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UNIVERSITY OF SOUTH ASIA

Department of Management Sciences


Customers Price Satisfaction in Banking Sector of Pakistan
Master of Business Administration (Marketing) (3.5 Years),
Session (2011-2015)
Submitted by:
Ihtsham Ali

0000456
Submitted to:

Khurram Aziz Fani

Project Advisor

M. AkramRahat Butt

Head of Department

47-Tufail Road, Lahore Cantt.


Tel: (042) 36672942-5
Email: info@usa.edu.pk, U.R.L: www.usa.edu.pk
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DECLARATION

I declare that this study submitted for the degree of Master of Business Administration has not
already been accepted in substance of nay degree, and is not being concurrently submitted in
candidature for any degree.

I also declare that this study submitted for the degree of Masters of business administration is the
result of my own work and investigations. Wherever possible I have acknowledged the authors
of references used and of views expressed which are than my own.

ACKNOWLEDEGEMENTS
All praises and admiration are for Almighty Allah, who is bounteous and merciful and whose
care and guidance led me to complete this ample task, and peace be upon Prophet Muhammad
(SAW) who is a torch of guidance and knowledge for humanity forever.
I thank to my parents for their love and support while I decided to be a Professional student.
I thank to my supervisor, Mr. Khurram Aziz Fani, for giving us the opportunity to work in a
very Interesting area, and for his support and guidance throughout our master studies at
University of South Asia.
Finally yet importantly, I am thankful to my parents, family members and friends who really
believed in me throughout my stay in this university and in the completion of this dissertation. I
also thanks my competitors who inspire to do best.

Ihtsham Ali
MB0000456
Masters of Business Administration (3.5 years)
University of South Asia, Lahore

Dedicated to Our
Beloved Parents,
Respected teachers & for all who are fighting for
Truth
(INSPIRING, ENCOURAGING AND SUGTAINGING)

Table of Contents
ACKNOWLEDEGEMENTS ......................................................................................................... 3
CHAPTER 1: INTRODUCTION, AIM AND OBJECTIVES ....................................................... 9
1.1: Background of the Research Topic: .................................................................................... 9
1.1.1: Customer Satisfaction for the Banking and its Importance: .......................................... 9
1.1.2: Importance of Pricing: ................................................................................................. 10
1.1.3: Antecedents of Price and its Satisfaction: ................................................................... 11
1.1.4: The Context of Price Satisfaction of Banking Sector in Pakistan: .............................. 11
1.2: Research Aim: .................................................................................................................... 12
1.3: Research Questions: ........................................................................................................... 12
1.4: Research Objectives: .......................................................................................................... 13
1.5: The Intended Outcome of the Dissertation Research:........................................................ 13
1.6: Limits and Delimits: ........................................................................................................... 13
1.7: Significance of the Study: .................................................................................................. 14
1.8: Dissertation Structure: ........................................................................................................ 15
1.8.1: Chapter 1Introduction: Aim and Objectives of Dissertation: .................................... 15
1.8.2: Chapter 2-Review of Literature: .................................................................................. 15
1.8.3: Chapter 3-Methodology: ............................................................................................. 15
1.8.4: Chapter 4-Findings and Discussion: ............................................................................ 16
1.8.5: Chapter 5-Conclusion and Recommendations: ........................................................... 16
1.9: Chapter Summary: ............................................................................................................. 16
CHAPTER 2 REVIEW OF LITERATURE ....................................................... 17
2.1: Introduction of the Chapter: ............................................................................................... 17
2.2: Satisfaction of the customers: ............................................................................................ 17
2.3: Loyalty of Customer: ......................................................................................................... 19
2.4: Analysis of Consumer Behavior Significance: ............................................................... 21
2.5: Pricing strategy: ................................................................................................................. 23
2.6: Pricing and Customer Satisfaction: .................................................................................... 24
2.7: Price Satisfaction:............................................................................................................... 25
2.8: Dimensions of price satisfaction: ....................................................................................... 27
2.8.1: Price Transparency: ..................................................................................................... 27
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2.8.2: Relative Price: ............................................................................................................. 28


2.8.3: Price-Quality Ratio: ..................................................................................................... 29
2.8.4: Price Confidence: ........................................................................................................ 30
2.8.5: Price Fairness: ............................................................................................................. 30
2.8.6: Price Reliability: .......................................................................................................... 32
2.9: Conceptual Framework of Research: ................................................................................. 32
2.10: Summary of Chapter: ....................................................................................................... 34
CHAPTER 3: METHODOLOGY ..................................................................... 35
3.1: Introduction of Chapter: ..................................................................................................... 35
3.2: Need for Research: ............................................................................................................. 35
3.3: Research Framework and Research Design: ...................................................................... 37
3.3.1: Research Philosophy: .................................................................................................. 38
3.3.2: Research Approach:..................................................................................................... 38
3.3.3: Research Strategy: ....................................................................................................... 39
3.3.4: Time Dimension for Data Collection: ......................................................................... 39
3.3.5: Tools for Collection of Data: ....................................................................................... 40
3.4: Research Population:.......................................................................................................... 40
3.5: Sampling Plan: ................................................................................................................... 41
3.6: Conduct of Survey: ............................................................................................................ 41
3.7: Analysis of Collected Data: ............................................................................................... 43
3.8: Research Ethics: ................................................................................................................. 44
3.9: Reliability and Validity: ..................................................................................................... 44
3.10: Summary of Chapter 3: .................................................................................................... 44
CHAPTER 4: FINDINGS AND DISCUSSION ..................................................... 45
4.1: Introduction to Chapter: ..................................................................................................... 45
4.2: Reliability of Findings: ...................................................................................................... 45
4.3: Validity of Findings: .......................................................................................................... 46
4.4: Review of Aim and Objectives: ......................................................................................... 47
4.5: Contextual Findings of the Research: ................................................................................ 47
4.5.1: Gender of Customers: .................................................................................................. 47
4.5.2:Frequency to Use Bank: ............................................................................................... 48
4.5.3: Profession of the Customers: ....................................................................................... 49
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4.5.4: Type of Customer: ....................................................................................................... 50


4.5.5: Academic Qualification of Customers: ....................................................................... 51
4.5.6: Age of the Customers: ................................................................................................. 52
4.5.7: Satisfaction of Customer: ............................................................................................ 53
4.5.8: Perception to Use Bank in Future:............................................................................... 54
4.5.9: Transaction (In Rs.) Execute by Customers: ............................................................... 55
4.5.10: Temporal Length of Using the Services from Bank:................................................. 56
4.5.11: Use of Internet Banking: ........................................................................................... 58
4.5.12: Customers Perception to Use Islamic Banking: ........................................................ 58
4.5.13: City of the Respondent: ............................................................................................. 59
4.5.14: Number of Accounts in Use: ..................................................................................... 60
4.5.15: Type of Bank Account: ............................................................................................. 61
4.6: Findings of RO 1 Important Dimensions of Price Satisfaction: ..................................... 62
4.6.1: Factor Loading of Price Reliability: ............................................................................ 63
4.6.2: Factor Loading of Price Confidence: .......................................................................... 64
4.6.3: Factor Loading of Price Transparency: ....................................................................... 65
4.6.4: Factor Loading for Relative Price: .............................................................................. 66
4.6.5: Factor Loading for Price-Quality Ratio:...................................................................... 67
4.6.6: Factor Loading for Price Fairness: .............................................................................. 68
4.6.7: Mean Score of Extracted Factors: ............................................................................... 69
4.7: Findings of RO 2 Analyse the Customer Satisfaction From Price Satisfaction:................ 70
4.8: Findings of RO 3Influence of Different Dimensions of Price Satisfatcion on Overall
Customer Satisfaction: .............................................................................................................. 72
4.8.1: Regression Analysis: ................................................................................................... 73
4.8.2: Regression Analysis: ................................................................................................... 76
4.9: Summary of Chapter: ......................................................................................................... 79
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS ................................ 80
5.1: Introduction: ....................................................................................................................... 80
5.2: Concluding Remarks: ......................................................................................................... 80
5.3: Findings of RO 4 Recomendations to Banking Industry to Satisfy Their Customers: ...... 81
5.3.1: Recommendation 1-Price Changes Communicated Timely: ...................................... 82
5.3.2: Recommendation 2-Bank Should Keep All Promises Regarding Prices: ................... 82
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5.3.3: Recommendation 3- Price Information Should Understandable and Comprehensible:


............................................................................................................................................... 82
5.3.4: Recommendation 4- Terms and Conditions of Bank Should Better Tailored to
Customers Needs: ................................................................................................................. 83
5.3.5: Recommendation 5-The Prices of How Much Customer Use Certain Services: ........ 83
5.3.6: Recommendation 6-Credit Transactions Should Not Cause Abnormally High Interest
Rates: ..................................................................................................................................... 83
5.4: Account of Achievement of Research Objectives: ............................................................ 84
5.4.1: Achievement of Research Objective 1: ....................................................................... 84
5.4.2: Achievement of Research Objective 2: ....................................................................... 84
5.4.3: Achievement of Research Objective 3: ....................................................................... 85
5.4.4: Achievement of Research Objective 4: ....................................................................... 85
5.5: Suggested FutureResearch Areas: ...................................................................................... 85
5.6: Summary of the Chapter: ................................................................................................... 86
Bibliography ................................................................................................ 87

CHAPTER 1: INTRODUCTION, AIM AND OBJECTIVES


In this chapter, introduction and background of price satisfaction of customers in banking
industry of Pakistan will be presented. Moreover, aim, objectives and research questions
regarding the topic will also be presented in this chapter.

1.1: Background of the Research Topic:

Satisfaction is the important factor in any business as well as banking and is a major challenge
for the industries to retain and satisfy the customer needs and wants. Previous researchers
identified different antecepdents of customers satisfaction which include performance,
disconfirmation, expectations and service quality of customers satisfaction, (Jamal et al., 2002).
Satisfaction of customers is a critical concern for both organizations and customers (European
institute of Public administration, 2008).

1.1.1: Customer Satisfaction for the Banking and its Importance:

Customers satisfaction has long been researched by the academics and practitioners of business
(Amin and Isa, 2008, Anderson et al., 1994, Anderson, 1998, Arasli et al., 2005, Bell et al., 2005,
Biyalogorsky et al., 2001, Brown, 2001, Churchill and Suprenant, 1982, Dick and Basu, 1994,
Gonzalez et al., 2004, Huber et al., 2001, Lee and Lin, 2005, Ranaweera and Neely, 2003, Rust
et al., 2004, SadiqSohail and Shanmugham, 2003, Wilding and Juriado,2004). Different
businesses, manufacturing to retailing, now focus on customers retention and satisfaction. This
includes both services and products. Kotler and Armstrong (2010) suggested that to satisfy the
customers needs and wants, organizations should give more attention on their products and
services. This would give competitive advantage to an organization over its counterparts.
Organizations who pay much attention to needs and wants of the customers satisfaction ensure
that they are following the philosophy of customer orientation. Moreover, Fornell et al. (1994)
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indicated that businesses should have to pay more attention on customers satisfaction as this is
becoming the major problem of the businesses.

They further highlighted that customers

satisfaction may also lead to repeat purchase among customers as well as positive word of mouth
for organization. Customers satisfaction has positive impact on sales and profitability of an
organization. This leads to increase in market share. Banks performance is also based on
customers satisfaction. Banking customers are said to be satisfied when the banks meet their
expectation level of the quality service and on the other side, dissatisfaction occurs if the
expectations are not fulfilled. It is important to identity the factors, which lead to customers
satisfaction is based in the banking sectors. The modern banking is moving towards mobile or
electronic banking and presently there are not too many banks that are providing the mobile
banking service facility. Customers satisfaction is not more than an act of providing enough
services acceptable by the customer. Customers satisfaction directly effects the profitability of
any organization. Customers satisfaction effects the reliability, reputation and success in the
banking sector (Zaman, Rustam, Umar 2013).
The organizations that monitor its customers needs and wants, they retain their customers.
Products and the services offered by an organization should be changed with the change in needs
and wants of the customer. Therefore, needs and wants should therefore be researched (Pine et
al,. 2010).
The above discussion shows the customers satisfaction. Monitoring needs and wants of
customers is now becoming an important area for the organization. This asserts that research on
customers satisfaction is important for organizations.

1.1.2: Importance of Pricing:

Athanassopoulos (2000) suggested that customers satisfaction is based upon such attributes as
innovation, price and convenience.Zhang and Raju(2010) indicated that customers adjust their
needs according to the pricing plans. Boone et al. (2009) explains that price of a product or
service has an impact on consumer behaviour. They identified that comparatively women instead

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of men have tendency to pay money, and white people pay less as compared to black people.
Price affects not only the purchase but also post-purchase behaviour.

Colgate and Varki(2001)identified that price and the level of general satisfaction have positive
relationship with each other. The prices charge to the people directly relates with customers
satisfaction. If a bank decides to charge high price for its services, this may result in
dissatisfaction of customer and may lead to a situation in which organization may lose its
customer, as customer would switch to other banks, which may comparatively charge low prices.
Price satisfaction is an important area and is still reap for research.

1.1.3: Antecedents of Price and its Satisfaction:


There are various factors that have an influence on customers satisfaction. Some of these are
honest pricing, fixed pricing, customers advocacy and money back guarantee. Renirtaz et al.
(2005) indicated that the customers retention strategy should be adopted carefully because
retaining a customer is a costly as well as important job. Shanka (2012) says that the
responsiveness, empathy, tangibility, assurance and reliability are the five dimensions of the
SERUPERF model to measure the customers satisfaction of a bank. Matzler et al. (2006) said
that to understand the price satisfaction is a difficult thing and they mentioned various factors of
price satisfaction. These factors include relative price, price reliability, price transparency, price
fairness and price-quality. Over the period customers change their preferences.

1.1.4: The Context of Price Satisfaction of Banking Sector in Pakistan:

This dissertation is related to banking industry of Pakistan and purpose of research is to find out
the impact of various dimensions of price satisfaction on customers satisfaction. Hopkinson and
Aman(2009) indicated that distribution channels in Pakistan are changing and has implications
not only for business community but for retail customers also. They highlighted that not only
large banks in market hold large market share but there is also a part of small banks in industry.
Small banks facing threats due to entry of large banks in market. Hopkinson and Aman(2009)
highlighted that retail business is going to be increased during coming years. The dissertation
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identified price satisfaction in banking sector of Pakistan for this dissertation research. There
were only 487 bank branches in Pakistan but after independence, many of the branches were
closed and only 195 branches were left in Pakistan. State Bank of Pakistan was launched in May
12, 1948. Various banks are now expanding their operations in various cities. Now, banks are
offering lots of products and services. Price satisfaction in services and products offered by
banks has been identified in this dissertation research.

