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Chapter - Three

Literature Review

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LITERATURE REVIEW

I. RELEVANCE OF CUSTOMER SATISFACTION IN INDIAN

BANKING INDUSTRY

In the view that Customer Satisfaction is indispensible in the banking

organizations, many government and non-government agencies as well

as academicians and practitioners undertook various studies.

Uppal R K and Poonam Rani (2012), in their study titled “Customer

Perception towards Better Banking Services in India - An Empirical

Study”, analyzed customer perception about CRM, reliability, accuracy,

security and transparency among the customers of public sector banks,

Indian private sector banks and foreign banks in Amritsar, Punjab. They

have found that most of the customers are satisfied with the different

banking services and that customer satisfaction can be improved by

ensuring more speed in rendering transactions and giving prompt services.

Ananth & Dr. A. Arulraj, February, (2011) conducted study on “Banking

Services Quality in Nagapattinam District, Tamil Nadu”, Indian Journal

of Marketing, Vol. 41, Issue No. 2, Page No. 3. This study reveals that at

every level of dealing with the customers, the bank management needs to

educate employees for banking activities and processes.

Pandit C Bilamge (2011) in his study “A Comparative Study of

Customer Perception towards Services rendered by Public Sector

Banks and Private Sector Banks” studied the issues relating to customer

services in the ICICI Bank and SBI. The study reveals that the ICICI Bank

is far ahead of the SBI in providing quality services to their customers.

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Puja Khatri and Yukti Ahuja (2010) through their research work, “A

Comparative Study of Customer Satisfaction in Indian Public Sector

and Private Sector Banks”, compares the public sector banks and private

sector banks in terms of customer satisfaction. The study showed that

private banks seem to have satisfied their customers better than public

sector banks by providing better facilities.

Anubhav Anand (2010), had worked out on “Factors affecting Customer

Satisfaction and their relative importance in Retail Banking”. His

Study focused on factors that are responsible for satisfaction of customer

and also enables assessment of influencing power of these factors. A major

contribution of the study has been provision of an approach for the

management of banks to identify the factors of customer satisfaction.

A, Kumaresan & I. Chitrakala & K. Gowtham, April (2010) conducted

study on “Credit Card Holders Expectations and Preferences Towards

Selected Banks in Coimbatore City, Tamil Nadu”, Indian Journal of

Marketing, Vol. 40, Issue No. 4, Page No. 40. This study reveals that

effective measures should be taken to make the consumers more aware

about the pros and cons of the credit cards among the users.

Ashok Kumar M. & Rajesh R., September (2009) conducted study on

“Whether Today‘s Customers are Satisfied? -A study with Banks”,

Indian Journal of Marketing, Vol. 39, Issue No. 9, Page No. 56. This study

reveals that both Public and Private sector banks lack one or the other

aspects so that there is no significant difference between overall

satisfactions of the banks.

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Mittal Anurag (2009) in his study, “Relationship Marketing

Effectiveness in Indian Banking”, compares the relationship market

orientation and customer satisfaction in the Retail Banking activities of

selected 5 public sector banks and 5 private sector banks in the State of

Delhi. Customers of both the group of banks were of the opinion that there

is wider difference in the application of customer relationship marketing in

the banks under study. The relationship marketing approach is not

effectively administered in public sector banks and so, customer

satisfaction level is low.

Nikhil Chandra Shil & Bhagban Das, August (2008) conducted study on

“Customer Satisfaction with regard to Banking: An Application of

QFD”, Management Research, Vol.7, No.8. The study reveals that

Customers nowadays are very choosy about the way they spend their

money. Quality is the first and foremost preference. Therefore, it is of

utmost importance for every organization to understand, respect, and

satisfy their customer‘s needs and feelings continuously.

Reserve Bank of India (2008) Department of Statistics and Information

Management, Chennai Regional Office, Local Board (Southern Region)

conducted a study to evaluate the satisfaction level of customers on various

services rendered by banks covering 2800 customers from 1496 bank

branches selected, using systematic sampling method. The study evaluates

the staff attitude to customers, infrastructural facilities, complaint handling

and redressal mechanism, interest rates and fees, loans and credit card

facilities. It was proved that, for complaint handling and redressal

mechanism, quick and fast services and loan facilities, the private sector

banks are better than the public sector banks. A majority of the respondents

are highly dissatisfied with the infrastructure facilities, interest rates for

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credit cards, service charges and fee levied by banks, especially private

sector banks.

Dhade & Mittal (2008), had worked out on the preferences ,satisfaction

level and chances of shifting of customer of public sector and new private

sector banks .This study focused on the primary opinion of customers of

these banks. There are a number of studies that refer to the importance of

clients/ customers' perceptions of quality (Takeuchi and Quelch, 1983).

These result from comparisons by expectations of service with actual

performance (Gronroos, 1982 and Berry, et al, 1985). Berry (1980) along

with Booms and Bitner (1981) argued that due to intangible nature of

services, customers use elements associated with the physical environment

when evaluating service quality. Managing the evidence and using the

environmental psychology are often seen as important marketing tools.

Mittal (2008) has studied the effect of IT- based services and customer

satisfaction in banking industry and has found that the IT-enabled services

delivered by banks have a positive impact on customer satisfaction.

Educated and young customers are much more satisfied with technology-

based services than others. Speed in the service delivery due to technology

adoption is the most important factor influencing customer satisfaction.

Shobhana, V.K. & Shanthi, G. (2008) assess the operational efficiency of

foreign banks in India using the data for the period 1996-97 to 2004-05.

Analysis of clearance is used to find that there is no significant relationship

between operational efficiency and variables such as size of assets, branch

network and staff strength, 31 foreign banks were selected for the study. It

is concluded that state bank of Mauritius achieved the highest productivity

whereas the operational efficiency of common international bank was the

lowest.

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Identification of customer segment is also vital for service development

and delivery in banks. For example, Jham and Khan (2008) implied that

Indian banks should take care of the needs of customers when introducing

various services to them. Their study revealed that customers of banks such

as ICICI, IDBI, HDFC, PNB and SBI were either in service or self

employed. Many customers of SBI and PNB were found to be retired from

their respective profession. Thus they recommended that banks should

envisage a strategy to serve customers with different occupations &

educational backgrounds. Banks must also advance their customer-centric

strategies by providing satisfaction through services leading to better

relationship building and earning profits for the banks.

Rajani Sofat & Preeti Hiro, September (2007) conducted a comparative

study on “Creativity and Innovations in Retail Banking- A comparative

Analysis of financial product offered by ICICI & HDFC Bank”, Indian

Journal of Marketing, Issue No. 9, Page No. 24. Results suggests that now

challenge for banking sector in the current scenario is to design and

innovate the financial product which are convenient to use & continuously

meet financial goals of the customers.

Dr. K.S.Jaiswal & Nitu Singh, January (2007) conducted a study on

“Retail Banking: Indian Scenario”, Indian Journal of Marketing, Issue

No.1, Page No. 32. Results suggest that changing face of Indian consumers

in term of number of households & their income class, building an affluent

middle class are factors of opportunity & retention of customers, indebtness

& information technology are challenges for retail banking in India.

