EJSS_29_1_02

European Journal of Social Sciences ISSN 1450-2267 Vol.29 No.1 (2012), pp. 12-25 © EuroJournals Publishing, Inc. 2012 http://www.europeanjournalofsocialsciences.com

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A Study on Customer Satisfaction towards Quality of

Service of an Indian Private Sector Bank using Factor Analysis

R. Amudha Senior Assistant Professor, School of Management, Sastra University

Thirumalaisamudrum, Thanjavur, Tamil Nadu, India E-mail: [email protected]

S. T. Surulivel

Senior Assistant Professor, School of Management, Sastra University Thirumalaisamudrum, Thanjavur, Tamil Nadu, India

E-mail: [email protected]

C. Vijaya Banu Associate Professor, School of Management, Sastra University

Thirumalaisamudrum, Thanjavur, Tamil Nadu, India E-mail: [email protected]

Abstract The personnel in the services sector have to prove that their services are customer-focused and that continuous process improvement is being delivered. Earlier, due to the lack of personal touch, the service quality had not been appreciated by the customers. The bank faces challenges to meet the needs of the customers regularly through its unique delivery channels. Manual service for personal interaction between employees and customers is considered important for every service organisation. Competitive advantage is exhibited through “effectiveness of services ensured” by the banking organisation. Customer satisfaction is taken as a yardstick for measuring the quality of service and providing excellent customer service decides the effectiveness of service delivery process. To study the customer satisfaction towards quality of service, primary data has been collected from 473 customers of ICICI Bank by applying stratified random sampling method. The analysis has been made using factor analysis and the result showed that the customers accept that the bank’s standard is nearing the industry standard. They opined that their loyalty towards the bank has increased and the bank also deserves it because of its level of commitment towards customers. Keywords: Quality of service, satisfaction, loyalty and trustworthiness.

1. Introduction The characteristics of services play a predominant role in determining the degree of service quality, which in turn makes the measurement of service quality difficult. Without prejudice, a service provider and a customer find it difficult to evaluate the service because of its intangibility. The services are considered to be intangible, as the customers perceive them instead of touching and seeing. It is very difficult for a service provider to arrange his service delivery systems to match the customer demand

European Journal of Social Sciences – Volume 29, Number 1 (2012)

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with the supply of services. This is so because the services are perishable in nature and the services cannot be made ready in advance and stored as that of materialistic items. The perishability of service also means that a service cannot be exactly repeated and it may result in dissatisfaction of the customers if their expectations are not met. The inseparability of services and service provider determine the role of people in service delivery systems. The heterogeneous nature of service means that every service is considered as unique and at all times it differs from other services. Attaining sustainable competitive advantage is practically difficult because the services cannot be easily copied and patented.

Services are often produced and consumed simultaneously, indicating that the customer is intimately involved in the process of producing and delivering a service. The involvement of customers in the service delivery process decides the nature of the service delivery process and its effectiveness. In general, the customer’s judgment of service quality can be regarded as an appraisal of the service delivery process and the service outcome, by comparing the expectations of the customers and desired benefits. This paves the way to assess quality from a services marketing point of view namely, perceived service quality. 2. Objectives of the Study To study about the satisfaction of the customers of ICICI Bank Ltd., (Industrial Credit and Investment Corporation of India) towards quality of service, ANOVA, Weighted ANOVA and factor analysis were used. 3. Scope of the Study In Forbes Global 2000 ranking the companies for the year 2008, out of top ten leading companies, ICICI Bank (world rank 374) is the first private sector banking company in the Indian banking sector. It stands second to the State Bank of India (world rank 219) in both private and public banking sectors.

The bank has a total revenue of US Dollars 5.79 billion and total assets of Rs.3, 997.95 billion (US$ 100 billion) as on 31st March 2008. On the same day it has over 33,000 employees throughout India. The bank also has a network of 1,700+ branches (as on 31 March 2010) and about 4,721 ATMs in India and presence in 19 countries, as well as some 24 million customers (at the end of July 2007). The success of the bank over the period is based on the service quality which has resulted in customer satisfaction and loyalty towards the bank. This formed the basis for the selection of this bank for measuring the customer satisfaction. Though there are e-banking facilities available, there exists a need for personal touch for the issue of debit cards, pin number for debit cards, pay orders, cheques, demand drafts and the like. This calls for the personal interaction between the bank and the customers. 4. Sampling Design Stratified random sampling method is adopted for the collection of the data from the customers of ICICI Bank. ICICI Bank operations are divided into four divisional offices in India, specifically, North, South, West and East. The South Division comprises four states Karnataka, Andhra Pradesh, Kerala, and Tamilnadu are called zonal offices. In Tamilnadu zonal office, the regional offices are carried on in metropolitan cities namely, Chennai, Coimbatore, Tiruchirappalli and Madurai. Under the regional offices, they have area operations and branch in charges depending on the volume of operations and productivity. Under the Tiruchirappalli region, half of the total branches have been selected within 100 kilometer radius and thirty questionnaires are distributed per branch and 20 branches are detailed in the following table.