1.2: Research Aim:

The aim of this research is to analyse customers price satisfaction on overall customers
satisfaction and to analyse customers satisfaction on pricing at retail banking industry of
Pakistan.
It is an important part to discuss to focus on customers price satisfaction. Moreover, this is an
area in which further research should be explored.

1.3: Research Questions:

Followings are the questions of this dissertation research:


1- What are the important dimensions of price satisfaction in banking industry of Pakistan?
2- To what extent customers of banking industry in Pakistan are satisfied with reference to
important dimensions of price satisfaction?
3- What is the influence of different dimensions of price satisfaction on overall price
satisfaction?
4- How can customers price satisfaction can be increased so as to increase overall customers
satisfaction?

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1.4: Research Objectives:

Following objectives based on above mentioned research aim and research questions.
1- To analyse the important dimensions of price satisfaction in banking industry of Pakistan.
2- To analyse the extent of customers satisfaction from dimensions of price satisfaction in
banking industry of Pakistan.
3- To analyse the influence of different dimensions of price satisfaction on overall customers
satisfaction.
4- To recommend members of banking industry so that they can increase price satisfaction of
banking customer.

1.5: The Intended Outcome of the Dissertation Research:

It envisaged the outcome of the dissertation would indicate the customers satisfaction level from
various price dimensions. The influence of various dimensions of price satisfaction on overall
satisfaction will also be highlighted in this dissertation.

1.6: Limits and Delimits:


Following are limitations and delimitations of the project.

The limitations of the project are as under:

1- This dissertation includes only those people who have their bank account or having been
associated with the bank in the capacity of customer. People who do not have any bank
account or any relation with banks were excluded from this dissertation.
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2- People who had been working with the banks and those who were willing to work with bank
in the capacity of customers in future will be excluded.
3- There are various price dimensions of product and service quality in banking sector.
However, not all the dimensions were used in this research.

Delimitations are as under:

1- The collection of data based on sample of population. Because this is not possible to cover
whole population.
2- The sample size taken in this dissertation is not very large because of limitations of money
and time.
3- Researcher has no time to confirm findings and conclusion of the dissertation.
4- This dissertation is based on feelings of the customers and what they perceive about banking
industry. Customers of other sectors are not part of research.

1.7: Significance of the Study:

Following are some of the advantages of this research


1- It would be an extension to literature of customers price satisfaction in banking sector.
2- It is an opportunity for customers to share their experiences.
3- The findings of this research would help the banking sector to satisfy their customers
regarding prices in Pakistan.

The findings of this research would help the banking sector to satisfy their customers regarding
prices in Pakistan.

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1.8: Dissertation Structure:

This section provides structure of the dissertation. It would be helpful for the readers to find the
relevant material quickly. There are five chapters in this dissertation. Brief introduction of these
chapters is given below:

1.8.1: Chapter 1Introduction: Aim and Objectives of Dissertation:

This chapter presented introduction and background of price satisfaction of customers in


banking industry of Pakistan. Aim, objectives and research questions regarding the topic
were also briefly discussed in this chapter. Summary of the chapter will be given at the end
of this chapter.

1.8.2: Chapter 2-Review of Literature:

In this chapter, review of literature will be presented. This includes satisfaction of the
customers, customers loyalty, pricing strategies literature, review of global banking sector of
Pakistan and different dimensions of price satisfaction. The main purpose of this chapter is to
develop and explain the conceptual framework which links customers satisfaction with pricing
and banking sector. The chapter will end with a summary of the chapter.

1.8.3: Chapter 3-Methodology:

This chapter will show research methods used by researchers for conducting this research
project. Chapter will start with introduction of the chapter and need for conducting research. In
this chapter, researcher will explain research strategy, research philosophy, data collection
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methods, research approach and time period associated with this research project. Thereafter,
population and sampling procedures will also be discussed and will be presented in this chapter.
Including this, the researcher will also provide details about research ethics, validity and
reliability of research findings. Chapter will end with its conclusion.

1.8.4: Chapter 4-Findings and Discussion:

In this chapter, researcher will discuss findings and analysis of research findings. This chapter
will start with the introduction of the chapter and will then present an account of reliability of
data and validity of results. Research aim and objectives will also reviewed in this chapter. After
this, the contextual information related to findings of research objectives will be provided. This
will be followed by analytical evaluation of the findings. Chapter will end with its conclusion.

1.8.5: Chapter 5-Conclusion and Recommendations:

This will be the last chapter of this dissertation and depict the conclusion and recommendations.

1.9: Chapter Summary:

This was the first chapter of the dissertation. It was all about detailed area of research, aim, and
objectives. Aim, objectives and research questions regarding the topic were briefly discussed in
this chapter. In the next chapter, review of literature will be presented.

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CHAPTER 2 REVIEW OF LITERATURE

2.1: Introduction of the Chapter:

The last chapter of the report presented introduction of the dissertation as well as aim, objectives
and research questions. In this chapter, review of literature will be presented. This will include
different themes satisfaction of the customer, customer loyalty, pricing strategies literature,
review of global banking sector of Pakistan and dimensions of price satisfaction. This chapter
will also explain conceptual framework of research. At the end of this chapter, summary of the
chapter will be given.

2.2: Satisfaction of the customers:

Customer satisfaction is now an important issue of the organizations. Oliver (1980) suggested
that satisfaction of customer is post purchase behaviour or consumer consumption behaviour of
customer. It is linked with customers mind and its result may be negative or positive
predilections in customers mind. Corporate strategy of an organization is strongly linked with
customer satisfaction (Homburg et al., 2005). Customer satisfaction contentions now obtrusive
among organizations so to improve the relations with customer organizations originate particular
programs. Many researchers identified that the financial performance of an organization is
associated with satisfaction of customer (Anderson et al., 1994, Rust and Zohorik, 1993,
Szymanski and Henard, 2001). Moreover, Anderson et al. (1994) highlighted number of firms in
Swedish and suggested that customers satisfaction and financial performance are positively
linked with each other. They jotted that if an organization has satisfied customers, it would lead
to increase satisfaction level of customer. Henrad and Szymanski (2001) conducted research on
customers satisfaction and recommended that in this area, there is need for further research in
this area. Richen (1983), Prince and File (1992) identified that satisfied customers express their
experience with their fellows and it becomes a part of mouth advertisement. This advertisement
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plays a positive or negative role and may alter relations of banks with its stakeholders.
Athanasupouls (2001) elaborated that the services are invisible and not tangible. Due to this, it is
difficult for the customers to judge customers satisfaction from services. Findings of both Hall
and Hall (1987) and Hofstede (1980) show that the unsatisfied customers share bad experiences
with the people which may disappoint prospective as well as existing customers and may serve
as negative marketing of the organization. This, in turn, may have negative impact on the
performance of the bank. Banks should collect primary as well as secondary data to evaluate
customers satisfaction. The main idea for evaluation and measurement of customers
satisfaction is customers retention. (Athanasupouls, 1998, 1999; Buttle, 1996; Cronin and Tylor,
1992, 1994; Parasumraman et al. 1985, 1988, 1991and 1993).

Nyer (1999) and Oliver (1987) explained that unsatisfied customer grumble and makes the
negative marketing of the bank. Ward and Al-Hawari (2006) said that the quality of services
have great impact on customers satisfaction and customer satisfaction have great influence on
the performance of bank. Unsatisfied customers can boot out the business from market and the
satisfied can boost up the business (Mohsin, 2011). Now-a-days, banks are competing for
customers and to increase their profit and market share. Banks are now shifting to the branchless
banking from traditional banking. Now, the banks are introducing mobile banking to capture the
maximum customer and mobile banking is another step towards customers satisfaction
(B.Anckar, 2002). There is a gap between consumers experience and expectations. The
customer satisfaction would be lower if companies offer bad experience to the customers.
OSullivan and McCalling (2012) suggested customer satisfaction has a positive impact on the
output of organization. Long-term organizational success requires customer satisfaction.
Organizations understand well how to satisfy their customer in different sectors. Employees
should maintain personal relationships with the customers by providing better services and
quality product. Organization needs to provide high level of quality services to survive long term
in market (Wen, Wang and Han, 2003).

Metava and Almossawi (1998) analyzed that the feelings of a customer while using the product
or services show the customers satisfaction. Kamakura and Mittal says that future purchases are
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based on the customer satisfaction. Zeithmal, Barry and Parasuraman (1988) explains that the
banks are using the innovative techniques to satisfy their customers like call centers, internet
banking and online system. Competitiveness and ease of use are the two elements of overall
satisfaction. To increase the organizations efficiency, now it is compulsory to measure customer
satisfaction.

According to Rehman and Khattak (2010), if any company is willing to retain old customers and
attract new customer then it should satisfy its customers better than others. Customer satisfaction
is very important area to invest. Organizations output depends upon the customer satisfaction.
Banks should pay attention to satisfy their customer. Customer satisfaction captures the attention
of banking industry due to the high competition among banking sector. In the service sector,
customer satisfaction has become more important because it directly affects the loyalty of the
customers (Ravichandran et al 2010).

2.3: Loyalty of Customer:

Qingyu, G (2009) suggested that organizations need to explore tactics and strategies related to
customers satisfaction in retail banking so that profits of the organizations can be increased.
Retail banking is based on relationships between organization and its customers. Long-term
relationship leads to an increase in profitability of a bank. Weaven and Herington (2007)
suggested that IT services are not only enough to maintain strong relationships of banking
customers. Customer loyalty can be achieved by fulfilling the personal need of customers. This
can be done in e-business situations like well-organized web sites. Use of online customer
supports services is a way through which one can improve its relationship with the customers
and it may also lead to customers delight. Ramaswamy and Prahalad (2004) said that the
organization creates value for provision of value to its customers. Both customers and
organizations should cooperate with each other for value generation. Chandrashekaran et al.
(2007) proved that there is relationship between customer loyalty and customer satisfaction.
Anderson and Sullivan (1993), Dick and Basu(1994), Gronholdtet al. (2000), Hallowell (1996),
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Loveman(1998) and Srinivasan et al. (2002) provided the evidence of link between customer
satisfaction and customer loyalty. Customer loyalty and profitability levels are positively linked
with each other as customer loyalty increases the profitability of the organization, creates
positive word of mouth and refers more consumers to the firm (Bell et al., 2005, Biyalogorsky et
al., 2001, Kandampully and Suhartanto, 2000, Mittal and Kamakura, 2001, Wangenheim and
Bayn, 2004, Yi and La, 2004). Organizations should improve customer loyalty and customer
satisfaction on priority basis. Loyal customers do not notice the increase in price actually; these
customers create positive word of mouth. Mobile banking, online-banking and Automated Teller
Machines led to development of electronic banking which resulted in satisfied and loyal
customer. Improvement in online banking systems may also lead to increase in satisfaction leve
of customers of banking sector (Khan, 2010). Rapid changes in the service industry are due to
innovations in technology and the large organization can only adopt innovative changes to make
their customer satisfied. Customers demands are changing with the change in technology
(Aliabdil et al 2012). Banking is expand else, its working hours due to first innovation in banking
industry and that is ATM. With the development in banking industry as well as innovation in
related attributes of banking industry, more and more services options are available to the
bankers which they may use to serve their customers. The main reason behind associated for
such fast innovation is customer loyalty. Without any hesitation, the users can use ATM any time
anywhere (S, Sultan, 2009).

It is the responsibility of the that they should provide information to the bank itself so that they
can satisfy their customers. Provide information and little training to customers so that
improvement in electronic banking quality and service can be made (Paynter and Chung, 2002).
To shift customer from retail banking to mobile banking the (CRM) customer relationship
manager have to play a vital role (Srivastava, 2007). Gayskem et al. (1998) suggested that trust
and belief are major factors that may help in attracting customers. Talking about the trust, one
should consider other factors such as risk. This will help in adoption of electronic banking and
other services offered by banks including ATM, online facilities and mobile banking etc.
(Turban and Lee, 2001; Pavlou and Featherman, 2003; Geffen et al, 2003).

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To increase the profits and market share, organizations have to recognize the importance of
customer satisfaction (Cacippo, 2000). The need of satisfaction of customer is growing among
all industries and including banks. Governments and private agencies working on different
surveys of customer satisfaction (Schay, et al. 2000). All over the world, banking institutions
now are well familiar with customers satisfaction and most of the banks have made customer
relationship departments. However, the same time the banks are facing dissatisfaction of retail
customer. There are multiple reasons for switching to the other banks including dissatisfaction
from the services of existing banks (Manrai and Manrai, 2007). The phrase Boss is always
right has been change into Customer is always right (Stya and Prabhakaran, 2003).
Parasuman et al. (1994) mentioned the service quality dimensions are; tangibility, understanding,
security, communication, credibility, reliability, competence, responsiveness and accessibility.

2.4: Analysis of Consumer Behavior Significance:

In order to analyze customers satisfaction, it is compulsory to understand the consumer behavior


(Deaton and Muellbauer, 1980, East, 1997, Moutinho, 1993, Solomon et al., 2007). Different
authors study the concept in different ways. Moutinho (1993) worked on tourism industry to
analyze consumer behavior and suggested that the both internal and external factors should be
examined while studying consumer behavior. It changes with internal and external factors so it is
very complex for studying it. It should be analyzed deliberately. Moutinho (1993) highlighted
that numerous factors are involved in consumer behavior. Organization culture is influential
factor which has an impact on buying of products and services. Prabhu and Ranaweera (2003)
proposed that organization should study customer behavior. Its importance cannot be neglect by
any firm because it have influence on long-term profitability. Chiu et al. (2006) elaborated that to
generate insight, organizations should study consumer behavior. Simon (2009) suggested that if
organizations understand consumer behavior, it would help them in increasing their customer
satisfaction and loyalty to stay ahead in the market. To increase profits and market share,
organizations will have to recognize importance of customer satisfaction (Cacippo, 2000). The
demand of customer satisfaction is growing among all industries and including banks.
Governments and private agencies have been conducting different surveys so as to evaluate
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customer satisfaction (Schay, et al. 2000). All over the world, banking institutions are now well
familiar with customers satisfaction and most of the banks have made customer relationship
departments. However, at the same time the banks are facing dissatisfaction of retail customer.
The phrase Boss is always right has been change into Customer is always right (Stya and
Prabhakaran, 2003). Parasuman et al. (1994) mentioned the service quality dimensions are;
tangibility, understanding, security, communication, credibility, reliability, competence,
responsiveness and accessibility.

