HBD Inc Students Consumer Behavior - Case Study Example

Name: Institution: Title: HBD Inc Case Study on Students’ Consumer Behavior Professor: Course: Date of Submission: Table of Content Executive Summery……………………………………………………………………………………………………..………….4 Introduction ………………………………………………………………………….……..4 Research Background Objectives…………………………………………………..………5 Reasons Why Customes Are Looking For Services Elswhere.…………………………....7 Building Successful Customer Relationships ………………………………………..…... 7 Knowing HBD Inc Bank Market……………………………………………………….…..8 Findings and Recommendations…………………………………………………….…..…10 Conclusion…………………………………………………………………….……..…….13 Bibliography………………………………………………………………………….…....14 Executive Summary The research report is build with a purpose of evaluating the student customers and their general behavior in banking activities. The HBD Inc bank has developed a market research on establishing service quality basing on different levels of customers’ perception in regard to the business service they offer. The team involved has a role of designing a research approach, which gives primary basis of analyzing data collected through the scientific developing questionnaire. The questionnaire is personally administered simple size of analysis by choosing the convenient basis from seven students all based in different countries. Research findings, indicate that the customers’ perception in all countries differ but the highly scoring parameter is revealed to be the tangible area, for instance employee presence of ATM and parking facilities for customer use, while the lower parameter involve competence areas. The research to reports on the necessary recommendations which can possibly worked on in providing solutions that the HBD Inc bank management has to put in place to achieve the desired quality in presence of customer perception. Introduction In service industries, worldwide, the subject of service quality remains a critical one as the business try hard to maintain a relative advantage in the marketplace. Since financial services, particularly banks compete in the marketplace with generally undifferentiated products and service quality becomes a primary competitive weapon (Trubik, 2000, pg 203). It is true that the structural changes have occurred in banking sector with banks being allowed to involve in a greater array of activities allowing them to become even more competitive with non-bank financial institutions (Lasser, 2000, p.78). An increased technological changes have to a great extend influenced the financial institutions to rethink on way forward in concern to their strategies for services offered to both commercial and individual customers. Research Background Objectives With the purpose to investigate the precise factors that affect attitude and consumer banking behavior of two types of consumers. Claims made by Brijball (2004, pg. 88) reveals different marketing constructs related to retail banking consumers this include marketplace segmentation, attitude, intension, preferences, student customers banking loyalty, banking selection choice and bank reputation among other customer satisfactory qualities. One marketing contract relates to retail customers that have the attracted a plethora, the study exposes the reality on the patronization process of retail customers or reasons on the basis of how customers choose to bank with specific commercial banks. An extensive review of this pertinent literature by Liang (2009, pg.53) suggests generations concerning patronizing process of customers to have made a significant contribution to the literature on banking and selection criteria of the retailing customers. The studies reveal that the western countries raised critical question as to the transportability of their results to other countries due to the differences in culture, political practice, legal settings and economical settings. Reasons Why Customes Are Looking For Services Elswhere There is a new era of risk and opportunity, with customer students increasingly mobile and ever-more demanding. Consumer perception are changing at a rapid rate, and banks are faced with threats of customers accessing some, if not all, of their services from other service providers, while similarly banks work to find an increased opportunity on the market share. Lack of customers confidence in the banking system has further pushed consumers to consider spreading their allegiances a cross a number of providers (Liang, 2009, pg.67). For instance, almost a quarter of European customers holds more than two accounts with a second bank and one in ten source more than two services from a third provider. However, the fact that three quarters of student customers who use more than one bank have only one product with each of their other banks, suggests that customers are more likely to select a specific bank for particular product. The resource statistics points out an increased move from multipurpose bank to customer demand, in developing new specialist banking services. Customers are demanding specialized products and high service quality, and these necessities needs to be met in helping reinforce trust and confidence in the banking industry. Within a decreased business margin trend, adaptable banks may need to re-visit strategic plans to find a balance between specialization of products and service and a continuous drive towards efficiency rate improvement. Many banks are already reviewing their operational and distribution models in light of this issue (Gup, 2000, pg.44). The research also found out differences across the markets. For instance, student customers in Spain44% and France 40% are most likely to hold between five or six products with their main banking compared to 30% average percentage within the six countries. UK customers about 27% are more likely to have just one product with their main bank compared to an estimated percentage of about 19% across Europe. According to Chaoprasert (2004, p.66) the research finding comes an opportunity for banks to identify those customers with who to develop abettor relationship based on the current purchasing habits, and strategize on maintain and adapting the right product and service offered so as to meet their specific demands. Some of the European student customers, an estimated percentage of about 14% of the market share distinguish themselves as contented promoters of their banks; these are customers that should be targeted more proactively as promoters of the bank to new customers. Services can be tailored to