Genesis of Union Bank of India

Union Bank of India (hereon referred to as ‘UBI’ or ‘the Bank’ or ‘Union Bank’) is firmly
committed to consolidating and maintaining its identity as a leading, innovative commercial
bank, with a proactive approach to the changing needs of the society. This has resulted in a
wide gamut of products and services, made available to its valuable clientele in catering to
the smallest of their needs.

Today, with its efficient, value-added services, sustained growth, consistent profitability and
development of new technologies, Union Bank has ensured complete customer delight,
living up to its image of having “GOOD PEOPLE TO BANK WITH”.

Over the years, the Bank has earned the reputation of being techno-savvy and is a
frontrunner among public sector banks in modern-day banking trends. Having launched
Core Banking Solution in 2002, Union Bank is the first large Public Sector Banks in the
country to have all their branches on a single Core Banking platform.

The Bank, having its registered office at Mumbai, has more than 2650 branches and
extension counters which are spread across various geographical locations in the country.

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 Abstract
Understanding Consumer Behaviour on Banking & Associated Services
By
Soumyajyoti Kundu
The consumer behaviour is very important in analysing the trends of any company. The
behaviour of consumers towards a product will vary from one product to another.
Influencing the way people act in their consumption patterns is a concern that has been of
great interest of late. This has been researched in many disciplines (Pearce, 2009). One of
the factors that lead to this, is a lot of competition in the service sector. There is a need to
understand the behaviour of the consumer so that one will get the buying behaviour of
them.

1. This study reviews banking services in India from the perspective of consumers of
banking services.
2. This report aims to assimilate about the various aspects of consumer behaviour and
to know the underlying consumer cognitive tendency of preference to different core
& associated services.
3. This study concerns with the following analysis:
a. Relationship of primary bank preference with demographic details.
b. Grouping of associated services with a common cognitive tendency of
consumers and their relation with consumer details.
c. Assessment & appropriability of loan requirement preferences of consumers
& facilities/services offered from banks.
d. Understanding the consumer banking channel usage preferences.
e. Analysing customer’s branch banking motives & their unstated demands.
f. Analysis of business customer behaviour in terms of current account
preferences.
g. Perception of consumers about union bank of India with respect to other
PSU’s & Private Banks.
h. Positioning of Union bank of India with respect to other PSU’s & Private
sector banks.
4. The findings come from a completely a descriptive research, which fails to consider
all the aspects for a particular assessment. Nevertheless it could provide a strong
base to improve on the findings by means of incorporating other factors which can
be obtained from an exploratory research.
5. The main theme of this project is to make understand the needs of various tools of
statistics that should be used while diversifying & their appropriability to changing
market dynamics.

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 Aim:
Union Bank of India has a vision to become one among the top nationalized banks with
global presence. In pursuit of this goal, Bank has already established a full-fledged branch in
Hong Kong and three Representative Offices in Shanghai, Abu Dhabi and Sydney. The Bank
intends to further expand to other geographies such as Indonesia, South Africa, Middle East,
Europe, etc.

Union Bank of India intends to expand into Indonesia by acquiring a local bank and has
identified the target bank. Union Bank of India needs to conduct an analysis of consumer
behaviour to decorate its services in accordance with the consumer taste & requirements.

Objectives:
To analyse the consumer preference trends with respect to their demographic details on
different banking & allied services.

Methodology:
Initially Secondary data is used to list the services & its determining parameters on which
consumer preference depends. Again analysis guidelines were obtained from secondary
research from previous research papers & clear picture what more could be done.

Here, I have gone for a descriptive research as my primary motive was not to find the
criteria or parameters that determine or define the certain behaviour but to understand the
contribution of already defined variables on the existing services.

For this exhaustive research, Primary data is obtained from questionnaire, which is further
organised in SPSS and analysed.

MARKETING RESEARCH PROCEDURE

STAGE – 1: Problem Definition

Market mapping and understanding the buying behaviour of customers.

