Professional Documents
Culture Documents
University of Derby
Abstract
This research aims to identify the factors that influence the marketing strategies of Bank
Rakyat Klang in promoting personal loan. The objective of this research is to identify
the factors that influence the customers choice of a bank in obtaining a personal loan.
Another objective is to determine the relationships between the factors that influence the
customers choice of a bank and the marketing strategies of Bank Rakyat Klang in
promoting personal loans. The third objective is to analyze how the customers decision
making factors can be used to improve the marketing strategies of Bank Rakyat Klang in
promoting personal loans. The writer chose quantitative research method in the form of a
questionnaire to help him to achieve the objectives of this research. Quantitative
research method was chosen as it is a statistically reliable method. In addition, it enables
a large amount of data from a large numbers of participants to be analysed and
summarised. It is easier to analysed statistical data in comparison to the data collected
through qualitative research. Quantitative research method enables the writer to compare
the statistical data with the past researches as well. The questionnaires were distributed
to 50 customers of Bank Rakyat Klang. First of all, the writer identified the customers
who have obtained loans from
50
participants randomly according to race and age group. Later, the results were analysed
by using SPSS 21.0. One of the limitations of this research is that there are 114 Bank
Rakyat in Malaysia with 3 located in Klang, but this research only covers Bank Rakyat
Klang. Next, the total populations in Malaysia are 28.9 million with 879867 Malaysians
in Klang but this research only involved 50 customers in Klang. Through this research, it
can be concluded that the location of the bank, interest rate of the loan, terms and
conditions of the loan, the application of technology, longer loan repayment period and
customer loyalty influence the customers choice for a bank in obtaining a personal loan.
Acknowledgement
I would like to express my deepest gratitude to my mother Madam Lee for her
valuable guidance and blessings.
I am very grateful to the management groups of Bank Rakyat Klang for
providing me with an environment to complete my research successfully.
I would also like to thank my supervisor Dr. Chantheney for her unwavering
support during the entire course of this research work.
I am deeply indebted to my Head of department Mr. Chan, who modeled me both
technically and morally for achieving greater success in life.
I would like to express my sincere thanks to Lecturer Dr. Chantheney for her
constant encouragement and support throughout the course, especially for the useful
suggestions given during the course of the research period.
I am very grateful to my internal guide, Ms. Jenny for being instrumental in the
completion of my research.
Lastly, I would like to take this opportunity to extend my deepest appreciation to
my family and friends who gave me moral support throughout the research period.
Table of Content
ii
Abstract
Acknowledgement
ii
Table of content
iii
List of Tables
List of Figures
xii
List of Appendix
xii
Chapter 1: Introduction
1.1
1.2
1.3
Research problem
1.4
Research objectives
1.5
1.6
iii
1.7
Research questions
1.8
Conceptual framework
1.9
Hypotheses
1.10
1.11
Definition of terms
8
9
9
10
10
1.12
12
1.13
13
Introduction
2.1
2.2
14
14
15
iv
18
18
19
20
21
2.3
22
2.4
27
2.5
27
Introduction
28
3.1
Type of research
28
3.2
Research approach
29
3.3
30
30
3.3.2 Sampling
30
Data collection
31
32
32
33
34
36
3.5
Data analysis
36
3.6
Conclusion of Chapter
36
3.4
Introduction
37
4.2
Descriptive analyses
37
37
40
40
41
vi
4.3
4.4
42
43
4.2.2.5 Advertisement
44
45
46
47
Inferential analysis
48
49
4.3.1.1 Hypothesis 1
50
4.3.1.2 Hypothesis 2
50
4.3.1.3 Hypothesis 3
51
4.3.1.4 Hypothesis 4
51
4.3.1.5 Hypothesis 5
52
4.3.1.6 Hypothesis 6
53
4.3.1.7 Hypothesis 7
53
4.3.1.8 Hypothesis 8
54
54
5.1
Introduction
55
5.2
55
56
56
57
57
57
58
5.2.2.5 Advertisement
58
59
59
60
61
61
61
62
62
5.2.3.5 Advertisement
62
viii
5.3
62
62
63
63
63
63
63
64
5.4
64
5.5
64
5.6
64
References
66
Bibliography
75
Appendix
76
List of tables
Table 2.1
26
Table 3.1
31
ix
Table 3.2
32
Table 3.3:
35
Table 4.1
37
Table 4.2
Characteristic of respondents
38
Table 4.3
39
Table 4.4
40
Table 4.5
41
Table 4.6
42
Table 4.7
43
Table 4.8
44
Table 4.9
45
Table 4.10
46
Table 4.11
47
Table 4.12
49
Table 4.13
50
List of figures
Figure 1.1
List of Appendix
Appendix 1
76
Appendix 2
77
xi
Appendix 2
xii
81
Chapter 1: Introduction
1.1 Background of the study
The demands of the present generation are far greater than their age. As a result, a steady
source of income is not sufficient to meet these demands and luxuries. According to
Mourmouras et al. (2012), the demand for personal loans in Malaysia are growing at a
rapid rate. The findings by Narain et al. (2013) also supported Mourmouras et al. (2012)
report. It was found that households loan accounted for 55% of the personal loans.
In Klang, Malaysia, there are 13 commercial banks with 74 branches, 7 investment
banks with 8 branches, 11 Islamic banks with 23 branches and 1 international bank with
1 branch. Appendix 1 gives detailed information about the banks in Klang. These
commercial, Islamic and international banks offer various types of loan including
personal loan. Personal loan is a consumer loan granted for personal, family or
household use (Fitch, 2006). In Malaysia, personal loans are available from as little as
RM1000 to RM150000 or more (iMoneyMy, 2013). The amount that a consumer can
borrow depends on his or her financial strength or ability to repay as well as the
conditions offered by the lender. The borrower signs a loan agreement that states the
amount borrowed, the interest rate and the total monthly payment that he needs to pay
when he takes out a personal loan with a bank. In addition, the loan agreement specify
the details of the loan repayment terms. In Malaysia, the maximum loan term ranges
from 4 years up to 20 years depending on the bank (Endut & Hua, 2009).
In Malaysia, two types of personal loans are available namely:a) secured personal loan
A personal loan is secured when the borrowers offer their assets like a house or car as
forms of security for their loan (Davidoff, 2012).
b) unsecured personal loans
A personal loan is unsecured when the borrowers need not offer any form of assets as
security for their loan (Garman & Forgue, 2007). However, unsecured loan is difficult to
obtain compared to a secured loan as the borrowers need to convince the lenders of their
financial strength. In general, the personal loan taken out by the majority of the
Malaysian is unsecured loan.
The interest rates for a personal loan can be classified into:a) fixed
A fixed interest rate refers to an interest rate that remains the same throughout the full
loan term despite fluctuations in the market (Knowles & Castillo, 2012). Although the
fixed interest rate protects a borrower from interest rate movements, the borrower has to
repay the amount as agreed in the loan agreement until the loan is paid in full. If the
borrower wishes to make extra payments, he has to incur an additional fee. In Malaysia,
the personal loans are usually of the fixed interest rate type. The interest rate for a
personal loan in Malaysia ranges from as low as 3.25% till 24% or more per annum.
b) variable interest rate.
