ABSTRACT
The study titled "Customer
Satisfaction and Patronage in Selected Money Deposit Banks in Umuahia, Abia
State, Nigeria" aims to evaluate the determinants of customer satisfaction
and patronage in selected money deposit banks, specifically Zenith and Eco banks
in Umuahia. The broad objective is complemented by specific goals: to ascertain
the relationship between relationship marketing and customer patronage; assess
the relationship between staff competence and customer patronage; identify the
relationship between ATM service delivery and customer patronage; and ascertain
the relationship between promptness in service delivery and customer patronage.
Employing a descriptive research method with a survey approach, data was
collected using questionnaires designed to elicit relevant information from
respondents. The study population comprises customers aged 18 and above,
residing in Umuahia North and South, with a total population of 213,183. A
sample size of 400 was determined using Taro Yamane’s formula. Data analysis
involved simple descriptive and inferential statistics, such as percentages,
frequency distribution, and regression analysis. The study's findings revealed
that relationship marketing and staff competence have a significant positive
impact on customer patronage, while ATM service delivery does not show a
positive relationship with customer patronage. However, promptness in service
delivery positively influences customer patronage. The study concludes that
customers prioritize quality and effective service delivery. Hence, banks
should focus on enhancing relationship marketing, ensuring prompt service
delivery, and employing competent staff to satisfy customers. Recommendations
include providing prompt service to justify the benefits of electronic banking,
employing quality staff to enhance services, and ensuring good connectivity and
power infrastructure to serve customers efficiently and conveniently.
TABLE OF CONTENTS
CHAPTER
ONE
1.0 INTRODUCTION
1.1 Background
to the Study
1.2 Statement
of the Problem
1.3 Objectives
of the Study
1.4 Research
Questions
1.5 Research
Hypotheses
1.6 Significance
of the Study
1.7 Limitations
of the study
1. 8 Scope
of the study
1.9 Definition
of related terms
CHAPTER
TWO
REVIEW
OF RELATED LITERATURE
2.1 Conceptual
Framework
2.1.1 Definition of Customer Satisfaction
2.1.2 Customer
Patronage
2.1.3 Variables
for Customer Satisfaction in Money Deposit Banks
2.2 Theoretical
Framework
2.2.1.
Assimilation Theory
2.2.2.
Contrast Theory
2.2.3 Assimilation-Contrast Theory
2.2.4.
Negativity Theory
2.2.5 Equity Theory
2.2.6.
Dissonance Theory
2.2.7 Hypothesis Testing Theory
2.2.8 Cue Utilization Theory
2.2.9 Stimulus Organism Response Theory
2.2.10 Adaptation level Theory
2.3 Empirical
Review
2.4 Overview of Zenith Bank Nigeria
2.5 Overview of Ecobank Nigeria
2.6 Summary
of reviewed related literature
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION
3.1 Research Design
3.1.1 Method
of Data Collection
3.1.2 Instrument
for Data Collection
3.1.3 Sources
of Data collection
3.2 Area
of the Study
3.3 Population of the Study
3.4 Determination
of Sample size
3.5 Sampling
Technique
3.6 Validity
and reliability of research instrument
3.7 Method
of Data Analysis
3.7.1 Model
Specification
CHAPTER
FOUR
DATA
PRESENTATION AND ANALYSIS
4.1
Data Analysis
4.2 Test
of the stated Hypotheses
CHAPTER
FIVE
SUMMARY,
CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations
REFERENCES
APPENDIX: QUESTIONNAIRE
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background to the Study
Customer’s satisfaction has been
identified as a core factor that determines the profitability, market share and
sales volume of every business organization operating in Nigeria, irrespective
of its marketing objectives, marketing mix strategies adopted by the firm and
corporate objectives of the business organization (Anyanwu, 2009).
According to Tse & wilton (2008),
and 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. According to Kim, Park and Jeong (2004), Customer
satisfaction is customers’ reaction to the state of satisfaction, and
customer’s judgment of satisfaction level. A customer whose needs are
satisfactorily met is propelled to patronize the services rendered by financial
institutions (Anyanwu, 2009).
