1

UNIVERSITY OF SOUTH ASIA

Department of Management Sciences

Customers’ Price Satisfaction in Banking Sector of Pakistan

Master of Business Administration (Marketing) (3.5 Years),

Session (2011-2015)

Submitted by:

Ihtsham Ali 0000456

Submitted to:

Khurram Aziz Fani Project Advisor

M. AkramRahat Butt Head of Department

47-Tufail Road, Lahore Cantt.

Tel: (042) 36672942-5

Email: info@usa.edu.pk, U.R.L: www.usa.edu.pk

2

DECLARATION

I declare that this study submitted for the degree of Master of Business Administration has not

already been accepted in substance of nay degree, and is not being concurrently submitted in

candidature for any degree.

I also declare that this study submitted for the degree of Masters of business administration is the

result of my own work and investigations. Wherever possible I have acknowledged the authors

of references used and of views expressed which are than my own.

3

ACKNOWLEDEGEMENTS

All praises and admiration are for Almighty Allah, who is bounteous and merciful and whose

care and guidance led me to complete this ample task, and peace be upon Prophet Muhammad

(SAW) who is a torch of guidance and knowledge for humanity forever.

I thank to my parents for their love and support while I decided to be a “Professional” student.

I thank to my supervisor, Mr. Khurram Aziz Fani, for giving us the opportunity to work in a

very Interesting area, and for his support and guidance throughout our master studies at

University of South Asia.

Finally yet importantly, I am thankful to my parents, family members and friends who really

believed in me throughout my stay in this university and in the completion of this dissertation. I

also thanks my competitors who inspire to do best.

Ihtsham Ali

MB0000456

Masters of Business Administration (3.5 years)

University of South Asia, Lahore

4

Dedicated to Our

Beloved Parents,

Respected teachers & for all who are fighting for

Truth

(INSPIRING, ENCOURAGING AND SUGTAINGING)

5

Table of Contents

ACKNOWLEDEGEMENTS ......................................................................................................... 3

CHAPTER 1: INTRODUCTION, AIM AND OBJECTIVES ....................................................... 9

1.1: Background of the Research Topic: .................................................................................... 9

1.1.1: Customer Satisfaction for the Banking and its Importance: .......................................... 9

1.1.2: Importance of Pricing: ................................................................................................. 10

1.1.3: Antecedents of Price and its Satisfaction: ................................................................... 11

1.1.4: The Context of Price Satisfaction of Banking Sector in Pakistan: .............................. 11

1.2: Research Aim: .................................................................................................................... 12

1.3: Research Questions: ........................................................................................................... 12

1.4: Research Objectives: .......................................................................................................... 13

1.5: The Intended Outcome of the Dissertation Research:........................................................ 13

1.6: Limits and Delimits: ........................................................................................................... 13

1.7: Significance of the Study: .................................................................................................. 14

1.8: Dissertation Structure: ........................................................................................................ 15

1.8.1: Chapter 1–Introduction: Aim and Objectives of Dissertation: .................................... 15

1.8.2: Chapter 2-Review of Literature: .................................................................................. 15

1.8.3: Chapter 3-Methodology: ............................................................................................. 15

1.8.4: Chapter 4-Findings and Discussion: ............................................................................ 16

1.8.5: Chapter 5-Conclusion and Recommendations: ........................................................... 16

1.9: Chapter Summary: ............................................................................................................. 16

CHAPTER 2 – REVIEW OF LITERATURE ....................................................... 17

2.1: Introduction of the Chapter: ............................................................................................... 17

2.2: Satisfaction of the customers: ............................................................................................ 17

2.3: Loyalty of Customer: ......................................................................................................... 19

2.4: Analysis of Consumer Behavior – Significance: ............................................................... 21

2.5: Pricing strategy: ................................................................................................................. 23

2.6: Pricing and Customer Satisfaction: .................................................................................... 24

2.7: Price Satisfaction:............................................................................................................... 25

2.8: Dimensions of price satisfaction: ....................................................................................... 27

2.8.1: Price Transparency: ..................................................................................................... 27

6

2.8.2: Relative Price: ............................................................................................................. 28

2.8.3: Price-Quality Ratio: ..................................................................................................... 29

2.8.4: Price Confidence: ........................................................................................................ 30

2.8.5: Price Fairness: ............................................................................................................. 30

2.8.6: Price Reliability: .......................................................................................................... 32

2.9: Conceptual Framework of Research: ................................................................................. 32

2.10: Summary of Chapter: ....................................................................................................... 34

CHAPTER 3: METHODOLOGY ..................................................................... 35

3.1: Introduction of Chapter: ..................................................................................................... 35

3.2: Need for Research: ............................................................................................................. 35

3.3: Research Framework and Research Design: ...................................................................... 37

3.3.1: Research Philosophy: .................................................................................................. 38

3.3.2: Research Approach:..................................................................................................... 38

3.3.3: Research Strategy: ....................................................................................................... 39

3.3.4: Time Dimension for Data Collection: ......................................................................... 39

3.3.5: Tools for Collection of Data: ....................................................................................... 40

3.4: Research Population: .......................................................................................................... 40

3.5: Sampling Plan: ................................................................................................................... 41

3.6: Conduct of Survey: ............................................................................................................ 41

3.7: Analysis of Collected Data: ............................................................................................... 43

3.8: Research Ethics: ................................................................................................................. 44

3.9: Reliability and Validity: ..................................................................................................... 44

3.10: Summary of Chapter 3: .................................................................................................... 44

CHAPTER 4: FINDINGS AND DISCUSSION ..................................................... 45

4.1: Introduction to Chapter: ..................................................................................................... 45

4.2: Reliability of Findings: ...................................................................................................... 45

4.3: Validity of Findings: .......................................................................................................... 46

4.4: Review of Aim and Objectives: ......................................................................................... 47

4.5: Contextual Findings of the Research: ................................................................................ 47

4.5.1: Gender of Customers: .................................................................................................. 47

4.5.2:Frequency to Use Bank: ............................................................................................... 48

4.5.3: Profession of the Customers: ....................................................................................... 49

7

4.5.4: Type of Customer: ....................................................................................................... 50

4.5.5: Academic Qualification of Customers: ....................................................................... 51

4.5.6: Age of the Customers: ................................................................................................. 52

4.5.7: Satisfaction of Customer: ............................................................................................ 53

4.5.8: Perception to Use Bank in Future:............................................................................... 54

4.5.9: Transaction (In Rs.) Execute by Customers: ............................................................... 55

4.5.10: Temporal Length of Using the Services from Bank:................................................. 56

4.5.11: Use of Internet Banking: ........................................................................................... 58

4.5.12: Customers Perception to Use Islamic Banking: ........................................................ 58

4.5.13: City of the Respondent: ............................................................................................. 59

4.5.14: Number of Accounts in Use: ..................................................................................... 60

4.5.15: Type of Bank Account: ............................................................................................. 61

4.6: Findings of RO 1 – Important Dimensions of Price Satisfaction: ..................................... 62

4.6.1: Factor Loading of Price Reliability: ............................................................................ 63

4.6.2: Factor Loading of Price Confidence: .......................................................................... 64

4.6.3: Factor Loading of Price Transparency: ....................................................................... 65

4.6.4: Factor Loading for Relative Price: .............................................................................. 66

4.6.5: Factor Loading for Price-Quality Ratio: ...................................................................... 67

4.6.6: Factor Loading for Price Fairness: .............................................................................. 68

4.6.7: Mean Score of Extracted Factors: ............................................................................... 69

4.7: Findings of RO 2 Analyse the Customer Satisfaction From Price Satisfaction:................ 70

4.8: Findings of RO 3Influence of Different Dimensions of Price Satisfatcion on Overall

Customer Satisfaction: .............................................................................................................. 72

4.8.1: Regression Analysis: ................................................................................................... 73

4.8.2: Regression Analysis: ................................................................................................... 76

4.9: Summary of Chapter: ......................................................................................................... 79

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS ................................ 80

5.1: Introduction: ....................................................................................................................... 80

5.2: Concluding Remarks: ......................................................................................................... 80

5.3: Findings of RO 4 Recomendations to Banking Industry to Satisfy Their Customers: ...... 81

5.3.1: Recommendation 1-Price Changes Communicated Timely: ...................................... 82

5.3.2: Recommendation 2-Bank Should Keep All Promises Regarding Prices: ................... 82

8

5.3.3: Recommendation 3- Price Information Should Understandable and Comprehensible:

............................................................................................................................................... 82

5.3.4: Recommendation 4- Terms and Conditions of Bank Should Better Tailored to

Customers’ Needs: ................................................................................................................. 83

5.3.5: Recommendation 5-The Prices of How Much Customer Use Certain Services: ........ 83

5.3.6: Recommendation 6-Credit Transactions Should Not Cause Abnormally High Interest

Rates: ..................................................................................................................................... 83

5.4: Account of Achievement of Research Objectives: ............................................................ 84

5.4.1: Achievement of Research Objective 1: ....................................................................... 84

5.4.2: Achievement of Research Objective 2: ....................................................................... 84

5.4.3: Achievement of Research Objective 3: ....................................................................... 85

5.4.4: Achievement of Research Objective 4: ....................................................................... 85

5.5: Suggested FutureResearch Areas: ...................................................................................... 85

5.6: Summary of the Chapter: ................................................................................................... 86

Bibliography ................................................................................................ 87

9

CHAPTER 1: INTRODUCTION, AIM AND OBJECTIVES

In this chapter, introduction and background of price satisfaction of customers’ in banking

industry of Pakistan will be presented. Moreover, aim, objectives and research questions

regarding the topic will also be presented in this chapter.

1.1: Background of the Research Topic:

Satisfaction is the important factor in any business as well as banking and is a major challenge

for the industries to retain and satisfy the customer needs and wants. Previous researchers

identified different antecepdents of customers’ satisfaction which include performance,

disconfirmation, expectations and service quality of customers’ satisfaction, (Jamal et al., 2002).

Satisfaction of customers is a critical concern for both organizations and customers (European

institute of Public administration, 2008).

1.1.1: Customer Satisfaction for the Banking and its Importance:

Customers’ satisfaction has long been researched by the academics and practitioners of business

(Amin and Isa, 2008, Anderson et al., 1994, Anderson, 1998, Arasli et al., 2005, Bell et al., 2005,

Biyalogorsky et al., 2001, Brown, 2001, Churchill and Suprenant, 1982, Dick and Basu, 1994,

Gonzalez et al., 2004, Huber et al., 2001, Lee and Lin, 2005, Ranaweera and Neely, 2003, Rust

et al., 2004, SadiqSohail and Shanmugham, 2003, Wilding and Juriado,2004). Different

businesses, manufacturing to retailing, now focus on customers’ retention and satisfaction. This

includes both services and products. Kotler and Armstrong (2010) suggested that to satisfy the

customers’ needs and wants, organizations should give more attention on their products and

services. This would give competitive advantage to an organization over its counterparts.

Organizations who pay much attention to needs and wants of the customers’ satisfaction ensure

that they are following the philosophy of customer orientation. Moreover, Fornell et al. (1994)

10

indicated that businesses should have to pay more attention on customers’ satisfaction as this is

becoming the major problem of the businesses. They further highlighted that customers’

satisfaction may also lead to repeat purchase among customers as well as positive word of mouth

for organization. Customers’ satisfaction has positive impact on sales and profitability of an

organization. This leads to increase in market share. Bank’s performance is also based on

customers’ satisfaction. Banking customers are said to be satisfied when the banks meet their

expectation level of the quality service and on the other side, dissatisfaction occurs if the

expectations are not fulfilled. It is important to identity the factors, which lead to customers’

satisfaction is based in the banking sectors. The modern banking is moving towards mobile or

electronic banking and presently there are not too many banks that are providing the mobile

banking service facility. Customers’ satisfaction is not more than an act of providing enough

services acceptable by the customer. Customers’ satisfaction directly effects the profitability of

any organization. Customers’ satisfaction effects the reliability, reputation and success in the

banking sector (Zaman, Rustam, Umar 2013).

The organizations that monitor its customers’ needs and wants, they retain their customers.

Products and the services offered by an organization should be changed with the change in needs

and wants of the customer. Therefore, needs and wants should therefore be researched (Pine et

al,. 2010).

The above discussion shows the customers’ satisfaction. Monitoring needs and wants of

customers’ is now becoming an important area for the organization. This asserts that research on

customers’ satisfaction is important for organizations.

1.1.2: Importance of Pricing:

Athanassopoulos (2000) suggested that customers’ satisfaction is based upon such attributes as

innovation, price and convenience.Zhang and Raju(2010) indicated that customers’ adjust their

needs according to the pricing plans. Boone et al. (2009) explains that price of a product or

service has an impact on consumer behaviour. They identified that comparatively women instead

11

of men have tendency to pay money, and white people pay less as compared to black people.

Price affects not only the purchase but also post-purchase behaviour.

Colgate and Varki(2001)identified that price and the level of general satisfaction have positive

relationship with each other. The prices charge to the people directly relates with customers’

satisfaction. If a bank decides to charge high price for its services, this may result in

dissatisfaction of customer and may lead to a situation in which organization may lose its

customer, as customer would switch to other banks, which may comparatively charge low prices.

Price satisfaction is an important area and is still reap for research.

1.1.3: Antecedents of Price and its Satisfaction:

There are various factors that have an influence on customers’ satisfaction. Some of these are

honest pricing, fixed pricing, customers’ advocacy and money back guarantee. Renirtaz et al.

(2005) indicated that the customers’ retention strategy should be adopted carefully because

retaining a customer is a costly as well as important job. Shanka (2012) says that the

responsiveness, empathy, tangibility, assurance and reliability are the five dimensions of the

SERUPERF model to measure the customers’ satisfaction of a bank. Matzler et al. (2006) said

that to understand the price satisfaction is a difficult thing and they mentioned various factors of

price satisfaction. These factors include relative price, price reliability, price transparency, price

fairness and price-quality. Over the period customers’ change their preferences.

1.1.4: The Context of Price Satisfaction of Banking Sector in Pakistan:

This dissertation is related to banking industry of Pakistan and purpose of research is to find out

the impact of various dimensions of price satisfaction on customers’ satisfaction. Hopkinson and

Aman(2009) indicated that distribution channels in Pakistan are changing and has implications

not only for business community but for retail customers also. They highlighted that not only

large banks in market hold large market share but there is also a part of small banks in industry.

Small banks facing threats due to entry of large banks in market. Hopkinson and Aman(2009)

highlighted that retail business is going to be increased during coming years. The dissertation

12

identified price satisfaction in banking sector of Pakistan for this dissertation research. There

were only 487 bank branches in Pakistan but after independence, many of the branches were

closed and only 195 branches were left in Pakistan. State Bank of Pakistan was launched in May

12, 1948. Various banks are now expanding their operations in various cities. Now, banks are

offering lots of products and services. Price satisfaction in services and products offered by

banks has been identified in this dissertation research.

1.2: Research Aim:

The aim of this research is “to analyse customers’ price satisfaction on overall customers’

satisfaction and to analyse customers’ satisfaction on pricing at retail banking industry of

Pakistan”.

It is an important part to discuss to focus on customers’ price satisfaction. Moreover, this is an

area in which further research should be explored.

1.3: Research Questions:

Followings are the questions of this dissertation research:

1- What are the important dimensions of price satisfaction in banking industry of Pakistan?

2- To what extent customers of banking industry in Pakistan are satisfied with reference to

important dimensions of price satisfaction?

