FA C U LT Y: D R .

G I TA A K U M TA
NMIMS University

RESEARCH METHODOLOGY

Does banking preferences depend on age group - A Study

Roll No Name
104 Vandana Butani
111 Shantanu Gupte
118 Monish Parekh
124 Mahesh Manghnani
140 Ameya Bhat
158 Abhijit Mukherjee

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 Research methodology
1.1 Scope of the study:
The study would try to throw some insights into the existing services provided by the banks and
the gap between the customer expectations, perceptions and the actual state of performance. The
results of the study would be able to recognize the lacunae in the system and thus provide key
areas where improvement is required for better performance and success ratio.

1.2 Research Objectives:

(1) To find out the level of expectation and the level of perception of the customers from the
services offered by the banks.

(2) To compare the level of perception and expectation of the services offered by the banks.

(3) To know which service quality dimension the bank is performing well and in which
dimension it needs improvement.

(4) To know the preference towards the public sector and private sector banks.

1.3Sampling Design:

 Targeted banks: Private & Public

 Sampling Frame: All the customers from all ages.

 Sampling Area: Mumbai & Thane.

 Sampling Method: Non- Probability Convenience Sampling

 Sample Size: 50 Respondents

1.4 Data Sources:

 Primary Data:
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 It is collected through structured questionnaire by conducting survey.

1.5 Research Design:

Our research is Descriptive in nature as the banking industry is well-developed in India

and lot of research has already been done in this area.

1.6 Research tool :

 SERVQUAL Analysis.

SERVQUAL is an instrument for measuring how customers perceive the quality of a service. In
the mid-1980s Berry and his colleagues Parasuraman and Zeithaml began to investigate what
determines service quality and how it is evaluated by customers. As a result of their study they
developed the SERVQUAL instrument for measuring service quality, which initially included 10
service quality dimensions, which were later reduced to the following five: tangibles, reliability,
responsiveness, assurance and empathy.

The instrument is based on the idea of the disconfirmation model, in other words on the
comparison of customers’ expectations with their experiences from the service. Usually, the five
dimensions of the instrument are described through the use of 22 attributes an “respondents are
asked to state (on a seven-point scale from “Strongly disagree” to “Strongly agree”) what they
expected from the service and how they perceived the service.”

This instrument has been widely used by researchers, but still, there are some controversies in its
applicability across different service industries. In some studies the five dimensions of the
instrument (determinants) have been found to be unstable across different types of services.
Therefore, the SERVQUAL tool should be applied very carefully and the set of determinants and
attributes used should be adapted to the specific situation.

 Chi-Square test of independence

The test is applied when there are two categorical variables from a single population. It is used to
determine whether there is a significant association between the two variables. For example, in

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an election survey, voters might be classified by gender (male or female) and voting preference
(Democrat, Republican, or Independent). We could use a chi-square test for independence to
determine whether gender is related to voting preference. This approach consists of four steps:
(1) state the hypotheses, (2) formulate an analysis plan, (3) analyze sample data, and (4) interpret
results.

1.7 Hypothesis:

A chi- square test for independence has been conducted for knowing the relation between the age
group and the preference towards the two types of banks.

 Ho: Preference towards public/private sector banks and age group are independent
of each other.

 H1: Preference towards public/private sector banks and age group are dependent of
each other.

1.8 Limitations of the Study:

 Respondents may give biased answers for the required data. Some of the
respondents did not like to respond.

 In our study we have included 50 customers.

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[5]
TRANSFORMATION INITIATIVES NEEDED FOR BANKS

[6]
 DATA ANALYSIS AND
INTERPRETATION
ANALYSIS OF GENERAL QUESTIONS

1) Which type of service do you prefer the most from the banks?

a ATM services b Internet banking c Mobile banking d Retail banking

12 11
10
10

8 7

6 ATM
4 4
4 3 3 Internet

2 1 1
0
0
18 TO 24 25 TO 34 35 TO 44 45 TO 60 ABOVE 60

2) Your Account Decisions are influenced by:

a Oneself b Market research c broker d friends/relatives

14
12
12 11
10
8 7 Oneself
6 5 Market research
4 3
2 Broker
2 1 1 1
Friends/Relatives
0
18 TO 24 25 TO 34 35 TO 44 45 TO 60 ABOVE
60

