Research Methodology 128

CHAPTER-3

RESEARCH METHODOLOGY
This chapter gives the Research Methodology followed in the study. It shows
the significance of the study, objectives of the study, research design of the study,
description, hypothesis and limitations of the study.

3.1 FOCUS OF THE STUDY

The resent years have witnessed significant developments in international
banking. Competition, disintermediation, new services and unique promotion schemes
are some of the emerging features of changing international banking scenario. The
globalization of financial markets has been further accelerated by the development of
technology particularly in the field of information technology and electronic banking
system. Now the customers are also more informed and learned to choose a better
bank for themselves. Again, on the managerial side, the Narasimham Committee has
made a strong plea for full autonomy of the commercial banks in India with RBI as
supervising and controlling authority.
So, the major problem before the commercial banks is their long-run survival
and forging way ahead by retaining their valued customers.

3.2 SIGNIFICANCE OF THE STUDY

With the entry of new generation tech-savvy private banks and expansion of
operations of foreign banks, the banking sector has become too competitive. The ‘one
for all’ and ‘all for one’ syndrome is being a go-by. To deal with the emerging
situations, bankers have to shed a lot of old ideas, change their practices, develop
customer loyalty programmes, and adopt a distinct approach to meet the challenges
ahead. It is desirable for banks to develop a customer-centric approach for future
survival and growth. The awareness has already drawn that prompt, efficient and
speedy customer service alone will tempt the existing customers to continue and
induce new customers to try the services offered by a bank.
In the light of the research findings, interest in service quality is, thus,
unarguably high. Poor quality places a bank at a competitive disadvantage. If
customers perceive quality as unsatisfactory, they may be quick to take their
Research Methodology 129

businesses else where. Thus, it is clear that service quality offers a way of achieving
success among other competing services.
Bank employee’s commitment and concern for customers needs can make or
mar the growth of the bank. This is where the bankers have an important role to play.
It is necessary that the customers should be made educated on new services
introduced by the banks.

3.3 OBJECTIVES OF THE STUDY

The present study mainly focuses on the Marketing of Financial Services. So
the main objectives are:
 To identify various financial services provided by the two private sector banks
viz. ICICI Bank and HDFC Bank.
 To determine the customers’ awareness level and opinion about new financial
services.
 To examine the satisfaction level of customers’ regarding quality and price of
financial services provided by the banks.
 To identify the problems faced by the banks.
 To find out the significance of difference between the expectations and
experiences of customers about financial services of the banks selected for the
study.

3.4 RESEARCH METHODOLOGY

Research methodology comprises defining and redefining problems,
formulating hypothesis or suggested solutions; collecting, organizing and evaluating
data, making deductions and reaching conclusions; and at last carefully testing the
conclusions to determine whether they fir the formulating hypothesis.
A useful research methodology must be systematic, logical, empirical and
replicable.
The researcher should follow certain systematic methods, steps and stipulation
in designing, planning and execution of the research.
Research Methodology 130

3.4.1 RESEARCH DESIGN

A research design is simply the frame work or plan for a study that is used as
guide in collecting and analyzing the data. It is a blue print used for completing a
study.

PILOT STUDY
A pilot study can refer to many types of experiments but generally the goal of
the study is to replicate the full scale experiment but only on a smaller scale. A pilot
study is often used to test the design of the full scale experiment. The design can then
be adjusted in time. This can turn out to be valuable should anything be missing in the
experiment and chances are that the full-scale experiment will not have to be re-done.
So, a sample of 20 respondents was taken for each questionnaire on the basis of
convenience sampling from the different groups. On the basis of the answers given
and time taken by the respondents, the questionnaires were redesigned and finalised.

DATA COLLECTION
The study is based on primary as well as secondary data.