Loyalty of the customer is the psychological state so it should be measured carefully. Large
organizations can satisfy customer better and hold them (Caippo, 2000). Feedback of customers
will help in measuring customer loyalty and in identifying those customers which are at risk
before lost. Customer loyalty provides help to customers so as to analyze the work of human
resources, IT and other elements (Schay, et al. 2000).

There is a positive link between loyalty and customer satisfaction as it increases the outcome of
organization (Colgate, 1999). Anderson and Colleagues (1994) analyzed that the 1% increase in
customer satisfaction will cause an increase of 11.4% in returns. Now the experts are focusing
directly on customer satisfaction. Satisfying and retaining the customer is less expensive as
compared to capturing the new customer (Johnson et al. 2000). Organizations are putting their
efforts to make the strategic plans to increase their customer loyalty. Researchers found out that
to create revenues in future it is compulsory to increase the customer loyalty (Fornell, 1992).

Kumbar (2011) analyzed that the electronic banking is based on assurance, responsiveness and
easy to use as these elements may lead to increase in customer loyalty (Faghani and Aghdaie,
2012). Australian studies shows that mostly people have no knowledge about the mobile
banking. Organizations should generate awareness about products and services as this may
increase level of adoption of electric banking service. New technology is not easy for everyone
so it may hinder people who are adopting electronic banking (Sathy, 1999).

22

For the assessment of the service quality, customer investigates characteristics of service quality
before using it. For the measurement of service quality, things evaluated are behavior of the
employees, materialistic proficiencies and other expressions. However, the most important is the
assessment of assurance characteristics. (Berry et al. 1985)

2.5: Pricing strategy:

The pricing strategy has received significant attention during the last few years. Berger et al.
(2007), Chen and Seshadri(2007), Li-fei(2008), Liu et al. (2009), Mak et al. (2008), Nelson et al.
(2007), Qi and Xiao Feng (2008), Utaka(2008), Xiao Jun and Hongmin(2009) conducted
research on pricing and related areas. The areas investigated by these researchers include both
online and off-line business environment. According to Anderson and Sullivan (1993), Anderson
(1998), Cao and Gruca(2007), Fornell et al. (2009), Herrmann et al. (2007) and Naumann et
al.(2009), pricing policy of an organization has strong association with an organizations
customer satisfaction. For instance, Herrmann et al. (2007), if a customer perceives that the
pricing policy of the organization is fairer then the customers became satisfied. However, on the
contrary, if the pricing thought to be the other way round, the customers may switch to other
organizations. Similarly, Naumann et al. (2009) reported the case of an organization which
started charging premium prices. Its customers did not like this thing and they switched to the
lower prices sellers. Further to this, Cao et al. (2003) highlighted that an organizations pricing
strategy will influence the pricing satisfaction of its customers, which in turn influences the
customer satisfaction. Similarly, Fornell et al. (2009) reported that the satisfaction level of the
customers from an organization increases if a customer can buy more from a given level of
money from an organization. This can, obviously occur if an organization decreases its prices.

23

2.6: Pricing and Customer Satisfaction:

Prices are the monitory units and paid against buying and selling of products or services. For
suppliers, it is the way to earn profits and customer react on prices called the buying behavior.
Price setting is also a marketing issue, which influences on customer behavior. Therefore, price
setting is a critical decision. This area is linked with price and pricing options. Many researchers
have worked on customer satisfaction. This research includes various price dimensions, which
deals with the price satisfaction in banking sector. Zhang and Raju (2010) identified that the
customers have to adjust prices according to marketing mix variables. For example, in
telecommunication sector services like pay-as-you-go is one of the ways to charge the prices.

Boone et al. (2009) highlighted that a lot of work has been carried on in the area of pricing and
its impact on customers satisfaction. They also explained that comparatively women have more
propensity to pay more price. Furthermore, as compare to white, black people have more
tendency to pay extra. Ahlswede, S. (2012) highlighted that the different analyses shows prices
play a main role to switch other banks. Ahlswede and Schildbach (2012) identify that the
customer need improvements in prices continuously to increase their satisfaction with bank.
Zohorik and Rust (1993) and Colgate et al. (1996) conduct a research and indicate that the
capturing the new customer an expensive and costly way as compared to retain the previous
customer. Researchers thought (Armstrong and Kotler, 2012) the evaluation of post purchase of
the service and the product is called the satisfaction. Lin (2011) says if banks willing to catch
attention and retention of customer, they have to give attention and importance to easy individual
customer and their way of spending their life even likes and dislikes. New modes of doing
business in banking sector is to give more importance to customer satisfaction.

Homburg et al. (2005) suggested that analysis of behavioral pricing including evaluation of
buyers reaction on different prices and decision-making behavior. Hallowell, R. (1996)

24

highlighted that customer satisfaction is very critical area banking sector and banking concerns
should identify major factors related to customer satisfaction in retail banking.

2.7: Price Satisfaction:

This chapter is all about price satisfaction. Various price dimensions are highlighted which are
linked with satisfaction of customer.

Bitner and Zeithaml (2000) highlighted that customer satisfaction is attached with values given
to customer, which influence their loyalty. They also indicated that value of customers is
associated with customers paying and getting. O.H (2003) indicated that customers compare
prices charges at the time of buying any new product or service with price which they had
already in mind. If the prices are high as compared to what the customers are expecting, it will be
the dissatisfaction of customer (O.H, 2003). Voss et al. (1998) highlighted that customer
satisfaction and price satisfaction relationship is a vast area, which is yet to be explored.
Customers satisfaction is linked with customer advocacy, money back guarantee and fix pricing.
Campbell (1999), Fornell et al. (1996), Keaveney(1995) and Varki and Colgate (2001) found that
the price satisfaction is a major issue for the organizations.

Matzler et al., (2004), Diller (1997) highlighted that customer satisfaction from prices is a
considerable area for organizations. They also suggested that the price satisfaction is based on
various factors. Diller (1997) jotted that base of purchase decision starts with search for goods
and services. When customers found goods and services, they will evaluate those against
predetermined values. The next step of evaluation is decision making of any product or service.
Repurchase decision of customer also depends upon customers perception which may be
developed after using a product or services.

25

Customers Decision process

Adopted from:
Pride, W. and O. C.(2014) Ferrell Foundations of Marketing, Cengage Learning.

Pride, W. and O. C (2014) explained that the price transparency is important at problem
recognition stage and information stage. Next stage is evaluation of alternatives and the decision
stage where customer consider price quality and relative price. Product and services usage and
repurchase decisions are dependent upon price fairness, price quality ratio and price reliability.
When product or services are purchased than customer evaluate it with other organizations
product and services. After this, customers decide that they will purchase again or not. Price
fairness and price quality are the basis of decision-making.

A discussion on dimensions of price satisfaction are given below.

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2.8: Dimensions of price satisfaction:

Matzler et al. (2004, 2006) and Diller (1997) indicated various price dimensions including price
transparency, relative price, price fairness, price quality ratio and price reliability. They
recommended that customers preferences change with the time. It is important to evaluate level
of price satisfaction of the customers. The price dimensions will be explored further.

2.8.1: Price Transparency:

Urban et al. (1996) abstracted the literature on price satisfaction and recommended that previous
studies in price satisfaction did not answer all the questions of pricing. They analyze grocery and
general retail industry to understand pricing strategy. They identified that customer would be
satisfied if they found different pricing options in products and services. They also indicated that
now-a-days, companies inform customers about prices in comparison to previous times.
Organizations have better communication sources to provide information. Therefore, it will be
possible for organizatins that they can create awareness among its customers. The process would
be easy and simple of purchasing. Customers exchange information among them as word of
mouth; loyal customers generate positive word of mouth. Price transparency shows the honesty,
openness, and create customer satisfaction. If organizations affirm the information about goods
and services it will lead to customers satisfaction. Diller (1997) indicated that transparency of
price leads to an increase in satisfaction level of customers as it would add to transparency
among customers. Organizations should provide information without any effort by customer.
When a customer discern price transparency, then they would not endeavor about further
information to assess which will cause to increase the level of customer satisfaction. Urbany et
al. (1996) indicated that in banking industry, different software were developed so as to facilitate
customers decision of buying of product and services. These software programs help customers
in choosing mortgage, account opening and loaning. Customers trust on organization increases
when prices are transparent. The above discussion shows that price transparency is important to
customer satisfaction. Urban (2003) highlighted that if information is easy to access, easy to
access alternatives, easy to make transactions, easy to communicate with other customers are the
27

five factors who increase customers power. Existence of price transparency is possible when
customer get complete, clear, recent and effortless information about product prices quoted by
company. Therefore, the price transparency is an important dimension of pricing strategy (Diller,
1997). Number of companies provide software-based advisor to help customers to get all
information about products and services they need. Microsoft, Intel, SACU, Patelco and Mission
Federal are those companies that provide the web-based tool bars to help customers in various
ways. Aim of these programs is to provide complete and comprehensive information about
products and services (Urban, 2003) offered by the customers.

2.8.2: Relative Price:

Colgate and Varki (2001), Keaveney (1995) worked on factors which affect price satisfaction.
Keaveney (1995) highlighted that profitability and market share has an influence on switching
behavior. He collected data from 500 respondents who are receiving services from different
organizations. He indicated 800 cases which caused customer switching behavior. He also
indicated 8 categories of switching behavior. Colgate and Varki (2001) suggested that there is
relationship between prices and customer retention. They suggested that pricing has an impact on
overall customers satisfaction and this will also leads to an increase in value that customers
receives from an organization. Colgate and Varki used the banking sector of New Zealand and
America and highlighted that pricing perception of customer influences overall value that
customers receive from organizations. Customers always compare prices offered by different
organizations. The comparison has the strong impact on customer satisfaction and they intend to
purchase from same organization. Product pricing is an important factor of customer satisfaction.
Matzler et al. (2006) proposed that customers gravitate the best prices by competing it with other
organizations. If the relative prices are available, customer will compare it with other offered
prices. When customer perceives that organization offers less-price as compared to others, than
the competitor does, customer would prefer best price and quality of product (Louter et al., 1991,
Grewal et al., 1996, Merrick, 2001, Wright and Smith, 2004).

28

Lam et al. (2004) and Gale (1994) highlighted that customers perception during purchase
product or services is based on two factors: perceived quality of product/service and perceived
price of product/service. According to Lam et al. (2004), customers perception is based on
information that one customer receives from other customers and on price-quality ratio. The
value received by the customer will be high if the perceived cost decreases and perceived quality
increase. The value of customer will be low, if quality did not meet the customers perception
and price exceeds (Cronin et al. 2000). Zeithaml (1998) identified that customer perceived value
as it is customers overall perception of the value of a product that what they receive. Monroe
(1990) and Zeithaml (1988) highlight that customers perception regarding the value can be
judged by the perception of receiving quality benefits of a product by paying something. This
type of definition is common in use that shows monetary and non-monetary factors, search cost,
time value and psychological cost. Customer value is the key factor that plays a central role in
purchase or in post purchase behavior. Different researchers give various theories on price and
quality impact on customers value. Formell et al. (1996) visited various industries and checked
the impact of post purchase behavior, perceived quality and price on overall customer
satisfaction. In every industry, they found that the price is a key component to purchase anything.
They further investigated that price was important when customers perceived value in two cases
out of seven. In their research related to impact of price in service sector. Voss et al. (1998)
highlight that perceived value has a major impact on the customers satisfaction as long as price
is consistent. At the same time, price also has a major impact if price is inconsistent.

2.8.3: Price-Quality Ratio:

Fornell et al. (1996) indicated that there is relationship between quality of product, customer
satisfaction and perception of pricing. They provided a model, which can be used to anticipate
the performance of market in different countries and industries. They conducted a research in
America and results of that research reveals new acumen of American economies. They
indicated that there is decreasing trend in American customer satisfaction. They explained that in
America, customers are getting more satisfaction from products as compared to services. In
addition to this, price and satisfaction attached with the customer expectation also influence
29

overall customers satisfaction level. Furthermore, quality and pricing affect the customer
satisfaction. Cronin et al. (2000) also added that overall satisfaction, quality and price affect the
customers purchase consideration.
In addition to this, Lam et al. (2004) and Gale (1994) proved that price quality ratio depends
upon two things; first, amount of money customer pays for goods or services. Second, perception
of level benefits that a customer receive from goods or services. If the benefits are more than
costs, the price quality ratio will be the high. According to Woodruff and Gardial (1996) to
satisfy your customer with price, the organization should offer the favorable price-quality ratio.

2.8.4: Price Confidence:

Diller (1997) reveals that if organizations want to create customers confidence on the
organizations, it should develop pricing strategies that are favourable for the customer. Increase
in customers confidence will cause an increase in customers satisfaction to the prices of an
organization. Matzler et al. (2006) highlighted that customer satisfaction with price is related
with price, quality and price transparency offered by organization to its customers. To satisfy the
customer, confidence is more important from organizations perspective. Vuchelan and Praet
(1989) highlighted case of France, Italy, UK and Germany to analyse the oil prices effects and
interest rates effects on customers confidence. They indicated that domestic currency
depreciation, interest rate and increasing oil prices resulted in decrease in the customer
confidence.

2.8.5: Price Fairness:

Campbell (1999) indicated that when organization changes prices, the customer perception also
changes with changing prices. Campbell (1999) analyzed two separate areas. In his first research,
he studied relationship between customer satisfaction and increase in prices of an organizations
products and services. He suggested that customers believe that price changing is not fair as this
30

is an unfair practice by organization. His second research findings suggested that goodwill of an
organization will be decreased if customer faces unfair price practices by organization. If the
organization can survive without increasing the price of products and services, then organization
should not increase prices. Both studies if combined together, provide evidence that price
changes effect customer satisfaction and show that there is moderate relationship between
reputation and goodwill of an organization. Campbell (1999) indicated that perception of unfair
pricing of an organization drives reduce intentions of purchasing from those organizations.

