CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

CUSTOMER SATISFACTION AND LOYALTY:

A CASE STUDY FROM THE BANKING SECTOR

Rahman, H.

Delivering superior service quality to customers in today’s business environment is very crucial and important due
the stiff competition in the local and international markets. The ability to provide high service quality will strengthen
the image, enhance retention of customers, attracting new potential customers through customer satisfaction and
loyalty. This study investigates the customer satisfaction and loyalty relationship in terms of basic service, advanced
service employed by Jamuna Bank Limited and customer perceptions regarding cost and prestige of receiving banking
service of the concerned bank. The study reveals that there is a signi¿cant relationship observed among advanced
service, cost & prestige and customer satisfaction. There is an insigni¿cant relationship observed between basic service
and customer satisfaction and ¿nally a positive signi¿cant relationship observed between customer satisfaction and
customer loyalty relationship.

JEL Classi¿cation: G21, M3

Keywords: Customer satisfaction; customer loyalty; basic service; advanced service

1. Introduction gained for a competitor. Due to stiffer market compe-

The service sector has produced approximately two-thirds tition, commercial banks need more efforts to be done
of worldwide GNP from twenty ¿rst century (Kara et al., to retain their existing customers, i.e. as much as they
2005). Within the huge service sector, the banking sector do on acquiring them (R. Khouri, H. Boulos, 2013).
is one of the most important entities; it has been growing The banking industry in Bangladesh today has become
relatively fast in the world. Commercial banks in Bangla- a very dynamic, competitive and complex environment
desh are one of the key components of the economy of where ¿nancial products and services offered by the
Bangladesh. Jamuna Bank Limited (JBL) is a Banking commercial banks have only minor differences, where
Company registered under the Companies Act, 1994. the industry situation is having a tremendous increase
The bank started its operation as a private commercial in customer demand and this require greater transfor-
bank in Bangladesh from 3rd June 2001. Being a 3rd mation with intense focus on customer satisfaction and
generation Bank of Bangladesh, it focuses on: remaining loyalty.
with time, managing change, developing human capi- This case study is an initiative to investigate the efforts
tal, and creating true customer value (JBL, 2013). With of Jamuna Bank Limited to make customers satisfaction
privatization, liberalization, deregulation and change and loyalty a special focus of its basic banking service,
in the technological environment, the banking industry advanced banking service and cost & prestige issues
has become more integrated especially private commer- of service received. However, basic banking, advanced
cial banking in Bangladesh. This has created a highly banking and cost & prestige factors have been consid-
competitive market environment in the banking indus- ered to investigate satis¿ed and loyal customer of Jamuna
try. In today’s business, a customer lost is a customer bank limited.