A variable interest rate refers to the interest rate which changes from time to time
according to fluctuations in the market (Henry, 2007)). The advantage of the variable
interest rate is that the borrower could benefit when the market rates are low. On the
other hand, if the market rates are higher, the borrower would have to pay more interest.
The interest rate is often the key factor that determines a good personal loan deal.
Besides obtaining a personal loan from the banks, the consumers can also obtain a
personal loan from the licensed money lenders. There are 4 licensed money lenders in
Klang namely Liger Capital Sdn. Bhd., BGH Credit & Leasing Sdn. Bhd., RM Ace
Consultants and a licensed Chettiar moneylender by the name of Ganesan Nagappan
(Yellow Pages, 2013). The interest rate for licensed money lenders is fixed at 12% per
annum for secured loans and 18% per annum for unsecured loans. The amount of
personal loan that a person can obtain ranges from RM 1000 up to RM 100,000. The
loan term ranges from a month to a year (Murugappan, 2009).
Bank Rakyat was founded in September 1954 after an expansion of the cooperative
movement in Peninsular Malaysia (BankRakyatA, 2013). It was formed under
the Cooperative Ordinance 1948. The cooperatives formed their respective
union banks in order to provide financial needs to their members. 11 union
banks merged and form Bank Agong in 1954 (Islam, 2012). Later, in 1967,
Bank Agong was replaced by Bank Kerjasama Malaysia Berhad with its
membership opened to cooperatives and individuals. The name was changed to
Bank Kerjasama Rakyat Malaysia Berhad in 1973. It is better known as Bank
Rakyat.
Bank Rakyat is governed by Bank Kerjasama Rakyat Malaysia Berhad Act 1978 which
allows it to provide financing to non-members (Muhamat, Rosly & Jaafar, 2011). Later,
Bank Rakyat was placed under the Ministry of Finance and the Ministry of Land and
Co-operative Development in 1989. In 1993, the Cooperative Act was revised and it
allows the Bank to operate in Sarawak and Sabah. Bank Rakyat took a huge step in 1993
by introducing Islamic banking products. In 2002, it became a full-fledged Islamic
cooperative bank. In the same year, Bank Rakyat together with 6 other financial
institutions were placed under the supervision of Bank Negara Malaysia. In 2004, Bank
Rakyat was under the supervision of the Ministry of Entrepreneur and Cooperative
Development. As of 2013, Bank Rakyat has 141 branches in Malaysia (BankRakyatA,
2013).
All the banks in Klang offer various kinds of loan and have their own specialties. Thus,
to survive in this competitive world, Bank Rakyat Klang has to have a good marketing
strategy to obtain a competitive advantage over the other banks. Besides, that Bank
Rakyat Malaysia also face competition from license money lenders. Marketing strategy
is the key to all types of businesses including the banks. Therefore, in this study the
writer wishes to find out the factors that influence the customers choice of a bank in
obtaining personal loans. By indentifying the factors that influence the customers
behaviour the marketing strategies that are apt for Bank Rakyat Klan can be identified.
1.4 Research Objectives
1. To identify the factors that influence the customers choice of a bank in obtaining a
personal loan.
2. To determine the relationships between the factors that influence the customers
choice of a bank and the marketing strategies of Bank Rakyat Klang in promoting
personal loans.
3. To analyze how the customers decision making factors can be used to improve the
marketing strategies of Bank Rakyat Klang in promoting personal loans.
the weaknesses in the strategies used that might be one of the causes why there are still a
number of Malaysians who resort to borrow money from the loan sharks.
Independent variables
Dependent variable
1.9 Hypotheses
Eight hypotheses have been designed for this research. They are as follows:H1 - Location of the bank influences the customers' choice of bank in obtaining
personal loans.
H2 - Customer service influences the customers' choice of bank in obtaining personal
loans.
H3 - Interest rate influences the customers' choice of bank in obtaining personal loans.
H4 - Terms and conditions set by the bank influence the customers' choice of bank in
obtaining personal loans
H5 - Advertisement influences the customers' choice of bank in obtaining personal loans
H6 - Application of technology influences the customers' choice of bank in obtaining
personal loans.
H7 - Longer repayment time influences the customers' choice of bank in obtaining
personal loans.
H8 - Customer loyalty influences their choice of bank in obtaining personal loans.
10
The signalling theory stated that competitive signals are regarded as announcements to
convey information or to obtain information from the rivals (Varadarajan &
Jayachandran, 1999).
The innovation theory brings long term profitability of the organization. It refers to a
process of creative destruction. It regards profits in an inherently dynamic environment
as an outcome of discovery as well as innovation which can provide the organization
with a differential advantage over its rivals (Jacobson, 1992).
The product quality theory stated that quality is any factor other than price has an impact
on the demand curve of a product. According to this theory, if an organization offers a
high price for a high quality product targeted at a small market niche, the organization
will exclude it from the contest for market share dominance in the broader market
automatically (Onkvisit & Shaw, 2008). Besides, this theory also stated that when
consumers are not certain of the quality of a product, they tend to use price as an
indicator of quality.
The market share theory stated that there is a strong relationship between the market
share and profitability. In markets with imperfect information regarding the performance
of products, the high market share of a brand represents superior quality to the
consumers (Donelly & Linton, 2012). In these markets, the customers tend to have more
confidence in high market share brands.
The market pioneering theory stated that the organization which is the first to introduce a
new product into the market or employ a new process has a competitive advantage
related to being the first to enter a market. Lastly, the market orientation theory stated
that in order to be successful, the organization needs to determine the needs and wants
of the customers and satisfy them more effectively than their rivals do (Pride & Ferrell,
2012).
11
1.12
The study conducted on the marketing strategies of Bank Rakyat Klang in promoting
personal loans is divided into 5 chapters stated below along with other basic components
of dissertation such as abstract, acknowledgement, table of content, list of figures and
tables, reference list, and appendices:
Chapter 1
This chapter introduces the financial institutions that are available in Klang, the
definition of personal loan, types of personal loans and types of interest rates. In
addition, this chapter also includes the maximum personal loan amount, the range of
interest rate for personal loan, the average personal loan repayment period, research
problem, research objectives, significances of this research, rationale of the study, scope
of the study, definition of terms, the introduction to marketing strategy and its theories as
well as the background of Bank Rakyat.
Chapter 2
This chapter aims to provide a comprehensive insight on the term marketing mix.
Besides, this chapter will include factors that influence the consumers choice criteria in
retail bank selection and the factors that affect customers decision for taking bank loans.
In addition, the marketing strategies of Bank Rakyat and gaps of the literature are also
included in this chapter.
Chapter 3
The third chapter is the methodology part of the paper that encompass the research
purpose, conceptual framework, research approach, research strategy, data analysis, data
quality (reliability and validity), ethical consideration applied during the collection of
data as well as research plan.
Chapter 4
The fourth chapter will conclude the results drawn from data analysis and discuss on
these results.
12
Chapter 5
Chapter 5 reflects the research objectives. This chapter also includes recommendations
for Bank Rakyat Klang on how it can further improve its marketing strategies to
promote personal loans, limitations of research and suggestions for further research.
13
14
However, a good promotion strategy does not guarantee a success. It has a strong
correlation with the other three Ps components.
