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CHAPTER 4: RESULTS AND ANALYSIS

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4.1Introduction
The next step after collecting the data is of its analysis because the data as such has no meaning
unless it is analyzed and interrelated by sophisticated statistical techniques in order to arrive at certain
reliable and valid conclusions. However, valid, reliable and adequate the data may be, it does not
serve any worthwhile purpose unless it is carefully edited, systematically classified and tabulated,
scientifically analyzed, intelligently interpreted and rationality concluded.

Analysis of the data means categorizing, ordering, manipulating and summarizing of data to obtain
answers to the research questions. The purpose of analysis is to reduce the data into intelligible and
interpretable form so that the relations of research problems can be studied and tested.

The discovery of wilder in the phenomena of nature not withstanding, their complexity and
apparent confusion is rendered possible by the process of analysis and syntheses which are the
foundation stone of all scientific method. Interpretations, therefore, calls for critical examinations
of the results of one’s analysis are the most important step in the total procedure of test.

4.2 Data Analysis Overview

All statistical analysis was carried out using SPSS statistical computer package. The analyses examined in
the study include:

1. Frequency analysis – was done to analyze the pattern of respondent’s background.

2. Reliability analysis – was done by using Cronbach’s Alpha to view reliability of the
measurement scale.
3. Descriptive Statistics – was done to analyze what are the determinants of Customer
Satisfaction and Recommend intentions.
4. Correlation analysis- was done to study the correlation between Customer Satisfaction and
recommend Intentions and Customer loyalty.
 5. Multiple Regressions – was done to study the linkage between three variables Customer
Satisfaction, Recommend Intentions and Customer Loyalty.

4.3 Instrument Used and Items of the Scale

Each of the items of Customer Satisfaction variable was evaluated on a five point Likert scale,
ranging from one: means ‘strongly dissatisfied’ to five: means ‘strongly satisfied’.

x The questionnaire items for customer Satisfaction for the study was adapted from the scale
developed by Reserve Bank of India for a Customer Satisfaction Survey conducted by them in year
2009.
The Reserve Bank of India being the central bank and a regulatory body has been actively involved in
the review, examination and evaluation of customer service in the banks RBI has also put in place
appropriate framework, through a set of disclosure norms for the banks, to provide the best services
to the customer. For the redressal of grievances of banking customers Banking Ombudsman
Scheme has been widened to encompass a wider spectrum of activities related to customer
complaints. The Customer Service Department has been set up to monitor customer related
[Link] the survey 189 scheduled commercial bank branches located in Delhi and Haryana were
covered. About 20 customers from each selected bank branch were selected as respondents to
canvas the survey schedule. The survey covered a total of 3785 customers. There were 2199
customers from Delhi and 1586 customers from Haryana. The response rate regarding the overall
satisfaction was 91.7 per cent.
x The questionnaire items for Recommend Intentions was adopted from a scale developed
by Lam et al ., for B2B Service Context in year 2004.
x The questionnaire items for customer Loyalty was adopted from a scale developed by
Pong & Yee (2001) based on their research for restaurant and phone-banking in the
Hongkong market.
Table 4.1 Items of Customer Satisfaction Scale:
Developed by Reserve Bank of India for a Customer Satisfaction Survey in year 2009

[Link]. Items for Customer Satisfaction

1 Courtesy and friendliness of staff
2 Information provided to you on interest rate, service charges, terms & conditions of
various services, penalties etc. through internet, media, brochures, handbook,
handout etc.
3 Knowledge of staff on various services offered by the bank and their willingness to
answer your queries
4 Equal treatment of all customers i.e. no discrimination based on the gender, status,
caste etc.
5 Reliability of services such as no technical failure, availability of staff for rendering
services etc.
6 Adherence to time limits for conducting your transactions
7 Promptness in correction of mistakes and redressal of your complaints
8 Amount charged for various banking services such as processing fee, folio charges
etc.
9 Timely intimation of changes in the above aspects, if any
10 Infrastructure facilities to customers such as adequate number of seating chairs, table,
fan etc. provided in the branch
11 Maintaining privacy and confidentiality of your bank account
12 Response to your telephonic queries
Savings Bank Account Not Applicable
(Go to Q. No. 18 if not applicable)
13 Attitude and assistance of bank staff in opening Savings Bank Account
14 Minimum balance requirement
15 Time taken to operate your SB account such as deposit, withdrawal etc.
16 Complying with standing instructions / direct payment of Telephone Bills, Insurance
etc. through bank account
17 ATM / Debit card facility
Fixed / Recurring Deposit Account Not Applicable
(Go to Q. No. 21, if not applicable)
18 Ease of opening FD / RD Account and Renewal of FD
19 Assistance in premature closure of FD
20 Ease of availing loan facility against FD
 DD Facilities Not Applicable
(Go to Q. No. 23, if not applicable)
21 Time taken to issue DD/cheque and Encash DD / Cheque
22 Charges / commission for DD /cheque facility
Credit Card facility of this bank Not Applicable
(Go to Q. No.26, if not applicable)
23 Billing accuracy of credit card and receipt of statement in time
24 Settlement and recovery procedures
25 Disclosure of all charges, terms and conditions in clear terms
ATM Services of this bank Not Applicable
(Go to Q. No. 30, if not applicable)
26 Ease of operation of ATM
27 Security arrangements at ATM
28 Availability of ATM services without connectivity problems, technical faults, cash
shortage etc
29 Cash / Cheque deposit through ATM
Loan facilities Not Applicable
(Go to Q. No.35 , if not applicable)
30 Procedural formalities in sanctioning the loan (only necessary documents /
information are insisted)
31 Time taken to disburse the loan after sanctioning
32 Transparency in interest rate charges against loans
33 Settlement and recovery procedures
34 Prompt release of original / collateral documents etc. after repayment of loan
35 Ease of availing Safe Deposit Locker facility
36
Internet / Online Banking
37 Overall how satisfied are you with your bank / branch

Table 4.2 Items of Recommend Intentions Scale:

Developed by Lam et al ., for B2B Service Context in year 2004.
Each of the items of Recommend Intentions variable was evaluated on a five point Likert scale,
ranging from one: ‘strongly disagree’ to five: ‘strongly agree’.

S. No. Items of Recommend Intentions

1 I say positive things to other people about the services provided at this
bank
2 I recommend this bank to my friends and relatives.
3 I encourage others to patronize this bank.
4 I recommend this bank as bank employees respond caringly when I share my
problems
5 I recommend this bank as bank personnel are filled with professionalism and
meet their commitment.

Table 4.3 Items of Customer Loyalty Scale: Developed by Pong & Yee (2001)

Each of the items of Customer Loyalty variable was evaluated on a five point Likert scale,
ranging from one: ‘strongly disagree’ to five: ‘strongly agree’.

S. NO. Items of Customer Loyalty

1 You will definitely visit this bank again.
2 You will give a positive feedback about this bank to others.

3 You will try new services of this bank

4 This bank is first choice in your mind when you need any banking services.
5 You have regularly used this bank for long period of time.
6 Assume that you have only three choices for banking than this bank will be
one among them.
7 You will continue your services with this bank even if charges are increased
moderately
8 You will continue using this bank services even if there are some major
changes
 4.4 Frequency Analysis

Table 4.4
Demographic Profile of the Banking Customers

Frequency Percentage Valid Percentage Cumulative

Percentage
Valid Public 223 62.8 63.0 63.0
Private 131 36.9 37.0 100.0
Total 354 99.7 100.0

Type of Bank
300

200

100

0
Publi c Pri vate

Type of Bank

Figure 4.1

Table 4.5
Age wise profile of the Customers of Retail Banking operations
 Age

Cumulat iv e
Frequency Percent Valid Percent Percent
Valid 18-27 132 37.2 37.3 37.3
28-37 125 35.2 35.3 72.6
38-47 35 9.9 9.9 82.5
48-57 42 11.8 11.9 94.4
58 AND ABOVE 20 5.6 5.6 100.0
Total 354 99.7 100.0
Missing Sy stem 1 .3
Total 355 100.0

Age
140

120

100

80

60

40

20

0
18-27 28-37 38-47 48-57 58 AND ABO VE

Age

Figure :4.2

Table 4.6
Occupation wise profile of the Customers of Retail Banking operations of the study
 Occupati on

Cumulativ e
Frequency Percent Valid Percent Percent
Valid Business 81 22.8 22.9 22.9
Prof essional 59 16.6 16.7 39.5
Serv ice 95 26.8 26.8 66.4
Pensioner 19 5.4 5.4 71.8
Farm er 11 3.1 3.1 74.9
St udent 55 15.5 15.5 90.4
Housewif e 30 8.5 8.5 98.9
Others 4 1.1 1.1 100.0
Total 354 99.7 100.0
Missing Sy stem 1 .3
Total 355 100.0

