MBA PROGRAM CHAPTER FOUR

Findings of the Study

As my study is concentrated with the comparison among the four private scheduled bank of Bangladesh in Rajshahi Area I have tried to compare their strategies, policies and their effectiveness and measure the satisfaction level of customers with the bank. To compare anything with others is very difficult. Because it is the applied research that always becomes different from others. Moreover, compare one bank to another depends on customers view, services view, cost position, attractiveness etc. Now I present their comparison in the below charts and figures following ways.

Target Customer

Target Customer: Target market determination is very important factors for every business organization. In banking sector it is also very important to determine target market appropriately. To determine the target market, market should be divided into several segments. Then banks can choose one or more segment as their market the segment chosen by the four Banks as target market. 

Target Customers

Customers	Brac	Dhaka	Islami	Prime
Large industry	ü	ü	ü
SME	ü		ü	ü
Consumer	ü		ü	ü
Students	ü			ü
Others	ü			ü

From the above table we see that IBBL targets to the large, SME and consumer for capturing higher resources. On the other hand Brac Bank is trying to satisfy the all the segment in the market prime, and Dhaka bank trying to uphold their service to the market and bidding the leader.

Product: Banking is a service based organization. So, it is very difficult for the banks to identify and develop various types service product. It is also difficult to identify the unexpressed demand of clients. Also there is very intensive competition in banking service and it is increasing very rapidly.

Services provided by Four Banks

Services	Brac	Dhaka	Islami	Prime
Deposit receiving	ü	ü	ü	ü
Locker facility	ü		ü
Debit card facility	ü	ü	ü
ATM facility	ü	ü	ü
Credit card facility	ü	ü	ü	ü
24 hours service	ü		ü
Door to door service	ü		ü	ü
Online facility	ü	ü	ü	ü
Counseling				ü
Money transferring	ü	ü	ü	ü
Foreign Exchange Facility		ü		ü
Loan facility	ü	ü	ü	ü

By observing the above table we understand that Islami Bank Bangladesh Limited (IBBL) holds maximum services as they are market leader. On the other hand Brac and Dhaka are the market challenger they are trying emulate to the IBBL. For this they are trying to increase their services.

Price: It is very tough to set prices of services. So, it is also very difficult to set prices of various bank services. Also intensive competition makes it more difficult. The four banks generally consider the following factors for determining the prices.

Considerable factors to determine interest rate

(%)

Types	Brac	Dhaka	Islami	Prime
On deposit	C, IRLM, S	IRLM, ADM	ADM, T	C, Co, IRLM, ADM, T
On lending money	I,  ALM, T	I, IRD, S	I, ALM, T	I, Co, IRD, S, ALM, T

Abbreviation indicates the followings

C= Consumer, Co = Competitors, IRLM = Interest rate of lending money, S= Security, ADM = Amount of depositing money, T= Time,         I = Investment, ALM = Amount of lending money, IRD= Interest rate of deposit.

Interest on deposit: The interest rates on deposits are varies on time and bank to bank. The interest rate of the four banks are given below

Interest on deposit

Customers	Brac	Dhaka	Islami	Prime
Savings account	6.5	6		6.00
Fixed account
For 3 month	6.5	11.5		11.50
For 6 month	6.5	11.75		11.50
For 1 year	6.5	12.00		11.75
For 2 year	N/A	11.00		11.75
For 5 year	N/A	11.00		11.75
Others				12.00

From the above table we see that, Prime, and Dhaka bank are fixing lower price than others and trying to attract all types of customer. They want to create image as higher paying on deposit on savings. On the other hand, IBBL as an Islami minded bank they don’t express themselves as a laoner, for this they operate their banking service following Islami Shariah that’s why their service price is different. But Brac Bank is providing lower amount of interest on deposit for decreasing their cost.