In various situations, organizations have to change price strategies. One of them is when
customer hurriedly purchase product and services. This situation increases bargaining power of
supplier as it he can better use his position in such circumstances. Suppliers can charge high
prices because of its own reasons. If customers perceive that change is price is unjust then it will
cause dissatisfaction among the customers of the organization.

Including that price fairness can etched back to theory of equity of Adams (1963). Swan and
Oliver (1989) highlighted that customers always compare the benefits of one transaction with
other transaction. If customer perceive inequity, they believe they are not receiving more benefits
as others are receiving. If customers feel that organization is getting high profits from the
customer, then they would remark it as unfair (Urbany et al., 1996). Many other researchers talk
about price fairness. In addition to this, Monroe and Martins (1994) indicated that when an
organization and its seller charges less prices to the customer and at the other side charges
regular prices it will result in price unfairness.
The above literature reveals the important relationship between customer perceptions and price
satisfaction of price fairness.

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2.8.6: Price Reliability:

Diller (1997) highlighted that the reliability of prices is linked with a situation in which
customers do not have not any surprises about the price changes to disturb them. This situation
occurs when organization charge hidden prices. Therefore, this situation can arise when
customers feel changes in prices unexpectedly. If organization communicates price changes in
time then the customers will not be disturbed regarding prices. This would help organizations in
building long-term relationship. Lee and Garbarino (2003) suggested that dynamic pricing
practices are not appreciated by the customers and it will cause dissatisfaction among customer.
If organization increase prices of its products and services because of an increase in demand of
its products and services then customers may loose their confidence. Nalebuff and Ayres (2003)
highlighted that in many situations organizations do not inform customers regarding prices. They
indicated the case of rental car and cell phone companies who charged hidden prices.
The above literature indicated that the reliability of price is an important dimension and
organizations should pay more attention towards this. Price reliability is important dimension of
price, which is the part of price satisfaction.

2.9: Conceptual Framework of Research:

Above literature, exhort that the preference of the organizations should be to satisfy needs and
wants of its customers. Organization can increase its customers through the satisfied customers
word of mouth. Product and service quality have strong impact on customer satisfaction. Repeat
purchase based on customer satisfaction, which will cause increase in profits. Satisfied customers
can attract new business of any organization. Satisfied customers of organization would create
positive word of mouth, which resulted as other customer attract to buy product and services.
Decision making in pricing strategy is important, it directly relates to customer satisfaction.
Customers are willing to pay fair prices; it has been prove that customers switch to other
organization due to dissatisfaction from pricing. There are number of dimensions of price
satisfaction. Every dimension have analyzed by different countries in different industries. The
32

aim of this dissertation is to analyze the customers price satisfaction on overall price satisfaction
in banking sector of Pakistan.
The researcher presented the context of banking industry of Pakistan. The banks are interested in
knowing about their customers perception about pricing strategy and their overall satisfaction.
This dissertation will not only help researcher to achieve the academic goals but at the same time
will support banking industry of Pakistan in understanding customers price satisfaction.

Figure 2.2: Conceptual Framework of Dissertation


33

Conceptual framework shows six price dimensions. It includes price fairness, price quality ratio,
relative pricing, price transparency, price confidence and price reliability. Each dimension have
the theoretical base in the conceptual framework of this dissertation.

2.10: Summary of Chapter:

Above chapter was the second chapter of dissertation and presented literature review on
customers price satisfaction and dimensions of price. This chapter highlighted that customer
price satisfaction is important factor for an organization. Customer satisfaction is not only the
responsibility of a specific department rather it is the responsibility of whole organization.
Organizations are competing based on customer satisfaction and aim at developing competitive
advantage based on it. In this situation, organizations should pay more attention towards
customer satisfaction and retention. This will positively affect organizational performance. It will
not be in favor of any organization to discourage customer and switch to other organization. Next
chapter will be research methodology.

34

CHAPTER 3: METHODOLOGY

3.1: Introduction of Chapter:

Chapter two of this dissertation presented literature review on the topic. This chapter will present
research methods used by researchers to conduct this research project. Chapter has started with
introduction of the chapter and will present need to conduct the research. In this chapter, the
researcher will explain the research philosophy, research strategy, research approach, data
collection methods, research approach and period used in this research project. Thereafter,
population and sampling procedures will also be discussed in this chapter. Including this, the
researcher will provide details about research ethics, validity and reliability of research findings.
Chapter three will end with conclusion of the chapter.

3.2: Need for Research:


According to Krishnaswamy et al. (2009) when we need to take decisions in our life mostly, we
use common sense to take decision, which we have experienced over the time. This type of
decision-making is not the best choice. If anyone faces an important issue and has to take
decision, one should systematically identify problem, collect and analyze data and then decide
what to do. This is a way to do research. Bell and Bryman (2007) suggested that research is a
systematic and objective process of collecting, recording, analyzing and interpreting data for aid
in solving business problems. In this dissertation, aim of the research is to analyze the price
satisfaction on overall satisfaction in banking sector of Pakistan. Researcher has decided to
conduct systematic research to achieve this aim. This dissertation has endured all possible stages,
defined the above definition. In rest of this chapter, discussion related to collection and analysis
data and findings will be presented.

35

Figure 3.1: The research process


Figure 3.1 shows research process. It shows that research starts with idea generation. In this
dissertation, customers price satisfaction was analyzed in banking sector of Pakistan. Next step
is the review of literature on the relevant topic. The researcher also developed theoretical
framework as well as aims and objectives of research which are given in first chapter. This
research design is also followed in this research and will be explained later in this chapter. Next
step is collection and data analysis. Data collection and analysis details will also be given in this
chapter. Findings and interpretation will be explained in next chapter. Conclusion will be
provided at the end of chapter five.

36

3.3: Research Framework and Research Design:


McNeill (1990) recommended that researcher should make a research design at the start of
research, which would be the helpful to researcher at various stages. Research design is also
helpful to adopt research techniques, which is closely related to research design. Research
philosophy, research approach and other methods are also linked with research issue so
researcher will discuss those issues so as resolve the research issue. Researcher developed
research design to help researcher in conducting research. Saunders (2009) emphasized that
researchers should understand the importance of having a robust research methodology and
should also explain system and logics of research. Researcher in this project followed research
design proposed by Saunders (2009). This model is known as research onion and has have five
inter-related stages in the onion.. The five layers of research onion are linked with each other.
Every layer of research onion is discussed as under:

Figure 3.2: Saunders Research Onion

37

3.3.1: Research Philosophy:

According to Saunders (2009), first step in designing a research project is to select an appropriate
philosophy for conducing research. Selected research philosophy is also attached with other
stages of research process as well as research onion. It shows the link of researchers point of
view of research world. Saunders (2009) gave three options in his research onion related to
research philosophy. These options were positivism, interpretivism and realism. First option of
research philosophy was positivism, which helps organization in moving towards a systematic,
structured and step-by-step research project. This philosophy applies only to scientific techniques
of data analysis and shows that research and research settings are detached. Positivism
philosophy generates quantitative data. The second philosophy is interpretivism and asserts that
it is not possible to envisage all research issues with high level of objectivity so one should apply
evolving techniques to resolve the research issues. Researcher should use loose research
methodology techniques, so that researcher can adjust research topic and research design
according to requirements of research problems. The third philosophy of Saunders is realism.
This philosophy is mostly used to solve natural science research problems.

This research involves a social science issue, so realism cannot be select as project philosophy.
Researcher also rejected interpretivism because research does not want to select an evolving
research project. Therefore, researcher decided to use positivism philosophy so as to use it for
data collection and data analysis.

3.3.2: Research Approach:

According to Saunders (2009), next step after finalizing the research philosophy is research
approach in the Saunders research design used in this research project. The two options are
opposite of each other and are inductive and deductive approach. Creswell (2014) contrasted
these approaches and suggested that inductive approach is related to interpretivism and deductive
approach is linked with positivism philosophy. To inquire about specific areas, from general to
specific, top-down approach or deductive approach should be used. On the other hand,
38

bottom-up or indicative approach, which is opposite of deductive approach, works from


specific to general approach. In deductive approach, researchers compile data related to research
aim and objectives and bring out findings. Researchers can use inductive approach for generation
of hypothesis.

Researcher selected the deductive approach in this research project. This is because of the fact
that deductive approach is linked with positivism. Furthermore, aim and objectives are selected,
so researcher does not need an evolving approach for conducting research. Therefore, purpose of
this research is to conduct a quantitative data analysis which is linked with deductive approach.

3.3.3: Research Strategy:

According to Saunders (2009), third layer of research onion is research strategy. Research onion
shows that there are several options related to research strategy. Case study, action research,
survey and grounded theory are some of them. Action research and grounded theory will not be
selected and used in this research project because they are not linked with research purpose,
philosophy and research approach. Researcher has developed and presented aim and objective in
first chapter of the report. Researcher did not select case study it is linked interpretivism, which
was not selected research philosophy for this dissertation. Researcher selected questionnaire for
this research strategy. Wilson (2010) said that survey is a useful method for managing large
number of people so as to obtain standardized response from the respondents. In this research,
questionnaires were used to collect data from customers who had been maintaining banking
relations with banks. The purpose of questionnaires was to collect data about customers
satisfaction from prices of banking sector.

3.3.4: Time Dimension for Data Collection:

Saunders (2009) recommended that when researcher has selected philosophy of research,
approach and strategy, next step in research design is selection of time dimension for research
project. There are two options in research onion related to time dimension. These are cross
sectional and longitudinal. In case of longitudinal research design, data is collected more than
39

one time. This is generally done for making comparisons. This research does not have any such
purpose so researcher did not select time-series data collection design. Finally, researcher
decided to use cross-sectional time horizon for collection of data.

3.3.5: Tools for Collection of Data:

Final step in research onion of Saunders (2009) is to select one or more options for data
collection. Saunders (2009) gave number of options for collection of data. More than one options
can be selected for collection of data yet it depends on nature of research issue. In this regard,
researcher used questionnaire for data collection. By using questionnaire, researcher tried to limit
his own biasness. Researcher needed quantitative data for data analysis so questionnaires were
used for collection of such data as these are suitable option for collection and analysis of
quantitative data. Researcher rejected observations, interviews and focus on group discussions;
was based on inner experience rather than facts. Researcher needed the primary data to complete
research aim, so that the questionnaires are the best approach. Secondary data was used by
researcher for literature review as well as for proposal development. Kumar (2010) supported the
use of primary data as it has more authenticity, reliability and relevance to research topic.
However, it takes time and is expensive. Secondary data can be less relevant, old and may not be
reliable. It can easily be available without much struggle. Mostly secondary data sources include
books, journals, industry reports, magazines and newspapers. Primary data is linked with
objectives of research, which are related to analysis of customers price satisfaction with overall
satisfaction in banking sector.

3.4: Research Population:

Bell and Bryman (2007) highlighted that population of research comprises of all those group of
people, phenomenon and matter related to statistical inquiry of research. According to bell and
Bryman (2007), there are two types of population. First is theoretical population, which is
ensemble to all elements. Other is the reachable population and includes all those persons who
are accessible or approachable by researcher using his existing research methods. In this
research, this was not possible for researcher to approach all members of population so he
40

collected data from the targeted population. Target population in this research comprise of all
those people who have their bank accounts with banks of Pakistan. Targeted population includes
those individuals group on which the researchers can apply conclusion.

3.5: Sampling Plan:


Bell and Bryman (2007) recommended that if it is not possible for researcher that he can collect
data from all the elements of research then he can collect data from a subset of population.
Moreover, if researcher is facing money and time pressure then it is better for researcher that he
should collect data from a sample. Subset of a population is called sample. This is an academic
research project, so researcher has to fund this research project from his own resources. The
funds were not enough for data collection from whole population. Therefore, researcher has
adopted sampling technique for data collection. There are two main sampling techniques from
which researcher can select one. First is probability sampling technique where as second is nonprobability sampling. Probability based sampling technique is deliberate technique of sample
selection. Here, every member has equal chance to be select. Mostly experimental researches are
based on probability based sampling. In the research, list of all the persons who have bank
account and using the products or services of bank in Pakistan is not available, so it was difficult
for researcher to adopt probability-based technique of sampling. Consequently, researcher has to
rely on non-probability sampling technique and out of this method, convenient sampling
technique was used. Therefore, researcher decided to use non-probability technique to choose
sample. To collect data, researcher selected 150 respondents. The sample selection method was
convenience based sampling technique. Cost and time of data collection was kept in mind by
researcher while collecting data.

3.6: Conduct of Survey:


Once the sampling plan has been decided, next step is to collection of data. In this regard, a
survey was carried out in Pakistan. There are number of advantages and disadvantages of
surveys. While collecting information related to this, researcher kept this thing in mind. First
41

method is conduct personnel interviews, based face-to-face interview between researcher and
respondent. These can be take place anywhere at office, home, street, and superstore and so on.
Its main advantage is the exact person can be cache for example, customer of the bank at outside
the bank or in the bank. However, each organization and customer has its own characteristic. It
can be time consuming; customer would not like to spend much time for interview. Second is
telephone survey method, which is most popular in USA. The 96% people have telephones at
their home. It is a fast way to conduct a survey with using the computer assisting telephone
interview. To generate results after very last interview. However, the people fed up from
telemarketing companies they do not like to respond long at phone in detail. The workforce is
increasing so the people can be busy at their work and would not like to respond in working
hours. Having no phone numbers of all customers is another issue and organizations did not
provide the data. Another method of fast and economic survey is email. However, having no
email addresses and most of people ignore such type of emails. There is difference in education,
not every customer is educated. Computer direct interviews can conduct at the time of
transaction, so this was also not possible for researcher to select this. The world of research is
getting popularity and the interviews now conduct through web page. It is very fast, economic
and latest way of survey. Like every method web page has its own limitations. People can easily
reject the survey form to save the time. Last method is questionnaire that can be use to collect
data. The questionnaire can be send in email, face-to-face response is easy and less time
consuming. It also can fill out by making someone telephone call. Therefore, the researcher has
selected the questionnaire method to collect the data.