Prof. Rajeshri Nathwani, (2007) conducted the study on “Customer

Preference & Managerial Effectiveness of Nationalized & Private

Sector Banks”, Indian Journal of Marketing. Results suggest that

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customers of nationalized banks are either neutral or satisfied with the

specified parameters concerned with their operations while the customers

of private banks more satisfied with their banks. Banking can be yet more

enjoyable & effective based on total quality management, bench marking.

Prof. A.S. Mohanrani & Dr. C. Mahavi, Feb (2007) conducted an

empirical study on, Product related characteristics, Promotion and

Marketing Mix are key tools in determining Purchase Behaviour and

Purchase Decision by Teenagers, Indian Journal of Marketing, Issue No. 2,

Page No. 3. Results suggest that teenagers are influenced by updated

information of the product and hence they go for information search,

collect information from different dealers on various aspects like price,

technology etc. They are also influenced by peer compulsion of sales talk

of the dealers. Teenager‘s employees two strategies-Emotionally

convincing & logically convincing to convincer their parents. Logical

teenagers give importance to sales promotion factors like offers & schemes,

while emotional teenagers gives importance to aesthetic appearance, color,

brand value, popularity & social image on selecting the products.

Dr. Sumathy Venkatesan & Dr. K. Prabhakar, Raj Kumar, March (2007)

conducted study on “Retail Banking Scene in India- A Holistic

Approach-Management Trends”, Journal of department of Business

Management, Issue No. 1, Vol. 4, Page No. 58. Results suggest that the

society is made up of individuals and the environment surrounding him. As

development take place in the society, the needs of people grow faster than

ever. The various structural changes taking place in the society could get a

catalytic favour in case proper financial product of service is made

available to all the individuals. In this changes scenario, retail segment is

considered more relevant if one looks from the angles of control

management of risks & maximum profit.

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Dr. R.L. Godara & Dr. S.L. Gupta, Jan-June (2007) conducted the study

about, “Awareness, Expectation and Acceptances levels of the

Customers with respect to the Use and Effectiveness of the New

Techniques in Banking in India”, Management Journal of Delhi

Productivity Council, Vol. 11, Page No. 38. Result of the study reveals that

the hectic lifestyle of the people where time is a scarce resource is the main

factor which is compelling customers to use new techniques in banking.

Thus in spite of being a relatively new introduction, it is quite surprising to

find from the survey, the kind of popularity that new technology gadgets

have achieved.

Dr. R.K. Uppal, April-Sept (2007) conducted study on “Retail Banking in

India: An emerging Issues and Future Outlook”, Management Trends,

Vol. 4, Page No. 2. The study reveals that to remain competitive in the

financial services landscape banks are required to expand their product

lines, add new delivery channels, develop more effective marketing system

& techniques & enhance service quality levels.

Dr. H.C. Purohit & Avinash D. Parthardikar, March (2007) conducted

study on “Service Quality Measurement and Consumer Perception

about the Services of Banking Institutions”, Indian Journal of Marketing,

Vol. 47, Issue No. 3, Page No. 12. This study reveals that the perception of

the consumers on different nationalized banks may differ due to the

behaviour of the individual employees or officers otherwise all the services

were rated as good by the respondents; except for loaning interest rate and

mortgage facilities.

Aggarwal, A.K., Singh, D. & Chaturvedi, N. (2007-08) analyzed the

performance of the banking sector and considered as a proxy for the

economy as a whole, due to banks wide spectrum of exposures. The paper

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argues that to survive and thrive in the long run, banks need to pursuer

strategies that Enable them to develop resources that are inimitable, rare,

durable and superior to competitors, while consolidation and convergence

are no doubt necessary to survive, they are by no means sufficient. The

most important point is that mergers and acquisitions in the banking sector

must be market led rather than prompted by government or regulator. We

are sure that our banking institutions, as in the post, shall rise to the

occasion and show the required flexibility to absorb and adopt. The

institutional changes to consolidate their position in the world market.

Kamakodi, N. (2007) examines how computerization has influenced the

banking habits and preference of Indian customers and which factors

influence these preferences. Changing of residence, salary account and

non-availability of the technology based services were given as the three

main reasons for changing the bank.

In an attempt to study the service gap, Dash and Kumar (2007) revealed

that customer’s expectations exceeded their perceptions, with regards to

various dimensions of service quality. They further claimed that perception

of either positive or negative service quality was related to the customer’s

future behavioral intentions. Therefore, if a positive quality gap exists, the

customers would tend to comment positively about the service. On the

contrary, a negative quality gap would result in customers complaining,

switching to other service providers, commenting negatively about the

provider or just decreasing the usage of the service. Hence it is

recommended that the banks should continuously monitor the service

quality levels so as to avoid erosion of service quality and migration or

switching by customers to another bank.

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Aswasti (2007) has studied about the service quality, customer satisfaction,

and behavioral intentions in the service sector and establishes that there is

association between the perceived service quality and the extent of

satisfaction derived from services. Service quality has a positive impact on

customer satisfaction; it influences the future purchase behavior and the

loyalty intentions of customers.

Vigg Silky, Mathur Garima and Holani Umesh (2007) in their study

“Customer Satisfaction in Retail Services: A Comparative Study of

Public and Private Sector Banks”, analyzed the major factors that are

contributing towards customer satisfaction in banking services and

compares customer satisfaction of public and private sector banks. The

study reveals that innovative services, network access, behavior of staff,

and brand image are some of the factors responsible for customer

satisfaction and there is no significant difference in the customer

satisfaction in between public sector and private sector banks.

Most of the studies by Vyas & Dhade (2006), Raman & Srinivas (2005),

compared the performance of Public, Private & Foreign Banks by using

measures of profitability, productivity and financial management. They do

poorly on all measures from Private and Foreign banks .Better performance

from Commercial banks is possible only if it incorporates profits as one of

the responsibility.

Lauren Bielski ( 2006) conducted the study on “Talk is cheap -Retail

banking ”, ABA Banking Journal, March, the Banking Industry tends to

have trouble with customers service in four key areas defining desirable

service levels for their brand and culture, measuring those service levels in

a way that provides illuminating information consistently, holding all

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organisation members strictly accountable for results and committing the

necessary resources to make sure that vision leads to follow-through.

TARP (2006) conducted the study on “Key Service Findings in e-Care

Banking”, Journal, March, in a recent survey of consumers using online

banking and other e-commerce sites, the following key findings relevant to

banking service issues emerged only 52% were completely satisfied, up to

38% of banking customers had to pick up the phone or visit branches

concerning their issue, one quarter of all banking e-mailers had to pick up

the phone after all to get it resolved. 30% reported that it took longer than

two days to receive some form of resolution and only a quarter received a

reply within twelve hours and on an up note: 8.8% received some sort of

immediate response either offering an answer, more information or setting

expectations for future reply.

Margaret Kane (2006) conducted the study on “Why Most Cross-Selling

Efforts Flop (Bank Marketing) and Seven Ways to Turn

Disappointment into Success”, ABA Banking Journal, Feb., here are

some tactics that we impact these areas and further your success keep the

message simple, develop clear matrices, tie cross-selling in to the

compensation programs, implement consistent front line sales process,

simplify product lines, package products and bring customers ―onboard

within the first ninety days.

Srivastava, R.M. (2006) concluded that in post nationalization period

witnessed an unprecedented expansion of the banking industry in India.

