S. R.

Luthra Institute
of Management
A Study To Analyse about Service Quality
Dimension, Customer Satisfaction and Customer
Loyalty at AXIS BANK LTD.
By Sagar M Pastagia
Enrollment no.: 157500592066

INTRODUCTION
Service Quality
It is a comparison of expectation about a service
with performance.
Assessment of how well a service is delivered.

SERVQUAL model
Dimensions of SERVQUAL

Tangibles
Reliability
Responsiveness
Empathy
Assurance

Customer Satisfaction
Difference between the value of the product
& services which the customer receives
from that the cost which they incurred for
purchasing.
The higher or lower satisfaction will
depends upon the quality of brand offered
by a company.

Customer Loyalty
The degree to which a customer shows
repeated purchasing from the same service
provider, possesses positive attitudes.
Visits the same service providers whenever
there arises a need/demand for similar
services.
Consistently purchasing a same product or
purchasing from same brand.

INTRODUCTION TO
INDUSTRY

Financial institution & Financial intermediary

Accepts deposits and Lends Money.

A bank connects customers that have

capital deficits to customers with capital
surpluses.

Global level
The global financial system suffered a
profound and traumatic shock in September
2008.
It was due to collapsing of US investment
bank Lehman Brothers.
Dried Credit up facilities.
Stricter banking rules.

National level

Lifeline & development of nation

The Reserve Bank of India is the central

bank of the country, which aims at:
Issuing of currencies
Maintaining reserves
Securing monetary stability

Public Sector, Private Sector & Cooperatives bank.

State level

Business oriented culture

Continuous government support

Cost & Quality of living

Challenges
Rural markets
Increased competition
Risks
High NPAs
Difficulty in maintaining reserve
requirements & liquidity

PESTEL Analysis

Political Factors
Favorable and stable political environment
Unstable political environment
FDI limits

Indian banking sector is least affected due

to the robust policy of RBI.

Economical Factors
Economic conditions
Inflation rates
Economic policies

Socio-Culture Factors
Increase in population
Literacy rate

Technological Factors
Branch banking to Anywhere banking
Continuous Advancement

Legal Factors
RBI laws & regulations
Various rates
Balance between stict & liberal policies

Current Trends
Internet/Mobile Banking
Products & Business collaborations
NRI banking
Cross selling
EFTs
ECS
FDI

Major Players
Nationalized
Banks

Private Banks

Co-operatives

Foreign Banks

SBI

ICICI Bank

Surat Mercantile

Standard
Chartered

PNB

HDFC Bank

Panchsheel
Mercantile

CitiBank

BOM

Axis Bank

AkhandAnand

Deutsche Bank

BOB

Yes Bank

Varachha

HSBC

Canara Bank

Induslnd Bank

Surat Peoples

Dena Bank

Kotak Mahindra
Bank

Surat National

Syndicate Bank

Dhanlakshmi
Bank

Surat District

Major Offerings
Personal & Corporate Banking
Priority banking
RTGS/NEFT
Demand Draft
CDM
Forex
Locker Facilities
Investments Facilities
Loan Facilities

COMPANY PROFILE
In 1993, with the name UTI Bank
Promoted by

Specified Undertaking of Unit Trust of India

(SUUTI),
Life Insurance Corporation of India (LIC),
General Insurance Corporation of India (GIC),

National Insurance Company Ltd.,

The New India Assurance Company Ltd.,
The Oriental Insurance Company Ltd. and
United India Insurance Company Ltd.

In 2007, UTI bank renamed to Axis Bank.

Various Business Segments:

Retail Banking
Delivering through multiple channels
Long term relationships

Corporate Banking
Customized service

CSR Activities:
Axis Bank Foundation (ABF)
1% of its net profit annually
It identifies right target group and ensures
that support reaches beneficiary.
Supports NGOs

Organogram

Divisions
Operations
Sales
Clearing

Market Positions
3rd largest private sector bank
About 13000 ATMs
Largest issuer of Debit Card
Over 2 lakhs EDCs machines

Few of Review of
Literature

Inamullah (2012)
Customer loyalty is the willingness of a
consumer to purchase and continuing the
same profitable relationship with a
particular company

Reichheld and Sasser (1990)

Stated that if firms reduce their 5%
customer defections then their profits
improved from 2% to 8%.