42

Figure 3.3: Benefits of Questionnaires

Researcher used questionnaires for collection of data. Questionnaire started with introduction of
researcher and research aim and professional information of researcher. Email address and phone
number of researcher was also provided in the questionnaire just in case of that if respondent
may have found difficult in answering the questions included in the research. Questionnaire has
the three sections. First section was based on importance of items whereas section two is based
on importance of price satisfaction. The third and last section was related to collection of basic
information of research. The researcher did not ask about bank account number, bank name and
phone number of the respondents, as researcher felt that respondent may or may not feel
unsecure in answering these questions. This questionnaire was distributed among four major
cities which are Lahore, Gujranwala, Gujrat and Sialkot. The respondents for this research were
students, businessperson and employees. Overall, 200 customer were approached to collect data
from different banks. Out of those, 150 customers agreed to cooperate and questionnaires were
distribute among them. Researcher got back only 117 questionnaires and out of these 117
questionnaires, there were 16 questionnaires, which were not filled properly. So, researcher
rejected those and used 103 questionnaires to analyze the results of customers price satisfaction
in banking sector of Pakistan. Researcher tested questionnaire before distributing it so that
researcher can remove disparity from questions and they respondent can easily answer all given
questions in the questionnaire.

3.7: Analysis of Collected Data:


A process to crack a problem or objective into meager parts to generate better understandings
called the analysis. Different techniques can be used to analyze data. There are diverse
techniques to use in scientific and social sciences research. Statistical Program for Social
Sciences were used to analyze collected data. Researcher has coded 103 questionnaires and
entered those in SPSS software. Factor-loading technique was used to extract important variables
from lengthy variables list. To finalize references, EndNote software was used by researcher.
Factor analysis was used to analyze customers satisfaction from banking services offered by
banks operated in Pakistan.
43

3.8: Research Ethics:


There are number of areas where researcher has to face ethical issues related to research project.
Participation in this research by the customers was entirely voluntary. The researcher did not
offer any benefits or pressure to customers to take part in research. Anonymity of customers was
ensured in this research so that no one can trace back respondents. The researcher did not ask
account number or bank name in questionnaire to maintain confidentiality. To secure
respondents information, data file was locked with password. Secondary data was also
acknowledged by researcher using Universitys defined referencing style.

3.9: Reliability and Validity:


Reliability and validity is an important element of research design as well as of research project
(Fowler, 2009). Researcher specially observed this during conduct of research. A detailed
account of this will be presented in next chapter.

3.10: Summary of Chapter 3:

Chapter 3 of this dissertation covers research methods selected by researcher so as to accomplish


this dissertation. Researcher also used positivism philosophy and deductive approach was used.
Furthermore, data was collected using a questionnaire. Cross sectional time dimension was used
in this research and population of the research included all those people who had their bank
accounts in Pakistan. A convenience-based sample of 150 customers was selected and 103
questionnaires were used for generation of findings. Findings are based on factor analysis
technique, which is a useful technique for reducing data. To analyze customers satisfaction,
researcher used mean scores used. Next chapter will cover research findings and interpretation of
research.

44

CHAPTER 4: FINDINGS AND DISCUSSION

4.1: Introduction to Chapter:

Previous chapter presented research methodology of dissertation. In this chapter, researcher will
present findings as well as analysis of research findings. This chapter will start with the
introduction of the chapter, which will be followed by an account of reliability of data and
validity of results. Research aim and objectives will also be reviewed in this chapter. This will be
followed by the contextual information related to research, which will provide related findings of
research objectives. After this, main findings of research will be given. At the end, conclusion of
chapter will be given.

4.2: Reliability of Findings:

According to Reibstein et al. (1988), reliability of findings are very important and are linked
with the level to which research project can repeat its findings. Kostakoglu et al. (1999)
highlighted that if another person conducts similar research and same or almost similar findings
emerge (with same conditions), then reliability of this research can be considered to be high.
Brown et al. (2000) highlighted that in social sciences research project we use Cronbachs alpha
for analysing reliability of findings. It is the measures of internal consistency of findings.
Researchers can use this if they have used Likert scale in questions and researcher intend to find
reliability of scale. Malory and George (2003) suggested that desired value of reliability of
findings is close to 0.7. In table, 4.1 values of Cronbachs alpha provided.

45

Table 4.1: Reliability Statistics


Sr.#

Dimension

Cronbach's Alpha

No of Items

Price Reliability

0.773

Price Confidence

0.798

Price Transparency

0.854

Relative Price

0.871

Price-Quality Ratio

0.658

Price Fairness

0.778

Table 4.1 shows reliability statistics of six dimensions of price satisfaction. These six dimensions
are price reliability, price confidence, price transparency, relative price, and price quality ratio
and price fairness. Furthermore, values of alpha of six dimensions were 0.773, 0.798, 0.854,
0.871, 0.658 and 0.778 respectively. All of these values are close to 0.7, which is the required
value. So, researcher found that as values of these constructs are close to 0.7 so they are reliable.
This enabled researcher to move further with analysis.

4.3: Validity of Findings:

Chafetz et al. (2011) and Mor et al. (1984) indicated importance of findings and these findings
are linked with the output of research. If the researcher feels that validity of the output data is
very high and then researcher can adopt proper research methods. The validity of external data is
very high because data was collected from actual customers of banking sector in Pakistan.
Researcher extracted different dimensions of price satisfaction from existing literature. The aim
of research to analyze price satisfaction on overall customer satisfaction and to analyze
customers satisfaction on pricing at retail banking sector of Pakistan. Cause and effect validity
was not required for this research because this was not a causal analysis. As validity of this
research was higher so researcher moved further with analysis.

46

4.4: Review of Aim and Objectives:

The aim of this dissertation is to analyze price satisfaction on overall customer satisfaction and to
analyze customers satisfaction on pricing at retail banking sector of Pakistan.
Following objectives based on above mentioned research aims and research questions.
1. To analayze the important dimensions of price satisfaction in banking industry of
Pakistan. .
2. To analyze the extent of customers satisfaction from dimensions of price satisfaction in
banking industry of Pakistan.
3. To analyze the influence of different dimensions of price satisfaction on overall customer
satisfaction.
4. To recommend members of banking industry so that they can increase price satisfaction
of banking customer.

4.5: Contextual Findings of the Research:

This section contains contextual findings of this research. It may help readers in understand that
from where the researcher collected the data. These findings are relate to gender, frequency of
use of the bank, type of customers, academic qualification, age, satisfaction level, duration of
using account, customers preferences of using internet and islamic banking and types of
account used by customer.

4.5.1: Gender of Customers:

Table 4.2 indicates gender of customers of bank in Pakistan.

47

Table 4.2: Gender of Customers


Frequency Percent
Cumulative Percent
78
75.7
75.7
25
24.3
100.0
103
100.0

Male
Female
Total

Table 4.2 demonstrated that 75.7 percent customers who took part in this research were male and
24.3 percent were female. This significant figure shows that females have momentous part in
banking sector but the major part was based on males. It shows there is a huge potential of
capturing female customers segment and inspire them to use banking services. It can be an
opportunity for the banks. Graphical representation of findings is given below.

Graph 4.1: Gender of respondents

4.5.2:Frequency to Use Bank:

The table given below shows the frequency of use of banking services.
Table 4.3: Frequency to Use Bank
Frequency

Percent

Cumulative Percent

Daily

8.7

8.7

Once in a week

48

46.6

55.3

Once in a month

38

36.9

92.2

Very seldom

7.8

100.0

103

100.0

Total

48

Table 4.3 demonstrated that 8.7 percent of customer are those who use banking services daily,
46.6 percent customers use bank once a week, 36.9 percent customers use bank once in a month
and 7.8 percent are the customers who use the bank very seldom.
There is graphical representation of frequency of usage the bank. It shows that most of the
persons use bank once in a week and second largest group of people use banks once in a month.
The third group use bank daily, perhaps they can be accountants, businesspersons and employees
of banks. Last and fourth group is who visit bank very seldom.

Graph 4.2: Frequency to use the bank

4.5.3: Profession of the Customers:

Table 4.4 shows profession of the customers who had been using banking services.
Table 4.4: Profession of the Customer
Frequency

Percent

Cumulative Percent

Student

19

18.4

18.4

Businessperson

29

28.2

46.6

Employee

55

53.4

100.0

Total

103

100.0

49

Table 4.4 demonstrated that 53.4 percent (the majority) of the customers of the bank were
employees at different places. Its mean banks should satisfy employees because they will receive
their salary in their accounts. The second largest area is business persons with 28.2 percent of the
population. They have mostly corporate accounts and banks should offer them more facilities
because they have strong account as compare to employees and students. The last and small area
18.4 percent covered by students.
Here is graphical (4.3) representation of customers according to their profession.

Graph 4.3: Profession of customers.


4.5.4: Type of Customer:

Table 4.5 given below shows the types of customers of banks that participated in this research.
Table 4.5: Type of Customers
Frequency

Percent

Cumulative Percent

Household

65

63.1

63.1

Retailer

31

30.1

93.2

Manufacturer

6.8

100.0

103

100.0

Total

Table 4.5 is linked with type of customers and demonstrate that 6.8 percent of the customer were
manufacturers, 30.1 percent were retailer and 63.1 percent customer had been using banking
services for their personal use. Household segment is the largest segment. Pakistan is facing
different energy and other economic and political crises. That is why there is decreasing the
50

manufacturing and manufacturers remain very few. The 63.1 percent is largest figure of those
people who use banks for household purpose. 30.1 percent customers are the retailers who have
large or small retail business.

Graph 4.4: Type of customers

4.5.5: Academic Qualification of Customers:

Table 4.6 demonstrates academic qualification of the customers who participated in this research.
Table 4.6: Academic Qualification
Frequency

Percent

Cumulative Percent

Under Matric

3.9

3.9

Matric

8.7

12.6

Intermediate

15

14.6

27.2

Graduation

35

34.0

61.2

Master

29

28.2

89.3

PhD

2.9

92.2

Professional Qualification

7.8

100.0

103

100.0

Total

51

Above table shows 2.9 percent customers were PhD, 3.9 percent customers were under matric,
7.8 percent customers had professional qualifications, 8.7 percent customers have done
matriculation, 14.6 percent customers have done intermediate, 28.2 percent customers have done
master and last and largest group is 34.0 percent customers who are the graduates. It can be seen
that there is an increasing trend towards education of the people. Awareness of the customer is
dependent upon education, from which they come to know that what they are getting and what
they are paying.

Graph 4.5: Academic qualification of the customers

4.5.6: Age of the Customers:


Table 4.7 given below shows age of the customers.
Table 4.7: Age of Customers
Frequency

Percent

Cumulative Percent

21-25

26

25.2

25.2

26-30

29

28.2

53.4

31-35

12

11.7

65.0

36-40

12

11.7

76.7

41-45

8.7

85.4

46-50

1.9

87.4

51-55

7.8

95.1

56-60

2.9

98.1

61 and above

1.9

100.0

103

100.0

Total

52

Age of customers mentioned in the above table 4.7 which demonstrates that the largest group, in
terms of age, is 28.2 percent of 26 to 30 years old people. The second largest group is 25.2
percent of age 21 to 25 years. Third and fourth is equal with 11.7 percent of 31 to 35 and 36 to
40 years old. Fifth largest age group is 41 years to 45 with 8.7 percent. Sixth largest percentage
is 7.8 percent of 51 to 55 years age group. 56 to 60 years old, customers are 2.9 percent and 46 to
50 and 61 to above people both are 1.9 percent of the bank customers.

Graph 4.6: Age of customers

4.5.7: Satisfaction of Customer:

In this section the level of customer satisfaction is given.


Table 4.8: Satisfaction level of the Customer
Frequency

Percent

Cumulative Percent

Highly Dissatisfied

3.9

3.9

Dissatisfied

6.8

10.7

Normal

33

32.0

42.7

Satisfied

49

47.6

90.3

Highly Satisfied

10

9.7

100.0

Total

103

100.0

53

The above table shows that the 3.9 percent customers who participated in this research are highly
dissatisfied and 6.8 percent are customers are the dissatisfied. 32.0 percent customers are normal
47.6 percent customers are the satisfied and only 9.7 percent customers are who are highly
satisfied. Here, researcher makes five different levels of the satisfaction to covers all type of
customers. Figure 4.7 is the graphical representation of customers satisfaction.

4.5.8: Perception to Use Bank in Future:

In table 4.9 perception of customer to use bank in future given.


Table 4.9: Perception to use bank in future
Frequency

Percent

Cumulative Percent

Perhaps Never

1.9

1.9

Indifferent

12

11.7

13.6

Will Use

60

58.3

71.8

Definitely Use

29

28.2

100.0

Total

103

100.0

Above table demonstrated that 1.9 percent customer were not willing to use bank in future, these
customers were highly dissatisfied as mentioned in table 4.8. This is not a huge figure and as
such does not create problem for industry but from a strategic perspective, bank should focus on
these customer also. According to 11.7 percent customers, they indifferent use the bank. These
are the customers, who are dissatisfied from bank mention in table 4.8 and they are not sure to
54

use or not to use the bank. The customers participate in this research and say will use are 58.3
percent, these are normal customers as per table 4.8 and bank should make such strategies to
make these customers loyal. Other 28.2 percent customers said they would definitely use the
bank. These customers are highly satisfied. These can be the corporate customers or those
customers who visit bank at daily basis.

Table 4.8: Perception to use bank in future

4.5.9: Transaction (In Rs.) Execute by Customers:

This section depicts the transactions executed by customer at bank.


Table 4.10: Transaction (In Rs.) execute by customer
Frequency

Percent

Cumulative Percent

Less than 50000

50

48.5

48.5

50,000-100,000

17

16.5

65.0

100,001-150000

2.9

68.0

150,001-200,000

4.9

72.8

200,001-250,000

4.9

77.7

300,001-350,000

2.9

80.6

400,000-450,000

1.0

81.6

450,001-500,000

2.9

84.5

More than 500,000

16

15.5

100.0

Total

103

100.0

55

The economic survey of 2013-2014 reveals that if we consider $2 poverty line per day according
to international standards for the countries having low income. The 60.19 percent population of
Pakistan live under the poverty line. Another survey highlighted that Punjab 19 percent, Sindh 33
percent, KPK 32 percent and Baluchistan 52 percent of its population is living under the poverty
line. Researcher has selected the Punjabs four major cities. The above table 4.10 depicts that
48.5 percent people makes transaction of less than 50,000, which is not an astonishing figure
because table 4.4 shows that 53.4 percent respondents are employees. Most of the employees
earn less than 50,000. Second largest is 16.5 percent, it includes employee and other persons.
Third largest is 15.5 percent it covers the businessperson. Other area from 100,001 to 500,000
covers the small businesspersons, retailers, wholesalers and others.
Here, graph 4.9 gives graphical presentation of transactions executed by customers at bank.