15
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

2. Research Objectives towards a product or service after they acquire and

A. To investigate respondents’ demographics. utilize it. In view of that, customer satisfaction is an
evaluative judgment after the experience that consumer
B. To investigate the relationship between basic service
utilizes the product or service after a speci¿c purchase
and customer satisfaction.
selection (Oliver, 1992). Many studies have found that
C. To investigate the relationship between advanced customer satisfaction plays a mediating role in the
service and customer satisfaction. customer satisfaction and customer loyalty relationship.
D. To investigate the relationship between cost & pres- Akhbar and Parvez (2009), in their study on 302 tele-
tige and customer satisfaction. communication customers in Bangladesh telecommuni-
E. To investigate the relationship between customer cation industry, have found customer satisfaction to be
satisfaction and customer loyalty. an important mediator between perceived service qual-
ity and customer loyalty. Kumar et al. (2010), in their
3. Literature review study on 100 bank customers in India, have revealed
Customer satisfaction and loyalty remain key issues of that service quality fosters customers’ attitudinal loyalty
marketing scholars and marketers and will remain so in through latent customer satisfaction.
the future. There is considerable evidence that customer Enhancing customer loyalty has become a popular topic
satisfaction and loyalty depend on service quality and for managers, consultants, and academics. The argu-
lead to the higher pro¿tability of the business. Qual- ments in support of loyalty are simple to understand.
ity in service can be determined by the extent to which Loyal customers are reported to have higher customer
customers’ needs and expectations can be satis¿ed retention rates, commit a higher share of their category
(Banerjee, 2012). Delivering superior service quality spending to the ¿rm, and are more likely to recommend
to customers in today’s business environment is very others to become customers of the ¿rm (Reichheld,
crucial and important due the stiff competition in the Sasser, 1990). Loyalty is the commitment of a current
market. The ability to provide high service quality will customer in respect to a particular store, brand and
strengthen the image, enhance retention of customers, service provider, when there are other alternatives that
attracting new potential customers via positive word-of- the current customer can choose instead (Shankar, Smith
mouth and eventually increase the pro¿t of the business and Rangaswamy, 2003). It forms positive attitudes by
(Zeithaml, 1996). Service quality is one of the critical producing repetitive purchasing behavior from time to
elements in determining the success and the competi- time. There is a strong connection customer loyalty and
tiveness of a particular organization. Organizations such ¿rm’s pro¿t. Reicheld (2003) suggested that the most
as banks can distance themselves from the competitors superior evidence of customer loyalty is the propor-
by performing high quality services for their customers. tion amount in percentage of current customers who
Service quality is one the favorite areas of researchers are having lots of enthusiasm to recommend a speci¿c
in their studies in retail banking industries (Johnston, good or service to their friends. Whereas the attitudi-
1997). Service quality has been considered as one of nal perspective, the current customers have a feeling of
the most critical elements in the retail banking indus- belonging to a speci¿c product or service or commit-
try (Stanford, 1994). Zeithaml et al. (1990) found that ment of the current customers towards a speci¿c good or
in order for business organizations to be successful and service. Pearson (1996) has de¿ned customer loyalty as
survive in the competitive environment, the most criti- a mindset of the customers who hold favorable attitudes
cal strategy is to deliver superior service quality to their towards a company, commit to repurchase the compa-
customers. Customer service quality is the driving force ny’s product or service, and recommend the product or
in both the traditional and virtual business worlds. In service to others.
today’s dynamic business environment, it is about build-
ing and sustaining a strong relationship with an organi- 4. Research Methodology
zation’s customers by understanding the ingredients of A scienti¿c manner of planning, executing, and discuss-
customer satisfaction (Banerjee, 2012). ing important results is essential for doing any study,
Academic literature suggests that customer satisfaction regardless of which ¿elds are being investigated, such
is a function of the discrepancy between a customer’s as managerial and social ¿elds. Therefore, this chap-
prior expectation and his or her perception regarding ter de¿nes the research design, theoretical framework,
the purchase (Yi, 1990). Customer satisfaction can also hypothesis development, population samples, data
be termed as the general attitude that customers have collection procedures and the techniques of data analysis

16
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

for examining the factors that affect customer satisfac- 4.4 Population and Sample
tion and loyalty with banking services in Jamuna Bank For the questionnaire survey, a convenient method of
Limited, Bangladesh. The said factors are basic service, sampling was used. There is no available source for the
advanced service, cost and prestige, customer satisfac- addresses of customers of Jamuna Bank Limited. There-
tion and customer loyalty. fore, friends, relatives, and other informal reference
groups were used to locate the potential respondents in
4.1 Research Design Bangladesh. Questionnaires were sent by email, post-
This study is descriptive and hypothesis testing in natu- age mail and directly to 150 customers of Jamuna Bank
ral. This study aimed to examine the factors that affect Limited. The number of initial replies received was 90.
customer satisfaction and loyalty among the customers After screening the ¿rst round of replies, a second round
of banking services. This study involved hypothesis test- of personal contacts was conducted by the researcher
ing based on what has been developed in the framework. and ¿nally 100 respondents were included in this study.
In the hypotheses testing, the relationship between the
independent and dependent variables was explained. 4.5 Data Collection Technique
Finally, data was collected using a survey method where This study is mainly based on primary data originating
questionnaires were used to collect information. from a survey. For this purpose, a constructed question-
naire was developed. With the exception of the questions
4.2 Research Framework regarding demographic characteristics, issues relating to
basic service, advanced service, cost & prestige, customer
Figure 1 Theoretical Framework satisfaction and loyalty were constructed, measured and
investigated through a ¿ve point scale standardized by
Bray¿eld-Rothe (1951).The scale consists of 25 state-
Customer Loyalty ments; each statement has ¿ve options/ points such as
strongly agree/ 5, agree/ 4, undecided/ 3, disagree/ 2, and
strongly disagree/ 1.
Customer Satisfaction A pilot study on 10 respondents was conducted using the
draft questionnaire. At the outcome of this phase, a few
initially selected variables were dropped to avoid multi-
coliniarity problem. In addition, some rephrasing was
done to arrive at a ¿nal version of the questionnaire for
Basic Advanced Cost
and Prestige
this study. The ¿nal questionnaire was put into operation
Service Service
by way of email, mail and personal survey.