3- What is the influence of different dimensions of price satisfaction on overall price

satisfaction?

4- How can customers’ price satisfaction can be increased so as to increase overall customers’

satisfaction?

13

1.4: Research Objectives:

Following objectives based on above mentioned research aim and research questions.

1- To analyse the important dimensions of price satisfaction in banking industry of Pakistan.

2- To analyse the extent of customers’ satisfaction from dimensions of price satisfaction in

banking industry of Pakistan.

3- To analyse the influence of different dimensions of price satisfaction on overall customers’

satisfaction.

4- To recommend members of banking industry so that they can increase price satisfaction of

banking customer.

1.5: The Intended Outcome of the Dissertation Research:

It envisaged the outcome of the dissertation would indicate the customers’ satisfaction level from

various price dimensions. The influence of various dimensions of price satisfaction on overall

satisfaction will also be highlighted in this dissertation.

1.6: Limits and Delimits:

Following are limitations and delimitations of the project.

The limitations of the project are as under:

1- This dissertation includes only those people who have their bank account or having been

associated with the bank in the capacity of customer. People who do not have any bank

account or any relation with banks were excluded from this dissertation.

14

2- People who had been working with the banks and those who were willing to work with bank

in the capacity of customers in future will be excluded.

3- There are various price dimensions of product and service quality in banking sector.

However, not all the dimensions were used in this research.

Delimitations are as under:

1- The collection of data based on sample of population. Because this is not possible to cover

whole population.

2- The sample size taken in this dissertation is not very large because of limitations of money

and time.

3- Researcher has no time to confirm findings and conclusion of the dissertation.

4- This dissertation is based on feelings of the customers’ and what they perceive about banking

industry. Customers’ of other sectors are not part of research.

1.7: Significance of the Study:

Following are some of the advantages of this research

1- It would be an extension to literature of customers’ price satisfaction in banking sector.

2- It is an opportunity for customer’s to share their experiences.

3- The findings of this research would help the banking sector to satisfy their customers’

regarding prices in Pakistan.

The findings of this research would help the banking sector to satisfy their customers’ regarding

prices in Pakistan.

15

1.8: Dissertation Structure:

This section provides structure of the dissertation. It would be helpful for the readers to find the

relevant material quickly. There are five chapters in this dissertation. Brief introduction of these

chapters is given below:

1.8.1: Chapter 1–Introduction: Aim and Objectives of Dissertation:

This chapter presented introduction and background of price satisfaction of customers’ in

banking industry of Pakistan. Aim, objectives and research questions regarding the topic

were also briefly discussed in this chapter. Summary of the chapter will be given at the end

of this chapter.

1.8.2: Chapter 2-Review of Literature:

In this chapter, review of literature will be presented. This includes satisfaction of the

customers’, customers’ loyalty, pricing strategies literature, review of global banking sector of

Pakistan and different dimensions of price satisfaction. The main purpose of this chapter is to

develop and explain the conceptual framework which links customers’ satisfaction with pricing

and banking sector. The chapter will end with a summary of the chapter.

1.8.3: Chapter 3-Methodology:

This chapter will show research methods used by researchers for conducting this research

project. Chapter will start with introduction of the chapter and need for conducting research. In

this chapter, researcher will explain research strategy, research philosophy, data collection

16

methods, research approach and time period associated with this research project. Thereafter,

population and sampling procedures will also be discussed and will be presented in this chapter.

Including this, the researcher will also provide details about research ethics, validity and

reliability of research findings. Chapter will end with its conclusion.

1.8.4: Chapter 4-Findings and Discussion:

In this chapter, researcher will discuss findings and analysis of research findings. This chapter

will start with the introduction of the chapter and will then present an account of reliability of

data and validity of results. Research aim and objectives will also reviewed in this chapter. After

this, the contextual information related to findings of research objectives will be provided. This

will be followed by analytical evaluation of the findings. Chapter will end with its conclusion.

1.8.5: Chapter 5-Conclusion and Recommendations:

This will be the last chapter of this dissertation and depict the conclusion and recommendations.

1.9: Chapter Summary:

This was the first chapter of the dissertation. It was all about detailed area of research, aim, and

objectives. Aim, objectives and research questions regarding the topic were briefly discussed in

this chapter. In the next chapter, review of literature will be presented.

17

CHAPTER 2 – REVIEW OF LITERATURE

2.1: Introduction of the Chapter:

The last chapter of the report presented introduction of the dissertation as well as aim, objectives

and research questions. In this chapter, review of literature will be presented. This will include

different themes satisfaction of the customer, customer loyalty, pricing strategies literature,

review of global banking sector of Pakistan and dimensions of price satisfaction. This chapter

will also explain conceptual framework of research. At the end of this chapter, summary of the

chapter will be given.

2.2: Satisfaction of the customers:

Customer satisfaction is now an important issue of the organizations. Oliver (1980) suggested

that satisfaction of customer is post purchase behaviour or consumer consumption behaviour of

customer. It is linked with customer’s mind and its result may be negative or positive

predilections in customers mind. Corporate strategy of an organization is strongly linked with

customer satisfaction (Homburg et al., 2005). Customer satisfaction contentions now obtrusive

among organizations so to improve the relations with customer organizations originate particular

programs. Many researchers identified that the financial performance of an organization is

associated with satisfaction of customer (Anderson et al., 1994, Rust and Zohorik, 1993,

Szymanski and Henard, 2001). Moreover, Anderson et al. (1994) highlighted number of firms in

Swedish and suggested that customers’ satisfaction and financial performance are positively

linked with each other. They jotted that if an organization has satisfied customers, it would lead

to increase satisfaction level of customer. Henrad and Szymanski (2001) conducted research on

customers’ satisfaction and recommended that in this area, there is need for further research in

this area. Richen (1983), Prince and File (1992) identified that satisfied customers express their

experience with their fellows and it becomes a part of mouth advertisement. This advertisement

18

plays a positive or negative role and may alter relations of banks with its stakeholders.

Athanasupouls (2001) elaborated that the services are invisible and not tangible. Due to this, it is

difficult for the customers to judge customers’ satisfaction from services. Findings of both Hall

and Hall (1987) and Hofstede (1980) show that the unsatisfied customers share bad experiences

with the people which may disappoint prospective as well as existing customers and may serve

as negative marketing of the organization. This, in turn, may have negative impact on the

performance of the bank. Banks should collect primary as well as secondary data to evaluate

customers’ satisfaction. The main idea for evaluation and measurement of customers’

satisfaction is customers’ retention. (Athanasupouls, 1998, 1999; Buttle, 1996; Cronin and Tylor,

1992, 1994; Parasumraman et al. 1985, 1988, 1991and 1993).

Nyer (1999) and Oliver (1987) explained that unsatisfied customer grumble and makes the

negative marketing of the bank. Ward and Al-Hawari (2006) said that the quality of services

have great impact on customers’ satisfaction and customer satisfaction have great influence on

the performance of bank. Unsatisfied customers can boot out the business from market and the

satisfied can boost up the business (Mohsin, 2011). Now-a-days, banks are competing for

customers and to increase their profit and market share. Banks are now shifting to the branchless

banking from traditional banking. Now, the banks are introducing mobile banking to capture the

maximum customer and mobile banking is another step towards customers’ satisfaction

(B.Anckar, 2002). There is a gap between consumers’ experience and expectations. The

customer satisfaction would be lower if companies offer bad experience to the customers.

O’Sullivan and McCalling (2012) suggested customer satisfaction has a positive impact on the

output of organization. Long-term organizational success requires customer satisfaction.

Organizations understand well how to satisfy their customer in different sectors. Employees

should maintain personal relationships with the customers by providing better services and

quality product. Organization needs to provide high level of quality services to survive long term

in market (Wen, Wang and Han, 2003).

Metava and Almossawi (1998) analyzed that the feelings of a customer while using the product

or services show the customer’s satisfaction. Kamakura and Mittal says that future purchases are

19

based on the customer satisfaction. Zeithmal, Barry and Parasuraman (1988) explains that the

banks are using the innovative techniques to satisfy their customers like call centers, internet

banking and online system. Competitiveness and ease of use are the two elements of overall

satisfaction. To increase the organizations efficiency, now it is compulsory to measure customer

satisfaction.

According to Rehman and Khattak (2010), if any company is willing to retain old customers and

attract new customer then it should satisfy its customers better than others. Customer satisfaction

is very important area to invest. Organization’s output depends upon the customer satisfaction.

Banks should pay attention to satisfy their customer. Customer satisfaction captures the attention

of banking industry due to the high competition among banking sector. In the service sector,

customer satisfaction has become more important because it directly affects the loyalty of the

customers (Ravichandran et al 2010).

2.3: Loyalty of Customer:

Qingyu, G (2009) suggested that organizations need to explore tactics and strategies related to

customers’ satisfaction in retail banking so that profits of the organizations can be increased.

Retail banking is based on relationships between organization and its customers. Long-term

relationship leads to an increase in profitability of a bank. Weaven and Herington (2007)

suggested that IT services are not only enough to maintain strong relationships of banking

customers. Customer loyalty can be achieved by fulfilling the personal need of customers. This

can be done in e-business situations like well-organized web sites. Use of online customer

supports services is a way through which one can improve its relationship with the customers

and it may also lead to customers’ delight. Ramaswamy and Prahalad (2004) said that the

organization creates value for provision of value to its customers. Both customers and

organizations should cooperate with each other for value generation. Chandrashekaran et al.

(2007) proved that there is relationship between customer loyalty and customer satisfaction.

Anderson and Sullivan (1993), Dick and Basu(1994), Gronholdtet al. (2000), Hallowell (1996),

20

Loveman(1998) and Srinivasan et al. (2002) provided the evidence of link between customer

satisfaction and customer loyalty. Customer loyalty and profitability levels are positively linked

with each other as customer loyalty increases the profitability of the organization, creates

positive word of mouth and refers more consumers to the firm (Bell et al., 2005, Biyalogorsky et

al., 2001, Kandampully and Suhartanto, 2000, Mittal and Kamakura, 2001, Wangenheim and

Bayón, 2004, Yi and La, 2004). Organizations should improve customer loyalty and customer

satisfaction on priority basis. Loyal customers do not notice the increase in price actually; these

customers create positive word of mouth. Mobile banking, online-banking and Automated Teller

Machines led to development of electronic banking which resulted in satisfied and loyal

customer. Improvement in online banking systems may also lead to increase in satisfaction leve

of customers of banking sector (Khan, 2010). Rapid changes in the service industry are due to

innovations in technology and the large organization can only adopt innovative changes to make

their customer satisfied. Customers’ demands are changing with the change in technology

(Aliabdil et al 2012). Banking is expand else, its working hours due to first innovation in banking

industry and that is ATM. With the development in banking industry as well as innovation in

related attributes of banking industry, more and more services options are available to the

bankers which they may use to serve their customers. The main reason behind associated for

such fast innovation is customer loyalty. Without any hesitation, the users can use ATM any time

anywhere (S, Sultan, 2009).

It is the responsibility of the that they should provide information to the bank itself so that they

can satisfy their customers. Provide information and little training to customers so that

improvement in electronic banking quality and service can be made (Paynter and Chung, 2002).

To shift customer from retail banking to mobile banking the (CRM) customer relationship

manager have to play a vital role (Srivastava, 2007). Gayskem et al. (1998) suggested that trust

and belief are major factors that may help in attracting customers. Talking about the trust, one

should consider other factors such as risk. This will help in adoption of electronic banking and

other services offered by banks including ATM, online facilities and mobile banking etc.

(Turban and Lee, 2001; Pavlou and Featherman, 2003; Geffen et al, 2003).

21

To increase the profits and market share, organizations have to recognize the importance of

customer satisfaction (Cacippo, 2000). The need of satisfaction of customer is growing among

all industries and including banks. Governments and private agencies working on different

surveys of customer satisfaction (Schay, et al. 2000). All over the world, banking institutions

now are well familiar with customers’ satisfaction and most of the banks have made customer

relationship departments. However, the same time the banks are facing dissatisfaction of retail

customer. There are multiple reasons for switching to the other banks including dissatisfaction

from the services of existing banks (Manrai and Manrai, 2007). The phrase “Boss is always

right” has been change into “Customer is always right” (Stya and Prabhakaran, 2003).

Parasuman et al. (1994) mentioned the service quality dimensions are; tangibility, understanding,

security, communication, credibility, reliability, competence, responsiveness and accessibility.

2.4: Analysis of Consumer Behavior – Significance:

In order to analyze customers’ satisfaction, it is compulsory to understand the consumer behavior

(Deaton and Muellbauer, 1980, East, 1997, Moutinho, 1993, Solomon et al., 2007). Different

authors study the concept in different ways. Moutinho (1993) worked on tourism industry to

analyze consumer behavior and suggested that the both internal and external factors should be

examined while studying consumer behavior. It changes with internal and external factors so it is

very complex for studying it. It should be analyzed deliberately. Moutinho (1993) highlighted

that numerous factors are involved in consumer behavior. Organization culture is influential

factor which has an impact on buying of products and services. Prabhu and Ranaweera (2003)

proposed that organization should study customer behavior. Its importance cannot be neglect by

any firm because it have influence on long-term profitability. Chiu et al. (2006) elaborated that to

generate insight, organizations should study consumer behavior. Simon (2009) suggested that if

organizations understand consumer behavior, it would help them in increasing their customer

satisfaction and loyalty to stay ahead in the market. To increase profits and market share,

organizations will have to recognize importance of customer satisfaction (Cacippo, 2000). The

demand of customer satisfaction is growing among all industries and including banks.

Governments and private agencies have been conducting different surveys so as to evaluate

22

customer satisfaction (Schay, et al. 2000). All over the world, banking institutions are now well

familiar with customers’ satisfaction and most of the banks have made customer relationship

departments. However, at the same time the banks are facing dissatisfaction of retail customer.

The phrase “Boss is always right” has been change into “Customer is always right” (Stya and

Prabhakaran, 2003). Parasuman et al. (1994) mentioned the service quality dimensions are;

tangibility, understanding, security, communication, credibility, reliability, competence,

responsiveness and accessibility.

Loyalty of the customer is the psychological state so it should be measured carefully. Large

organizations can satisfy customer better and hold them (Caippo, 2000). Feedback of customers

will help in measuring customer loyalty and in identifying those customers which are at risk

before lost. Customer loyalty provides help to customers so as to analyze the work of human

resources, IT and other elements (Schay, et al. 2000).

There is a positive link between loyalty and customer satisfaction as it increases the outcome of

organization (Colgate, 1999). Anderson and Colleagues (1994) analyzed that the 1% increase in

customer satisfaction will cause an increase of 11.4% in returns. Now the experts are focusing

directly on customer satisfaction. Satisfying and retaining the customer is less expensive as

compared to capturing the new customer (Johnson et al. 2000). Organizations are putting their

efforts to make the strategic plans to increase their customer loyalty. Researchers found out that

to create revenues in future it is compulsory to increase the customer loyalty (Fornell, 1992).

Kumbar (2011) analyzed that the electronic banking is based on assurance, responsiveness and

easy to use as these elements may lead to increase in customer loyalty (Faghani and Aghdaie,

2012). Australian studies shows that mostly people have no knowledge about the mobile

banking. Organizations should generate awareness about products and services as this may

increase level of adoption of electric banking service. New technology is not easy for everyone

so it may hinder people who are adopting electronic banking (Sathy, 1999).