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3) Which factors do you consider before opening account or in purchasing new plan in a
particular bank?
A: Oneself , B : Market research , C : Broker , D: Friends/Relatives
8 7 7
7 6 Financial position
6 5 5
5
4 Current Market
3 Position
2 2 2 2
2 1 11 1 1 1 Goodwill
1
0
Future prospects
18 TO 24 25 TO 34 35 TO 44 45 TO 60 ABOVE
60

4) Which bank is more secure according to you?

a Public Sector b Private Sector

14 13
12
12
10
8 7
Public
6
4
4 3 Private
2 2
2 1
0
18 TO 24 25 TO 34 35 TO 44 45 TO 60 ABOVE 60

5) Which bank gives you personalized service

A. Public Sector B. Private sector
14

12

10

8
Public
6
Private
4

0
18 TO 24 25 TO 34 35 TO 44 45 TO 60 ABOVE 60

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6) Are you satisfied with the services provided by your present bank

A. Yes B. No

16
14
12
10
8
Yes
6
4 NO
2
0
18 TO 25 TO 35 TO 45 TO ABOVE
24 34 44 60 60

7) If you decide to switch from your present bank to another bank then you
would prefer

A.Public sector Bank B. Private sector Bank

10
8
8 7 7
6 6
6

4 3 3 Public
2
2 1 1 Private

0
18 TO 25 TO 35 TO 45 TO ABOVE
24 34 44 60 60

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 ANALYSIS OF CHI SQUARE TEST OF INDEPENDENCE

Chi square test of independence

Hypothesis:

H0: Preference towards public/private sector banks and age group are independent of
each other.
H1: Preference towards public/private sector banks and age group are dependent of each
other.

where

Fo= observed frequency

Fe= expected frequency for each cell

Fe=(frequency for the column)(frequency for the row)/n

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 Calculation

Observed frequency
Age group
Preference 18-24 25-34 35-44 45-60 Above 60 Total of Row
Public sector banks 2 7 7 6 3 25
Private sector banks 3 7 6 1 1 18
Total of column 5 14 13 7 4 43

XExpected frequency

  Age group
Preference 55 and
towards banks 18-25 26-35 36-45 46-55 above
Public sector
banks 2.907 8.140 7.558 4.070 2.326
Private sector
banks 2.093 5.860 5.442 2.930 1.674

Obs. Freq (Fo) Ex. Freq (Fe) Fo-Fe (Fo-Fe)2 [(Fo-Fe)2]/Fe

2.000 2.907 -0.907 0.823 0.283
7.000 8.140 -1.140 1.299 0.160
7.000 7.558 -0.558 0.312 0.041
6.000 4.070 1.930 3.726 0.915
3.000 2.326 0.674 0.455 0.196
3.000 2.093 0.907 0.823 0.393
7.000 5.860 1.140 1.299 0.222
6.000 5.442 0.558 0.312 0.057
1.000 2.930 -1.930 3.726 1.272
1.000 1.674 -0.674 0.455 0.272

Calculated 3.810

Degree of freedom=(R-1)*(C-1)
= (2-1)*(5-1)
=4
Confidence level = 95 %
Therefore χ2tab = 9.49
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Now in this case χ2cal < χ2tab hence null hypothesis is ACCEPTED and alternative hypothesis is
REJECTED.

Conclusion: Preference towards public/private sector banks and age group are
INDEPENDENT of each other.