Nowadays, the consumers often take into considerations the price of the products when
they obtain a product or service. It is the most flexible element among the 4Ps.
Marketers can raise or lower the prices of the products according to the market. Price is
an important factor to obtain a competitive advantage (Stolt, 2010).
The applications of 4Ps are limited. In 1981, Booms and Bitner proposed 7Ps marketing
mix. The 7Ps includes product, price, promotion, place, participants, physical evidence
and process.
15
location, availability of parking close to a bank and the availability of a wide range of
loans and mortgages were the main factors affecting the customers decisions to select a
bank.
Furthermore, a study was carried out among 209 university students in Maryland, USA
by Khazeh and Decker (1992) to identify the factors that influence the customers
decision to choose a bank. The main findings were quite similar to the aforementioned
reasons. According to research, the main factors are the banks reputation, interest rates
on loans, quick loan approval and customer services.
According to a research which was conducted in Sweden to identify the factors that
influence the consumers choice criteria in
convenience of location were found to play minor roles in bank selection. According to
this research, there is no bank that can offer all products and be the best for all
customers. However, there are a number of leaders in terms of deposit base, in terms of
loans outstanding base, in terms of assets and a niche leader bank (Zineldin, 1983). This
proves that functional quality plays a more essential factor than traditional marketing
activities.
Meanwhile, a research conducted among 1000 students aged between 19-24 with 45%
male and 55% female (Almossawi, 1983) to identify their bank selection criteria. The
factors that determine bank selection are service charges, interest charged on loans,
quick loan approval, availability of parking space near the bank, friendliness of bank
personnel, availability and location of automated teller machines as well as banks
reputation. This research was carried out as the commercial banks need to identify the
criteria on which potential customers determine their bank selection decision in order to
plan an appropriate marketing strategy to attract new customers.
It is worth noticing that pricing is an essential criteria in bank selection according to a
research which was conducted in Singapore. The study was carried out among 500
undergraduates to identify the factors that effect bank selection decisions. According to
16
the research, pricing and product dimensions of bank services were the two main criteria
in bank selection (Ta, 1983). The price dimension includes low service charges, high
interest rates for savings and low interest rates on loans.
Besides, a research was carried out in Sabah, Malaysia to identify the reasons behind the
customers selection of Islamic Mortgage in a bank in Sabah. The sample of the research
included 250 bank customers who were chosen randomly. According to the research, the
customers select the bank for mortgage loan purpose based on three main reasons. They
are customer services, elements of Shariah and Islamic principles and based on pricing
which is the interest rate of the loan (Amin, 2008).
Furthermore, a research was carried out in Athens to identify the bank choice criteria and
the factors that affect customers choice in selecting a bank for mortgage loan. The
research was carried out among 1092 bank customers in Athens. Questionnaire was
distributed to customers. Through this research, four distinct factors were identified as
the main choice criteria that affect consumers bank choice for personal loan. They are
bank service quality, product attributes, communication and access (Lymperopoulos,
1991). According to research, the quality of customer service is the most important
aspect that the customers take into consideration when selecting the bank for personal
loan purpose.
2.2.2 The study of the factors that affect customers decision for taking out bank
loans
Many researches have studied the criteria of bank selection but there are only two that
studied the factors that affect customers decision for taking out bank loans. The first
research was conducted in 2012 among 277 bank customers in Greece (Frangos, 2012).
According to this research, there were four main factors that influenced the customers
17
decision for taking out bank loans namely customer service, shop design, interest rates
and personal marital status.
Nurfahana (2011) did a research on the factors that attract the teachers to obtain 1Aslah
Personal Financing-I loan from Bank Rakyat. The research was carried out among 60
teachers who were teaching in a primary school in Gua Musang, Kelantan. Nur fahana
identifed three main marketing strategies that were employed by the Bank Rakyat Gua
Musang to attract the teachers to obtain 1Aslah personal Financiang-I loan. Nurfahana
had discussed three marketing strategies namely promotion strategy, price strategy and
product strategy in her study.
2.2.3
18
According to Haron & Azmi (2005), all the banks in Malaysia provide services that are
easily accessible by the customers. In order to have easy access to the services
provided by the bank, the bank chose appropriate place that is convenient and
reachable for the customers. The majority of the banks in Malaysia realised that
location of the banks and their branches played an important role in the success of
their businesses.
For the consumers, price represents the quality of a product (Brucks & Naylor, 2000).
Therefore, a product has to be given an appropriate price according to its quality. A
product that is not given a reasonable price may affect the sales and may cause products
failure. Henard & Szymanski (2001) stated that the price has a strong association with
the sales of the product. As such, the price of a product must always be in conformity
with the other 4Ps.
In banking, the pricing strategy is the charge that is imposed on the borrowers.
According to a research, the pricing strategy reduces revenue but can contribute to
customer loyalty (Hallowell, 2011). Customer loyalty is hard to acquire and retain. A
proper pricing is an important key to customer loyalty (Kandampully & Suhartanto,
2000). According to Garvey (2013), the banks should not simply increase the prices of
their products and expect the customers to be loyal. The majority of the leading banks in
the world is employing customer-centric pricing strategies in order to attract, retain
customers as well as to gain more profits in the long run.
19
A research was carried out by Alvarez & Casielles (2005) to identify the relationship
between promotional strategy and the consumers buying behaviour. The research was
carried out randomly among 100 consumers in Oviedo, Spain. The results of the
research showed that the promotion is an important factor which the consumers take into
considerations when purchasing a product. Promotion is regarded as a tool that can help
the retailers or manufacturers to achieve their objectives (McNeil, 2013). A great price
reduction is the method that has the greatest influence on the consumers buying
behaviour. In addition, the research showed that it is essential for the manufacturers or
retailers to impose promotion in order to gain competitive advantage over their
competitors (Alvarez & Casielles, 2005). Their research showed that promotional
strategy plays a vital role in consumers preferences when purchasing a product.
Promotions based on price is the most effective marketing strategy.
Promotional strategy includes price reduction, advertisement, coupons, trade deals,
rewards programs, rebates, attractive contests and sweepstakes (O'guinn, et al., 2011).
Neslin (2002) stated that promotional strategy can help to increase sales by attracting
more customer to purchase the products. According to Neslin, promotional strategy is an
ubiquitous component of marketing strategy for an organization. Neslin stated that
20
promotional strategy has a great influence on the buying behaviours of the customers.
He had observed the number of purchases made for a product over a 60-week period.
Neslin noticed that more products were purchased during the promotional period
compared to the non-promotional period. His research showed that there was an increase
by 50% in sales via promotional strategy. Thus, it is clear that promotional strategy helps
to attract consumers and indirectly increases the sales.
2.2.3.4 Product strategy
A product is the basis of marketing strategy (Lancaster & Reynolds, 2002). Without a
product, an organization need not have a marketing strategy. An organization needs to
have a product in order to proceed with price and promotion strategy. Donelly (2012)
defined a product as a physical item that meets the needs of a particular type of customer
in terms of quality, appearance, image, convenience and variety.