23

For the assessment of the service quality, customer investigates characteristics of service quality

before using it. For the measurement of service quality, things evaluated are behavior of the

employees, materialistic proficiencies and other expressions. However, the most important is the

assessment of assurance characteristics. (Berry et al. 1985)

2.5: Pricing strategy:

The pricing strategy has received significant attention during the last few years. Berger et al.

(2007), Chen and Seshadri(2007), Li-fei(2008), Liu et al. (2009), Mak et al. (2008), Nelson et al.

(2007), Qi and Xiao Feng (2008), Utaka(2008), Xiao Jun and Hongmin(2009) conducted

research on pricing and related areas. The areas investigated by these researchers include both

online and off-line business environment. According to Anderson and Sullivan (1993), Anderson

(1998), Cao and Gruca(2007), Fornell et al. (2009), Herrmann et al. (2007) and Naumann et

al.(2009), pricing policy of an organization has strong association with an organization’s

customer satisfaction. For instance, Herrmann et al. (2007), if a customer perceives that the

pricing policy of the organization is fairer then the customers became satisfied. However, on the

contrary, if the pricing thought to be the other way round, the customers may switch to other

organizations. Similarly, Naumann et al. (2009) reported the case of an organization which

started charging premium prices. Its customers did not like this thing and they switched to the

lower prices sellers. Further to this, Cao et al. (2003) highlighted that an organization’s pricing

strategy will influence the pricing satisfaction of its customers, which in turn influences the

customer satisfaction. Similarly, Fornell et al. (2009) reported that the satisfaction level of the

customers from an organization increases if a customer can buy more from a given level of

money from an organization. This can, obviously occur if an organization decreases its prices.

24

2.6: Pricing and Customer Satisfaction:

Prices are the monitory units and paid against buying and selling of products or services. For

suppliers, it is the way to earn profits and customer react on prices called the buying behavior.

Price setting is also a marketing issue, which influences on customer behavior. Therefore, price

setting is a critical decision. This area is linked with price and pricing options. Many researchers

have worked on customer satisfaction. This research includes various price dimensions, which

deals with the price satisfaction in banking sector. Zhang and Raju (2010) identified that the

customers have to adjust prices according to marketing mix variables. For example, in

telecommunication sector services like “pay-as-you-go” is one of the ways to charge the prices.

Boone et al. (2009) highlighted that a lot of work has been carried on in the area of pricing and

its impact on customers’ satisfaction. They also explained that comparatively women have more

propensity to pay more price. Furthermore, as compare to white, black people have more

tendency to pay extra. Ahlswede, S. (2012) highlighted that the different analyses shows prices

play a main role to switch other banks. Ahlswede and Schildbach (2012) identify that the

customer need improvements in prices continuously to increase their satisfaction with bank.

Zohorik and Rust (1993) and Colgate et al. (1996) conduct a research and indicate that the

capturing the new customer an expensive and costly way as compared to retain the previous

customer. Researchers thought (Armstrong and Kotler, 2012) the evaluation of post purchase of

the service and the product is called the satisfaction. Lin (2011) says if banks willing to catch

attention and retention of customer, they have to give attention and importance to easy individual

customer and their way of spending their life even likes and dislikes. New modes of doing

business in banking sector is to give more importance to customer satisfaction.

Homburg et al. (2005) suggested that analysis of behavioral pricing including evaluation of

buyers’ reaction on different prices and decision-making behavior. Hallowell, R. (1996)

25

highlighted that customer satisfaction is very critical area banking sector and banking concerns

should identify major factors related to customer satisfaction in retail banking.

2.7: Price Satisfaction:

This chapter is all about price satisfaction. Various price dimensions are highlighted which are

linked with satisfaction of customer.

Bitner and Zeithaml (2000) highlighted that customer satisfaction is attached with values given

to customer, which influence their loyalty. They also indicated that value of customers is

associated with customers’ paying and getting. O.H (2003) indicated that customers compare

prices charges at the time of buying any new product or service with price which they had

already in mind. If the prices are high as compared to what the customers are expecting, it will be

the dissatisfaction of customer (O.H, 2003). Voss et al. (1998) highlighted that customer

satisfaction and price satisfaction relationship is a vast area, which is yet to be explored.

Customer’s satisfaction is linked with customer advocacy, money back guarantee and fix pricing.

Campbell (1999), Fornell et al. (1996), Keaveney(1995) and Varki and Colgate (2001) found that

the price satisfaction is a major issue for the organizations.

Matzler et al., (2004), Diller (1997) highlighted that customer satisfaction from prices is a

considerable area for organizations. They also suggested that the price satisfaction is based on

various factors. Diller (1997) jotted that base of purchase decision starts with search for goods

and services. When customers found goods and services, they will evaluate those against

predetermined values. The next step of evaluation is decision making of any product or service.

Repurchase decision of customer also depends upon customers’ perception which may be

developed after using a product or services.

26

Customer’s Decision process

Adopted from:

Pride, W. and O. C.(2014) Ferrell Foundations of Marketing, Cengage Learning.

Pride, W. and O. C (2014) explained that the price transparency is important at problem

recognition stage and information stage. Next stage is evaluation of alternatives and the decision

stage where customer consider price quality and relative price. Product and services usage and

repurchase decisions are dependent upon price fairness, price quality ratio and price reliability.

When product or services are purchased than customer evaluate it with other organizations’

product and services. After this, customers decide that they will purchase again or not. Price

fairness and price quality are the basis of decision-making.

A discussion on dimensions of price satisfaction are given below.

27

2.8: Dimensions of price satisfaction:

Matzler et al. (2004, 2006) and Diller (1997) indicated various price dimensions including price

transparency, relative price, price fairness, price quality ratio and price reliability. They

recommended that customers’ preferences change with the time. It is important to evaluate level

of price satisfaction of the customers. The price dimensions will be explored further.

2.8.1: Price Transparency:

Urban et al. (1996) abstracted the literature on price satisfaction and recommended that previous

studies in price satisfaction did not answer all the questions of pricing. They analyze grocery and

general retail industry to understand pricing strategy. They identified that customer would be

satisfied if they found different pricing options in products and services. They also indicated that

now-a-days, companies inform customers about prices in comparison to previous times.

Organizations have better communication sources to provide information. Therefore, it will be

possible for organizatins that they can create awareness among its customers. The process would

be easy and simple of purchasing. Customers exchange information among them as word of

mouth; loyal customers generate positive word of mouth. Price transparency shows the honesty,

openness, and create customer satisfaction. If organizations affirm the information about goods

and services it will lead to customers’ satisfaction. Diller (1997) indicated that transparency of

price leads to an increase in satisfaction level of customers as it would add to transparency

among customers. Organizations should provide information without any effort by customer.

When a customer discern price transparency, then they would not endeavor about further

information to assess which will cause to increase the level of customer satisfaction. Urbany et

al. (1996) indicated that in banking industry, different software were developed so as to facilitate

customer’s decision of buying of product and services. These software programs help customers

in choosing mortgage, account opening and loaning. Customers’ trust on organization increases

when prices are transparent. The above discussion shows that price transparency is important to

customer satisfaction. Urban (2003) highlighted that if information is easy to access, easy to

access alternatives, easy to make transactions, easy to communicate with other customers are the

28

five factors who increase customers power. Existence of price transparency is possible when

customer get complete, clear, recent and effortless information about product prices quoted by

company. Therefore, the price transparency is an important dimension of pricing strategy (Diller,

1997). Number of companies provide software-based advisor to help customers to get all

information about products and services they need. Microsoft, Intel, SACU, Patelco and Mission

Federal are those companies that provide the web-based tool bars to help customers in various

ways. Aim of these programs is to provide complete and comprehensive information about

products and services (Urban, 2003) offered by the customers.

2.8.2: Relative Price:

Colgate and Varki (2001), Keaveney (1995) worked on factors which affect price satisfaction.

Keaveney (1995) highlighted that profitability and market share has an influence on switching

behavior. He collected data from 500 respondents who are receiving services from different

organizations. He indicated 800 cases which caused customer switching behavior. He also

indicated 8 categories of switching behavior. Colgate and Varki (2001) suggested that there is

relationship between prices and customer retention. They suggested that pricing has an impact on

overall customer’s satisfaction and this will also leads to an increase in value that customers

receives from an organization. Colgate and Varki used the banking sector of New Zealand and

America and highlighted that pricing perception of customer influences overall value that

customers receive from organizations. Customers always compare prices offered by different

organizations. The comparison has the strong impact on customer satisfaction and they intend to

purchase from same organization. Product pricing is an important factor of customer satisfaction.

Matzler et al. (2006) proposed that customers gravitate the best prices by competing it with other

organizations. If the relative prices are available, customer will compare it with other offered

prices. When customer perceives that organization offers less-price as compared to others, than

the competitor does, customer would prefer best price and quality of product (Louter et al., 1991,

Grewal et al., 1996, Merrick, 2001, Wright and Smith, 2004).

29

Lam et al. (2004) and Gale (1994) highlighted that customer’s perception during purchase

product or services is based on two factors: perceived quality of product/service and perceived

price of product/service. According to Lam et al. (2004), customer’s perception is based on

information that one customer receives from other customers and on price-quality ratio. The

value received by the customer will be high if the perceived cost decreases and perceived quality

increase. The value of customer will be low, if quality did not meet the customer’s perception

and price exceeds (Cronin et al. 2000). Zeithaml (1998) identified that customer perceived value

as “it is customers overall perception of the value of a product that what they receive”. Monroe

(1990) and Zeithaml (1988) highlight that “customers perception regarding the value can be

judged by the perception of receiving quality benefits of a product by paying something.” This

type of definition is common in use that shows monetary and non-monetary factors, search cost,

time value and psychological cost. Customer value is the key factor that plays a central role in

purchase or in post purchase behavior. Different researchers give various theories on price and

quality impact on customer’s value. Formell et al. (1996) visited various industries and checked

the impact of post purchase behavior, perceived quality and price on overall customer

satisfaction. In every industry, they found that the price is a key component to purchase anything.

They further investigated that price was important when customers perceived value in two cases

out of seven. In their research related to impact of price in service sector. Voss et al. (1998)

highlight that perceived value has a major impact on the customers’ satisfaction as long as price

is consistent. At the same time, price also has a major impact if price is inconsistent.

2.8.3: Price-Quality Ratio:

Fornell et al. (1996) indicated that there is relationship between quality of product, customer

satisfaction and perception of pricing. They provided a model, which can be used to anticipate

the performance of market in different countries and industries. They conducted a research in

America and results of that research reveals new acumen of American economies. They

indicated that there is decreasing trend in American customer satisfaction. They explained that in

America, customers are getting more satisfaction from products as compared to services. In

addition to this, price and satisfaction attached with the customer expectation also influence

30

overall customers’ satisfaction level. Furthermore, quality and pricing affect the customer

satisfaction. Cronin et al. (2000) also added that overall satisfaction, quality and price affect the

customers’ purchase consideration.

In addition to this, Lam et al. (2004) and Gale (1994) proved that price quality ratio depends

upon two things; first, amount of money customer pays for goods or services. Second, perception

of level benefits that a customer receive from goods or services. If the benefits are more than

costs, the price quality ratio will be the high. According to Woodruff and Gardial (1996) to

satisfy your customer with price, the organization should offer the favorable price-quality ratio.

2.8.4: Price Confidence:

Diller (1997) reveals that if organizations want to create customers confidence on the

organizations, it should develop pricing strategies that are favourable for the customer. Increase

in customers’ confidence will cause an increase in customers’ satisfaction to the prices of an

organization. Matzler et al. (2006) highlighted that customer satisfaction with price is related

with price, quality and price transparency offered by organization to its customers. To satisfy the

customer, confidence is more important from organization’s perspective. Vuchelan and Praet

(1989) highlighted case of France, Italy, UK and Germany to analyse the oil prices effects and

interest rates effects on customer’s confidence. They indicated that domestic currency

depreciation, interest rate and increasing oil prices resulted in decrease in the customer

confidence.

2.8.5: Price Fairness:

Campbell (1999) indicated that when organization changes prices, the customer perception also

changes with changing prices. Campbell (1999) analyzed two separate areas. In his first research,

he studied relationship between customer satisfaction and increase in prices of an organizations

products and services. He suggested that customers believe that price changing is not fair as this

31

is an unfair practice by organization. His second research findings suggested that goodwill of an

organization will be decreased if customer faces unfair price practices by organization. If the

organization can survive without increasing the price of products and services, then organization

should not increase prices. Both studies if combined together, provide evidence that price

changes effect customer satisfaction and show that there is moderate relationship between

reputation and goodwill of an organization. Campbell (1999) indicated that perception of unfair

pricing of an organization drives reduce intentions of purchasing from those organizations.

In various situations, organizations have to change price strategies. One of them is when

customer hurriedly purchase product and services. This situation increases bargaining power of

supplier as it he can better use his position in such circumstances. Suppliers can charge high

prices because of its own reasons. If customers perceive that change is price is unjust then it will

cause dissatisfaction among the customers of the organization.

Including that price fairness can etched back to theory of equity of Adams (1963). Swan and

Oliver (1989) highlighted that customers always compare the benefits of one transaction with

other transaction. If customer perceive inequity, they believe they are not receiving more benefits

as others are receiving. If customers feel that organization is getting high profits from the

customer, then they would remark it as unfair (Urbany et al., 1996). Many other researchers talk

about price fairness. In addition to this, Monroe and Martins (1994) indicated that when an

organization and its seller charges less prices to the customer and at the other side charges

regular prices it will result in price unfairness.

The above literature reveals the important relationship between customer perceptions and price

satisfaction of price fairness.

32

2.8.6: Price Reliability:

Diller (1997) highlighted that the reliability of prices is linked with a situation in which

customers do not have not any surprises about the price changes to disturb them. This situation

occurs when organization charge hidden prices. Therefore, this situation can arise when

customers feel changes in prices unexpectedly. If organization communicates price changes in

time then the customers will not be disturbed regarding prices. This would help organizations in

building long-term relationship. Lee and Garbarino (2003) suggested that dynamic pricing

practices are not appreciated by the customers and it will cause dissatisfaction among customer.

If organization increase prices of its products and services because of an increase in demand of

its products and services then customers may loose their confidence. Nalebuff and Ayres (2003)

highlighted that in many situations organizations do not inform customers regarding prices. They

indicated the case of rental car and cell phone companies who charged hidden prices.

The above literature indicated that the reliability of price is an important dimension and

organizations should pay more attention towards this. Price reliability is important dimension of

price, which is the part of price satisfaction.

2.9: Conceptual Framework of Research:

Above literature, exhort that the preference of the organizations should be to satisfy needs and

wants of its customers. Organization can increase its customers through the satisfied customers’

word of mouth. Product and service quality have strong impact on customer satisfaction. Repeat

purchase based on customer satisfaction, which will cause increase in profits. Satisfied customers

can attract new business of any organization. Satisfied customers of organization would create

positive word of mouth, which resulted as other customer attract to buy product and services.

Decision making in pricing strategy is important, it directly relates to customer satisfaction.

Customers are willing to pay fair prices; it has been prove that customers switch to other

organization due to dissatisfaction from pricing. There are number of dimensions of price

satisfaction. Every dimension have analyzed by different countries in different industries. The

33

aim of this dissertation is to analyze the customers’ price satisfaction on overall price satisfaction

in banking sector of Pakistan.

The researcher presented the context of banking industry of Pakistan. The banks are interested in

knowing about their customer’s perception about pricing strategy and their overall satisfaction.

This dissertation will not only help researcher to achieve the academic goals but at the same time

will support banking industry of Pakistan in understanding customers’ price satisfaction.