Oliver (2009), opined that customer
satisfaction and patronage are considered important in defining organizational
performance and attaining their corporate objectives. Enhancing customer
patronage through adequate customer satisfaction is essential because it is a
key to business success of any banking institution. In the competitive economy,
customer’s satisfaction has come under limelight due to stiff competition among
business organizations operating in a dynamic and competitive business
environment, where organizations are striving to gain and maintain competitive
advantage through the use of available human factor and other organizational
resources to satisfactorily meet the need and expectations of their customers
(Sinh et al, 2011).
Business environment in a developed and
developing countries has changed due to increase globalization and free trade
(Oliver, 2009). Because of these reasons, to stay and remain vibrant in a
competitive environment and deliver acceptable financial returns, managers must
know how to handle changes which are unaccepted by focusing on how to increase
customer’s patronage through effective customer’s satisfaction (Naseem et al,
2011).
In Nigeria, customer’s satisfaction has
become important to business success of banking institutions. Suggested reasons
for this apparent trend include; flexible employment, higher mobility and
competition in banking industry (Panda, 2003). Understanding customer
satisfaction in banking institutions operating in Nigeria is important not only
from economic perspective, but also for the creation of good image of banking
for organizational and staff development.
Banking institutions across the globe
have recognized the importance of customer’s satisfaction, developing and
maintaining enduring relationship with their customer as two crucial parameters
leading to increased business profits. At the same time the several banking
institutions are experiencing increasing level of retail customer’s
dissatisfaction (Mistry, 2013). The causes of dissatisfaction are not well
known empirically, however, from rational point of view the probable causes may
include; low technology, low responsiveness from bank’s employees, unreliable
and inconsistence in service delivery and poor level of customer relationship
marketing. There may be other causes which are out of the above list of possible
causes but none has been established.
Bank customers are likely to focus on
how banks fulfill their promise and how they show interest to do work. These
include criteria like; promptness in rendering service and willingness to help
customers. Also, customer assurance like speed and accuracy in transaction,
staff quality and other related criteria which customers are likely to focus
on. Therefore, commercial or money deposit banks in Abia State should give more
focus on increasing performance and profitability which leads to increased
bonding, trust, communication, shared value, empathy and reciprocity (Anyanwu,
2009).
In 1928, foreign banks were opened in
Nigeria which led to monopolization of banking operations by foreign banks. In
order to break this yoke of monopolistic and discriminatory banking activities,
some Nigerians came together with the aim of establishing indigenous banks.
Recently, there are twenty one (21) money deposit banks which are authorized to
transact business in the country.
In recent times, Banks in Nigerian have
seen the need to develop and maintain effective techniques to enhance the
interaction of customers and banks staffs. This has made bank managers to focus
on how to create close affiliation with their customers, this is why the
Nigerian money deposits banks create a separate department known as customer
care units to address customers issues and complaints in order to ensure that
customers get value for their money, thereby enhancing customers loyalty,
building and maintaining customers cordial relationship with the banks in order
to achieve competitive advantage that can lead to customer retention and
increased profitability (Sheth, 2005). The main and fundamental advantage of adopting
relationship marketing approach is that it builds stronger relationship with
customers who increases the result of performance such as increased sales,
market share benefits, return on investment and customers retention (Nguyen,
2011) and its dimensions on customers’ satisfaction such as trust, bonding,
communication, share value, empathy and reciprocity in the money deposit banks
in Nigeria.
Oliver (2009), posits that the advent
of Automated Teller Machines (ATMs) in Nigeria has provided a new dimension for
banks to effectively satisfy customers’ needs and expectations. ATMs provide a
new method of dispensing customer’s services which are expected to increase
efficiency, sales performance, cash availability and enhance customer’s
satisfaction and patronage. ATMs services enhance operation and customer’s
satisfaction in-terms of reduction in flexibility of time and speedy handling
of voluminous transaction which traditional services where service unable to
handle efficiently and expediently. They provide electronic access to customers
and are able to serve customers outside the banking halls. They perform
important functions of the banks; such as withdrawal and deposit of cash,
printing of mini-statement, settlement of bills etc.
The use of information and
communication technology by banks operating in Nigeria has increased the speed
and accuracy of service delivery, and has also ensured promptness in rendering
of essential services. Customers no longer complain of difficulties encountered
in the past which has to do with carrying financial transactions in other
branches aside the branch where the individual opened the account.