However accompanied inefficiency and poor financial health to overcome

this problem and improve the efficiency of banks, various tectonic

measures were taken since1991. This has resulted in improvement in

productivity, profitability and strengthening of financial position of the

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banks so much that they are out shining those of advanced notions

.However banks have still to go a long way to sustain their Competitive

success. Indian Commercial Banks also need to enhance their system and

procedure to international standards and also simultaneously fortify their

financial position.

Singla & Arora (2005) studied the comparative performance of Canara

Bank and Indian Bank that both the banks have improved their financial

performance during the study period where Canara Bank has an upper hand

in growth of deposit, advances and average working funds. In case of

productivity it is rising in both the banks but remained much higher in

Canara Bank.

Arora, U. & Verma, R. (2005) studied the performance evolution of

public sector banks in the post reforms period on the basis of four

parameters that are financial parameters, operational parameters,

profitability parameters and productivity parameters and during this period

the performance of public sector banks is quite satisfactory.

Christian Homburg, Nicole Koschate and Wayne D. Hayer (2005)

conducted the study on “Do Satisfied Customers Really Pay More? A

Study Of Relationship Between Customer Satisfaction And Willingness

To Pay”, Journal Of Marketing, Vol. 69, Page No. 2, April, two

experimental studies a lab experiment and a study involving a real usage

experience over time reveal the existence of a strong, positive impact of

customer satisfaction on willingness to pay, and they provide support for a

non linear, functional structure based on disappointment theory (i.e. an

inverse S-shaped form).

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In another study Regasamy & Kumar (2005), the comparative analysis on

the services among three major banking segments revealed that the foreign

banks have topped the list in terms of delivering qualitative customer

service. The study also revealed that the private sector banks compete

successfully with foreign banks and make efforts to provide better banking

services in tune with the changing global competitive scenario.

Aggarwal, M. (2005) highlights the performance of three sectors of banks

(i.e. public, private and foreign) in the pre liberalization period and the

post- liberalization periods in terms of growth rate of their interest income

as a %age working funds, non-interest income as a %age working funds,

operational expenses as a %age operational income, cost of deposits,

spread as a %age working funds, operational productivity etc. The data

were collected for the period of 21 years starting from 1980 to 2001 the

study of paper reveals that the operational productivity of all the sectors is

better in post liberalization period.

Bedi (2005) has studied about the relationship between quality and

customer satisfaction in selected banks in Chandigarh and has empirically

established that the perceived service quality towards customers has a

positive and significant impact on customer satisfaction.

Jitendra Kumar Das ( 2005 ) conducted the study on “Customerisation:

Getting To The Customer”, ICFAI Journal Of Marketing Management,

Vol. IV, Page No. 1, Feb., in this chapter, an approach has been proposed

to customaries a company to better address customer‘s needs and thus to

stay ahead of competitors.

Suresh Garimella (2005) concluded the study on “Trends in Marketing”,

ICFAI Journal Of Marketing Management, Vol. IV, Page No. 2, May, the

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author here attempts to portray some of the trends that may drive the

discipline of marketing in the era to come.

Harish Kumar (2004) conducted the study on “A Comment on Customer

Satisfaction Measurement in Banking Services-Business Perspectives”,

Vol. 6, Page No. 1, Jan-June, The private banks, specially the foreign ones

have been giving the nationalised banks a run for their money. Banks like

ICICI, UTI, HDFC, IDBI And Kotak Mahindra Bank have made

spectacular growth both in terms of volume of business generated and

customer services by launching various innovative banking products which

were hitherto unheard in Indian economy at least. Entry and / or expansion

of such foreign banks as City Bank, American Bank, Standard Chartered

Bank, HSBC Bank Etc. have all along been leading the way both in terms

of innovative approach to tap potential customer base and introduction of

imaginative products and services in the Indian market.

Chandan, Jean Louis and Boris Bartikowski (2004) conducted the study on,

“An Ordinal Satisfaction Scale Allowing to Classify Respondents as

Satisfied, Indifferent or Dissatisfied”, International Journal of Research

and Marketing, Vol. 19, the authors identify semantic descriptions of the

boundaries of the indifference zone pertaining to a satisfaction

measurement scale. They analyzed expressions of dissatisfaction,

indifference and satisfaction and proposed and ordinal measurement scale

of consumer satisfaction.

Hamburg C., Koschate N. (2004) conducted the study on “How Do

Consumers React To Price Increases?”International Journal of Research

and Marketing, Vol. 26(4), and this paper explore the role of perceived

fairness and consumer satisfaction on the repurchase intention after a price

increase. The findings of two experimental studies reveal that perceived

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fairness has a positive impact on the repurchase intention and that

satisfaction moderates this relationship.

Raj Kumar Venkateran And V. Kumar (2004) conducted the study on “A

Customer Life Time Value Frame Work For Customer Selection And

Resource Allocation Strategy”, Journal Of Marketing, Vol. 68, Page No.

4, October, the analysis suggests that there is potential for improved profits

when managers design resource allocation rules that maximise CLV.

Managers can use the authors frame work to allocate marketing resources

efficiently across customers and channels of communication.

Robert Lensink and Niels Hermes (2004) conducted the study on “The

Short Term Effects of Foreign Bank Entry or Domestic Bank

Behaviour; Does Economic Development Matter?”, Journal Of Banking

And Finance, Vol. 28, Issue No. 3, March, this paper investigation shows

that at lower levels of economic development foreign bank entry is

generally associated with higher costs and margins for domestic banks. At

higher levels of economic developments the effects appear to be less clear,

foreign bank entries associated with a fall of costs, profits and margins of

domestic banks or is not associated with changes in these domestic bank

variables.

Ronald T. Rust, Catherine N. Lemon, Valarie A. Zeithaman (2004)

conducted the study On “Return on Marketing: Using Customer Equity

to Focus on Marketing Strategy”, Journal Of Marketing, Vol. 68, Page

No. 1, January, their frame work enables what if evaluation of marketing

ROI, which can include such criteria as return on quality, return on

advertising, return on loyalty program and even return on corporate citizen

ship given a particular shift in customer perceptions.

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Zillur Rehman ( 2005 ) conducted the study on “Service Quality: Gaps

In The Indian Banking Industry” , ICFAI Journal Of Marketing

Management, Vol.-IV, No.-1, Feb., this study deals with the measurement

of service quality of banks in India. It investigates the discrepancy between

customers‘ expectations and perceptions towards the quality of services.

The study was conducted using the SERVQUAL instrument. The results

indicate that the sample population has perceptual problems with their

banking service experiences.

Robert A.W. Kole & BAS Hillebrand (2003) conducted the study on

“What Makes Product Development Market Oriented? Towards A

Conceptual Frame Work”, International Journal of Innovation

Management, Vol. 7, Page No. 2, June, author presents a conceptual frame

work detailing the elements of market oriented product development and

the relationship between these elements.

Toya Kerko, Chizuru Nishio (2003) conducted the study on “Analysis of

Customer Retention Model in Retail Financing Services”, International

Journal of Research and Marketing, Vol.12 (1-2), the Authors develop a

model of the relationship between transaction account and financial

investments based on theories of consumer behaviour towards perceived

service quality, satisfaction and loyalty. They identified three key factors:

product quality, interaction quality and organisation quality, which affect

customer satisfaction and loyalty formation in the Japanese retail financial

market.