Figure 2.2: Conceptual Framework of Dissertation

34

Conceptual framework shows six price dimensions. It includes price fairness, price quality ratio,

relative pricing, price transparency, price confidence and price reliability. Each dimension have

the theoretical base in the conceptual framework of this dissertation.

2.10: Summary of Chapter:

Above chapter was the second chapter of dissertation and presented literature review on

customer’s price satisfaction and dimensions of price. This chapter highlighted that customer

price satisfaction is important factor for an organization. Customer satisfaction is not only the

responsibility of a specific department rather it is the responsibility of whole organization.

Organizations are competing based on customer satisfaction and aim at developing competitive

advantage based on it. In this situation, organizations should pay more attention towards

customer satisfaction and retention. This will positively affect organizational performance. It will

not be in favor of any organization to discourage customer and switch to other organization. Next

chapter will be research methodology.

35

CHAPTER 3: METHODOLOGY

3.1: Introduction of Chapter:

Chapter two of this dissertation presented literature review on the topic. This chapter will present

research methods used by researchers to conduct this research project. Chapter has started with

introduction of the chapter and will present need to conduct the research. In this chapter, the

researcher will explain the research philosophy, research strategy, research approach, data

collection methods, research approach and period used in this research project. Thereafter,

population and sampling procedures will also be discussed in this chapter. Including this, the

researcher will provide details about research ethics, validity and reliability of research findings.

Chapter three will end with conclusion of the chapter.

3.2: Need for Research:

According to Krishnaswamy et al. (2009) when we need to take decisions in our life mostly, we

use common sense to take decision, which we have experienced over the time. This type of

decision-making is not the best choice. If anyone faces an important issue and has to take

decision, one should systematically identify problem, collect and analyze data and then decide

what to do. This is a way to do research. Bell and Bryman (2007) suggested that research is a

“systematic and objective process of collecting, recording, analyzing and interpreting data for aid

in solving business problems”. In this dissertation, aim of the research is to analyze the price

satisfaction on overall satisfaction in banking sector of Pakistan. Researcher has decided to

conduct systematic research to achieve this aim. This dissertation has endured all possible stages,

defined the above definition. In rest of this chapter, discussion related to collection and analysis

data and findings will be presented.

36

Figure 3.1: The research process

Figure 3.1 shows research process. It shows that research starts with idea generation. In this

dissertation, customers’ price satisfaction was analyzed in banking sector of Pakistan. Next step

is the review of literature on the relevant topic. The researcher also developed theoretical

framework as well as aims and objectives of research which are given in first chapter. This

research design is also followed in this research and will be explained later in this chapter. Next

step is collection and data analysis. Data collection and analysis details will also be given in this

chapter. Findings and interpretation will be explained in next chapter. Conclusion will be

provided at the end of chapter five.

37

3.3: Research Framework and Research Design:

McNeill (1990) recommended that researcher should make a research design at the start of

research, which would be the helpful to researcher at various stages. Research design is also

helpful to adopt research techniques, which is closely related to research design. Research

philosophy, research approach and other methods are also linked with research issue so

researcher will discuss those issues so as resolve the research issue. Researcher developed

research design to help researcher in conducting research. Saunders (2009) emphasized that

researchers should understand the importance of having a robust research methodology and

should also explain system and logics of research. Researcher in this project followed research

design proposed by Saunders (2009). This model is known as research onion and has have five

inter-related stages in the onion.. The five layers of research onion are linked with each other.

Every layer of research onion is discussed as under:

Figure 3.2: Saunders Research Onion

38

3.3.1: Research Philosophy:

According to Saunders (2009), first step in designing a research project is to select an appropriate

philosophy for conducing research. Selected research philosophy is also attached with other

stages of research process as well as research onion. It shows the link of researchers’ point of

view of research world. Saunders (2009) gave three options in his research onion related to

research philosophy. These options were positivism, interpretivism and realism. First option of

research philosophy was positivism, which helps organization in moving towards a systematic,

structured and step-by-step research project. This philosophy applies only to scientific techniques

of data analysis and shows that research and research settings are detached. Positivism

philosophy generates quantitative data. The second philosophy is interpretivism and asserts that

it is not possible to envisage all research issues with high level of objectivity so one should apply

evolving techniques to resolve the research issues. Researcher should use loose research

methodology techniques, so that researcher can adjust research topic and research design

according to requirements of research problems. The third philosophy of Saunders is realism.

This philosophy is mostly used to solve natural science research problems.

This research involves a social science issue, so realism cannot be select as project philosophy.

Researcher also rejected interpretivism because research does not want to select an evolving

research project. Therefore, researcher decided to use positivism philosophy so as to use it for

data collection and data analysis.

3.3.2: Research Approach:

According to Saunders (2009), next step after finalizing the research philosophy is research

approach in the Saunders research design used in this research project. The two options are

opposite of each other and are inductive and deductive approach. Creswell (2014) contrasted

these approaches and suggested that inductive approach is related to interpretivism and deductive

approach is linked with positivism philosophy. To inquire about specific areas, from general to

specific, “top-down” approach or deductive approach should be used. On the other hand,

39

“bottom-up” or indicative approach, which is opposite of deductive approach, works from

specific to general approach. In deductive approach, researchers compile data related to research

aim and objectives and bring out findings. Researchers can use inductive approach for generation

of hypothesis.

Researcher selected the deductive approach in this research project. This is because of the fact

that deductive approach is linked with positivism. Furthermore, aim and objectives are selected,

so researcher does not need an evolving approach for conducting research. Therefore, purpose of

this research is to conduct a quantitative data analysis which is linked with deductive approach.

3.3.3: Research Strategy:

According to Saunders (2009), third layer of research onion is research strategy. Research onion

shows that there are several options related to research strategy. Case study, action research,

survey and grounded theory are some of them. Action research and grounded theory will not be

selected and used in this research project because they are not linked with research purpose,

philosophy and research approach. Researcher has developed and presented aim and objective in

first chapter of the report. Researcher did not select case study it is linked interpretivism, which

was not selected research philosophy for this dissertation. Researcher selected questionnaire for

this research strategy. Wilson (2010) said that survey is a useful method for managing large

number of people so as to obtain standardized response from the respondents. In this research,

questionnaires were used to collect data from customers who had been maintaining banking

relations with banks. The purpose of questionnaires was to collect data about customer’s

satisfaction from prices of banking sector.

3.3.4: Time Dimension for Data Collection:

Saunders (2009) recommended that when researcher has selected philosophy of research,

approach and strategy, next step in research design is selection of time dimension for research

project. There are two options in research onion related to time dimension. These are cross

sectional and longitudinal. In case of longitudinal research design, data is collected more than

40

one time. This is generally done for making comparisons. This research does not have any such

purpose so researcher did not select time-series data collection design. Finally, researcher

decided to use cross-sectional time horizon for collection of data.

3.3.5: Tools for Collection of Data:

Final step in research onion of Saunders (2009) is to select one or more options for data

collection. Saunders (2009) gave number of options for collection of data. More than one options

can be selected for collection of data yet it depends on nature of research issue. In this regard,

researcher used questionnaire for data collection. By using questionnaire, researcher tried to limit

his own biasness. Researcher needed quantitative data for data analysis so questionnaires were

used for collection of such data as these are suitable option for collection and analysis of

quantitative data. Researcher rejected observations, interviews and focus on group discussions;

was based on inner experience rather than facts. Researcher needed the primary data to complete

research aim, so that the questionnaires are the best approach. Secondary data was used by

researcher for literature review as well as for proposal development. Kumar (2010) supported the

use of primary data as it has more authenticity, reliability and relevance to research topic.

However, it takes time and is expensive. Secondary data can be less relevant, old and may not be

reliable. It can easily be available without much struggle. Mostly secondary data sources include

books, journals, industry reports, magazines and newspapers. Primary data is linked with

objectives of research, which are related to analysis of customers’ price satisfaction with overall

satisfaction in banking sector.

3.4: Research Population:

Bell and Bryman (2007) highlighted that population of research comprises of all those group of

people, phenomenon and matter related to statistical inquiry of research. According to bell and

Bryman (2007), there are two types of population. First is theoretical population, which is

ensemble to all elements. Other is the reachable population and includes all those persons who

are accessible or approachable by researcher using his existing research methods. In this

research, this was not possible for researcher to approach all members of population so he

41

collected data from the targeted population. Target population in this research comprise of all

those people who have their bank accounts with banks of Pakistan. Targeted population includes

those individuals group on which the researchers can apply conclusion.

3.5: Sampling Plan:

Bell and Bryman (2007) recommended that if it is not possible for researcher that he can collect

data from all the elements of research then he can collect data from a subset of population.

Moreover, if researcher is facing money and time pressure then it is better for researcher that he

should collect data from a sample. Subset of a population is called sample. This is an academic

research project, so researcher has to fund this research project from his own resources. The

funds were not enough for data collection from whole population. Therefore, researcher has

adopted sampling technique for data collection. There are two main sampling techniques from

which researcher can select one. First is probability sampling technique where as second is non-

probability sampling. Probability based sampling technique is deliberate technique of sample

selection. Here, every member has equal chance to be select. Mostly experimental researches are

based on probability based sampling. In the research, list of all the persons who have bank

account and using the products or services of bank in Pakistan is not available, so it was difficult

for researcher to adopt probability-based technique of sampling. Consequently, researcher has to

rely on non-probability sampling technique and out of this method, convenient sampling

technique was used. Therefore, researcher decided to use non-probability technique to choose

sample. To collect data, researcher selected 150 respondents. The sample selection method was

convenience based sampling technique. Cost and time of data collection was kept in mind by

researcher while collecting data.

3.6: Conduct of Survey:

Once the sampling plan has been decided, next step is to collection of data. In this regard, a

survey was carried out in Pakistan. There are number of advantages and disadvantages of

surveys. While collecting information related to this, researcher kept this thing in mind. First

42

method is conduct personnel interviews, based face-to-face interview between researcher and

respondent. These can be take place anywhere at office, home, street, and superstore and so on.

Its main advantage is the exact person can be cache for example, customer of the bank at outside

the bank or in the bank. However, each organization and customer has its own characteristic. It

can be time consuming; customer would not like to spend much time for interview. Second is

telephone survey method, which is most popular in USA. The 96% people have telephones at

their home. It is a fast way to conduct a survey with using the computer assisting telephone

interview. To generate results after very last interview. However, the people fed up from

telemarketing companies they do not like to respond long at phone in detail. The workforce is

increasing so the people can be busy at their work and would not like to respond in working

hours. Having no phone numbers of all customers is another issue and organizations did not

provide the data. Another method of fast and economic survey is email. However, having no

email addresses and most of people ignore such type of emails. There is difference in education,

not every customer is educated. Computer direct interviews can conduct at the time of

transaction, so this was also not possible for researcher to select this. The world of research is

getting popularity and the interviews now conduct through web page. It is very fast, economic

and latest way of survey. Like every method web page has its own limitations. People can easily

reject the survey form to save the time. Last method is questionnaire that can be use to collect

data. The questionnaire can be send in email, face-to-face response is easy and less time

consuming. It also can fill out by making someone telephone call. Therefore, the researcher has

selected the questionnaire method to collect the data.

43

Figure 3.3: Benefits of Questionnaires

Researcher used questionnaires for collection of data. Questionnaire started with introduction of

researcher and research aim and professional information of researcher. Email address and phone

number of researcher was also provided in the questionnaire just in case of that if respondent

may have found difficult in answering the questions included in the research. Questionnaire has

the three sections. First section was based on importance of items whereas section two is based

on importance of price satisfaction. The third and last section was related to collection of basic

information of research. The researcher did not ask about bank account number, bank name and

phone number of the respondents, as researcher felt that respondent may or may not feel

unsecure in answering these questions. This questionnaire was distributed among four major

cities which are Lahore, Gujranwala, Gujrat and Sialkot. The respondents for this research were

students, businessperson and employees. Overall, 200 customer were approached to collect data

from different banks. Out of those, 150 customers agreed to cooperate and questionnaires were

distribute among them. Researcher got back only 117 questionnaires and out of these 117

questionnaires, there were 16 questionnaires, which were not filled properly. So, researcher

rejected those and used 103 questionnaires to analyze the results of customers’ price satisfaction

in banking sector of Pakistan. Researcher tested questionnaire before distributing it so that

researcher can remove disparity from questions and they respondent can easily answer all given

questions in the questionnaire.

3.7: Analysis of Collected Data:

A process to crack a problem or objective into meager parts to generate better understandings

called the analysis. Different techniques can be used to analyze data. There are diverse

techniques to use in scientific and social sciences research. Statistical Program for Social

Sciences were used to analyze collected data. Researcher has coded 103 questionnaires and

entered those in SPSS software. Factor-loading technique was used to extract important variables

from lengthy variables list. To finalize references, EndNote software was used by researcher.

Factor analysis was used to analyze customers’ satisfaction from banking services offered by

banks operated in Pakistan.

44

3.8: Research Ethics:

There are number of areas where researcher has to face ethical issues related to research project.

Participation in this research by the customers was entirely voluntary. The researcher did not

offer any benefits or pressure to customers to take part in research. Anonymity of customers was

ensured in this research so that no one can trace back respondents. The researcher did not ask

account number or bank name in questionnaire to maintain confidentiality. To secure

respondents information, data file was locked with password. Secondary data was also

acknowledged by researcher using University’s defined referencing style.

3.9: Reliability and Validity:

Reliability and validity is an important element of research design as well as of research project

(Fowler, 2009). Researcher specially observed this during conduct of research. A detailed

account of this will be presented in next chapter.

3.10: Summary of Chapter 3:

Chapter 3 of this dissertation covers research methods selected by researcher so as to accomplish

this dissertation. Researcher also used positivism philosophy and deductive approach was used.

Furthermore, data was collected using a questionnaire. Cross sectional time dimension was used

in this research and population of the research included all those people who had their bank

accounts in Pakistan. A convenience-based sample of 150 customers was selected and 103

questionnaires were used for generation of findings. Findings are based on factor analysis

technique, which is a useful technique for reducing data. To analyze customers’ satisfaction,

researcher used mean scores used. Next chapter will cover research findings and interpretation of

research.

45

CHAPTER 4: FINDINGS AND DISCUSSION

4.1: Introduction to Chapter:

Previous chapter presented research methodology of dissertation. In this chapter, researcher will

present findings as well as analysis of research findings. This chapter will start with the

introduction of the chapter, which will be followed by an account of reliability of data and

validity of results. Research aim and objectives will also be reviewed in this chapter. This will be

followed by the contextual information related to research, which will provide related findings of

research objectives. After this, main findings of research will be given. At the end, conclusion of

chapter will be given.

4.2: Reliability of Findings:

According to Reibstein et al. (1988), reliability of findings are very important and are linked

with the level to which research project can repeat its findings. Kostakoglu et al. (1999)

highlighted that if another person conducts similar research and same or almost similar findings

emerge (with same conditions), then reliability of this research can be considered to be high.

Brown et al. (2000) highlighted that in social sciences research project we use Cronbach’s alpha

for analysing reliability of findings. It is the measures of internal consistency of findings.

Researchers can use this if they have used Likert scale in questions and researcher intend to find

reliability of scale. Malory and George (2003) suggested that desired value of reliability of

findings is close to 0.7. In table, 4.1 values of Cronbach’s alpha provided.

