone.

The survey approach is typically linked with deductive approach (Saunders et al., 2003:1; Bryman ; Bell, 2007:11). The quantitative methods provide a large view and a distance from data. The method is known to be focus, methodical and give the possibility for generalisation by population membership (Ghauri ; Gronhaug, 2010:106).

For the purpose of this research, a survey research will be used as it enables the compilation of considerable amount of statistics from a considerable population in a really efficient way. In addition, survey research presents better command of the research progression (Saunders et al., 2003:66-67). The major reason amongst others for carrying out surveys is to have probability sampling (Saunders, et al., 2003:66).

Based on the present research instruments, a survey questionnaire was elaborated. Moreover, based on the research questions and objectives, a proper sample frame was chosen.Particular attention was exercised to choose a sample which was more representative of the chosen population for the research. (Saunders et al., 2003:66). The appropriateness of using the survey in this research is to aid the investigator identifies and gives details statistically on the features that determine customer satisfaction and by extension customer loyalty at the MCB Ltd. Quantitative method is warranted in the study since it is to the point; it helps to examine the connection and establish causality between variables. The sample represents a large population. The reliability and validity of the instruments are of utmost importance.

9.2 SAMPLING STRATEGY

The research will target clients of MCB Ltd, more precisely customers of Flacq branch who are around 15000 in numbers. The target customers are of different ages and live in different localities within the district of Flacq. The customers are not known. The sample size is big enough to present consequential data that required time to collect. It is to be noted that the bigger the sample size the less the margin of error. Therefore, the sample size for this study will to be 100 Customers in numbers.

9.3 DATA COLLECTION INSTRUMENTS

The instrument to be employed in this study is questionnaires. It was taken up from existing literature and customised to fit the present study. The questionnaires will be administered to clients of MCB to establish the impact of service quality dimensions on customer loyalty.
The questionnaire to be used is a Likert scale in a five response pattern with 1=strongly agree to 5=strongly disagree. The Likert Scale is easy to construct and administer. Hansson and Arnetz (2005: 178) acknowledge this fact.

9.4 DATA ANALYSIS

The data collected will be analysed quantitatively since the study includes quantitative data. All data will be uploaded in an excel sheet and then analysed using SPSS. The validity of the data will have to be assessed. Thus, this research study will employ purely quantitative research techniques in its data analysis. This integrated approach is viewed to be more convenient when dealing with respondents who have busy schedules and limited time at their disposal. The analytical instrument for this study is the Statistical Package for Social Science (SPSS) using graphs, tables and descriptive statistics. This software has been widely used by researchers as a data analysis technique (Zikmund, 2003:1).
The following statistical Inferences will be used :
• Reliability analysis, to measure reliability using Cronbach alpha; and
• Correlation analysis to assess the relationship of the demographics with the other variables in the questionnaire. The results have been discussed in Chapter Four.

9.5 PILOT STUDY
A pilot study is important before collecting data, according to Saunders et al. (2009:394). The motives behind performing a pilot test are :
• To improve the questionnaire.
• People participating in the research will have no issues in responding the questions.
• The recording of data will be easier.
• Ability to assess the validity of the questions.
• To evaluate the consistency of the information that will be collected.
• Verify the research methods utilised.
• Make sure that the research approaches adopted are realisable.

Pilot investigation of the experimental test data can be carried out to make sure that the information gathered will help to answer the research questions. (Saunders et al., 2009: 394).
In this study, a pilot investigation with a sample of 10 respondents will be undertaken and their comments will help to adjust the questionnaire accordingly.

10. ETHICAL CONSIDERATIONS

The data collection stage is linked with some ethical issues, according to Saunders et al. (2009:193). The following principles of ethical considerations will be taken into account in the proposed research:

• The researcher will ensure that the respondents, that is, the bank’s customers are not exposed to any kind of harm, either reputational or behavioural;
• Respect of the self-esteem of respondents will be ensured in the research since customers have confidence in their bank and the researcher will act responsibly to ensure that customers are fully respected;
• Since the study is on the service quality experience and its impact on the customers’ loyalty, caution will be exercised to ensure that respondents are fully agreeable to participate in the survey;
• The protection of the privacy of respondents (banks’ customers) will be ensured as the research will be anonymous; and
• Before conducting the study, the researcher will ensured a clear and transparent communication of the content of the survey and the rationale behind to the respondents in an honest and transparent manner.

For this research, it is important to consider these ethical matters since the research will be conducted in a particular organisation, that is, MCB, which is a reputable bank in the country. Its customers believe in the institution and trust that their opinions are valued.

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