A MAJOR PROJECT REPORT

ON

PERCEIVED VALUE, SERVICE QUALITY,

CORPORATE IMAGE & CUSTOMER LOYALTY A STUDY OF BANKING SECTOR
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Dr4 S4S4B5AKAR
(Faculty Guide)

S'6($tt!+ 67
JITENDRA SING5 KUS58A5 PRAVEEN S5ARMA

PRESTIGE INSTITUTE OF MANAGEMENT, G8ALIOR

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DECLARATION
We JITENDRA SING5 KUS58A5 , PRAVEEN S5ARMA student of MBA IIIrd Semester of Prestige Institute of Management, Gwalior, here y declare that the !ro"ect is our original !iece of wor# and not the co!y of any such wor# underta#en y someone else, all the information , facts and figures !resented in the re!ort are first hand in nature$ %hey are actually ased on our intense efforts$ We ha&e com!leted this !ro"ect under the guidance of Dr4 S4S4B5AKAR ('I()*%+( PIMG)$

'ate,

JITENDRA SING5 KUS58A5 PRAVEEN S5ARMA (MBA IIIr+ S!(43

CERTIFICATE

%his is to certify that JITENDRA SING5 KUS58A5 , PRAVEEN S5ARMA of MBA IIIrd Semester

Student

!rogramme ha&e com!leted their ma"or research !ro"ect and

!re!ared this re!ort of PERCEIVED VALUE, SERVICE QUALITY, CORPORATE IMAGE & CUSTOMER LOYALTY A STUDY OF BANKING SECTOR under our guidance $

'ate,

Dr4 S4S4B5AKAR
(Faculty Guide)

ACKNO8LEDGEMENT

)-!ressing gratitude is a difficult tas# and words often fall short reflecting one.s feeling$ *onsidered it as a !ri&ilege and an honor to ha&e een gi&en the o!!ortunity of doing my training In Prestige Institute of Management Gwalior4 A num er of !eo!le were associated and engaged in the creation of this !ro"ect wor# and I would li#e to e-!ress my than#s to each one of them$ It is indeed a moment of great !leasure to e-!ress my sense of !rofound gratitude and inde tedness to all the !eo!le who ha&e een instrumental in mar#eting my training a rich e-!erience$ I am &ery grateful to Dr4 S4 S4 B #>#r ('irector, Prestige Institute of Management) Gwalior who ga&e me this o!!ortunity carryout this !ro"ect in *ollege, Prof$ S $%"# S#)>"#% (M(P co/coordinator) $I would li#e to e-!ress my gratitude towards Dr4 S4 S4 B #>#r, my faculty guide, for his &alua le ad&ice, guidance, su!!ort, !recious time and encouragement that he offered to me during the course of !ro"ect !re!aration, it made actual com!le-ities of the world a lot easier to handle$ 0ast ut not the least, I would li#e to than# God, my family, my teacher and friends who always su!!orted me directly and indirectly and without their trust and co/o!eration my !ro"ect would ha&e !ro&ed to e e-tremely difficult$

'ate,

JITENDRA SING5 KUS58A5 PRAVEEN S5ARMA (MBA IIIr+ S!(43

T#6%! o& ?o)t!)t,

TOPIC
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PAGE NO4
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04 I)tro+'?t$o)

B#)>$)9 S!?tor $) I)+$# Ban#ing in India in the modern sense originated in the last decades of the 28th century$ %he first an#s were Ban# of 9industan (211:/283;) and %he General Ban# of India, esta lished 218< and since defunct$ %he largest an#, and the oldest still in e-istence, is the State Ban# of India, which originated in the Ban# of *alcutta in =une 28:<, which almost immediately ecame the Ban# of Bengal$ %his was one of the three !residency an#s, the other two eing the Ban# of Bom ay and the Ban# of Madras, all three of which were esta lished under charters from the British )ast India *om!any$ %he three an#s merged in 2;32 to form the Im!erial Ban# of India, which, u!on India>s inde!endence, ecame the State Ban# of India in 2;??$ For many years the !residency an#s acted as 6uasi/central an#s, as did their successors, until the (eser&e Ban# of India was esta lished in 2;4?$ In 2;<; the Indian go&ernment nationalised all the ma"or an#s that it did not already own and these ha&e remained under go&ernment ownershi!$ %hey are run under a structure #now as >!rofit/ma#ing !u lic sector underta#ing> (PS7) and are allowed to com!ete and o!erate as commercial an#s$ %he Indian an#ing sector is made u! of four ty!es of an#s, as well as the PS7s and the state an#s, they ha&e een "oined since 2;;:s y new !ri&ate commercial an#s and a num er of foreign an#s$ Ban#ing in India was generally fairly mature in terms of su!!ly, !roduct range and reach/e&en though reach in rural India and to the !oor still remains a challenge$ %he go&ernment has de&elo!ed initiati&es to address this through the State an# of India e-!anding its ranch networ# and through the @ational Ban# for Agriculture and (ural 'e&elo!ment with things li#e microfinance$ C'rr!)t "!r$o+ By 3:24 , an#ing in India was generally fairly mature in terms of su!!ly, !roduct range and reach/e&en though reach in rural India still remains a challenge for the !ri&ate sector and foreign an#s$ In terms of 6uality of assets and ca!ital ade6uacy, Indian an#s are considered to ha&e clean, strong and trans!arent alance sheets relati&e to other an#s in com!ara le economies in its region$ %he (eser&e Ban# of India is an autonomous ody, with minimal !ressure from the go&ernment$ With the growth in the Indian economy e-!ected to e strong for 6uite some time/es!ecially in its ser&ices sector/the demand for an#ing ser&ices, es!ecially retail an#ing, mortgages and in&estment ser&ices are e-!ected to e strong$ +ne may also e-!ect MAAs, ta#eo&ers, and asset sales$ In March 3::<, the (eser&e Ban# of India allowed War urg Pincus to increase its sta#e in Bota# Mahindra Ban# (a !ri&ate sector an#) to 2:C$ %his is the first time an in&estor has een allowed to hold more than ?C in a !ri&ate sector an# since the (BI announced norms in 3::? that any sta#e e-ceeding ?C in the !ri&ate sector an#s would need to e &etted y them$

