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Customer Satisfaction Dimensions of a Bank in Malaysia. Ng Siew Imm , Serene. Introduction. Through liberalization and globalization, Malaysian banking sector has undergone a lot of structural changes where banks were required to go through a series of merging exercises.

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Presentation Transcript
introduction
Introduction

Through liberalization and globalization, Malaysian banking sector has undergone a lot of structural changes where banks were required to go through a series of merging exercises.

As a result of that exercise, number of banks has reduced to 22 where nine are Malaysian-controlled commercial banks and 13 are foreign-controlled commercial banks in Malaysia (Bank Negara Malaysia, 2009; MIDA, 2009).

Thereafter, competition between banks became even more intense as all banks can then afford to offer similar range of products or services (Allred and Addams, 2000).

introduction cont
Introduction (cont..)

Therefore, maintaining customer satisfaction has appeared as single most important factor to remain relevant in financial service institutions, as pointed out by many researchers (e.g. Rust and Zahorik, 1993; Trubik and Smith, 2000).

Thus, it is important for managers to understand their customer s’ satisfaction level in various aspects of bank services so that they are aware of areas for improvements.

problem statement
Problem Statement
  • For many years customer satisfaction has been a major goal of business organizations, since it has been proven to affect customer retention and companies’ market share (Hansemark and Albinsson, 2004), especially in markets that are highly competitive and saturated, like financial services (Rust and Zahorik, 1993 and Trubik and Smith, 2000).
  • However, not many researches have been done in Malaysia to understand customer satisfaction level in banking industry. Thus, this study adds value to the literature by assessing dimensionality of customer satisfaction of a bank based on Malaysian data.
research questions
Research Questions
  • Is there a satisfaction difference between male and female customers?

2. Is there satisfaction difference across ethnic groups?

3. Are more educated customers experiencing lesser level of satisfaction?

4. Are more satisfied customers more likely to continue visit the bank?

significance of study
Significance of study
  • This study is significant to bank managers in at least three ways.
  • First, it helps bank manager to identify customer service dimensions weakly performed and improve them accordingly to better meet their customers’ need.
  • Second, it helps to understand customer satisfaction levels across gender, ethnic and education groups in Malaysia for the bank to better design their marketing strategy.
  • Finally, it helps to identify customer satisfaction dimensions determining revisit intention so that manager is aware of important services dimensions bank must provide to stay relevant in the business.”
customer satisfaction
Customer Satisfaction
  • Satisfaction in services can be conceptualized as facet (attribute-specific) or as overall (aggregate);
  • and it can be viewed as transaction-specific (encounter satisfaction) or as cumulative (satisfaction over time) (Host and Knie-Andersen, 2004).
  • In this study, satisfaction is conceptualized as customers’ satisfaction towards a service provider’s performance in various aspects of bank services basing on attitude-specific dimension.
slide8
H1
  • Gender shown quality ranking perception differences where men ranked effectiveness and reliability highest while women ranked price highest in banking sector (Spathiset al., 2004).
  • In a different study investigating gender’s effect on perceptions of satisfaction in a public service environment, men were reported to enjoy higher level of service satisfaction compared to women (Dimitriades and Maroudas, 2007).
  • Based on various findings reported in banking and public service context, it is likely that gender too will show different satisfaction level in this study. Therefore, the following hypothesis is developed:

H1: There are significant mean differences in various aspects of satisfaction between female and male customers.

slide9
H2
  • Lopez, Hart and Rampersed (2007) examined the association between ethnicity and customer satisfaction level in the financial service sector and revealed that respondents from the three largest regional ethnic groups (African-American, Latinos and Non-Latino Caucasians) weighted the importance of several of the ten service quality dimensions quite differently.
  • Thus, it is likely that ethnic groups in Malaysia would also perceive various aspects of satisfaction differently. Hence, H2 is proposed below.

H2: There are significant mean differences in various aspects of satisfaction across ethnic groups.

slide10
H3
  • Mittal and Kamakura (2001) investigated the moderating effect of customer characteristics between customer satisfactions, repurchase intent and repurchase behavior. They found consumers with some college or higher educational level recorded lower satisfaction level than those with only a high school education or less (Mittal and Kamakura, 2001).
  • The finding was further validated by Cloud (2003) who also found a negative relationship between education level and customer satisfaction in a community health centers.
  • H3: There is a negative relationship between academic qualification and satisfaction level.
slide11
H4
  • Specific to banking industry, Boshoff and Gray (2004) confirmed a positive relationship between satisfaction level and revisit intention.
  • A recent study by Lee and Hwan (2005) also indicated that customer satisfaction directly affects purchase (revisit) intentions in the Taiwanese banking industry. Similarly, a study conducted by Pont and McKuilken (2005) in Australian banking industry supported the above findings.
  • Thus, the more satisfied the customers are, the more likely they are to revisit the bank in future. Hence, H4 is proposed as below.
  • H4: There is a positive relationship between various aspects of satisfaction level and revisit intention.
data collection
DATA COLLECTION
  • Data will be collected from academic and non-academic staff in a public university in Malaysia.
  • The questionnaire survey will be conducted between February and March 2011.
measures
MEASURES
  • Customer satisfaction aspects - 27 item scale of Hallowell (1996)
  • Overall customer satisfaction - single-item measure of Hallowell (1996)
  • Revisit Intention – 4 item scale of Boshoff and Gray (2004)
  • Demographic information - gender, ethnic group, academic qualification
data analysis
DATA ANALYSIS
  • Factor analysis - to identify underlying aspects of the 27 customer satisfaction items.
  • H1 - Independent sample t-test

H2 – ANOVA

H3 - Spearman Rank Correlation

H4 – Pearson Correlation Analyses