Occupation
120

100

80

60

40

20

0
Busi ness Service Farmer Housewife
Professional Pensi oner Student Others

Occupation

Figure: 4.3

Table 4.7
 Total Experience of the Customers with the Bank

Total Experience with bank

Cumulat iv e
Frequency Percent Valid Percent Percent
Valid < 1y ear 27 7.6 7.6 7.6
<2 y ears 78 22.0 22.0 29.7
< 4 y ears 115 32.4 32.5 62.1
< 6 y ears 59 16.6 16.7 78.8
<10 y ears 72 20.3 20.3 99.2
> 10 y ears 3 .8 .8 100.0
Total 354 99.7 100.0
Missing Sy stem 1 .3
Total 355 100.0

Total Experience with bank

140

120

100

80

60

40

20

0
< 1year <2 years < 4 years < 6 years <10 years > 10 years

Total Experience with bank

Figure :4.4

4.5 Descriptive Analysis

4.5.1 Descriptive Statistics of factors of Customer Satisfaction

Standard Deviations for the determinants of Customer Satisfaction were noticed (ranging from.
.7630 to 3.1506) which represents that the data are well dispersed and closely distributed to the
mean. Whereas mean varies between (3.1717 to 3.9096)

Table 4.8 Descriptive Analysis of factors of Customer Satisfaction

[Link]. Factors Mean Std. Deviation

N

1 Courtesy and friendliness of staff 354 3.8051 .8673

2 Information Provided 354 3.4972 .9288

3 Knowledge of staff 354 3.5339 .9641

4 Equal treatment 354 3.4379 1.1626

5 Reliability of services 354 3.3672 1.0102

6 Adherence to time limit 354 3.6667 .9531

7 Promptness in correction 354 3.4124 1.0011

8 Amount charged for various services 354 3.4363 .9782

9 Timely intimation of changes 354 3.2351 1.0546

10 Infrastructure facilities 354 3.4576 1.1876

11 Maintaining privacy & confidentiality 354 3.9096 1.0580

12 Response to telephonic queries 354 3.2174 1.1370

13 Attitude & assistance in opening saving a/c 354 3.7722 .9521

14 Minimum bal required 354 3.6036 1.0319

15 Time taken in operating saving a/c 354 3.5149 .9864

16 Complying with standing instruction (saving 354 3.1717 1.1200
a/c)
 17 ATM card facility 354 3.7720 1.2146
18 Ease of opening FD/RD 354 3.8372 .8842
19 Assistance in premature closure of FD 354 3.5634 .8478
20 Ease of availing loan on FD 354 3.6143 .9628
21 Time taken to issue DD 354 3.6245 1.0213
22 Charges/comm.. for DD 354 3.6293 .9733
23 Billing accuracy in credit card 354 3.6321 .9544
24 Settlement and recovery procedure 354 3.5864 .9243
25 Disclosure of all charges and terms 354 3.7348 2.1421
26 Ease of operation of ATM 354 3.8111 .9482
27 Security arrangement at ATM 354 3.7778 1.9065
28 ATM services without connectivity 354 3.3529 1.0889
29 Cash/Cheque Deposit through ATM 354 3.2932 1.1428
30 Procedural formalities in sanctioning Loan 354 3.8000 3.1506
31 Time taken to disburse the loan 354 3.5763 .9689
32 Transparency in interest rate against loan 354 3.5932 1.0518
33 Settlement & Recovery Procedure 354 3.4375 .9421
34 Prompt Release of documents after loan 354 3.5698 .9975
repayment
35 Ease of availing deposit locker facility 354 3.6434 .9450
36 Internet /online banking 354 3.6977 .9742
37 Overall satisfaction level for Bank 354 3.7233 .7630

4.5.2 Descriptive Statistics of Recommend Intentions

Standard Deviations for the determinants of Recommend Intentions were noticed to vary (ranging from
.9401 to 1.032) which represents that the data are well dispersed and closely distributed to the mean.
Whereas mean varies between (3.3390 to 3.5847). Table 4.9 illustrates the findings.
Table 4.9 Descriptive Statistics of Recommend Intentions

S. No. Variables Mean Std. Deviation

1 I say positive things to others about the services 3.5847 .9401
provided at this bank
2 I recommend this bank to my friends 3.5269 .9505
3 I encourage others to patronize this bank 3.3390 1.0061
4 I recommend this bank as bank employees respond 3.4124 1.0068
caringly
S. No. Variables Mean Std. Deviation
5 I recommend this bank as bank personnel are filled 3.3644 1.0321
with professionalism

4.5.3 Descriptive Statistics of Customer Loyalty

Standard Deviations for the factors of Customer Loyalty were noticed to vary (ranging from .9856 to
1.1819) which represents that the data is medium dispersed and closely distributed to the mean.
Whereas mean varies between (3.5847 to 3.3390). Table 4.10 illustrates the findings

Table 4.10
Descriptive Statistics of Customer Loyalty

S. No. Variables Mean Std. Deviation

1 I will definitely visit this bank again 3.6808 .9856
2 I will give positive feedback about this bank to others 3.5960 1.0200
3 I will try new services of this bank 3.4674 1.0497
4 This bank is first choice in my mind when I need any 3.3390 1.1332
banking services
 5 I had regularly used this bank for long period of time 3.5734 1.0626
6 Assume that you have only three choices for banking 3.4759 1.0767
than this bank is one
7 I will continue my services even if charges are increased 3.1751 1.1819
moderately
8 I will continue using this bank services even if their are 3.2429 1.1330
some major changes

Table 4.11

Descriptive Statistics of all three variables

Descriptive Statistics

N Mean Std. Dev iation

Customer Satisf action 353 3.5964 .4934
Recommend Intentions 355 3.4451 .7699
Customer Loy alty 355 3.4440 .8084
Valid N (listwise) 353

4.6 Reliability Analysis

The credibility of the research finding
The three analysis tools can check the credibility of any research
x Reliability Analysis: This can be done by using Cronbach’s Alpha .
x Validity Analysis: Validity tests have been conducted to select and assess the final items of the
construct that are finally used for statistical testing. Among several; two types of validity tests
namely, content and criterion-related validity have been conducted in this study. According to
Rungtusanatham (1998), the content validity of a construct is termed as the degree to which
the measure spans the domain of the construct’s theoretical definition. It represents the
adequacy with which a particular domain of construct was sampled (Nunnally, 1978; Ahir,
Golhar and Waller, 1996). Content validity is subjective and judgmental but is often based on
 two standards as suggested by Nunnally: does the instrument contain a representative set of
measures, and were sensible methods of scale construction used (Flynn, Sakakibara,
Schroeder, Bates and Flynn, 1990).

For this study, the content validity of the instrument was ensured as the service quality
dimensions, recommend intentions and customer loyalty attributes were included from an
extensive review of related literature and feedback of banking customers obtained during
exploratory interviews.
The selected attributes were thoroughly reviewed and approved by two professor level
academicians and two professionals from the related field.
x Sensitivity Analysis: As each of these items was evaluated on a five-point Likert scale, ranging
from 1: “strongly disagree” to 5: “strongly agree”. So because of use of Likert Scale confirm the
sensitivity check of the research.

Reliability Analysis
To measure the internal consistency of items, reliability analysis was conducted by calculating the
Cronbach’s alpha for the main construct. Given that the multidimensionality of the construct, alpha
coefficients were computed for all dimensions separately that are presented. The results show that
Cronbach’s alpha measures for all dimensions exceed the threshold point of 0.70 .

The reliability of items was assessed by computing the Cronbach’s alpha. Cronbach’s alpha measures the
internal consistency of the items and the details are in Table No : 4.12. For the purpose of this research,
Cronbach’s alpha has been computed separately to assess the reliability of the scales adopted in the
study. All the values of Cronbach’s alpha ranges from 0.83 to 0.86, Cronbach’s alpha Value for Customer
Satisfaction Scale is 0.879, Cronbach’s alpha Value for Recommend Intentions scale is 0.839, Cronbach’s
alpha Value for Customer Loyalty Scale is 0.887and overall Cronbach’s alpha comes to be 0.931 thereby,
indicating good consistency among the items within each dimension and scale. This indicates that all
dimensions of the construct significantly contribute to the reliability and therefore should be retained

Table No. 4.12

Cronbach’s alpha coefficient

S. No. Scale Items Cronbach’s alpha.

 1 Customer Satisfaction Scale 0.8791
2 Customer Recommend Intentions Scale 0.8397
3 Customer Loyalty 0.8876
4 Overall Scale of the Study 0.9312

4.7 Determinants of Customer Satisfaction and its Analysis

Objective No. 1 To study the Determinants of Customer satisfaction in Banking

For achieving the first objective with the help of through literature Review and the experience of the
researcher in doing a project on Customer Satisfaction Survey done by RBI in year 2009 was used
and on the behalf of this review following determinants were identified in regards to Customer
Satisfaction in Retail Banking.