4.6 Data Analysis Technique

4.3 Hypothesis Development The SPSS statistics software package was used for statis-
In this study, the hypotheses have been selected based tical analysis. Reliability of data was measured by using
on the literature review mentioned above to describe Chronbach’s Alpha (Cornbach, 1951). The Chronbach
the relationship among those variables that inÀuence Alpha was 0.906. An Alpha higher than that is suggested
customer satisfaction and customer loyalty. by Nunnally (1978) and therefore data collected can be
considered reliable. Descriptive statistical techniques such
H1: There is a positive/signi¿cant relationship as mean and standard deviation were used to measure the
between the basic service and customer satisfaction. mean scores and their variability. Pearson Correlation was
used to indicate correlations among the variables, Linear
H2: There is a positive/signi¿cant relationship Regression analysis was used to test the hypothesis.
between the advanced service and customer
satisfaction 5. Findings and Data Analysis
H3: There is a positive/signi¿cant relationship between 5.1 Respondent’s Demographic
the cost & prestige and customer satisfaction.
The questionnaires were distributed to customers of
H4: There is a positive/signi¿cant relationship between Jamuna Bank Limited; among them were: 22% of
the customer satisfaction and customer loyalty. Students, 49% of Service Holders, 28% of Businessmen

17
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

and 1% of the respondents occupied the profession of 76% were married and 24% unmarried; 68% of the
Other. Thirty percent of the respondents’ monthly gross respondents were male and 32% female. Twenty-seven
income was below Tk 30,000, 33% of the respondents’ percent of the respondents connected with the bank
monthly gross income was within Tk 30,000-50,000, below 5 years, 52% connected within 5-10 years and
17% of the respondents’ monthly gross income was 21% respondents connected above 10 years. Among
above Tk 50,000. Thirty-one percent of the respon- the respondents education, one can see: 7% SSC, 15%
dents were under age 30 years, 46% were between HSC, 32% Bachelor, 45% Master, and 1% have a PhD
30-45 years, 23% were above 45 years. Among them degree.

Table 1 Survey, 2013

Respondent’s Demographic Frequency Percent Cumulative Percent

Student 22 22.0 22.0
Service Holder 49 49.0 71.0
Profession Business man 28 28.0 99.0
Others 1 1.0 100.0
Total 100 100.0
bellow 30000 30 30.0 30.0
30000-50000 53 53.0 83.0
Gross Income
above 50000 17 17.0 100.0
Total 100 100.0
below 30 31 31.0 31.0
30-45 46 46.0 77.0
Age
above 45 23 23.0 100.0
Total 100 100.0
Yes 76 76.0 76.0
Marital Status No 24 24.0 100.0
Total 100 100.0
Male 68 68.0 68.0
Sex Female 32 32.0 100.0
Total 100 100.0
Below 5 27 27.0 27.0
Year of 5-10 52 52.0 79.0
Connection above 10 21 21.0 100.0
Total 100 100.0
SSC 7 7.0 7.0
HSC 15 15.0 22.0
Bachelor 32 32.0 54.0
Education
Master 45 45.0 99.0
PhD 1 1.0 100.0
Total 100 100.0

5.2 Descriptive Statistics value of cost and prestige was 3.9820 and standard
Descriptive statistics such as mean and percentage deviation (.66551). The mean value of customer satis-
were used to measure the percentage of variables faction was 4.0540and standard deviation (.60024).
and also used to describe the mean of dependent and The mean value of customer loyalty was 4.2060 and
independent variables. Table 2 shows the mean value standard deviation (.49682) with minimum value was
of basic service was 4.22 and standard deviation 1.00, and the maximum value was 5.00 and therefore
(.63469). The mean value of advanced service was variability of each factor is measured in terms of stan-
3.9780 and standard deviation (.65003). The mean dard deviation.