SOURCES OF DATA COLLECTION

 Primary data has been collected through well structured comprehensive
questionnaires. The questions were designed keeping in view of the objectives of the
study. Two sets of questionnaires were developed, one for the bank customers and one
for the bank execution. In some cases, the researcher also had personal discussion with
the respondents with the objectives of soliciting additional information and using this
information to supplement the information collected through questionnaires. The final
sets of questionnaires along with covering letter were then mailed to a total of 1000
bank customers and 60 bank employees selected via convenient sampling technique
from Sonipat and Rohtak Districts of Haryana state. Following procedure was adopted
to collect data from the targeted respondents.
1. Procedure to collect data from bank customers: in case of bank customers,
500 customers of each bank, namely ICICI bank and HDFC bank were approached. To
make sample truly representative, customers belonging to different demographic
groups like gender, age, education, occupation and income level, background were
Research Methodology 131

contacted. The numbers of usable questionnaires collected are shown in the table 3.1.
Table 3.1
Bank Customers’ Survey Response

Total Questionnaires Total no. of filled

Name of Bank
Sent questionnaires received
ICICI 500 414
HDFC 500 334
Total 1000 748

It is evident from the table 3.1 that out of total 500 questionnaires administered
to each bank, namely, ICICI and HDFC Bank, 414 and 334 usable responses were
received respectively. In all, 748 filled questionnaires were collected.
Table 3.2
Customer Profile by Type of Banks

Parameters ICICI HDFC Total

F %age F %age F %age
Gender
Male 316 76.33 256 76.65 572 76.47
Female 98 23.67 78 23.35 176 23.53
Age
Less than 25 110 26.57 104 31.14 214 28.61
25-35 Years 174 42.03 72 21.56 246 32.89
35-60 Years 75 18.12 98 29.34 173 23.13
60 & above 55 13.29 60 17.96 115 15.37
Background
Urban 309 74.64 252 75.45 561 75
Rural 105 25.36 82 24.55 187 25
Education
Up to HSC 15 03.62 21 6.29 36 4.82
Professional 85 20.53 43 12.87 128 17.11
Graduate 116 28.02 134 40.12 250 33.42
Post-graduate 198 47.83 136 40.72 334 44.65
Research Methodology 132

Occupation
Business 75 18.12 58 17.37 133 17.78
Service men 166 40.10 132 39.52 298 39.84
Professional 54 13.04 26 7.78 80 10.70
Student 95 22.94 79 23.65 174 23.26
Retired 24 5.80 39 11.68 63 8.42
Income
Less than ` 2 Ls 252 60.87 175 52.40 427 57.09
Between ` 2 to 5 Ls 133 32.13 100 29.94 233 31.15
More than ` 5 Lacs 29 7.00 59 17.66 88 11.76
Research Methodology 133

SAMPLE DESCRIPTION: Various demographic factors have been analyzed. A

detailed description of the sample is as follows:
DESCRIPTION OF ICICI BANK RESPONDENTS
Gender-wise Distribution
Table 3.3
Distribution of ICICI Bank Respondents according to their Gender

ICICI Bank
Parameter
F %age
Gender
Male 316 76.33
Female 98 23.67
Total 414 100

Fig. 3.1 Gender-wise Distribution of ICICI Bank Respondents

Gender-wise Distribution
Female
24%

Male
76%

The table 3.3 & figure 3.1 shows that 76.33% respondents were male and the
remaining 23.67% were female.
Research Methodology 134

Age-wise Distribution

Table 3.4
Distribution of ICICI Bank Respondents according to their Age

Age F %age
Less than 25 110 26.57
25-35 Years 174 42.03
35-60 Years 75 18.11
60 & above 55 13.29
Total 414 100

Fig. 3.2 Age-wise Distribution of ICICI Bank Respondents

Age-wise Distribution
60 & above
13%
Less than 25
27%

35-60 Years
18%

25-35 Years
42%

The table 3.4 & figure 3.2 shows that 26.57% respondents were in the age
group of less than 25 years. 42.03% respondents were in the age group of 25-35 years,
18.11% respondents in the age group of 35-60 years and 13.29% respondents in the
age group of 60 & above.
Research Methodology 135

Residential Status -wise Distribution

Table 3.5
Distribution of ICICI Bank Respondents according to their Residential Status

