Customer satisfaction and its implication on banks performance in nigeria

Thesis Overview

<p> </p><p><b>INTRODUCTION</b></p><p><b>1.1 &nbsp; Background to<br>the study</b></p><p>It<br>is believed that the goal of every organization is to meet the needs and the<br>requirements of its stakeholders. Meeting the needs and the requirements of the<br>stakeholders will not only ensure the survival of the organization but also<br>allow it to flourish. Customers are presumed to be one of the most important<br>stakeholders in any organization because without them, organizations are not<br>likely to succeed. Hence, marketers emphasize on research in the area of<br>consumer behaviour and particularly behavioural intention. Knowledge of<br>consumer behaviour will go a long way in ensuring effective marketing policies<br>towards the interest of customers which will eventually facilitates positive<br>customer attitude towards the organizations. More especially, since customer behavioural<br>intention is a strong indication of his actual behaviour</p><p>As<br>a result of financial sector liberalization in Nigeria in the 1980s, the<br>banking sector experienced a boom. Low entry requirements by the regulatory<br>authority and the high premiums that could be earned through foreign exchange<br>business led to the quick entry by new players into the lucrative banking<br>industry. Between the period of 1985 and 1993 the number of licensed banks rose<br>astronomically from<br>41 to 120 (Central Bank of Nigeria, 1995). And this led to the increase of the<br>sector’s contribution to GDP and employment. Given that banks are important<br>constituents of the sector, it can therefore be argued that banks in Nigeria<br>contribute significant percentage of the country’s GDP in the recent past.<br>(Adeoye, 2007). For instance, the sectoral reconstitution of service industry<br>to the growth of GDP for 2004, 2005, 2006, 2007 and 2008 were 8.8, 8.0, 9.2,<br>9.9 and 10.5 respectively (CBN, 2009) The importance of the Nigerian banking<br>sector does not limited to Nigeria alone but also spill over to most. This<br>significant contribution of the services industry and specifically banking<br>sector in Nigeria really warrant investigation in order to enhance the sector’s<br>continuous growth which will eventually result in the better performance of the<br>economy It is however noted that one of the ways through which banks can meet<br>the expectations of their customers who are the back-bone of the banks’<br>business is via the understanding of the customers’ behaviour.</p><p>The<br>customer service unit has become important in many ways for most organizations,<br>but the general view is that many organizations do not take it too seriously.<br>Customer service may be provided by a person, group or by an automated means<br>called “Self Service”. The customer service management is a compulsory section<br>of the bank. Commercial banks form the largest and are the country’s most<br>important group of financial institutions. With stiffer competition among<br>domestic and foreign banks, therefore it is important for the commercial banks<br>in Nigeria to improve the quality of their services. The growth of competition<br>in banks has led to the customer being stronger because he or she has many<br>options to choose from. It is those banks that have excellent customer<br>satisfaction levels that succeed in this environment of hyper competition.<br>Success of a service provider depends on the high quality relationship with<br>customers which determines customer satisfaction and loyalty. The corporate<br>objective of any bank which is “maximization of shareholders wealth” can only<br>be achieved if customers are retained and satisfied. This is in line with the<br>perception that the key to successful marketing of financial services is<br>identification and packaging of customers’ needs to their satisfaction.</p><p>Customer<br>service therefore involves the means through which there would be a mutually<br>beneficial satisfaction of non-tangible product needs of the people who have a<br>will to satisfy these needs. It’s focused on the predicted upon concept which<br>involves a proper identification and understanding of needs of potential and<br>actual consumers as well as adaptation of organizational operations to deliver<br>the right customer service more effectively and efficiently</p><p><b>1.2<br>&nbsp; STATEMENT OF PROBLEM</b></p><p>Over<br>the years in developing economy like Nigeria banks are faced with the problem<br>of distress lack of public confidence, inability of banks to meet up with customer’s<br>satisfaction in terms of granting of credit facilities spending an average time<br>in the bank halls for transactions, inadequate capital base, etc. In Nigeria,<br>the customer service unit is more effective in the banks than in all other<br>organizations of the economy. Yet, the banks still have a long way to go in<br>order to satisfy the customers of banks worldwide. The banking business today<br>has gone beyond arm- chair banking era where the customers had to look for the<br>banker to transact business. It is now the era of highly competitive business<br>among banks. These financial institutions now engage in aggressive search of<br>the customer to patronize their products and services.