Co)?!"t'#% &r#(! *or>

Cor"or#t! $(#9!

A cor!orate image refers to how a cor!oration is !ercei&ed $ It is generally acce!ted image or what a com!any stand for $ %he creation of a cor!orate image is an e-ercise !re!aration management $ It is created !rimarily y mar#eting e-!erts who use !u lic relations and other forms of !romotions to suggest a mental !icture to the !u lic$ %y!ically a cor!orate image designed to e a!!ealing to the !u lic, so that the com!any can s!ar# and interest among consumers ,create share of mind, generate rand e6uity, and thus facilitate !roduct sales$ A cor!orations image is not solely created y the com!any , +ther contri utors to a com!anies image could include news medias, "ournalists, la or unions, en&ironmental organiDations, and other @G+S$ *or!orations are not the only form of organiDation that creates these ty!es of images $ Go&ernment, charita le organiDation, criminal organiDation, religious organiDation ,!olitical organiDation and educational organiDation all tend to ha&e a uni6ue image, an image that is !artially deli erate and !artially accidental, !artially self created and !artially e-ogenous$ P!r?!$B!+ B#%'! It is essential to #now what consumers &alue, efore one can truly understand channel !urchase intentions and channel choice$ What do consumers really want from their online and offline sho!!ing e-!eriencesE What attri utes are most im!ortant in their "udgments of &alueE What dri&es them to use one channel o&er anotherE %his research !ro!oses that the channel !urchase intentions de!end on the e-!ectations of &alue, i$e$ a tradeoff etween the !ercei&ed enefits and costs deri&ed from using channels for !urchasing$ %o com!are oth channels from a consumer !ers!ecti&e, the conce!t of !ercei&ed &alue is chosen, as it re!resents a consumer.s o&erall assessment of the utility ased on !erce!tions of what is recei&ed and what is gi&en (cf$ Feithaml 2;88)$ Percei&ed &alue is e-!ected to significantly influence channel !urchase intentions, and y measuring its !redictors, it can !ro&ide insights in how &alue is constructed in oth channels$ %his cha!ter starts with a theoretical ac#ground on the definitions and nature of &alue$ @e-t, it shows how consumers form their e&aluations of &alue, followed y a classification of !urchase/related costs and enefits$ Finally, the cha!ter !ro&ides the main antecedents of !ercei&ed &alue and !urchase intentions that are used as in!ut to the conce!tual model$ S!rB$?! G'#%$t7 Ser&ices are commodities that cannot e stored or disa!!ear in use, or as acti&ities that re6uire !ersonal contact$ %he distinct characteristics of ser&ices are intangi ilityG !erish a ility, heterogeneity of the !roduct, and simultaneously of !roduction and consum!tion$ %wo economic units are re6uired for a ser&ice to e !roduced H the consumer and the !roducer$ While the consumer cannot retain the actual ser&ice after it is !roduced, the effect of the ser&ice can e retained$ Managing a ser&ice o!eration re6uires the manager to understand the ser&ice conce!t, ser&ice deli&ery system, and ser&ice le&els$ As the consumer has a #ey role in the definition and e&aluation of all three elements, it is im!erati&e that ser&ice managers ha&e a clear understanding of consumer e-!ectations and !erce!tions$ Ser&ices may e !ro&ided y !ri&ate or !u lic agencies$ %hese characteristics enhance the im!ortance of certain mar#eting strategies that are