different of customers using sophisticated customer analysis, while introducing a friend schemes and loyalty program helps to value their commitment to the bank. Building Successful Customer Relationships Customer satisfaction has never been of any concern to major banking leaders and HBD Inc management is not an exception. This is the right time for HBD Inc leaders to identify the specific satisfaction drivers that must influence their businesses, and act on those findings in improving the service quality and customers perception. In our survey, the expected drivers of satisfaction included price, service and product offering. These are the three main sources of customer dissatisfaction (Gup, 2000, pg.144). In light of credit crisis, a bout 25 % of the respondent who planed to change their bank refers to lack of reliance as the reason to change. However, the grounds for customers moving to other banks might be very different across the markets. For instance, price was a key factor some parts of the market, the Italian based Student customers, which recorded a bout 50% and German recording an estimated percentage of about 55% , on the contrary, this was not the case for France and UK customers, where only 16% cases were cited to be the reason for changing banks (Lasser, 2000, pg.122). The research report reveals a continued need for HBD Inc bank to segment their customer bases and target the loyal customers. As service controls move embrace online banking and telephone banking, customers still claims for personal relationship with their banks. A third of respondents, rate personal relationships as highly important and 46% are considered the current level of personal service of the HBD Inc bank to be either bad or limited. This again varies across the markets with high dissatisfaction appearing in the United Kingdom with an estimated 12% and Italy 13% while Spanish market recorded 40% customer describing the level of personal attention as excellent (Liang, 2009, pg.66). While capitalizing on the cost reduction opportunities offered by new market channels, the HBD Inc bank management has to be mindful of are turn to the traditional values brought about by the credit crisis, as majority of students customers among many other customers seek to be involved in a one-to-one contact and personal relationships, perhaps in a bid to build trust. The HBD Inc management also needs to ensure that the new channels meet the customer’s needs. The research found out that among the customers to whom online banking is available 13% do not use it and 43% of respondents were uninterested in mobile telephone banking. Knowing HBD Inc Bank Market As well as segmenting the customer behaviors within each institution, it is clear from our findings that there are distinct differences between European markets. Each European region has been affected differently by the financial crisis. In particular, UK student customers report a heightened loss of trust compared with those in the other countries. In this market survey about 56% of customers say that their trust in bank has been negatively impacted, showing the clear need for work to be done by the HBD Inc bank marketing team to actively values of service of the institution in the UK market (Chaoprasert, 2004, p.56-57). HBD Inc bank needs to consider ways of enhancing trust among their customer base, perhaps by better communicating messages around ethical practices and changes in behavior. It is also important to develop new customer strategies and focus on the loyalty programs as a long run source of income and enhanced relationships (Zeithaml, 2000, pg.55). Market approval drivers business significantly across markets and stays mindful while of these often differences when developing new products and new ways of providing service to their customers. The effect of credit crisis only intensified by the disparities and cross border banks will have to address customer’s issues which adopt a modified ways across different markets. The research finding emphasizes on the HBD Inc general banking quality service provision that have a distinct marketing edge since improved levels of service quality are linked to high revenue, increased cross-sell ratio and high customer retention (Brijball, 2004, pg.102), and market share. In addition, the research reveals that customer will remain loyal if a better and greater value service quality is made available compared to other service providers in the market. This is one strategy that will boost HBD’s profits earnings if the firm positions it self in a better than their market rivals, while targeting student consumers. With this background, customer satisfaction and service quality are the main compelling attention of all baking institutions globally and HBD Inc bank is not an exception. It remains true that HBD Inc bank delivery of high- service quality to customers offers the firm a great opportunity to differentiate from the market competitors (Zeithaml, 2000, pg.88-91). In contrast, high quality service assures customer satisfaction and loyalty, while developing greater customer willingness to suggest and recommend the experience service to their peers, this serve to reduce customer complaints and improving customer retention rates to a much great extent (Trubik, 2000, pg. 201) Questionnaire 1. Is it true that students’ customers are moving from different bank institution basing on the assumptions made below? (True or False) a) Availability similar banking services to all banks within the target market b) Poor or limited services from the current service providers c) Higher deposit among other banking charges 2. Describe the reasons that lead consumers (students) to look for services elsewhere? 3. Discuss how the HBD Inc bank develops its customer relationship? 