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Table 1: Area of sampling

Place of branch No. of branches No. of branches selected Tiruchy 6 4 Pudukkottai 26 7 Karur 2 1 Ariyalur 1 1 Perambalur 2 1 Dindugal 5 3 Thanjavur 3 2 Kumbakonam 1 1 Total 46 20

Source: Calculated based on survey data

Primary data is collected by personally administering questionnaires to the branches of ICICI Bank as mentioned in the table: 1. Out of 600 (20 branches X 30 questionnaires), 127 are found incomplete and 473 are fully complete with 78.8% of response rate. The analysis is based on the opinion collected from 473 customers of ICICI Bank.

The sum of squares of variations within sample and sum of squares of variations among sample could not be easily calculated manually because of the large size of the data collected. For this purpose, statistical inferential techniques are used with the help of the software NCSS package. Thus ANOVA for the data was performed to study the significant variation between and among the variables involved. Weighted ANOVA was performed to rank the variables according to their order of importance as perceived by the customers.

The personnel in the services sector have to prove that their services are customer-focused and that continuous process improvement is being delivered. As the quality of service also determine the degree of loyalty, the preference of the bank by customers and their expectations towards the bank while comparing with the banks are also studied in this chapter with the help of ANOVA single factor and weighted ANOVA. 5. Literature Cited Thomas, Dan R. E.,(1978) says that service differentiation is necessary for the growth and development of service businesses. Chase, Richard B ,(1981) holds that the potential efficiency of a service system is a function of the degree of customer contact entailed in the creation of the service product. Roest, Henk C. A., (1998) explored the assessment of service quality expectations and opportunities to manage them in purchase decision making. Dellande, Stephanie Joy, (1999) stated that services in which the customer participated to create while within the service organization and must comply with his/her role once outside of the service organization to ensure positive outcomes and customer satisfaction, have been labeled as compliance dependent services (CDS) Such services typically entail a service delivery process that was of longer duration, requiring long-term interactions with service providers and often requiring lifestyle changes.

Oliva Pue, Rogelio,(1996) stated that service quality could not be measured and tested in as straightforward a manner as quality could be measured and tested in manufacturing. The difficulty in developing quality metrics had biased service businesses to focus on controlling measurable variables--typically, expenses and work flows--while under-investing in the more intangible factors of service capacity and service quality. In the long-term, this strategy could result in mediocre levels of service quality, poor customer satisfaction, low customer loyalty, and high turnover of service personnel. Ultimately, this result could change the cost structure of service delivery by shifting the major cost component from operating expenses to costs of poor quality. The new cost structure caused poor financial performance that lead management to tighten the control of expenses and work flows, creating a vicious cycle of eroding service quality.


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Barbara R. Lewis, (1993) stated that bank and other financial services providers were increasingly developing service quality initiatives. He also stressed the development of service quality measurement tools and the need for an integrated approach to service quality relating to changing customer expectations. Pita Castelo, Jose, (2000) said that customer loyalty, customer satisfaction/dissatisfaction (CS/D) and Service Quality (SQ) were some of the most substantial concepts in marketing. Financial services, and especially retail banking, have unique characteristics which make them operationally different from manufacturing business or other services. The main objective of this research is an empirical test, for the first time, of the relationship between CS/D and SQ, and the impact of a new variable (usage rate) on customer loyalty in the context of retail banking.

Zeithaml, Valarie A, Berry, Leonard L and Parasuraman, A, (1996) offered a conceptual model of the impact of service quality on particular behaviours that signal whether customers remain with or defect from a company. Results from a multicompany empirical study examining relationships from the model concerning customers' behavioural intentions show strong evidence of their being influenced by service quality. Roth Aleda V., vander Velde, Marjolijn ,(1991) said that the competitive priorities of retail banks was empirically linked with operations strategy contents of structure, infrastructure, and integration choices. The pattern of operations choices varied competitive priority.

Parasuraman,A (2002) proposed a framework for understanding the inter-linkages among service quality and the various components of the company-customer perspective of productivity. Valarie A Zeithaml, A Parasuraman and Arvind Malhotra, (2002) stated that to deliver superior service quality, managers of companies with Web presences must first understand how customers perceive and evaluate online customer service.

William E Jackson III, Purushottaman Nandakumar and Aleda V Roth ,(2003) suggested that the optional level of a bank's service quality depends critically on the competitive structure of the market in which the bank operates, the degree of demand interaction between banks, and the ease of imitation of competitors' service quality innovations.

Vimi and Mohd (2008) undertook a study of the determinants of performance in the Indian retail banking industry based on perception of customer satisfaction. The finding of the study reinforces that customer satisfaction is linked with performance of the banks. The customer satisfaction is studied with the variable intermediaries’ behaviour, quality of service, waiting line strategy, handling of customer complaints and service encounters.

