FACTORS THAT DETERMINE CUSTOMER SATISFACTION LEVEL IN .
www.ajbms.orgISSN: 2047-2528Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]FACTORS THAT DETERMINE CUSTOMER SATISFACTION LEVEL INBANKING INSTITUTIONS: Evidence from Ghanaian Banking IndustryOduro RichardCape Coast PolytechnicDepartment of Accountancy StudiesP.O. Box AD 50Cape CoastE-mail: pabene2@yahoo.comABSTRACTIn the financial world, Investors always want to put their funds intoinvestments that yields maximum returns. Thus, they seek avenues wherethere exist effective and efficient management of resources includingcustomers as this serves as indication for promise of future returns. This hascreated a source of concern for the researchers and thus, this study seeks toevaluate factors that determine customer satisfaction level of bankinginstitutions operating in Ghana in terms of certain variables noted for qualityservice delivery. The main objective of this study is to assess the factors thatunderline customers’ satisfaction level of the banks operating in Ghana, interms of service quality and customer satisfaction. The chi-square and factoranalysis, were the main statistical tools used for the analysis. Sample sizes of300 respondents were selected from three selected banks operating in Ghana.Analysis of the data reveals that the most important factor that influencescustomer choice of bank is the cost of service followed by easy access to loanfacilities. The study found that three factors that influence consumer’ssatisfaction level of the banks. That is, Customer Relation and Service, StaffCompetency and Responsive and Convenient banking.Keywords: Customer Satisfaction, Service quality, Bank, Factor Analysis.1.0BACKGROUND OF THE STUDY1.1IntroductionAccording to Tse and Wilton (1988) and Oliver (1999), customer satisfaction is defined asan evaluation of the perceived discrepancy between prior expectations of the customer andthe actual performance of a product. It is how customer evaluates the ongoing performanceof a product or service. According to Kim, Park and Jeong (2004) customer satisfaction iscustomer’s reaction to the state of satisfaction, and customer’s judgment of satisfactionlevel. Customer satisfaction is very important in today’s business world, the ability of aservice provider to create high degree of satisfaction is crucial for product differentiationand developing strong relationship with customers. Customer satisfaction is an ambiguousand abstract concept. Actual manifestation of the state of satisfaction will differ from oneperson to another, from one product/service to another. The state of satisfaction dependson a number of factors which consolidate as psychological, economic and physical factors.Banking in Ghana can be seen as an avenue which provides investors alternativeinvestment avenues to invest their surplus fund and at the same time providing a platformfor investors requiring funds for investment. It may be seen as one of the ancillary servicesthat deal with money and other financial matters which facilitates business with regards topayments and acceptance of deposit. The Banks have the responsibility of mobilizing andprudently investing their capitals into viable ventures in order to make profit to sustain Society for Business Research Promotion 1
www.ajbms.orgISSN: 2047-2528Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]their businesses, fulfill their social responsibility, increase and protect the shareholders’interest and above all meet their customers’ expectation.The Banking system in Ghana was designed to provide simple, quick, easily accessible andflexible financial solution to meet the needs of the Investors and borrowers in the Ghanaianeconomy. Commercial Banks were expected to play general roles of providinginstitutionalized banking for the Ghanaian in all sectors in the economy.1.2Statement of the ProblemTo survive and succeed in business in the modern world it is necessary to seek and retainloyal customers for the product or services provided by the business. However, mostbusinesses especially banking institutions operating in the Ghanaian banking industrytend to focus much on seeking and getting customers rather than retaining the customers.The inability of these banking institutions to retain their customers can be attributed to thefact that, customers’ expectations are rarely identified and the few that are identified arenot adequately satisfied in terms of quality customer services. Also, the pressure puttingon banks by the government has compel most banking institutions to raise the cost of theirservices to such a level that, customers finds it extremely difficult to appreciate the servicesprovided by the banks. This indeed makes the banks to focus on survival in the bankingenvironment rather than meeting customers’ need. However, with the emergence of newbanking institutions into the banking industry focus still remain on survival but this timein a different dimension ‘ focusing on customers’ needs’.Consumer research has devoted little attention to factors that determine the satisfactionlevel of clients of the various banking institutions. Conversely, only a few publishedacademic researchers were focused on comparative studies. This has created a source ofconcern for the researcher and thus, this study seeks to evaluate customer satisfactionlevel of performance of selected banks operating in Ghana in terms of certain variablesnoted for quality service delivery and make the necessary recommendation.2.0REVIEW OF RELEVANT LITERATUREA number of