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 SERVQUAL ANALYSIS
A : Servqual Analysis for Private Sector bank

Table -1
Dimension Statement Expectati Perception Gap Score Average for
on Score Score Dimension
1 6 5 -1
2 5 5 0
3 7 3 -4
Tangibles 4 5 5 0 -1.25
5 6 6 0
6 6 6 0
7 4 6 2
8 6 6 0
Reliability 9 5 5 0 0.4
10 3 5 2
11 5 6 1
12 4 6 2
Responsiveness 13 3 5 2 1.75
14 6 6 0
15 6 6 0
16 4 4 0
Assurance 17 6 7 1 0.25
18 5 3 -2
19 5 6 1
20 2 3 1
21 1 3 2
Empathy 22 6 6 0 0.4

Unweighted Average SERVQUAL score: 0.23

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Table -2 :Weightages
Features Points
1.    The appearance of the banks physical facilities, equipment, personnel and 10
communication materials.
2.    The bank's ability to perform the promised service dependably and accurately 25

3.    The banks willingness to help customers and provide prompt service. 20
4.    The knowledge and courtesy of the bank's employees and their ability to convey 25
trust and confidence.
5.    The caring individual attention the bank provides its customers. 20
Total: 100

SCORE
SERVQUAL Score Weighting Weighted
Dimension from from Table 2 Score
Table -1
Tangibility -1.25 0.10 -0.13

Reliability 0.40 0.25 0.10

Responsiveness 1.75 0.20 0.35
Assurance 0.25 0.25 0.06
Empathy 0.40 0.20 0.08

Average Weighted score: 0.47

Servqual dimension weighted Score

0.40 0.35

0.30

0.20
0.10
0.10 0.06 0.08
Weighted Score

0.00

-0.10

-0.20

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B : Servqual Analysis for Public sector bank
Table -1
Expectati Perception Average for
Dimension Statement on Score Score Gap Score Dimension
1 4 6 2
2 5 6 1
3 7 5 -2
Tangibles 4 7 4 -3 -0.5
5 7 5 -2
6 7 4 -3
7 7 5 -2
8 7 6 -1
Reliability 9 7 6 -1 -1.8
10 7 4 -3
11 7 3 -4
12 6 5 -1
Responsiveness 13 7 2 -5 -3.25
14 7 5 -2
15 7 5 -2
16 6 6 0
Assurance 17 7 5 -2 -1.5
18 7 3 -4
19 7 3 -4
20 5 1 -4
21 7 2 -5
Empathy 22 7 3 -4 -4.2

Unweighted Average SERVQUAL score: -1.41

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Table -2 : Weightages
Features Points
1.    The appearance of the banks physical facilities, equipment, personnel and 10
communication materials.
2.    The bank's ability to perform the promised service dependably and accurately 25

3.    The banks willingness to help customers and provide prompt service. 20
4.    The knowledge and courtesy of the bank's employees and their ability to convey 25
trust and confidence.
5.    The caring individual attention the bank provides its customers. 20
Total: 100

SCORE
SERVQUAL Score from Weighting Weighted
Dimension Table 1 from Table 2 Score

Tangibility -0.50 0.10 -0.05

Reliability -1.80 0.25 -0.45

Responsiveness -3.25 0.20 -0.65
Assurance -1.50 0.25 -0.38
Empathy -4.20 0.20 -0.84

Average Weighted score: -2.37

Weighted Score
0.00
-0.10
-0.20
-0.30
-0.40
-0.50
-0.60
-0.70
-0.80
-0.90

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 KEY FINDINGS
Key Findings for general questions

 According to respondents the most preferred banking service is ATM service followed by
internet banking.

 Most of the respondent’s account decisions are influenced by themselves.

 Most important factor which respondent consider before opening an account is Financial
positions followed by future prospects.

 According to respondents most secure bank is Public sector banks.

 From the Chi square test of independence, it has been found that Preference towards
public/private sector banks and age group are INDEPENDENT of each other.

Key Findings for servqual questions

Gap Score

 For Private sector bank, the gap score for tangibility is minimum followed by assurance,
empathy, reliability and responsiveness.

 For Public sector bank, the gap score for Empathy is minimum followed by
responsiveness.

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 CONCLUSION
 ATM is the preferred service.

 Public sector bank is considered to be more secured.

 There is a no dependency relationship between age group and preference towards

public/private sector banks.

RECOMMENDATIONS

 Public sector banks should emphasize on improving their services on responsiveness and
Empathy.

 Private sector banks should emphasize on improving their services on tangibility and
assurances.

 Though mobile banking is convenient and user friendly, respondents generally don t
prefer it more because of safety issues.

List of books

 Richard I.Levin,David S.Rubin –Statistics For Management, Seventh

Edition

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