CONSUMER BEHAVIOR

TOWARDS

BANKING SECTOR

Submitted to: - Submitted by: -

Prof. Ranjai Ghosh Aakash

Anindita

Anshuman

Bhavna

Prashant

Utkarsh

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Table of Content

Sl. Topic Page

No. no.
1 Preface 4
2 Executive summary
3 introduction
4 Review of Literature
5 Objective of the study
6 Research Methodology
7 SPSS Analysis
8 Graphical analysis and Interpretation
9 Findings
10 Conclusion
11 Bibliography
12 Questionnaire

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 Preface

The Indian banking industry is passing through an exciting growth phase. The
surge in the real economy, which has grown at over 8% in the past three
fiscals, has provided significant growth opportunities for the sector. The rising
personal incomes of the population have provided banks numerous
opportunities for product development and distribution innovations.

India has a robust banking structure characterized by three major bank

groups, viz., Public Sector Banks, Private Sector Banks and Foreign Banks,
and a large network of branches.

Basic objective of any business is to maximize profit. Energy industrial or

service oriented operation runs itself for the accomplishment of smooth
return with least expenditure. For this purpose in this highly competitive
world it becomes very important for the product or services to sell it with
fighting the existing conditions.

Today companies work is a war zone of rapidly changing competition

technological advancements and other policies which keeps on changing by
the regulatory authorities, so to run business successfully and profitably it is
essential that company must keep re-examining their strategies through
continuous market studies.
A questionnaire was carefully prepared and thereafter an extensive survey
was conducted in different banks and ATMs. Data and results obtained from
this survey has been carefully analyzed and incorporated in this report
suggestions based on this survey.

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Executive Summary

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 Introduction

Consumer behavior is very complex phenomenon, which is considered

primarily in marketing decisions. It has been rightly said "Understand, you do
not understand, you will not understand, you cannot understand all your
customers but still you have to do your best to understand them."

In consumer behavior this is very difficult to make a uniform theory that may
suggest that a particular individual or group will behave in a particular
manner. Consumer behavior is dynamic and to be studied regularly.
Increasing awareness, living standards and urbanization has led to increase
in the changing preferences and the same has forced the marketers to
change their product features, packaging styles, distribution channels and so
on. There is a famous saying the "Success has a simple formula-Do your best
and people must like it". Similarly, for marketers the advice is- offer the best
and customers must like it'. Identical products always have their life cycle the
product life cycle suggests that there is a level of maturity of the product and
after that no more consumers can be attracted for that. The case is very
same with preferences of consumers that they always like some innovative
and different products to use. The study of consumer behavior is compulsory
to know about likes and dislikes of consumers from time to time so that the
products and services can be offered accordingly. Customers have their own
unique needs, demands and preferences in a particular segment. Marketers
have to study customers in particular segment. Really interesting it is, the
study of consumer behavior can make it possible that after observing and
examining the behavior of consumer a marketer can present his product in

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such a way that the product can capture the market. However it was very
difficult to sell that product earlier. Consumer behavior indeed gives every
possible answer to the complex questions concerned with consumer's buying
reasons.

Introduction of Banking

Services have been the fastest growing segment of the world economy,
particularly in developing countries, creating many opportunities for different
service-related firms . A

critical service for the development of an economy is the provision of banking

services. Many developing countries have well-established banking
infrastructure and branch networks (Greenland, Coshall & Combe, 2006). For
banks to thrive, both product and service delivery must be adequately
aligned with customer expectations: achieving customer satisfaction and
loyalty is essential for long-term survival.

Banks are defined as the "Organizations, which accepts deposits from

public and give loans from the general public." In the present time
they are over and above this definition. Banks are providing innovative
services with innovates styles. ATMs, Credit cards and Internet banking have
changed the quality of delivery of services of banks. Banking services are
growing with many new additions such as money transfers, Bank assurance,
NRI services and so on. Promotion of service has been a challenging task.
Banking services being of a sophisticated nature should be promoted
carefully, clearly and innovatively.

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The following diagramme will tell about the all marketing decisions taken in
services industry or banking services. These all are essential decisions which
are concerned are essential ingredients of services marketing mix. The
analysis has been done in the context of banking services.

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When customer is treated as the king of the market, the study of consumer behaviour
becomes more important for marketing decisions. There is no doubt that the behaviour is
the base of marketing decisions.