Rust & Zahorik, 1993

Customer satisfaction is positively related to
customer loyalty and organizational profits.

Vesel & Zabkar, 2009

Consumer loyalty is a behavior of a
consumer, which shows the willingness to
repurchase from a company and continuing
the relationships with them in future.

Gerpott, Rams & Schindler, 2001

The higher or lower satisfaction will
depends upon the quality of brand offered
by a company

Guo, Xiao & Tang, 2009

Customer satisfaction is the very important
for the company for retaining the existing
customers

Siddiqi (2010) found that service quality is

positively correlated with customer
satisfaction;
Empathy having the highest positive
relation with customer satisfaction, which
was followed by Assurance and Tangibility.
On the other hand, Lo, Osman, Ramayah
and Rahim (2010) found that Assurance
and Empathy has the highest impact on
customer satisfaction.
While Reliability has the highest impact on
customer satisfaction according to Arasli,
Smadi and Katircioglu (2005)

Parasuraman, Zeithaml and Berry

(1985) proposed the model for determining
Service Quality which was SERVQUAL model

(Angur et al., 1999)

All dimensions are not equally important for
explaining variances in overall service
quality. The most vital dimensions were
responsiveness and reliability, followed by
the empathy and tangible; assurance was
least important in banking industry

RESEARCH METHODOLOGY

Problem Statement
The main need of this study is to determine
the relationship between Service Quality,
Customer Satisfaction & Customer Loyalty in
retail banking sector.

Research Problem
To understand whether Service Quality affect
customer satisfaction or not and
To understand the impact of customer satisfaction
on customer loyalty.

Research Objectives

Primary Objective
To study the relationship between Service quality
dimensions and customer satisfaction and to analyze
the association between customer satisfaction &
customer loyalty.

Secondary Objectives
To study about the customer satisfaction.
To study the relationship between number of
products customer uses with Customer Loyalty
To study whether the satisfaction is affected by
priority account.

Hypothesis

Service Quality dimensions will have

significant prediction on Customer Satisfaction
Service Quality dimensions will have
significant prediction on Customer Loyalty
Customer satisfaction will have significant
prediction on customer loyalty
Priority Account has significant & positive
relation with Satisfaction
No. of products used by customer has positive
& significant relation with Loyalty.

Research Design

Type of Design
Descriptive Research Design

Data Collection
Primary data: Personal interview approach
Instrument: Questionnaires

Secondary Data
For the secondary data, use of the available
literature and other relevant publications has
been made to find out the theoretical framework

Sampling Plan

Target population:
Any individual who uses any services of Axis Bank
is a target population for this study.

Sample population:
Account holders of Axis bank in Adajan branch,
Surat

Sample size:
Responses from 200 Account holders

Sampling method:
Non-Probability Convenience sampling.

Data Analysis Tools &

Techniques

The statistical techniques used for analyzing

this study include:

Regression Analysis
Chi-Square Test
Cross tabulation
Frequency distribution
Reliability Test

Data interpretation and analysis by using

Microsoft Excel 2007 and SPSS version 15.