B. Janki, (2002), analyzed in his article that how technology is effecting

employee’s productivity. There is no doubt, in India particularly PSBs will

need to use technology to improve operating efficiency and customer

services. Harnessing employee technology synergy is crucial for unleashing

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productivity and reaching out to the huge base of retail customers, who are

also dispersed in rural and semi-urban areas.

Sureshchandar et al., (2002). Service quality and customer satisfaction do

exhibit independence and are indeed different constructs from the

customer’s point of view. A small step in unearthing and understanding the

constructs of service quality and customer satisfaction and their

implications on competitive fruition has been put forward in a study on

banking services.

Kittiwat Uchupalanan (2000) conducted the study on “Competition and

IT Based innovation in banking services”, International Journal of

Innovation Management, Vol. 4, Page No. 4, Special Issue, December, this

article examines the dynamic relationships between competitive strategy

and information technology based products and process innovations in

financial services. The study draws on detailed case studies of five IT based

innovations inter branch online service, automated teller machine service,

credit card service and electronic fund transfer at point of sale service.

Hess, L R (1999) has investigated how satisfaction with a service

employee affects customer’s overall satisfaction with a service

organization, following an employee- initiated service failures. The study

shows that the customer’s past service experience with an organization

directly impact customer’s overall satisfaction with the organization

Bhattacharya, (1997) has found public sector banks with the highest

efficiency among the three categories of bank groups as foreign and private

sector banks have much lower efficiencies. However PSBs started showing

a decline in efficiency after 1987, private banks witnessed no change and

foreign banks disclosed sharp rise in efficiency.

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Spreng & Mackoy (1996), In a study addressing the relationship between

service quality and satisfaction, suggested that perceived service quality

was an antecedent to satisfaction. Although the direction of the quality/

satisfaction relationship (i.e. quality leads to satisfaction) is fairly well

understood for services, the question of whether or not (and how) this

relationship varies depending on particular settings and/or situations is not.

Sameer Goel (1995) conducted the study on “Indian Banking:

Management Responses”, International Journal of Development Banking,

important points made by the author are discussed- some of the main

analytical and numeric tools available to assess bank performance,

comment on the statistical and mathematical theories, need of well-

integrated management information and internal control systems, detailed

look at product development costing and marketing strategies and there is

need for adopting flexible and transparent policies in personal functions.

James L. Walker (1995) conducted the study on “Service Encounter

Satisfaction: Conceptualized”, Journal of Services Marketing, Vol. 9,

Page No. 1, he conducted the study on this model affords one a better

understanding of the process of service satisfaction. By identifying and

separating the peripheral and core dimensions of services, by explicitly

considering the evaluation process over time, by implementing the concept

of active and passive expectations within a service encounter, and by

incorporating a consumers zone of indifference, a more realistic decision

process for consumer evaluations of services comes forth.

Richard A. Spreng, Gilbert D. Harrell, Robert D. Meckoy (1995)

conducted the study on “Service Recovery: Impact on Satisfaction and

Intentions”, Journal Of Service Marketing, Vol. 9, Page No. 1, empirical

evidence, observed across a variety of service industries, indicates that

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customers who have experienced problems with service suppliers are often

dissatisfied with the ways in which the problems are resolved.

Spreng & Mackoy (1995), The Customer Satisfaction paradigm posits that

confirmed standards lead to moderate satisfaction; positively disconfirmed

(exceeded) standards lead to high satisfaction, and negatively disconfirmed

(underachieved) standards lead to dissatisfaction. The subject of continued

(and considerable) debate in the marketing literature, the distinction and

association between service quality and customer satisfaction remains at

the forefront of many academic- and practitioner-oriented research

endeavors.

Garg, M. (1994) studied that Indian scheduled commercial banks have

achieved remarkable progress in last two decades under study, particularly

in branch expansion in rural areas, deposits mobilization and credit

deployment to priority sector and small borrowers but their profits have not

kept pace their growth and hence, their share in profits have come down,

whereas foreign banks with a much smaller geographical spread and

resources base, earn almost as much by way of profits as the 20

Nationalized Banks put together. There is a lot of difference in the pattern

of advances and investments and even lending rates of Indian and foreign

banks.

Penny Lent (1992) conducted the study on “Banks Put Employees in

Customer’s Shoes”, ABA Banking Journal, March, to ensure that

employees roll out a red carpet every time a customer walks in, training

programs works at building empathy with the customer.

Mark Arend (1991) conducted the study on “High-Tech Branches

Streamline Customer Service”, ABA Banking Journal, July, looking for

ways to differentiate their services and lower costs, banks are automating

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the delivery of information at the branches with customer-friendly

technology. It was observed that technology can enhance customer service

through 24-hour banking and the customer is not at a disadvantage.

Daniel Hall (1989) conducted the study on “Turning Quality Service

Talk Into Action ” ,ABA Banking, June, improvement in behaviour to

fulfil its commitment to quality service prior to developing its program,

first security only provided sales training to officers that called on

businesses. Role-playing is an excellent instructional method.

Parasuraman, et al. (1988) developed a 22-item scale, referred to as

SERVQUAL Scale, which is widely used as a generic instrument for

measuring service quality. The basis for identifying the five components

was factor analysis of the 22-item scale developed from focus groups and

from the specific industry applications undertaken by the authors

(Parasuraman, et al., 1985, 1988; and Zeithaml, et al., 1990). Though, the

veracity of conceptualizing the SERVQUAL scale has been questioned by

Carman (1990), the validity of the 22 individual performance scale items

that make up the SERVQUAL scale appears to be well supported both by

the procedures used to develop the items and by their subsequent use as

reported in the literature (Brown and Swartz, 1989; Zeithaml, et al., 1990;

Lewis, 1991; Young, et al., 1994; Berry and Parasuraman, 1997).

K.G.K. Subba Rao (1988) conducted the study on “Indicators of Banking

Development State Wise Analysis”, RBI Occasional papers, Vol. 9, Page

No. 1, March, main findings of study are there has been substantial

reduction in coefficient of variation among the states, in the post-

nationalization period.

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Barry Biederman (1986) conducted the study on, “Is Relationship

Banking Really What You Offer ?”, ABA Banking Journal, August,

banks that are able to pull together all the elements I have talked about will

be well on the road to relationship banking. It‘s questionable that celebrity

spokesman do anything to enhance a bank‘s customer relationships.

Parasuraman, et al. (1985) suggested that the criteria used by consumers

mould their expectations and perceptions of delivered service quality fit

into ten dimensions: tangibility, reliability, responsiveness, communication,

credibility, security, competence, courtesy, understanding/knowing the

customer and access.

Gronroos (1982) had identified two service quality dimensions, viz.,

functional quality and technical quality. Functional quality represents the

perception of the manner in which the services are delivered. Technical

quality or outcome quality on the other hand, represents the outcome of the

service act or what the customer receives in the end (Brady and Cronin,

2001).

Levitt (1981) proposed that customers use appearances to make judgments

about realities. The less tangible a product is the more powerful shall be the

effect of packaging while judging that product.

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II. LITERATURE REVIEW CONCERNING PERFORMANCE

EFFICIENCY OF INDIAN BANKS IN POST LIBERALISATION ERA

There are numerous empirical studies conducted on the issue of

profitability of commercial banks in India as well as abroad. Present

review deals with the empirical studies in Indian context on profitability

of banking sector. Present section deals with some of the notable studies

in this field.