1.2 Statement of the Problem
The level of competition has made bank
managers to focus on how to be in a close contact with their customers, in
order not to lose their active customers to their presumed competitors. Bank
services are increasing in Nigeria, yet the level of failure in their services
indicate that ineffective relationship with the customers seemed to be
pronounced. Banks generally today, have become chameleons in their nature
thereby changing from one service providers to the other and establishing
another branch so as to meet the needs of the customers and to show to the
generality of public that their services are unique and better than the others.
Customers experience human traffic while trying to access their services, this
has destabilized customers, thereby forcing them to open more than one account
across the banking industry in Nigeria in order to satisfy their financial
needs.
As with every other technological
breakthrough, the advent of ATMs has increased the service delivery of banks in
Nigeria. Bank customers do not have to spent huge amount of time queuing up in
the banking hall in order to carryout minor transactions like depositing or
withdrawing of money from one’s account, paying or transferring of fund into a
different 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; out of service, unable to dispense cash
amongst others. These acts of disappointment results to dissatisfaction among
consumers of banking service, which in most cases results to low patronage of
customers of money deposit banks (Ndubuisi, 2003).
The nonchalant attitude of most bank
officials rendering services to customers have been identified as a one of the
key factors responsible for customer’s dissatisfaction. This has led to a reduction
in the number of those patronizing the service of money deposit banks. Because
dissatisfied customers will always look for an alternative means of satisfying
their needs and wants.
More so, the level of competition in
the Nigerian financial institutions have forced the institutions to focus on certain
strategies like; relationship marketing, promptness in rendering services,
staff quality, speed and accuracy of transaction in order to remain competitive
relevant in the sector. Though, many studies have been undertaken on this
aspect, none involves the study of customer’s satisfaction and patronage in
money deposit banks in Umuahia metropolis, Abia state, Nigeria. This study will
fill the gap and enhanced marketing performance and reinforcement of marketing
strategies.
1.3 Objectives of the Study
The broad objective of the study was to
evaluate the determinants of customer’s satisfaction and patronage in selected
money deposit banks in Umuahia, Abia State, Nigeria.
The specific objectives of the study
were to:
i.
ascertain
the relationship between relationship marketing and customer patronage;
ii.
access
the relationship between staff competence (quality) and customer patronage;
iii.
identify
the relationship between ATMs service delivery and customer patronage;
iv.
ascertain
the relationship between promptness in service delivery and customer patronage.
1.4 Research Questions
The following research questions guided
the researcher in the course of the study, which are:
i.
is
there any relationship between relationship marketing and customer patronage?
ii.
is
there any relationship between staff competence (quality) and customer
patronage?
iii.
is
there any relationship between ATMs service delivery and customer patronage?
iv.
is
there any relationship between promptness in service delivery and customer patronage?
1.5 Research Hypotheses
H01: Relationship marketing
does not have a significant relationship with customer
patronage;
H02: Staff
quality or competence does not have any significant influence on customer patronage;
H03: There
is no positive relationship between ATMs service delivery and customer patronage;
H04: Promptness
in service delivery does not positively influence customer patronage.
1.6 Significance of the Study
The significance of this research work
which centred on the determinant of customer satisfaction among selected money
deposit banks 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. 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.
ii.
Customers/Stakeholders: This research work will provide information on the various
strategies adopted by banks geared towards satisfactorily meeting the needs of
their customers.
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 determine customer satisfaction.
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 Limitations of the study
i.
Inadequate responses: The inadequate responses generated from the respondents was
a great challenge faced by the researcher, as respondents were not willing to
give out information.
ii.
Limited fund: The
funds were not enough for the research to carry out tough research as the researcher
wanted to visit different money deposit banks but due to limited finance the
researcher failed to fulfill that.
iii.
Time Constraint: The study had little time to generate favourable
information for the study. Hence, due to the non-availability of needed time,
the researcher could not gather relevant materials and data for the study.
1. 8 Scope of the study
This study is on customer satisfaction
and patronage of selected money deposit banks operating in Umuahia, Abia State.
The subjective scope is consumer’s behaviour, geographical scope is customers
of Zenith and Eco Bank in Umuahia. The coverage scope is customers of these
banks.
1.9 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.
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