The introduction of new products is one of the elements of product strategy. New
products are the key to the success of an organization as it helps to attract customers and
thus increases the sales. Cooper & Kleinschmidt (2011) had carried out a research to
evaluate the relationship between the introduction of new products and the success of an
organization. The research showed that 40% of the products which are on sale in the
United States now are products which are not available 5 years ago. The majority of the
organizations are dependent on the new products for their sales. According to Cooper &
Kleinschmidt the introduction of new products does not necessarily succeed. A total of
33% of new products which were introduced in the United States failed at launch.
Cooper & Kleinschmidt also found that 46% of the resources that the organizations
spent on the new products were wasted. They had compared and contrasted 43 pairs of
new products which consists of a mixture of successful and unsuccessful new products.
They concluded that in order to have a successful product strategy, it is necessary to
understand the users needs, pay attention to marketing and launch publicity, employ
outside technology and external scientific communication and the managers ought to be
responsible for their jobs.
21
Bank Selection,
Martenson(1983)
customers and 53
bank branch
Factors affecting
managers
Qualitative method
the customers
decisions to select conducted among 106 wide range of loans and mortgages
a bank in Hong
Hong Kong
Kucukemiroglu,
bank.
(1992)
Factors affecting
foreign banks
Qualitative method
the customers
a bank in USA,
209 university
(1992)
Factors affecting
Maryland,USA.
Qualitative method
the customers
a bank in
bank customers in
Sweden,
Sweden
22
Zineldin (1983)
To identify the
Qualitative method
bank selection
criteria in
conducted among
Bahrain,
Almossawi
(1983)
female
To identify the
Qualitative method
as banks reputation
Pricing and product dimensions of
bank selection
decisions in
500 undergraduates
Singapore.
in Singapore.
Ta (1983)
To identify the
Quantitative method
reasons behind
the customers
selection of
customers of a bank
Islamic Mortgage
in Sabah
in a bank in
Sabah.
Amin (2008)
23
To identify the
Quantitative method
bank choice
conducted among
customers choice
in Athens
in selecting bank
personal loan.
(1991)
The factors that
Quantitative method
affect customers
decision for
loans in Greece
in Greece
Quantitative method
affect customers
decision for
taking out
teachers of a primary
1Aslah Personal
school in Kelantan
Frangos (2012)
10
11.
Financing-I
Nurfahana (2011)
Factors that
GIS analysis
influence the
feasibility of a
location
Weon et al.
(2010)
land value.
24
12
The influence of
Quantitative method
A strategic location of an
organization is essential to
customer
attraction
in Korea.
Weon et al.
(2010)
13
14
The relationships
Qualitative method
of customer
- A total of 100
satisfaction,
customers who
customer
loyalty, and
profitability
given questionnaires
for bank.
relationship
between
Hallowell (2011)
To identify the
product.
Oviedo,Spain.
consumers
buying
behaviour,
Alvarez &
Casielles (2005)
25
15
The influence of
strategy on
Ketchup company.
sales,
Neslin (2002)
compared to non-promotional
60 weeks.
Neslin (2002)
strategy.
16
To evaluate the
relationshi
Articles and
newspapers.
p between
recognition of a technical
introductio
opportunity, proficient
n of new
products
and the
success of
an
entrepreneur.
organizatio
n.
Cooper &
Kleinschmidt
(2011)
17
To evaluate the
Compared and
relationshi
contrasted 43 pairs of
p between
introductio
consists of a mixture
n of new
of successful and
products
unsuccessful new
and the
products.
success of
an
jobs.
26
organizatio
n.
Cooper &
Kleinschmi
dt (2011)
Table 2.1 Review of key studies
2.4 Gaps in the literature
Many researches have studied the factors that affect customers choice in selecting bank.
However, there are only two researches that studied the factors that affect customers
choice in selecting bank for personal loans and this research was conducted in Greece.
No research has been done on the relationship between location of bank, customer
service, interest rate, terms and conditions, influences from others, application of
technology, longer repayment period and customer loyalty with the customers choice of
obtaining a personal loan from Bank Rakyat Klang.
All the previous studies will serve as a guideline to the writer. It helps the writer to
identify the factors that affect customers choice in selecting a bank to obtain personal
loans. Hence, this research will not only identify the factors that affect customers choice
in selecting bank for personal loans but also the relationships that are not covered in the
past researches.
2.5 Conclusion of the chapter
Based on the literature review it can be concluded that there are various factors that
affect the customers choice criteria in selecting a bank. These factors are availability of
a wide range of loans, bank location, influence of parents choices, payment of salary via
a certain bank, parking close to a bank, banks reputation, interest rates on loans, quick
loan approval and customer services. On the other hand, the factors that affect the
customers decisions to select a bank for personal loans are customer service, shop
design, interest rates and personal marital status. All the banks employ the four
27
marketing strategies namely place strategy, promotion strategy, price strategy and
product strategy in attracting and retaining their customers.
Introduction
This chapter provides details concerning research methodology used to achieve research
objectives. This chapter includes a discussion on the type of research, research approach,
research population and sampling, data collection method, reliability of the research
instrument, validity of the research instrument and data analysis methods. At the end of
the chapter, the overall summary of this chapter is provided.
28
This research aims to identify the factors that influence marketing strategies of Bank
Rakyat Klang in promoting personal loan. Descriptive research plays a role in describing
these factors. In addition, this research also aims to identify the relationship between the
factors that influence marketing strategies of Bank Rakyat Klang in promoting personal
loans and the customers choice for a bank in obtaining personal loans. As such, the
writer has chosen explanatory research to help him to identify the relationships between
the independent and dependent variables. The independent variables are location of the
bank, the interest rate of the personal loan, the terms and conditions of the personal loan,
influences from others, technology, repayment period and customer loyalty. On the other
hand, the dependent variable is the customers choice on a bank in obtaining personal
loan. Thus, both descriptive and explanatory researches are employed in this current
research.
29
presented in the form of tables. Statistically presented data can help to eliminate bias and
thus producing a more accurate results compared to the data collected through
qualitative research.
Furthermore, quantitative research enables a large amount of data from a large numbers
of participants to be analysed and summarised. It is easier to analysed statistical data in
comparison to the data collected through qualitative research (Bellini & Rumrill, 2009).
The writer can compare the statistical data with the past researches as well.
Besides, quantitative research is less expensive and requires lesser time in comparison to
qualitative research which involves interviews and group discussions (Barnes, et al.,
2013). Quantitative research is in the form of close-ended questionnaire and the
participants can answer the questions in a short period of time. On the other hand,
interviews and group discussions may require several hours and the writer have to
transcribe the discussions before they can be analysed. Transcription is not needed for
quantitative research as the data collected from the questionnaire can be key-in to SPSS
21.0 directly.
30
The research population in this study were customers of who had taken personal loans
from banks. The research sample of this study were 50 customers who had
obtained personal loan from Bank Rakyat Klang. The participants for the current
research must be between 18 and 65 years old as only this age group was eligible
to obtain personal loans from Bank Rakyat Klang (www.bankrakyat.com.my).