DATA ANALYSIS &

INTERPRETATION

Respondents Profile
Gender

female; 27%

Male; 73%

Male

female

Age

31 to 50 years; 49%

Above 50 years; 13%

Minor; 1%

18 to 30 years; 39%

Educational Qualification

Post Graduate; 28; 14%

Graduate; 112; 56%
Doctorate; 4; 2%

Under Graduate; 56; 28%

Income

5 lakhs to 10 lakhs; 55; 28%

10 lakhs to 15 lakhs; 12; 6%

More than 15 Lakhs; 4; 2%

Less than 5 lakhs; 129; 65%

Less than 5 lakhs

5 lakhs to 10 lakhs

10 lakhs to 15 lakhs

More than 15 Lakhs

Occupation

House-wife; 30; 15%

Salaried; 70; 35%
Student; 14; 7%
Retired; 6; 3%
Others; 11; 6%

Businessmen; 69; 35%

Businessmen

Salaried

House-wife

Student

Retired

Others

Products/Service usage by
Respondents
14
27
63
16
43
62
23
17
21
7
41
156

No. of Products/Services used

65
58

41

14

16

Priority Account

Yes 41 21%

No 159 80%

Yes

No

Duration of using products/services of Axis

Bank
73

45

42

40

Tangibles
108

103
85

79

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

69
47
35
25

18

23
8

0 0

0 0

Reliability
117

116
99
86

77

75

79

72

34

26
6
0 Strongly
0
Agree
Disagree

11
1

1
0
0 Neutral
Agree
Strongly Disagree

0 0

Responsiveness
99

98
86

93

64

57
43

38
21
1
0 Agree
Strongly
Disagree

Agree 0 0
Strongly Disagree

Neutral

Empathy
105

105
82

74
65

62
53
31
8
0 Agree
Strongly
Disagree

13
2
Agree 0 0
Strongly Disagree

Neutral

Assurance
112
96

91 93

78
55
33

25
16
1
0 0 Agree
Strongly
Disagree

0
Agree
Strongly Disagree

Neutral

Customer Satisfaction
142

134

44

39
22

0
0 Satisfied
Highly Satisfied
Dissatisfied
Highly Dissatisfied

19
0
Neutral

Customer Loyalty
118
99
87

96

84 87

81
56
28

26

14

23

1
0 Definitely
0
Will
Probably Won't

0
Probably
Will 0 0
Can't Say
Definitely Won't

0 0

Reliability Test
Particulars

No. of Statements

Cronbachs Alpha

16

0.928

Customer Satisfaction

0.708

Customer Loyalty

0.816

22

0.932

SERVQUAL

Overall Reliability

Regression Analysis:
Tangibles with Customer
Satisfaction

Tangibles with Loyalty

Reliability with
Satisfaction

Reliability with Loyalty

Responsiveness with
Satisfaction

Responsiveness with
Loyalty

Empathy with Satisfaction

Empathy with Loyalty

Assurance with
Satisfaction

Assurance with Loyalty

Satisfaction vs. Loyalty

Chi-Square Analysis:
Priority Account & Satisfaction

No. of Products with

Loyalty

Findings from Frequency

Distribution
Most of the respondents have savings
account, Fixed/Recurring Deposits &
products like Demat account is used by very
few respondents.
Maximum respondents uses less than 3
product/services and very few respondents
uses 4 or more services.
Majority of respondents are using services
of Axis bank for more than 4 years.
The parking facility is major problem of
respondents

It was also found during the study that

majority of the respondent wants Axis Bank
to replace the Cash Depositing Machine
(CDM) as there are many problems related
with it.
Extra CDM inside and also outside the
premises which works 24 X 7.
Maintaining the minimum balance.
High service charges;Debit Card charges,
More ATM transaction charges, etc.

Telephone Banking helps in solving

problems.
Cheque Depositing Machine also reduces
their work.
Overall it can be found that they are happy
with the service of Axis Bank.

Findings from Analysis

Tangibles have weak impact on satisfaction &
Loyalty.
Reliability has moderate impact on
Satisfaction, but it has no impact on Loyalty.
Responsiveness has good impact on
Satisfaction, while it has very weak impact on
Loyalty.
Empathy has good impact on Satisfaction and
Loyalty.
Assurance also has good impact on
Satisfaction, while it has weak impact on
Loyalty.

Satisfaction have moderate impact on

Loyalty.
Strong relationship between Customer
having priority account & Satisfaction.
Stickiness of customer does not depends on
no. of products & services used.

Conclusion
Service Quality has Moderate impact on
Satisfaction and weak impact on Loyalty.
The relation between Satisfaction and Loyalty
was also moderate & can be said that
Satisfaction do not contribute much to Loyalty.
But a strong relation exists between customer
who have priority account and Satisfaction.
While, numbers of products does not stick
customer to Axis Bank Ltd.

Recommendations
Parking Facilities can be improved.
Improving Cash Depositing Machine.
Placing a Cash Depositing Machine outside
the premises.

THANK YOU