uni6ue to ser&ices mar#eting, such as ser&ice customiDation, managing e&idence, ma#ing the ser&ice tangi le, and synchroniDing su!!ly and demand !atterns$ Iuality is an e-tremely difficult conce!t to define in a few words$ At its most asic, 6uality has een defined as conforming to re6uirements $%his im!lies that organiDations must esta lish re6uirements and s!ecificationsG once esta lished, the 6uality goal of the &arious function of an organiDation is to com!ly strictly with these s!ecifications$ Many analyses of ser&ice 6uality ha&e attem!ted to distinguish etween o "ecti&e measures of 6uality and measures which are ased on the more su "ecti&e !erce!tions of customers$ A de&elo!ment of this idea y Gronroos identified Jtechnical. and Jfunctional. 6uality as eing the two !rinci!le com!onents of 6uality$ %echnical 6uality refers to the relati&ely 6uantifia le as!ects of a ser&ice which consumers recei&e in their interactions with a ser&ice firm$ Because it can easily e measured y oth customer and su!!lier, it forms an im!ortant asis for "udging ser&ice 6uality$ )-am!les of technical 6uality include the waiting time in an automo ile ser&ice wor# sho! and the relia ility of their ser&ices$ %his, howe&er, is not the only element that ma#es u! !ercei&ed ser&ice 6uality$ Because ser&ices in&ol&e direct consumer/ !roducer interaction, consumers are also influenced y how the technical 6uality is deli&ered to them$ %his is what Gronroos descri es as functional 6uality and cannot e measured as o "ecti&ely as the elements of technical 6uality$ In the case of the 6ueue in a automo ile ser&ice wor# sho!, functional 6uality is influenced y such factors as the en&ironment in which 6ueuing ta#es !lace and consumers !erce!tions of the manner in which 6ueues are handled y the staff$ Ser&ice 6uality is a highly a stract construct, in contrast to goods where technical as!ects of 6uality !redominate$ Many conce!tualiDations of ser&ice 6uality therefore egin y addressing the a stract e-!ectations that consumers hold in res!ect of 6uality$ *onsumers su se6uently "udge ser&ice 6uality as the e-tent to which !ercei&ed ser&ice deli&ery matches u! to these initial e-!ectations$ In this way, a ser&ice which is !ercei&ed as eing of mediocre standard may e considered of high 6uality when com!ared against low e-!ectations, ut of low 6uality when assessed against high e-!ectations$ Analysis of ser&ice 6uality is com!licated y the fact that !roduction and consum!tion of a ser&ice generally occur simultaneously, with the !rocess of ser&ice !roduction often eing "ust as im!ortant as the ser&ice outcome$ A further !ro lem in understanding and managing ser&ice 6uality researcher study the le&el of ser&ice 6uality in A!co 9yundai Basaragod$ 9ere researcher use 6uestionnaire for measuring le&el of ser&ice 6uality for the im!ro&ement of com!any$ +nce the customer e-!ectation are understand that hel!s for continuous de&elo!ment of ser&ice 6uality$

C',to(!r %o7#%t7 *ustomer 0oyalty is winning the confidence of the customer in fa&or of an organiDation such that the relationshi! ecomes a win/win situation for oth the organiDation as well as the

customer$ *ustomer 0oyalty is not a !rocess that finishes with the customer "oining the 0oyalty Program ut actually a !rocess that starts with the customer "oining the same$ *ustomer 0oyalty is something more of what an enter!rise must get from the customer$ As o!!osed to what the name suggests is not "ust something that the customer has to uild towards the enter!rise$ It is not "ust the customer who is eing loyal to the com!any in the !rogress But also the com!any that has to maintain its loyalty to the customer

A4 R!B$!* o& L$t!r#t'r!