Market mapping would enable the company to identify potential customers across various
sectors. Understanding the buying behaviour would help foray into the parameters the mass
choose to select banks. It would also give a brand perception and brand positioning status of
Union Bank of India with respect to other PSU’s & Private Banks.

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STAGE –2: Approach to the Problem

Information needed would enlist general information about the company like:

Year of establishment: It would give a fair idea about how long the company has been in the
industry, to what extent has the customer benefits are structured and have been influenced,
choice of associated services decisions etc.

Exploratory Research parameters: These are the parameters on which the research is
carried to establish relationships & come to a meaning full interpretation of the analysis.

Market dynamics- Key factors which consumers value to select/rate a bank.

Brand perception- How the company is perceived in the eyes of the customers vis-à-vis
other competitors.

STAGE –3: Research Design Formulation:

 The scope of the project was diversified across services namely:

a) Choice of Primary Bank
b) Preference in groups of Associated services
c) Assessment on the appropriability of loan
d) Contribution of factors towards branch banking
e) Preference for current account for business customers

 The consumers targeted belong to all races, classes & categories

 Research approach- Survey

 Research Tool- Questionnaire

SAMPLE PLAN

 Sample size- 500 consumers

 Data obtained for – Primary (Questionnaire) & Secondary (Internet) Research.

 Contact method- Mailing communications, Personal Interviews & Google docs.

 Research Area- Kolkata, Berhampore

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 Analysis & Interpretation
1. Primary Bank Preference

a) Primary Bank * Age Range

Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 35.929a 4 .000
Likelihood Ratio 40.325 4 .000
Linear-by-Linear Association 27.374 1 .000
N of Valid Cases 337
a. 2 cells (20.0%) have expected count less than 5. The minimum expected count is 4.38.
Null Hypothesis: Primary bank selection is independent of age
Alternate Hypothesis: There exists a dependency.
Chi square shows a significant dependency rejecting null hypothesis.

Directional Measures
Asymp. Approx. Approx.
Value Std. Errora Tb Sig.
Nominal by Lambda Symmetric .144 .049 2.746 .006
Nominal Primary Bank
.220 .084 2.333 .020
Dependent
Age Range
.092 .043 2.038 .042
Dependent
Goodman and Primary Bank
.107 .028 .000c
Kruskal tau Dependent
Age Range
.028 .010 .000c
Dependent
a. Not assuming the null
hypothesis.

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 Directional Measures
Asymp. Approx. Approx.
Value Std. Errora Tb Sig.
Nominal by Lambda Symmetric .144 .049 2.746 .006
Nominal Primary Bank
.220 .084 2.333 .020
Dependent
Age Range
.092 .043 2.038 .042
Dependent
Goodman and Primary Bank
.107 .028 .000c
Kruskal tau Dependent
Age Range
.028 .010 .000c
Dependent
a. Not assuming the null
hypothesis.
Symmetric Measures

Value Approx. Sig.

Nominal by Phi .327 .000
Nominal
Cramer's V .327 .000
N of Valid Cases 337

The symmetric measures show significant degree of association between age & primary
bank preference.

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IMPLICATION: Results shows people ranging in an age range bracket of 20-30 prefer or have
private bank as their primary bank. The percentage for 20-30 yrs old having private primary
bank is highest, While there isn’t any significant difference for people within 40-50. People
within age range of 60-70 have hardly private primary bank accounts.

b) Primary Bank * Annual Income

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Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 21.663a 3 .000

Likelihood Ratio 21.810 3 .000

N of Valid Cases 572

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 20.14.

Null Hypothesis: Primary bank selection is independent of income.

Alternate Hypothesis: There exists a dependency.
Chi square shows a significant dependency rejecting null hypothesis.

IMPLICATION: Results shows people with medium to high income range still prefer PSU’s,
but the tendency is changing for low income groups. A high sample haven’t mentioned their
income level, but if distributed normally, we find there is a significant shift from PSU’s to
Private banks for middle class consumers too.

c) Primary Bank * Profession

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Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 74.167a 3 .000

Likelihood Ratio 75.387 3 .000

N of Valid Cases 572

Null Hypothesis: Primary bank selection is independent of Profession.