Target Customer

Interest on others facilities:  The four banks provide various other modern services. They also imposed charges on those facilities. The charges are  

Interest on others facilities 

Services/facilities	Brac	Dhaka	Islami	Prime
Locker service	*N/A	Token charge		*N/A
Debit card	Free	Free		*N/A
ATM	400 p. a.	Free		*N/A
Credit card	1500	1%		1400-2000
24 hours service	Free	N/A		*N/A
Home delivery service	Free	N/A		*N/A
Online facility	Free	Token charge		50p/m
Counseling	Free	N/A		Free
Money transferring	Free	100 *p. trans.		.10%
Foreign Exchange Facility	Free	variable		.50%

*p.a. = Means per annum

* P. trans.= Means per transaction

* N/A = Refers not applicable

*P/m=Per month

Maximum service of the Brac Bank is free attracting their customer. But others bank charges higher they emphasize on image building. On the other hand Bank has only two service that is, Money transferring and foreign exchange facility due to previous state bank.

Charges on Transaction: There are some general transactions are provided by various banks. The charges on this transaction are also vary bank to bank. The charges of several transactions of the four banks are

Charges on Transaction

Customers	Brac	Dhaka	Islami	Prime
DD	-	0.15%	10	0.10%
TT	Free	N/A	10+30	0.10%+50
PO	115	200	10	0.10%
SDR	N/A	N/A	N/A	0.10%

We can see from the charge that Islami Bank charges very lower price than others. Also Brac Bank imposed free on various transactions primarily for attracting the new clients. But Prime Bank and Dhaka Bank imposed comparably higher price.

Interest on Loan Facility: Interest on loan mainly vary on the amount, time, and mortgage. This is the main sources of bank income. The interest rate on loans of Brac Bank, Dhaka Bank, IBBL, Prime Bank are shown in the chart

Interest on Loan Facility

(%)

Customers	Brac	Dhaka	Islami	Prime
Corporate	10.75	14-16	14.5-15	14.5-16
SME	11	15-17	10-15	15-16
Consumer	10.5	18	7.5-14.5	16

From the above chart we see the interest rate on loan of Brac Bank are comparatively others. IBBL also imposed lower rate of interest on loan.

Place: Customers are separated from the bank. They are living in various areas in the country. So, to attract the customer, to serve them it is necessary to reach. Distribution channel should be such away that every potential customers within the country and get the facility to achieve the benefits provides by the bank.

Banking activities as a service it provides direct distribution channel. So, more branches indicate more efficiency in distribution. The branches of four banks are

Table Statement of Banks in the year 2006

Name of Bank	Branches
Islami Bnak Bangladesh	176
Prime Bank	52
Dhaka Bank	39
Brac Bank	27

We see that IBBL has the highest number of branches than others. But Brac bank has lowest number of branches.

Considerable factors to open bank branch: The banks always consider the factors of area for opening a branch. This is given the following chart.

Considerable factors to open bank branch

Factors	Brac	Dhaka	Islami	Prime
Urban area		ü	ü	ü
Semi Urban area	ü		ü	ü
Rural area		ü	ü	ü

IBBL considers all the factors and they try to open their branches in everywhere the country.

User of modern banking facilities: For smooth distribution of banking system banks always use various modern banking facilities. The four banks also use some of the modern banking facilities. They are using –

User of modern banking facilities by types of business enterprise

B. Enterprise	Brac	Dhaka	Islami	Prime
Retail store			ü	ü
Super market	ü			ü
Shopping mall	ü	ü		ü
Air ways
Travel agency
Others		ü	ü

Number of cash counters: For providing efficient cash services every banks have separate cash counters. They may provide cash services with one or more cash counters.

Number of cash counters

Cash counter	Brac	Dhaka	Islami	Prime
Number	3	5	9	1

IBBL has the highest number of cash counters. So, they can provide quick and efficient service in cash.

Systems of cash counter: The systems of cash counter of the four banks are given in the following chart.

Systems of cash counter

system	Brac	Dhaka	Islami	Prime
Single counter disposal	ü	ü		ü
Numbers of counter disposal			ü

We see that Prime Bank, Dhaka Bank and Brac Bank provide single counter disposal which is easier than others methods. But IBBL provides numbers of counters disposal which is difficult and time consuming than single counter disposal. 

Foreign exchange operation: Foreign exchange is an important service of banks. Most of the banks have foreign exchange services in their selected branches.

Numbers of Branches for foreign exchange operation

	Brac	Dhaka	Islami	Prime
Numbers	6	20	38	38

IBBL and Prime Banks provide foreign exchange services with the highest number of branches.