Bargal and Sharma (2008) analysed the role of service marketing in banking sector. The identified the important service factors in the banking sector are diversified services, flexible business transaction hours, accessibility of banking location, installation of web system, profession training to then employees, customers’ complaint system and performance based appraisal system to enrich their services to their customers.

Chiung-Ju Liang, Wen-Hung Wang, (2006) aims to test the relationship between perceived service quality satisfaction and relationship intentions, or, in other words, whether or not consumers will consider building long-term relationships with service providers on the basis of a single instance of perceived service quality. They suggest that financial products with different product attributes need different kinds and levels of service and relationship investment and also suggest that there does exists a positive relationship between service quality satisfaction and perceived relationship investment. The results of the survey analysis showed that only one driver--the financial driver--is significant to the advisors in keeping their clients satisfied. 6. Customer Service Delivery Process Perceived service quality is the judgment of the customers of their overall experience of the service environment of an organization. The success in delivering quality service lays an understanding about how customers arrive at this judgment. When an organization fails to study and understand the process of customer’s judgment, it will loose a customer. Exactly, the competitive companies will target the


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lost customer. This will threaten the competitive position of the company in the market. Customer Service Process (ADAT) must be followed by the service organizations through the golden rules of service process namely, Acknowledging (Greeting the Customer), Determining (Analyzing needs and wants), Accommodating (Satisfy request quickly and efficiently) and Thanking (Appreciating the customer, confirm satisfaction). 7. Customer Expectations towards Services Adequate service can be defined as the lowest level of service the customers will expect without being discontented. Sources of satisfactory service expectations are transitory service intensifiers, perceived service alternatives, self-perceived service role and situational factors. Transitory service intensifiers consist of short-term individual factors which make a customer conscious of the need for service. Perceived service alternatives are additional service providers from whom the customers can get service. The customer’s self-perceived service role is defined as customer perceptions of the degree to which customers exert an influence on the level of service they receive. Situational factors are defined as the service performance conditions that customers view as beyond the control of the service provider. Predicted service is the level of service the customers believe they are likely to get.

The type of service that the consumers believe a company can deliver and a consumer hopes to receive is termed as desired service. Sources of desired and predicted service expectations include explicit service promises, implicit service promises, word-of-mouth communications and past experiences. Explicit service promises are personal and non-personal statements about the service made by an organization to customers and are completely in the control of the service provider. Implicit service promises are service related cues other than explicit promises that lead to inferences about what service should and will be like. Word-of-mouth communications are the personal and non-personal statements made by the parties (including consumer reports, friends and family) other than the organization convey to customers what service will be like and influence both predicted and desired service. Past experience, the customer’s previous exposure to service that is relevant to the focal service, is another force in shaping predictions and desires.

Figure 1: Components determining quality of service

Quality of service

Positive word of mouth

Trust

Loyalty

Preference of the bank

Meeting the standards

Quality satisfaction


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Six variables namely, satisfaction of quality, positive word of mouth, trust, loyalty, preference of the bank and meeting the standards has been analysed to study the customer satisfaction towards the quality of service provided by ICICI Bank Ltd., as shown in Fig No:1. The data are analysed and studied with the help of ANOVA and factor analysis. 7.1. Satisfaction with Quality

Satisfaction with quality dimension can be measured with the help of experience gained by the customers while purchasing or consuming the service provide by the bank. They should also be satisfied with the quality and value of service received by them to facilitate the repeated purchases of the services of the bank. 7.2. Positive Word-of-Mouth

Satisfaction of the quality of service by the customers will lead to spreading of positive word-of-mouth about the services to others. This will enhance the volume of transactions of the bank in future. This positive word-of-mouth act as a silent salesman and it is one of the methods to improve the progress of the bank. The recommendations to others will have a positive impact and he himself will also continue to be the customer. Therefore, it is possible to retain an existing customer and to gain a new customer for the bank. An existing customer may extend the number of products in future and increase his overall perceived value of services. 7.3. Trustworthiness and Commitment

The satisfaction towards the quality of service will result in increase in degree of loyalty towards the bank. This leads to enhanced commitment towards the bank. The customers will start placing their own trust on the services of the bank. This trustworthiness and the level of commitment will enhance the operation of the bank and lead to increased growth in future. 7.4. Loyalty

It depends on the degree of perception the consumer have towards the organization and its services. One of the effective measures of loyalty is to measure the degree to which the consumers will vouch for the organization. If the consumers go out of their way to recommend the product or service to others, it’s an effective measure of their perception. Loyalty of the customers is analyzed as follows: 7.5. Preference of the Bank

The customers will prefer a bank mainly because of the satisfaction of the quality provided, adherence to the industry standards, reasonable price paid for the quality received, reasonable quality received for the price paid, competitive prices offered, considered best among the competitors and implement satisfactory problem –solving method. 7.6. Meeting of Standards by the Bank