Alternate Hypothesis: There exists a dependency.
Chi square shows a significant dependency rejecting null hypothesis.

Symmetric Measures

Value Approx. Sig.

Nominal by Nominal Phi .360 .000

Cramer's V .360 .000

N of Valid Cases 572

The symmetric measures show a good degree of association between primary bank
preference & profession.

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IMPLICATION: Bar chart shows salaried customers have a primary private bank account may
be due to the employer’s preference to easy accessible banks. Again the unmentioned
sample if distributed in a normal distribution, we find business customers prefer private
banks over PSU’s. Whereas Self employed consumers still prefer PSU’s may be because of
reliability towards PSU’ for their hard earned money.

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 2. Associated Services- Cluster analysis:

In this analysis, two clusters have been defined and relationship with Primary bank,
gender & age is derived.

Cluster1: Refers to technology savvy people, who are acquainted with Internet and with
advanced facilities usage.

Cluster2: Refers to people who doesn’t use advanced banking channels and still rely on
branch banking. These people don’t use value added services such as: Internet banking,
Sweep card for shopping etc.

Final Cluster Centres

Cluster
1 2
Locker facility 2 2
Sweep facility 3 2
Net banking 1 2
Mobile Banking 2 3
Easy availability of cheque book 1 2
Passbook facility 2 2
Email facility 1 3
Bill Pay for Utility bill payments 2 2

ANOVA
Cluster Error
Mean Mean
Square df Square df F Sig.
Locker facility 18.191 1 .504 400 36.125 .000
Sweep facility 12.402 1 .253 400 49.089 .000
Net banking 190.229 1 .201 400 947.965 .000
Mobile Banking 67.329 1 .187 400 359.982 .000
Easy availability of
88.438 1 .453 400 195.040 .000
cheque book
Passbook facility 2.517 1 .488 400 5.153 .024
Email facility 223.900 1 .166 400 1346.750 .000

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 Bill Pay for Utility bill
16.155 1 .469 400 34.471 .000
payments
The F tests should be used only for descriptive purposes because the clusters have been
chosen to maximize the differences among cases in different clusters. The observed
significance levels are not corrected for this and thus cannot be interpreted as tests of the
hypothesis that the cluster means are equal.
IMPLICATION: Annova table every component is significantly associated and can form
cluster. This cluster formation would help to promote products to certain customer
segments.
From the analysis we see that people who are prone to internet usage prefer internet
banking along with email statements & sweep facility.
And on the other hand people who prefer branch banking prefer easy availability of cheque
books, Passbook facility & utility bill payment system in the banks.

(a) Cluster Number of Case * Primary Bank

Chi-Square Tests
Asymp. Sig. Exact Sig. (2- Exact Sig. (1-
Value df (2-sided) sided) sided)
Pearson Chi-Square 35.588a 1 .000
b
Continuity Correction 34.407 1 .000
Likelihood Ratio 36.118 1 .000
Fisher's Exact Test .000 .000
Linear-by-Linear
35.500 1 .000
Association
N of Valid Casesb 402
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 93.14.

Significance test shows that Primary Bank selection is dependent on the clusters.
IMPLICATION: The below graph shows technology people do prefer Private banks over
PSU’s, where as contemporary people still prefer PSU’s as their primary bank. This analysis
shows that certain facilities like Net banking, Mobile banking, Email statement, Sweep
facility are specialised by Private Banks. PSU’s outplay Private counterparts in passbook

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facility & utility bill payment options inside banks.

(b) Cluster Number of Case * Gender

Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.005a 2 .605
Likelihood Ratio 1.005 2 .605
N of Valid Cases 402
a. 2 cells (33.3%) have expected count less than 5. The minimum expected count is 3.38.
Chi square test shows Gender & the Cluster relation is not significant i.e both are
independent of each other.

IMPLICATION: Again the Bar Chart doesn’t give any clear inference about any relationship.