46

Table 4.1: Reliability Statistics

Sr.# Dimension Cronbach's Alpha No of Items

1 Price Reliability 0.773 4

2 Price Confidence 0.798 4

3 Price Transparency 0.854 5

4 Relative Price 0.871 6

5 Price-Quality Ratio 0.658 5

6 Price Fairness 0.778 4

Table 4.1 shows reliability statistics of six dimensions of price satisfaction. These six dimensions

are price reliability, price confidence, price transparency, relative price, and price quality ratio

and price fairness. Furthermore, values of alpha of six dimensions were 0.773, 0.798, 0.854,

0.871, 0.658 and 0.778 respectively. All of these values are close to 0.7, which is the required

value. So, researcher found that as values of these constructs are close to 0.7 so they are reliable.

This enabled researcher to move further with analysis.

4.3: Validity of Findings:

Chafetz et al. (2011) and Mor et al. (1984) indicated importance of findings and these findings

are linked with the output of research. If the researcher feels that validity of the output data is

very high and then researcher can adopt proper research methods. The validity of external data is

very high because data was collected from actual customers of banking sector in Pakistan.

Researcher extracted different dimensions of price satisfaction from existing literature. The aim

of research to analyze price satisfaction on overall customer satisfaction and to analyze

customers satisfaction on pricing at retail banking sector of Pakistan. Cause and effect validity

was not required for this research because this was not a causal analysis. As validity of this

research was higher so researcher moved further with analysis.

47

4.4: Review of Aim and Objectives:

The aim of this dissertation is to analyze price satisfaction on overall customer satisfaction and to

analyze customers’ satisfaction on pricing at retail banking sector of Pakistan.

Following objectives based on above mentioned research aims and research questions.

1. To analayze the important dimensions of price satisfaction in banking industry of

Pakistan. .

2. To analyze the extent of customers satisfaction from dimensions of price satisfaction in

banking industry of Pakistan.

3. To analyze the influence of different dimensions of price satisfaction on overall customer

satisfaction.

4. To recommend members of banking industry so that they can increase price satisfaction

of banking customer.

4.5: Contextual Findings of the Research:

This section contains contextual findings of this research. It may help readers in understand that

from where the researcher collected the data. These findings are relate to gender, frequency of

use of the bank, type of customers, academic qualification, age, satisfaction level, duration of

using account, customers’ preferences of using internet and islamic banking and types of

account used by customer.

4.5.1: Gender of Customers:

Table 4.2 indicates gender of customers of bank in Pakistan.

48

Table 4.2: Gender of Customers

Frequency Percent Cumulative Percent

Male 78 75.7 75.7

Female 25 24.3 100.0

Total 103 100.0

Table 4.2 demonstrated that 75.7 percent customers who took part in this research were male and

24.3 percent were female. This significant figure shows that females have momentous part in

banking sector but the major part was based on males. It shows there is a huge potential of

capturing female customers’ segment and inspire them to use banking services. It can be an

opportunity for the banks. Graphical representation of findings is given below.

Graph 4.1: Gender of respondents

4.5.2:Frequency to Use Bank:

The table given below shows the frequency of use of banking services.

Table 4.3: Frequency to Use Bank

Frequency Percent Cumulative Percent

Daily 9 8.7 8.7

Once in a week 48 46.6 55.3

Once in a month 38 36.9 92.2

Very seldom 8 7.8 100.0

Total 103 100.0

49

Table 4.3 demonstrated that 8.7 percent of customer are those who use banking services daily,

46.6 percent customers use bank once a week, 36.9 percent customers use bank once in a month

and 7.8 percent are the customers who use the bank very seldom.

There is graphical representation of frequency of usage the bank. It shows that most of the

persons use bank once in a week and second largest group of people use banks once in a month.

The third group use bank daily, perhaps they can be accountants, businesspersons and employees

of banks. Last and fourth group is who visit bank very seldom.

Graph 4.2: Frequency to use the bank

4.5.3: Profession of the Customers:

Table 4.4 shows profession of the customers who had been using banking services.

Table 4.4: Profession of the Customer

Frequency Percent Cumulative Percent

Student 19 18.4 18.4

Businessperson 29 28.2 46.6

Employee 55 53.4 100.0

Total 103 100.0

50

Table 4.4 demonstrated that 53.4 percent (the majority) of the customers of the bank were

employees at different places. Its mean banks should satisfy employees because they will receive

their salary in their accounts. The second largest area is business persons with 28.2 percent of the

population. They have mostly corporate accounts and banks should offer them more facilities

because they have strong account as compare to employees and students. The last and small area

18.4 percent covered by students.

Here is graphical (4.3) representation of customers according to their profession.

Graph 4.3: Profession of customers.

4.5.4: Type of Customer:

Table 4.5 given below shows the types of customers of banks that participated in this research.

Table 4.5: Type of Customers

Frequency Percent Cumulative Percent

Household 65 63.1 63.1

Retailer 31 30.1 93.2

Manufacturer 7 6.8 100.0

Total 103 100.0

Table 4.5 is linked with type of customers and demonstrate that 6.8 percent of the customer were

manufacturers, 30.1 percent were retailer and 63.1 percent customer had been using banking

services for their personal use. Household segment is the largest segment. Pakistan is facing

different energy and other economic and political crises. That is why there is decreasing the

51

manufacturing and manufacturers remain very few. The 63.1 percent is largest figure of those

people who use banks for household purpose. 30.1 percent customers are the retailers who have

large or small retail business.

Graph 4.4: Type of customers

4.5.5: Academic Qualification of Customers:

Table 4.6 demonstrates academic qualification of the customers who participated in this research.

Table 4.6: Academic Qualification

Frequency Percent Cumulative Percent

Under Matric 4 3.9 3.9

Matric 9 8.7 12.6

Intermediate 15 14.6 27.2

Graduation 35 34.0 61.2

Master 29 28.2 89.3

PhD 3 2.9 92.2

Professional Qualification 8 7.8 100.0

Total 103 100.0

52

Above table shows 2.9 percent customers were PhD, 3.9 percent customers were under matric,

7.8 percent customers had professional qualifications, 8.7 percent customers have done

matriculation, 14.6 percent customers have done intermediate, 28.2 percent customers have done

master and last and largest group is 34.0 percent customers who are the graduates. It can be seen

that there is an increasing trend towards education of the people. Awareness of the customer is

dependent upon education, from which they come to know that what they are getting and what

they are paying.

Graph 4.5: Academic qualification of the customers

4.5.6: Age of the Customers:

Table 4.7 given below shows age of the customers.

Table 4.7: Age of Customers

Frequency Percent Cumulative Percent

21-25 26 25.2 25.2

26-30 29 28.2 53.4

31-35 12 11.7 65.0

36-40 12 11.7 76.7

41-45 9 8.7 85.4

46-50 2 1.9 87.4

51-55 8 7.8 95.1

56-60 3 2.9 98.1

61 and above 2 1.9 100.0

Total 103 100.0

53

Age of customers mentioned in the above table 4.7 which demonstrates that the largest group, in

terms of age, is 28.2 percent of 26 to 30 years old people. The second largest group is 25.2

percent of age 21 to 25 years. Third and fourth is equal with 11.7 percent of 31 to 35 and 36 to

40 years old. Fifth largest age group is 41 years to 45 with 8.7 percent. Sixth largest percentage

is 7.8 percent of 51 to 55 years age group. 56 to 60 years old, customers are 2.9 percent and 46 to

50 and 61 to above people both are 1.9 percent of the bank customers.

Graph 4.6: Age of customers

4.5.7: Satisfaction of Customer:

In this section the level of customer satisfaction is given.

Table 4.8: Satisfaction level of the Customer

Frequency Percent Cumulative Percent

Highly Dissatisfied 4 3.9 3.9

Dissatisfied 7 6.8 10.7

Normal 33 32.0 42.7

Satisfied 49 47.6 90.3

Highly Satisfied 10 9.7 100.0

Total 103 100.0

54

The above table shows that the 3.9 percent customers who participated in this research are highly

dissatisfied and 6.8 percent are customers are the dissatisfied. 32.0 percent customers are normal

47.6 percent customers are the satisfied and only 9.7 percent customers are who are highly

satisfied. Here, researcher makes five different levels of the satisfaction to covers all type of

customers. Figure 4.7 is the graphical representation of customers’ satisfaction.

4.5.8: Perception to Use Bank in Future:

In table 4.9 perception of customer to use bank in future given.

Table 4.9: Perception to use bank in future

Frequency Percent Cumulative Percent

Perhaps Never 2 1.9 1.9

Indifferent 12 11.7 13.6

Will Use 60 58.3 71.8

Definitely Use 29 28.2 100.0

Total 103 100.0

Above table demonstrated that 1.9 percent customer were not willing to use bank in future, these

customers were highly dissatisfied as mentioned in table 4.8. This is not a huge figure and as

such does not create problem for industry but from a strategic perspective, bank should focus on

these customer also. According to 11.7 percent customers, they indifferent use the bank. These

are the customers, who are dissatisfied from bank mention in table 4.8 and they are not sure to

55

use or not to use the bank. The customers participate in this research and say will use are 58.3

percent, these are normal customers as per table 4.8 and bank should make such strategies to

make these customers loyal. Other 28.2 percent customers said they would definitely use the

bank. These customers are highly satisfied. These can be the corporate customers or those

customers who visit bank at daily basis.

Table 4.8: Perception to use bank in future

4.5.9: Transaction (In Rs.) Execute by Customers:

This section depicts the transactions executed by customer at bank.

Table 4.10: Transaction (In Rs.) execute by customer

Frequency Percent Cumulative Percent

Less than 50000 50 48.5 48.5

50,000-100,000 17 16.5 65.0

100,001-150000 3 2.9 68.0

150,001-200,000 5 4.9 72.8

200,001-250,000 5 4.9 77.7

300,001-350,000 3 2.9 80.6

400,000-450,000 1 1.0 81.6

450,001-500,000 3 2.9 84.5

More than 500,000 16 15.5 100.0

Total 103 100.0

56

The economic survey of 2013-2014 reveals that if we consider $2 poverty line per day according

to international standards for the countries having low income. The 60.19 percent population of

Pakistan live under the poverty line. Another survey highlighted that Punjab 19 percent, Sindh 33

percent, KPK 32 percent and Baluchistan 52 percent of its population is living under the poverty

line. Researcher has selected the Punjab’s four major cities. The above table 4.10 depicts that

48.5 percent people makes transaction of less than 50,000, which is not an astonishing figure

because table 4.4 shows that 53.4 percent respondents are employees. Most of the employees

earn less than 50,000. Second largest is 16.5 percent, it includes employee and other persons.

Third largest is 15.5 percent it covers the businessperson. Other area from 100,001 to 500,000

covers the small businesspersons, retailers, wholesalers and others.

Here, graph 4.9 gives graphical presentation of transactions executed by customers at bank.

Graph 4.9: Transactions executed by customer

4.5.10: Temporal Length of Using the Services from Bank:

In this section, researcher has given the table and graphical presentation of temporal length of

using services from bank.

57

Table 4.11: Temporal Length of Using Services

Frequency Percent Cumulative Percent

Less than 1 year 8 7.8 7.8

1 year 18 17.5 25.2

2 years 10 9.7 35.0

3 years 24 23.3 58.3

4 years or more 43 41.7 100.0

Total 103 100.0

Above table 4.11 shows the temporal length of using services from bank. As researcher

explained earlier in table 4.4 that most of the respondents were employee and they were doings

jobs for several years. Therefore, 41.7 percent people are those who are having their accounts

more than more years. Its means that these customers having long-term relationship with banks it

may be said that old customers. Banks should focus on the customers who are using services

from a long time. Bank should give them value added services to make them loyal. The

customers using the services from bank from 3 years are 23.3 percent. This is the second largest

group; there can be the various type of people like; employees, retailers, corporate customers and

others. The findings almost equal. New customers are very few, so bank should introduce such

products and services who inspire the customer to use the services. Here is the graphical

presentation of temporal length of using services from bank.

Graph 4.10: Temporal Length of using services from bank

58

4.5.11: Use of Internet Banking:

This section shows customers perception to use the internet banking.

Table 4.12: Use of Internet Banking

Frequency Percent Cumulative Percent

Yes 29 28.2 28.2

No 74 71.8 100.0

Total 103 100.0

Above table demonstrated that the most of the customers did not use internet banking and very

few of the respondents like to use internet banking. The customers should move towards internet

banking to save their time and use the modern technique of banking on their phone. Banks

should help the customers to learn internet banking that save the time of bank and customers.

There is a lot of scope to be pioneer in offering the internet banking. Here is the graphical

presentation of trend to use internet banking.

Graph 4.11: Customer perception to use the internet banking

4.5.12: Customers Perception to Use Islamic Banking:

This section shows customers perception to use Islamic banking.

59

Table 4.13: Use of Islamic Banking

Frequency Percent Cumulative Percent

Yes 29 28.2 28.2

No 74 71.8 100.0

Total 103 100.0

Co-incidentally the above table 4.13 having the same results that is in table 4.12. Its findings

shows that the people in Muslim country like Pakistan do not like to use Islamic banking. It is

such an astonishing figure 71.8 percent people do not use Islamic banking and the people 28.2

percent who use the Islamic banking are not satisfied with the use of Islamic banking as there are

number of barriers to adopt pure Islamic banking.

Graph 4.12: Customers perception to use Islamic banking

4.5.13: City of the Respondent:

In this section city of the respondents are given.

Table 4.14: City of Respondent

Frequency Percent Cumulative Percent

Lahore 28 27.2 27.2

Gujranwala 56 54.4 81.6

Gujrat 13 12.6 94.2

Sialkot 6 5.8 100.0

Total 103 100.0

60

Above table shows city of respondents. Researcher has selected four major cities of the Punjab

that is more reliable for research point of view. Most of the respondents belong to Gujranwala

and Lahore. Lahore is capital of province Punjab. Rest of the respondents belong to Gujrat and

Sialkot. Here is the graphical presentation 4.13 of cities.

4.5.14: Number of Accounts in Use:

In this section number of accounts using by customer given.

Table 4.15: Number of Accounts in Use

Frequency Percent Cumulative Percent

1 65 63.1 63.1

2 33 32.0 95.1

3 1 1.0 96.1

4 3 2.9 99.0

5 or more 1 1.0 100.0

Total 103 100.0

Above table demonstrated that most of the customers use one account and very few of them have

two accounts and only 4.9 percent people who have more than two accounts in different or same

bank. Here the following is graphical representation of number of accounts in use.

61

Graph 4.14: Number of accounts in use

4.5.15: Type of Bank Account:

Given table 4.16, 4.17, 4.18, 4.19 showing the types of bank account.

Table 4.16: Current Account

Frequency Percent Cumulative Percent

Yes 70 68.0 68.0

No 33 32.0 100.0

Total 103 100.0

Table 4.17: Saving Account

Frequency Percent Cumulative Percent

Yes 30 29.1 29.1

No 73 70.9 100.0

Total 103 100.0

Table 4.18: Corporate Account

Frequency Percent Cumulative Percent

Yes 6 5.8 5.8

No 97 94.2 100.0

Total 103 100.0

Table 4.19: Joint Account

Frequency Percent Cumulative Percent

Yes 3 2.9 2.9

No 100 97.1 100.0

Total 103 100.0

62

Above tables 4.16, 4.17, 4.18 and 4.19 demonstrates that most of the customers use current

account as compare to other three. Pakistan is an Islamic country, so most of the customer

prefers interest free banking. Therefore, banking is moving towards Islamic banking but it takes

time. Few of the respondents were businesspersons who have the corporate account and the joint

account also to operate in organization. Some respondents have saving account to save their

future; some of them are employees and retailers.