The customers also expect that the bank that provides services must meet the standards followed by the industry as a whole and the bank in particular. Only if the bank is able to meet the standards fixed by itself and the industry, it can gain sustainable competitive advantage. The ICICI Bank has the following standards for its services:

Opening of account immediately, Activating the accounts within three days from opening Issuing the debit card within seven days by courier and twelve days by post Issue of PIN number for the debit card on the next day from the date of receiving


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Issuing cheque book within five days, issuing the demand draft within six minutes Issuing the pay order within six minutes Accepting cash deposits less than Rs.50,000 within eight minutes Accepting cash deposits more than Rs.50,000 within fifteen minutes

H.1 Occupational pattern of the customers do not have significant difference over the quality of service provided by ICICI Bank. Table 2: Comparative table showing the opinion of the customers-ANOVA-Single factor

Quality of service Occupational pattern Calculated valueSatisfaction of quality Rejected 13.26109 Positive word-of-mouth Rejected 10.4772 Trust Accepted 0.297562 Loyalty Rejected 4.794793 Preference of the Bank Rejected 3.958577 Meeting of standards Rejected 4.218084 Overall opinion Rejected 5.356372

Source: Calculated based on survey data Table value = 3.014904.

H.2 Annual incomes of the customers do not have significant difference over the quality of service provided by ICICI Bank. Table 3: Comparative table showing the opinion of the customers-ANOVA-Single factor

Quality of service Annual income Calculated value Satisfaction of quality Rejected 3.299129 Positive word-of-mouth Rejected 20.10881 Trust Rejected 16.64342 Loyalty Rejected 3.582485 Preference of the Bank Accepted 0.486575 Meeting of standards Rejected 5.110081 Overall opinion Rejected 27.33311

Source: Calculated based on survey data Table value = 3.014904.

The table No: 2 and 3 states that the occupational pattern of the customers do have the relationship towards satisfaction of quality, positive word-of-mouth, loyalty, bank preference and meeting of standards except towards trust to be placed on the bank. All the variables are influenced by the annual income pattern of the customers except bank preference. As a whole, the occupational pattern and the income level of the customers have an influence on the above mentioned variables.

The customers of different occupations and income levels perceive the quality of the service provided in different way and they are ready to provide a word-of-mouth to others and create trust and loyalty towards ICICI Bank. The quality of service provided by the ICICI Bank has influenced the customers for their repeated purchases with the bank irrespective of the occupational pattern and income level. The customers are satisfied to the extent that they are willing to give positive word of mouth and recommend the bank to their friends and relatives. Thus the positive word of mouth has an impact on the customers to continue as a customer of ICICI Bank. Irrespective of the occupational pattern, every respondent show his commitment and trustworthiness towards the bank. But based on income level, the customers feel that their degree of commitment and trust differs as they receive a different attitude from the intermediaries of ICICI Bank.

The customers either based on occupational pattern and annual income, they perceive the value of the service received and then recommend the bank to others. Based on the occupational pattern, the customers feel that the standards of ICICI Bank are not up to their level of satisfaction and based on their level of income, they were satisfied with the standards. They felt that the ICICI Bank is nearing


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the industry standards and it is best among the competitors. Based on the occupational pattern and level of income, the customers feel that the standards of ICICI Bank are not up to their level of satisfaction. This small degree of dissatisfaction is revealed in gap score when SERVQUAL instrument is administered.

The impact on these variables is further illustrated with the weighted ANOVA table in the following table. Table 4: Comparative table showing the ranking of the customers ANOVA - Weighted Scale

Particulars Weighted Scale Rank Satisfactory solution of the problem 76.45 1 Competitive prices are provided by the bank 72.77 2 Have you received your Cash within 8 minutes if it is less than Rs.50,000? 71.09 3 Highly preferred Bank over other competitors 70.00 4 Have you realized pleasant surprises while using the product 69.16 5 Have you received your Cheque Book within 5 days? 68.84 6 Reasonable quality is provided for the price paid 68.77 7 Have you received your PIN number for Debit Card the next day? 67.03 8 Have you received your Debit Card within 7 days by courier? 66.52 9 Have you received your Pay Order within 6 minutes? 65.87 10 Have your expectations been attained through real time experience 65.55 11 Bank’s standard is nearer to industry standard 65.42 12 Have you received your Demand Draft within 6 minutes? 65.23 13 Satisfactory quality of service received from the bank 64.32 14 The Bank deserves loyalty from you 63.03 15 Increased growth of your loyalty towards the bank over the past 62.71 16 Reasonable price is paid for the quality of the product 62.39 17 Satisfactory level of commitment of the bank towards you 61.68 18 Did you open the account immediately? 61.55 19 Have you received your Cash within 15 minutes if it is more than Rs.50,000? 61.48 20 Have you received your Debit Card within 12 days by post? 60.13 21 Satisfactory trustworthiness of the bank 58.13 22 Was your account activated within 3 days by the bank? 55.81 23 Extend the number of products in future 53.03 24 Overall perceived value of products 52.52 25 Continuation as a customer 49.61 26 Highly Satisfied with the usage of experience of the product 41.74 27 Recommendation to others 37.94 28 Highly Satisfied with the quality of product purchased 35.81 29 Highly Satisfied with the purchase experience 23.16 30 Highly Satisfied with the value of the product purchased 20.97 31