1. First Dimension Identified is Service Quality that includes

x Tangibles: Physical facilities, equipment, and appearance of personnel

x Reliability: Ability to perform the promised service dependably accurately
x Responsiveness: Willingness to help customer and provide prompt service
x Assurance: Knowledge and courtesy of employees and their ability to inspire trust and
confidence
x Empathy: Caring, individualized attention the firm provides its customer

2. Second Dimension Identified is banking services specific factors that includes satisfaction
from
x Saving A/C facility
x Fixed Deposit facility
x Demand Draft Facility
x Credit Card Facility
x ATM Facility
x Loan Facility
x Online Banking Facility
x Locker Facility
3. Third Dimension Identified is Overall Satisfaction of the Customer From that Bank
Once the dimensions were identified than on these factors one Sample T-Test was applied to
check that whether the mean of a single variable differs from a specified constant. It checks
that do there is a significant difference between the two groups i.e. observed value and test
value (the significance is less than .05).

In previous studies, the researchers have identified this type of fact, and also there are different
models for customer satisfaction (Jamal&kamal, 2004; Levesque&Mc Dougall, 1996; Moutinho &
Smith, 2000), which can be used by the banking industry to have a better view about this concept.

Application of ‘T’ Test:

Since the One-Sample T Test procedure compares the mean to a specified value, it is useful to know
what the mean value is. As in our research work we have observed 3 as the test value.

The One-Sample T Test procedure tests whether the mean of a single variable differs from a specified
constant. The mean value is displayed in the One Sample Statistics table, and the constant is test value
displayed in the One Sample T Test table. A low significance value (typically below 0.05) indicates that
there is a significant difference between the test value and the observed mean.

If the confidence interval for the mean difference does not contain zero, this also indicates that the
difference is significant. If the significance value is high and the confidence interval for the mean
difference contains zero, then you cannot conclude that there is a significant difference between the
test value and the observed mean.
 Table 4.13
T-Test for Service Quality
One-Sample Statistics

Mean Std. Deviation Std. Error Mean

Service 353 3.5029 .6146 3.271E-02

Quality

Table 4.14
One-Sample Test for Service Quality

Test Value =
3
T Df Sig. (2- Mean 95% Confidence
tailed) Difference Interval of the
Difference
Lower Upper

Service Quality 15.376 352 .000 .5029 .4386 .5673

The mean of our sample of Satisfaction for Service Quality is 3.5029, which is slightly higher
than our test value of 3.
Our T value is 15.376.
We have 352 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two groups (the significance is less than .05).
Therefore, we can say that our observed mean of service quality of 3.50 is significantly greater than the
test value of 3.
 Table 4.15
T-Test for Satisfaction for Saving A/C
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for
Saving A/c 353 3.5720 .6876 3.660E-02

Table 4.16
One-Sample Test for saving A/C

Test
Value = 3
T Df Sig. (2-tailed) Mean 95% Confidence
Difference Interval of the
Difference
Lower Upper

Satisfaction 15.628 352 .000 .5720 .5000 .6439

for Saving
A/c

The mean of our sample of Satisfaction for Saving A/C is 3.5720, which is slightly higher than
our test value of 3.
Our T value is 15.628.
We have 352 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction for Saving A/C of 3.57 is significantly greater than
the Test Value of 3.
 Table 4.17
T-Test for Satisfaction for Fixed Deposits
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for Fixed 346 3.5515 .7351 3.952E-02

Deposit

Table 4.18
One-Sample Test for Fixed Deposits

Test Value
=3

T Df Sig. (2- Mean 95% Confidence

tailed) Difference Interval of the
Difference
Lower Upper

Satisfaction for 13.956 345 .000 .5515 .4738 .6293

Fixed Deposit

The mean of our sample of Satisfaction for FD is 3.5515, which is slightly higher than our test
value of 3.
Our T value is 13.95
We have 345 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction for FD of 3.5515 is significantly greater than the
Test Value of 3.

Table 4.19
T-Test for Satisfaction for Demand Draft Facility
 One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for 331 3.6143 .8702 4.783E-02

Demand Draft

Table 4.20
One-Sample Test for Draft facility

Test Value =
3

T Df Sig. (2-tailed) Mean 95% Confidence

Difference Interval of the
Difference
Lower Upper

Satisfaction for 12.843 330 .000 .6143 .5202 .7084

Demand Draft

The mean of our sample of Satisfaction for Demand Draft 3.6143which is slightly higher than
our test value of 3.
Our T value is 12.843
We have 330 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction for DD of 3.61 is significantly greater than the Test
Value of 3.

Table 4.21
T-Test for Satisfaction for Credit Card Facility
 One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for 353 3.5821 .8495 4.521E-02

Credit Card

Table 4.22
One-Sample Test

Test Value =
3
T Df Sig. (2-tailed) Mean 95% Confidence
Difference Interval of the
Difference
Lower Upper

Satisfaction for 12.875 352 .000 .5821 .4932 .6710

Credit Card

The mean of our sample of Satisfaction for Credit Cards Facility is 3.5821, which is slightly
higher than our test value of 3.
Our T value is 12.875
We have 352 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction for Saving Credit Cards of 3.58 is significantly
greater than the Test Value of 3.
 Table 4.23
T-Test for Satisfaction for ATM Facility
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for 353 3.5474 .8597 4.576E-02

ATM

One-Sample Test

Test Value = 3

95% Confidence
t Df Sig. Mean Interval of the
(2-tailed) Difference Difference

Lower Upper

Satisfaction for 11.962 352 .000 .5474 .4574 .6374

ATM

Table 4.24

The mean of our sample of Satisfaction for ATM Facility is 3.5474, which is slightly higher than
our test value of 3.
Our T value is 11.962
We have 352 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction for ATM of 3.54 is significantly greater than the
Test Value of 3.
 Table 4.25
T-Test for Satisfaction for Loan Facility
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for
Loan facility 353 3.4852 .8675 4.617E-02

Table 4.26
One-Sample Test

Test Value =
3
t Df Sig. (2-tailed) Mean 95% Confidence
Difference Interval of the
Difference
Lower Upper

Satisfaction for
Loan facility 10.510 352 .000 .4852 .3944 .5760

The mean of our sample of Satisfaction for Loan Facility is 3.485, which is slightly higher than
our test value of 3.
Our T value is 10.50
We have 352 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction Loan Facility of 3.485 is significantly greater than
the Test Value of 3.
 Table 4.27
T-Test for Satisfaction for Online Banking Facility
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for 348 3.7385 .8976 4.812E-02

online banking

Table 4.28
One-Sample Test

Test Value =
3
t Df Sig. (2-tailed) Mean 95% Confidence
Difference Interval of the
Difference
Lower Upper

Satisfaction for
online banking 15.348 347 .000 .7385 .6439 .8331

The mean of our sample of Satisfaction for Online Banking Facility is 3.7385, which is slightly
higher than our test value of 3.
Our T value is 15.348
We have 347 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction Online Banking Facility of 3.485 is significantly
greater than the Test Value of 3.
 Table 4.29
T-Test for Satisfaction for Locker Facility
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Satisfaction for
locker facility 344 3.6716 .8840 4.766E-02

Table 4.30
One-Sample Test
Test Value = 3

T Df Sig. (2-tailed) Mean 95% Confidence

Difference Interval of the
Difference
Lower Upper

Satisfaction 14.090 343 .000 .6716 .5778 .7653

for locker
facility

The mean of our sample of Satisfaction for Locker Facility is 3.6716, which is slightly higher
than our test value of 3.
Our T value is 14.090
We have 343 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Satisfaction Locker Facility of 3.485 is significantly greater than
the Test Value of 3.
 Table 4.31
T-Test for Over all Satisfaction with the Bank
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Over all 353 3.7323 .7442 3.961E-02

Satisfaction

Table 4.32
One-Sample Test

Test Value =
3
t df Sig. (2-tailed) Mean 95% Confidence Interval of the
Difference Difference

Lower Upper

Over all 18.488 352 .000 .7323 .6544 .8102

Satisfaction

The mean of our sample of Overall Satisfaction from a Bank is 3.732, which is slightly higher
than our test value of 3.
Our T value is 18.488
We have 352 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Overall Satisfaction of 3.732 is significantly greater than the
Test Value of 3.
Discussions for Objective No.1: To study the Determinants of Customer satisfaction in
Banking
In this study we have observed that in the Banking Industry service quality is observed to be
one of the service dimension contributing to the customer satisfaction and we have also
observed that quality relates to managerial delivery of the service while satisfaction reflects
customers' experiences with that service and the same has been proved by the following
researchers.