Graph 4.9: Transactions executed by customer

4.5.10: Temporal Length of Using the Services from Bank:

In this section, researcher has given the table and graphical presentation of temporal length of
using services from bank.

56

Table 4.11: Temporal Length of Using Services


Frequency
Percent
Cumulative Percent
Less than 1 year
8
7.8
7.8
1 year
18
17.5
25.2
2 years
10
9.7
35.0
3 years
24
23.3
58.3
4 years or more
43
41.7
100.0
Total
103
100.0

Above table 4.11 shows the temporal length of using services from bank. As researcher
explained earlier in table 4.4 that most of the respondents were employee and they were doings
jobs for several years. Therefore, 41.7 percent people are those who are having their accounts
more than more years. Its means that these customers having long-term relationship with banks it
may be said that old customers. Banks should focus on the customers who are using services
from a long time. Bank should give them value added services to make them loyal. The
customers using the services from bank from 3 years are 23.3 percent. This is the second largest
group; there can be the various type of people like; employees, retailers, corporate customers and
others. The findings almost equal. New customers are very few, so bank should introduce such
products and services who inspire the customer to use the services. Here is the graphical
presentation of temporal length of using services from bank.

Graph 4.10: Temporal Length of using services from bank

57

4.5.11: Use of Internet Banking:

This section shows customers perception to use the internet banking.


Table 4.12: Use of Internet Banking
Frequency

Percent

Cumulative Percent

Yes

29

28.2

28.2

No

74

71.8

100.0

Total

103

100.0

Above table demonstrated that the most of the customers did not use internet banking and very
few of the respondents like to use internet banking. The customers should move towards internet
banking to save their time and use the modern technique of banking on their phone. Banks
should help the customers to learn internet banking that save the time of bank and customers.
There is a lot of scope to be pioneer in offering the internet banking. Here is the graphical
presentation of trend to use internet banking.

Graph 4.11: Customer perception to use the internet banking

4.5.12: Customers Perception to Use Islamic Banking:

This section shows customers perception to use Islamic banking.

58

Table 4.13: Use of Islamic Banking


Frequency

Percent

Cumulative Percent

Yes

29

28.2

28.2

No

74

71.8

100.0

Total

103

100.0

Co-incidentally the above table 4.13 having the same results that is in table 4.12. Its findings
shows that the people in Muslim country like Pakistan do not like to use Islamic banking. It is
such an astonishing figure 71.8 percent people do not use Islamic banking and the people 28.2
percent who use the Islamic banking are not satisfied with the use of Islamic banking as there are
number of barriers to adopt pure Islamic banking.

Graph 4.12: Customers perception to use Islamic banking

4.5.13: City of the Respondent:

In this section city of the respondents are given.


Table 4.14: City of Respondent
Frequency

Percent

Cumulative Percent

Lahore

28

27.2

27.2

Gujranwala

56

54.4

81.6

Gujrat

13

12.6

94.2

Sialkot

5.8

100.0

103

100.0

Total

59

Above table shows city of respondents. Researcher has selected four major cities of the Punjab
that is more reliable for research point of view. Most of the respondents belong to Gujranwala
and Lahore. Lahore is capital of province Punjab. Rest of the respondents belong to Gujrat and
Sialkot. Here is the graphical presentation 4.13 of cities.

4.5.14: Number of Accounts in Use:

In this section number of accounts using by customer given.


Table 4.15: Number of Accounts in Use
Frequency

Percent

Cumulative Percent

65

63.1

63.1

33

32.0

95.1

1.0

96.1

2.9

99.0

5 or more

1.0

100.0

Total

103

100.0

Above table demonstrated that most of the customers use one account and very few of them have
two accounts and only 4.9 percent people who have more than two accounts in different or same
bank. Here the following is graphical representation of number of accounts in use.

60

Graph 4.14: Number of accounts in use

4.5.15: Type of Bank Account:

Given table 4.16, 4.17, 4.18, 4.19 showing the types of bank account.
Table 4.16: Current Account
Frequency Percent Cumulative Percent
Yes 70
68.0
68.0
No 33
32.0
100.0
Total 103
100.0

Yes
No
Total

Table 4.17: Saving Account


Frequency Percent
Cumulative Percent
30
29.1
29.1
73
70.9
100.0
103
100.0

Yes
No
Total

Table 4.18: Corporate Account


Frequency
Percent
Cumulative Percent
6
5.8
5.8
97
94.2
100.0
103
100.0

Yes
No
Total

Table 4.19: Joint Account


Frequency
Percent
Cumulative Percent
3
2.9
2.9
100
97.1
100.0
103
100.0

61

Above tables 4.16, 4.17, 4.18 and 4.19 demonstrates that most of the customers use current
account as compare to other three. Pakistan is an Islamic country, so most of the customer
prefers interest free banking. Therefore, banking is moving towards Islamic banking but it takes
time. Few of the respondents were businesspersons who have the corporate account and the joint
account also to operate in organization. Some respondents have saving account to save their
future; some of them are employees and retailers.

4.6: Findings of RO 1 Important Dimensions of Price Satisfaction:

First research objective of this dissertation was toanalyse the important dimensions of price
satisfaction in banking industry of Pakistan. Researcher has designed a questionnaire to collect
data from customers of banking industry of Pakistan. Data has been collected related to six price
dimensions. These are price reliability, price confidence, price transparency, relative price, price
quality ratio and price fairness. In each dimension researcher asked various questions.
Researcher used factor analysis method to indicate important factors from each dimensions.
According to Harrington (2008), factor analysis is a multivariate technique which can be used for
data reduction. Main purpose is to use factor analysis is to extract the important factors from
number of factors. This technique helped researcher in reducing less important variables and
extract other more important variables. Harrington (2008) highlighted that while applying factor
analysis, researcher should check the assumptions of Kaiser-Meyer-Olkin measure of sample
adequacy and Bartlets test of sphericity. The Kaiser-Meyer-Olkin value should be near to 0.7
and Bartlets test of sphericity value should less than 0.005. Further more, the researcher can take
interest in table of total variance. This table shows the individual importance as well as if they
combined.
Rotated components matrix table is in interest of researcher, which shows label of extracted
factors. Normally a high value of rotation will be the extracted factor. The given below details
are about factor loading.

62

4.6.1: Factor Loading of Price Reliability:

Table 4.20 given below gives values of KMO and Bartletts Test of Sphericity for price
reliability in banking sector.
Table 4.20: KMO and Bartlett's Test Price Reliability
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.666
Approx. Chi-Square
141.141
Bartlett's Test of Sphericity
Df
6
Sig
.000

Above table, 4.20 showed the KMO and Bartlett's test results of factor loading of price
reliability. Values of these two assumptions conform to required values (KMO should be close to
0.7 and Bartletts should be less than 0.005). These values encouraged researcher to proceed
further with analysis.

Table 4.21: Total Variance Explained Price Reliability


Component
Extraction Sums of Squared Loadings
Total % of Variance
Cumulative %
1
2.395
59.867
59.867
2

Above table shows number of extracted factor individually. It showed that researcher applied
the factor loading technique on 4 factors of price reliability and one factor was extracted by
factor analysis. Variance of extracted factor was 59.867 percent. Factor loading identified 59.867
percent important variable and reduce the variable having 40.133 percent. It shows that
management should increase more than half importance to give importance on remaining 40.133
percent.

Table 4.22: Component Matrix Price Reliability


Price changes communicated properly

1
.828

Price changes communicated timely


There are no hidden costs

.854
.764

Prices and conditions do not change unexpectedly

.629

63

The above table indicated extracted factor of price reliability. This table reveals that the second
factor Price changes communicated timelyhave thelargest value .854.
4.6.2: Factor Loading of Price Confidence:

Table 4.23 given below gives values of KMO and Bartletts Test of Sphericity for price
confidence in banking sector.

Table 4.23: KMO and Bartlett's Test Price Confidence


Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.702
Approx. Chi-Square
107.261
Bartlett's Test of Sphericity
df
6
sig
.000

Above table, 4.23 showed the KMO and Bartlett's test results of factor loading of price
confidence. Values of these two assumptions met the required values (KMO should be close to
0.7 and Bartletts should be less than 0.005). These values encouraged researcher to proceed
further.
Table 4.24: Total Variance Explained Price Confidence
Component
Extraction Sums of Squared Loadings
Total % of Variance
Cumulative %
1
2.334
58.351
58.351
2

Above table showed number of extracted factor individually. It shows that researcher applied the
factor loading technique on 4 factors of price reliability, 1 factor was extracted by SPSS.
Variance of extracted factor was 58.351 percent. Factor loading identify 59.867 percent
important variable and reduce the variable having 41.649 percent. It shows that management
should increase more than half importance to give importance on remaining 41.649 percent.

64

Table 4.25: Component Matrix Price Confidence


I can count on my customer advisor to find the best price for me.

1
.730

Bank keeps all promises regarding prices.


I am convinced that the prices and conditions of are favourable.

.802
.770

Prices at bank remain constantly low.

.752

The above table 4.25 indicate the extracted factor of price confidence. This table reveals that the
second factor Bank keeps all promises regarding priceshave the largest value .802.

4.6.3: Factor Loading of Price Transparency:

Table 4.26 given below gives values of KMO and Bartletts Test of Sphericity for price
transparency in banking sector.
Table 4.26: KMO and Bartlett's Test Price Transparency
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.835
Approx. Chi-Square
234.400
Bartlett's Test of Sphericity
df
10
sig
.000

Above table, 4.26 showed the KMO and Bartlett's test results of factor loading of price
transparency. Current values of these two assumptions meet the required values (KMO should be
close to 0.7 and Bartletts should be less than 0.005) these values encourage the researcher to
proceed.
Table 4.27: Total Variance Explained Price Transparency
Component
Extraction Sums of Squared Loadings
Total % of Variance
Cumulative %
1
3.207
64.134
64.134
2

Above table 4.27 shows the number of extracted factor individually. It shows that researcher
applied the factor loading technique on 5 factors of price reliability, 1 factor was extracted by
SPSS. Variance of extracted factor was 64.134 percent. Factor loading identify 59.867 percent
important variable and reduce the variable having 35.866 percent. It shows that management
should increase more than half importance to give importance on remaining 35.866 percent.
65

Table 4.28: Component Matrix Price Transparency


All price components are clear, comprehensible and understandable

1
.838

Price information is complete, correct and frank

.833

Price information is understandable and comprehensible


I am properly informed about the prices of the services

.864
.802

I know what I pay and what I get

.649

The above table 4.28 indicate the extracted factor of price transparency. This table reveals that
the third factor Price information is understandable and comprehensiblehave the largest value
.864.

4.6.4: Factor Loading for Relative Price:

Table 4.29 given below gives values of KMO and Bartletts Test of Sphericity for relative price
in banking sector.
Table 4.29: KMO and Bartlett's Test Relative Price
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.852
Approx. Chi-Square
283.055
Bartlett's Test of Sphericity
Df
15
Sig
.000

Above table, 4.29 showed the KMO and Bartlett's test results of factor loading of relative price.
Current values of these two assumptions meet the required values (KMO should be close to 0.7
and Bartletts should be less than 0.005) these values encourage the researcher to proceed.

Table 4.30: Total Variance Explained Relative Price


Component
Extraction Sums of Squared Loadings
Total % of Variance
Cumulative %
1
3.659
60.983
60.983
2

Above table shows number of extracted factor individually. It shows that researcher applied the
factor loading technique on 6 factors of price reliability, 1 factor was extracted by SPSS.
Variance of extracted factor was 60.983 percent. Factor loading identify 59.867 percent
66

important variable and reduce the variable having 39.017 percent. It shows that management
should increase more than half importance to give importance on remaining 39.017 percent.

Table 4.31: Component Matrix Relative Price


I believe the offer made by bank are better offer as compared to other banks
Terms and conditions of bank are better tailored to my needs than terms and
conditions of other banks
Terms and conditions of bank are better than those of other banks are.

1
.713
.847
.735

I am convinced that my bank is the best choice

.805

My bank guarantees the lowest prices

.803

My bank allows considerable discounts

.775

The above table 4.31 indicate the extracted factor of relative price. This table reveals that the
third factor Terms and conditions of bank are better tailored to my needs than terms and
conditions of other banks have the largest value .847.

4.6.5: Factor Loading for Price-Quality Ratio:

Table 4.32 given below gives values of KMO and Bartletts Test of Sphericity for price-quality
ratio in banking sector.
Table 4.32: KMO and Bartlett's Test Price-Quality Ratio
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.786
Approx. Chi-Square
126.140
Bartlett's Test of Sphericity
Df
10
Sig
.000

Above table, 4.32 showed the KMO and Bartlett's test results of factor loading of price-quality
ratio. Current values of these two assumptions meet the required values (KMO should be close to
0.7 and Bartletts should be less than 0.005) these values encourage the researcher to proceed.
Table 4.33: Total Variance Explained Price Quality Ratio
Component
Extraction Sums of Squared Loadings
Total % of Variance
Cumulative %
1
2.588
51.756
51.756
2

67

Above table 4.33 shows the number of extracted factor individually. It shows that researcher
applied the factor loading technique on 5 factors of price reliability, 1 factor was extracted by
SPSS. Variance of extracted factor was 51.756 percent. Factor loading identify 59.867 percent
important variable and reduce the variable having 48.244 percent. It shows that management
should increase more than half importance to give importance on remaining 48.244 percent.
Table 4.34 Component Matrix Price-Quality Ratio
Price and quality meet my needs
I get a good price-quality ratio

1
.749
.755

The prices I pay are fair

.807

I have the impression that I know what I am paying for

.732

The prices I pay depend on how much I use certain services

.814

The above table 4.34 indicate the extracted factor of price quality ratio. This table reveals that the
third factor The prices I pay depend on how much I use certain serviceshave the largest value
.814.

4.6.6: Factor Loading for Price Fairness:

Table 4.35 given below gives values of KMO and Bartletts Test of Sphericity for price fairness
in banking sector.
Table 4.35: KMO and Bartlett's Test Price Fairness
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.761
Approx. Chi-Square
120.145
Bartlett's Test of Sphericity
df
6
sig
.000

Above table showed KMO and Bartlett's test results of factor loading related to price fairness.
Current values of these two assumptions meet the required values (KMO should be close to 0.7
and Bartletts should be less than 0.005) these values encourage the researcher to proceed.