18
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

Table 2 Descriptive Statistics (Survey, 2013)

Factors Statements N X V Average X Average V

Help in Opening Account 100 4.1900 .84918
Basic Service Advice on deposit 100 4.1400 .91032
4.2200 .63469
Deposit is Secure 100 4.4800 .59425
(Independent
variable) Credit Facilities 100 4.0700 1.03724
Security in Bank Premises 100 4.2200 .75985
Advanced New Facilities for customer 100 3.9000 .92660
Service Overtime Banking Facilities 100 3.7000 1.03962
3.9780 .65003
Good Internal Physical Environment 100 4.1600 .82536
(Independent Con¿dentiality on Deposit 100 4.1800 .77041
variable) Available Service Provider 100 3.9700 1.00960
Cost and Responsive to Customer Complain 100 3.9400 .89691
Prestige Convenient Service Charges 100 3.9500 .88048
3.9820 .66551
Friendly Attitude 100 3.9600 .90921
(Independent Positive Mentality 100 4.0700 1.01757
variable) Contribution for Society 100 3.9900 .94810
Customer Ease of Transaction 100 3.9700 .91514
Satisfaction Prompt Service 100 4.0400 .85185
4.0540 .60024
Getting Advice 100 4.0100 .92654
(Intervening Arrangement for Customer 100 4.1100 .88643
variable) Attractive Interest Rate 100 4.1400 .75237
Customer Value Added Service 100 4.1300 .69129
Loyalty Interested to Deposit 100 4.2900 .59110
Take Credit Facility 100 4.2100 .79512 4.2060 .49682
(Dependent Inform New Banking Service 100 4.1100 .77714
variable) Strong Relationship with bank 100 4.2900 .70058

5.3 Correlations among Variables

Table 3 Correlations

Basic Advanced Cost and Customer Customer

Service Service Prestige Satisfaction Loyalty
Pearson Correlation 1
Basic
Sig. (2-tailed)
Service
N 100
Pearson Correlation .590** 1
Advanced
Sig. (2-tailed) .000
Service
N 100 100
Pearson Correlation .445** .607** 1
Cost and
Sig. (2-tailed) .000 .000
Prestige
N 100 100 100
Pearson Correlation .376** .586** .700** 1
Customer
Sig. (2-tailed) .000 .000 .000
Satisfaction
N 100 100 100 100
Pearson Correlation .297** .482** .441** .573** 1
Customer
Sig. (2-tailed) .003 .000 .000 .000
Loyalty
N 100 100 100 100 100

Note: **. Correlation is signi¿cant at the 0.01 level (2-tailed).

19
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

Table 4 Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

a
1 .729 .532 .517 .41701

a. Predictors: (Constant), Cost and Prestige, Basic Service, Advanced Service

Table 5 ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 18.974 3 6.325 36.371 .000a
Residual 16.694 96 .174
Total 35.668 99