Table: 4 states that among the thirty one ranks, the top five ranks are given for the satisfactory solution of the problem, the competitive prices offered by bank, collection of cash which is less than Rs.50,000 within 8 minutes thus resulting in pleasant surprises in dealing with the bank and this bank being the highly preferred bank among the competitors. This shows the satisfaction of the customers with the quality of services of the bank.

The next five ranks are given for the issue of cheque book within 5 days, Debit Card within 7 days by courier, PIN number for Debit Card the next day and Pay Order within 6 minutes, thus resulting in the satisfaction of reasonable quality for the price paid by them.

The customers also accept that the bank’s standard is nearing the industry standard and it meets their expectations by providing satisfactory quality of service. They also accept that the loyalty towards the bank has increased and the bank also deserves it because its satisfactory quality of service, reasonable price and the level of commitment towards them. They are also satisfied with the issue of demand draft within 6 minutes. But they are less satisfied with immediate opening of the account and


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receiving cash which is more than Rs.50, 000, because they rank these services as 19th and 20th among 31 ranks.

The customers have given the least ranking for the services like issue of Debit card within 12 days by post and the activation of the account within 3 days by the bank. Some of the customers are not willing to continue as a customer and they are not ready to pass positive word-of -mouth to their friends and relatives. They do not perceive a good value for the products purchased as the quality and usage of the products are not up to their satisfaction level. As they are not satisfied with the purchase experience and trustworthiness of the bank, they are not willing to extend their support to the products in future.

The sustainable competitive position in service industry emphasizes the importance of quality of customer service, which has the impact of the technology advancement and LPG namely, Liberalization, Privatization and Globalization. Thus, assessing customer service quality in service industries such as banks, hospitals, library, telecommunications and insurance is very important in determining the standard expected from the industry. Zeithaml (1987) explains that the service quality as the judgment of the customers regarding the performance of an organization. It is measured by way of attitude of the customers, which is the difference between customer’s expectations and perceptions of the service performance received. Lewis and Booms (1983) describe service quality as a measure of matching the customer expectations with the degree of service delivery. Meeting the customers’ expectations on a continuous basis determines the degree of service delivery. Service quality is measured with customers’ expectations and perceptions of the services extended by an organization. For this purpose, perceptions (P) are expressed as consumers’ attitude about the service received and expectation (E) as consumers’ requirements. The P-E service quality model is designed to measure perceived quality, which is corresponding to perceptions- minus- expectations (Teas 1993). Customer expectations are attitudes about service delivery that is regarded as standards against which performance is decided, because customers compare their perceptions of performance with the standards while measuring service quality. Thus, knowledge about customer expectations is important to service marketers to attain sustainable competitive advantage by maintaining service quality. Table 5: The test of sampling adequacy for the key factors determining the quality of service of ICICI Bank

Ltd.

KMO and Bartlett's TestKaiser-Meyer-Olkin Measure of Sampling Adequacy. .551

Bartlett's Test of Sphericity Approx. Chi-Square 4.404E3 Df 465 Sig. .000


Kaiser – Meyer –Olkin measure of sampling adequacy (0.551) has been calculated in the above table for the key factors determining the quality of service of ICCI Bank Ltd. This helps to measure the appropriateness of using factor analysis. Since the calculated value is between 0.5 and 1, the factor analysis is appropriate. The thirty one key factors for determining the quality of service has been chosen by the researcher and the opinion of the customers has been collected by using Likert scales. Likert scales and other scaling techniques has been used generally used researcher to explore the influencing factor but then the question of reliability arises.

Factor analysis has been used to reduce the thirty one key variables determining the quality of service into smaller number of factors and to justify those factors. Principal component analysis provides a unique solution; the original data can be reconstructed from the results. The solution generated will prove the criteria for retention of the variable. The next Table shows Communalities for each item, which measures the percent of variance and may interpreted as the ‘reliability of the indicator’ .The column “initial” presents 1.000 for all the 31 items was kept in the diagonal of the


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correlation matrix always used in the extraction of principal component .In the column “extraction” there is listing of communalities for each item and it tells the variance accounted by each variable and it is computed as the sum of squared factor loadings. Since the factors are uncorrelated the squared loadings may be added to get the total percent, which is given as communalities. Table 6: Communalities