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 (c) Cluster Number of Case * Age Range

Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 38.492a 4 .000
Likelihood Ratio 40.965 4 .000
Linear-by-Linear Association 22.947 1 .000
N of Valid Cases 334
a. 2 cells (20.0%) have expected count less than 5. The minimum expected count is 4.18.
Chi square test rejects the null hypothesis which means there lays a significant dependency
between the cluster and age range.

IMPLICATION: Graph shows that age group of 20-30 are the bulk consumers belonging to
cluster1 i.e tech savvy group. As the age increases people of contemporary frame of mind
increases so bulk of consumers of age 50 and above represent cluster2.

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 3. Loan – Factor Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .597
Bartlett's Test of Sphericity Approx. Chi-Square 39.738
df 21
Sig. .008

Chi square & Significance test confirms about the dependency of the components & is valid
for factor analysis.

Rotated Component Matrixa

Component
1 2 3
Interest .646 .160 .063
Collateral .144 .250 -.692
LoanSanctionAmount -.224 -.692 .023
Documentation -.277 .355 .316
RelationshipWithBank .216 .161 .711
ServiceProvided -.143 .600 -.038
Quick Services .738 -.192 -.040
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.

IMPLICATION:
Factor 1: Interest & Quick Services
Factor2: loan Sanctioned Amount, Service Provided & Documentation
Factor3: Collateral, Relationship with Bank

Factor component analysis defines that certain consumer, who is sensitive to a particular
component is also sensitive to components of same factor.

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Loan factor Regression

(a) Factor 1

Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 Quick Services, Interesta . Enter
a. All requested variables entered.
b. Dependent Variable: BART factor score 1 for analysis 1

Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .926a .858 .857 .37781454
a. Predictors: (Constant), QuickondoorServices, Interest

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 ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 446.916 2 223.458 1565.448 .000a
Residual 74.084 519 .143
Total 521.000 521
a. Predictors: (Constant), QuickondoorServices, Interest
b. Dependent Variable: BART factor score 1 for analysis 1
Annova confirms the dependency of the component on the factor and 86% of factor 1 can
be explained by change in the dependent variable.

Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -2.648 .051 -52.409 .000
Interest .509 .015 .564 33.832 .000
Quick Services .339 .008 .669 40.109 .000
a. Dependent Variable: BART factor score 1 for analysis 1

(b) Factor2

Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .941a .886 .886 .33820818
a. Predictors: (Constant), ServiceProvided, Documentation, LoanSanctionAmount

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 461.749 3 153.916 1345.601 .000a
Residual 59.251 518 .114
Total 521.000 521

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Annova confirms the dependency of the component on the factor and 89% of factor 2 can
be explained by change in the dependent variable.

Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .236 .076 3.114 .002
LoanSanctionAmou
-.447 .010 -.635 -42.660 .000
nt
Documentation .191 .009 .330 22.257 .000
ServiceProvided .273 .007 .551 37.041 .000
a. Dependent Variable: BART factor score 2 for analysis 1

The Co-efficient table shows the constant & individual co-efficient which can be used to
prepare a regression equation.

(C) Factor3
Variables Entered/Removedb

Model Variables Entered Variables Removed Method

1 RelationshipWithBank,
. Enter
Collaterala
a. All requested variables entered.

b. Dependent Variable: BART factor score 3 for analysis 1

Model Summary

Std. Error of the

Model R R Square Adjusted R Square Estimate
1 .957a .915 .915 .29213337
a. Predictors: (Constant), RelationshipWithBank, Collateral

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 ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression 476.708 2 238.354 2792.928 .000a
Residual 44.292 519 .085
Total 521.000 521
a. Predictors: (Constant), RelationshipWithBank, Collateral
b. Dependent Variable: BART factor score 3 for analysis 1
Annova confirms the dependency of the component on the factor and 91% of factor 3 can
be explained by change in the dependent variable.
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -.034 .040 -.863 .389
Collateral -.368 .007 -.642 -50.014 .000
RelationshipWithBan
.331 .006 .662 51.591 .000
k
a. Dependent Variable: BART factor score 3 for analysis 1

The Co-efficient table shows the constant & individual co-efficient which can be used to
prepare a regression equation.