a. Predictors: (Constant), Cost and Prestige, Basic Service, Advanced Service

b. Dependent Variable: Customer Satisfaction

Bivariate Correlations is used to know the nature, direc- lation between two variables with coef¿cient correlation
tion and signi¿cance of the bivariate relationship of the r =.482 at p < 0.00 level. The correlation between Cost
variables of this study. Therefore, the researcher used and Prestige and Customer Satisfaction, indicates that
the Bivariate Correlations procedure to compute Pear- there was a signi¿cant correlation between two variables
son’s correlation coef¿cient. Table 3 shows the Pearson’s with coef¿cient correlation r =.700 at p < 0.00 level. The
correlation coef¿cient of the variables of the study. A rule correlation between Cost and Prestige and Customer
of thumb is that multicollinearity may be a problem if Loyalty, indicates that there was a signi¿cant correla-
a correlation is >.90, in the correlation matrix formed tion between two variables with coef¿cient correlation
by all the independent variables (Coakes, S. J. and L. G. r = .441 at p < 0.00 level. The correlation between Custo-
Steed, 2000). Based on the analysis presented in Table 3, mer Satisfaction and Customer Loyalty, indicates that
the results show that there is a positive correlation there was a signi¿cant correlation between two variables
between the variables, the correlation between basic with coef¿cient correlation r = .573 at p < 0.00 level.
service and advanced service, indicates that there was
a signi¿cant correlation between two variables with 5.4 Regression Analysis
coef¿cient correlation r =.590 at p < 0.00 level. The Multiple regressions were used to study the effect of
correlation between basic service and Cost and Prestige, the independent variables (X1 = Basic service, X2 =
indicates that there was a signi¿cant correlation between Advanced service, X3 = Cost and prestige) to depen-
two variables with coef¿cient correlation r = .445 at dent variable (Y = customer satisfaction). Signi¿cance
p < 0.00 level. The correlation between basic service and level for, Basic service, Advanced service, and Cost and
Customer Satisfaction, indicates that there was a signif- prestige are accepted on Alpha (Į) = 1 %, signi¿cance
icant correlation between two variables with coef¿cient level = 99% signi¿cant at 1% (*). Table 4 shows the
correlation r =.376 at p < 0.00 level. The correlation analysis of multiple regressions. The value of R was
between basic service and Customer Loyalty, indicates (.729), the value of R square was (.529) and the standard
that there was a signi¿cant correlation between two vari- error of the estimate was (.41701). The model summary
ables with coef¿cient correlation r =.297 at p < 0.03 level. and the data are shown in Table 4.
The correlation between Advanced Service and Cost and The results from Table 4 show that the regression equation
Prestige, indicates that there was a signi¿cant correla- explains more than 53.2 % of the variability in customer
tion between two variables with coef¿cient correlation satisfaction. This is an acceptable level for R2 in explain-
r = .607 at p < 0.00 level. The correlation between ing variability of customer satisfaction. The results of the
Advanced Service and Customer Satisfaction, indicates multiple regression models indicate that customer expec-
that there was a signi¿cant correlation between two vari- tation, perceived quality, perceived value and corporate
ables with coef¿cient correlation r =.586 at p < 0.00 level. image explain the variance in customer satisfaction. The
The correlation between Advanced Service and Customer value of the R2 (R Square) is an acceptable value for
Loyalty, indicates that there was a signi¿cant corre- explaining variability of customer satisfaction. Analysis

20
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

Table 6 Coef¿cientsa

Unstandardized Standardized
Collinearity Statistics
Model Coef¿cients Coef¿cients t Sig.
B Std. Error Beta Tolerance VIF
(Constant) 1.202 .320 3.759 .000
Basic Service -.025 .083 -.027 -.307 .760 .640 1.562
1
Advanced Service .248 .091 .268 2.729 .008 .504 1.984
Cost and Prestige .495 .080 .549 6.194 .000 .620 1.613

a. Dependent Variable: Customer Satisfaction

Table 7 Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .573a .329 .322 .40912

a. Predictors: (Constant), Customer Satisfaction

of variance test statistics (ANOVA) indicates that the were found to be very signi¿cant and supportive of the
model is signi¿cant at Į = 0.000. Table 7 provides the hypotheses regression analysis except basic service;
information on the signi¿cance of the model indicating value was not statistically signi¿cant and it does not
a signi¿cant p-value of 0.000. The AVOVA ¿ndings are supported the hypothesis.
shown in Table 5 below. Multiple regression analysis in Table 6 was employed
Table 5 shows the ANOVA ¿ndings that the indepen- to determine whether basic service has an effect on
dent variables as a whole have signi¿cant relationships customer satisfaction; the result of regression analy-
with customer satisfaction (F = 36.371) (Sig 0.000). sis revealed that there was no signi¿cant relationship
Furthermore, this result is supported by the signi¿cant between basic service and customer satisfaction (.760);
correlation among the variables. The ¿ndings show that B = -.025. Because the signi¿cant value can’t be met, the
the multiple regression coef¿cients for all independent requirement which is the value of signi¿cant should be
variables with customer satisfaction is R (.729) and less than 0.05. Therefore, this hypothesis is rejected. In
R square (.532). The number of independent variables rela- contrast, the multiple regression analysis as in Table 6
tive to the sample size inÀuences R square. The adjusted was employed to determine whether the advanced
R square becomes smaller as fewer observations per inde- service has an effect on customer satisfaction; the result
pendent variable are made. It reÀects the decreasing ratio of regression analysis revealed that there was a posi-
of estimated coef¿cients to the sample size and compen- tive relationship between these two variables at the
sates for (Over ¿tting) of the data as R square increases signi¿cance level (.008) with B = .248. Therefore, this
(Hair, et. al., 2006). As shown in Table 8 the Collinearity hypothesis is supported and met the requirement. The
Statistics VIF result for basic service =1.562, advanced multiple regression analysis in Table 6 was employed to
service =1.984, cost & prestige =1.613. These results determine whether the Cost and Prestige has an effect
are signi¿cant and acceptable complying with standard on customer satisfaction; the result of regression analysis
requirement value for Collinearity Statistics VIP of less revealed that there was a positive relationship between
than 10, standard requirement VIF < 10 (Coake and these two variables at the signi¿cance level (.000);
Steed, 2007). B = .495. The hypothesis is accepted because the result
Table 6 shows that all the values of the T-statistic are of signi¿cance is less than 0.05 (Signi¿cance require-
signi¿cant for advanced service and cost & prestige and ment standard < 0.05).
insigni¿cant for basic service. Thus, all the independent Table 07 shows the analysis of multiple regressions. The
variables can be retained in the model. In other word, value of R was (.573), the value of R square was (.329)
these variables can explain the change in customer satis- and the standard error of the estimate was (.40912). The
faction. Table 6 shows that two independent variables model summary and the data are shown in Table 07.The