CommunalitiesParticulars Initial Extraction Highly satisfied with the quality of the product purchased 1.000 .722 Highly satisfied with the purchase experience 1.000 .682 Highly satisfied with the value of the product purchased 1.000 .750 Highly satisfied with the usage experience of the product 1.000 .618 Recommendation to others 1.000 .635 Continuation as a customer 1.000 .738 Extend the number of products in future 1.000 .633 Overall perceived value of products 1.000 .676 Satisfactory trustworthiness of the Bank 1.000 .721 Satisfactory level of commitment of the Bank towards customer 1.000 .571 The Bank deserves loyalty from customer 1.000 .781 Increased growth of loyalty towards the Bank over the past 1.000 .644 Satisfactory quality of service received from the Bank 1.000 .688 Bank’s standard is nearer to industry standard 1.000 .673 Reasonable price is paid for the quality of the product 1.000 .658 Reasonable quality is provided for the price paid 1.000 .750 Competitive prices are provided by the bank 1.000 .809 Highly preferred Bank over other competitors 1.000 .778 Satisfactory solution of the problem 1.000 .712 Expectations been attained through real time experience 1.000 .715 Realized pleasant surprises while using the product 1.000 .730 Open the account immediately 1.000 .730 Account activated within 3 days by the Bank 1.000 .744 Received Debit Card within 7 days by courier 1.000 .581 Received your Debit Card within 12 days by post 1.000 .725 Received PIN number for Debit Card the next day 1.000 .700 Received your Cheque Book within 5 days 1.000 .598 Received your Demand Draft within 6 minutes 1.000 .730 Received your Pay Order within 6 minutes 1.000 .821 Received Cash within 8 minutes if it is less than Rs.50,000 1.000 .691 Received Cash within 15 minutes if it is more than Rs.50,000 1.000 .658 Extraction Method: Principal Component Analysis.


The communalities show how much of the variance in the variable has been accounted for by the extracted factors. The table shows that 82.1% of the variance is found in standard norms of issuing Pay Order within six minutes while 80.9% of the variance is found in the competitive prices offered by the bank. 78.1% of the variance is found in the loyalty deserved by the bank from its customers. 77.8% of the variance is found in the preference of ICICI Bank over its competitors.75% of the variance is found in the reasonable quality for the price paid by the customers.73.8% of the variance is found in the continuation of the customers as a customer in the future and 73% of the variance is found in the pleasant surprises in usage of the product, immediate opening of the account and receiving of demand draft within six minutes. 72% of the variance is found in the trustworthiness of the bank and quality of the product purchased. Initial communalities are the estimates of the variances in each variable accounted for by all components or factor contributing to quality of service. Extraction communalities are estimates of the variance in each variable accounted for by the factors in the factor solution. Variance accounted by factors before rotation and after rotation has been shown in the following table.


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Table 7: Total Variance Explained

Total Variance Explained

Component Initial Eigenvalues

Extraction Sums of Squared Loadings

Total % of

VarianceCumulative %

Total % of

VarianceCumulative %

1 Satisfactory solution of the problem 3.683 11.881 11.881 3.683 11.881 11.881 2 Competitive prices are provided by the bank 2.968 9.575 21.456 2.968 9.575 21.456 3 Received Cash within 8 minutes if it is less than Rs.50,000 2.262 7.298 28.754 2.262 7.298 28.754 4 Highly preferred Bank over other competitors 2.092 6.747 35.500 2.092 6.747 35.500 5 Realized pleasant surprises while using the product 2.007 6.474 41.974 2.007 6.474 41.974 6 Received Cheque Book within 5 days 1.496 4.826 46.800 1.496 4.826 46.800 7 Reasonable quality is provided for the price paid 1.405 4.532 51.332 1.405 4.532 51.332 8 Received PIN number for Debit Card the next day 1.279 4.127 55.459 1.279 4.127 55.459 9 Received Debit Card within 7 days by courier 1.261 4.068 59.527 1.261 4.068 59.527 10 Received Pay Order within 6 minutes 1.105 3.565 63.093 1.105 3.565 63.093 11 Expectations been attained through real time experience 1.077 3.475 66.568 1.077 3.475 66.568 12 Bank’s standard is nearer to industry standard 1.027 3.314 69.882 1.027 3.314 69.882 13 Received Demand Draft within 6 minutes .944 3.046 72.928 14 Satisfactory quality of service received from the bank .821 2.650 75.578 15 Bank deserves loyalty from customers .784 2.529 78.106 16 Increased growth of loyalty towards the bank over the past

.703 2.268 80.374

17 Reasonable price is paid for the quality of the product .663 2.137 82.511 18 Satisfactory level of commitment of the bank towards customers

.621 2.004 84.516

19 Open the account immediately .608 1.961 86.476 20 Received Cash within 15 minutes if it is more than Rs.50,000

.572 1.846 88.322

21 Received Debit Card within 12 days by post .517 1.669 89.991 22 Satisfactory trustworthiness of the bank .477 1.540 91.531 23 Account activated within 3 days by the bank .399 1.288 92.819 24 Extend the number of products in future .397 1.280 94.098 25 Overall perceived value of products .353 1.139 95.238 26 Continuation as a customer .310 1.001 96.238 27 Highly Satisfied with the usage of experience of the product

