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4.1 Need for research

Financial institutions, particularly the retail-banking sector, are facing extensive competition. For this reason like other services sector the concept of loyalty is very important to retail banking sector. Researchers (e.g. Caruana 2002, Bloemer et al., 1998) and academicians have argued that loyalty could be achieved through customer satisfaction. Thus customer satisfaction plays a vital role in establishing loyalty. It is also noted that there are various factors that lead to satisfaction towards the bank. However, Considerable researchers (e.g. Parasuraman, et al., 1988 and Zeithaml, et al., 1990) have pointed out service quality as the key factor of customer satisfaction. Hence, the concept of satisfaction, service quality and loyalty are related to each other and it is important to understand relationships among them.

4.2 Research problem

To understand whether service quality dimensions affect customer satisfaction or not and to understand the impact of customer satisfaction on customer loyalty.
Based on the above research problem, two basic questions can be investigated: Research question 1: Is there any relationship between customer satisfaction and loyalty in retail banking? This question will analyze the impact of customer satisfaction on the level of customer loyalty. If there is a relationship then the study will find the degree of relationship. Research question 2: Is there any relationship between dimensions of service quality and customer satisfaction? This question will analyze the impact of service quality dimensions on the customer satisfaction. If there is a relationship then the study will find the degree of relationship.

Five key dimensions of service quality reliability, responsiveness, assurance, empathy and tangibles as per SERVQUAL model developed by Parasuraman, Zeithaml and Berry have been adopted to investigate this question.

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4.3 Research objectives

The objective of this research work is to determine: 1. Overall customer satisfaction in Retail banking. 2. Relationship between Service quality dimensions and customer satisfaction. 3. Relationship between customer satisfaction and customer loyalty.

4.4 List of information needed

Respondents profile
It is important to get a general idea about the respondents age, education and occupation as various factors might also influence their perception. No restrictions are made regarding age, sex, education and working status as the intention is to get a generalized idea regarding loyalty and satisfaction.

Duration of banking:
In order to investigate customer satisfaction and loyalty with the bank, it is also important to explore for how long the respondents are having accounts with their present bank as longer duration indicates a reasonable degree of customer satisfaction. The duration is classified as: 1) Less than 1 year 2) 1-3 years 3) More than 3 years

Respondents view about various service quality aspects

On the basis of SERVQUAL model, Respondents need to be asked questions about following service quality aspects: 1. Responsiveness Includes quickness of services and employees willingness to help customers. 2. Reliability Includes timeliness and accuracy of services. 3. Assurance Includes courtesy, competency and safety in services.

13 4. Empathy Includes convenient working hours and personal attention. 5. Tangibles Includes appearance of physical facilities and appearance of employees.

Overall Experience of the respondents with the services of their bank

Overall experience of respondents is asked in order to investigate their satisfaction level with their present bank. Satisfaction level is important to know because the role of above mentioned service quality aspects in formation of customer satisfaction is to be analyzed. Overall experience is classified as: Excellent (=very satisfied) Good (= Satisfied) Average (=somewhat satisfied) Poor (=dissatisfied) Very Poor (= very dissatisfied)

Respondents intention regarding future usage of banks services (Cognitive aspect of loyalty)
In order to find out loyalty towards the bank, the respondents need to be asked to express their agreement or disagreement weather in future they will choose their present bank as the first option for their required banking services.

Recommending the bank to others (Affective aspect of loyalty)

In order to find out loyalty towards the bank, the respondents need to be asked, whether they will recommend the bank to the people they know or not.

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4.5 Variables of the study

1. Demographic Variables

Age Gender Education level Occupation

2. Variable to measure duration of banking

Duration with the bank (number of years)

3. Variables to measure dimensions of service quality

1. Responsiveness dimension
Quickness of services Employees willingness to help

2. Reliability dimension

Timeliness of services Accuracy of services

3. Assurance dimension

Courtesy of bank employees Competency of bank employees Safety in transactions

4. Empathy dimension

Convenient working hours of the bank Personal attention by the bank employees

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5. Tangibles dimension

Appearance of Physical facilities of the bank Appearance of the bank employees

4. Variable to measure overall customer satisfaction

Overall Experience with the bank

5. Variables to measure customer loyalty

Intention regarding future usage of banks services Intention to recommend bank.