3.3.2 Sampling
The sampling strategy selected for this study is stratified and random sampling. First of
all, the writer approached the bank customers who were waiting to be attended
by the tellers and explained to them that he wished to conduct a research about
their choice of bank to obtain a personal loan.
customers who had taken personal loans from Bank Rakyat Klang were chosen
as samples. The 50 participants were also chosen according to race as in table
3.1 to represent the racial composition of Malaysians. In Malaysia, Malays and
other indigenous make up 61.4%, Chinese 23.7%, Indians 7.1% and others 7.8%
(Soh, 2012). The writer chose the number of participants according to race to
reduce the potential of bias. Besides, this stratified random sample provided a
better representation of the population (Cochran, 2007)
33
13
Total no of participants
50
31
32
33
in this section were regarding the participants age, gender, education level, career and
reasons for obtaining personal loan from Bank Rrakyat Klang.
Part 2 of the questionnaire contained 31 questions for the customers of Bank Rakyat
Klang which were used to prove the 8 hypotheses that were stated in Chapter 1. 23
questions were used to measure independent variable location of the bank, customer
service, interest rate, terms and conditions, advertisement, application of technology and
longer repayment period. Another 8 questions were used to measure dependent variable
which was customers choice of bank to obtain personal loan.
All the questions were accessed on a 5-point Likert-type scales (Stangor, 2011) which
ranged from strongly agree to strongly disagree . This was done in order to obtain a
better answer from the respondents. The participants were required to rate each of the
question according to Likert-type scales as shown in table 3.2.
Strongly agree
Agree
Disagree
Strongly disagree
customers. 23 questions in the questionnaire for the current research were obtained
from past research. The other 8 questions in the questionnaire has been adapted by the
writer from the said research. Therefore, the research instrument in this research is
reliable.
Furthermore, a pilot test was carried out among 10 customers at Bank Rakyat Klang
before the actual research was carried out. The results obtained from the pilot test was
tested by using Cronbachs Alpha. The results of the pilot test and actual test are as
shown in the table below:
Variables
Number of
Items
Cronbachs
Alpha
Pilot test
Cronbachs
Alpha
Actual test
.89
.86
Customer Service
.7
.68
Interest Rate
.7
.82
. 86
.75
Advertisement
.71
.77
Application of Technology
.72
.86
.78
.74
Customer Loyalty.
.8
.81
.8
.97
35
Table 3.3: Reliability test after pilot test and actual test
To interpret alpha value the guidelines given by George and Mallery (2001) are as
follows:> .9
> .8
> .7
> .6
> .5
> .4
The reliability test for pilot study and actual test was between .68 to .97, which shows
acceptable to high reliability measurement.
3.4.5 Validity of the research instrument
According to Bell (2005), validity refers to the degree in which a research instrument
measures what it is supposed to measure. The participants in this research were selected
based on stratified random sampling method. Thus, this research is valid as all the
customers who had obtained loan from Bank rakyat Klang had equal chance to take part
in the research.
3.5 Data Analysis
The data collected through quantitative research was analysed by using SPSS 21.0.
According to Malhotra (2004) descriptive analysis using frequency distribution, mean
and standard deviation were used to explain the frequency of the respondents profile
and variables in the questionnaire. Inferential analysis using Pearson correlation
coefficient test was used to test the hypotheses (Gravetter & Wallnau, 2004) that were
developed for this study in chapter 1. The relationships between the location of the bank,
customer service, interest rate, terms and conditions set by the bank, advertisement,
application of technology, longer repayment period, customer loyalty and the customers
choice of bank to obtain personal loans were identified based on the statistical results
36
obtained from SPSS 21.0. The effectiveness of the current marketing strategies of Bank
Rakyat Klang was evaluated as well through the statistical data.
3.6 Conclusion of the chapter
It can be concluded that the research methodology created for this research study can
enable the writer to conduct the study by using the most appropriate tools. Using these
effective tools selected in this chapter, the writer can obtain the results and findings of
the study that are presented in the next chapter.
Number of
Number of
questionnaires
questionnaires
distributed
50
collected
50
37
Demographic
Factors
Gender
Categories
Frequency
Percentages
Female
20
40.0
Male
30
60.0
Total
50
100.0
Below 30
10.0
30-49
41
82.0
50 and above
8.0
Total
50
100.0
Education Level
SPM
19
38.0
First Degree
22
44.0
18.0
Total
50
100.0
Housewife
14.0
Private Sector
26
52.0
Hawker/businessman/woman
14.0
Age
Career
38
Government Servants
10
20.0
Total
50
100.0
Table 4.2 shows that there are 30 male and 20 female participants. 60% of the
participants are male and 40% of the participants are female. The mmajority of the
respondents are 30 to 49 years old. 5 participants (10%) are below 30 years old, 41
participants (82%) are in between 30-49 years old and only 4 participants (8%) are 50
years old and above. The majority of the participants are 1 st degree holders (44%), 19
participants (38%) are SPM leavers and 9 participants (18%) have Master or higher
qualification. The table shows that the majority of the participants (52%) work in
private sectors. 7 participants (14%) are housewives, 7 participants (14%) are hawkers
or doing businesses and 10 participants (20%) are government servants.
Mode
Valid
Age
50
39
Percentage of agreement*
1
2
3
4
5
Convenient location
Mean
Std.
Deviation
2.0
2.0
6.0
22.0
68.0
4.52
.910
2.0
4.0
10.0
30.0
54.0
4.30
.886
attracted you to
choose our bank for
personal loan.
Table 4.4 shows that majority of the respondents have chosen Bank Rakyat Klang
because of its convenient location. 68% of the customers strongly agree that convenient
40
location plays an important role in attracting them to obtain personal loan from Bank
Rakyat Klang. The mean for this item is 4.52. Likewise, 54% of the respondents strongly
agree that they obtained the personal loan from Bank Rakyat Klang as the banks ATM
machine is available everywhere. The mean for this item is 4.30. This finding is similar
to the findings by Almossawi (1983) where availability and location of automated teller
machines affect the customers decision for choosing a bank.
4.2.2.2 Customer service
Customer service is measured by 5 items. They are as follows:Items
Percentage of agreement*
1
2
3
4
5
Mean
Std.
Deviation
4.0
20.0
72.0
4.0
3.76
.591
2.0
2.0
8.0
72.0
16.0
3.98
.714
Your
requests/questions are
promptly answered.
24.0
14.0
54.0
8.0
3.22
.493
The application
process was
thoroughly explained
10.0
68.0
22.0
4.12
.558
2.0
8.0
78.0
12.0
4.00
.535
41
According to Table 4.5 majority of the customers (72%) agree that the bank staffs are
professional and knowledgeable. On the other hand, 72% respondents agree that they
were courteously greeted by the bank staffs during their visit to Bank Rakyat Klang.
Table 4.5 also shows that 54% of the respondents agree that their requests or questions
were promptly answered by the bank staffs. In addition, it was found that 68% of the
respondents agree that the bank staffs thoroughly explained the loan application process
when they applied for personal loan and 78% respondents agree that they were kept
informed throughout the loan application process. The mean for these 5 items fall in
between 3.22 and 4.12 which is in between neutral or agree according to 5-point Likert
scale. This finding is similar to the findings by Frangos (2012), Khazeh & Decker (1992)
and Amin (2008) where customer service influences the marketing strategies of the bank
in attracting customers to the bank.
Percentage of agreement*
2
3
4
5
Mean
Std.