Luther (1976) chaired the committee appointed by Reserve Bank of India

to study the productivity, efficiency and profitability of commercial banks.

The committee analyzed the various issues related to the planning,

budgeting and marketing in commercial banks.

Amandeep (1991) attempted to estimate profit and profitability of Indian

Nationalized banks and to study the impact of priority sector lending, credit

policies, geographical expansion, industrial sickness, competition, deposit

composition, establishment expenses, ancillary income, spread and burden

on bank profitability. For this purpose, trend analysis, ratio analysis and

regression analysis were used. Swamy (2001) studied the comparative

performance of different bank groups since 1995-96 to 1999-2000. An

attempt was made by researcher to identify factors which could have led to

changes in the position of individual banks in terms of their share in the

overall banking industry. He analyzed the share of rural branches , average

branch size, trends in bank’s profitability, share of public sector assets,

share of wages in expenditure, provision and contingencies, net non

performance assets in net advances, spread, has been calculated.

He concluded that in many respects nationalized public sectors banks much

better than private banks, even they are better than foreign banks.

102

Milind Sathya (2005) examined the effect of privatization of banks on

performance and efficiency. The data taken was for five years (1998-2002)

and it was analyzed by using difference of means test. The banking sector

in India includes domestic banks (privately owned, partially privatized

banks, fully PSB’s) as well as foreign banks, and objective of this study is

to study the impact of privatization on the banking firms. It was concluded

that partially privatized banks have performed better as compared to fully

PSB’s in respect of financial performance and efficiency. Partially

privatized banks have continued to show improved performance and

efficiency in the year after privatization

Ved Pal & Malik (2007) in their empirical paper examined the difference

in financial characteristics of public, private and foreign sector banks based

on factors such as profitability, liquidity, risk and efficiency. Sample of 74

Indian commercial banks consisting of 24 public sector, 24 private sector

and 23 foreign banks was taken for the period of 2000- 2005. Multinomial

regression analysis was used and results revealed that foreign banks proved

to be high performer in generating business with a given level of resources

and they are better equipped with managerial practices and in terms of

skills and technology. Foreign banks were more consistent with market

system as reflected in terms of net interest margin. The public banks

emerged as the next best performer after foreign banks. There were giving

a higher return on equity in comparison to foreign and private banks. It was

high performer in economizing their expenses which was reflected from

expense rate and efficiency ratio. The private sector banks emerged with a

better utilization of resources as compared to PSB’s.

103

Most of the studies were concerned of commercial banks as a whole and

were covering very limited number of years. PSB’s maintained its

dominance in the banking system. Keeping into consideration the research

gaps an endeavor is made in the present study to examine the performance

of PSB’s by calculating various ratios and their Compound Annual Growth

Rates (CAGRs) and Coefficient of Variation (CV).














strategies that enable them to develop resources that are inimitable, rare,








104





the performance of public sector banks is quite satisfactory. Bhattacharya,

(1997) has found public sector banks with the highest efficiency among the

three categories of bank groups as foreign and private sector banks have

much lower efficiencies. However PSBs started showing a decline in

efficiency after 1987, private banks witnessed no change and foreign banks

disclosed sharp rise in efficiency.






also dispersed in rural and semi-urban areas. Banks can use technology to

address customer needs and improve their interaction with customer

keeping in touch through telephone and Internet. The focus on technology

will increase like never before to add value to customer service, develop

new products, strengthen risk management, and asset liability management

and improve profitability. However technology is only an enabling tool and

whether banks actually what they want to achieve will be determined by

the drive and motivation of their work force and response of the staff.






105



nationalized banks put together. There is a lot of difference in the pattern of

advances and investments and even lending rates of Indian and foreign

banks.






Narayanasami, T.S. (2005) stated that rural lending is relatively less risky

and more profitable for all classes of commercial banks. Credit plays a

catalytic role at the right time in accelerating economic development.

Economic reforms have brought about irreversible changes in several

sectors of the economy. Indian banking is also in a better position with

respect to technology, capital adequacy and credit management, risk

bearing capacity, international competitiveness and contribution to the

national economy.

Ram, T.T (2002) said that business is being completely reinvented because

transaction costs are much lower on the Internet than in traditional

channels. The banks are rapidly shifting their business functions &

customers relationships on to the Web.

Satyamurty (1994) clarified the concepts of profits, profitability &

productivity applicable to the banking industry organized by the bank

managements that the pressure on the profitability is more due to the

factors beyond their control.

106








lowest.


witnessed an unprecedented expansion of banking industry in India.



measures were taken since 1991. This has resulted in improvement in


banks so much that they are outshining those of advanced notions

.However banks have still o go a long way to sustain their Competitive



financial position.

Singh, I. & Kumar, P. (2006) analyzed that deposits is a major

determinant of spread followed by borrowings and labour. The study again

concluded that average technical and allocative efficiency are the highest in

foreign banks while of PSBs is although lower than FBs but much better

than private sector banks.




107



Canara Bank.

T. Padamasai (2000) studied that productivity and profitability of five big

banks increased throughout the post-reforms period in terms of selected

ratios of each parameter, but on account of efficiency, the performance of

the top five banks is very dismissal as inefficiency has increased during the

study period. He suggested that if the government sells its share in the

profit making banks, it would be able to bail out the weak banks.

108

RESEARCH GAP

The banking sectors open the door for many players with the forces of

globalisation and technology revolution in 21st Century. So, it has become

compulsory for all category banks to make hard marketing efforts to tap the

opportunity prevailing in the market and to survive in the time of cut throat

competition through attract, retain and satisfy their customers. From the

review of literature, the researcher concludes that very few studies have

been conducted about the comparative performance in the post-

liberalization era. The present study is devoted to find out the performance

shifting in 2010-13.

Above listed all review literature gives insight for related market and

customer research with various findings. The gap has been found in some

of the areas. Comparison of effective marketing efforts of Indian banks and

Foreign banks through analysing customer awareness and related

knowledge is still not came in focus of any researcher.

81

LITERATURE REVIEW

I. RELEVANCE OF CUSTOMER SATISFACTION IN INDIAN

BANKING INDUSTRY

In the view that Customer Satisfaction is indispensible in the banking

organizations, many government and non-government agencies as well

as academicians and practitioners undertook various studies.

Uppal R K and Poonam Rani (2012), in their study titled “Customer

Perception towards Better Banking Services in India - An Empirical

Study”, analyzed customer perception about CRM, reliability, accuracy,

security and transparency among the customers of public sector banks,

Indian private sector banks and foreign banks in Amritsar, Punjab. They

have found that most of the customers are satisfied with the different

banking services and that customer satisfaction can be improved by

ensuring more speed in rendering transactions and giving prompt services.

Ananth & Dr. A. Arulraj, February, (2011) conducted study on “Banking

Services Quality in Nagapattinam District, Tamil Nadu”, Indian Journal

of Marketing, Vol. 41, Issue No. 2, Page No. 3. This study reveals that at

every level of dealing with the customers, the bank management needs to

educate employees for banking activities and processes.

Pandit C Bilamge (2011) in his study “A Comparative Study of

Customer Perception towards Services rendered by Public Sector

Banks and Private Sector Banks” studied the issues relating to customer

services in the ICICI Bank and SBI. The study reveals that the ICICI Bank

is far ahead of the SBI in providing quality services to their customers.