</p><p>The<br>researcher is of the view to carry out an investigation into these remote<br>causes of banks inability to meet up with customers’ needs and requirements and<br>how this had affected the banks performance over the years, after this<br>investigation the result from this study should be able to proffer to solutions<br>to banks inability to satisfy their customers in Nigeria, hence how to impress<br>its performance through total quality management.</p><p><b>1.3<br>&nbsp; OBJECTIVES OF THE STUDY</b></p><p>i. &nbsp; &nbsp; <br>To ascertain the extent of relationship between service quality and bank<br>performance</p><p>ii. &nbsp; &nbsp;<br>To examine if there is a positive relationship between customer’s level of<br>loyalty and performance.</p><p>iii. &nbsp; <br>To find out how quality customer satisfaction affects bank performance</p><p><b>1.4 RESEARCH HYPOTHESES</b></p><p>In<br>order to achieve the stated objectives of this study, the following hypotheses<br>are formulated:</p><p><b>Hypothesis<br>One</b></p><p><b>HO:</b>&nbsp; <br>There is no positive relationship between service quality and bank performance</p><p><b>H1:</b>&nbsp; &nbsp; There is a positive relationship<br>between service quality and bank performance</p><p><b>Hypothesis<br>Two</b></p><p><b>HO:<br>&nbsp; </b>There is no positive relationship between<br>customer level of loyalty and bank performance.</p><p><b>H2: &nbsp; &nbsp;</b>There is a positive relationship between customer<br>level of loyalty and bank performance</p><p><b>Hypothesis<br>Three</b></p><p><b>HO:</b>&nbsp; There is no positive relationship<br>between customer satisfaction bank performances.</p><p><b>H3:</b>&nbsp; &nbsp;<br>There is a positive relationship between customer satisfaction bank<br>performances.</p><p><b>1.5 &nbsp;<br>SIGNIFICANCE OF THE STUDY</b></p><p>This<br>research work will attempt to examine the performance of bank in Nigeria. The<br>significance of this study is to examine the extent to which bank performance<br>has geared up the growth of the Nigeria economy through loan and advances for<br>investment.</p><p>Hence,<br>the research is interested in the effect of the customer’s satisfaction and<br>dissatisfaction, characteristics of service, assessment and measurement of<br>customer’s satisfaction in bank for more clarity of the study.</p><p><b>1.6<br>SCOPE AND LIMITATIONS OF THE STUDY</b></p><p>This<br>study covers customer’s satisfaction in bank performance. A sample of one<br>hundred and thirty three (133) was taken from the total population of the<br>study. This study was conduct amongst staffs of a selected bank in Benin City<br>to know how customer’s satisfaction has implication on bank performance for a<br>period between 2010 – 2013.</p><p>In<br>carrying out research work, a number of constraints have militated against this<br>research work. Every human endeavour is said to be limited by some factor and<br>this research work is not on exceptional to the rule. There was low response<br>rate. There was difficulty in obtaining information from respondent as they<br>often referred to height schedule and fatigue in fitting the questionnaire.<br>This being that the researcher cannot administer the questionnaire to other<br>respondent form other part of the country.</p><p><b>1.7 &nbsp; &nbsp; <br></b><b>DEFINITION OF TERMS</b></p><p><b>Organization: </b>This<br>is a social unit of people that is structured and managed to meet a need or to<br>pursue collective goals.</p><p><b>Stakeholders:</b>&nbsp;These<br>are persons or group or organization that has interest or concern in an<br>organization.</p><p><b>Customer’s<br>Satisfaction:</b>&nbsp;A business term, is a measure of how<br>products and services supplied by a company meet or surpass customer.</p><p><b>Brand<br>Loyalty:</b>&nbsp;When consumers become committed to your brand and<br>make repeat purchases over time.</p><p><b>Profitability:</b>&nbsp;This<br>is the primary goal of all business ventures. Without profitability, the<br>business will not survive in the long run. It is measured with income and<br>expenses.</p><p><b>Competition:</b>&nbsp;The<br>existence within a market for some good or service of a sufficient number of<br>buyers and sellers such that no single market participant has enough influence<br>to determine the going price of the good or service.</p><p><b>Defensive<br>Strategy:</b>&nbsp;A management approach designed to reduce the risk<br>of loss.</p><p><b>Service<br>Quality:</b>&nbsp;An assessment of how well a delivered service<br>conforms to the clients expectations.</p><p><b>Reliability:</b>&nbsp;The<br>ability of a system or component to perform its required functions under stated<br>conditions for a specified period of time.</p><p><b>Empathy:</b>&nbsp;This<br>is the capacity to recognize emotions that are being experienced by another<br>sentiment or fictional being.</p><p><b>1.8<br>ORGANIZATION OF THE STUDY</b></p><p>This research work is organized in five chapters,<br>for easy understanding, as follows Chapter one is concern with the<br>introduction, which consist of the (overview, of the study), statement of<br>problem, objectives of the study, research question, significance or the study,<br>research methodology, definition of terms and historical background of the<br>study. Chapter two highlight the theoretical framework on which the study is<br>based, thus the review of related literature. Chapter three deals on the<br>research design and methodology adopted in the study. Chapter four concentrate<br>on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and<br>recommendations made of the study.</p> <br><p></p>