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The discussion of the theories of service quality, customer value, customer loyalty, customer satisfaction and buying- decision process were made in Literature review to analyse the problem of the bank properly.
On the basis of conclusions, recommendations were made to the bank that they should increase the over all customer service quality, customer value and customer loyalty by means of reorganising and reconstructing the staff of the bank, service of the bank by using the drivers of increasing customer satisfaction. This development should be sufficient enough to meet the expectation of the customers of the bank.
Keywords: ICICI bank, Customer, Satisfaction, Loyalty, Banking Industry, Service.
In the retail banking industry the service quality is the main criteria to enhance the business. Heskett et all., (1997) said that the high quality of service believed to be influenced by customer value and customer satisfaction, again the customer satisfaction directly influence the customer loyalty. The customer value, customer satisfaction, service quality resulting the customer loyalty is the main aspect which the retail banking industry should concentrate.
Cronin and Taylor (1992), said that the purchase intention of the customers in the retail banking industry depend on the customer satisfaction.
The customer getting the best response from the service provider result in the increase of profitability, the positive word of mouth and brand loyalty which is the function of the customer loyalty. Hence the customer satisfaction from the service quality is necessary.
Parasuraman et al. (1988), proposed that the SERVQUAL analysis was suitable to analyse the service quality of the banking industry by collecting data from the bank customers. The SERVIQUAL consist of five dimensions related to the service operation, that are tangibles services, reliability, responsiveness, assurance and empathy. The use of internet banking services in the banking industry result as a one of the factor for creating service quality. The analysis of the service quality determines the customer satisfaction.
The data was collected from the secondary research and the primary research. Secondary data involves collection of data through relevant databases, journals, textbooks and internet websites.
The ICICI is abbreviated as Industrial Credit and Investment Corporation of India. The Year from 1999 to 2003 was crucial in the era of expansion of ICICI bank. In the year 2001 it opened up representative office in UK in the year 2002 . The bank opened its subsidiaries in UK in the year 2003 . (http://www.rediff.com/money/2003/nov/06icici.htm, dated- 08/12/2010)
The ICICI bank strategy mainly targeted the NRI's living abroad . ICICI bank won the excellence in the remittance business award in the year 2008 . In UK it has formed an alliance with Lloyds TSB and uses it's branches to expand it's business . The ICICI bank has branches all over UK . The branches are in Birmingham, Coventry, East Ham, Harrow, Knightsbridge, Leeds, Leicester, Manchester, Slough, Southall and Wembley.(http://www.icicibank.co.uk/contactus.html, dated-08/12/2010)
The barriers of ICICI bank in UK were that it has to do competition with the top banks of the world such as HSBC , Royal bank of Canada , Barclays bank , Net west bank , Lloyd TSB bank and etc. ICICI bank is the emerging bank where as its revelry are the expert of the UK market and they have the complete dominance over the UK market customers . ICICI bank targets only the Indian customer for the remittance , where as the other revelry are targeting the all segment of the population .
Research question(s) [P2]:
What are the most importance influential factor which attract the customers to ICICI bank, UK ?
Do the customer service qualities satisfied/dissatisfied the customers of ICICI bank, UK?
Do the Customer values satisfied/dissatisfied the customers of the bank?
Do the customer loyalties satisfied/dissatisfied the customer of the ICICI bank, UK?
What are the weakness of the ICICI bank, UK in terms of customer relation?
What are the factors influence customer to make a purchase decision in the ICICI bank, UK?
Are the product and services were sufficient to make purchase decision?
H0: The customers are not satisfied for service qualities of ICICI bank,UK.
H1: The customers are very satisfied for service quality of ICICI bank,UK.
H0: There are no factors to influence customer to make a purchase decision in the ICICI bank,UK.
H1: There are many factors to influence customer to make a purchase decision in the ICICI bank,UK.
H0: The relationship between the customer satisfaction, customer value, customer service quality and customer loyalty of the ICICI bank,UK are not good.
H1: The relationship between the customer satisfaction, customer value, customer service quality and customer loyalty of the ICICI bank,UK are very good.