68

Table 4.36: Total Variance Explained Price Fairness


Component
Extraction Sums of Squared Loadings
Total % of Variance
Cumulative %
1
2.440
60.989
60.989
2

Above table 4.36 shows the number of extracted factor individually. It shows that researcher
applied the factor loading technique on 4 factors of price reliability, 1 factor was extracted by
SPSS. Variance of extracted factor was 60.989 percent. Factor loading identify 59.867 percent
important variable and reduce the variable having 39.011 percent. It shows that management
should increase more than half importance to give importance on remaining 39.011 percent.

Table 4.37: Component Matrix Price Fairness


I do not get worse terms and conditions than others for the same service

1
.844

Terms and conditions are affordable for everyone, independently of income

.771

Credit transactions do not cause abnormally high interest rates


My bank does not take advantage of me

.848
.643

The above table 4.37 indicate the extracted factor of price quality ratio. This table reveals that the
third factor Credit transactions do not cause abnormally high interest rateshave the largest
value .848.

4.6.7: Mean Score of Extracted Factors:

Summary of extracted factors table 4.31 is given. Mean score of each extracted factor
was compute to analyse further.

Sr. #
1
2
3
4

Category
Price Reliability
Price Confidence
Price Transparency
Relative price

5
6

Price-Quality Ratio
Price Fairness

Table 4.31: Summary of Extracted Factors


Extracted Factor
Price changes communicated timely
Bank keeps all promises regarding prices.
Price information is understandable and comprehensible
Terms and conditions of bank are better tailored to my needs than terms and
conditions of other banks
The prices I pay depend on how much I use certain services
Credit transactions do not cause abnormally high interest rates

69

Table 4.32 given bellow shows the summary of mean score of extracted factors.
Sr.
#
1
2
3
4
5
6

Table 4.32: Mean Summary of Extracted Factors


Extracted Factor
Price changes communicated timely
Bank keeps all promises regarding prices.
Price information is understandable and comprehensible
Terms and conditions of bank are better tailored to my needs than terms and
conditions of other banks
The prices I pay depend on how much I use certain services
Credit transactions do not cause abnormally high interest rates

Mean Score
4.03
3.92
3.83
3.64
3.98
3.75

4.7: Findings of RO 2 Analyse the Customer Satisfaction From Price


Satisfaction:

The given table 4.33 is the comparison of mean score of importance and satisfaction for
extracted factors.

Sr.#
1
2
3
4
5
6

Table 4.33: Comparison of Mean Score of Importance and Satisfaction for Extract Factors
Mean
Mean
Factor
Importance
Satisfaction
Price changes communicated timely
4.03
2.85
Bank keeps all promises regarding prices.
3.92
2.93
Price information is understandable and comprehensible
3.83
2.72
Terms and conditions of bank are better tailored to my needs than
3.64
2.49
terms and conditions of other banks
The prices I pay depend on how much I use certain services
3.98
2.54
Credit transactions do not cause abnormally high interest rates
3.75
2.74

The above table demonstrated analysis of the mean score of importance and satisfaction of the
customer. Mean of importance is 4.03 and mean satisfaction is 2.85 for factor number one Price
changes communicated timely. Value of importance and satisfaction shows that there is gap of
1.18. Its means that the factor one has more importance in price reliability dimension, but the
satisfaction level is comparatively low. Bank should make such strategies to increase the
customer satisfaction; bank may install such type of softwares with the help of IT specialists

70

that automatically send the new information to the customer. It is a less expensive and advanced
way to provide information.
Moreover, table 4.33 shows mean score of second factor Bank keeps all promises regarding
prices for importance is 3.92 and for satisfaction is 2.93. There is gap between importance and
satisfaction is 0.99. There may be the problem with customer to understand the prices. This value
shows that the customer give more importance to factor 2 Bank keeps all promises regarding
prices of price confidence rather than other factors. However, the satisfaction mean is not
desired value. This gap can be reduce by adopting some techniques. Bank should provide full
details of price of their products and services. However, customer did not perceive any
misconception. Another thing is that provide complete information to customer before using the
services or products.
Further to this, table 4.33 showed mean score of third extracted factor Price information is
understandable and comprehensible of price transparency, its importance is 3.83 and
satisfaction is 2.72. The gap between both values is 1.11. Generally, customer wants to know the
price information, which should be easily understandable to the customer. Banks do not have the
same type of customers, the gender, education, profession and their frequency to use the bank
can be the different. So that every customer did not perceive the same information. There is lots
of business, economic and cost terms used to highlight the prices. Not every term is
understandable by the customer, so that the bank should adopt such customized methods to
satisfy their customer. Bank also can offer the various products or services according to their
customers nature.
Moreover, table 4.33 showed mean scores for terms and conditions of bank are better tailored to
my needs than terms and conditions of other banks which is the fourth extracted value from
relative price dimension. Its mean score of importance is 3.64 and satisfaction is 2.49. There is
gap between these values which is of 1.15. Customers are highly expecting that bank tailor
customer needs. It shows that customers want customization. To tailor the needs of every
customer is not possible. However, bank can make some strategies by categorizing the customer
in various sector e.g. offer the services all employees that should be different from the services
provided businessperson and from students.

71

Moreover, table 4.33 shows mean scores for prices I pay depend on how much I use certain
services is the fifth extracted factor of price-quality ratio dimension. Value of mean score of
importance is 3.98 and the 2.68 is for satisfaction. There is gap of 1.44 between both values. This
factor shows that customers wants to pay according to use of services but the reality is opposite.
Every time they use services, they pay same as previous. Here, customers wants to get such
services in which they use services more and more and prices should be reduce according to
transaction.
Likewise, mean scores of credit transactions do not cause abnormally high interest rates is the
sixth extracted factor of price fairness dimension. The mean score is 3.75 of its importance and
the 2.74 for its satisfaction. The gap between both values is 1.01. This extracted value shows that
customers are willing to pay less interest on their credit transactions. World is moving towards
online banking and use plastic (dr/cr card) money to remain safe from any inconvenience. Most
of the customers use the credit cards to pay at the time of shopping. Banks provide the service as
an agent and pay the money at the behalf of customer but after charge interest.

4.8: Findings of RO 3Influence of Different Dimensions of Price Satisfatcion


on Overall Customer Satisfaction:
Third research objective was to analyse influence of different dimensions of price satisfaction on
overall customer satisfaction. These independent dimensions are price reliability, price
confidence, price transparency, relative price, price-quality ratio and price fairness. For this
objective, researcher used regression analysis to analyse impact of six price dimensions on
overall customer satisfaction. Dependent factor was overall satisfaction of customer.

72

4.8.1: Regression Analysis:


Table 4.34: Descriptive Statistics
Factors
Please indicate your overall level of satisfaction of bank

Mean
3.52

Std. Deviation
.906

N
103

Price changes communicated timely

2.85

1.240

103

Bank keeps all promises regarding prices.

2.93

1.254

103

Price information is understandable and comprehensible

2.72

1.232

103

Terms and conditions of bank are better tailored to my needs than terms and
conditions of other banks

2.49

1.170

103

The prices I pay depend on how much I use certain services

2.54

1.170

103

Credit transactions do not cause abnormally high interest rates

2.74

1.180

103

Above table shows mean values of customer price satisfaction of six price dimensions. Whereas
values of standard deviation were high and did not meet required standards.

73

Table 4.35: Correlations

Terms and
conditions
of bank are
better
Price
tailored to
Please
information my needs
indicate
is
than terms
your overall Price
Bank keeps understand and
level of
changes
all promises able and
conditions
satisfaction communica regarding comprehens of other
of bank
ted timely prices.
ible
banks

Credit
transactions
The prices I do not
pay depend cause
on how
abnormally
much I use high
certain
interest
services
rates

Please indicate your


overall level of
1.000
satisfaction of bank

.243

.290

.415

.201

.302

.304

Price changes
communicated
timely

1.000

.580

.429

.509

.359

.409

Bank keeps all


promises regarding .290
prices.

.580

1.000

.451

.557

.413

.399

Price information is
understandable and .415
comprehensible

.429

.451

1.000

.476

.339

.455

Terms and
conditions of bank
are better tailored to
.201
my needs than terms
and conditions of
other banks

.509

.557

.476

1.000

.364

.413

The prices I pay


depend on how
much I use certain
services

.302

.359

.413

.339

.364

1.000

.559

.304

.409

.399

.455

.413

.559

1.000

Credit transactions
do not cause
abnormally high
interest rates

.243

Above table gave correlation, demonstrated correlation of independent variable is very high. It
means that change in one variable will cause to change in other associated variable as well as
dependent variable. So that was difficult to find out that percentage change in dependent
variable is due to which variable and how much.

74

Table 4.36: Model Summary


Model
1

R
.463

R Square
.214

Adjusted R Square
.165

Std. Error of the Estimate


.828

Above table presented model summary. The value of R square is the figure of interest to
researcher. The value of R square is .214 that shows the model is 21.4 percent is accurate. To
proceed further with these values will cause the less accurate findings.
Table 4.37: ANOVA
1

Model
Regression

Sum of Squares
17.904

Df
6

Mean Square
2.984

Residual

65.785

96

.685

Total

83.689

102

F
4.355

Sig.
.001a

Above table 4.37 presents the findings of ANOVA. Last column of this table 4.37 shows the
significance value. Which should be less than 0.005. This model indicates that this model is
significant for researcher to develop regression equation.

Table 4.38: Coefficients


Unstandardized Coefficients
1

Model
(Constant)

Standardized
Coefficients

B
2.386

Std. Error
.264

Beta

t
9.025

Sig.
.000

PR

.010

.086

.013

.113

.910

PC

.075

.089

.104

.842

.402

PT

.243

.082

.331

2.963

.004

RP

-.078

.092

-.101

-.851

.397

PQR

.108

.088

.140

1.234

.220

PF

.054

.091

.070

.594

.554

Table 4.38 is given to develop given below regression equation.


Customer Satisfaction = 2.380 + 0.010 PR + 0.075 PC + 0.243 PT - 0.078 RP + 0.108 PQR +
0.54 PF

75

The findings of regression model shows that value of PC 0.075 and PQR 0.108 are reliable and
researcher drop other data and proceed with PC and PQR values by applying again regression
technique on both dimensions.

4.8.2: Regression Analysis:

The given table provide the values of descriptive statistics.


Table 4.39: Descriptive Statistics
Factors
Please indicate your overall level of satisfaction of bank

Mean
3.52

Std. Deviation
.906

N
103

Price information is understandable and comprehensible

2.72

1.232

103

The prices I pay depend on how much I use certain services

2.54

1.170

103

Above table gave descriptive statistics and it gave mean values of customer price satisfaction of
two important price dimensions. Where as the values of standard deviation meet the said
standard. These values are reliable for researcher to proceed further.

76

Table 4.40:
Correlations

Please indicate your


overall level of
satisfaction of bank

Terms and
conditions of
bank are
Price
better
Please
information tailored to
indicate
is
my needs
your overall Price
Bank keeps understanda than terms
level of
changes
all promises ble and
and
satisfaction communicat regarding
comprehensi conditions of
of bank
ed timely
prices.
ble
other banks

The prices I
pay depend
on how
much I use
certain
services

Credit
transactions
do not cause
abnormally
high interest
rates

1.000

.243

.290

.415

.201

.302

.304

Price changes
.243
communicated timely

1.000

.580

.429

.509

.359

.409

Bank keeps all


promises regarding
prices.

.290

.580

1.000

.451

.557

.413

.399

Price information is
understandable and .415
comprehensible

.429

.451

1.000

.476

.339

.455

Terms and conditions


of bank are better
tailored to my needs
.201
than terms and
conditions of other
banks

.509

.557

.476

1.000

.364

.413

The prices I pay


depend on how
much I use certain
services

.302

.359

.413

.339

.364

1.000

.559

.304

.409

.399

.455

.413

.559

1.000

Credit transactions do
not cause abnormally
high interest rates

Above table 4.40 of correlation, demonstrate that the correlation of independent variable is very
high its mean that change in one variable will cause to change in other associated variable as
well as dependent variable. So that researcher was selected the less correlated values being bold
in the above table.

Table 4.41: Model Summary


Model
R
a
1
.449

R Square
Adjusted R Square
.201
.185

77

Std. Error of the Estimate


.817

The 4.41 table of model summary shows the R square values, which is more reliable among 28
variables. These both have the value of 20.1 percent that is reliable and researcher can proceed
further with these values.
Table 4.42: ANOVA
Model
1
Regression

Sum of Squares Df
16.861
2

Mean Square
8.430

Residual

66.829

100

.668

Total

83.689

102

F
12.615

Sig.
.000a

Above table presented findings of ANOVA. Last column of this table 4.44 showed significance
value, which should be less than 0.005. This model indicated that this model is significant for
researcher to develop regression equation.

Table 4.43: Coefficients


Standardized
Unstandardized Coefficients Coefficients
Model
1

Std. Error
.231

Beta

(Constant)

B
2.459

t
10.636

Sig.
.000

PT

.259

.070

.353

3.716

.000

PQR

.141

.074

.183

1.922

.057

Table 4.43 is given to develop given below regression equation.


Customer Satisfaction = 2.459 + 0.259 PT +0.141 PQR
Above table indicated findings of regression analysis are Price Transparency (PT) and PriceQuality Ratio is important variables of price dimension. Banks should pay their full attention on
these extracted factors. Furthermore, extracted factors should ensure reliability. These two
factors of price dimensions have the impact on customer satisfaction, so the banking
organizations should be careful about these factors and pay more attention on these two factors
to make their customers satisfied.

78

4.9: Summary of Chapter:

This section gave the summary of the chapter of this research. The reliability and validity of the
data presented at the start of the chapter, which shows the authenticity of the data. Factor loading
technique has been adopted to extract important factors. These factors were related to different
constructs including price reliability, price confidence, price transparency, relative price, pricequality ratio and price fairness. However, regression analysis shows values were not significant
to proceed further. The important factors identified from the correlation table were less
correlated with each other. After identifying important variables, equation was developed by the
researcher. The important variables were Price information is understandable and
comprehensible and The prices I pay depend on how much I use certain services from the
price dimension of price transparency and price-quality ratio. The researcher has selected Please
indicate your overall level of satisfaction of bank as dependent variable. In the next chapter,
conclusion and recommendations will be presented.

