Abstract
Consumer
satisfaction and loyalty represent a fundamental step in understanding how
profitable organisations are. This work studies the determining factors of
customer satisfaction and how loyal they remain to their various money deposit
banks. The study assessed customers’
satisfaction of selected money deposit banks ,taking into consideration the
charges of services, relationship marketing, quality of services, and ATM
service delivery of those banks. The population of study comprises of customers of the selected banks in Umuahia Metropolis who are 18yrs and
above.. Method of data collection were questionnaires. Tables and percentages
were also used in presenting and analyzing the data collected. The research
found out that relationship marketing, charges of services and quick ATM
service delivery are factors mediating against customer satisfaction and
loyalty in the banking sector.
TABLE OF
CONTENTS
TITLE PAGE
ABSTRACT
ACKNOLEDGEMENT
CHAPTER
ONE………………………………………………………………………………………......1
INTRODUCTION…………………………………………………………………………………….......1
1.1 BACKGROUND TO THE STUDY……………………………………………………………………1
1.2 STATEMENT OF THE PROBLEM…………………………………………………………………...3
1.3 OBJECTIVES OF THE
STUDY……………………………………………………………………....4
1.4 RESEARCH QUESTIONS……………………………………………………………………………5
1.5 RESEARCH HYPOTHESIS………………………………………………………………………….5
1.6 SIGNIFICANCE OF THE STUDY…………………………………………………………………..6
1.7 SCOPE OF THE
STUDY...…………………………………………………………………………...7
1.8 DEFINITION OF RELATED
TERMS……………………………………………………………….7
CHAPTER
TWO………………………………………………………………………………………….8
2.0 INTRODUCTION…………………………………………………………………………………….8
2.1 REVIEW OF RELATED LITERATURE…………………………………………………………….8
2.1 CONCEPTUAL FRAMEWORK……………………………………………………………………..8
2.1.1 DEFINITION OF CUSTOMER
LOYALTY……………………………………………………….8
2.1.2 DEFINITION OF CUSTOMER
SATISFACTION………………………………………………..10
2.1.3 VARIABLES IN MEASURING CUSTOMER
SATISFACTION………………………………...11
2.1.3.1 RELATIONSHIP
MARKETING………………………………………………………………...12
2.1.3.2 CHARGES OF
SERVICES………………………………………………………………………14
2.1.3.3 QUALITY OF
SERVICES……………………………………………………………………….15
2.1.3.4 ATM SERVICE
DELIVERY…………………………………………………………………….16
2.2 THEORITICAL REVIEW…………………………………………………………………………….17
2.2.1 CUE UTILIZATION
THEORY…………………………………………………………………….17
2.2.2 STIMULUS ORGANISM RESPONSE
THEORY…………………………………………………18
2.2.3 EQUITY THEORY…………………………………………………………………………………18
2.2.4 DISSONANCE THEORY…………………………………………………………………………..18
2.2.5 ASSIMILATION
THEORY………………………………………………………………………...19
2.3 EMPIRICAL REVIEW……………………………………………………………………………….19
2.4 SUMMARY OF REVIEWED RELATED
LITERATURE…………………………………………..21
CHAPTER
THREE……………………………………………………………………………………...23
3.0 INTRODUCTION…………………………………………………………………………………….23
3.1 RESEARCH DESIGN………………………………………………………………………………...23
3.1.1 METHOD OF DATA
COLLECTION……………………………………………………………...23
3.1.2 INSTRUMENT FOR DATA
COLLECTION………………………………………………………24
3.1.3 SOURCES OF DATA
COLLECTION……………………………………………………………..24
3.2 AREA OF THE STUDY………………………………………………………………………………24
3.3 POPULATION OF THE
STUDY…………………………………………………………………….24
3.4 DETERMINATION OF SAMPLE
SIZE……………………………………………………………..25
3.5 SAMPLING TECHNIQUE…………………………………………………………………………...26
3.6 VALIDITY AND RELIABILITY OF RESEARCH
INSTRUMENT………………………………..26
3.7 METHOD OF DATA
ANALYSIS……………………………………………………………………26
3.7.1 MODAL
SPECIFICATION………………………………………………………………………...27
CHAPTER
FOUR…………………………………………………………………………………….…28
FINDINGS
AND DISSCUSION……………………………………………………………………...…28
4.0 INTRODUCTION…………………………………………………………………………………….28
4.1 DATA ANALYSIS……………………………………………………………………………………32
CHAPTER
FIVE…………………………………………………………………….…………………..40
SUMMARY,
CONCLUSION AND RECOMMENDATIONS……………………………………….40
5.1 SUMMARY OF FINDINGS………………………………………………………………………….40
5.2 CONCLUSION FROM
FINDINGS………………………………………………………………......41
5.3 RECOMMENDATIONS……………………………………………………………………………...41
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background to the Study
Financial institutions in Nigeria
operate in a fierce and dynamic competitive business environment. Most times,
they are faced with tough and perplexing competition, occasioned by the
increasing rate at which financial institution sprouts on a daily basis.