82

Puja Khatri and Yukti Ahuja (2010) through their research work, “A

Comparative Study of Customer Satisfaction in Indian Public Sector

and Private Sector Banks”, compares the public sector banks and private

sector banks in terms of customer satisfaction. The study showed that

private banks seem to have satisfied their customers better than public

sector banks by providing better facilities.

Anubhav Anand (2010), had worked out on “Factors affecting Customer

Satisfaction and their relative importance in Retail Banking”. His

Study focused on factors that are responsible for satisfaction of customer

and also enables assessment of influencing power of these factors. A major

contribution of the study has been provision of an approach for the

management of banks to identify the factors of customer satisfaction.

A, Kumaresan & I. Chitrakala & K. Gowtham, April (2010) conducted

study on “Credit Card Holders Expectations and Preferences Towards

Selected Banks in Coimbatore City, Tamil Nadu”, Indian Journal of

Marketing, Vol. 40, Issue No. 4, Page No. 40. This study reveals that

effective measures should be taken to make the consumers more aware

about the pros and cons of the credit cards among the users.

Ashok Kumar M. & Rajesh R., September (2009) conducted study on

“Whether Today‘s Customers are Satisfied? -A study with Banks”,

Indian Journal of Marketing, Vol. 39, Issue No. 9, Page No. 56. This study

reveals that both Public and Private sector banks lack one or the other

aspects so that there is no significant difference between overall

satisfactions of the banks.

83

Mittal Anurag (2009) in his study, “Relationship Marketing

Effectiveness in Indian Banking”, compares the relationship market

orientation and customer satisfaction in the Retail Banking activities of

selected 5 public sector banks and 5 private sector banks in the State of

Delhi. Customers of both the group of banks were of the opinion that there

is wider difference in the application of customer relationship marketing in

the banks under study. The relationship marketing approach is not

effectively administered in public sector banks and so, customer

satisfaction level is low.

Nikhil Chandra Shil & Bhagban Das, August (2008) conducted study on

“Customer Satisfaction with regard to Banking: An Application of

QFD”, Management Research, Vol.7, No.8. The study reveals that

Customers nowadays are very choosy about the way they spend their

money. Quality is the first and foremost preference. Therefore, it is of

utmost importance for every organization to understand, respect, and

satisfy their customer‘s needs and feelings continuously.

Reserve Bank of India (2008) Department of Statistics and Information

Management, Chennai Regional Office, Local Board (Southern Region)

conducted a study to evaluate the satisfaction level of customers on various

services rendered by banks covering 2800 customers from 1496 bank

branches selected, using systematic sampling method. The study evaluates

the staff attitude to customers, infrastructural facilities, complaint handling

and redressal mechanism, interest rates and fees, loans and credit card

facilities. It was proved that, for complaint handling and redressal

mechanism, quick and fast services and loan facilities, the private sector

banks are better than the public sector banks. A majority of the respondents

are highly dissatisfied with the infrastructure facilities, interest rates for

84

credit cards, service charges and fee levied by banks, especially private

sector banks.

Dhade & Mittal (2008), had worked out on the preferences ,satisfaction

level and chances of shifting of customer of public sector and new private

sector banks .This study focused on the primary opinion of customers of

these banks. There are a number of studies that refer to the importance of

clients/ customers' perceptions of quality (Takeuchi and Quelch, 1983).

These result from comparisons by expectations of service with actual

performance (Gronroos, 1982 and Berry, et al, 1985). Berry (1980) along

with Booms and Bitner (1981) argued that due to intangible nature of

services, customers use elements associated with the physical environment

when evaluating service quality. Managing the evidence and using the

environmental psychology are often seen as important marketing tools.

Mittal (2008) has studied the effect of IT- based services and customer

satisfaction in banking industry and has found that the IT-enabled services

delivered by banks have a positive impact on customer satisfaction.

Educated and young customers are much more satisfied with technology-

based services than others. Speed in the service delivery due to technology

adoption is the most important factor influencing customer satisfaction.








lowest.

85

Identification of customer segment is also vital for service development

and delivery in banks. For example, Jham and Khan (2008) implied that

Indian banks should take care of the needs of customers when introducing

various services to them. Their study revealed that customers of banks such

as ICICI, IDBI, HDFC, PNB and SBI were either in service or self

employed. Many customers of SBI and PNB were found to be retired from

their respective profession. Thus they recommended that banks should

envisage a strategy to serve customers with different occupations &

educational backgrounds. Banks must also advance their customer-centric

strategies by providing satisfaction through services leading to better

relationship building and earning profits for the banks.

Rajani Sofat & Preeti Hiro, September (2007) conducted a comparative

study on “Creativity and Innovations in Retail Banking- A comparative

Analysis of financial product offered by ICICI & HDFC Bank”, Indian

Journal of Marketing, Issue No. 9, Page No. 24. Results suggests that now

challenge for banking sector in the current scenario is to design and

innovate the financial product which are convenient to use & continuously

meet financial goals of the customers.

Dr. K.S.Jaiswal & Nitu Singh, January (2007) conducted a study on

“Retail Banking: Indian Scenario”, Indian Journal of Marketing, Issue

No.1, Page No. 32. Results suggest that changing face of Indian consumers

in term of number of households & their income class, building an affluent

middle class are factors of opportunity & retention of customers, indebtness

& information technology are challenges for retail banking in India.

Prof. Rajeshri Nathwani, (2007) conducted the study on “Customer

Preference & Managerial Effectiveness of Nationalized & Private

Sector Banks”, Indian Journal of Marketing. Results suggest that

86

customers of nationalized banks are either neutral or satisfied with the

specified parameters concerned with their operations while the customers

of private banks more satisfied with their banks. Banking can be yet more

enjoyable & effective based on total quality management, bench marking.

Prof. A.S. Mohanrani & Dr. C. Mahavi, Feb (2007) conducted an

empirical study on, Product related characteristics, Promotion and

Marketing Mix are key tools in determining Purchase Behaviour and

Purchase Decision by Teenagers, Indian Journal of Marketing, Issue No. 2,

Page No. 3. Results suggest that teenagers are influenced by updated

information of the product and hence they go for information search,

collect information from different dealers on various aspects like price,

technology etc. They are also influenced by peer compulsion of sales talk

of the dealers. Teenager‘s employees two strategies-Emotionally

convincing & logically convincing to convincer their parents. Logical

teenagers give importance to sales promotion factors like offers & schemes,

while emotional teenagers gives importance to aesthetic appearance, color,

brand value, popularity & social image on selecting the products.

Dr. Sumathy Venkatesan & Dr. K. Prabhakar, Raj Kumar, March (2007)

conducted study on “Retail Banking Scene in India- A Holistic

Approach-Management Trends”, Journal of department of Business

Management, Issue No. 1, Vol. 4, Page No. 58. Results suggest that the

society is made up of individuals and the environment surrounding him. As

development take place in the society, the needs of people grow faster than

ever. The various structural changes taking place in the society could get a

catalytic favour in case proper financial product of service is made

available to all the individuals. In this changes scenario, retail segment is

considered more relevant if one looks from the angles of control

management of risks & maximum profit.