Satisfaction can be considered at two levels:

x The transaction or encounter level and

x Overall satisfaction (Bitner and Hubbert, 1994).

Initially, Cronin and Taylor (1992) hypothesized that satisfaction is an antecedent of service quality.
However, their research with a multi-industry sample showed, in a LISREL analysis, an opposite
relationship.

Quality appears to be only one of the service factors contributing to the customer's satisfaction
judgements (Cronin and Taylor, 1992). Spreng and Mackoy (1996), who test a modified version of a
model proposed by Oliver (1993) that sought to integrate the satisfaction and service quality literature,
also provide support for service quality as being an antecedent to satisfaction.

More recently, this relationship has also been confirmed from a study in a health-care setting by
Deruyter et al. (1997), who also show that service quality should be treated as an antecedent of service
satisfaction. Iacobucci et al. (1995) conclude that the key difference between service quality and
customer satisfaction is that quality relates to managerial delivery of the service while satisfaction
reflects customers' experiences with that service. They argue that quality improvements that are not
based on customer needs will not lead to improved customer satisfaction.

Similar to Dick and Basu (1994), Anderson and Fornell (1994), Iacobucci et al. (1995), and Rust and Oliver
(1994), ``quality is one dimension on which satisfaction is based'') we view service quality as an
antecedent to satisfaction. Bolton and Drew (1994, p. 176) point out, customer satisfaction depends on
preexisting or contemporaneous attitudes about service quality.'' Bitner et al., (1994) and Anderson et
al., (1994) also point to this link by suggesting that improved service quality will result in a satisfied
customer and suggest that to a large extent this relationship is intuitive.

4.8 Determinants of Recommend Intentions and its Analysis

Objective 2 To study the Determinants of Recommend Intentions.

Second objective was achieved by going through the literature review and it was explored that
importance of word-of-mouth has generated interest in the use of intention to recommend as a
predictor of firm performance (Keiningham et al., 2007b; Morgan and Rego 2006; Reichheld
2003). Some resulting evidence shows intention to recommend predicts firm performance better
than customer satisfaction (Keiningham et al., 2007a; Pingitore et al., 2007). To be a superior
predictor of future performance, intention to recommend must reflect something that is not
already captured in customer satisfaction. Therefore, this research investigates whether such
factors can be identified by dealing customer satisfaction and intention to recommend as distinct
concepts that will be having its Impact on Customer loyalty in Retail Banking.

Determinants of Recommend Intentions: According to Lam et al,. 2004

xPositive Word-of-Mouth
xCare towards customers (Empathy)
xBank Personnel Professionalism
xCustomer Encouragement to Patronize
xCommitment of the bank Personnel

Once the dimensions for Recommend intentions were identified than on these factors one
Sample T-Test was applied to check that whether the mean of a single variable differs from a
specified constant. It checks that do there is a significant difference between the two groups i.e.
observed value and test value (the significance is less than .05).
 Table 4.33
T-Test for Positive Word of mouth
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

I say positive things to others about the 354 3.5847 .9401 4.996E-02
services provided at this bank

Table 4.34
One-Sample Test

Test Value = 3

t Df Sig. (2- Mean Difference 95% Confidence

tailed) Interval of the
Difference
Lower Upper

I say positive things to 11.703 353 .000 .5847 .4865 .6830

others about the
services provided at
this bank

The mean of our sample for Positive Word of mouth is 3.5847, which is slightly higher than our
test value of 3.
Our T value is 11.703
We have 353 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
 Therefore, we can say that our mean for Positive word of mouth is 3.58 that is significantly greater than
the Test Value of 3.

Table 4.35
T-Test for Recommend Intentions
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

I recommend 353 3.5269 .9505 5.059E-02

this bank to
my friends

Table 4.36
One-Sample Test

Test Value
=3

T Df Sig. (2-tailed) Mean 95% Confidence Interval

Difference of the Difference
Lower Upper

I recommend this bank 6.339 353 .000 .3390 .2338 .4442

to my friends

The mean of our sample for Recommend Intentions is 3.5269, which is slightly higher than our
test value of 3.
Our T value is 6.339
We have 353 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Recommend Intentions is 3.52 that is significantly greater than
the Test Value of 3.

Table 4.37
T-Test for Encouragement to Patronize the Bank

One-Sample Statistics

St d. Error
N Mean St d. Dev iation Mean
I encourage other to
354 3.3390 1.0061 5.347E-02
patronise this bank

Table 4.38

One-Sample Test

Test Value = 3
95% Confidence
Interv al of the
Mean Diff erence
t df Sig. (2-tailed) Diff erence Lower Upper
I encourage other to
6.339 353 .000 .3390 .2338 .4442
patronise this bank

The mean of our sample for Encouragement to patronize is 3.3390, which is slightly higher than

our test value of 3.

Our T value is 6.339

We have 353 degrees of freedom.

Our significance value is .000.

There is a significant difference between the two values (the significance is less than .05).
 Therefore, we can say that our mean for Encouragement to patronize is 3.3390 that is significantly

greater than the Test Value of 3.

Table 4.39
T-Test for Recommend Intentions because they Care (Empathy)
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

I recommend this bank as 354 3.4124 1.0068 5.351E-02

the bank employees
respond caringly

Table 4.40
One-Sample Test

Test
Value = 3

T Df Sig. (2- Mean 95% Confidence Interval

tailed) Difference of the Difference

Lower Upper

I recommend this bank as 7.708 353 .000 .4124 .3072 .5177

the bank employees
respond caringly

The mean of our sample of Recommendation Because of Care is 3.4124, which is slightly higher
than our test value of 3.
Our T value is 7.708
We have 353 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
 Therefore, we can say that our mean for Recommendation because of care of employees is 3.4124 that
is significantly greater than the Test Value of 3.
Table 4.41
T-Test for Recommendations because of Personnel Professionalism
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

I recommend this bank as

bank personnel are filled with 354 3.3644 1.0321 5.485E-02
professionalism

Table 4.42
One-Sample Test

Test Value
=3
I recommend this bank as bank T df Sig. (2- Mean 95% Confidence
personnel are filled with tailed) Difference Interval of the
professionalism Difference

Lower Upper

6.643 353 .000 .3644 .2565 .4723

The mean of our sample of Recommendation because of personnel Professionalism is 3.364,

which is slightly higher than our test value of 3.
Our T value is 6.643
We have 353 degrees of freedom.
Our significance value is .000.
There is a significant difference between the two values (the significance is less than .05).
Therefore, we can say that our mean for Recommendation because of personnel Professionalism is
3.364 that is significantly greater than the Test Value of 3.

Discussions
The findings of determinants of recommend intentions are Positive word of mouth, commitment, care ,
courage of customer to patronize bank and employees professionalism has also pointed out by other
researchers .

Recommendation by positive word-of-mouth is increasingly seen as a marketing tool that generates the
greatest benefit for supplier firms (Morgan and Rego 2006, Reichheld 2006). There is evidence that
recommendations have a strong influence on consumer choice, particularly in the pre-purchase stage
(East et al., 2005). It stands to reason that in a purchase decision-making context, consumers rely more
on customer recommendations rather than either marketing content or advertising by the provider
(Biyalogorsky et al., 2001). Therefore, since existing customers can be good sales people, customer
recommendations must be considered an important driver for diffusing products and services.

Chris Baumann ,Suzan Burton,Gregory Elliott,Hugo M. Kehr (2007) in their research “Prediction of
attitude and behavioural intentions in retail banking” have observed that the Willingness to
recommend is best predicted by affective attitude,WOM, overall satisfaction and empathy. Short-term
behavioral intentions, however, were best predicted by overall satisfaction and responsiveness, while
long-term intentions were predicted by overall satisfaction, affective attitude and empathy.

From a review of past research, it is clear that customer satisfaction can affect post-purchase behavior
such as re-purchase and customer recommendations (e.g. Gremler et al. 2001, Yeung and Ennew 2001).
According to Anderson (1998) however, customers may not recommend services to other people, even
though they satisfied with the service. That is, customer satisfaction and word-of-mouth have a U-
shaped relationship. This means that if customer does not have a high level of satisfaction, he/she will
not be willing to recommend his/her service experience to other people. Similarly, Santos and Boote
(2003) posited that the perceived performance of a product or service should be above a consumer’s
desired expectations. Otherwise, this will not affect a positive action such as a compliment or a
recommendation. A number of studies seek to explore the determinants of consumer recommendations
(Brown et al.2005, Shabbir et al.,2007).