.271 .874 97.112

28 Recommendation to others .262 .845 97.957 29 Highly Satisfied with the quality of product purchased .252 .813 98.770 30 Highly Satisfied with the purchase experience .227 .733 99.504 31 Highly Satisfied with the value of the product purchased .154 .496 100.000

Extraction Method: Principal Component Analysis. Source: Calculated based on survey data

The first twelve factors have Eigen values more than 1.Only these factors are rotated Cumulative % refers to percent of variance accounted cumulatively by previous factor and this factor. The first twelve factors account for 69.882% of the variance, and the above table shows the general characteristics of factors before and after rotation. Next is an Eigen value, which is also called as ‘characteristic roots’. The ratio of the Eigen values is the ratio of explanatory importance of the factors with respect to variables. If the factor has low Eigen value then it is contributing little to the explanation of variances and may be ignored as unnecessary.

From the above table it is clear that the Eigen values are the percent of variance attributable to each factor and the cumulative variance of the factor and the previous factor. The first factor satisfactory solution to the problem accounts for 11.881% of the variance, the second factor Competitive prices provided by the bank is 9.575%, the third factor level of receiving Cash within 8 minutes if it is less than Rs.50,000 is 7.298% and the fourth factor highly preferred Bank over other


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competitors contributes 6.747% . The variance for the subsequent factors are realized pleasant surprises while using the product is 6.474%, received Cheque Book within 5 days is 4.826%, reasonable quality is provided for the price paid is 4.532%, received PIN number for Debit Card the next day is 4.127%, received Debit Card within 7 days by courier is 4.068%, received Pay Order within 6 minutes is 3.565%, expectations been attained through real time experience is 3.475% and the bank’s standard is nearer to industry standard is 3.314%. All the remaining factors are not significant. Eigen values measure the amount of variation in the total sample accounted for by each factor. The first twelve factors have more than one Eigen value and those factors are significant factors towards group cohesiveness and others are not significant. Table 8: Component Matrix

Component Matrixa Component Component 1 2 3 4 5 6 7 8 9 10 11 12 Satisfactory quality of service received from the Bank

-.664 -.136 .185 -.104 -.278 -.122 .192 .161 .129

The Bank deserves loyalty from customers

-.595 -.127 .385 -.115 .113 -.285 .277 .119 .140 .188

Increased growth of loyalty towards the Bank over the past

-.519 -.103 .292 .131 -.171 .195 .174 .322 .235

Reasonable price is paid for the quality of the product

-.509 .289 -.473 .152 .163 .162

Highly satisfied with the quality of the product purchased

.483 -.364 -.205 -.197 -.264 .195 .264 .281

Highly satisfied with the value of the product purchased

.473 -.330 -.225 -.159 .445 .109 .331

Highly satisfied with the purchase experience

.473 -.177 -.193 .114 .122 .370 .381 .280

Open the account immediately .379 .554 .253 -.206 .291 .138 -.144 -.170 Continuation as a customer .244 -.530 -.104 .306 .233 -.121 -.447 Account activated within 3 days by the Bank

.441 .527 -.139 -.279 .281 .116 -.105 .103 .190 .132

Recommendation to others .241 -.520 .233 .321 -.276 -.247 Highly satisfied with the usage experience of the product

.315 -.511 -.166 .108 -.148 -.128 .193 .323 -.167

Bank’s standard is nearer to industry standard

-.299 .465 -.107 -.157 .207 .286 .246 .281 -.239

Competitive prices are provided by the bank

.229 -.672 .148 .183 .312 .193 -.194 -.191 .159

Reasonable quality is provided for the price paid

-.180 .191 -.566 .139 .219 .286 .270 .303 -.193

Received Cash within 15 minutes if it is more than Rs.50,000

.240 .399 .149 .322 .177 .221 .197 -.285 .220 .237

Satisfactory level of commitment of the Bank towards customers

-.278 -.207 .369 .245 -.122 .343 .269 -.176

Received Pay Order within 6 minutes

.151 .103 .642 .151 .274 .204 -.396 -.187 .197

Received Demand Draft within 6 minutes?