Review of literature

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 1) Mittal, Arun, Advertising and Sales Promotion, Wisdom Publication, New
Delhi, Edition -2008, p-225

Advertising appeal is the method used to draw the attention of consumers

and to influence their feelings toward the product, service, or cause. There
are hundreds of different appeals that can be used as the foundation for
advertising messages. These are the central idea of an ad which has been
used to catch the attraction of customer by heart. The theme of a
commercial strikes a person in depth and forces him/her to act in the desired
manner. Generally advertising appeals are broken into two categories:
rational appeals and emotional appeals.

Uses of Appeals in Banking Services Advertising:

Name of Bank Broad Personal/Social Marketing Approach Theme/Punch Line

Category
Union Bank of India Emotional Social/Parental Affection Security and Future benefit Because your dreams are not only yours.
Appeal
Royal Bank ofEmotional Personal/Style Differentiation In years a player comes who change the way
Scotland Group Appeal the game is played.
HSBC Rational Practical Customization of ServiceNot two people are the same
Offering
IDBI Rational Practical Comprehensiveness ofBanking for All
Services offering
State Bank of India Emotional Personal/Reliability Supporting the customers With you all the way
Security

2) Traditional service quality

During the past few decades, the widely acknowledged importance of service
quality resulted in numerous attempts by researchers, practitioners and
managers, aimed at its conceptualization and measurement. However, this
has been proven to be a difficult task, causing long-lasting debates among
those involved, mainly due to the intangible nature of services and problems
stemming from the simultaneous production and consumption of a service
(Carman, 1990). Despite this controversy, it can be argued that there is a
convergence towards the Parasuraman et al. (1988, p. 16) view that

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customer perceived service quality, is a ‘global judgment or atti- tude,
relating to the superiority of the service.’ Several measuring instruments
have been developed, aiming to capture and explain the service quality
dimensions. There is little doubt that, among these, SERVQUAL is the most
popular, a fact acknowledged even by its critics (e.g. Asubonteng et al.,
1996). SERVQUAL has been developed in a series of stages leading to
consecutively more refined versions (Parasuraman et al., 1985, 1988, 1991,
1994). In the most commonly used version (Parasuraman et al., 1988),

service quality is calculated as the gap between customer expectations and

perceptions. The 22 items of this instrument are categorized into:

 Reliability: The ability to perform the promised service dependably

and accurately.

 Tangibles: The appearance of physical facilities, equipment, personnel

and communications materials.

 Responsiveness: The willingness to help customers and to provide

prompt service.

 Assurance: The knowledge and courtesy of employees and their

ability to convey trust and confidence.

 Empathy: The provision of caring, individualised attention to

customers.

3) Service quality and satisfaction

There is very little doubt that there is a causal relationship between customer
perceived service quality and satisfaction. Nevertheless, there is an ongoing
debate in literature on the direction of Total Quality Management 227this
relationship, i.e. whether service quality influences satisfaction or vice versa.

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According to Parasuraman et al. (1988), perceived service quality relates to
long-term and global evaluation of a service, whereas satisfaction is linked to
evaluations of specific service transactions. They pointed out those incidents
of customer satisfaction from their experiences with the provided service
influence the perceptions of service quality. On the other hand, other
researchers (e.g. Cronin & Taylor, 1992; Spreng &McKoy, 1996) have found
that service quality is an antecedent of customer satisfaction. Parasuraman
et al. (1994) moderated this disagreement by attributing the different
perspectives on this issue to the global scope of perceived service quality as
opposed to the transaction-oriented nature of satisfaction. Research on the
relationship between quality and satisfaction in the internet services context
is again at its early stages. However, several scholars advocate that
customer-perceived internet service quality, either overall or specific
dimensions, significantly influences customer satisfaction (e.g. Jun et al.,
2004; Lee & Lin, 2005; Long &McMellon, 2004; Van Iwaarden et al., 2003.

Yang & Fang, 2004; Zhu et al., 2002). This fact resulted in the adherence of
the present study to the proposition made by Lee et al. (2000, p. 222) stating
that ‘customers can evaluate (be sat- isfied/dissatisfied with) an
object/service only after they interpret (perceive) it.

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 Objective of the study

 To compare satisfaction level customers using public and private sector

banks.

 To study about the factors that affects the customer overall perception
towards public sector and private sector bank.

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 Research Methodology

This chapter describes the research methodology adopted to achieve the

objectives of the study. It includes the scope of the study, research design,
collection of data, analysis of data and limitations of the study.

Scope of the study

The scope of the study is to get the first hand knowledge about the
consumer behavior of public sector banks and private sector banks in Greater
Noida. The scope is restricted to study the factors affecting the satisfaction of

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consumers while availing the services in banks in Greater Noida. This is done
to avoid perceptual bias and for providing objectivity to the study.