Deviation
Competitive interest
rates for loan
attracted you to
choose our bank
2.0
6.0
38.0
54.0
4.42
.751
2.0
10.0
24.0
64.0
4.50
.735
42
Table 4.6 shows that the mean for this item is 4.42. 54% of the respondents strongly
agree that competitive interest rates for loan attracted them to choose Bank Rakyat
Klang. In addition the above table shows that the majority of the customers (64%)
strongly agree that they obtained personal loan from Bank Rakyat Klang as they are
attracted by the privileged interest terms offered in comparison with other banks. The
mean for this item is 4.50. This is similar to the findings by Frangos (2012), Khazeh &
Decker (1992) and Amin (2008) where the interest rate is one of the factors that affect
the customers choice for the bank.
4.2.2.4 Terms and conditions
Terms and conditions is measured by 5 items. They are as follows:Items
You are satisfied with
the loan amount
offered.
You find that the loan
application a simple
procedure and involves
Less bureaucratic
formalities.
You are satisfied with
the terms and
conditions regarding
deferral of
installments.
You are satisfied with
the terms and
conditions set for
guarantors.
You were kept
informed throughout
the application
process.
Percentage of agreement*
1
2
3
4
5
0
8.0
10.0 52.0 30.0
Mean
Std
Deviation
4.04
.922
8.0
8.0
20.0
64.0
4.40
1.059
12
6.0
22.0
60.0
4.54
.937
14.0
54.0
30.0
4.10
1.345
2.0
2.0
68.0
24.0
4.06
1.319
43
According to Table 4.7, 52% of the customers agree that they are satisfied with the loan
amount offered by Bank Rakyat Klang. The table also shows that 64% of the
respondents strongly agree that the loan application from Bank Rakyat Klang is a simple
procedure and involves less bureaucratic formalities. In addition, 60% of the customers
strongly agree that they are satisfied with the terms and conditions regarding deferral of
installments which is imposed by Bank Rakyat Klang. Besides, Table 4.7 shows that
slightly more than half of the customers (54%) agree that they are satisfied with the
terms and conditions set for guarantors. 68% of the customers agree they were kept
informed throughout the application process. The mean for these 5 items fall in between
4.04 and 4.54 which is agree according to the 5-point Likert scale. Frangos (2012),
Khazeh & Decker (1992) and Hallowell (2011) had done research on influence of term
and condition set by bank but their findings found this variable insignificant.
4.2.2.5 Advertisement
Advertisement is measured by 3 items. They are as follows:Items
Percentage of agreement*
1
2
3
4
5
Mean
Std.
Deviation
30.0
50.0
20.0
3.90
.763
44.0
52.0
4.0
3.60
.571
26.0
50.0
22.0
3.92
.792
44
Table 4.8 shows 50% of the customers agree that they obtained personal loan from Bank
Rakyat Klang due to recommendation from others. Besides, 52% of the respondents
agree that they know about personal loan offered by Bank Rakyat Klang through the
internet. In addition, the above table shows that half of the customers agree that they
obtained information regarding personal loan offered by Bank Rakyat Klang through the
flyers or brochures. The mean for these 3 items fall in between scale 3 and 4, which is in
between neutral and agree according to the 5-point Likert scale. Nurfahana (2011),
Alvarez & Casielles (2005) and Neslin (2002) found that advertisement which is one of
the promotional strategies, can help to attract customers to obtain a personal loan from a
bank. However, the current research revealed that advertisement does not influence the
customers decision for a bank in obtaining a personal loan.
Percentage of agreement*
1
2
3
4
5
Mean
Std.
Deviation
4.0
16.0
28.0
52.0
4.28
.781
4.0
16.0
24.0
56.0
4.32
.814
45
Table 4.9 shows more than half (52%) of the customers strongly agree that they are
satisfied with the short waiting period due to the employment of high technology by
Bank Rakyat Klang. The mean for this item is 4.28. Besides, Table 4.9 also shows that
the majority of the customers (56%) strongly agree that the bank processes their personal
loan applications in a short time due to the use of high technology. The mean for this
item is 4.32. This finding is similar to the findings by Cooper & Kleinschmidt (2011)
where the application of technology plays an important role in ensuring the success of
product strategy.
4.2.2.7 Longer repayment period
Longer repayment period is measured by 2 items. They are as follows:Items
Percentage of agreement*
1
2
3
4
5
Mean
Std.
Deviation
2.0
2.0
6.0
36.0
54.0
4.38
.855
4.0
8.0
58.0
30.0
4.14
.729
Items
Percentage of agreement*
1
2
3
4
5
4.0
16.0
28.0
52.0
4.28
.870
4.0
8.0
6.0
22.0
60.0
4.26
1.139
Mean
Std.
Deviation
47
Correlation test is carried out to identify whether or not there is significant relationship
between independent and dependent variables. There are two types of correlation test.
They are Spearman Rho and Pearson (Walker & Maddan, 2013).
The Spearmans rank correlation coefficient is a nonparametric measure that describes
statistical relationship between two variables by using monotonic function (Chernick,
2011). On the other hand, Pearson product-moment correlation coefficient measures the
linear relationship between two variables and is denoted by r (Weinberg & Abramowitz,
2008). Pearson product-moment correlation coefficient is chosen to identify the
relationship between independent and dependent variables in this research (Buchanan,
2008). Pearson correlation coefficient is chosen as the data is normally distributed.
The data in this research meet all the requirements for Pearson correlation coefficient.
The requirements are as follows:a. The scale of measurement is in the form of ratio or interval
b. Variables are normally distributed
c. Linear association
d. No outliers in the data (Jackson, 2012)
The correlation value r indicates positive or negative relationship between the variables.
In a positive relationship, if the value of a variable increases, the value of the correlated
variable increases as well and vice versa. In a negative relationship, if the value of a
vaariable increases, the value of the other variable decreases and vice versa.
The interpretation of correlation value r is based on Guilfords rule of thumb (Kelly,
2009) as shown below:-
-0.90 to -1
-0.70 to -0.90
-0.40 to -0.70
-0.20 to -0.40
48
-0.20 to 0.20
no or negligible relationship
0.40 to 0.70
weak positive relationship
0.40 to 0.70
moderate positive relationship
0.70 to 0.90
high positive relationship
0.90 to 1
very high positive relationship
Table 4.12 Interpretation of correlation value r
4.3.1 Hypotheses testing
Hypothesis
Pearson
Correlation
Sig.
.814
.004
.02
.889
.901
.010
.836
.001
.140
.331
.719
.010
.788
.003
.919
.001
49
H1: There is a significant relationship between location of the bank and the
customers choice of bank in obtaining personal loans.
Based on the findings in Table 4.13, it is clear that there is a significant relationship
between location of the bank and the customers' choice of bank in obtaining personal
loans. The r value is 0.814 and p=0.004<0.05. The r value indicates high positive
relationship and it is statistically significant as the p is <0.05. Kaynak & Kucukemiroglu
(1992), Martenson (1983), Zineldin (1983) and Weon, et al. (2010) stated that there is a
positive relationship between location of the bank and the customers decision for
choosing a bank. Almossawi (1983) also found that the availability of ATM machines is
strongly associated with the customers choice of a bank. Hence, it can be concluded that
location of a bank has a positive and significant relationship with the customers choice
of bank in obtaining personal loan. Thus, H01 is rejected and H1 is accepted.