.189 .618 -.176 .272 -.125 -.219 -.140 .310 -.145

Received your Cheque Book within 5 days

.168 .140 .555 -.345 -.204 .164 .182

Received Cash within 8 minutes if it is less than Rs.50,000

.156 .240 .452 .269 .294 .106 .318 .303 -.102 -.152

Received PIN number for Debit Card the next day

.224 .315 -.653 .109 -.183 .199 .116

Realized pleasant surprises while using the product

.233 .146 .330 .554 -.169 -.152 .228 -.358

Received Debit Card within 7 days by courier

.331 .456 -.469 .126

Satisfactory solution of the problem

.374 -.202 .101 .389 -.339 -.183 .355 -.162 .233


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Table 8: Component Matrix - continued Received Debit Card within 12 days by post

.396 .293 .118 .233 -.261 -.419 .223 .156 .171 .248

Expectations been attained through real time experience

.430 .272 .354 .191 .198 -.484

Overall perceived value of products -.206 -.376 .117 .137 -.139 .445 -.450 .111 -.143 Extend the number of products in future

.131 -.359 .312 .250 .393 -.184 .171 .210 .238

Satisfactory trustworthiness of the Bank

-.204 -.108 .333 .317 -.305 .138 .261 .264 -.441 -.103

Highly preferred Bank over other competitors

.162 .195 -.240 .126 .325 -.256 -.248 .289 -.290 .470 -.122

Extraction Method: Principal Component Analysis. a. 12 components extracted. Source: Calculated based on survey data

The above table shows the loadings of the thirty one variables on the twelve factor extracted. The higher the absolute value of the loading, the more the factor contributes to the variable. The gap represents loadings that are less than 0.5, this makes reading the table easier. All loadings less than 0.5 have been suppressed and twelve factors namely satisfactory solution to the problem, competitive prices provided by the bank , receiving Cash within 8 minutes if it is less than Rs.50,000, highly preferred Bank over other competitors, realized pleasant surprises while using the product, received Cheque Book within 5 days, reasonable quality is provided for the price paid, received PIN number for Debit Card the next day, received Debit Card within 7 days by courier, received Pay Order within 6 minutes, expectations been attained through real time experience and the bank’s standard is nearer to industry standard. 8. Major Findings The customers are more satisfied with the satisfactory solution of the problem given by the intermediaries, the competitive prices offered by bank, collection of cash which is less than Rs.50,000 within 8 minutes thus resulting in pleasant surprises in dealing with the bank and this bank being the highly preferred bank among the competitors. This shows the satisfaction of the customers with the quality of services of the bank. The customers are satisfied with maintaining of standards regarding the issue of cheque book within 5 days, Debit Card within 7 days by courier, PIN number for Debit Card the next day and Pay Order within 6 minutes, thus resulting in the satisfaction of reasonable quality for the price paid by them.

The customers also accept that the bank’s standard is nearing the industry standard and it meets their expectations by providing satisfactory quality of service. They are also of the opinion that their loyalty towards the bank has increased and the bank also deserves it because it’s satisfactory quality of service, reasonable price and the level of commitment towards them. They are also satisfied with the issue of demand draft within 6 minutes. But they are less satisfied with immediate opening of the account and receiving cash which is more than Rs.50, 000. The customers are less satisfied with the services like issue of Debit card within 12 days by post and the activation of the account within 3 days by the bank. 9. Conclusion The customers are not willing to continue as a customer and they are not ready to pass positive word-of -mouth to their friends and relatives. They do not perceive a good value for the products purchased as the quality and usage of the products are not up to their satisfaction level. As they are not satisfied with


25

the purchase experience and trustworthiness of the bank, they are not willing to extend their support to the products in future. References [1] Barbara R Lewis. Service Quality: Recent Developments in Financial Services, International

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[5] Dellande, Stephanie Joy. Gaining customer compliance in services, University of California, Irvine, United States -- California, 1999.

[6] Lewis RC, Booms BH. The marketing aspects of service quality, in Berry L, Shostack G, Upah G. (eds.), Emerging Perspectives on Services Marketing, American Marketing Association, Chicago, IL, 1983: 99-107.

[7] Oliva Pue, Rogelio. A dynamic theory of service delivery: Implications for managing service quality, Massachusetts Institute of Technology, United States – Massachusetts, 1996.

[8] Parasuraman A. Service quality and productivity: A synergistic perspective, Managing Service Quality, 2002; 12(1): 6-9.

[9] Pita Castelo, Jose,An empirical examination of the antecedents of customer loyalty in retail banking in Spain , Universidad Complutense de Madrid, Spain, 2000: 1-15.

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[11] Roth, Aleda V, van der Velde, Marjolijn, Operations as Marketing: A Competitive Service Strategy, Journal of Operations Management, 1991; 10(3): 303-328.

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[14] Valarie A Zeithaml, A Parasuraman, Arvind Malhotra. Service quality delivery through Web sites: A critical review of extant knowledge, Academy of Marketing Science, 2002; 30(4): 362-375.

[15] Vimi J, Mohd KK. Determinants of performance in retail banking: perspectives of customer satisfaction and relationship marketing, Singapore Management Review, December, 2008.

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[17] Zeithaml V. Defining and Relating Price, Perceived Quality and Perceived Value, Marketing Services Institute Report, Marketing Services Institute, Cambridge, MA, 1987; 1: 87-101.

[18] Zeithaml, Valarie A, Berry Leonard L, Parasuraman, A. The behavioral consequences of service quality, Journal of Marketing, April 1996; 60: 31-46.

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