87

Dr. R.L. Godara & Dr. S.L. Gupta, Jan-June (2007) conducted the study

about, “Awareness, Expectation and Acceptances levels of the

Customers with respect to the Use and Effectiveness of the New

Techniques in Banking in India”, Management Journal of Delhi

Productivity Council, Vol. 11, Page No. 38. Result of the study reveals that

the hectic lifestyle of the people where time is a scarce resource is the main

factor which is compelling customers to use new techniques in banking.

Thus in spite of being a relatively new introduction, it is quite surprising to

find from the survey, the kind of popularity that new technology gadgets

have achieved.

Dr. R.K. Uppal, April-Sept (2007) conducted study on “Retail Banking in

India: An emerging Issues and Future Outlook”, Management Trends,

Vol. 4, Page No. 2. The study reveals that to remain competitive in the

financial services landscape banks are required to expand their product

lines, add new delivery channels, develop more effective marketing system

& techniques & enhance service quality levels.

Dr. H.C. Purohit & Avinash D. Parthardikar, March (2007) conducted

study on “Service Quality Measurement and Consumer Perception

about the Services of Banking Institutions”, Indian Journal of Marketing,

Vol. 47, Issue No. 3, Page No. 12. This study reveals that the perception of

the consumers on different nationalized banks may differ due to the

behaviour of the individual employees or officers otherwise all the services

were rated as good by the respondents; except for loaning interest rate and

mortgage facilities.




88


strategies that Enable them to develop resources that are inimitable, rare,













In an attempt to study the service gap, Dash and Kumar (2007) revealed

that customer’s expectations exceeded their perceptions, with regards to

various dimensions of service quality. They further claimed that perception

of either positive or negative service quality was related to the customer’s

future behavioral intentions. Therefore, if a positive quality gap exists, the

customers would tend to comment positively about the service. On the

contrary, a negative quality gap would result in customers complaining,

switching to other service providers, commenting negatively about the

provider or just decreasing the usage of the service. Hence it is

recommended that the banks should continuously monitor the service

quality levels so as to avoid erosion of service quality and migration or

switching by customers to another bank.

89

Aswasti (2007) has studied about the service quality, customer satisfaction,

and behavioral intentions in the service sector and establishes that there is

association between the perceived service quality and the extent of

satisfaction derived from services. Service quality has a positive impact on

customer satisfaction; it influences the future purchase behavior and the

loyalty intentions of customers.

Vigg Silky, Mathur Garima and Holani Umesh (2007) in their study

“Customer Satisfaction in Retail Services: A Comparative Study of

Public and Private Sector Banks”, analyzed the major factors that are

contributing towards customer satisfaction in banking services and

compares customer satisfaction of public and private sector banks. The

study reveals that innovative services, network access, behavior of staff,

and brand image are some of the factors responsible for customer

satisfaction and there is no significant difference in the customer

satisfaction in between public sector and private sector banks.

Most of the studies by Vyas & Dhade (2006), Raman & Srinivas (2005),

compared the performance of Public, Private & Foreign Banks by using

measures of profitability, productivity and financial management. They do

poorly on all measures from Private and Foreign banks .Better performance

from Commercial banks is possible only if it incorporates profits as one of

the responsibility.

Lauren Bielski ( 2006) conducted the study on “Talk is cheap -Retail

banking ”, ABA Banking Journal, March, the Banking Industry tends to

have trouble with customers service in four key areas defining desirable

service levels for their brand and culture, measuring those service levels in

a way that provides illuminating information consistently, holding all

90

organisation members strictly accountable for results and committing the

necessary resources to make sure that vision leads to follow-through.

TARP (2006) conducted the study on “Key Service Findings in e-Care

Banking”, Journal, March, in a recent survey of consumers using online

banking and other e-commerce sites, the following key findings relevant to

banking service issues emerged only 52% were completely satisfied, up to

38% of banking customers had to pick up the phone or visit branches

concerning their issue, one quarter of all banking e-mailers had to pick up

the phone after all to get it resolved. 30% reported that it took longer than

two days to receive some form of resolution and only a quarter received a

reply within twelve hours and on an up note: 8.8% received some sort of

immediate response either offering an answer, more information or setting

expectations for future reply.

Margaret Kane (2006) conducted the study on “Why Most Cross-Selling

Efforts Flop (Bank Marketing) and Seven Ways to Turn

Disappointment into Success”, ABA Banking Journal, Feb., here are

some tactics that we impact these areas and further your success keep the

message simple, develop clear matrices, tie cross-selling in to the

compensation programs, implement consistent front line sales process,

simplify product lines, package products and bring customers ―onboard

within the first ninety days.


witnessed an unprecedented expansion of the banking industry in India.



measures were taken since1991. This has resulted in improvement in


91

banks so much that they are out shining those of advanced notions

.However banks have still to go a long way to sustain their Competitive



financial position.






Canara Bank.





the performance of public sector banks is quite satisfactory.

Christian Homburg, Nicole Koschate and Wayne D. Hayer (2005)

conducted the study on “Do Satisfied Customers Really Pay More? A

Study Of Relationship Between Customer Satisfaction And Willingness

To Pay”, Journal Of Marketing, Vol. 69, Page No. 2, April, two

experimental studies a lab experiment and a study involving a real usage

experience over time reveal the existence of a strong, positive impact of

customer satisfaction on willingness to pay, and they provide support for a

non linear, functional structure based on disappointment theory (i.e. an

inverse S-shaped form).

92

In another study Regasamy & Kumar (2005), the comparative analysis on

the services among three major banking segments revealed that the foreign

banks have topped the list in terms of delivering qualitative customer

service. The study also revealed that the private sector banks compete

successfully with foreign banks and make efforts to provide better banking

services in tune with the changing global competitive scenario.










Bedi (2005) has studied about the relationship between quality and

customer satisfaction in selected banks in Chandigarh and has empirically

established that the perceived service quality towards customers has a

positive and significant impact on customer satisfaction.

Jitendra Kumar Das ( 2005 ) conducted the study on “Customerisation:

Getting To The Customer”, ICFAI Journal Of Marketing Management,

Vol. IV, Page No. 1, Feb., in this chapter, an approach has been proposed

to customaries a company to better address customer‘s needs and thus to

stay ahead of competitors.

Suresh Garimella (2005) concluded the study on “Trends in Marketing”,

ICFAI Journal Of Marketing Management, Vol. IV, Page No. 2, May, the

93

author here attempts to portray some of the trends that may drive the

discipline of marketing in the era to come.

Harish Kumar (2004) conducted the study on “A Comment on Customer

Satisfaction Measurement in Banking Services-Business Perspectives”,

Vol. 6, Page No. 1, Jan-June, The private banks, specially the foreign ones

have been giving the nationalised banks a run for their money. Banks like

ICICI, UTI, HDFC, IDBI And Kotak Mahindra Bank have made

spectacular growth both in terms of volume of business generated and

customer services by launching various innovative banking products which

were hitherto unheard in Indian economy at least. Entry and / or expansion

of such foreign banks as City Bank, American Bank, Standard Chartered

Bank, HSBC Bank Etc. have all along been leading the way both in terms

of innovative approach to tap potential customer base and introduction of

imaginative products and services in the Indian market.