4.6: Findings of RO 1 – Important Dimensions of Price Satisfaction:

First research objective of this dissertation was toanalyse the important dimensions of price

satisfaction in banking industry of Pakistan. Researcher has designed a questionnaire to collect

data from customers of banking industry of Pakistan. Data has been collected related to six price

dimensions. These are price reliability, price confidence, price transparency, relative price, price

quality ratio and price fairness. In each dimension researcher asked various questions.

Researcher used factor analysis method to indicate important factors from each dimensions.

According to Harrington (2008), factor analysis is a multivariate technique which can be used for

data reduction. Main purpose is to use factor analysis is to extract the important factors from

number of factors. This technique helped researcher in reducing less important variables and

extract other more important variables. Harrington (2008) highlighted that while applying factor

analysis, researcher should check the assumptions of Kaiser-Meyer-Olkin measure of sample

adequacy and Bartlet’s test of sphericity. The Kaiser-Meyer-Olkin value should be near to 0.7

and Bartlet’s test of sphericity value should less than 0.005. Further more, the researcher can take

interest in table of total variance. This table shows the individual importance as well as if they

combined.

Rotated components matrix table is in interest of researcher, which shows label of extracted

factors. Normally a high value of rotation will be the extracted factor. The given below details

are about factor loading.

63

4.6.1: Factor Loading of Price Reliability:

Table 4.20 given below gives values of KMO and Bartlett’s Test of Sphericity for price

reliability in banking sector.

Table 4.20: KMO and Bartlett's Test – Price Reliability

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .666

Bartlett's Test of Sphericity Approx. Chi-Square 141.141

Df 6

Sig .000

Above table, 4.20 showed the KMO and Bartlett's test results of factor loading of price

reliability. Values of these two assumptions conform to required values (KMO should be close to

0.7 and Bartlett’s should be less than 0.005). These values encouraged researcher to proceed

further with analysis.

Table 4.21: Total Variance Explained– Price Reliability

Component Extraction Sums of Squared Loadings

Total % of Variance Cumulative %

1 2.395 59.867 59.867

2

Above table shows number of extracted factor individually. It showed that researcher applied

the factor loading technique on 4 factors of price reliability and one factor was extracted by

factor analysis. Variance of extracted factor was 59.867 percent. Factor loading identified 59.867

percent important variable and reduce the variable having 40.133 percent. It shows that

management should increase more than half importance to give importance on remaining 40.133

percent.

Table 4.22: Component Matrix– Price Reliability

1

Price changes communicated properly .828

Price changes communicated timely .854

There are no “hidden” costs .764

Prices and conditions do not change unexpectedly .629

64

The above table indicated extracted factor of price reliability. This table reveals that the second

factor “Price changes communicated timely”have thelargest value .854.

4.6.2: Factor Loading of Price Confidence:

Table 4.23 given below gives values of KMO and Bartlett’s Test of Sphericity for price

confidence in banking sector.

Table 4.23: KMO and Bartlett's Test – Price Confidence

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .702

Bartlett's Test of Sphericity Approx. Chi-Square 107.261

df 6

sig .000

Above table, 4.23 showed the KMO and Bartlett's test results of factor loading of price

confidence. Values of these two assumptions met the required values (KMO should be close to

0.7 and Bartlett’s should be less than 0.005). These values encouraged researcher to proceed

further.

Table 4.24: Total Variance Explained– Price Confidence

Component Extraction Sums of Squared Loadings

Total % of Variance Cumulative %

1 2.334 58.351 58.351

2

Above table showed number of extracted factor individually. It shows that researcher applied the

factor loading technique on 4 factors of price reliability, 1 factor was extracted by SPSS.

Variance of extracted factor was 58.351 percent. Factor loading identify 59.867 percent

important variable and reduce the variable having 41.649 percent. It shows that management

should increase more than half importance to give importance on remaining 41.649 percent.

65

Table 4.25: Component Matrix– Price Confidence

1

I can count on my customer advisor to find the best price for me. .730

Bank keeps all promises regarding prices. .802

I am convinced that the prices and conditions of are favourable. .770

Prices at bank remain constantly low. .752

The above table 4.25 indicate the extracted factor of price confidence. This table reveals that the

second factor “Bank keeps all promises regarding prices”have the largest value .802.

4.6.3: Factor Loading of Price Transparency:

Table 4.26 given below gives values of KMO and Bartlett’s Test of Sphericity for price

transparency in banking sector.

Table 4.26: KMO and Bartlett's Test – Price Transparency

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .835

Bartlett's Test of Sphericity Approx. Chi-Square 234.400

df 10

sig .000

Above table, 4.26 showed the KMO and Bartlett's test results of factor loading of price

transparency. Current values of these two assumptions meet the required values (KMO should be

close to 0.7 and Bartlett’s should be less than 0.005) these values encourage the researcher to

proceed.

Table 4.27: Total Variance Explained– Price Transparency

Component Extraction Sums of Squared Loadings

Total % of Variance Cumulative %

1 3.207 64.134 64.134

2

Above table 4.27 shows the number of extracted factor individually. It shows that researcher

applied the factor loading technique on 5 factors of price reliability, 1 factor was extracted by

SPSS. Variance of extracted factor was 64.134 percent. Factor loading identify 59.867 percent

important variable and reduce the variable having 35.866 percent. It shows that management

should increase more than half importance to give importance on remaining 35.866 percent.

66

Table 4.28: Component Matrix– Price Transparency

1

All price components are clear, comprehensible and understandable .838

Price information is complete, correct and frank .833

Price information is understandable and comprehensible .864

I am properly informed about the prices of the services .802

I know what I pay and what I get .649

The above table 4.28 indicate the extracted factor of price transparency. This table reveals that

the third factor “Price information is understandable and comprehensible”have the largest value

.864.

4.6.4: Factor Loading for Relative Price:

Table 4.29 given below gives values of KMO and Bartlett’s Test of Sphericity for relative price

in banking sector.

Table 4.29: KMO and Bartlett's Test – Relative Price

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .852

Bartlett's Test of Sphericity Approx. Chi-Square 283.055

Df 15

Sig .000

Above table, 4.29 showed the KMO and Bartlett's test results of factor loading of relative price.

Current values of these two assumptions meet the required values (KMO should be close to 0.7

and Bartlett’s should be less than 0.005) these values encourage the researcher to proceed.

Table 4.30: Total Variance Explained– Relative Price

Component Extraction Sums of Squared Loadings

Total % of Variance Cumulative %

1 3.659 60.983 60.983

2

Above table shows number of extracted factor individually. It shows that researcher applied the

factor loading technique on 6 factors of price reliability, 1 factor was extracted by SPSS.

Variance of extracted factor was 60.983 percent. Factor loading identify 59.867 percent

67

important variable and reduce the variable having 39.017 percent. It shows that management

should increase more than half importance to give importance on remaining 39.017 percent.

Table 4.31: Component Matrix– Relative Price

1

I believe the offer made by bank are better offer as compared to other banks .713

Terms and conditions of bank are better tailored to my needs than terms and

conditions of other banks .847

Terms and conditions of bank are better than those of other banks are. .735

I am convinced that my bank is the best choice .805

My bank guarantees the lowest prices .803

My bank allows considerable discounts .775

The above table 4.31 indicate the extracted factor of relative price. This table reveals that the

third factor “Terms and conditions of bank are better tailored to my needs than terms and

conditions of other banks” have the largest value .847.

4.6.5: Factor Loading for Price-Quality Ratio:

Table 4.32 given below gives values of KMO and Bartlett’s Test of Sphericity for price-quality

ratio in banking sector.

Table 4.32: KMO and Bartlett's Test – Price-Quality Ratio

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .786

Bartlett's Test of Sphericity Approx. Chi-Square 126.140

Df 10

Sig .000

Above table, 4.32 showed the KMO and Bartlett's test results of factor loading of price-quality

ratio. Current values of these two assumptions meet the required values (KMO should be close to

0.7 and Bartlett’s should be less than 0.005) these values encourage the researcher to proceed.

Table 4.33: Total Variance Explained– Price Quality Ratio

Component Extraction Sums of Squared Loadings

Total % of Variance Cumulative %

1 2.588 51.756 51.756

2

68

Above table 4.33 shows the number of extracted factor individually. It shows that researcher

applied the factor loading technique on 5 factors of price reliability, 1 factor was extracted by

SPSS. Variance of extracted factor was 51.756 percent. Factor loading identify 59.867 percent

important variable and reduce the variable having 48.244 percent. It shows that management

should increase more than half importance to give importance on remaining 48.244 percent.

Table 4.34 Component Matrix– Price-Quality Ratio

1

Price and quality meet my needs .749

I get a good price-quality ratio .755

The prices I pay are fair .807

I have the impression that I know what I am paying for .732

The prices I pay depend on how much I use certain services .814

The above table 4.34 indicate the extracted factor of price quality ratio. This table reveals that the

third factor “The prices I pay depend on how much I use certain services”have the largest value

.814.

4.6.6: Factor Loading for Price Fairness:

Table 4.35 given below gives values of KMO and Bartlett’s Test of Sphericity for price fairness

in banking sector.

Table 4.35: KMO and Bartlett's Test – Price Fairness

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .761

Bartlett's Test of Sphericity Approx. Chi-Square 120.145

df 6

sig .000

Above table showed KMO and Bartlett's test results of factor loading related to price fairness.

Current values of these two assumptions meet the required values (KMO should be close to 0.7

and Bartlett’s should be less than 0.005) these values encourage the researcher to proceed.

69

Table 4.36: Total Variance Explained– Price Fairness

Component Extraction Sums of Squared Loadings

Total % of Variance Cumulative %

1 2.440 60.989 60.989

2

Above table 4.36 shows the number of extracted factor individually. It shows that researcher

applied the factor loading technique on 4 factors of price reliability, 1 factor was extracted by

SPSS. Variance of extracted factor was 60.989 percent. Factor loading identify 59.867 percent

important variable and reduce the variable having 39.011 percent. It shows that management

should increase more than half importance to give importance on remaining 39.011 percent.

Table 4.37: Component Matrix– Price Fairness

1

I do not get worse terms and conditions than others for the same service .844

Terms and conditions are affordable for everyone, independently of income .771

Credit transactions do not cause abnormally high interest rates .848

My bank does not take advantage of me .643

The above table 4.37 indicate the extracted factor of price quality ratio. This table reveals that the

third factor “Credit transactions do not cause abnormally high interest rates”have the largest

value .848.

4.6.7: Mean Score of Extracted Factors:

Summary of extracted factors table 4.31 is given. Mean score of each extracted factor

was compute to analyse further.

Table 4.31: Summary of Extracted Factors

Sr. # Category Extracted Factor

1 Price Reliability Price changes communicated timely

2 Price Confidence Bank keeps all promises regarding prices.

3 Price Transparency Price information is understandable and comprehensible

4 Relative price Terms and conditions of bank are better tailored to my needs than terms and

conditions of other banks

5 Price-Quality Ratio The prices I pay depend on how much I use certain services

6 Price Fairness Credit transactions do not cause abnormally high interest rates

70

Table 4.32 given bellow shows the summary of mean score of extracted factors.

Table 4.32: Mean Summary of Extracted Factors

Sr.

#

Extracted Factor Mean Score

1 Price changes communicated timely 4.03

2 Bank keeps all promises regarding prices. 3.92

3 Price information is understandable and comprehensible 3.83

4 Terms and conditions of bank are better tailored to my needs than terms and

conditions of other banks

3.64

5 The prices I pay depend on how much I use certain services 3.98

6 Credit transactions do not cause abnormally high interest rates 3.75

4.7: Findings of RO 2 Analyse the Customer Satisfaction From Price

Satisfaction:

The given table 4.33 is the comparison of mean score of importance and satisfaction for

extracted factors.

The above table demonstrated analysis of the mean score of importance and satisfaction of the

customer. Mean of importance is 4.03 and mean satisfaction is 2.85 for factor number one “Price

changes communicated timely”. Value of importance and satisfaction shows that there is gap of

1.18. Its means that the factor one has more importance in price reliability dimension, but the

satisfaction level is comparatively low. Bank should make such strategies to increase the

customer satisfaction; bank may install such type of software’s with the help of IT specialists

Table 4.33: Comparison of Mean Score of Importance and Satisfaction for Extract Factors

Sr.# Factor Mean

Importance

Mean

Satisfaction

1 Price changes communicated timely 4.03 2.85

2 Bank keeps all promises regarding prices. 3.92 2.93

3 Price information is understandable and comprehensible 3.83 2.72

4 Terms and conditions of bank are better tailored to my needs than

terms and conditions of other banks

3.64 2.49

5 The prices I pay depend on how much I use certain services 3.98 2.54

6 Credit transactions do not cause abnormally high interest rates 3.75 2.74

71

that automatically send the new information to the customer. It is a less expensive and advanced

way to provide information.

Moreover, table 4.33 shows mean score of second factor “Bank keeps all promises regarding

prices” for importance is 3.92 and for satisfaction is 2.93. There is gap between importance and

satisfaction is 0.99. There may be the problem with customer to understand the prices. This value

shows that the customer give more importance to factor 2 “Bank keeps all promises regarding

prices” of price confidence rather than other factors. However, the satisfaction mean is not

desired value. This gap can be reduce by adopting some techniques. Bank should provide full

details of price of their products and services. However, customer did not perceive any

misconception. Another thing is that provide complete information to customer before using the

services or products.

Further to this, table 4.33 showed mean score of third extracted factor “Price information is

understandable and comprehensible” of price transparency, its importance is 3.83 and

satisfaction is 2.72. The gap between both values is 1.11. Generally, customer wants to know the

price information, which should be easily understandable to the customer. Banks do not have the

same type of customers, the gender, education, profession and their frequency to use the bank

can be the different. So that every customer did not perceive the same information. There is lots

of business, economic and cost terms used to highlight the prices. Not every term is

understandable by the customer, so that the bank should adopt such customized methods to

satisfy their customer. Bank also can offer the various products or services according to their

customer’s nature.

Moreover, table 4.33 showed mean scores for “terms and conditions of bank are better tailored to

my needs than terms and conditions of other banks” which is the fourth extracted value from

relative price dimension. Its mean score of importance is 3.64 and satisfaction is 2.49. There is

gap between these values which is of 1.15. Customers are highly expecting that bank tailor

customer needs. It shows that customers want customization. To tailor the needs of every

customer is not possible. However, bank can make some strategies by categorizing the customer

in various sector e.g. offer the services all employees that should be different from the services

provided businessperson and from students.

72

Moreover, table 4.33 shows mean scores for “prices I pay depend on how much I use certain

services” is the fifth extracted factor of price-quality ratio dimension. Value of mean score of

importance is 3.98 and the 2.68 is for satisfaction. There is gap of 1.44 between both values. This

factor shows that customers wants to pay according to use of services but the reality is opposite.

Every time they use services, they pay same as previous. Here, customers’ wants to get such

services in which they use services more and more and prices should be reduce according to

transaction.

Likewise, mean scores of “credit transactions do not cause abnormally high interest rates” is the

sixth extracted factor of price fairness dimension. The mean score is 3.75 of its importance and

the 2.74 for its satisfaction. The gap between both values is 1.01. This extracted value shows that

customers are willing to pay less interest on their credit transactions. World is moving towards

online banking and use plastic (dr/cr card) money to remain safe from any inconvenience. Most

of the customers use the credit cards to pay at the time of shopping. Banks provide the service as

an agent and pay the money at the behalf of customer but after charge interest.