Residential
F %age
Status
Urban 309 74.64
Rural 105 25.36
Total 414 100

Fig. 3.3 Residential Status - wise Distribution of ICICI Bank Respondents

Background-wise Distribution

Rural
25%

Urban
75%

Table 3.5 and figure 3.3 shows that 74.64% of total respondents were from
urban area and rest 25.36% are from rural background.
Research Methodology 136

Education-wise Distribution

Table 3.6
Distribution of ICICI Bank Respondents according to their Education

Education F %age
Up to HSC 15 03.62
Professional 85 20.53
Graduate 116 28.02
Post-graduate 198 47.83
Total 414 100

Fig. 3.4 Education-wise Distribution of Respondents

Education-wise Distribution

Up to HSC
4%
Professional
21%

Post-
graduate
47%

Graduate
28%

Table 3.6 and figure 3.4 shows that out of 414 respondents 3.62% were up to
HSC, 20.53% were professional, 28.02% were graduate and 47.83% were post-
graduates.
Research Methodology 137

Occupation-wise Distribution

Table 3.7
Distribution of ICICI Bank Respondents according to their Occupation

Occupation F %age
Business 75 18.12
Service men 166 40.10
Professional 54 13.04
Student 95 22.94
Retired 24 5.80
Total 414 100

Fig. 3.5 Occupation-wise Distribution of ICICI Bank Respondents

Occupation-wise Distribution
Retired
6% Business
18%

Student
23%

Professional
13% Service men
40%

From the table 3.7 and figure 3.5 it is clear that 18.12% respondents were
doing their own business, 40.10% were service men and 13.04% belonged to
professional category. 22.94% of the respondents were students and only 5.8% were
retired. It can be concluded that majority of the respondents belonged to service class.
Research Methodology 138

Income-wise Distribution

Table 3.8
Distribution of ICICI Bank Respondents according to their Income

Income (Annual) F %age

Less than ` 2 Lacs 252 60.87
Between ` 2 to 5 Lacs 133 32.13
More than ` 5 Lacs 29 7.00
Total 414 100

Fig. 3.6 Income-wise Distribution of ICICI Bank Respondents

Income-wise Distribution
More than `
5 Lacs
7%

Between ` 2
to 5 Lacs
32%
Less than ` 2
Lacs
61%

Table 3.8 and figure 3.6 shows 60.87% respondents had annual income less
than ` 2 Lacs per annuam, 32.13% respondents had income between ` 2-5 lacs and
7% had annual income of ` 5 lacs or above. So majority of the respondents had less
than ` 2 lacs income.
Research Methodology 139

DESCRIPTION OF HDFC BANK RESPONDENTS

Gender-wise Distribution

Table 3.9
Distribution of HDFC Bank Respondents according to their Gender

HDFC Bank
Parameter
F %age
Gender
Male 256 76.65
Female 78 23.35
Total 334 100

Fig. 3.7 Gender-wise Distribution of HDFC Bank Respondents

Gender-wise Distribution
Female
23%

Male
77%

From the table 3.9 and figure 3.7 it is clear that 76.65% respondents were male
and the remaining 23.35% were female.
Research Methodology 140

Age-wise Distribution

Table 3.10
Distribution of HDFC Bank Respondents according to their Age

Age F %age
Less than 25 104 31.14
25-35 Years 72 21.56
35-60 Years 98 29.34
60 & above 60 17.96
Total 334 100

Fig. 3.8 Age-wise Distribution of HDFC Bank Respondents

Age-wise Distribution

60 & above
18%
Less than 25
31%

35-60 Years
29%

25-35 Years
22%

From the table 3.10 and figure 3.8 it is clear that 31.14% respondents were in
the age group of less than 25 years. 21.56% respondents were in the age group of 25-
35 years, 29.34% respondents in the age group of 35-60 years and 17.96%
respondents in the age group of 60 & above.
Research Methodology 141

Residential Status -wise Distribution

Table 3.11
Distribution of HDFC Bank Respondents according to their Residential Status