IMPLICATION: It is clear that each of the factor has been explained significantly by the
constituent variables. Thus the associated variables in each factor should be focussed upon
while stressing on a particular variable for promoting a particular service or product.

From the results we can conclude that, while promoting a easy loan, if the bank is stressing
on attractive interest rate it should also highlight on quick services for the sanction of the
loan.

This is to be done for each factor.

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 4. Discriminant Analysis- Channels- Background

Standardized Canonical Discriminant Function Coefficients

Function
1 2
Branch .020 .651
ATM -.381 -.406
Internet 1.017 -.053
Mobile -.031 .623

Canonical Discriminant Function Coefficients

Function
1 2
Branch .026 .855
ATM -.548 -.584
Internet 1.505 -.079
Mobile -.042 .850
(Constant) -2.308 -2.359
Unstandardized coefficients

Wilks' Lambda
Test of
Function(s) Wilks' Lambda Chi-square df Sig.
1 through 2 .710 170.159 8 .000
2 .970 15.101 3 .002

Wilk’s lamda confirms a significant degree of association of the functions & components.
From Canonical Discriminant Function Coefficients, we find that Internet Banking is the
discriminating function.

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Classification Statistics

Classification Function Coefficients

education
Hsc grad post grad
Branch 4.704 4.890 4.349
ATM 3.059 3.561 4.050
Internet 5.032 3.226 2.937
Mobile 3.866 4.130 3.607
(Constant) -18.661 -16.739 -14.982
Fisher's linear discriminant functions

Classification Resultsa
Predicted Group Membership Total
education Hsc grad post grad
Original Count Hsc 223 47 60 330
grad 32 48 33 113
post grad 13 16 30 59
% Hsc 67.6 14.2 18.2 100.0
grad 28.3 42.5 29.2 100.0
post grad 22.0 27.1 50.8 100.0
a. 60.0% of original grouped cases correctly classified.

IMPLICATION: From classification function co- efficient table we find Internet & Branch
banking are the key differentiating component if education background is concerned.

So, for a certain customer demographics, which is educational background here the
determinant variable that induces the customer preferences towards a particular channel is
Internet banking.

We also find that, as only 60 % of the original group cases were correctly classified, higher
educational qualification doesnt have any direct exponentially incease in preferences
towards Internet banking. Some other variables have significant contribution towards
determining the preference. Nevertheless keeping all other constant for education internet
banking is the discriminating factor among these groups.

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 5. Regression Analysis- Branch Banking

Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .795a .631 .628 .72596
a. Predictors: (Constant), RelationshipWithBank, chequeDepoWithdraw, InvestmentAdvice,
cashdepowithdraw, LoanEnquiry

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 465.927 5 93.185 176.814 .000a
Residual 271.945 516 .527
Total 737.872 521
a. Predictors: (Constant), RelationshipWithBank, chequeDepoWithdraw,
InvestmentAdvice, cashdepowithdraw, LoanEnquiry
b. Dependent Variable: visit

Annova shows the association & dependency of variables with Branch Banking & these
variables explains Branch banking by 63%.
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3.584 .238 15.060 .000
cashdepowithdraw .187 .036 .205 5.209 .000
chequeDepoWithdra
.171 .034 .185 5.054 .000
w
InvestmentAdvice -.144 .035 -.154 -4.123 .000
LoanEnquiry -.212 .036 -.258 -5.892 .000
RelationshipWithBank -.136 .035 -.153 -3.927 .000
a. Dependent Variable: visit

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The Co-efficient table shows the constant & individual co-efficient which can be used to
prepare a regression equation.This analysis shows that the constitute variables are able to
explain 63% of the branh banking reasons. This limitation can be eliminated by identifying
new variables through an extensive exploratory research. Nevertheless we can see the
individual impact over the total reasons. Despite having ATM facilities & CRM officers for
loan enquiry , these two have the highest requirement. So , we can infer the websites
providing loan information is not satisfactory to meet the customer needs & may be the
interface in ATM machines isn’t friendly or object oriented or reliable enough to meet the
customer needs.