The majority of work suggests that consumer post-purchase responses are the key underlying
antecedents of customer recommendations. In particular, most researchers note that satisfied
customers are willing to recommend services to others (e.g. Palmatier et al., 2006, Morgan and Rego
2006). On the other hand, Csikszentimihalyi (1990) proposes that flow experience emphasizes an
individual’s subjective experience state made by interacting with activities that may also act as a kind of
post-purchase responses. Hence, besides customer satisfaction, we posit that flow experience is
important to the study of customer recommendation behavior.

Objective 3

To find out Impact of Customer Satisfaction & Recommend Intentions in managing

Customer Loyalty.

Managerial Perspective was used to achieve this objective. Where researcher had talked to around 20
Branch Managers of various banks (Public as well as Private sector banks) to know their view point
about Impact of Customer Satisfaction and Recommend Intentions in managing Customer loyalty.

Although by the application of Correlation on the available data we analyze that there is
positive correlation between the following variables.

x Customer Satisfaction
x Recommend Intentions
x Customer Loyalty

Correlation Analysis

The correlations table displays Pearson correlation coefficients, significance values, and the number of

cases with non-missing values. Pearson correlation coefficients assume the data are normally

distributed. The Pearson correlation coefficient is a measure of linear association between two

variables. The values of the correlation coefficient range from -1 to 1. The sign of the correlation

coefficient indicates the direction of the relationship (positive or negative).

The absolute value of the correlation coefficient indicates the strength, with larger absolute values

indicating stronger relationships. The correlation coefficients on the main diagonal are always 1.0,

because each variable has a perfect positive linear relationship with itself. Correlations above the main

diagonal are a mirror image of those below. The significance of each correlation coefficient is also

displayed in the correlation table.

The significance level (or p-value) is the probability of obtaining results as extreme as the one observed.

If the significance level is very small (less than 0.05) then the correlation is significant and the two

variables are linearly related. If the significance level is relatively large (for example, 0.50) then the

correlation is not significant and the two variables are not linearly related.N is the number of cases with

non-missing values. Pearson correlation was computed to test the formulated hypothesis. Table 8 shows

that the correlation for all the scales is highly significant at 99% level of confidence.

The result shown in Table No. 4.4.3 shows that there is the strongest association between the

customer loyalty and Recommend Intentions (r = 0.814, p < 0.01) and Followed by customer

satisfaction (r = .699, p < 0.01).

 Table 4.43

Correlations Table
Customer Loyalty Customer Recommend
Satisfaction Intentions
Pearson Customer Loyalty 1.000 .699 .814
Correlation
Customer Satisfaction .699 1.000 .671

Recommend Intentions .814 .671 1.000

Sig. (1-tailed) Customer Loyalty . .000 .000

Customer Satisfaction .000 . .000

Recommend Intentions .000 .000 .
N Customer Loyalty 353 353 353
Customer Satisfaction 353 353 353

Recommend Intentions 353 353 353

Significant positive correlation reveals that the higher level of Recommend intentions and customer
satisfaction lead to higher customer loyalty.

By using the statistical analysis, some results, which can show that among the factors, some has more
correlation with others, are gained. At this step, we don’t have a model for loyalty, but by looking at
table which is the matrix of the correlations between the factors we can understand that Recommend
Intentions is the highly correlated element with loyalty, than next is Customer Satisfaction and Customer
loyalty and the least correlation exist between Customer Satisfaction and Recommend Intentions It
means that the two factors that are highly correlated for those variables a little change in one
(Recommend Intentions) has a great influence on other (loyalty).This means the banking managers
should focus on this part to meet the customer Satisfaction so that they recommend their services to
others in order to have loyal ones.

Observation from Interaction with Bank Mangers

To summarize the observation they said Earlier Indian customers were hidden behind the impenetrable
wall of loyalty to the local banks. But now with intense competition not only from domestic players
there is a tough competition in the market from the foreign players too which is creating an atmosphere
where the toughest job for the bank manger is to earn its customer loyalty.

“Today, a customer loss is a customer gain for a competitor.”

With the help of secondary data from bank annual reports, RBI reports it was observed that if
we compare few aspects of banking industry over a period of last few years i.e. growth in the
number of ATM’s in the country, population of customers per bank branch, population per
ATM, percentage of ATM located at various locations (like Rural, semi-urban, urban,
metropolitan cities), RTGS facility e.t.c.

All aspects indicate that competition is growing day by day. Population per branch, per ATM
over the period of time is going down because of more players in the market to the customers.

Second observation is that there is a great scope in rural area and semi-urban area for the
growth of banking industry, which is yet to be fully explored.

Thirdly with the advent of technology in every sector banking industry has also benefited as
observed that number of ATM’s has been increased over the period of years and it has also
given push to the use of RTGS (Real time gross settlement) services. So all the facts proves that
as the competition is increasing day by day, options are also increasing with the customers any
organization which want to survive has to focus on Customer Satisfaction and Recommend
Intentions to manage Customer Loyalty.
 Source:RBI Trends and Progress 2009-2010
Figure No. 4.5

It was observed from above figure that the number of ATM’s has been increased from 17642 to 43651
During the period of year 2005 to year 2009.

Source:RBI Trends and Progress 2009-2010

Figure No. 4.6

It was observed from the above Figure No. 4.6 that population per ATM has gone down over a period
from year 2007 to 2009 in both the centers in Rural area as well as urban areas that shows because of
increasing competition number of banks has been increased and ATM’s of various bank has also been
increased resulting in decrease in number of customers creating a need for Customer Retention and
loyalty Management.

Source: RBI Trends and Progress 2009-2010

Figure No. 4.7

It was observed from the above Figure No. 4.7 that population per ATM in Rural sector and Semi–urban

sector has gone up during a period from year 2007 to 2009 and population per ATM in urban sector and

Metropolitan sector over this period has gone down which shows that competition is increasing in urban

areas and ATM’s of various bank has also been increased resulting in decrease in number of customers

creating a need for Customer Retention and loyalty Management. But on the other hand it was

observed that in Rural and Semi urban sector the number of customers per ATM were increased that

shows there is still a great scope for retail modern banking services in these areas that has yet to be

explored.
 Source: RBI Trends and Progress 2009-2010
Figure No. 4.8
It was observed from the above Figure No.5.8 that population per Bank Branch in Rural sector and
Urban sector has gone down during a period from year 2007 to 2009 which shows that competition is
increasing in Urban areas as well as Rural areas for various bank resulting decrease in number of
customers creating a need for Customer Retention and loyalty Management.

Source: RBI Trends and Progress 2009-2010

Figure No. 4.9

RTGS (Real Time Gross Settlement)

The above Figure No.4.9 shows that during the period of year 2004 to 2009 the use of Real time
gross settlement has been increased year over year. Which clearly reflects that the use of modern
technological banking services has been increased.

With so many competitors, companies need to spend as much energy on retaining customers as
they do on acquiring them. Businesses that understand churn and invest accordingly will need to
invest less in placating dissatisfied customers and less in winning new ones to grow. Businesses
these days are observing that if their rivals are having better retention machines they will rapidly
overtake them. Understanding how and why the churn occasion comes about will be critical.”
For managing customers normally the Banks are using the two strategies one is offensive that
takes care of increasing market share by concentrating on new customers and the second is
Defensive Strategies which focuses on retention of present customers as suggested by Fornell in
Figure No. 4.10

Figure No. 4.10

According to their views a critical fact that should be kept in mind is that, although, it may be possible to
acquire or retain any customer; it is not economically desirable to do so for every customer.
In fact, the cost of retention of customers is inversely related to their inherent loyalty intensity (i.e., the
higher the loyalty intensity, the lower the retention costs, and vice versa). Also acquisition costs are
positively correlated to loyalty intensity: it costs more to acquire a customer whose tendency is to stick
with its current provider than one with a greater propensity to switch. Acquisition and retention costs
include the carefully attributed costs associated with advertising, other communications, promotions
and incentives in the form of price discounts, cash and/or other goods and services, frequent-user and
affinity programs, and customer contact.

According to the Bank Personnel they are emphasizing on various aspects to manage Customer
Loyalty
x Standardizing their processes and systems to deliver consistent outcomes.
x Reward customers for their relationships in entirety
x Reward groups and communities as a whole:
x Provide effective and innovative solution.
x Strengthen their existing competencies.
x Reward “good” behavior
x Develop their human capital and new competencies.
x Upholding integrity in delivering their services.
x Build harmonious relationships with the community.
x Take a good care of the environment in delivering their services.

