A
Research Proposal on Customer Satisfaction on Commercial Bank of Nepal
Chapter-1
Introduction
1.1 Background
Banking sector in Nepal is facing a rapidly changing market.
This is also known as the late effect of world financial crisis. In addition, the
impact of the economic problems and financial crisis among the financial
institutions creates a great challenge for the overall banking sectors. At this
situation aiming for the customer satisfaction is the most challenging task for
banks. Through the satisfied customers, a bank can easily measure the
effectiveness of the business, its potential and position in the industries and
the areas that are needed to polish and improve. But gathering a satisfied
customer is not an overnight miracle but with the full of patience and
bountiful of effort.
It is a well known fact that no business can exist without
customers. So they must be satisfied. More than any other, banking is a
customer oriented services industry and Nepalese banks have started realizing
that business depends on client service and the satisfaction of the customer.
Customer satisfaction is the key factor for customer retention and thereby the
banks success. So identifying and improving the factors that can limit the
satisfaction of customer is the crucial step for the bank which wants to be a
step forward than its competitors.
Customer satisfaction is an ambiguous and applied concept and
the actual manifestation of the state of satisfaction will vary from person to
person and product/service to product/service. The state of satisfaction
depends on a number of both psychological and physical variables which
correlate with satisfaction behaviors such as return and recommend rate. The
level of satisfaction can also vary depending on other options the customer may
have and other products against which the customer can compare the
organization's products. Among several factors; Quality, Timeliness,
Efficiency, Ease of Access, Organizational environment, Commitment to the
Customer and Innovation, Behavior of employees, Willingness to solve problems,
friendliness, knowledge level, communication skills etc. are some major factors
that affect the satisfaction of customer. These factors are used for
measurement and continuous improvement of customer satisfaction.
Machhapuchchhre Bank Ltd was founded in 1998 as the first
regional commercial bank to start banking business from the western region of
Nepal with its head office in Pokhara. It is one of the full fledged commercial
bank operating in Nepal; and it ranks in the top most among the private
commercial banks. With its past success and experience MBL is striving to
facilitate its customers’ needs by delivering the best of services in
combination with the state of the art technologies and best international practices.
But its business environment is not same as it was in the past. Its business
environment is more complex with the entrance of powerful competitor, rapid
change in customers’ service/product expectations, increasing employee
turnover, possible cross sales and with many other factors. So, before moving
to the something new and continuing existing one, it is necessary to identify
the factors affecting the satisfaction and its current level.
1.2 Statement of the Problem
Customers have expectations and criteria when they judge whether
the provided banking services is satisfactory or not. At the same time, due to
the high competition in a banking sector, the perception of customers and
potential customers are also divided according to the services that they want
to achieve. The proper identification of customer satisfaction helps to retain
customers and to increase brand awareness, profitability and effectiveness of
bank’s services. These are the major customer oriented opportunities and
challenges for the banking sector in Nepal, so the Machhapuchchhre Bank Ltd’s.
Among the different problems regarding customer satisfaction, followings will
be the major concern of this study.
i. What
are the factors affecting the customer satisfaction of MBL?
ii. How the
MBL can gather the customer satisfaction, which is the same focus of other
competing banks?
iii. What are the most
satisfactory factors that are provided by competing banks to its customers?
iv. What types of
product/services are expected by MBL’s customer in future?
1.3 Objective of the Study
General objectives:
i. To
identify, if any, possible way to increase customer satisfaction.
ii. To
explore the factor affecting the customer satisfaction of Machhapuchchhre Bank
Ltd.
Specific objective:
iii. To explore and
analyze critically the customer satisfaction of Machhapuchchhre Bank Ltd.
1.4 Research Hypotheses
The following are the possible alternative hypotheses in this
study.
H1: Competency of the bank has positive impact on
customer satisfaction.
H2: Responsiveness of the bank has positive impact on
customer satisfaction.
H3: Timeliness of the bank has positive impact on
customer satisfaction.
H4: Online banking of the bank has positive impact on
customer satisfaction.
H5: Communication of the bank has positive impact on
customer satisfaction.
H6: Credibility of the bank has positive impact on
customer satisfaction.
H7: Customer and Social welfare program of the bank
has positive impact on customer satisfaction.
H8: Appearance of the bank has positive impact on
customer satisfaction.
H9: It is expected that customer are satisfied with
overall loan and deposit services of bank.
1.5 Operational Definitions and Assumptions:
Customer satisfaction is the result of interaction between the
consumer’s pre-purchase expectations and post purchase evaluation. More
generally satisfaction is the state of liking or disliking the services/product
after experiencing it. Here, consumer/customer are any individuals or households
or organizations that use goods and services generated within the economy.