Research Design

The research design constitutes the blueprint for the collection,

measurement and analysis of data. It is the strategy for a study and the plan
by which the strategy is to be carried out.

The research design of the project is causal as it formulates which variable

are the cause (IV) and which variable are the effect (DV) associated with the
population using banking services. Causal research used to evidence of cause
and effect relationship.

Data Collection

Primary Data

Primary data is that data which is collected for the first time. It is
original in nature in the shape of raw material. For the purpose of collection
of primary data, a well structured questionnaire was framed which was filled
by the respondents. The questionnaire comprises of close ended questions. In
close ended questions dichotomous, ranking, nominal’s scale, checklist
questions and multiple choice questions are used.

Sampling design:

Sample size: 180 people were surveyed.

Sampling Area: Greater Noida, U.P

Sampling technique: a probability sampling technique named stratified

sampling has been used in the research.

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Data Analysis and Interpretation

For the purpose of analyzing, raw data was summarized in a master

table and from this table the results have been carried out. The questions
having multiple/ alternative choices were analyzed by taking percentages. In
the case of questions on Nominal scale, the mean scores were calculated.

Limitations of the study

Sincere efforts have been made to collect authentic and reliable

information from respondents, however the report is subject to following
limitations:

i. Some respondents were reluctant to give the information, so their

responses may be biased.
ii. Study was conducted in Greater Noida only. So the results of the study
may not be applicable in other areas.
iii. The factors which are taken in this research is not only the base to
judge the consumer behavior, some other psychological factors may
slightly impact on the same.

About SPSS tools

In this study we want to check the satisfaction level of respondent from

private and government bank. For this we have use ordinal scale i.e. rating to
know the satisfaction level. We have 1 t0 5 as rating scale where 1 is very
good, 2 is good, 3 is average, 4 is poor and 5 is very poor.

To compare the satisfaction level of respondents of private and govt. bank

and to know where there is any significant difference on the satisfaction level

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of private and govt. bank. To check the above objective we have used SPSS
tools (ANNOVA)

Hypothesis

Null Hypothesis- There is no significant difference between mean rating for the
private and government banks.

Alternet Hypothesis- There is significant difference between mean rating of the

private and government banks.

ANNOVA TEST

Between-Subjects Factors
Value Label N
BANK 1 PRIVATE
95
BANK
2 GOVT.BANK 85

INTERPRETATION- This table shows, there are 95 respondent of private bank and
85 respondent of govt. bank.

Descriptive Statistics
Dependent Variable:RITING
BANK Mean Std. Deviation N
PRIVATE BANK 1.95 .749 95
GOVT.BANK 2.87 .828 85
Total 2.38 .911 180

INTERPRETATION- According to mean, satisfaction level of private

bank is greater than govt. bank.

Here our first objective is proved.

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Tests of Between-Subjects Effects
Dependent Variable:RITING
Type III Sum of
Source Squares df Mean Square F Sig.
a
Corrected Model 38.237 1 38.237 61.698 .000
Intercept 1041.348 1 1041.348 1.680E3 .000
BANK 38.237 1 38.237 61.698 .000
Error 110.313 178 .620
Total 1171.000 180
Corrected Total 148.550 179

a. R Squared = ,857 (Adjusted R Squared = ,853)

 In this table we can see the significance level of bank is less than
0.05. It means null hypothesis is rejected.

 So the alter net hypothesis is accepted. It means there is significant

difference between mean rating of the private and government
banks.

 The value of R Squared is 0.857, it means this project is 85.7%

correct.

Analysis and Interpretation

Age group 18-25 26-35 36-45 46-55 55+

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INTERPRETATION- our sample is indicating that maximum number of bank
users are between age group 18 to 25 ranges.

Occupation:
Student

Businessman

Salaried person (Gov.)

Salaried person (Pvt.)

Other, please specify

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INTERPRETATION: maximum number of banking service users in our
sample are the students.

Which bank you prefer mostly

High Low
Government Bank
Private Bank

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INTERPRETATION: Maximum numbers of respondents prefer private banks
which are indicated as 53% of consumers are consumers of private bank
followed by Government bank.

Which of following banks do you have account?

(a) ICICI Bank

(b) SBI Bank

(c) OBC Bank

(D) Axis Bank

(e) Other Please specify __________________

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INTERPRETATION: 39% of consumers prefer SBI followed by ICICI bank
indicated at 38%. It means ICICI and SBI leader in Greater Noida area.