Therefore, in order to win and remain competitively vibrant amidst numerous
competitors, financial institutions operating in the state must strive towards
indentifying and profitably meeting the needs and expectations of their
customers. This will no doubt result to effective customer satisfaction, a
vital prerequisite for customer loyalty and continued patronage (Oliver, 2009).
Owing to the numerous benefits
adequate customers’ satisfaction offer to any business organization, customer
satisfaction has become an issue of pertinent concern to marketing managers or
executives, especially those operating in services industries (Bennett and
Rundle-Thiele, 2004). Moreso, if the customers are satisfied with a provided
goods or a particular service, the probability that they will use the service
again increases (East, 2007).
According
to Oliver (2009), customer satisfaction is the perceived discrepancy between
prior expectations of the customer and the actual performance of a
product/service. It is how customer evaluates the ongoing performance of a
product or service. From the above definition, it clear that customers get
satisfied only when the actual performance of a product supercede the
expectations they have prior the purchase of such products or services.
Furthermore, Kim, Park and Jeong (2004), opined that Customer satisfaction is
customers’ reaction to the state of satisfaction, and customer’s judgment of
satisfaction level. A customer whose needs are satisfactorily met by any
financial institution is propelled to remain loyal and this loyalty is
displayed in the form of repeat purchase (Anyanwu, 2009).
Kotler (2002) defines customer
satisfaction by giving details on the attributes of a highly satisfied
customer. According to him, a highly satisfied customer stays loyal, linger,
and buys more as the company introduces new products and upgrades existing
products; talks favourably about the company its products and upgrade existing
products; pays less attention to competing brands and is less sensitive to
price, offers service or product ideas to the company and costs less to him
than new customers because transactions are routine.
Oliver (2007) opines that customer
loyalty refers to "a deeply held commitment to re-buy or re-patronize a
preferred product or service consistently in the future despite situational
influences and marketing efforts having the potential to cause quick service.
Moreso, Anderson and Jacobsen (2000) posit that "customer loyalty is
actually the result of an organization creating a benefit for a customer so
that it will maintain or increase their purchases from the organization. The
above definition of customer loyalty points to the fact that customer loyalty
is achieved through identifying and satisfactorily meeting the needs and
expectations of customers.
Most
financial institutions operating in the state that have experienced increased
market share through customer loyalty have realized the importance of
identifying and satisfying customer’s needs (Martin, 2009). No wonder in recent
times, banks operating in Umuahia have devised various strategies geared
towards improving the quality and reliability of their services through the
establishment of customer compliant or feedback box, mobile banking system,
staff friendliness, speed and accuracy in transaction and willingness to help
customers.
1.2 Statement of the Problem
Customer satisfaction and customer
loyalty are essential ingredients for the survival and growth of financial
institutions in Nigeria (Oliver, 2009). However, limited knowledge has been
provided by researchers and academicians on the determinants of customer’s
satisfaction and various strategies financial institutions can adopt to ensure
that customers needs are identified and profitably satisfied. As such, bank
executives and managers in the state do not understand the various ways of
identifying customer’s needs and how to ensure that these identified needs are
satisfied with little or no complain from the customers. Many financial
institutions in the state lose a large number of their customer due to the
limited knowledge on customer satisfaction and loyalty.
Most
financial institutions operating in the state have eroded the principle of
marketing concept in dealing with their customers. Little or no time is spent
by bank managers or executives to identify what the needs and wants of the
target market are before coming up with new services. Their core concern is how
to maximize profit through rendering of various services irrespective of
whether the services meet the expectations of the consumers or not. This has
resulted to increasing dissatisfaction among consumers of banking services in
the state, which in most cases have propelled consumers that express some level
of loyalty to refrain from carrying out financial transaction with such financial
institutions.