researchers have tested the relationship existing between customerexpectation, perceived service quality and customers satisfaction and found out that, thereis a strong positive correlation. (Zeithaml, et al, 1988, Parasuraman et al, 1985; 1988; ).Thus increase in service quality of the banks can satisfy and develop attitudinal loyalty ofcustomers which ultimately retains valued customers (Nadiri, et al 2009). Also the higherthe level of perceived service quality of customer, the higher the customer satisfaction.When perceived service quality is less than expected service quality customer will bedissatisfied (Jain and Gupta, 2004). Previous researchers have found that satisfaction ofthe customers can help the brands to build long and profitable relationships with theircustomers (Eshghi, Haughton and Topi, 2007). Though it is costly to generate satisfied andloyal customers but that would prove profitable in a long run for a firm (Anderson, Fornelland Mazvancheryl, 2004). Therefore a firm should concentrate on the improvement ofservice quality and charge fair price in order to satisfy their customers which wouldultimately help the firm to retain its customers (Gustafsson, Johnson and Roos, 2005).Customer satisfaction can be determined by either subjective factors (e.g. customer needs,emotions) or objective factors (e. g. product and service features). Applying to the bankingindustry, there have been numerous studies that examine attributes that clients expectregarding customer satisfaction. Atkinson (1988) found out that cleanliness, security, valuefor money and courtesy of staff determine customer satisfaction. Knutson (1988) revealedthat conducive atmosphere and comfort, convenience of location, prompt service, safetyand security, and friendliness of employees are important. Barsky and Labagh (1992)stated that employee attitude are likely to influence customers' satisfaction. A studyconducted by Akan (1995) showed that the main determinants of customer satisfaction arethe behaviour of employees, cleanliness and timeliness. Choi and Chu (2001) concludedthat staff quality, product qualities and value are the top three factors that determinecustomer' satisfaction. Society for Business Research Promotion 2
www.ajbms.orgISSN: 2047-25283.0Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]OBJECTIVES OF THE STUDYThe main objective of this study is to assess the factors that underline customers’satisfaction level of the performance of the banks operating in Ghana, in terms of servicequality and customer satisfaction. The following sub objectives were also considered; To determine whether factors, such as gender, occupational status and level ofeducation influence customers’ preference of banks in Ghana. To identify the minimum number of factors that significantly influencescustomer satisfaction level of performance of banks in Ghana. To rate the bank performance in terms of the identified factors.4.0HYPOTHESESThe study is premised on the following null hypothesis;H0: There is no association between services quality attributes and banks selected bycustomers.5.0DATA AND METHODSA cross sectional survey method was used for the study. By purposive sampling, the threebanking institutions were selected for the study. For the purpose of confidentiality, thenames of the selected banks will not be disclosed. The first bank, Bank A, was selectedbecause it has won the Chartered Institute of Marketing Ghana Award as the overall bestbank in recent years. The second bank, Bank B, has consecutively won the NationalBanking award for the Best Customer Service category twice within the same period. Andthe third bank, Bank C, was selected on the basis that, it has the highest number ofnetworked branches. A sample of 100 customers was drawn from each of the three banks.Ten variables which measures the customer satisfaction level were selected from theclassification of variables as outlined by Wilson et al (1992): these include– Product/Service Range;– Affordability of price product/Service;– Courtesy ofStaff,– Knowledgeable staff;– Responsive to Customer Complaints;– Slow tocustomer complaints;– Product/Service Innovation;– Access to loan facilities;– Convenience Bank Product/Service and– Promptness of Service Provision.The main instrument of data collection was questionnaire. To ensure accuracy ofresponses, the research instrument was self-administered by the researchers to thesubjects of the study at the premises of the respective banks. During the administration ofthe research instrument, quota sampling was use in the selection of the research objects.The analysis of the data gathered from this research is in two parts. The first part, which isthe preliminary analysis made use of descriptive statistics tools such as charts and cross tabulation. Linear correlation analysis was also performed as part of the preliminaryanalysis to observe the co - linearity among the selected variables. This forms the basis ofthe factor analysis. The research hypothesis was tested using the chi-squared test. Thesecond part, which is the further analysis made an extensive use of factor analysis. Themethod of extraction of factors was the Principal Component Analysis.6.0RESULTS AND FINDINGS6.1Preliminary AnalysisThis section reports the descriptive analysis of the data collected from the customers of theselected banking institutions.6.1.1 Demographic Profile of respondentsEven though a Quota sample of 100 respondents were selected from each bank but themakeup of the respondent was made as random as possible. Society for Business Research Promotion 3