21
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

Table 8 ANOVAb

Model Sum of Squares df Mean Square F Sig.

Regression 8.034 1 8.034 47.997 .000a
1 Residual 16.403 98 .167
Total 24.436 99

a. Predictors: (Constant), Customer Satisfaction

b. Dependent Variable: Customer Loyalty

Table 9 Coef¿cientsa

Unstandardized Standardized
Collinearity Statistics
Model Coef¿cients Coef¿cients t Sig.
B Std. Error Beta Tolerance VIF
(Constant) 2.282 .281 8.130 .000
1 Customer
.475 .069 .573 6.928 .000 1.000 1.000
Satisfaction

a. Dependent Variable: Customer Loyalty

Table 10 The Summary of Hypotheses Results

Hypotheses Results
H1 : There is a positive/signi¿cant relationship between the basic service and customer satisfaction Rejected
H2: There is a positive/signi¿cant relationship between the advanced service and customer satisfaction. Accepted
H3: There is a positive/signi¿cant relationship between the cost & prestige and customer satisfaction. Accepted
H4 : There is a positive/signi¿cant relationship between the customer satisfaction and customer loyalty Accepted

results from Table 07 show that the regression equation relationship observed among advanced service, cost
explains more than 32.9% of the variability in loyalty. & prestige and customer satisfaction and loyalty rela-
Collinearity Statistics VIF result for customer satisfac- tionship and insigni¿cant for basic service employed
tion =1.000. Collinearity Statistics VIP of less than 10, by Jamuna Bank Limited. The customer becomes very
meet the standard requirement. much dynamic and the customer satisfaction relation-
These multiple regressions were used to study the effect ship may Àuctuate suddenly; therefore, special concen-
of the independent variables (X1 = Customer Satisfac- tration of Jamuna Bank Limited on basic service should
tion) to dependent variable (Y = Customer Loyalty). be employed for maximizing customer value and pref-
Finally, the multiple regression analysis in Table 08 was erences for making them satis¿ed and loyal. Employ-
employed to determine whether the Customer Satis- ees should be well trained to understand the needs and
faction has an effect on customer loyalty; the result of preferences of customers and provide services accor-
regression analysis revealed that there was a positive dingly that the organization is supposed to provide for
relationship between these two variables at the signi¿- its customers. Customer satisfaction and loyalty relation-
cance level (.000); B = .475. The hypothesis is accepted ship in terms of service quality dimensions is complex
because the result of signi¿cance is less than 0.05 and dynamic. Therefore special attention from service
(Signi¿cance requirement standard < 0.05). providers on customer value maximization and expec-
tation ful¿llment should be employed in order to make
6. Managerial Implications them satis¿ed and loyal.
Measuring customer satisfaction and loyalty relation- With the growing up of the world economy, a dramatic
ship in terms of basic service, advanced service, cost change has been observed in the banking sector. This
& prestige investigated therefore positive signi¿cant has brought higher employment opportunities, increases