'as iwas A 'as (3::1), customer satisfaction leading to customer loyalty is one of the most unassaila le conce!t of modern management !ractice$ Karious researches ha&e in&estigated the relationshi! etween some #ey factor such as !ercei&ed &alue of !roduct and ser&ice , com!etiti&e cost, customer focus feed ac# in&ol&ement , cometent em!loyees , inno&ati&eness and co!orate social res!onci ility H and *S in different conte-t$ Some studies ha&e een done on the effect of order management $ *ycle (+M*) and !roduct !ortfolio and their relationshi!s with *S$ %here has een little in&estigation into the relationshi! of +M* and *S, along with !roduct 6uality and !roduct !rice in the indian conte-t $ 0e& et al (3::8), e-amines the im!act of cor!orate !hilanthro!hy growth on sales growth using a large sam!le of charita le contri ution made y 7$S !u lic com!anies from 2;8; through 3:::$ A!!lying Granger causality tests, we find that charita le contri utions are significantly associated with future re&enue, whereas the association etween re&enue and future contr utions is marginally significant at est$ We then identify the mechanism underlying our findings$ +ur results are !articularly !ronounced for firms that are highly sensiti&e to consumer !erce!tion, where indi&idual consumers are the !redominant customers$ In addition, we document a !ositi&e relationshi! etween contri utions and customer satisfaction$ +&erall , our e&idence suggests that cor!orate !hilanthro!hy, under certain circumstances, furthers firms economic o&"ecti&es$ Klachos et al (3::8), influence their e&aluation of cor!orate social res!onsi ility efforts$ %he study re&eals the mediating role of consumer trust in *S( e&aluation framewor#s, manager should monitor consumer trust ,which seems to e an im!ortant su !rocess regulating the effect of consumer attri utions on !atronage and recommendation intentions$ Further, managers may allay the negati&e effects of !rofit/moti&ated gi&ing y doing well on ser&ice 6uality !erce!tions$ +n the other hand, a!!ro!riately moti&ated gi&ing continues to !ositi&ely affect trust regardless of the !erformance of the firm on ser&ice 6uality !ro&ision$ Moi er et al (3::5), e-amines the image of audit firms in s!ain$ S!ain offers a &alua le research conte-t in that it is relati&ely new audit mar#et and one where the to! com!any audits are not totally dominated y the large multinationa#l audit firms, allowing for a com!arison of the images of such firms allowing for a com!arison of the images of such firms against those associated with smaller , national audit firms$ %he findings of the sur&ey are !ertinent gi&en the current le&el of de ate internationally o&er the role, regulation and 6uality of regulating ser&icesand concerns o&er the !otential im!act of recent cor!orate scandals on auditor re!utation$ +ur studies show that the image of audit firms in s!ain ha&e differed on a dimension, mostly concerned with the !ricing of audit ser&ices and the s!read of audit clients $%he study also shows the areas of the audit firms cor!orate image wherethe actual image of the firm differs significantly from that desired y the management of their clients$ Battisti (3::4), in this !a!er two inde-es will e !ro!osed $ *ustomer satisfaction of a ser&ice will e study througha Lso calledM formati&e model$It seems !ossi le to rea#down the two inde-es in to three le&els, which can e considered from ottom to to! or crosswise , thus

!ro&iding different !ossi ilities for analysis$ %he system of weighting used has een ased u!on actual num er of answers to each 6uestions$ Gritti(3::1) , addressed how customer satisfaction and loyalty in the an#ing industry may affect !rofita ility $ %his hel!s to identify the strategies and com!etencies necessary to enefit from customer relationshi!s which are im!ortant sources for im!ro&ed !erformances in the an#ing $ We do this y analyDing data collected on 3,2:? customers of 228 ranches of one of the iggewst an#s of Italian an#ing grou!$ We find that customer satisfactio im!acts lloyalty, whiuchg in turn has a direct effect on financial and non/finanacialcustomer &alue$ Moreo&er, loyalty is a mediator etween financial and non/financial customer &alue and two sources of cuysomer satisfaction , namely relationshi!s with the front office and the ranch ,on the one hand, and the !roducts offered, on the other$ (AKI (3::8), S%A%)' %9A% '7) %+ I@*()ASI@G com!etition in retail an#ing, understanding the customer !erce!tion a out ser&ice 6uality is ecoming indis!ensa le$ %he !ri&ate sector an#s through their initiati&es for meeting customers e-!ectations and gaining a cutting edge$ %his is reflected y the increasing mar#et share and etter !rofita ility of !ri&ate an#s in com!arison to that of !u lic sector an#s$ At the same time, !u lic sector an#s ha&e also res!onded to the challenges !osed y the !ri&ate sector an#s through conscious efforts to enhance their &ser&ice 6uality$ %his study com!ares !u lic sector an#s and !ri ate sector an#s interms of user !erce!tion of their retail an#ingser&ices$

R#t$o)#% o& t ! ,t'+7

%his study is eing conducted to identify the factor effecting cor!orate image and how ser&ice 6uality gi&es effect on customer loyalty$ *ustomer loyalty is the ac# one of an#ing sector in !resent scenario without customer loyalty an#ing growth is not !ossi leG ser&ice 6uality is also im!ortant factor of customer loyalty$ %he study is aimed to ma"or the im!act of rand image, study shows relationshi! etween cor!orate image and customer loyalty , ser&ice 6uality and customer loyalty, !ercei&ed &alue and customer loyalty$ (esearch is hel!ful in an#ing sector and other organiDation to fulfillment of customer loyalty and im!ro&ing their rand image as a mar#et satisfaction these are some &aria le those effecting the customer loyalty$ Although there has een se!arate researches done on these &aria le still a connecting lin# is missing which is encouraged to undergoing this research$