4.8: Findings of RO 3Influence of Different Dimensions of Price Satisfatcion

on Overall Customer Satisfaction:

Third research objective was to analyse influence of different dimensions of price satisfaction on

overall customer satisfaction. These independent dimensions are price reliability, price

confidence, price transparency, relative price, price-quality ratio and price fairness. For this

objective, researcher used regression analysis to analyse impact of six price dimensions on

overall customer satisfaction. Dependent factor was overall satisfaction of customer.

73

4.8.1: Regression Analysis:

Table 4.34: Descriptive Statistics

Factors Mean Std. Deviation N

Please indicate your overall level of satisfaction of bank 3.52 .906 103

Price changes communicated timely 2.85 1.240 103

Bank keeps all promises regarding prices. 2.93 1.254 103

Price information is understandable and comprehensible 2.72 1.232 103

Terms and conditions of bank are better tailored to my needs than terms and

conditions of other banks 2.49 1.170 103

The prices I pay depend on how much I use certain services 2.54 1.170 103

Credit transactions do not cause abnormally high interest rates 2.74 1.180 103

Above table shows mean values of customer price satisfaction of six price dimensions. Whereas

values of standard deviation were high and did not meet required standards.

74

Table 4.35: Correlations

Above table gave correlation, demonstrated correlation of independent variable is very high. It

means that change in one variable will cause to change in other associated variable as well as

dependent variable. So that was difficult to find out that percentage change in dependent

variable is due to which variable and how much.

Please

indicate

your overall

level of

satisfaction

of bank

Price

changes

communica

ted timely

Bank keeps

all promises

regarding

prices.

Price

information

is

understand

able and

comprehens

ible

Terms and

conditions

of bank are

better

tailored to

my needs

than terms

and

conditions

of other

banks

The prices I

pay depend

on how

much I use

certain

services

Credit

transactions

do not

cause

abnormally

high

interest

rates

Please indicate your

overall level of

satisfaction of bank

1.000 .243 .290 .415 .201 .302 .304

Price changes

communicated

timely

.243 1.000 .580 .429 .509 .359 .409

Bank keeps all

promises regarding

prices.

.290 .580 1.000 .451 .557 .413 .399

Price information is

understandable and

comprehensible

.415 .429 .451 1.000 .476 .339 .455

Terms and

conditions of bank

are better tailored to

my needs than terms

and conditions of

other banks

.201 .509 .557 .476 1.000 .364 .413

The prices I pay

depend on how

much I use certain

services

.302 .359 .413 .339 .364 1.000 .559

Credit transactions

do not cause

abnormally high

interest rates .304 .409 .399 .455 .413 .559 1.000

75

Table 4.36: Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .463 .214 .165 .828

Above table presented model summary. The value of R square is the figure of interest to

researcher. The value of R square is .214 that shows the model is 21.4 percent is accurate. To

proceed further with these values will cause the less accurate findings.

Table 4.37: ANOVA

Model Sum of Squares Df Mean Square F Sig.

1 Regression 17.904 6 2.984 4.355 .001a

Residual 65.785 96 .685

Total 83.689 102

Above table 4.37 presents the findings of ANOVA. Last column of this table 4.37 shows the

significance value. Which should be less than 0.005. This model indicates that this model is

significant for researcher to develop regression equation.

Table 4.38: Coefficients

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 2.386 .264 9.025 .000

PR .010 .086 .013 .113 .910

PC .075 .089 .104 .842 .402

PT .243 .082 .331 2.963 .004

RP -.078 .092 -.101 -.851 .397

PQR .108 .088 .140 1.234 .220

PF .054 .091 .070 .594 .554

Table 4.38 is given to develop given below regression equation.

Customer Satisfaction = 2.380 + 0.010 PR + 0.075 PC + 0.243 PT - 0.078 RP + 0.108 PQR +

0.54 PF

76

The findings of regression model shows that value of PC 0.075 and PQR 0.108 are reliable and

researcher drop other data and proceed with PC and PQR values by applying again regression

technique on both dimensions.

4.8.2: Regression Analysis:

The given table provide the values of descriptive statistics.

Table 4.39: Descriptive Statistics

Factors Mean Std. Deviation N

Please indicate your overall level of satisfaction of bank 3.52 .906 103

Price information is understandable and comprehensible 2.72 1.232 103

The prices I pay depend on how much I use certain services 2.54 1.170 103

Above table gave descriptive statistics and it gave mean values of customer price satisfaction of

two important price dimensions. Where as the values of standard deviation meet the said

standard. These values are reliable for researcher to proceed further.

77

Above table 4.40 of correlation, demonstrate that the correlation of independent variable is very

high its mean that change in one variable will cause to change in other associated variable as

well as dependent variable. So that researcher was selected the less correlated values being bold

in the above table.

Table 4.41: Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .449a .201 .185 .817

Table 4.40:

Correlations

Please

indicate

your overall

level of

satisfaction

of bank

Price

changes

communicat

ed timely

Bank keeps

all promises

regarding

prices.

Price

information

is

understanda

ble and

comprehensi

ble

Terms and

conditions of

bank are

better

tailored to

my needs

than terms

and

conditions of

other banks

The prices I

pay depend

on how

much I use

certain

services

Credit

transactions

do not cause

abnormally

high interest

rates

Please indicate your

overall level of

satisfaction of bank

1.000 .243 .290 .415 .201 .302 .304

Price changes

communicated timely .243 1.000 .580 .429 .509 .359 .409

Bank keeps all

promises regarding

prices.

.290 .580 1.000 .451 .557 .413 .399

Price information is

understandable and

comprehensible

.415 .429 .451 1.000 .476 .339 .455

Terms and conditions

of bank are better

tailored to my needs than terms and

conditions of other

banks

.201 .509 .557 .476 1.000 .364 .413

The prices I pay

depend on how

much I use certain

services

.302 .359 .413 .339 .364 1.000 .559

Credit transactions do

not cause abnormally

high interest rates

.304 .409 .399 .455 .413 .559 1.000

78

The 4.41 table of model summary shows the R square values, which is more reliable among 28

variables. These both have the value of 20.1 percent that is reliable and researcher can proceed

further with these values.

Table 4.42: ANOVA

Model Sum of Squares Df Mean Square F Sig.

1 Regression 16.861 2 8.430 12.615 .000a

Residual 66.829 100 .668

Total 83.689 102

Above table presented findings of ANOVA. Last column of this table 4.44 showed significance

value, which should be less than 0.005. This model indicated that this model is significant for

researcher to develop regression equation.

Table 4.43: Coefficients

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 2.459 .231 10.636 .000

PT .259 .070 .353 3.716 .000

PQR .141 .074 .183 1.922 .057

Table 4.43 is given to develop given below regression equation.

Customer Satisfaction = 2.459 + 0.259 PT +0.141 PQR

Above table indicated findings of regression analysis are Price Transparency (PT) and Price-

Quality Ratio is important variables of price dimension. Banks should pay their full attention on

these extracted factors. Furthermore, extracted factors should ensure reliability. These two

factors of price dimensions have the impact on customer satisfaction, so the banking

organizations should be careful about these factors and pay more attention on these two factors

to make their customers satisfied.

79

4.9: Summary of Chapter:

This section gave the summary of the chapter of this research. The reliability and validity of the

data presented at the start of the chapter, which shows the authenticity of the data. Factor loading

technique has been adopted to extract important factors. These factors were related to different

constructs including price reliability, price confidence, price transparency, relative price, price-

quality ratio and price fairness. However, regression analysis shows values were not significant

to proceed further. The important factors identified from the correlation table were less

correlated with each other. After identifying important variables, equation was developed by the

researcher. The important variables were “Price information is understandable and

comprehensible” and “The prices I pay depend on how much I use certain services” from the

price dimension of price transparency and price-quality ratio. The researcher has selected “Please

indicate your overall level of satisfaction of bank” as dependent variable. In the next chapter,

conclusion and recommendations will be presented.

80

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS

5.1: Introduction:

In previous chapter, researcher discussed findings of data analysis. In this chapter, researcher

will conclude his research and will present recommendations regarding the topic and problem.

Moreover, a summary of main findings of the research will also be presented. In addition to this,

researcher will also highlight future areas of interest for research.

5.2: Concluding Remarks:

“Customer is always right” this quote explains various things to organizations. World is

becoming global village and organizations move towards customer satisfaction. Therefore, the

managers and the leaders make such strategies based on customer satisfaction.

The aim of this research was “to analyse customers’ price satisfaction on overall customers’

satisfaction and to analyse customers’ satisfaction on pricing at retail banking industry of

Pakistan”. Banks should pay more attention on customer satisfaction, as this is becoming the

major problem of the bank. The repeat purchase as well positive word of mouth for organizations

is based on the customers’ satisfaction. It has positive impact on sales and profitability of an

organization.This results increase in market share. Performance of banking is strongly based on

satisfaction of customer. Banking customers are said to be satisfied when banks meet their

expectation level of quality service. On the other hand, dissatisfaction occurs if expectations are

not fulfilled.

First objective was to analyze the important dimensions of price satisfaction in banking industry

of Pakistan. Customer satisfaction is based on few factors in the banking sectors. The modern

81

banking is moving towards mobile or electronic banking therefore only few banks are providing

mobile banking service facility.

Second objective was to analysethe extent of customers’ satisfaction from dimensions of price

satisfaction in banking industry of Pakistan. Important dimensions has been extracted to analyse

the customer satisfaction.

Third objective was to analyse the influence of different dimensions of price satisfaction on

overall customers’ satisfaction.Customer satisfaction is not more than an act of providing enough

services acceptable by the customer. Customer satisfaction is directly dependent upon

profitability of any organization. Customer satisfaction affects reliability, reputation and success

in the banking sector.

Fourth objective was to recommend members of banking industry so that they can increase price

satisfaction of banking customer. Increase in customer satisfaction is a tough task for

organizations because of competition among organizations and change in need and wants of the

customers. Change in the needs and wants cause deflection of the customer. The organizations

that monitor its customers’ needs and wants they continuously retain their customers forever.

Products and services offered by an organization should be changed with the needs and wants of

the customer.

5.3: Findings of RO 4 Recomendations to Banking Industry to Satisfy Their

Customers:

The fourth objective of this research was to recomend members of banking industry so that they

can increase price satiscfaction of banking customer in Pakistan. This section depicts various

recommendations, so that the banking industry can satisfy their customers to increse their

business and market share as well.

82

5.3.1: Recommendation 1-Price Changes Communicated Timely:

Table 4.33 revealed that, there is a gap between importance and satisfaction. The customers are

not or less satisfied from price communication services of banks. Change in prices and not

communicated in the time is issue of every customer either businessperson, employee or student.

Every day world is moving towards new inventions. Banks should improve their technology and

hire technological experts along with latest softwares. Customer’s data should be update every

time, so that the new information or price changes information provide to customers on their cell

phone and email.

5.3.2: Recommendation 2-Bank Should Keep All Promises Regarding Prices:

Table 4.33 revealed that, there is a gap between importance and satisfaction. Customers are not

satisfied from banks promises regarding prices. Bank should keep all promises fulfill rearding

prices and employees beware about all changes in price.

5.3.3: Recommendation 3- Price Information Should Understandable and Comprehensible:

Table 4.33 revealed that, there is a gap between importance and satisfaction. Customers are not

satisfied from price information, as they perceive it is complex to understand. Bank is a financial

institute, they use economic, business and cost terms while deciding prices. Every person have

not business qualification, so they unable to understand the decided prices. Bank should use easy

and understandable terms or language to every customer.

83

5.3.4: Recommendation 4- Terms and Conditions of Bank Should Better Tailored to

Customers’ Needs:

Table 4.33 reveals that, there is a gap between importance and satisfaction. Customers are not

satisfied from bank, as they did not tailor the needs of costumer. Banks have the many types of

the customers and none of them is equal according to their needs and income level. Therefore,

bank should also make the customized strategies to satisfy their customer.

5.3.5: Recommendation 5-The Prices of How Much Customer Use Certain Services:

Table 4.33 reveals that, there is a gap between importance and satisfaction. Customers are not

satisfied from bank that they do not charge price according to use of certain services. There are

the various types of customer (table 4.4) and their frequency to use the bank (table 4.3) is differ

from each other. Those customers who use bank weekly or on daily basis should have provide

some benefits according to their transactions as compare to the users who use bank very seldom

or monthly.

5.3.6: Recommendation 6-Credit Transactions Should Not Cause Abnormally High

Interest Rates:

Table 4.33 reveals that, there is a gap between importance and satisfaction. Customers are not

satisfied from banks as they charge high rate of interest on credit transactions. Interest is the way

to generate income of banks, but it is now need of the customers to use credit cards for payments.

Banks should promote credit transactions on the base of low interest to generate more business

and profits.

84

5.4: Account of Achievement of Research Objectives:

In this section, an account of achievement of research objectives will be presented.

5.4.1: Achievement of Research Objective 1:

First research objective of this research was “to analyze the important dimensions of price

satisfaction in banking industry of Pakistan”. The findings and analysis of this research reported

that there is 6 important price dimensions among 28, extracted by SPSS. First dimension is

“Price changes communicated timely” second dimension is “Bank keeps all promises regarding

prices” third dimension is “Price information is understandable and comprehensible” fourth

dimension is “Terms and conditions of bank are better tailored to my needs than terms and

conditions of other banks” fifth dimension is “The prices I pay depend on how much I use

certain services” last and sixth dimension is “Credit transactions do not cause abnormally high

interest rates”. Hence, researcher believes that this research objective was achieved.

5.4.2: Achievement of Research Objective 2:

Second research objective of this research was “to analyse the extent of customers’ satisfaction

from dimensions of price satisfaction in banking industry of Pakistan”. The findings and analysis

of this research reported that all the extracted price dimensions compared with the customer

satisfaction. There was huge difference between importance and price satisfaction, that

difference has been find out and measured. Hence, researcher believes that this research

objective was achieved.

85

5.4.3: Achievement of Research Objective 3:

Third research objective of this research was “to analyse the influence of different dimensions of

price satisfaction on overall customers’ satisfaction”. The findings and analysis of this research

reported that these independent dimensions are price reliability, price confidence, price

transparency, relative price, price-quality ratio and price fairness. For this objective, researcher

used regression analysis to analyse impact of six price dimensions on overall customer

satisfaction. Dependent factor was overall satisfaction of customer. Hence, researcher believes

that this research objective was achieved.

5.4.4: Achievement of Research Objective 4:

Fourth research objective of this research was “to recommend members of banking industry so

that they can increase price satisfaction of banking customer”. The findings and analysis of this

research depicts various recommendations, so that the banking industry can satisfy their

customers to increse their business and market share as well. Hence, researcher believes that this

research objective was achieved.

5.5: Suggested FutureResearch Areas:

Here are some suggestions for future research.

1- Researcher suggests that all limitations of the research, which were identified earlier in

this report, should be overcome in future researches.

2- The researcher should select other cities to test the findings of this research paper.

3- The researcher should select one of more banking products and should evaluate

customers’ satisfaction for that and apply this research methodology on it.

86

5.6: Summary of the Chapter:

This is the fifth and last chapter of this dissertation. It presented concluding remarks and

summary of findings. The research objective four was recommendations and it was presented in

this chapter. The six recommendations were given in this chapter on the basis of extracted

factors.

87

Bibliography

Brown, A., Cramer, L. D., Eckhus, D., Schimidt, J., Ware, L. & Mackenzie, E. 2000. Validity

and reliability of the dexter hand evaluation and therapy system in hand-injured patients. Journal

of Hand Therapy, 13, 37-45.