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 6. Factor & Regression Analysis- Current Account Preferences

a) Factor Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .774
Bartlett's Test of Sphericity Approx. Chi-Square 17.186
df 21
Sig. .007

The Kaiser-Meyer-Olkin Measure test confirms that the sample adequate to go for a factor
analysis. The Chi-square value & significance rejects the null hypothesis at 95 % confidence
level.

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I have taken eigen value of 1.1 to make the interpretation simpler. From the scree plot we
find the elevation has started from point 4 but we have taken 3 factors for easy grouping
and further regression analysis has been done to know the degree of association.

Rotated Component Matrixa

Component
1 2 3
chequefacility -.185 .541 .518
noofwithdrawls .468 -.024 .490
DDpayorder -.188 .415 -.096
Internetbanking -.218 -.737 .109
OverdraftFacility .742 .079 -.194
EEFCaccnt -.031 -.185 .693
relationshipWithBank -.498 .106 -.084
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.

From the rotated component matrix which is nothing but an amplified standardised
component, we find the 3 factors and the components are as follows:

Factor1: Overdraft Facility, Relationship with bank

Factor2: Cheque Facility, DD/Pay order, Internet Banking
Factor3: EEFC Account, No. of Withdrawals

Factor analysis helps to identify customers unstated needs, which if satisfied will induce
customer delight. Certain customers, who are sensitive cheque facility, will be also sensitive
to DD/pay order & Internet Banking for current account preference.

b) Regression corresponding to factors with its key components

Factor1

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 Model Summaryb
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .858a .736 .735 .51483058
a. Predictors: (Constant), relationshipWithBank, OverdraftFacility
b. Dependent Variable: REGR factor score 1 for analysis 1

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 383.439 2 191.719 723.331 .000a
Residual 137.561 519 .265
Total 521.000 521
a. Predictors: (Constant), relationshipWithBank, OverdraftFacility
b. Dependent Variable: REGR factor score 1 for analysis 1
Annova table shows a strong degree of association among the factors & its components.
Model summary suggests 73 % of the factor1 can be explained by the two components.

Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -1.546 .116 -13.282 .000
OverdraftFacility .617 .020 .701 30.957 .000
relationshipWithBa
-.300 .016 -.433 -19.103 .000
nk
a. Dependent Variable: REGR factor score 1 for analysis 1

The Co-efficient table shows the constant & individual co-efficient which can be used to
prepare a regression equation.

Factor 2

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 Model Summary

Std. Error Change Statistics

Mode R Adjusted of the R Square Sig. F
l R Square R Square Estimate Change F Change df1 df2 Change
1 . 3745.44
.978a .956 .956 .956 3 518 .000
21053289 3
a. Predictors: (Constant), Internetbanking, DDpayorder,
chequefacility

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 498.040 3 166.013 3745.443 .000a
Residual 22.960 518 .044
Total 521.000 521
a. Predictors: (Constant), Internetbanking, DDpayorder, chequefacility
b. Dependent Variable: REGR factor score 2 for analysis 1

Annova table shows a strong degree of association among the factors & its components.
Model summary suggests 96 % of the factor2 can be explained by the two components.

Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .943 .060 15.684 .000
chequefacility .452 .008 .497 53.828 .000
DDpayorder .274 .006 .390 42.255 .000
Internetbanking -.621 .008 -.712 -77.158 .000
a. Dependent Variable: REGR factor score 2 for analysis 1

The Co-efficient table shows the constant & individual co-efficient which can be used to
prepare a regression equation.

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Factor 3
Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .970a .941 .941 .24330562
a. Predictors: (Constant), chequefacility, noofwithdrawls, EEFCaccnt

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 490.336 3 163.445 2761.010 .000a
Residual 30.664 518 .059
Total 521.000 521
a. Predictors: (Constant), chequefacility, noofwithdrawls, EEFCaccnt
b. Dependent Variable: REGR factor score 3 for analysis 1

Annova table shows a strong degree of association among the factors & its components.
Model summary suggests 94 % of the factor3 can be explained by the two components and
one component (cheque facility) which is strongly correlated.

Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -5.574 .063 -87.962 .000
noofwithdrawls .259 .006 .457 42.816 .000
EEFCaccnt .587 .009 .661 61.953 .000
chequefacility .455 .010 .500 46.896 .000
a. Dependent Variable: REGR factor score 3 for analysis 1

IMPLICATION: The Co-efficient table shows the constant & individual co-efficient which can
be used to prepare a regression equation. It is clear that each of the factor has been
explained significantly by the constituent variables. Thus the associated variables in each
factor should be focussed upon while stressing on a particular variable for promoting a
particular service or product.

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The regression analysis reveals the unit impact of each constitute variable on the overall
factor component.

Results shows high turnover customers whose transactions are above average would prefer
a cheque facility for its convenience & they belong to the customer segments who have
EEFC account. So while designing a particular product or service offering related to EEFC
account, value added services like cheque facilities would make more sense to the
customers & would attract them over other banks who doesnt design thier offerings based
on these recommendations.

7. Multidimensional Scaling for Brand Positioning

This analysis refers to the perceived brand value of Union Bank of India with respect to
other banks & financial Institutions.
For meaningful interpretation, I have chosen two axis or dimensions.
X-axis dimension- Reliability
Y-axis dimension- Accessibility to value added/new services

Output

Iteration history for the 2 dimensional solution (in squared distances)

                  Young's S-stress formula 1 is used.

                Iteration     S-stress      Improvement

                    1           .20693
                    2           .17937         .02756
                    3           .17406         .00531
                    4           .17357         .00049

                         Iterations stopped because
                 S-stress improvement is less than   .001000

From iteration history we find the stress is lowest for a 4 dimensional solution. But often a 4
dimensional solution is hard to interpret as the knowledge of the dimension rests with the
analyst. As I have identified two axis from an extensive secondary research, 2 dimensional
solutions seemed to be more logical as the stress range is similar with a range of
0.005.There is a stress improvement from 2 dimension to 4 dimension, but not significant
enough to carry on a 4 dimension analysis.

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 Stimulus Coordinates

                         Dimension

Stimulus    Stimulus      1       2

 Number     Name

    1       Yes Bank    -.1396  -.9544

    2       Allahabad Bank     .4414  -1.3434
    3      Standard Chattered   -1.4167     .2722
    4       ICICI Bank     -1.2053   1.0977
    5       AXIS Bank        .6757    1.3152
    6       Financial Institutions   -1.1208    -.7258
    7       Union Bank of India    1.2761   
-.3099
    8       State Bank of India        1.4891     .
6484

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 The Euclidean distance model depicts the different brands in a 3 dimensional view,
which in itself is difficult to understand. So for ease of illustration we obtain the
below graph:

X-axis dimension- Reliability

Y-axis dimension- Accessibility to value added/new services

IMPLICATION::From the graph we find the brand of Union bank of India is highly perceived
in terms of reliability but it needs to improve its perceived service offered image. So the
basis for positioning its brand is here. So, from the picture we find that its potential
competition is against SBI & may be some other PSU banks & not with Private sector banks.
Now if it wants to reposition itself it needs to improve on the quality of service offered as
reliability is already present.

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 Recommendations & Conclusion

This analysis provides some unique & useful insights about the customer consumption
pattern, their preferences, stated & unstated needs. Companies use different tools to
position a certain product or service in the customer cognition. This analysis provides the
component which enables a bank to identify target groups, their exact needs & promotion
offers which is really useful to the target segments to satisfy their unstated needs & delight
them.
Briefly the statistical methods used & their implications:

Discriminant Analysis: For Classification & Prediction.