Also, the banking services includes: bank accounts, personal loans, commercial
loans, issuance of cards (debit, credit, ATM) and processing of their
transactions etc. The customer satisfaction measurement variable can be defined
as follows:
a. Employees: Employee
characteristics and performance related variable directly affect the
satisfaction of customer. This includes:
i. Responsiveness:
The willingness of employees to help customers and provide prompt service. It
also includes the speed of responses to complaints.
ii. Friendliness:
Friendliness helps to increase quality of service /product. Employees
individual attention giving, caring to customer, etc are measured here.
iii. Skill and
knowledge: Skill is measured by the way how employee performs their task and
delivers to customers. The employees’ skill highly depends on their education
level.
iv. Timeliness: How
fast the employee can deliver the demanded services by their customers.
v. Communication:
Understandable, acceptable, informing about facility and possible risks etc.
b. Product
and Services: It includes all product and service (explained above)
related factors of the bank.
i. Variety:
Availability of same category services/product in a multi form, benefit and
prices. (i.e. Yuba bachat, child saving etc.)
ii. Price:
The customer pays for receiving product or services from the bank.
iii. Special services:
It includes services like ABBS, online transaction etc.
iv. Appearance of the
bank: The color combination, attractiveness of inside and outside decoration,
parking style etc.
v. Service
process: The step that should be completed before getting product or services
from the bank. (i.e. the process to deposit, borrow loan etc.)
c. Image: Primarily
this criteria includes,
i. Credibility:
It includes employees trust worthy in transactions and other services, banks
ability to make secure transactions and assure security etc.
ii. Technological
excellence: What types of technology is used by the bank. In what extent it
serves the customers expectations.
iii. Customer and
social welfare: The bank’s activities for customers’ and social welfare. (i.e.
stock ownership opportunity for customers, donations to poor students in school
etc.)
d. Access: Network
expansion of the bank, branches location, as well as observed troubles in the
service system (strikes, damaged ATMs, etc.), availability of service access
(i.e. ATM both access, Bank service access, etc.) are included in this
criterion.
Chapter-2
Literature Survey and Theoretical Framework
2.1 Literature Review
Customer satisfaction is an applied term that determines on how
products and services supplied by a company meet or surpass customer
expectation. Following Cronin et al. (2000), conceptualize customer
satisfaction to be an evaluation of an emotion, reflecting the degree to which
the customer believes the service provider evokes positive feelings. Customer
satisfaction reflects the degree to which a consumer believes that the
possession or use of a service evokes positive feelings. Cronin et al.’s (2000)
various models and theories that have been developed to this end (Oliver, 1980;
Swan and Trawick, 1980; Tse and Wilton, 1988; Anderson and Sullivan, 1993;
Patterson et al., 1997), indicate that customer satisfaction is related to the
size and direction of disconfirmation, which is defined as the difference
between the post-purchase and post-usage evaluation of the performance of the
product/service and the expectations held prior to the purchase (Sharma and
Ojha, 2004).
In banking industry, being competitive is already a given
factor. Customers expect that banks should be strong enough even if there are
uncertainties in the country, most especially in the financial stream. In the
long run, the customer satisfaction can be the key element of the organization
to prepare another strategy (Gitman and McDaniel, 2005). Thereby it can enhance
its further success and long lifecycle.
The dream of every organizations and so the banks; having
a satisfied customer will be injection for its success and basis to continue
its business lifecycle, if achieved through continuous delivery of
satisfactions by reducing resistance and reluctance of the customers
towards the bank’s offered products and services. If not, just a respite and waste of time and
fund.
However, keeping customers is also dependent on a number of
other factors. These include a wider range of product choices, greater
convenience, better prices, and enhanced income (Storbacka et al., 1994).
Whereas, Ioanna (2002) further proposed that product
differentiation is impossible in a competitive environment like the banking
industry. Banks everywhere are delivering the same products. For example, there
is usually only minimal variation in interest rates charged or the range of
products available to customers. Bank prices are fixed and driven by the
marketplace. Thus, bank management tends to differentiate their firm from
competitors through service quality. Service quality is an imperative element
impacting customers’ satisfaction level in the banking industry. In banking,
quality is a multi-variable concept, which includes differing types of convenience,
reliability, services portfolio, and critically, the staff delivering the
service.
The study showed that increased use of service quality and
professional behaviors (such as formal greetings) improved customer
satisfaction and reduced customer attrition. This is well documented in a study
by Leeds (1992), who documented that approximately 40 percent of customers
switched banks because of what they considered to be poor service. Leeds
further argued that nearly three-quarters of the banking customers mentioned
teller courtesy as a prime consideration in choosing a bank.
Several studies are conducted in this setting regarding the
customer satisfaction. In those studies, the contradiction occurs in variables
that affect the Customer satisfaction. In some studies, price and variety of
product/services are major factors affecting the customer satisfaction with
some other. While in some other studies there is an inverse finding that there
is no possibility to differentiate their price and services, thereby they have
less or no impact in Customer satisfaction.
2.2 Theoretical Framework
There
are several variables that affect the Customer Satisfaction level. In this
study only organizational factors are considered to measure customer
satisfaction of MBL. It is expected that those independent variable have more
variability with dependent
Chapter-3
Methodology
Methodology refers the steps that will be adopted in this study.
The more systematic method gives the more actual results for the study. The
method for this study includes research plan and design, description of sample,
data collection procedure and data analysis plan.
3.1 Research Plan and Design
A research design is the planned specification of methods and
procedures for acquiring the information needed to structure to solve the
problems.
The research design used in this study is descriptive. It
includes survey and fact finding enquiries to fulfill different objectives. It
will use the available data from primary and secondary sources. Structured questionnaire
will be used to gather the information through primary sources.
3.2 Description of the Sample
In this study customer is the single sampling segment. The
sample size of thirty five despondence will be used by considering the budget
and time constraints. Among them twenty five respondents will be the customer
of MBL and remaining ten respondents will be the customer of any other two
banks. The entire respondents to meet the determined sample size will be
selected randomly in six days of data collection. But, definitely the more
effort will be given to include the respondents as explained above (i.e. male
and female, those who know well about the quality of services provided by MBL
and its competitors and the like).
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