Target Customer

Promotional activities: Promotional activities create awareness, interest, desired and action for banking services. It also helps to create their image positioning in customer mind. Now a day, for intensive competition every bank increases their promotional activities. Promotion becomes one of the most important activities in bank service marketing. There are four tools of promotion.

Advertisement: Advertisement is the most uses promotional tools. In advertising various media are used. Media used by the four banks for advertising are given in the below chart.

Media used by bank for advertisement

Media	Brac	Dhaka	Islami	Prime
Television		ü	ü	ü
Radio			ü
Poster			ü
Newspaper	ü	ü	ü	ü
Magazine			ü	ü
Bill board	ü	ü	ü	ü

Personal selling: Now a day, most of the banks use personal selling as promotional tool for their banking services, because personal selling is the most effective promotional activity for service marketing.

Field of activities

Particulars	Brac	Dhaka	Islami	Prime
To aware credit scheme				ü
To aware modern banking facilities	ü	ü	ü
To aware new service			ü

Though the use personal selling activity is low but it is increasing quickly day by day for getting better competitive advantages.

Public relation: It helps the banks for creating better image. Public relation activities of the four banks are given below chart.

Public relation activities followed by the bank

Particulars	Brac	Dhaka	Islami	Prime
Sponsorship				ü
Donation			ü	ü
Infrastructure development
Participation in social program	ü	ü	ü	ü

So the banks should increase their Public relation activities for creat better image.

Sales promotion: Sales promotion is another tool of promotional activities. As banking is a service base organization it perform a low amount of sales promotion activity.

                       Sales promotional activities followed by the bank

Particulars	Brac	Dhaka	Islami	Prime
coupon
Incentive	ü			ü
Low interest rate on loan for particular time				ü
Low service charge in different services	ü		ü	ü
Observing service week		ü

We see that Prime bank use the most sales promotional activity for attracting the customer and create better Image.

These are the various strategies followed by the four banks in the Product, Price, Place and promotion sector. They use these strategies for designing some marketing strategies.

Target Customer

Overall marketing strategies: The overall marketing strategies followed by the four banks are given below in chart.

Marketing strategy followed by the bank

Strategies	Brac	Dhaka	Islami	Prime
Expanding market	ü	ü
Encourage to use more	ü	ü	ü	ü
Find new market segment	ü	ü	ü
Protecting existing market through strong distribution network			ü
Market challenger strategy		ü
Customer retention strategy	ü	ü
Find and occupy niche market	ü		ü
Cost leadership strategy	ü	ü
Premium policy	ü

Brac Bank as a new entrance try to achieve the result quickly that is why they are following the maximum strategies and the others emphasize on the selective strategies to hold their current position.

From the research I conducted, find out these strategies followed by the four banks to achieve their objectives through satisfying their customers.

Target Customer

 Measuring customer satisfaction on Bank Services

I also try to measure the satisfaction level of customers of the four banks. I try to see the impact of these strategies on the customer of the four banks. That is why I find out major factors that determine the satisfaction level of the customer. Then I prepare the final questionnaire and serve 60 customers of the four banks. I selected 15 customers of each banks. Though the number is limited but I try to find out the appropriate level of satisfaction.

Brac Bank: The customers of Brac Bank give their opinion about the various factors of the bank services. Their frequency distribution is as follows.

                             Frequency distribution of Brac Bank

Factors	Highly satisfied (5)	Satisfied (4)	Neither satisfied nor dissatisfied (3)	Dissatisfied (2)	Highly dissatisfied (1)
up-to-date equipment		9	6
physical facilities	6	6	3
Employees dress up	3	6	6
Image		9	6
bank promised	3	9	3
Dependency	3	12		4
location of the bank branch		8	3
Exact knowledge provided	3	9	3
Error free record	4	5	6
Safety		9	6
Employee trust	3	9	3
Employee attention	2	8	5
Interest rate	3	6	3	3
Operating time	3	6	6
Total system	8	5	2

From the above table we find out the clients measurement of Brac Bank towards various factors. We see that most of the existing customers are satisfied. But the interest rate and operating time should be developed better for better customer satisfaction.

Frequency distribution of Prime Bank: In the following chart the frequency of Prime Bank are given.