Research Aims & Objectives [P4]:
In this research, the researcher will analyse the influential factor which generates the customer satisfaction and makes the buying the decision process towards the ICICI bank, UK. And will recommend the bank to increase the customer satisfaction and market share.
The following are the objectives of this research,
To discuss the importance of customer satisfaction in an organisation.
To discuss and identify the theories of customer satisfaction, particularly emphasising on the service quality, customer value and customer loyalty.
Analysing and finding the customer satisfaction, of ICICI bank, UK regarding factors of customer service quality, customer value and customer loyalty.
To determine the key influencing factor among customer service quality, customer value and customer loyalty, which resulted in the buying behaviour of ICICI bank, UK.
Reviewing the concept of the customer satisfaction resulted from the service quality, customer value and customer loyalty obtained from ICICI bank, UK.
To verify the relationship between the customer satisfaction, customer value, customer service quality and customer loyalty of the ICICI bank, UK.
Literature Review [P5]:
In order to support the aim of this research, a literature review was undertaken. Also, literature review focuses on the second objective of the research. This literature review deals with the factors related to the customer satisfaction.
The Greek philosopher, Epictetus says that "What concerns me is not the way things are, but rather the way people think things are "(Szwarch, 2005, p.3).The concept of the consumer satisfaction were depend on the thinking of the consumer.
The researchers of the customer satisfaction such as Heskett, Sasser and Schlesingler (1997) said that customer satisfaction is a transitional on-going process. Oliver (1997) gave a static definition of the consumer satisfaction by analysing the total consumption process and experience of the customer. "Satisfaction is defined as a pleasurable fulfilment. That is the consumer senses that consumption fulfils some needs, desire, goals, or so forward and that this fulfilment is pleasurable. Thus satisfaction is the consumers sense that consumption provides outcomes against the standard of pleasure versus displeasure. For satisfaction to affect loyalty frequent or cumulative satisfaction is required so that individual satisfaction episodes become aggregated or blended" Oliver (1997).
The theories of consumer expectation have been researched by a number of researchers. Oliver (1980) said that expectations consist of an estimate of likelihood or probability of occurrence. Expectations of the customer are the based on the evaluation of goodness or badness of product and services. It is determined that desired performance made by customer about the levels of performance during a transaction.
The feeling of satisfaction arises when the customer compares their perception of actual product s or services performance to the past expectations. The difference between past expectations and actual performance results in the disconfirmation
The disconfirmation concept are based on the comparison of consumer's expectation and observed performance. The disconfirmation has three possibilities
Positive disconfirmation- It occurs when the product or service performance is grater then the expectation.
Negative disconfirmation- It happens when the product or service performance is less then the expectation.
Zero disconfirmation- It occurs when the product or service performance is meet or same as the expectation, then the consumer feels a state of no disconfirmation or zero disconfirmation.
Importance of Customer satisfaction in an Organisation
"Customer satisfaction is increasingly becoming a corporate goal as more and more companies strive for quality in their product and services"(Bitner and Hubbert, 1994, p.78). There is an intense competition in the market to capture the customers. Therefore the global leaders cannot think competing in the market, only with the price factor alone. They realised that the customer satisfaction is the most important factor to become the business leader. The ability of the firm to remain in the business is necessary to win customers over competition since the customer is the foundation of the business. For example "The retailer Tesco focusing on the customer, managed itself to increase its market share and profitability by becoming the market leader in the highly competitive and cost-conscious market place"(Cook, 2002, p. 4). Today the customers were more educated and well informed. They will not be diverted from their expectation. They have wide range of option to choose the product and services. To achieve the complete satisfaction from product and services the customer makes active comparison between different product and services. The customer's expectation rises gradually when they begin to use a better services. Therefore the organisation have challenges to maintain the high level of customer satisfaction always. The competitive market force the firm to raise their customer satisfaction always.