www.ajbms.orgISSN: 2047-2528Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]Out of the 300 respondents surveyed, 199 representing 66.3% of the total respondents weremale and 101 representing 33.7% were female. This result cuts across the three banks thatwere used in the survey. This gives a strong indication that, generally, males have moreinterest in transacting with banks than females.The study also aimed at bringing out the categories of occupation and their interest inbanking activities of the various banking institutions. The observation made was notsignificantly different across the banks. Within each bank, employees seem to have moreinterest in transacting with banks than any other category. Bank A recorded 14% of thetotal respondent (representing 42% within the Bank A respondents) being employees. Theresult in The Bank B and Bank C shows 14.33% (42.99% within banks) and 14%(representing 42% within Banks) respectively. Possible reason attributed to this observationmay be of the fact that, employees salaries are paid through their bank account and alsomay want to have access to loan facilities provided by the banks. 3.67% of the respondentswere students across each of the banking institution representing 11% of the respondentwithin each bank being students.The survey also brings out whether customers select banks based on their educationbackground. For the purpose of this research, customer education levels were classified ashaving a formal education (first cycle, second cycle and third cycle) and informal education(no school). Out of the 300 respondents’ survey, 40 representing 13.3% of the totalrespondents had no formal education whereas the remaining 86.7% of the total respondenthad had a formal education in either first, second or third cycle of education. This impliesthat educated people have more interest in banking as compared to people with no formaleducation.The survey also considered the mix of customers that were involved in the study in terms ofthe length of time within which they have transacted with their current bankers. Dataobtain from the survey indicates that, most of the banks customers are considered as newas more than half of the respondents have transact with their banks for a period less thanone year.6.1.2 Rating of Product/Service AttributesThe survey also aimed at bringing out the factors that influence the customers’ choice ofbanking institutions in Ghana. The 300 sample selected were asked to rate seven attributesthat commonly influence customers choice of banks in Ghana from 1 to 7 with 1 indicatingthe least important and 7 being the most important. The attributes used and the scoreobtained by each of the selected banks and in total is shown in table 1.Table 1: Effective Scores of Customer Rating of Product Attribute ofSelected Banking InstitutionsSelected BanksProduct/ServiceAttributeBank ABank BBank CTotalPopularity4003974031,200Access to loan facilities4264204271,273Wide product range4224264121,260Low cost of service4594614721,392Branch Convenience3563543571,0677007007002,100Maximum Effective ScoreEffective Score is defined as the respondent rating multiplied by the number of respondentsrating a bank as such. Mathematically, Society for Business Research Promotion 4
www.ajbms.orgISSN: 2047-2528Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]This analysis tends to identify the most important factors/variables that influencecustomer choice of banking institution in Ghana. From the values obtained in table 1,customers select their bankers on the basis of Low Cost of Service. Followed by this factoris ‘Access to loan facilities’ in respect of Bank A and Bank C customers. The customers ofBank B see ‘wide product range’ as the next influencing factor apart from low service cost.However, in total low service cost is seen as the most influencing factor followed by ‘Accessto loan facilities’ as these are the attributes with the highest effective score. This may beseen as the two most important factors that influence customer for choosing as theirbankers.6.1.3 Test of HypothesisThe Study is premised on the null hypothesis that, ‘There is no association betweenservices quality attributes and banks selected by clients’ as against an alternativehypothesis that, ‘There is association between services quality attributes and banksselected by clients’ The contingency table shown in Table 2 indicates the observed andexpected frequencies for the categories. Within each cell, the expected frequency is placedin a bracket and the observed frequency is not in the bracket.Table 2: Crosstabulation of bank service attribute against bank typeSelected BanksBank ABank BTotalBank 38)1200Access toloan facilitiesWide productrangeLow cost 54.61)357.00(356.89)1067Total2810.00Chi-Sq 12.599,2803.00DF 12,2821.008434P-Value 0.000At a significance level of 5% we fail to accept the null hypothesis, as thep value of 0.000is lesser than value of 0.05. We therefore conclude that, there is significanceassociation between services quality attributes and banks selected by clients. Customersselect their bankers based on one or more of the selected attributes.6.1.4Preliminary analysis of variablesAs stated earlier, ten variables were used to assess customer satisfaction. The preliminaryanalysis of variables is carried out to have a fair idea of the responses given by therespondents. The analysis is carried out for each bank and the three banks in total to verifyif there exist any differences in the responses given by the respondents. Observation of theresponses to the rating of the variables of interest shows that, highest rating for eachvariable is 5 indicating strongly agreement to the statement posed to respondents. However,each variable has a minimum rating of 1 indicating strongly disagreement to the statementposed to them. Summary of responses from respondents is shown in Table 3. Society for Business Research Promotion 5