79

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS

5.1: Introduction:

In previous chapter, researcher discussed findings of data analysis. In this chapter, researcher
will conclude his research and will present recommendations regarding the topic and problem.
Moreover, a summary of main findings of the research will also be presented. In addition to this,
researcher will also highlight future areas of interest for research.

5.2: Concluding Remarks:

Customer is always right this quote explains various things to organizations. World is
becoming global village and organizations move towards customer satisfaction. Therefore, the
managers and the leaders make such strategies based on customer satisfaction.
The aim of this research was to analyse customers price satisfaction on overall customers
satisfaction and to analyse customers satisfaction on pricing at retail banking industry of
Pakistan. Banks should pay more attention on customer satisfaction, as this is becoming the
major problem of the bank. The repeat purchase as well positive word of mouth for organizations
is based on the customers satisfaction. It has positive impact on sales and profitability of an
organization.This results increase in market share. Performance of banking is strongly based on
satisfaction of customer. Banking customers are said to be satisfied when banks meet their
expectation level of quality service. On the other hand, dissatisfaction occurs if expectations are
not fulfilled.
First objective was to analyze the important dimensions of price satisfaction in banking industry
of Pakistan. Customer satisfaction is based on few factors in the banking sectors. The modern

80

banking is moving towards mobile or electronic banking therefore only few banks are providing
mobile banking service facility.
Second objective was to analysethe extent of customers satisfaction from dimensions of price
satisfaction in banking industry of Pakistan. Important dimensions has been extracted to analyse
the customer satisfaction.
Third objective was to analyse the influence of different dimensions of price satisfaction on
overall customers satisfaction.Customer satisfaction is not more than an act of providing enough
services acceptable by the customer. Customer satisfaction is directly dependent upon
profitability of any organization. Customer satisfaction affects reliability, reputation and success
in the banking sector.
Fourth objective was to recommend members of banking industry so that they can increase price
satisfaction of banking customer. Increase in customer satisfaction is a tough task for
organizations because of competition among organizations and change in need and wants of the
customers.

Change in the needs and wants cause deflection of the customer. The organizations

that monitor its customers needs and wants they continuously retain their customers forever.
Products and services offered by an organization should be changed with the needs and wants of
the customer.

5.3: Findings of RO 4 Recomendations to Banking Industry to Satisfy Their


Customers:

The fourth objective of this research was to recomend members of banking industry so that they
can increase price satiscfaction of banking customer in Pakistan. This section depicts various
recommendations, so that the banking industry can satisfy their customers to increse their
business and market share as well.

81

5.3.1: Recommendation 1-Price Changes Communicated Timely:

Table 4.33 revealed that, there is a gap between importance and satisfaction. The customers are
not or less satisfied from price communication services of banks. Change in prices and not
communicated in the time is issue of every customer either businessperson, employee or student.
Every day world is moving towards new inventions. Banks should improve their technology and
hire technological experts along with latest softwares. Customers data should be update every
time, so that the new information or price changes information provide to customers on their cell
phone and email.

5.3.2: Recommendation 2-Bank Should Keep All Promises Regarding Prices:

Table 4.33 revealed that, there is a gap between importance and satisfaction. Customers are not
satisfied from banks promises regarding prices. Bank should keep all promises fulfill rearding
prices and employees beware about all changes in price.

5.3.3: Recommendation 3- Price Information Should Understandable and Comprehensible:

Table 4.33 revealed that, there is a gap between importance and satisfaction. Customers are not
satisfied from price information, as they perceive it is complex to understand. Bank is a financial
institute, they use economic, business and cost terms while deciding prices. Every person have
not business qualification, so they unable to understand the decided prices. Bank should use easy
and understandable terms or language to every customer.

82

5.3.4: Recommendation 4- Terms and Conditions of Bank Should Better Tailored to


Customers Needs:

Table 4.33 reveals that, there is a gap between importance and satisfaction. Customers are not
satisfied from bank, as they did not tailor the needs of costumer. Banks have the many types of
the customers and none of them is equal according to their needs and income level. Therefore,
bank should also make the customized strategies to satisfy their customer.
5.3.5: Recommendation 5-The Prices of How Much Customer Use Certain Services:

Table 4.33 reveals that, there is a gap between importance and satisfaction. Customers are not
satisfied from bank that they do not charge price according to use of certain services. There are
the various types of customer (table 4.4) and their frequency to use the bank (table 4.3) is differ
from each other. Those customers who use bank weekly or on daily basis should have provide
some benefits according to their transactions as compare to the users who use bank very seldom
or monthly.

5.3.6: Recommendation 6-Credit Transactions Should Not Cause Abnormally High


Interest Rates:

Table 4.33 reveals that, there is a gap between importance and satisfaction. Customers are not
satisfied from banks as they charge high rate of interest on credit transactions. Interest is the way
to generate income of banks, but it is now need of the customers to use credit cards for payments.
Banks should promote credit transactions on the base of low interest to generate more business
and profits.

83

5.4: Account of Achievement of Research Objectives:

In this section, an account of achievement of research objectives will be presented.

5.4.1: Achievement of Research Objective 1:

First research objective of this research was to analyze the important dimensions of price
satisfaction in banking industry of Pakistan. The findings and analysis of this research reported
that there is 6 important price dimensions among 28, extracted by SPSS. First dimension is
Price changes communicated timely second dimension is Bank keeps all promises regarding
prices third dimension is Price information is understandable and comprehensible fourth
dimension is Terms and conditions of bank are better tailored to my needs than terms and
conditions of other banks fifth dimension is The prices I pay depend on how much I use
certain services last and sixth dimension is Credit transactions do not cause abnormally high
interest rates. Hence, researcher believes that this research objective was achieved.

5.4.2: Achievement of Research Objective 2:

Second research objective of this research was to analyse the extent of customers satisfaction
from dimensions of price satisfaction in banking industry of Pakistan. The findings and analysis
of this research reported that all the extracted price dimensions compared with the customer
satisfaction. There was huge difference between importance and price satisfaction, that
difference has been find out and measured. Hence, researcher believes that this research
objective was achieved.

84

5.4.3: Achievement of Research Objective 3:

Third research objective of this research was to analyse the influence of different dimensions of
price satisfaction on overall customers satisfaction. The findings and analysis of this research
reported that these independent dimensions are price reliability, price confidence, price
transparency, relative price, price-quality ratio and price fairness. For this objective, researcher
used regression analysis to analyse impact of six price dimensions on overall customer
satisfaction. Dependent factor was overall satisfaction of customer. Hence, researcher believes
that this research objective was achieved.

5.4.4: Achievement of Research Objective 4:

Fourth research objective of this research was to recommend members of banking industry so
that they can increase price satisfaction of banking customer. The findings and analysis of this
research depicts various recommendations, so that the banking industry can satisfy their
customers to increse their business and market share as well. Hence, researcher believes that this
research objective was achieved.

5.5: Suggested FutureResearch Areas:

Here are some suggestions for future research.


1- Researcher suggests that all limitations of the research, which were identified earlier in
this report, should be overcome in future researches.
2- The researcher should select other cities to test the findings of this research paper.
3- The researcher should select one of more banking products and should evaluate
customers satisfaction for that and apply this research methodology on it.

85

5.6: Summary of the Chapter:

This is the fifth and last chapter of this dissertation. It presented concluding remarks and
summary of findings. The research objective four was recommendations and it was presented in
this chapter. The six recommendations were given in this chapter on the basis of extracted
factors.

86

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90

Respected Ms. / Sir

I am a student of Masters of Business Administration at University of South Asia (Lahore).

As a partial requirement to complete my MBA program degree, I am conducting a research on perception of


customers about Pricing Strategy of retail banking customers.

In this regard, I need your support in the form of responses to the questions given in the two sections in the
questionnaire. Your responses will not only help me academically but also it would support banking sector in
improving pricing offered to you. The participation in this research is entirely voluntary and you are free to leave the
research at any point of time. Moreover, whatever you will say in this questionnaire will be used for academic purpose
or for improving the pricing strategy of banking sector. Whenever required, the findings will only be reported in
aggregation only.

Please accept my heartiest gratitude in anticipation for responding to this questionnaire.

Regards.

Ihtsham Ali
Masters of Business Administration
University of South Asia
Lahore, Pakistan
Email: ihtsham_ali@yahoo.com
Phone: +92-345-6541126

91

QUESTIONNAIRE
If you are a customer of any bank and using different services and products, then fill this questionnaire. Otherwise,
return the questionnaire to Customer Service Representative of bank.

SECTION I
This section deals with your expectations of pricing of a bank. Please think about the ideal banking that would offer
best pricing and with which you would be pleased to do business. Select the best answer that reflects your feeling
about your bank. There is no right or wrong answers All I am interested in is a number that reflects your feeling
regarding bank. Please read the statements and rate them on a scale of 1 to 5, 1 being that you Not at all important
and 5 being Very Important

Sr.
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Scale

DESCRIPTION
Price Reliability
Price changes communicated properly
Price changes communicated timely
There are no hidden costs
Prices and conditions do not change unexpectedly
Price Confidence
I can count on my customer advisor to find the best price for me.
Bank keeps all promises regarding prices.
I am convinced that the prices and conditions of are favourable.
Prices at banks remain constantly low.
Price Transparency
All price components are clear, comprehensible and understandable
Price information is complete, correct and frank
Price information is understandable and comprehensible
I am properly informed about the prices of the services
I know what I pay and what I get
Relative Price
I believe the bank I visit have the same or even a better offer
Terms and conditions of bank are better tailored to my needs than terms
and conditions of other banks
Terms and conditions of bank are better than those of other banks.
I am convinced that my bank is the best choice
My bank guarantees the lowest prices
My bank allows considerable discounts
Price-Quality Ratio
Price and quality meet my needs
I get a good price-quality ratio
The prices I pay are fair
I have the impression that I know what I am paying for
The prices I pay depend on how much I use certain services
Price Fairness
I do not get worse terms and conditions than others for the same service
Terms and conditions are affordable for everyone, independently of income
Credit transactions do not cause abnormally high interest rates
My bank does not take advantage of me

92

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

5
5
5
5
5

4
4
4
4
4

3
3
3
3
3

2
2
2
2
2

1
1
1
1
1

5
5

4
4

3
3

2
2

1
1

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

5
5
5
5
5

4
4
4
4
4

3
3
3
3
3

2
2
2
2
2

1
1
1
1
1

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

SECTION II
This section deals with your satisfaction of pricing of bank. Please think about your experience at bank and share
whether your expectations about pricing have been met or not. In this regard, select the best answer that reflects
your feeling about the pricing strategy of bank. There is no right or wrong answers All I am interested in is a number
that reflects your feeling regarding bank. Please read the statements and rate them on a scale of 1 to 5, 1 being that
you Highly Dissatisfied and 5 being Highly Satisfied

Sr.
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Scale

DESCRIPTION
Price Reliability
Price changes communicated properly
Price changes communicated timely
There are no hidden costs
Prices and conditions do not change unexpectedly
Price Confidence
I can count on my customer advisor to find the best price for me.
Bank keeps all promises regarding prices.
I am convinced that the prices and conditions of are favourable.
Prices at bank remain constantly low.
Price Transparency
All price components are clear, comprehensible and understandable
Price information is complete, correct and frank
Price information is understandable and comprehensible
I am properly informed about the prices of the services
I know what I pay and what I get
Relative Price
I believe the offer made by bank are better offer as compared to other banks
Terms and conditions of bank are better tailored to my needs than terms
and conditions of other banks.
Terms and conditions of banks are better than those of other banks.
I am convinced that my bank is the best choice
Bank guarantees the lowest prices
Bank allows considerable discounts
Price-Quality Ratio
Price and quality meet my needs
I get a good price-quality ratio
The prices I pay are fair
I have the impression that I know what I am paying for
The prices I pay depend on how much I use certain services
Price Fairness
I do not get worse terms and conditions than others for the same service
Terms and conditions are affordable for everyone, independently of income
Credit transactions do not cause abnormally high interest rates
Bank does not take advantage of me

93

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

5
5
5
5
5

4
4
4
4
4

3
3
3
3
3

2
2
2
2
2

1
1
1
1
1

5
5

4
4

3
3

2
2

1
1

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

5
5
5
5
5

4
4
4
4
4

3
3
3
3
3

2
2
2
2
2

1
1
1
1
1

5
5
5
5

4
4
4
4

3
3
3
3

2
2
2
2

1
1
1
1

SECTION III
1)

Please mention your name ______________________________________________

2) Gender
Male
Female

3) Please indicate how often do you come for use the bank?
Daily
Once in a week
Once in a Month

Very seldom

4) Please indicate what do you do?


Student
Businessman

Employee

5) Please indicate which type of customer are you?


Household
Retailer

Manufacturer

6) Please indicate the level of your current academic qualification.


Under Matric Matric FA/FSc/ICom Graduation
Masters

PhD

Profession Qualification

7) Please indicate how old are you?


Less than 20 years
21 to 25
41 to 45

26 to 30

46 to 50

31 to 35

51 to 55

36 to 40

56 to 60

61and above

8) Please indicate your overall level of satisfaction of bank. (Tick whichever is applicable)
Highly dissatisfied
Dissatisfied
Normal
Satisfied
Highly Satisfied

9) Please indicate whether you will continue to use services from the bank?
Never
Perhaps never Indifferent
will use
definitely use

10) Please indicate the amount of transactions (in RS) that you generally execute at bank?
Less than 50,000
50,001 to 100,000
10,001 to 150,000
150,001 to 200,000

200,001 to 250,000

300,001 to 350,000

350,001 to 400,000

400,001 to 450,000

450,001 to 500,000

More than 500,000

11) Please indicate from how long have you are getting services from bank?
Less than 1 year
1 year 2 years
3 years
4 years or more

94

12) How often do you visit bank?


Daily Thrice a week Once a week
As and when required

Once a fortnight once a month

Other

13) Please indicate if you use internet banking?


Yes
No

14) Please indicate if you use Islamic banking?


Yes
No

15) Please indicate city in which you live?


Lahore
Gujranwala
1

Gujrat

Sialkot

16) How many banks accounts do you have?


2
3
4
5 or more

17) Please indicate type of bank account that you have with your banks. (tick all which are applicable )
Current account
Saving account Corporate account Joint account Others

18) Please indicate type of bank service do you use. (tick all which are applicable)
Money account
ATM card Credit card
Locker Money transfer
Loan

Letter of credit

Other 1, please indicate

Thanks for your support and time

95

Other 2, please indicate

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