4. What are the sensitive qualities that student customers are looking for in the banking institutions? a) Prices and direct and personal service b) Reduced charges on banking deposits c) Online banking service 5. What are the suggested solutions proposed reduction of increase pull out of student customer from HBD Inc bank? (true or false) a) Provision of employee in rewarding quality service to customers b) Development of Infrastructure facilities to meet customers demands Findings and Recommendations There are different views residing the discussions on each of the parameters of student customers’ perception on service quality offered by the HBD Inc bank compared to other market plays. a) Customer support, this serves an important service that bank should provide to the customers. Proper support to the customers may lead to the banks generating profits as well build customers’ confidence and trust. According to the market analysis conducted, the results indicate customers’ perception is positive concerning service offered by the bank in the way of customer sustainability. The mean score parameter on this recorded a standard deviation of 0.99, with a coefficient of variance indicating 32.6% However, HBD Inc bank has a poor support as the ranking mean score indicate less favorable position compared to other market providers. This calls for increased attention to this parameter in improving customer perception. b) Good manners and hospitality, the HBD Inc banking personnel’s behavior and customer direct conduct is one of the key parts of responsibility in ensuring customer quality. On this parameter, the bank scored lower according to customer’s expectation, the mean score recorded at 3.25 and the Z-score reflecting a 0.0255. The firm management has a role of developing customers handling skills. This will eventually improve customers’ loyalty. c) Solving customers’ complains, this is a vital service quality which is sensitive to all customers, the student customers expect bank personal to resolve their demands. The research to reveals that customer’s perception in our case is insufficient and the bank needs to give more attention to this issue. It is also an issue to give attention to this issue. As the parameter scored a 3.12, while the standard deviation and the coefficient of variance are stated to have scored 0.85 and 27% respectively. d) Imposing of service charges and fines, HBD Inc banking charges various amounts to the customers’ account for their services such as demand drafts, money transfer, cherub books issues among other service charges. The customer perception on this parameter indicated the lowest score among all business parameters examined during the research, indicating that customers were very unsatisfied with the banking charges imposed. The mean score reflected to be 2.38 lowest of all parameters used in the research. It there fore remains important that banks reviews its service charges objectively reversing it to a fairly acceptable measure (Zeithaml, 2000, pg. 77). This will potentially encourage more customer willingness to bank with HBD Inc bank, while improving customers’ loyalty through quality service as the parameter demands. e) Promptness and accuracy in transaction, on this, customers seek a better banking transaction service as it has to be on time and accurate. This parameter score fairly, with a mean score recorded to be 3.45. Compared to other parameters customers support, resolving customers’ complaints, it is understood that customers’ perception on this case were satisfied with HBD Inc banking service. f) Bank reputation, as any other bank HBD Inc bank wants to run there business with a good reputation. The HBD Inc bank has a good reputation as the customers’ mean score is quoted at 3.62, with standard deviation of 0.89. Hence, goodwill and reputation acts as other important parameters of customer perception in area of competence. g) Infrastructure facilities, for instance parking and ATM, these are some of preconditions in orders to run the businesses like financial institutions. HBD Inc bank has to improve on provision of the infrastructural facilities to the customers. The perception of the student customers to these are high with a mean score of 3.62 and are ranked the best. This indicates the bank is providing such services and the customers are happy and satisfied with the available infrastructural facilities (Bick, Albatt & Brown, 2004, pg. 315). h) Banking network, this is another important aspect of banking companies. In our case customer perception is good and the mean score is at 3.63 ranked second best. i) Internet banking, more recently banking system has been advanced, and more banks are now using modern technology and embracing IT. HBD Inc banking system has adopted internet banking adding new dimension to its service delivery. This is one measure that student customers among other customers have embraced to save on time and receive prompt services. On the contrary the customer response is not satisfactory as its mean score is recorded as 3.24. Conclusion The research discussions above indicate that customers’ behavior and perception vary according to the nature of service and product on offer. In our cases all highest customers’ perception demonstrated in the tangible area of bank infrastructure facilities followed by the empathy areas for instance timing of the bank (Zeithaml, 2000, pg.68). Basing our research findings the HBD Inc bank management has to focus on the responses revealed to be weak, strategies on the best solutions in meeting customers’ requirements. More emphasis has to be laid to the issues of customer satisfaction by addressing service qualities and address staff incentive programs to consider awarding superior service quality. Understanding of the bank’s customer base marks another vital initiative by the management of HBD Inc bank. This will help the bank target identified resources towards key customers. Bibliography Bick, G. B. 2004. Customer perceptions of the value delivered by retail. The International Journal of Bank Marketing , Vol. 22 Nos 4/5,pg.300-318. Brijball, S. 200). Customer behaviour: a Southern African perspective. Cape Town: Juta Publishers. Chang, L. A. 2005. “Relationships among service quality, customer satisfaction. International Journal of Management , 57. Chaoprasert, C. A. 2004. Service quality improvement in Thai retail banking and its Management implications. ABAC Journal , Vol. 24 No. 1, pp. 47-66. Gup, B. E. 2000. The new financial architecture: banking regulation in the 21st century. London: Greenwood Publishing Group. Lasser, W. M. 2000. Service quality perspectives and satisfaction in private banking. Journal of Services Marketing , Vol. 14 No. 3, pp. 244-71. Liang, C, J 2009. The influence of customer perceptions on finacial perfomance in finacial services. The International Journal of Bank Marketing , Vol. 27 No. 2, pp. 129-49. Trubik, E. A. 2000. Developing a model of customer defection in the Australian banking industry. Managerial Auditing Journal , Vol. 15 No. 5, pp. 199-208. Zeithaml, V. 2000. Service quality, profitability, and the economic worth of customers: what we know and what we need to learn. Journal of the Academy of Marketing Science , Vol. 28 No. 1, pp. 67-85. Read More