4.3.1.2 Hypothesis 2
H02:
no or negligible
50
4.3.1.3 Hypothesis 3
H03: There is no significant relationship between interest rate and the customers
choice of bank in obtaining personal loans.
H3: There is a significant relationship between interest rate and the customers
choice of bank in obtaining personal loans.
Based on the findings in Table 4.13, it is clear that there is a significant relationship
between interest rate and the customers' choice of bank in obtaining personal loan. The r
value is 0.901 and p=0.01<0.05. The r value indicates very high positive relationship
and it is statistically significant as the p is <0.05. Thus, H03 is rejected and H3 is
accepted. This finding is similar to the findings by Frangos (2012), Khazeh & Decker
(1992) and Amin (2008) where the interest rate was found to have positive and
significant relationship with the customers choice of bank. Hence, it can be concluded
that the interest rate of loan has a positive and significant relationship with the
customers choice of bank in obtaining personal loan.
4.3.1.4 Hypothesis 4
H04: There is no significant relationship between terms and conditions set by the
bank and the customers choice of bank in obtaining personal loans.
H4: There is a significant relationship between terms and conditions set by the
bank and the customers choice of bank in obtaining personal loans.
Based on the findings in Table 4.13, it is clear that there is a significant relationship
between terms and conditions set by the bank and the customers' choice of bank in
obtaining personal loans. The r value is 0.836 and p=0.001<0.05. The r value indicates
high positive relationship and is statistically significant as the p is <0.05. Thus, H4 is
accepted. However, past research by Frangos (2012), Khazeh & Decker (1992) and
51
Hallowell (2011) did not find any significant relationship between the terms and
conditions and the customers choice of bank in obtaining a personal loan.
4.3.1.5 Hypothesis 5
H05: There is no significant relationship between advertisement and the customers
choice of bank in obtaining personal loan.
H5 There is a significant relationship between advertisement and the customers
choice of bank in obtaining personal loan.
Based on the findings in Table 4.13, it is clear that there is no significant relationship
between advertisement and the customers' choice of bank in obtaining personal loans.
The r value is 0.14 and p=0.331>0.05. The r value indicates no or negligible relationship
and it is statistically insignificant as the p is >0.05. Thus, H05 is accepted and H5
rejected. However, Nurfahana (2011), Alvarez & Casielles (2005) and Neslin (2002)
found that advertisement which is one of the promotional strategies which has a positive
and significant relationship with the customers choice of bank and can help to attract
customers to obtain a personal loan from a bank. Nevertheless, the current findings
suggest that the relationship between advertisement and the customers choice of bank in
obtaining personal loan is negligible and insignificant.
52
4.3.1.6 Hypothesis 6
H06: There is no significant relationship between application of technology and the
customers choice of bank in obtaining personal loan.
H6: There is a significant relationship between application of technology and the
customers choice of bank in obtaining personal loan.
Based on the findings in Table 4.13, it is clear that there is a significant relationship
between application of technology and the customers' choice of bank in obtaining
personal loan. The r value is 0.719 and p=0.01<0.05. The r value indicates
high
bank in obtaining
personal loans. The r value is 0.788 and p=0.003<0.05. The r value indicates
high
4.3.1.8 Hypothesis 8
H08: There is no significant relationship between customer loyalty and the
customers choice of bank in obtaining personal loan.
H8: There is ao significant relationship between customer loyalty and the
customers choice of bank in obtaining personal loan.
Based on the findings in Table 4.13, it is clear that there is a significant relationship
between customer loyalty and the customers' choice of bank in obtaining personal loans.
The r value is 0.919 and p=0.001<0.05. The r value indicates high positive relationship
and it is statistically significant as the p is <0.05. Thus, H8 is accepted. However past
research done by Hallowell (2011) and Frangos (2012) did not find any significant
relationship between customer loyalty and the customers choice of bank in obtaining a
personal loan.
4.4 Conclusion of the chapter
Based on the current findings location of the bank, interest rate, terms and conditions set
by the bank, application of technology and longer repayment period are found to
influence the customers choice of bank in obtaining personal loan. Customer loyalty is
also a significant factors according to current findings whereas past research by
Hallowell (2011) and Frangos (2012) found it insignificant. On the other hand, customer
service and advertisement do not influence the customers choice of Bank Rakyat Klang
in obtaining a personal loan. These two findings differ from past research whereby
Frangos (2012), Khazeh & Decker (1992) and Amin (2008) found customer service an
important factor that influence customers choice. Alvarez & Casielles (2005) and
Neslin (2002) found that advertisement important. Further discussion about these issues
are dealth with in chapter 5.
54
55
The three research questions that were posed in Chapter One had been answered in
Chapter Four. The three questions are as follows:5.2.1 Research Question 1
What are the factors that influence the customers choice of a bank in obtaining a
personal loan?
Based on the findings in Chapter 4, location of the bank, interest rate of the loan, terms
and conditions of the loan, application of technology, longer repayment period and
customer loyalty influence the customers decision in choosing a bank for a personal
loan. These findings were supported by the past researches and marketing strategies as
mentioned in chapter 4. However, Frangos (2012), Khazeh & Decker (1992) and Amin
(2008) found that customer service influenced the customers choice of a bank in
obtaining a personal loan. Nevertheless, the current findings showed that customer
service does not influence the customers decision in choosing a bank for a personal
loan. Likewise, Alvarez & Casielles (2005) and Neslin (2002) found that advertisement,
which is one of the promotional strategies, can help to attract customers to obtain a
personal loan from a bank but the current findings showed that advertisement does not
influence the customers choice of a bank in obtaining a personal loan. At the same time,
based on the current findings, customer loyalty is significant whereas past research by
Hallowell (2011) and Frangos (2012) found it insignificant. Therefore, further research
has to be done on advertisement, customer service and customer loyalty to come to a
more conclusive findings.
56
strategies of a bank in promoting personal loan. Therefore, Bank Rakyat Klang should
pay attention to place strategy in promoting personal loans.
57
current finding is supported by Khazeh & Decker (1992) Frangos (2012) and Amin
(2008) who stated that interest rate is one of the factors that affect the customers choice
for the bank. Hence, the marketing strategy employed by Bank Rakyat Klang through
imposing low interest rate had attracted customers to obtain personal loans from the
bank.
However, past research by Frangos (2012), Khazeh & Decker (1992) and
Hallowell (2011) on the influence of term and condition set by banks found this variable
insignificant. Nevertheless, terms and conditions set for taking up a loan is part of price
strategy and is vital marketing strategy Rizal & Francis (2010); Henard & Szymanski
(2001). As such, terms and conditions play important roles in the marketing strategies of
Bank Rakyat Klang in promoting personal loan.