Residential
F %age
Status
Urban 252 75.45
Rural 82 24.55
Total 334 100

Fig. 3.9 Residential Status -wise Distribution of HDFC Bank Respondents

Background-wise Distribution

Rural
25%

Urban
75%

Table 3.11 and figure 3.9 shows that 75.45% of total respondents were from
urban background and rest 24.55% were from rural background.
Research Methodology 142

Education-wise Distribution

Table 3.12
Distribution of HDFC Bank Respondents according to their Education

Education F %age
Up to HSC 21 06.29
Professional 43 12.87
Graduate 134 40.12
Post-graduate 136 40.72
Total 334 100

Fig. 3.10 Education-wise Distribution of HDFC Bank Respondents

Education-wise Distribution
Up to HSC
6%
Professional
13%

Post-
graduate
41%

Graduate
40%

Analysis shows that out of 334 respondents 6.29% were up to HSC, 12.87%
were professional, 40.12% were graduate and 40.72% were post-graduates. So
majority of the respondents were either graduate or postgraduate.
Research Methodology 143

Occupation-wise Distribution

Table 3.13
Distribution of HDFC Bank Respondents according to their Occupation

Occupation F %age
Business 58 17.37
Service men 132 39.52
Professional 26 7.78
Student 79 23.65
Retired 39 11.68

Fig. 3.11 Occupation-wise Distribution of HDFC Bank Respondents

Occupation-wise Distribution

Retired
Business
12%
17%

Student
24%

Service men
Professional
39%
8%

From the above analysis it is clear that 18.12% respondents were doing their
own business, 40.10% were service men and 13.04% belonged to professional
category. 22.94% of the respondents were students and only 5.8% were retired. It can
be concluded that majority of the respondents belonged to service class.
Research Methodology 144

Income-wise Distribution

Table 3.14
Distribution of HDFC Bank Respondents according to their Income

Income (Annual) F %age

Less than ` 2 Lacs 175 52.40
Between ` 2 to 5 Lacs 100 29.94
More than ` 5 Lacs 59 17.66
Total 334 100

Fig. 3.12 Income-wise Distribution of HDFC Bank Respondents

Income-wise Distribution

More than `
5 Lacs
18%

Less than ` 2
Lacs
52%
Between ` 2
to 5 Lacs
30%

Table 3.14 and figure 3.12 shows 52.40% respondents had annual income less
than ` 2 lacs per annuam, 29.94% respondents had income between ` 2-5 lacs and
17.66% had annual income of ` 5 lacs or above. So majority of the respondents had
less than ` 2 lacs income.
Research Methodology 145

2. Procedure to collect data from bank Employees: in case of bank employees, 30

bank employees, including branch manager, customer relationship manager and other
front line staff, of each bank, namely, ICICI and HDFC bank were approached. Table
summarizes the usable responses obtained:

Table 3.15
Bank Employees’ Survey Response
Total Total no. of filled
Name of Bank Questionnaires Sent questionnaires received
ICICI 30 25
HDFC 30 25
Total 60 50

It is evident from the table 3.15 that of total 30 questionnaires each distributed
to bank employees, namely, ICICI and HDFC bank, 25 from each bank usable
questionnaires were collected.
 Secondary Data: Secondary data is the data which is available in published
form and which was collected earlier by people for some purposes. There may be
various sources of secondary data such as-newspapers, magazines, journals, books,
reports, documents and other published information.
1. Banks annual reports -Banks issues there annual reports to get the people
informed with the profitability and growth of the bank. These annual reports help a lot
to get the latest data and other related information for our research. It tells about the
increase or decrease in profits and other facilities.
2. Manuals and Brochures of banks – manuals and broachers of banks also help
in identifying various financial services provided by the banks.