The main focus of the banks is building a strong strategic framework so as to meet customer’s
satisfaction followed by Recommend Intentions to Manage Loyalty by:
x Understanding and being sensitive to their needs
x Being friendly and helpful to them
x Listening attentively to what they say
x Being responsive to changes in their needs

Discussions

Firstly, since only when the satisfaction with the core service and relationship is high, the commitment
will be higher, banks have to ensure that utmost importance is given to attributes like quality, product
features, product availability, managing good relations with customers etc.
Secondly, relational switching costs can be increased only by investing in the soft or the relational assets
(Nielson, 1996), in terms of various adaptations to favor the customer and also the investments in other
soft assets like training for the working staff of the customers etc. Since the interaction is mostly
interpersonal in nature, these outcomes hold major lessons for them.

Reward customers for their relationships in entirety Some banks have already shown the way like
Citibank’s Thank You Network which aims to reward customers for “everyday banking”, acknowledges
the importance of both the depth and monetary value of customer relationships. Customers earn points
for just about everything – right from using their checking account to buying products and services to
making purchases on their cards. Interestingly, by not automatically offering membership to the
program, requiring instead that customers call up to enroll, the bank may have generated greater pull
and user interest.

MasterCard’s innovative program awards bonus points to customers of banks using the Master Card
platform. By rewarding the full scope of relationships ranging from checking and savings to loan
applications and money markets, the program encourages customers to do more with their bank,and
also with their cards.

India’sICICI Bank has shown great foresight by making loyalty programs more inclusive through the
recent introduction of a separate loyalty program for its rural business, catering to its Rural Retail Asset
Group, Rural Business Banking and Agri- Business Banking verticals.

Moreover, the staff role is critical in understanding the customer needs and in satisfying them: the
higher satisfaction will then increase customer retention.

Reward groups and communities as a whole Drawing a parallel, rather than consider individual
relationships, banks could base their rewards program on the aggregate engagement of all members of
the same family or community. National City has already applied this principle by allowing small
business owners to combine business accounts with personal accounts for calculation of rewards

Rewarding groups and homogeneous communities creates a win-win for both – customers who might
not have met the eligibility criteria on their own gain entry into the program and their banks secure the
loyalty of an entire group in one stroke.

Reward “good” behavior Barclays, which in March 2009,unveiled a unique loyalty program
aimed at improving usage of electronic channels among its customers. Each time a customer uses
mobile or Internet banking, subscribes to alerts via SMS or visits an ATM instead of a branch, he
or she is awarded points.

Reward longevity: The greatest value that any loyalty program can deliver is customer stickiness –
ironically, this goes unrewarded most of the time. Banks invest millions in capturing and maintaining
business data that can provide useful insight into customer loyalty. This information can be used to
innovate upon existing programs by offering greater rewards to customers that have stayed with the
bank for the longest length of time or made repeat purchases

Offer recognition: Sometimes, a demonstrated acknowledgement of the customers’ importance means

more to them than material reward. Banks can reciprocate their customers’ loyalty and advocacy with a
gesture in kind – which could be by way of preferential service or shorter call-waiting time.

Make rewards meaningful: MasterCard decided to do things differently. Members of their program can
customize their rewards to their taste, from the prosaic to the exotic.

Analysis of credit-card programs shows that the best customers – those that are profitable to maintain
qualify for a reward within 6 months, whereas those in the bottom tier fail to do so even after 18
months. In fact, it is resource -draining to service these clients. Unfortunately, since most programs are
perennial, banks may not be able to disenfranchise these customers. However, they can minimize costs
by scaling down marketing activity directed at these customers, replacing full colour promotional
material with low cost alternatives and making use of electronic communication.

Objective No.4

To study the linkage between Customer Satisfaction, customer Recommend intentions & Customer
Loyalty in Banking Services.

For achieving the objective to study the linkage between Customer satisfaction, Recommend
Intentions and Customer Loyalty following applications have been performed on the data

x Test of Normality (One-Sample Kolmogorov-Smirnov Test)

x Multicollinearity Diagnosis
x Multiple Regression Analysis
4.9 Test of Normality (One-Sample Kolmogorov-Smirnov Test)

Prior to applying the regression analysis, the assumptions for the regression analysis were tested. To
test the normality of the residuals, the Kolmogorov-Smirnov test has been used. To test the normality of
the residuals, the Kolmogorov-Smirnov test has been used. The K-S test result in Table No.4.44 provides
the evidence that the residual is normally distributed and the regression analysis can be executed.

The Kolmogorov-Smirnov Test compares an observed cumulative distribution function to a

theoretical cumulative distribution. The theoretical distribution can be normal, uniform, or
Poisson. In this example, the normal distribution is selected. Parameters of the theoretical
distribution are estimated from the observed data. Absolute indicates the largest absolute
difference between the theoretical cumulative distribution and the observed cumulative
distribution function. The K-S test result in Table 4.44 provides the evidence that the residual is
normally distributed and the regression analysis can be executed.

Table 4.44
One-Sample Kolmogorov-Smirnov Test Table

Customer Recommend Customer Loyalty

Satisfaction Intention

353 353 353

N
Normal
Parameters Mean 3.5964 3.4451 3.4440

Std. Deviation .4934 .7699 .8084

Most Absolute
Extreme .085 .129 .103
Differences
Positive .059 .072 .042
 Negative -.085 -.129 -.103

Kolmogorov- 1.599 2.431 1.933

Smirnov Z
Asymp. Sig. .012 .000 .001
(2-tailed)

Note: a Test distribution is Normal.

b Calculated from data.
4.10 Multicollinearity Diagnosis
Multicollinearity diagnosis was done using

x Variance Inflation Factor (VIF) and

x Tolerance Value (TV).

VIF = 1/(1-Ri2) is the coefficient of the multiple determination of regression produced by regressing the
variable Xi against the other X variables.

If any VIF exceeded 10, the correspondent variable should be considered to be deleted or otherwise
used as an alternative method instead of Ordinary Least Square. The tolerance of an independent
variable is an additional method to measure the effects of multicollinearity in a data set. The value of
the tolerance of the variable has a range from zero to one. If the tolerance of the variable value is
close to one, it indicates the independence; and if the tolerance value is close to zero, the variables
are multicollinear.
x VIF value is 1.817 for both the Independent variables i.e. Customer satisfaction and
Recommend Intentions, which is well below the cut-off value of 10.
x On the other hand, the Tolerance Values are above 0.550. These factors indicate
that there is no evidence of multicollinearity problem in the regression model.

The values of the Variance Inflation Factor and Tolerance Value for regression model are presented in
Table 4.45 and indicates no evidence of Multicollinearity. In order to check the correlation between the
residuals, Durbin-Watson test statistic was computed. The test statistic can vary between 0 and 4. Field
(2005) suggests that the value less than 1 or greater than 3 are cause for concern; however, values
closer to 2 or value of 2 means that the residuals are uncorrelated. The result of Durbin-Watson test has
been shown in Table 4.46. Value of D-W test close to 2 (i.e. 1.878) shows that the residuals are
independent, that is, uncorrelated, thereby, fulfilling the assumption for applying the regression model.

Table 4.45
Multicollinearity Diagnosis Table
 Coeffi cientsa

Collinearity Statistics
Model Tolerance VI F
1 Customer Satisf action .550 1.817
Recommend Intentions .550 1.817
a. Dependent Variable: Customer Loy alty

4.11 Multiple Regression Analysis

A regression analysis is a method to view the relationship between one dependent and one
independent variable. When using the regression technique, it is allowed to make predictions of
the likely values of the dependent variable from the known values of the independent variable
(Burns & Burns, 2008). The simple linear regression aims to find a straight line that summarizes
the relationship between the two continuous variables in a scatter graph. The continuous
variables are affected by the alpha and beta parameters, with the regression technique’s estimate
values being the parameters to make the line fit the observation in the best way. The result will
be a linear relationship. Important to note is that there is no evidence that an increase in the
independent variable causes an increase in the dependent variable although it may appear that
way; one can only conclude that they move together. The simultaneous increase in the
independent and de-pendent variables may have been caused by unknown variables excluded
from the study or other variables that do affect the dependent but are unknown to the authors
(Burns, & Burns, 2008).

The multiple regression analysis is used to see how several independent variables are related to
the dependent variable. It is an extension of the simple regression analysis. The multiple
regression analysis is normally used to test a theoretical model to be able to see which variables
are most related to the dependent variable, and give a more precise dependent variable (Zikmund
& Babin, 2010). The accuracy of the predictions depend on the strength of the correlation
between the variables. By using multiple relevant independent variables, the understanding of a
specific case will be improved (Burns & Burns, 2008).