A firm who gives value to its customers, it receives the customer satisfaction as the outcome. Day (1990) advocated that in today's competitive environment, creating superior customer value is most important for company's performance. The concentration of the firm on the customer values leads to increase the profit as well as market value. Porter(1980) said that a company can adopt two market strategies (1) cost leadership and,(2) product differentiation. But Day (1990) argued that both the strategies have same objective to create superior customer value. Without the superior customer value the achieving of market leadership is in vain. Woodruff (1997) said that the customer value is related to the trade off between what the customer pays in exchange for acquiring and using a product or services from seller and what the customer viewed what he/she received.
Customer Value Creating Service Quality
Butz and Goodstein (1996) defines that the customer value as the emotional bond established between a customer and a product after the customer has used a salient product or service provided by that suppliers. Again Anderson and Narus (1998) build a linkage between customer value and perception of service quality . They advocated that the consumer value can be understand by the entire process of consumption experience of the customer.
Jacoby and Chesnut, (1978) said that the brand loyalty was simply measured in terms of the outcome variables. "Customer loyalty have focused on primarily on the product-related or brand loyalty, whereas researchers on the customer loyalty to the service organisation has remained limited" (Gremler and Brown, 1996). He added that the concept of loyalty to the intangible products, and their definition of service loyalty include three specific components that are, (1) Purchase, (2) attitude and , (3) cognition. The service loyalty is the level at which customer shows repeat purchasing behaviour from service provider. As a result he/she posses a positive attitude behaviour towards provider. And customer consider to use only the service provider when there is need for the service.
The customers becomes loyal to the service provider because they have good knowledge of the service provider and believe on them. The customer have good service quality have positive attitude towards the service provider by knowing that the service quality will be developed and convey the positive massage to the people in contact about the service provider. The customer has interest to continue to get the service from the service provider even if the price of the service charge is increased as the service provider is the first choice to the customer.
There is a great different in the traditional and modern service quality delivery to the customer. The modern service quality enhancement need the implement of internet facility. The use of IT is important in the many service enabled organization the analysis of technology for the service quality attribute are also necessary. The IT based services can create dissatisfaction to the customer if they are unable to use the service. The gradual increase in the number of customer to use the IT service it is the challenge to the organization to make it more efficient and more effective. Furey, 1991 and licata et al., (1998) said that IT can help to improve the service quality by reducing error rate. The IT based services generate high customer satisfaction.
The review of the literature reveals that there is a great effect of the customer value, customer loyalty, product and service quality for the formation of the customer satisfaction. The fulfilment of the customer expectation and need results in the customer satisfaction. The customer getting best response from the service provider increase in the profitability , brand loyalty, word of mouth and buying intention. Customer satisfaction results in the customer retention and customer buying attitude. The service is provider having challenges in the competitive market to ensure the best customer satisfaction otherwise it will lead to switch to other service provider.
Today the world are globalised and customers were well educated and well informed, this increased the competition among the firms and organisations. The competition gave the customer bargaining power and switching power to chose the product and service. To retain the customer and satisfy the customer is the major issue for the organisation to become cost leadership and to become product/ service differentiation. To maintain the service quality in the cost conscious market is the challenge to the organisation. The organisation use various driver of the customer satisfaction to retain the customers, such as service quality, Customer value and customer loyalty.
The objective of this research is to "reviewing the theoretical issues of Customer value , customer satisfaction, service quality and customer satisfaction, customer buying intention in retail banking industry. Initially researcher relates the theory with the previous researches on financial institutions. After getting in-depth knowledge of the customer activity and desire towards financial institution, the researcher relates the theory to the customer perception and service quality towards the retail banking industry.
The growing competition and lack of service differentiation in the banking industry, it become necessary for banks to increase customer satisfaction, service quality, customer value and customer loyalty. The customer retention is the greater issue since wide range of substitute are available for the customer. The business considering with only the product and services will not last long.
The customer loyalty can help the business to grow but the customer loyalty without perfect service quality and customer value will finally lead to collapse of the business. The service quality, customer value and customer satisfaction is the important considering issues in the retail banking industry to become market leader, profitability and brand loyalty.
Therefore, it became important for the ICICI bank, UK to full fill the needs and wants of the customers and to serve better service quality.
Action plan [D2]:
Topic & Title