3.4.2 SAMPLE DESIGN

The sample design of the present study comprises the following elements:
 Sampling element: As it is rather impossible to examine the whole universe,
two commercial banks from private sector, namely, ICICI and HDFC bank have been
choose for the present study. The justification behind the selection of these banks lies
in the fact that these are the dominant and leading private sector banks, and have vast
network all over India and very large customer base.
Research Methodology 146

 Services Covered: Though banks provide a large number of financial services,

yet it was not possible to include all those services in the study. So only seven
financial services viz. ATM service, home loan, personal loan, internet banking, phone
banking, credit cards and loan against security were included in this study.

 INTERNET BANKING
In India, ICICI Bank was the first bank to introduce online banking website
way back in 1996 followed by HDFC bank and Citibank. But as far as public sector
banks are concerned, they remained laggards in the race for adopting internet banking
services. It was only in 2001, when SBI- India’s largest public sector bank launched
its internet banking services. Facilities, with internet banking provided by the banks
were balance enquiry and statement, transaction history, online transfer of funds,
account-to-card fund transfer, link bank/card/demat accounts, use of debit card
online, pre-paid mobile recharge, pay of utility bills, send a smart money order, open
fixed deposits and recurring deposits, order a demand draft / pay order, subscribe for
mobile banking, request a cheque book, request a change of address, stop payment
request, request a debit card, monthly bank account statement by E-mail, re-
issue/upgrade of ATM/Debit Card, link bank accounts to ATM/Debit Card, renewal /
premature closure of FD/RD, request a duplicate physical bank statement secure
mailbox etc.

 ATM SERVICE
Among these new alternate delivery channels, the most popular is the ATM.
Facilities With ATMs given by banks identified as withdraw cash, balance enquiry,
mini statement, fund transfer between accounts, cheque book request, value added
services, complain format, code of commitment change ATM PIN, credit card
payment, deposit cash or cheques, net banking password request, refill prepaid
mobile, pay utility bills etc.

 HOUSING LOAN
Home loan is a secured loan offered against the security of a house/property
which is funded by the bank’s loan. The property could be a personal properly or a
commercial one. The home loan is a loan taken by a borrower from the bank issued
Research Methodology 147

against the properly/security intended to be bought on the part by the borrower giving
the banker a conditional ownership over the property i.e. if the borrower failed to pay
back the loan, the banker can retrieve the lent money by auctioning the property.
Today most of the banks offer home loan to their customers in order to solve the
housing problem in the country and enhance the standard of living. The various
features of home loan includes: home improvement loan, home extension loan, land
purchase loan etc.

 PERSONAL LOAN
A loan that establishes consumer credit that is granted for personal use based
on the borrower’s integrity and ability to pay. This loan is specifically designed to
meet the unexpected financial requirement of the customers. This means that this loan
is not linked to a particular purchase such as other loans but customer can use it for
anything.

 CREDIT CARD
A credit card allows consumers to purchase products or services without cash
and to pay for them at a later date. To qualify for this type of credit, the consumer
must open an account with a bank or company, which sponsors a card. They then
receive a line of credit with a specified dollar amount. They can use the card to make
purchases from participating merchants until they reach this credit limit. Every month
the sponsor provides a bill, which tallies the card activity during the previous 30 days.
Depending on the terms of the card, the customer may pay interest charges on the
amount that they do not pay for on a monthly basis. Also, credit cards may be
sponsored by large retailers (such as major clothing or department stores) or by banks
or corporations (like VISA or American Express).
Credits cards are a relatively recent development. The VISA Company, for
example, traces its history back to 1958 when the Bank of America began its Bank
Americard program. In the mid-1960s, the Bank of America began to license banks in
the United States the rights to issue its special Bank Americards. In 1977 the name
Visa was adopted internationally to cover all these cards. VISA became the first credit
card to be recognized worldwide.
Research Methodology 148

 PHONE BANKING
Phone banking is a telephone banking service that gives information about the
account at any branch, from anywhere, at any time. It allows making certain requests
to the bank regarding particular account. It also provides information about other
products and services of the bank.