Prime Bank

Factors	Highly satisfied (5)	Satisfied (4)	Neither satisfied nor dissatisfied (3)	Dissatisfied (2)	Highly dissatisfied (1)
up-to-date equipment	3	9	3
physical facilities	6	9
Employees dress up		12		3
Image	4	8	2	1
bank promised	6	9
Dependency		6	9
location of the bank branch	9	6
Exact knowledge provided		9		6
Error free record	3	6		6
Safety	2	3	4	6
Employee trust	4	8	2	1
Employee attention	3	12
Interest rate		3	6	6
Operating time	4	8	2	1
Total system		12	3

From the above table we find out the clients measurement of Prime Bank towards various factors of bank service. We see that most of the existing customers are satisfied with the service provided by the bank. But the interest rate, employee dress-up, safety, error free record and exact knowledge provided are not in satisfied level.

Frequency distribution of Islami Bank:    In the following chart the frequency of Islami Bank are given.

Islami Bank

Factors	Highly satisfied (5)	Satisfied (4)	Neither satisfied nor dissatisfied (3)	Dissatisfied (2)	Highly dissatisfied (1)
up-to-date equipment		9	6
physical facilities		9	6
Employees dress up	3	6	6
Image	2	6	3	3	1
bank promised	3	2	8	2
Dependency	4	4	5	2
location of the bank branch	5	8	2
Exact knowledge provided	3	6	6
Error free record	6	6	3
Safety	6	6	3
Employee trust	3	12
Employee attention		9	6
Interest rate		9	6
Operating time	4	8	2	1
Total system	3	6	6

From the above table we find out the clients measurement of Islami Bank Bangladesh Ltd. towards various factors. We see that most of the existing customers are satisfied. But they are very dissatisfied with the image of the bank. Because they are the very strong supporter of a specific parties. So, the bank should create positive image towards it.

Frequency distribution Dhaka Bank: In the following chart the frequency of Dhaka Bank are given.

                                               Dhaka Bank

Factors	Highly satisfied (5)	Satisfied (4)	Neither satisfied nor dissatisfied (3)	Dissatisfied (2)	Highly dissatisfied (1)
up-to-date equipment	9	6
physical facilities	6	7	2
Employees dress up	7	6	2
Image	4	8	2	1
bank promised	3	12
Dependency		12	3
location of the bank branch	6	9
Exact knowledge provided	5	6	4
Error free record	6	5	4
Safety	5	10
Employee trust	4	10	1
Employee attention	3	10	2
Interest rate		2	6	7
Operating time	3	10	2
Total system	3	12

From the above table we find out the clients measurement of Dhaka Bank towards various factors. But they are very much dissatisfied with their interest rate. Bank should increase the interest rate according to customer expectation.  

Comparative study on customer satisfaction of four banks

Firstly I have found out the level of satisfaction of the respondents on various factors. I conducted my study with five scale questionnaire with a score of each scale.

Highly satisfied                                 5

Satisfied                                            4

Neither satisfied nor dissatisfied       3

Dissatisfied                                                 2

Highly dissatisfied                            1

After finding the level of satisfaction I sum the score of each factor. Then I divided the total score with the total number of respondents to find out the average of each factors of the four banks.

Average score =  

Factors	Brac	Dhaka	Islami	Prime
up-to-date equipment	3.6	4.6	3.6	4
physical facilities	4.2	4.3	3.6	4.4
Employees dress up	3.8	4.4	3.8	3.6
Image	4	4	3.3	4
bank promised	4.2	4.2	3.4	4.4
Dependency	3.8	3.8	3.7	3.6
location of the bank branch	3.3	4.4	4.2	4.6
Exact knowledge provided	3.6	4	3.8	3.2
Error free record	3.9	4.1	4.2	3.4
Safety	4	4.3	4.2	3
Employee trust	4	4.2	4.2	4
Employee attention	3.8	4	3.6	4.2
Interest rate	3.8	2.6	3.6	2.8
Operating time	4	4	4	4
Total system	4.4	4.2	3.8	3.8

From the above table we see that the interest rate of Dhaka Bank, and Prime Bank is very dissatisfy level. But the other facilities are in satisfying level. On the other hand Brac Bank and Islami Bank have satisfied interest rate but and employee physical facilities are in lower than others.

As my study explores on description of the four banks I have just tried to compare their services and consumer satisfaction in marketing aspects and I have found the above findings.