5.2.2.5 Advertisement
The mean for these 3 items tested for this variable is between 3.60 and 3.90 which is
neutral according to the 5-point Likert scale. The inferential statistic showed that the
relationship between the advertisement and the customers choice of bank in obtaining a
personal loan is negligible and insignificant. The findings in Chapter 4 revealed that the
majority of the customers neither agree or disagree that they chose to obtain a personal
loan from Bank Rakyat Klang due to recommendation from friends and information that
they acquired via the internet or flyers. Overall, it can be concluded that the
advertisement does not play a vital role in determining the customers choice for a bank
in obtaining a personal loan. However, according to the literature review in Chapter 2,
58
Nurfahana (2011) had identified that promotional strategy helps to attract customers to
obtain a personal loan from a bank. In addition, Alvarez & Casielles (2005) and Neslin
(2002) found that promotion is an important factor which the consumers take into
considerations when purchasing a product. Neslin (2002) also found that there was an
increase by 50% in sales via promotional strategy. Advertisement is one of the
promotional strategies. According to Oldroyd (2012) advertisement is part of promotion
strategy which is an important item in marketing mix (4Ps). Therefore, further research
need to be done to find a conclusive answer fot this variable in terms of the marketing
strategies of Bank Rakyat Klang.
mean for this variable is 4.38 and 4.14. In addition, the inferential statistic also showed
that there is a positive and significant relationship between longer repayment period and
the customers choice of bank in obtaining a personal loan. Thus, it is clear that longer
repayment period of the loan affects the customers decision for a bank in obtaining a
personal loan. However, based on literature review no past researches had proven that
longer repayment period is one of the factors that influence the customers choice of
bank in obtaining a personal loan. Although Frangos (2012) had done a research on
longer repayment period among bank customers in Greece, his findings did not identify
this factor as a determining item. Thus, this current research has identified longer
repayment period for personal loans as a marketing strategy for Bank Rakyat Klang.
5.2.2.8 Customer loyalty
The findings in Chapter 4 confirmed that the majority of the customers are satisfied with
the personal loan offered by Bank Rakyat Klang and will recommend to others. The
mean for this item is 4.28. Besides, the majority of them were customers of Bank Rakyat
Klang before they applied for a personal loan from the bank. This shows that these
customers chose to obtain a personal loan from Bank Rakyat Klang as they are loyal
customers of the respective bank. The mean for this item is 4.26. In addition, the
inferential statistic showed that there is a positive and significant relationship between
customer loyalty and the customers choice of bank in obtaining a personal loan.
Overall, it can be concluded that customer loyalty influences the customers choice of
bank in obtaining a personal loan. Hallowell (2011) stated that the price strategy can lead
to customer loyalty. However, no past researches had proven that customer loyalty is
one of the factors that influence the customers choice of bank in obtaining a personal
loan. Thus, this current research is able to identify the relationship between customer
loyalty and the customers decision in choosing a bank to obtain a personal loan.
According to Paavola (2006) and Fournier, Susan & Yao (1997), customer loyalty need
to be taken into consideration by marketers. It can be concluded that customer loyalty
influences the customers to obtain a personal loan from Bank Rakyat Klang. As such,
customer loyalty plays important roles in the marketing strategies of Bank Rakyat Klang
60
61
62
63
Rakyat Klang on how it can further improve its marketing strategies in promoting
personal loan.
5.3.2.2 To the bank industry
This research can be used as a reference to other banks on how they can improve their
marketing strategies in promoting personal loan. The findings of this research which are
supported by previous studies can be used by the banking industry in Malaysia as no
previous study as been done in Malaysia pertaining to personal loans.
5.4
This research only covers Bank Rakyat Klang in Klang, Malaysia. There are 141 Bank
Rakyat branches in Malaysia with 3 branches in Klang (Bank Rakyat, 2013). In addition,
the population of Malaysia is 28.9 million (Trading Economics, 2013). There are 879867
Malaysians in Klang (Mongabay, 2013). This research only involves 50 customers in
Klang. The number of respondents in this study is limited and therefore it imposes
difficulty in terms of developing a comprehensive study with significant results.
5.5 Suggestions for further research
The results obtained from this research may not be accurate as it only covers 1 out of
141 Bank Rakyat branches in Malaysia. A more accurate results can be obtained by
conducting a research that covers all the 141 Bank Rakyat branches in Malaysia. In
addition, this research only involves 50 customers in Klang. Future research should
involve more participants in order to improve the results. Further research should be
conducted on factors that influence customers choice of bank based on Kotlers model of
buyer behavior which not only examines the marketing aspect but also marketing and
other stimuli, the buyers black box and buyer responses (Kotler, 2003). Detail of
Kotlers model of buyer behavior is attached in Appendix 3. Further research also has to
be done on advertisement, customer service and customer loyalty to come to a more
conclusive findings since. The findings of current research differs from past research.
64
5.6
The findings based on the questionnaires have helped to prove 6 out of 8 hypotheses
stated in Chapter One. It can be concluded that the location of the bank, interest rate of
the loan, terms and conditions of the loan, the application of technology, longer loan
repayment period and customer loyalty influence the customers choice for a bank in
obtaining a personal loan. In order to further improve its marketing strategies in
promoting personal loan, Bank Rakyat Klang should focus on these 6 factors. On the
other hand, customer service and advertisement do not influence the customers choice
for a bank in obtaining a personal loan.
65
References
66
Baker, L. (2005) Year nine intermediate Mathematics: Stage 5.2. 1st edn.
Singapore: Green Giant Press.
10
11
Bell, J. (2005) Doing your research project: A guide for first-time researchers
in education, health and social science. 4th edn. Berkshire: Open University
Press.
12
13
14
15
16
Brucks, M., Zeithaml, V. A., & Naylor, G. (2000) Price and brand name as
BIBLIOGRAPHY
1
Appendix
68
4
1
1
1
15
2
10
INVESTMENT BANKS
Affin Investment Bank Bhd
Aminvestment Bank Bhd
Maybank Investment Bank Bhd.
CIMB Investment Bank Bhd.,
OSK Investment Bank Bhd.
Ecm Libra Investment Bank Bhd
ISLAMIC BANKS
2
1
2
1
1
1
Maybank Bhd.
Malaysia Bhd.
2
3
1
Tbk.
Appendix 2
Questionnaires for the customers
Part 1
1. Age
a. Below 30
b. 30-49
c. 50 and above
2. Gender
69
a. Male
b. Female
3. Educational Level:
a. SPM
b. First degree
c. Masters and above
4. Career:
a. Farmer/fisherman
b. housewife
c. government servants
d. private sector
e. hawker/businessman/woman
5. Reasons for obtaining personal loan
a. business
b. Personal education
c. childrens education
d. medical
e. other emergencies
Part 2:
To measure independent variable 1 (Location of the bank) respondents were asked
to answer following questions
1 Convenient location attracted you to choose our bank for
personal loan.
You obtained the personal loan as the banks ATM
our bank.
You are attracted by the privileged interest terms offered in
70
4
4
4
4
4
5
5
5
5
5
1
1
2
2
3
3
4
4
5
5
deferral of installments
13 You are satisfied with the terms and conditions set for
guarantors.
14 You are satisfied with the speed of approval and immediate
payout.
To measure independent variable 5 (Advertisement) respondents were asked to
answer following questions
15 You obtained the personal loan from us due to
1
1
2
2
3
3
4
4
5
5
flyers/brochures.
To measure independent variable 6 (Application of technology) respondents were
asked to answer following questions
18 You are satisfied with the short waiting time due to the
71
on advertisement.
29 I chose Bank Rakyat Klang to obtain personal loans
72
Appendix 3
Kotlers Model of Buyer Behavior
73