22
CENTRAL EUROPEAN BUSINESS REVIEW RESEARCH PAPERS VOLUME 2, NUMBER 4 , DECEMBER 2013

in income level, and changes in consumption patterns Kara, A., Lonial, S., TarÕm, M., Zaim, S. (2005).
and consequently there emerges a competitive environ- A paradox of service quality in turkey the seemingly
ment. Speci¿cally, the expansion of banking business, contradictory relative importance of tangible and
along with customized services, has created an implied intangible determinants of service quality. European
Business Review, 17 (1): 5-20. http://dx.doi.
competition in this sector. This competition has created
org/10.1108/09555340510576230
a service gap for their internal and external customers.
The scenario has created an urge for the bank policy Khouri, R., Boulos, H. (2013). Conceptual Framework
makers to identify the underlying reasons and brought Development for Customer Loyalty in Malaysian
Commercial Banking Industry. European Journal
them into consideration of the customer satisfaction and
of Innovation and Business, 11.
loyalty issues. In such a situation, customer satisfaction
and loyalty of bank customer become important issues Nunnally, J. L. (1978). Psychometric Theory. New York.:
that have to be taken care of in order to achieve ultimate McGraw Hill Company.
goals of the banking sector. Since one of the key factors Oliver, R. L. (1992). An investigation of the attribute basis
of an organization is its customer and the success/failure of emotion and related affects in consumption:
of the organization largely depends on their satisfaction/ suggestions for a stage-speci¿c satisfaction framework.
Advance in Consumer Research, 19: 237-244.
dissatisfaction.
Pearson, N. (1996). Building brands directly: creating
business value from customer Relationships.
References Macmillionlan Business, 20 (6): 68-82.
Akbar, M. M., Parvez, N. (2009). Impact of Service Quality, Reichheld, F.F., Sasser Jr., W. E (1990). Zero defections:
Trust and Customer Satisfaction on Customer Loyalty. quality comes to services. Harvard Business Review,
ABAC Journal, 29 (1): 24-38. 68 (5): 105-111.
Arun Kumar, S., Tamil Mani, B. Mahalingam, S., Vanjikovan, Shankar, V., Smith, A. K., Rangaswamy, A. (2003). Customer
M. (2010). InÀuence of Service Quality on Attitudinal satisfaction and loyalty in online and ofÀine encounters.
Loyalty in Private Retail Banking: An Empirical Study. International Journal of Research in Marketing, 20(2):
Journal of Marketing, 65 (6): 36-47. 153-175.
Banerjee, N. (2012). A Comparative Study of Customers’ Stafford, M., (1994). How customers perceive SQ. Journal
Perceptions of Service Quality Dimensions between of Retail Banking, 17 (2): 29- 38.
Public and Private Banks in India. International Journal Reichheld, F. F. (2003). The One Number You Need to Grow.
of Business Administration. 3 (5): 34. Harvard Business Review, 81 (12): 485-491.
Bray¿eld, A. H., Rothe, H. F. (1951). An Index of Job Yi, Y. (1990). A Critical Review of Consumer Satisfaction.
Satisfaction. Journal of Applied Psychology, 35 (5): Review of Marketing. 4: 68-123
307-311. http://dx.doi.org/10.1037/h0055617 Zeithaml, V. A., Parasuraman, A., Berry, L. L. (1990). Deli-
Coakes, S. J., Steed, L. G. (2007). SPSS: Analysis without vering Quality Service: Balancing Customer Perceptions
anguish: Version 14.0 for Windows. Milton, Qld: John and Expectations. New York, NY: The Free Press.
Wiley & Sons. Zeithaml, V. A., Berry, L. L., Parasuraman, A. (1996). The
Cronbach L. J. (1951). Coef¿cient Alpha and Internal Behavioral Consequences of Service Quality. Journal
Structure of Test. Psychometrika. 16: 297-334. of Marketing, 60: 31–46.
Author
Hair, J.F., Black, W.C., Babin, A.L., Tatham, R.L. (2006)
Multivariate Data Analysis. 6Th Edition. Upper Saddle Md. Hasebur Rahman
River, NJ: Pearson Prentice Hall. Assistant Professor
Department of Business Administration
Johnston, R.. (1997). Identifying the critical determinants
of service quality in retail banking: importance and Pabna University of Science and Technology
effects. The International Journal of Bank Marketing. Pabna-6600, Bangladesh
15 (4): 111-119. [email protected]

23