To be able to judge how trustworthy the regression model is, the R2 (the multiple coefficient of
determination) is used. The higher value of the R2, the more trustworthy the equation is. R2 only
describes the sample (Parasuraman, et al., 2004) to be able to judge the trustworthiness of the
whole population. However, even if the R2 shows a very high value of 0.9 (90 percentage trust
worthiness) it can be the case that there is no association between the dependent and independent
variables. To be able to judge if there really is an association, the F-statistics is used as an
additional tool to verify the association within the population. A critical value of F is calculated,
and to determine whether R2 is significant, the F value should be greater than the critical F
(Parasuraman, et al., 2004).

Dependent Variable: Customer Loyalty

Independent Variable: 1. Customer Satisfaction

2. Recommend Intentions

Framework for Satisfaction and Loyalty

Figure No. 4.11

 Figure No. 4.12

Model Summary

Multiple regression analysis was applied with the help of SPSS software and enter method was use for
the data entry of the variables. This table displays R, R squared, adjusted R squared, and the standard
error. R is the correlation between the observed and predicted values of the dependent variable. The
values of R range from -1 to 1.

The sign of R indicates the direction of the relationship (positive or negative). So in the present study the
value of R is 0.84, which is close to 1 indicating a positive relationship between the variables

The absolute value of R indicates the strength, with larger absolute values indicating stronger
relationships.

R squared is the proportion of variation in the dependent variable explained by the regression model.
The values of R squared range from 0 to 1. Small values indicate that the model does not fit the data
well. The sample R squared tends to optimistically estimate how well the models fit the population.
As in the present study in Table No. 4.44 the value of R squared is 0.706 this high value of R squared
indicates that the model fits in the data very efficiently Adjusted R squared attempts to correct R
squared to more closely reflect the goodness of fit of the model in the population.

Use R Squared to help you determine which model is best. Choose a model with a high value of R
squared that does not contain too many variables. Models with too many variables are often over fit
and hard to interpret.

So in the present study we are getting very good result in terms of value of adjusted R squared also as
the value is 0.704 with only three variables.

In addition to D-W test, the results of the regression for relationship between the Customer loyalty
Recommend Intentions and customer satisfaction showed the adjusted R-square equal to 0.704 (Table)
indicating high proportion of explained variance and this adjusted R-square was found to be statistically
significant.

Table 4.46

Model Summaryb

Adjusted St d. Error of Durbin-W

Model R R Square R Square the Estimate atson
1 .840a .706 .704 .4410 1.878
a. Predictors: (Constant), Recommend Int entions, Cust omer
Satisf action
b. Dependent Variable: Customer Loy alty

Regression ANOVA Table Analysis

This table summarizes the results of an analysis of variance. The sum of squares, degrees of
freedom, and mean square are displayed for two sources of variation, regression and residual.
The output for Regression displays information about the variation accounted for by your
model. The output for Residual displays information about the variation that is not accounted
for by your model. And the output for Total is the sum of the information for Regression and
Residual.
A model with a large regression sum of squares (163.175) in comparison to the residual sum of
squares (68 only) indicates that the model accounts for most of variation in the dependent
variable as shown in Table No 4.47.

Very high residual sum of squares indicate that the model fails to explain a lot of the variation
in the dependent variable, and you may want to look for additional factors that help account
for a higher proportion of the variation in the dependent variable. The mean square is the sum
of squares divided by the degrees of freedom.

The F statistic is the regression mean square (MSR) divided by the residual mean square (MSE).
The regression degrees of freedom is the numerator df and the residual degrees of freedom is
the denominator df for the F statistic. The total number of degrees of freedom is the number of
cases minus 1.

If the significance value of the F statistic is small (smaller than say 0.05) then the independent
variables do a good job explaining the variation in the dependent variable .If the significance
value of F is larger than say 0.05 then the independent variables do not explain the variation in
the dependent variable.

As the significance value of the F statistic is small (smaller than say 0.05) so we can conclude
that the independent variables do a good job explaining the variation in the dependent
variable.

Table 4.47
ANOVAb

Sum of
Model Squares df Mean Square F Sig.
1 Regression 163.175 2 81.587 419.525 .000a
Residual 68.067 350 .194
Total 231.241 352
a. Predictors: (Constant), Recommend Intentions, Customer Satisfaction
b. Dependent Variable: Customer Loy alty
Regression Coefficients

The unstandardized coefficients are the coefficients of the estimated regression model. Often
the independent variables are measures in different units. The standardized coefficients or
betas are an attempt to make the regression coefficients more comparable. If you transformed
the data to z scores prior to your regression analysis, you would get the beta coefficients as
your unstandardized coefficients. The t statistics can help you determine the relative
importance of each variable in the model .As a guide regarding useful predictors, look for t
values well below -2 or above +2.

As in reference to the data analysis of this study the t values for both the variables is above 2
shown in Table No. 4.45 i.e.

x 7.08 for Customer satisfaction and

x 16.08 for Recommend intentions reflect the relative high importance of these two
variables in the model.

Multiple Regression Table

Table 4.48

Coefficientsa

Standardi
zed
Unstandardized Coeff icien
Coeff icients ts Collinearity Statistics
Model B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) -.467 .173 -2.694 .007
Customer Satisf action .455 .064 .277 7.089 .000 .550 1.817
Recommend Intentions .660 .041 .629 16.081 .000 .550 1.817
a. Dependent Variable: Customer Loyalty

Note: 1. Beta coefficient is the standardized regression coefficient, which allows comparison of the
relatives on the dependent variable of each independent variable.
2. t-statistics help to determine the relative importance of each variable in the model
As per the results in the Regression Table No. 4.48
Unstandardized Coefficients of Beta

x Is 0.455 for Customer Satisfaction and

x Is 0.660 for recommend Intentions

Standardized Coefficients

x Is 0.277for Customer Satisfaction and

x Is 0.629 for recommend Intentions

t-Value
x Is 16.081 for recommend Intentions and
x Is 7.089 for Customer Satisfaction

Multiple Regression analysis shows that the Recommend Intentions best predicts and is a good

explanatory variable of the customer loyalty followed by Customer Satisfaction. As the Beta value

(Standardized coefficient) is higher in case of Recommend Intentions that is 0.629 and for Customer

Satisfaction it is 0.277 that indicate clearly that in Banking Sector recommend Intentions have greater

impact on Customer loyalty than Customer Satisfaction. Although in Descriptive analysis the value of

mean score of Customer Satisfaction was higher that Recommend Intentions in Table No.4.11
 Histogram
Dependent Variable: Customer Loyalty
50

40

30

20

10 Std. Dev = 1.00

Mean = 0.00

0 N = 353.00
-3
-2 5
-2
-1
-1 5

1.
1.
2.
2.
3.
3.
-.7 5
-.2
.2
.7
.2
.7
.2
.7
.2

25
75
25
75
25
75
5
5
5
5
5
5

Regression Standardized Residual

Figure No. 4.13

Discussions

In the present study Multiple Regression analysis shows that the Recommend Intentions best predicts
and is a good explanatory variable of the customer loyalty and followed by Customer Satisfaction. It has
also been observed by correlation analysis that there is a positive relationship between Customer
Satisfaction, recommend intentions and customer loyalty. Following studies can be discussed as some
support the findings.
Reichheld (2001) claims that the most important sign of loyalty is the customer’s willingness to
recommend the company to others. Because a person recommending is putting their own reputation on
the line, the probability for referrals can be seen as a good predictor of loyalty.

As stated by Alhabeeb (2007), positive word of mouth plays an important role in strengthening brand
loyalty and widening its reach. It acts as a free advertisement, declaring information on the satisfying
experience with the brand and offering proven benefits, that can lead to an automatic recruiting of new
consumers, who may do the same, and pull in more new consumers, and so on. The group of favorable
consumers gets larger and larger, and many favorable consumers may soon become loyal and
committed. Overall satisfaction with an experience does lead to customer loyalty.

Barden and Teel (1983) argue that customer satisfaction is important to the marketer because “it is
generally assumed to be significant determinant of repeat sales, positive word of mouth and consumer
loyalty”.

Similarly, Bloemer and Poiesz (1993) have argued, “satisfaction can be thought of as an important
determinant of brand loyalty”.

Anderson and Fornell (1994) point out that customer loyalty is determined to a large extent by customer
satisfaction. Boulding et al. (1993) found a positive relationship between service qualities and
repurchase intentions and willingness to recommend. Bloemer et al. (1998) also found a positive
relationship between perceived service quality and preference loyalty and price indifference loyalty.