Chandan, Jean Louis and Boris Bartikowski (2004) conducted the study on,

“An Ordinal Satisfaction Scale Allowing to Classify Respondents as

Satisfied, Indifferent or Dissatisfied”, International Journal of Research

and Marketing, Vol. 19, the authors identify semantic descriptions of the

boundaries of the indifference zone pertaining to a satisfaction

measurement scale. They analyzed expressions of dissatisfaction,

indifference and satisfaction and proposed and ordinal measurement scale

of consumer satisfaction.

Hamburg C., Koschate N. (2004) conducted the study on “How Do

Consumers React To Price Increases?”International Journal of Research

and Marketing, Vol. 26(4), and this paper explore the role of perceived

fairness and consumer satisfaction on the repurchase intention after a price

increase. The findings of two experimental studies reveal that perceived

94

fairness has a positive impact on the repurchase intention and that

satisfaction moderates this relationship.

Raj Kumar Venkateran And V. Kumar (2004) conducted the study on “A

Customer Life Time Value Frame Work For Customer Selection And

Resource Allocation Strategy”, Journal Of Marketing, Vol. 68, Page No.

4, October, the analysis suggests that there is potential for improved profits

when managers design resource allocation rules that maximise CLV.

Managers can use the authors frame work to allocate marketing resources

efficiently across customers and channels of communication.

Robert Lensink and Niels Hermes (2004) conducted the study on “The

Short Term Effects of Foreign Bank Entry or Domestic Bank

Behaviour; Does Economic Development Matter?”, Journal Of Banking

And Finance, Vol. 28, Issue No. 3, March, this paper investigation shows

that at lower levels of economic development foreign bank entry is

generally associated with higher costs and margins for domestic banks. At

higher levels of economic developments the effects appear to be less clear,

foreign bank entries associated with a fall of costs, profits and margins of

domestic banks or is not associated with changes in these domestic bank

variables.

Ronald T. Rust, Catherine N. Lemon, Valarie A. Zeithaman (2004)

conducted the study On “Return on Marketing: Using Customer Equity

to Focus on Marketing Strategy”, Journal Of Marketing, Vol. 68, Page

No. 1, January, their frame work enables what if evaluation of marketing

ROI, which can include such criteria as return on quality, return on

advertising, return on loyalty program and even return on corporate citizen

ship given a particular shift in customer perceptions.

95

Zillur Rehman ( 2005 ) conducted the study on “Service Quality: Gaps

In The Indian Banking Industry” , ICFAI Journal Of Marketing

Management, Vol.-IV, No.-1, Feb., this study deals with the measurement

of service quality of banks in India. It investigates the discrepancy between

customers‘ expectations and perceptions towards the quality of services.

The study was conducted using the SERVQUAL instrument. The results

indicate that the sample population has perceptual problems with their

banking service experiences.

Robert A.W. Kole & BAS Hillebrand (2003) conducted the study on

“What Makes Product Development Market Oriented? Towards A

Conceptual Frame Work”, International Journal of Innovation

Management, Vol. 7, Page No. 2, June, author presents a conceptual frame

work detailing the elements of market oriented product development and

the relationship between these elements.

Toya Kerko, Chizuru Nishio (2003) conducted the study on “Analysis of

Customer Retention Model in Retail Financing Services”, International

Journal of Research and Marketing, Vol.12 (1-2), the Authors develop a

model of the relationship between transaction account and financial

investments based on theories of consumer behaviour towards perceived

service quality, satisfaction and loyalty. They identified three key factors:

product quality, interaction quality and organisation quality, which affect

customer satisfaction and loyalty formation in the Japanese retail financial

market.





96


also dispersed in rural and semi-urban areas.

Sureshchandar et al., (2002). Service quality and customer satisfaction do

exhibit independence and are indeed different constructs from the

customer’s point of view. A small step in unearthing and understanding the

constructs of service quality and customer satisfaction and their

implications on competitive fruition has been put forward in a study on

banking services.

Kittiwat Uchupalanan (2000) conducted the study on “Competition and

IT Based innovation in banking services”, International Journal of

Innovation Management, Vol. 4, Page No. 4, Special Issue, December, this

article examines the dynamic relationships between competitive strategy

and information technology based products and process innovations in

financial services. The study draws on detailed case studies of five IT based

innovations inter branch online service, automated teller machine service,

credit card service and electronic fund transfer at point of sale service.

Hess, L R (1999) has investigated how satisfaction with a service

employee affects customer’s overall satisfaction with a service

organization, following an employee- initiated service failures. The study

shows that the customer’s past service experience with an organization

directly impact customer’s overall satisfaction with the organization

Bhattacharya, (1997) has found public sector banks with the highest

efficiency among the three categories of bank groups as foreign and private

sector banks have much lower efficiencies. However PSBs started showing

a decline in efficiency after 1987, private banks witnessed no change and

foreign banks disclosed sharp rise in efficiency.

97

Spreng & Mackoy (1996), In a study addressing the relationship between

service quality and satisfaction, suggested that perceived service quality

was an antecedent to satisfaction. Although the direction of the quality/

satisfaction relationship (i.e. quality leads to satisfaction) is fairly well

understood for services, the question of whether or not (and how) this

relationship varies depending on particular settings and/or situations is not.

Sameer Goel (1995) conducted the study on “Indian Banking:

Management Responses”, International Journal of Development Banking,

important points made by the author are discussed- some of the main

analytical and numeric tools available to assess bank performance,

comment on the statistical and mathematical theories, need of well-

integrated management information and internal control systems, detailed

look at product development costing and marketing strategies and there is

need for adopting flexible and transparent policies in personal functions.

James L. Walker (1995) conducted the study on “Service Encounter

Satisfaction: Conceptualized”, Journal of Services Marketing, Vol. 9,

Page No. 1, he conducted the study on this model affords one a better

understanding of the process of service satisfaction. By identifying and

separating the peripheral and core dimensions of services, by explicitly

considering the evaluation process over time, by implementing the concept

of active and passive expectations within a service encounter, and by

incorporating a consumers zone of indifference, a more realistic decision

process for consumer evaluations of services comes forth.

Richard A. Spreng, Gilbert D. Harrell, Robert D. Meckoy (1995)

conducted the study on “Service Recovery: Impact on Satisfaction and

Intentions”, Journal Of Service Marketing, Vol. 9, Page No. 1, empirical

evidence, observed across a variety of service industries, indicates that

98

customers who have experienced problems with service suppliers are often

dissatisfied with the ways in which the problems are resolved.

Spreng & Mackoy (1995), The Customer Satisfaction paradigm posits that

confirmed standards lead to moderate satisfaction; positively disconfirmed

(exceeded) standards lead to high satisfaction, and negatively disconfirmed

(underachieved) standards lead to dissatisfaction. The subject of continued

(and considerable) debate in the marketing literature, the distinction and

association between service quality and customer satisfaction remains at

the forefront of many academic- and practitioner-oriented research

endeavors.








Nationalized Banks put together. There is a lot of difference in the pattern

of advances and investments and even lending rates of Indian and foreign

banks.

Penny Lent (1992) conducted the study on “Banks Put Employees in

Customer’s Shoes”, ABA Banking Journal, March, to ensure that

employees roll out a red carpet every time a customer walks in, training

programs works at building empathy with the customer.

Mark Arend (1991) conducted the study on “High-Tech Branches

Streamline Customer Service”, ABA Banking Journal, July, looking for

ways to differentiate their services and lower costs, banks are automating