Moreso,
the lackadaisical and nonchalant attitude exhibited by most bank officials in
the process of rendering services to customers have been identified as a one of
the key factors responsible for customer’s dissatisfaction (Ndubuisi, 2013).
This has lead to a reduction in the number of those patronizing the service of
money deposit banks in the state, resulting to customer disloyalty, because
dissatisfied customers will always look for alternative means or ways of
satisfying their needs and wants.
Martin
(2009), posits that the advent of ATMs has increased the service delivery of
financial institutions in Nigeria. Customers do not have to spent huge amount
of time in the bank waiting for cashier over the counter to carry out transaction
rather certain minor transactions can be conducted without visiting the bank
where the customer opened the account. Unfortunately, the poor level of
technological development of most developing nations and dilapidating nature of
infrastructural development has hampered the efficiency of the ATM’s machine.
Hence, customers have to battle with issues like; issuer switch, out of
service, unable to dispense cash amongst others. These acts of disappointment
results to customers’ dissatisfaction which in most cases lead to customer
disloyalty.
1.3 Objectives of the Study
The
main objective of the study is to assess the effect of customer satisfaction on
customer loyalty among customers of selected money deposit banks in Umuahia
Metropolis. However, the specific objectives of the study are to:
i.
ascertain the effect of
charges of services rendered by money deposit banks on customer loyalty;
ii.
determine if any
relationship between relationship marketing and customer loyalty;
iii.
access the relationship
between quality of service and customer loyalty;
iv.
find out if any
relationship exists between ATM service delivery and customer loyalty.
1.4 Research Questions
The
following research questions will guide the researcher in the course of the
study, which are:
i.
do the charges of
services have any effect on customer loyalty?
ii.
does any relationship
exist between relationship marketing and customer loyalty?
iii.
does any relationship
exist between quality of service and customer loyalty?
iv.
does any relationship
exist between ATM service delivery and customer loyalty?
1.5 Research Hypotheses
H01: The charges of services rendered by money
deposit banks do not have any significant
effect on customer’s loyalty;
H02: Relationship
marketing does not have a significant relationship with customer’s loyalty;
H03: Quality of service
does not have any significant relationship with customer’s loyalty;
H04: There is no
positive relationship between ATM service delivery and customer loyalty;
1.6 Significance of the Study
The
significance of this research work which centred on the effect of customer
satisfaction on customers loyalty among customers of selected money deposit
Banks in Umuahia metropolis, could be
discussed under the following sub-heading:
i.
Money
Deposit Banks: Through the study, various money
deposits banks that operate in Nigeria will get a detailed and unambiguous
understanding of the factors that determine customer’s satisfaction and how
these factors inturn influence customers loyalty. This will ensure that
commercial banks and other financial institutions in the country are more
attuned to the needs and expectations of their target market in order to ensure
that customers remain loyal.
ii.
Customers/Stakeholders:
This research work will provide detailed and comprehensive information on the
various strategies adopted by banks geared towards satisfactorily meeting the
needs of their customers and how to improve in service delivery.
iii.
Academic
institutions: The study will add to the existing
knowledge on the determinants of customer satisfaction. It provides the basis
for further research to be carried out by potential researchers who may desire
to explore other elements that influence customer satisfaction and ensure customer
loyalty.
iv.
Management
of business organizations: Marketing policy makers
will find the result very useful in planning programme that will ensure the
survival of the organization and meet the needs and requirement of both
depositors and stakeholders of the organization.
1. 7 Scope of the study
This
study is on customer satisfaction and loyalty of selected money deposit bank
operating in Umuahia, Abia State. The subjective scope is consumer’s behaviour,
geographical scope is customers of Access Bank, Diamond bank, Fidelity bank,
First bank and Ecobank in Umuahia metropolis.
1.8 Definition of related terms
i.
Bank:
A financial establishment that uses money deposited by customers for investment
pays it out when required, makes loan at interest and exchange currency.
ii.
Satisfaction:
Satisfaction is defined as customer’s level of approval when comparing a
product’s perceived performance with his/her expectations.
iii.
Customer:
Customer is an individual that purchases the goods and services produced by a
business or firm.
iv.
Service:
These are valuable action, deed or effort performed to satisfy a need. It is
the payment of interest or loan installment, dividends as scheduled.
v.
Quality:
Quality has been defined as conforming to requirement or lead down
specification.
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