No. of transaction in one month

a) 1-3

b) 4-7

c) More than 7

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INTERPRETATION: 35% of consumers go for more than 7 transactions in a
month.

How many times you have to come in a bank

a) 1-3

b) 4-7

c) More than 7

INTERPRETATION: 53% of Consumers have to visit the bank for more than 7
times in a month.

Are you using financial services?

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 Yes No

INTERPRETATION: As maximum number of consumers are using financial

services (lones, credit cards, etc.).

Does Private Banks provide better facilities than Government Banks?

(a) High

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(b) Low

INTERPRETATION: Private banks provide better facilities than government

banks ,which is indicated as 81% of respondents are prefering private banks
as compared to Government Bank as only 18%.

Are you satisfied with ATM availability of your bank?

High Low

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 Government Bank
Private Bank

INTERPRETATION: 56% of consumers are satisfied with the ATM availability

of private bank.

Are you satisfied of value added services provided by your bank?

High Low
Government Bank
Private Bank

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INTERPRETATION: 71% of respondents are satisfied with the value added
services of private banks as compared to Government banks indicating only
29%.

How would you rate product /service offered vs. cost by your Bank?

High Low
Government Bank
Private Bank

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INTERPRETATION: 58% of consumers are satisfied with the private banks as
they are providing good service as per the cost.

Finding and Conclusion

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Since our sample was collected from Greater Noida, majority of the
respondents were students mainly in the age group of 18-25.Most of the
respondents used private banks instead of government banks.SBI scored the
highest when it came to acquaint oneself with saving account pattern in
banks ,closely followed by ICICI.As far as number of transactions and visit to
the bank is concerned in one month, majority of them used it more than 7
times .As far as financial services are concerned, majority of them used it.

Private banks clearly scored over government banks when it came to

facilities, ATM availability, satisfaction with value added service and
perceives it to be a value for money proposition when it came to choosing
private banks.

So, from the findings of the survey we have done, it can be concluded that
customers in this new era does not take whatever is offered to him/her.
Rather it is the customer who decides the fortune of any company by
deciding what company should offer them customers have certainly become
the king.

It has become quite clear that banks have become an important part in every
respondent’s life. Most of them chose private banks as they believe it to be a
better value proposition in terms of better facilities, ATM availability, value
added services etc. It was also seen from the survey that age also played an
important role in deciding which banks to choose, normally people with age
above 35and above showed brand loyalty with banks like SBI probably
because of better brand image and past experience. Thus, it can be clearly
said that age, value, availability, price, product, service played an important
role in deciding which bank to chose.

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 Bibliography

www.citehr.com

www.wikipedia.org/

www.psychologytoday.com/

www.managementparadise.com

www.scribd.com

www.nytimes.com

www.consumerpsychologist.com/

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 QUESTIONNAIRE

Name……………………………………………………….

Age group 18-25 26-35 36-45 46-55

55+

1) Occupation:
Student

Businessman

Salaried person (Gov.)

Salaried person (Pvt.)

Other, please specify

2) Which bank you prefer mostly

High Low
Government Bank
Private Bank
3) Which of following banks do you have account?

(a) ICICI Bank

(b) SBI Bank

(c) OBC Bank

(D) Axis Bank

(e) Other Please specify __________________

4) No. of transaction in one month

d) 1-3

e) 4-7

f) More than 7

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 5) How many times you have to come in a bank

d) 1-3

e) 4-7

f) More than 7

6) Are you using financial services

Yes No

7) Tick the boxes where appropriate.

“1” for High, “2” for Low

Gov. Privat
Bank e
Bank
Service is always provided in appropriate time?
Staff members are helpful ?
Do you think that the members are interested in understanding
your needs
The information given by them is clear and easy to understand?
I was treated in a friendly, courteous and helpful manner.
Letters and Brochures are easy to understand(customer friendly)?
My queries are attended promptly and I’m satisfied with the
response I receive.
8) Does Private Banks provide better facilities than Government
Banks?

(a) High

(b) Low

9) Are you satisfied with ATM availability of your bank?

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 High Low
Government Bank
Private Bank

10) Are you satisfied of value added services provided by your

bank?

High Low
Government Bank
Private Bank
11) How would you rate product /service offered vs. cost by your Bank?

High Low
Government Bank
Private Bank
12) If you have rate bank according to the level of satisfaction what will
rate them in scale of 1 to 5.

1- V.Goo 2- Goo 3- Avera 4- Poo 5- V.Poo

d d ge r r
Governm
ent Bank
Private
Bank
THANK YOU

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