To classify certain group usage pattern in terms of using banking channels discriminant
analysis is of primordial importance. Again for an unknown group or target segments, one
can form a discriminant function using the co- efficient, which is similar to regression
equation. Through this equation companies can identify his/her’s cognitive needs & can
offer him the needful solution. This would enable to predict the group membership for a
new data point. The recommendation is when promoting a certain product to a new
customer, he needs to be classified & his needs are to be predicted through the discriminant
function and then appropriate product is to be offered. This would save time & money of
the company & will increase brand loyalty of the customer.

Factor Analysis: For logical reduction of numerous variables into specific & holistic factors
for easy interpretation. In the analysis I have done factor analysis for Loan & Current
account preferences. For both the cases we have seen the presence of numerous variables
which becomes difficult to interpret. So those variables are restricted into factors whose
components are strongly correlated. Factors when cross tabulated gives logical results.

Cluster Analysis: This analysis helps to map the profile of its target audience in terms of
lifestyle, attitudes & perceptions. Prior information about a target population is important

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to understand the presence of different cluster in a single population. Proper identification
of these clusters would enable to map their preferences, perceptions & attitudes towards a
product or service. The recommendation is that for market segmentation the corresponding
results should be consulted.

Multivariate Regression Analysis: This has been used extensively throughout the analysis.
Regression helps the degree of association or dependency of the dependent variable on the
independent variable. It also helps us to know the % of explanation done by the
independent variable about the dependent. From the regression equation we get to see the
amplification effect of a dependent variable have for an unit change in any of the
independent ones. Regression equation helps to estimate budgets, effects of certain
promotion activities on overall goals etc.

Multidimensional Scaling: This analysis is generally used for brand positioning. It helps to
understand how consumers perceive a particular brand with respect to others. This analysis
provides useful insights on how to position a particular brand & its constituent products &
services. Here it has been used to judge the brand position of UBI by comparative distance
modelling technique. The recommendation is to position UBI as a high end or pioneer in
advanced & modern banking service provider among the PSU’s.

So, it is imperative to apply the correct analysis to appropriate data to get meaningful
results. I have tried my best to make understand the importance of statistical tools in
diversifying business and tried to provide an insight about the criticalities in identifying
parameters & their appropriate analysis to come to a meaningful inference.
The limitation of the project is that it has considered the bulk of the parameters for certain
analysis from secondary data, whose comprehensibility, integrity & reliability may be
doubted. For a more comprehensive analysis, exploratory research should be done to arrive
at reliable components, which will be sufficient to explain each factor with more than 95%
confidence.

Finally the key improvements or points that should be implemented are the following:
1. Internet Banking has come out to be a determing factor for having new technology
savvy customers. The reliabilty of PSU’s internet banking is less compared to Private

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 counterparts. So, the positioning has to be done in such a way that it could infuse a
sense of reliability on Internet banking offers made by PSU’s.
2. Loan has come out to be an important factor for customer preference in chosing
primary bank. So the services has to be designed in such a way which would ensure
quich sanction of loans with less or single door documentation solution with a
dedicated loan department with customer friendly CRM.
3. Third is the designing of the user interface in ATM’s as well in websites that provide
usefull information about the services offered needs to be altered accordingly.
4. Analysis shows, modern breed of customers prefer one stop holistic solution. So
account opening solution should include savings, current, EEFC & demat account
integrated under a umbrella with cheque & other facilities attached.
5. Finally, MDS shows the customer perception about UBI vis a vis other banks. The
corporate strategy has to be formulated in such a way that would exploit the
reliability already present and offer value added modern services.
------------------

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 References

Books: Marketing Research by Rajendra Nargundkar

Statistics for Management by Gerald kellar
Applied Statistics for Business & Economics by Doane & Steward

Websites: www.Statsoft.com
www.stat.oecd.org
http://lib.stat.cmu.edu/DASL/
http://it.stlawu.edu
http://www.bea.gov/
Papers: Reference Guide on Multiple Regressions by Daniel L. Rubinfeld from the Federal
Judicial Center

 www.jstor.org
 www.ScienceDirect.com
 www.elsevier.com
 Project Muse
 UCLA Library: Online Materials

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