4.6 Hypothesis for the study

The following hypotheses are adopted for this study: 1. There is a significant relationship between duration of banking and customer satisfaction. 2. There is a significant relationship between dimensions of service quality and customer satisfaction. 2.1 There is a significant relationship between responsiveness and customer satisfaction. There is a significant relationship between quickness of services and customer satisfaction There is a significant relationship between willingness to help and customer satisfaction

2.2 There is a significant relationship between reliability and customer satisfaction. There is a significant relationship between timeliness of services and customer satisfaction

16 There is a significant relationship between accuracy of services and customer satisfaction

2.3 There is a significant relationship between assurance and customer satisfaction. There is a significant relationship between courtesy and satisfaction customer

There is a significant relationship between competency and customer satisfaction There is a significant relationship between safety and customer satisfaction

2.4 There is a significant relationship between empathy and customer satisfaction There is a significant relationship between convenient working hours and customer satisfaction There is a significant relationship between personal attention and customer satisfaction

2.5 There is a significant relationship between tangibles and customer satisfaction. There is a significant relationship between appearance of physical facilities and customer satisfaction There is a significant relationship between appearance of the bank employees and customer satisfaction

3. There is a significant relationship between customer satisfactions and loyalty. There is a significant relationship between customer satisfaction and future usage of services. There is a significant relationship between customer satisfaction and recommendation of bank.

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4.7 Research design

The research design adopted for this study is Descriptive Correlational research. The purpose of correlational research is to examine the type (positive or negative) and strength (low, moderate or high) of relationship among study variables. Correlational research is descriptive in nature as there is no manipulation of variables or experimental treatments. Also there is no presumption of a cause and effect relationship, all that can be established is that there is or is not an association between two or more study variables.

4.8 Data collection

1. Primary data collection Approach: Primary data collection has been done by communication approach. Communication method: Survey via personal interview.
A structured interview method is used by recording respondents answers on a questionnaire form having pre-specified response format.

Instrument: Questionnaires Type of questionnaires: Structured Close ended.

As per the need of this research, 16 close-ended questions have been asked. Abstract information of all types has been collected through pre- designed close-ended questions.

Type of Scale: Rating scale Multiple choice single response scale. 2. Secondary data collection: for the secondary data, use of the available literature
and other relevant publications has been made to find out the theoretical framework and also to know what early research mentioned regarding the given topic.

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4.9 Pre-testing
The questionnaire was pre-tested on a small sample of 10 respondents and based on this minor changes were made to improve the clarity of the questionnaire.

4.10 Sampling plan

Target population:
Any person of age 18 and above from Surat city who maintains at least one account at any commercial or cooperative bank.

Sampling area: Athwa Zone, Rander Zone, Varachha Zone, Katargam zone. Sample population: Account holders residing in these four zones. Sample size:
Total 300 respondents chosen on following basis: Athwa Zone : 75 Rander Zone: 75 Varachha Zone: 75 Katargam zone: 75

Sampling method:
Non probability - Convenience Sampling Method. In nonprobability sampling, members are selected from the population in some nonrandom manner. Population elements are selected on the basis of their availability (e.g., because they volunteered) or because of the researcher's personal judgment that they are representative. Among the various nonprobability sampling methods the chosen method is Convenience sampling. Convenience sampling is used in research when the researcher is interested in getting an inexpensive approximation of the truth. As the name implies, the sample is selected because they are convenient. This nonprobability method is often used during preliminary research efforts to get a gross estimate of the results, without incurring the cost or time required to select a random sample.

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4.11 Limitations of the study

Time Constraint: Time has been a limiting factor as the study has been conducted just in 90 days. This study is restricted to four zones (Athwa,Rander,Varachha and Katargam) of Surat city only. Findings may vary according to demographic factors such as age, gender, education, occupation, income levels, standard of living etc. and all these factors have not been considered separately. It includes only those retails banks as named by respondents and may not include all retail banks existing in Surat. The study is designed to give a generalized idea about customer satisfaction and loyalty in retail banking and it does not aim to provide such results for any particular bank. The service quality dimensions considered for this study are strictly based on SERVQUAL model developed by Parasuraman, Zeithaml and Berry which is a generalized model applicable for any industry. Hence, any other dimensions specific to retail banking might not be covered by this study. Limitation of respondent: The size of respondents is small (300 respondents) due to time limit. Any part of questionnaire not understood by any of the respondent can be a cause error in findings. The sampling technique used is convenience so results could be biased if any of samples selected was not a true representative of population. Many of respondents might not have answered the questionnaire with complete seriousness and might have done discrimination is answers.

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4.12 Scope of the study

This study first measures the impact of duration of banking and service quality dimensions on customer satisfaction. After that it analyzes impact of overall customer satisfaction on customer loyalty. Due to the time constraint it does not include impact of demographic factors such as age, education, gender etc. on customer satisfaction and loyalty but it constitutes future scope for this research.

4.13 Data analysis method

The statistical tools analyzing this study include: 1. 2. 3. 4. Frequency distribution Cross tabulation Chi square test Contingency coefficient.

As this research deals with nominal and ordinal type of data, nonparametric measures of association (Chi- square test and contingency coefficient) are appropriate choice for this study. Data interpretation and analysis have been conducted by using Microsoft Excel 2002 and Medcalc Statistical software version 10.5.1.0.