Chafetz, M. D., Prentkowski, E. & Rao, A. 2011. To work or not to work: Motivation (not low

IQ) determines symptom validity test findings. Archives of Clinical Neuropsychology, 26, 306-

313.

Harington, D. 2008. Confirmatory Factor Analysis, Oxford University Press, USA.

Kostakoglu, E., Batur, S., Tiryalki, A. & Gogus, A. 1999. Reliability and validity of the Turkish

version of the Positive and Negative Syndrome Scale (PANSS). Turk Psikoloji Dergisi, 14, 23-

34.

Mor, V., Laliberte, L., Morris, J. N. & Wimann, M. 1984. The Karnofsky performance status

scale: an examination of its reliability and validity in a research setting. Cancer, 53, 2002-2007.

Reibsten, D., Batesonn, J. E. G. & Boulding, W. 1988. Conjoint analysis reliability: Empirical

findings. Marketing Science, 7, 271-286.

George, D., & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and

reference. 11.0 update (4th ed.). Boston: Allyn & Bacon

http://www.dailytimes.com.pk/business/03-Jun-2014/earning-2-a-day-60-19-population-live-

below-poverty-line

http://www.starwelfare.org/post/291/PAKISTAN:-Increasing-Level-of-Poverty-in-

Pakistan!!.html

Aman, A. & Hopkinson, G. (2009) The changing structure of distribution channels in Pakistan.

International Journal of Retail & Distribution Management, 38, 341-359.

Amin, M. & Isa, Z. (2008) An examination of the relationship between service quality perception

and customer satisfaction: A SEM approach towards Malaysian Islamic banking. International

Journal of Islamic and Middle Eastern Finance and Management, 1, 191-209.

88

Anderson, E. W. (1998) Customer satisfaction and word of mouth. Journal of Service Research,

1, 5.

Anderson, E. W., Fornell, C. & Lehmann, D. R. (1994) Customer satisfaction, market share, and

profitability: findings from Sweden. The Journal of Marketing, 58, 53-66.

Arasli, H., Mehtap-Smadi, S. & KATIRCIOGLU, S. T. (2005) Customer service quality in the

Greek Cypriot banking industry. Managing Service Quality, 15, 41-56.

Bell, S. J., Auh, S. & Smalley, K. (2005) Customer relationship dynamics: service quality and

customer loyalty in the context of varying levels of customer expertise and switching costs.

Journal of the Academy of Marketing Science, 33, 169.

Biyalogorsky, E., Gerstner, E. & Libai, B. (2001) Customer referral management: Optimal

reward programs. Marketing Science, 20, 82-95.

Boone, L. E., Kurtz, D. L., Mackenzie, H. F. & SNOW, K. (2009 ) Contemporary Marketing

New York.

Brown, R. D. (2001) E-commerce: customer service success factors. Futurics, 25, 18-30.

Churchill, G. A. & Suprenant, C. (1982) An investigation into the determinants of customer

satisfaction. . Journal of Marketing Research, 101, 491-504.

Dash, S., Brunning, E. & Acharya, M. (2009) The effect of power distance and individualism on

service quality expectations in banking A two-country individual- and national-cultural

comparison. International Journal of Bank Marketing, 27, 336-358.

Dick, A. S. & Basu, K. (1994) Customer loyalty: toward an integrated conceptual framework.

Journal of the Academy of Marketing Science, 22, 99.

Gonzalez, M. E., Quesada, G., Picado, F. & Eckelman, C. A. (2004) Customer satisfaction using

QFD: an e-banking case. MANAGING SERVICE QUALITY., 14, 317-330.

Herrmann, A., Wricke, M. & Huber, F. (2000) Kundenzufriedenheit durch Preisfairness.

Marketing ZFP, 22 131-43.

Huber, F., Herrmann, A. & WRICKE, M. (2001) Customer satisfaction as an antecedent of price

acceptance: results of an empirical study. Journal of Product & Brand Management, 10, 160-169.

89

Jones, T. O. & Sasser, W. E. (1996) Why satisfied customers defect. Journal of Management in

Engineering, 12, 11.

Keaveney, S. M. (1995) Customer behavior in services industries: An Exploratory Study. Journal

of Marketing, 59 71-82.

Kotler, P. & Armstrong, G. (2010) Principles of marketing, Prentice Hall.

LEE, G. G. & LIN, H. F. (2005) Customer perceptions of e-service quality in online shopping.

International Journal of Retail & Distribution Management, 33, 161-176.

Matzler, K., Wurtele, A. & Renzl, B. (2006) Dimensions of price satisfaction: a study in the

retail banking industry. International Journal of Bank Marketing, 24, 216-231.

Parasuraman, A., Zeithml, V. A. & Berry, L. L. (1988) SERVQUAL: a multiple-item scale for

measuring consumer perceptions of service quality. Journal of Retailing, 64, 12-40.

Pine, B. J., Peppers, D. & Rogers, M. (2010) Do you want to keep your customers forever?,

Harvard Business School Press.

Raju, J. S. & Zhang, Z. J. (2010) Four Key Qualities of Any" Pay as You Wish" Pricing

Strategy, Pearson Education publishing as FTPress Delivers.

Ranaweera, C. & Neely, A. (2003) Some moderating effects on the service quality-customer

retention link. International Journal of Operations & Production Management, 23, 230-248.

Rust, R. T., Zeithaml, V. A. & Lemon, K. N. (2004) Customer-centered brand management.

Harvard business review, 82, 110-120.

Sadiq Sohail, M. & Shanmugham, B. (2003) E-banking and customer preferences in Malaysia:

An empirical investigation. Information Sciences, 150, 207-217.

Varki, S. & Colgate, M. (2001) The role of price perceptions in an integrated model of

behavioral intentions. Journal of Service Research, 3, 232.

Wilding, R. & Juriado, R. (2004) Customer Perceptions on Logistics Outsourcing

in the European Consumer Goods Industry. International Journal of Physical Distribution &

Logistics Management, 34, 628.

90

Jamal, Ahmad, and Kamal Naser. "Customer satisfaction and retail banking: an assessment of

some of the key antecedents of customer satisfaction in retail banking." international journal of

bank marketing 20.4 (2002): 146-160.

Ahlswede, S. (2012). Fee vs. commission: Quality of advice is not only determined by

remuneration. Deutsche Bank Research. Current Issues. Frankfurt am Main.

Ahlswede, S. and J. Schildbach (2012). Poised for a comeback: Bank deposits. Deutsche Bank

Research. Current Issues. Frankfurt am Main.

Homburg, Christian and Nicole Koschate (2005): Behavioral Pricing Forschung im Überblick.

Zeitschrift für Betriebswirtschaft (parts 1 and 2), H4/5, pp. 383-423 and 501-524.

Hallowell, R. (1996). "The relationships of customer satisfaction, customer loyalty, and

profitability: an empirical study." International journal of service industry management 7(4): 27-

42.

Pride, W. and O. C. Ferrell Foundations of Marketing, Cengage Learning.

Vuchelen, J. 2004. Consumer Sentiment and Macroeconomic Forecasts, Journal of Economic

Psychology, 25(4), 493–506. Mcneill, P. 1990. Research Methods, Routledge.

http://www.surveysystem.com/sdesign.htm

Kumar, R. 2010. Research methodology: A step-by-step guide for beginners, Sage Publications

Ltd.

Saunders, M., Lewis, P. & Thornhill, A. 2009. Research Methods for Business Students,

Financial Times/Prentice Hall.

91

Respected Ms. / Sir

I am a student of Masters of Business Administration at University of South Asia (Lahore).

As a partial requirement to complete my MBA program degree, I am conducting a research on perception of

customers about Pricing Strategy of retail banking customers.

In this regard, I need your support in the form of responses to the questions given in the two sections in the

questionnaire. Your responses will not only help me academically but also it would support banking sector in

improving pricing offered to you. The participation in this research is entirely voluntary and you are free to leave the

research at any point of time. Moreover, whatever you will say in this questionnaire will be used for academic purpose

or for improving the pricing strategy of banking sector. Whenever required, the findings will only be reported in

aggregation only.

Please accept my heartiest gratitude in anticipation for responding to this questionnaire.

Regards.

Ihtsham Ali

Masters of Business Administration

University of South Asia

Lahore, Pakistan

Email: ihtsham_ali@yahoo.com

Phone: +92-345-6541126

92

QUESTIONNAIRE

If you are a customer of any bank and using different services and products, then fill this questionnaire. Otherwise,

return the questionnaire to Customer Service Representative of bank.

SECTION I

This section deals with your expectations of pricing of a bank. Please think about the ideal banking that would offer

best pricing and with which you would be pleased to do business. Select the best answer that reflects your feeling

about your bank. There is no right or wrong answers – All I am interested in is a number that reflects your feeling

regarding bank. Please read the statements and rate them on a scale of 1 to 5, 1 being that you “Not at all important”

and 5 being “Very Important”

Sr. #

DESCRIPTION Scale

Price Reliability

1 Price changes communicated properly 5 4 3 2 1

2 Price changes communicated timely 5 4 3 2 1

3 There are no “hidden” costs 5 4 3 2 1

4 Prices and conditions do not change unexpectedly 5 4 3 2 1

Price Confidence

5 I can count on my customer advisor to find the best price for me. 5 4 3 2 1

6 Bank keeps all promises regarding prices. 5 4 3 2 1

7 I am convinced that the prices and conditions of are favourable. 5 4 3 2 1

8 Prices at banks remain constantly low. 5 4 3 2 1

Price Transparency

9 All price components are clear, comprehensible and understandable 5 4 3 2 1

10 Price information is complete, correct and frank 5 4 3 2 1

11 Price information is understandable and comprehensible 5 4 3 2 1

12 I am properly informed about the prices of the services 5 4 3 2 1

13 I know what I pay and what I get 5 4 3 2 1

Relative Price

14 I believe the bank I visit have the same or even a better offer 5 4 3 2 1

15 Terms and conditions of bank are better tailored to my needs than terms and conditions of other banks

5 4 3 2 1

16 Terms and conditions of bank are better than those of other banks. 5 4 3 2 1

17 I am convinced that my bank is the best choice 5 4 3 2 1

18 My bank guarantees the lowest prices 5 4 3 2 1

19 My bank allows considerable discounts 5 4 3 2 1

Price-Quality Ratio

20 Price and quality meet my needs 5 4 3 2 1

21 I get a good price-quality ratio 5 4 3 2 1

22 The prices I pay are fair 5 4 3 2 1

23 I have the impression that I know what I am paying for 5 4 3 2 1

24 The prices I pay depend on how much I use certain services 5 4 3 2 1

Price Fairness

25 I do not get worse terms and conditions than others for the same service 5 4 3 2 1

26 Terms and conditions are affordable for everyone, independently of income 5 4 3 2 1

27 Credit transactions do not cause abnormally high interest rates 5 4 3 2 1

28 My bank does not take advantage of me 5 4 3 2 1

93

SECTION II

This section deals with your satisfaction of pricing of bank. Please think about your experience at bank and share

whether your expectations about pricing have been met or not. In this regard, select the best answer that reflects

your feeling about the pricing strategy of bank. There is no right or wrong answers – All I am interested in is a number

that reflects your feeling regarding bank. Please read the statements and rate them on a scale of 1 to 5, 1 being that

you “Highly Dissatisfied” and 5 being “Highly Satisfied”

Sr. #

DESCRIPTION Scale

Price Reliability

1 Price changes communicated properly 5 4 3 2 1

2 Price changes communicated timely 5 4 3 2 1

3 There are no “hidden” costs 5 4 3 2 1

4 Prices and conditions do not change unexpectedly 5 4 3 2 1

Price Confidence

5 I can count on my customer advisor to find the best price for me. 5 4 3 2 1

6 Bank keeps all promises regarding prices. 5 4 3 2 1

7 I am convinced that the prices and conditions of are favourable. 5 4 3 2 1

8 Prices at bank remain constantly low. 5 4 3 2 1

Price Transparency

9 All price components are clear, comprehensible and understandable 5 4 3 2 1

10 Price information is complete, correct and frank 5 4 3 2 1

11 Price information is understandable and comprehensible 5 4 3 2 1

12 I am properly informed about the prices of the services 5 4 3 2 1

13 I know what I pay and what I get 5 4 3 2 1

Relative Price

14 I believe the offer made by bank are better offer as compared to other banks 5 4 3 2 1

15 Terms and conditions of bank are better tailored to my needs than terms and conditions of other banks.

5 4 3 2 1

16 Terms and conditions of banks are better than those of other banks. 5 4 3 2 1

17 I am convinced that my bank is the best choice 5 4 3 2 1

18 Bank guarantees the lowest prices 5 4 3 2 1

19 Bank allows considerable discounts 5 4 3 2 1

Price-Quality Ratio

20 Price and quality meet my needs 5 4 3 2 1

21 I get a good price-quality ratio 5 4 3 2 1

22 The prices I pay are fair 5 4 3 2 1

23 I have the impression that I know what I am paying for 5 4 3 2 1

24 The prices I pay depend on how much I use certain services 5 4 3 2 1

Price Fairness

25 I do not get worse terms and conditions than others for the same service 5 4 3 2 1

26 Terms and conditions are affordable for everyone, independently of income 5 4 3 2 1

27 Credit transactions do not cause abnormally high interest rates 5 4 3 2 1

28 Bank does not take advantage of me 5 4 3 2 1

94

SECTION III

1) Please mention your name ______________________________________________

2) Gender

Male Female

3) Please indicate how often do you come for use the bank?

Daily Once in a week Once in a Month Very seldom

4) Please indicate what do you do?

Student Businessman Employee

5) Please indicate which type of customer are you?

Household Retailer Manufacturer

6) Please indicate the level of your current academic qualification.

Under Matric Matric FA/FSc/ICom Graduation Masters PhD

Profession Qualification

7) Please indicate how old are you?

Less than 20 years 21 to 25 26 to 30 31 to 35 36 to 40

41 to 45 46 to 50 51 to 55 56 to 60 61and above

8) Please indicate your overall level of satisfaction of bank. (Tick whichever is applicable)

Highly dissatisfied Dissatisfied Normal Satisfied Highly Satisfied

9) Please indicate whether you will continue to use services from the bank?

Never Perhaps never Indifferent will use definitely use

10) Please indicate the amount of transactions (in RS) that you generally execute at bank?

Less than 50,000 50,001 to 100,000 10,001 to 150,000

150,001 to 200,000 200,001 to 250,000 300,001 to 350,000

350,001 to 400,000 400,001 to 450,000 450,001 to 500,000

More than 500,000

11) Please indicate from how long have you are getting services from bank?

Less than 1 year 1 year 2 years 3 years 4 years or more

95

12) How often do you visit bank?

Daily Thrice a week Once a week Once a fortnight once a month

As and when required Other

13) Please indicate if you use internet banking?

Yes No

14) Please indicate if you use Islamic banking?

Yes No

15) Please indicate city in which you live?

Lahore Gujranwala Gujrat Sialkot

16) How many banks accounts do you have?

1 2 3 4 5 or more

17) Please indicate type of bank account that you have with your banks. (tick all which are applicable )

Current account Saving account Corporate account Joint account Others

18) Please indicate type of bank service do you use. (tick all which are applicable)

Money account ATM card Credit card Locker Money transfer

Loan Letter of credit Other 1, please indicate Other 2, please indicate

Thanks for your support and time