Based on Coyne (1989), there are two critical thresholds affecting the link between satisfaction and
loyalty. On the high side, when satisfaction reaches a certain level, loyalty increases dramatically; at the
same time, when satisfaction declined to a certain point, loyalty dropped equally dramatically (Oliva et
al., 1992; Bowen & Chen, 2001).

Fornell (1992) argues that high customer satisfaction will result in increased loyalty for the firm and that
customers will be less prone to overtures from competition. However, the ability of customer
satisfaction scores to predict such loyalty has not been adequately demonstrated (Higgins, 1997). Fornell
et al. (1996) also offer some evidence of the linkage between customer satisfaction and loyalty.
Anderson and Fornell (1994) point out that customer loyalty is determined to a large extent by customer
satisfaction. Satisfaction is thus viewed as an antecedent of relative attitude because without
satisfaction consumers will not hold a favorable attitude towards a brand as compared to other
alternatives available (Dick and Basu, 1994). According to several researchers (Sirdeshmukh, Singh &
Sabol, 2002; Zeithaml, Berry & Parasuraman, 1996), brand loyalty results in positive word of mouth and
repeat purchasing by the brand’s existing consumers. A customer’s repeated purchase and brand loyalty
are closely associated with his or her satisfaction with an initial purchase, the concept of customer
satisfaction is of utmost importance because of its influence on repeat purchases and word-of-mouth
(WOM) publicity (Cronin & Taylor, 1992; Fornell, 1992; Halstead & Page, 1992). Customer satisfaction
was found to be a significant determinant of repeat sales and customer loyalty (Anderson & Sullivan,
1993; Liljander & Strandvik, 1995; Anderson 1998), which in the tourism and hospitality context would
mean person’s intention to revisit a country again (Weber, 1997; Kozak & Rimmington, 2000). From the
indicators and past research, the ‘recommend’ concept (Lam et al., 2004) is similar in meaning to
‘advocate’ (White & Schneider, 2000) and positive word-of-mouth (WOM) (e.g., Brown et al., 2005). For
example, Hartline and Jones (1996) name WOM ‘word-of-mouth recommendation’, Reynolds and Beatty
(1999) indicated that ‘word-of-mouth recommendations have been found to be very important in
consumers’ decision making for a variety of products and services’, and Griffin (1995) contends that
building relationships with customers will lead to customer advocacy, where WOM flourishes.

4.12 RESULTS & FINDINGS

1. From the descriptive analysis the results that are observed is that customers are more satisfied with
these five services as the mean score of satisfaction are highest for the following five: Maintaining
privacy & confidentiality, Ease of opening FD/RD, Ease of operation of ATM, Courtesy and
friendliness of staff, Procedural formalities in sanctioning Loan of Banks in Retail Banking.
2. From the descriptive analysis of the data results that are observed is that customers are least
satisfied with these five services as the mean score of satisfaction are minimum for the following
five: ATM services without connectivity, Cash/Cheque Deposit through ATM, Timely intimation of
changes, Response to telephonic queries, Complying with standing instruction of Banks in Retail
Banking.
3. From the descriptive analysis it is observed that the mean score of Customer Satisfaction is
maximum followed by Recommend Intentions and than the mean score of Customer Loyalty.
4. Single sample T-Test of Satisfaction for Service Quality proves that our observed mean of service
quality of 3.50 is significantly greater than the test value of 3 as p value is less than .05.
5. Single sample T-Test of Satisfaction for Saving A/C facility proves that mean for Satisfaction for
Saving A/C of 3.57 is significantly greater than the Test Value of 3 as p value(significance value) is
less than .05.
6. Single sample T-Test for Satisfaction for FD Services proves that mean for Satisfaction for FD of
3.5515 is significantly greater than the Test Value of 3 as p value (significance value) is less than .05.
7. Single sample T-Test for Satisfaction for Demand Draft Services proves that mean for Satisfaction for
DD of 3.61 is significantly greater than the Test Value of 3 as p value (significance value) is less than
.05.
8. Single sample T-Test for Satisfaction for credit card facility Services proves that mean for Satisfaction
for Saving Credit Cards of 3.58 is significantly greater than the Test Value of 3 as p value (significance
value) is less than .05.
9. Single sample T-Test for Satisfaction for Loan facility Services proves that mean for Satisfaction Loan
Facility of 3.485 is significantly greater than the Test Value of 3 as p value (significance value) is less
than .05.
10. Single sample T-Test for Satisfaction for Online Banking facility Services proves that mean for
Satisfaction Online Banking Facility of 3.485 significantly greater than the Test Value of 3 as p value
(significance value) is less than .05.
11. Single sample T-Test for Satisfaction for Locker facility Services proves that mean for Satisfaction
Locker Facility of 3.485 significantly greater than the Test Value of 3 as p value (significance value) is
less than .05.
12. Single sample T-Test for Satisfaction for Locker facility Services proves that mean for Satisfaction
Locker Facility of 3.485 significantly greater than the Test Value of 3 as p value (significance value) is
less than .05.
13. Single sample T-Test for Satisfaction for overall satisfaction proves that mean for Overall Satisfaction
of 3.732 significantly greater than the Test Value of 3 as p value (significance value) is less than .05.
14. Single sample T-Test for Positive Word of Mouth proves that mean Positive word of mouth of 3.58
significantly greater than the Test Value of 3 as p value (significance value) is less than .05.
15. Single sample T-Test for Recommend Intentions proves that mean for Recommend Intentions of
3.52 significantly greater than the Test Value of 3 as p value (significance value) is less than .05.
16. Single sample T-Test for Encouragement to patronize proves that mean for Encouragement to
patronize of 3.3390 and is significantly greater than the Test Value of 3 as p value (significance
value) is less than .05.
17. Single sample T-Test for Recommendation because of care proves that mean for Recommendation
because of care is 3.4124 and is significantly greater than the Test Value of 3 as p value (significance
value) is less than .05.
18. Single sample T-Test for Recommendation because of personnel Professionalism proves that mean
for Recommendation because of personnel Professionalism is 3.364 and is significantly greater than
the Test Value of 3 as p value (significance value) is less than .05.
19. The Kolmogorov-Smirnov normality Test provides the evidence that the residual is normally
distributed and the regression analysis can be executed.
20. Multicollinearity diagnosis was done and indicates that there is no evidence of Multicollinearity as
the VIF value is 1.817 for both the Independent variables i.e. Customer satisfaction and Recommend
Intentions, which is well below the cut-off value of 10. On the other hand, the Tolerance Values are
above 0.550. These factors indicate that there is no evidence of multicollinearity problem in the
regression model.
21. Value of Durbin-Watson test close to 2 (i.e. 1.878) shows that the residuals are independent, that is,
uncorrelated, thereby, fulfilling the assumption for applying the regression model.
22. The result shows that there is the strongest association between the customer loyalty and
Recommend Intentions (r = 0.814, p < 0.01) and Followed by customer satisfaction (r = .699, p <
0.01). Significant positive correlation reveals that the higher level of Recommend intentions and
customer satisfaction lead to higher customer loyalty.
23. As in the present study the value of R squared is 0.706 this high value of R squared indicates that the
model fits in the data very efficiently Adjusted R squared attempts to correct R squared to more
closely reflect the goodness of fit of the model in the population.
24. A model with a large regression sum of squares (163.175) in comparison to the residual sum of
squares (68 only) indicates that the model accounts for most of variation in the dependent variable.
25. Multiple Regression analysis shows that the Recommend Intentions best predicts and is a good
explanatory variable of the customer loyalty followed by Customer Satisfaction. As the Beta value
(Standardized coefficient) is higher in case of Recommend Intentions that is 0.629 and for Customer
Satisfaction it is 0.277 that indicate clearly that in Banking Sector recommend Intentions is a better
indicator of Customer loyalty than Customer Satisfaction

4.13 Chapter Summary

This chapter concludes the analysis and results of the data collected under the research work. All the
statistical analyses were carried out using SPSS statistical computer package Version 12. The analysis in
the study was firstly done with the use of Frequency analysis to analyze the pattern of respondent’s
background .Then Reliability analysis was done by using Cronbach’s Alpha to view reliability of the
measurement scale .Next Descriptive Statistics was used to analyze what are the are the determinants
of Customer Satisfaction and Recommend intentions. Correlation analysis was also used to study the
correlation between Customer Satisfaction, Recommend Intentions and Customer Loyalty. Test of
Normality (One-Sample Kolmogorov-Smirnov Test) and Multicollinearity Diagnosis was done before
doing Multiple Regression.
Then Multiple Regression was used in the research work to study the linkage between three variables
Customer Satisfaction, Recommend Intentions and Customer Loyalty. Then all the findings of the various
statistical tool that were used in the research were discussed by comparing the results with the previous
studies done .And finally all the results were compiled and presented in the end of the chapter .