www.ajbms.orgISSN: 2047-2528Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]Table 3: Descriptive summary of responsesVariableDescriptive StatisticsMinimum 3.12-.1510X9159233.08-.1350X10158993.00-.0580– Product/Service RangeWith respondents being asked whether they agree to the fact that, Customers have a widerange of product and services to choose from, 49.7% disagree to that fact. 25% wereundecided and the 25.3% agreed. The sum of the all the responses yielded a sum of 777which is highly positively skewed to the right. Thus, generally, respondents disagree to thatfact.– Affordability of price product/ServiceWith respondents being asked whether they agree to the fact that, the price for the bank’sproducts and service are affordable, 24.7% disagree to that fact. 41.7% were undecided andthe 33.9% agreed. The sum of the all the responses yielded a sum of 988 which is slightlynegatively skewed (almost normal). Thus, generally, respondents are undecided about thisfact.– Courtesy of StaffWith respondents being asked whether they agree to the fact that, the staff is courteousand friendly, 62.6% disagree to that fact. 7.7% were undecided and the 29.7% agreed. Thesum of the all the responses yielded a sum of 764 which is highly positively skewed to theright. Thus, generally, respondents disagree to that fact.– Knowledgeable StaffWith respondents being asked whether they agree to the fact that, the staff isknowledgeable in their area of operation, 25.7% disagree to that fact. 32.0% were undecidedand the 42.3% agreed. The sum of the all the responses yielded a sum of 986 which isnegatively skewed. Thus, generally, respondents agree to this fact.– Responsive to Customer ComplaintsWith respondents being asked whether they agree to the fact that, the bank is responsive tocustomers’ complaints, 19.0% disagree to that fact. 7.7% were undecided and the 73.3%agreed. The sum of the all the responses yielded a sum of 1,061 which is negatively skewed.Thus, generally, respondents agree to this fact. Society for Business Research Promotion 6
www.ajbms.orgISSN: 2047-2528Asian Journal of Business and Management SciencesVol. 2 No. 7 [01-13]– Slow to customer complaintsWith respondents being asked whether they agree to the fact that, the ba
satisfaction level of the banks. That is, Customer Relation and Service, Staff Competency and Responsive and Convenient banking. Keywords: Customer Satisfaction, Service quality, Bank, Factor Analysis. 1.0 BACKGROUND OF THE STUDY 1.1 Introduction According to Tse and Wilton (1988) and Oliver (1999), customer satisfaction is defined as
Customer satisfaction has identified as an important influencer on customer loyalty. Further, customer trust impacted by customer satisfaction which proved that customer satisfaction is an antecedent of customer trust. Moreover, an indirect relationship between customer satisfaction and loyalty through customer trust was observed.
of satisfaction and quality, i.e. if one perceives quality and customer satisfaction as a process (cf. Deming, 1982). Consequently, technical and moral quality affect customer satisfaction, while the manufacturer can determine the level of customer satisfaction and respond via product innovations to ensure even greater customer satisfaction. By .
strategies and customer satisfaction. ii. Ho 3b - There is no statistical significant relationship between honest complaint resolution strategies and customer satisfaction. LITERATURE REVIEW Concept of Customer Satisfaction Customer satisfaction refers to a person's satisfaction with a product, a service, or a supplier (Terpstra
IAS 36 – LỖ TỔN THẤT TÀI SẢN. xxx KHÔNG áp dụngcho Ápdụngcho x Hàng tồnkho (IAS 2) x . Tài sản tài chính (IFRS 9) x . Quyền lợi người lao động (IAS 19) x . Tài sản thuế hoãn lại (IAS 12) x . Hợp đồng xây dựng (IAS 11) x . Bất động s
customer satisfaction correlated positively with customer satisfaction. Badara, et. al. (2013) states the importance of customer satisfaction as it is a significat predictor to customer loyalty. In the airlines area, airline companies have recently realized the importance of customer satisfaction to find themselves in this competitive world.
the words "evaluation" and "opinion", and satisfaction with the word "feeling". Customer satisfaction can be experienced at the specific encounter level or at an overall level of satisfaction. Service encounter satisfaction is the customer's satisfaction or .
Summarize degree of satisfaction (overall and by subgroups) Compare satisfaction (or performance) to some standard Expectations Ratings of competitors Analyze determinants of satisfaction Overall satisfaction as a function of satisfaction with particular components of satisfaction
realizes a functional behavior of a logic system from a given description (stated in form of verbal statements, truth table, K-map, state diagram, etc.) Example : Synthesize a logic function that realizes the following truth table. Use AND, OR, and NOT gates Figure 2.15. A function to be synthesized. Chapter 2-14 Synthesis of digital circuits f (a) Canonical sum-of-products f (b) Minimal-cost .