 LOAN AGAINST SECURITIES

Loan against securities offers a customer instant liquidity. Customer doesn’t

have to sell securities. Bank will then grant customer an overdraft facility up to a value
determined on the basis of the securities pledged by customer. A current account will
be opened and customer can withdraw money as and when they require. Interest will
be charged only on the amount withdrawn and for the time span utilized.
 Sampling Unit: Sampling unit of present study consists of individual bank
customers and bank employees of the banks under consideration.
 Area of the study: The present study is based on the information obtained
through a survey process with a geographical focus on two districts viz. Rohtak and
Sonepat in the state of Haryana.
 Sample size: Sampling method adopted is based on convenience sampling 748
respondents were chosen having different age, education- level, sex, occupation
income and background.

3.4.3 DATA ANALYSIS

The purpose of analysis was to obtain specific meaning from data collected.
The following steps were taken in the present study in order to meaningfully analyse
the data:
 Editing: Data was edited after collection of all filled questionnaires.
 Tabulation: Both simple and cross tabulation were done in the present study.
 Presentation: Bar diagrams, graphs and pie-charts were used to present the
facts.
3.4.4 USE OF STATISTICAL TECHNIQUES
The hypotheses framed in this respect were tested statistically for their
significance: Chi- square Test probably the most widely used non-parametric test of
significance. Using this technique, we test the significant difference between the
Research Methodology 149

observed distribution of data among categories and the expected distribution based on
null hypothesis. Mathematically, it is define as:
χ2= ∑ (O-E) 2
E
Where O= Observed Frequency
E= Expected Frequency
Degree of Freedom = (C-1) (R-1)
Where C refers to columns and R refers to rows.
The test was conducted at 95% confidence level (5% level-of-significance).
The calculated chi-square values were compared with the table value of chi-
square at given degree- of- freedom. If the calculated value of chi-square value
worked out to be less than the table value, the deviation of observed frequency from
expected frequency was considered to be insignificant. Consequently, the null
hypothesis was accepted. If the calculated chi-square value was found to be more than
table value, the difference was considered to be significant and null hypothesis was
rejected.
Paired T-test has been applied in this study. The paired T-test has been
applied to test the significance of difference of opinion of the bank customers before
availing the service and after availing the service i.e. the difference between
expectations and experiences of the customers about the financial services provided
by the banks. Respondents were asked to respond to the statements in the
SERVQUAL model questionnaire consisted of 22 statements related to the five
dimensions (i.e. tangibles, reliability, responsiveness, assurance and empathy) of
service quality in which the customers of banks responded against their expectations
and perceptions. Question was designed on 7 point numerical scale, where, 1
represents strongly disagree, 2 for disagree, 3 for somewhat disagree, 4 neutral to the
statement, 5 for somewhat agree and 6 for agree and 7 represents strongly agree with
the statements.
Hypothesis H0 – There is no difference between the expectation level and
experience of the customers about banks.
Hypothesis H1 – There is difference between the expectation level and
experience of the customers about banks.
Research Methodology 150

To know the correlation between the ranks given by ICICI Bank and HDFC
Bank customers the factors of selecting a particular bank, Spearman’s rank co-
efficient of correlation method has been used, which is determined as under:
R = 1 - 6 {∑ D2 + 1/12(m3-m)}
N3-N
Where R = Rank Coefficient of Correlation
D= Difference between the ranks of paired of two variables
N= Number of pair of observations
In some cases %age, weighted average, ranking method have been applied.

3.5 LIMITATIONS OF THE STUDY

The present study would be conducted by an individual scholar and therefore,
it would be completed under certain constraints in terms of availability of time,
availability financial resources, universe and sample of the propose study. Some
limitations are listed below:
 The study was limited to selected branches of ICICI bank and HDFC bank (in
the distt. of Sonepat and Rohtak) because it was not possible to study the entire
universe with the limited resources and time availability at hand.

 Since the time was less the researcher took a sample of 748 respondents and so
the results could not be generalized for all the customers of ICICI bank and HDFC
bank in India.

 The study is based on primary data collected from the respondents assuming
that they have given their genuine preferences without hiding anything.

 It is hoped that the results of the present study may gave some insight in the
customer opinion/ behaviour/ expectation about the services provided by the banks.