FIND OUT THE EXISTING MARKETING STRATEGIES OF PRIVATE SCHEDULED BANKS AND MEASURING THE SATISFACTION LEVEL OF CLIENTS: A CASE STUDY ON BRAC BANK, DHAKA BANK, ISLAMI BANK AND PRIME BANK OF RAJSHAHI CITY.
INTRODUCTION
In this globalization age consumers are become very conscious about their rights and that is why every business organization emphasizes on consumerism. Organizations always try to satisfy their consumers. Banking is a service organization also tries to satisfy their clients. But now a day competitive in banking sector increased very quickly. Now the competitive is very intensive. Banks are always provided new strategies for getting competitive advantages. They include new product categories, prices, promotional activities and other modern banking facilities to satisfy existing clients and to attract new clients.
Also customers are very dynamic. Their needs are growing which increase their demand too. So, it is very tough to satisfy the customer needs entirely. Islami Bank, Dhaka Bank, Brac Bank and Prime Bank are the most established Banks in Bangladesh. These four Banks competing each other very intensively. That is why I tried to find out the major marketing strategies and to measure the satisfaction level of customer of these four banks.
Objective of the study
° To know the banking system of private scheduled banks in Bangladesh.
° To measure the customer satisfaction level of clients towards various functions of bank services.
° To identify the effective policy and strategy of private scheduled banks in Bangladesh
° To find out the problems regarding existing marketing policy & strategy followed by the Private Scheduled Banks of Bangladesh.
° To recommend how to develop the clients satisfaction level by developing appropriate marketing strategies.
Methodology
In order to find out the marketing strategies and measure the customer satisfaction level of private scheduled bank of Brac Bank, Dhaka Bank, Islami Bank and Prime Bank I have used various method to collect and present data. Mainly I used two types of data for this purpose-
1. Primary data
2. Secondary data
Primary data: This report has prepared through extensive use of primary data. It is collected from group of people who are related with this bank. The following methods are used in collecting primary data. These are-
a) Direct interviewing: I have collected data from the branch manager, executives, officers and bank clients with the protested and well designed questionnaire.
b) Personal communication: I have gathered data through personal communication with the officers, executives, managers and clients of the bank branch.
c) Observation method: I went to every department of four Banks and observe their activities.
Secondary data: Secondary sources are those which are published or processed materials. I have collected secondary data from the following sources-
1. Various types of official documents
2. Some published research report, books, journal and articles
3. Personnel departments of four Banks
4. File study, some books on Banking theory and practice
5. Loans and advance manuals
6. Different books of service marketing
Sample
Sample is a representative unit of a population. Few or all of the characteristics of population may posses by the sample. But it is mentionable that sample must be representative to the population. My samples are Branch managers, executives, officers and clients of the four banks.
Sample Area
Sample area means the scope of a research that will be conducted. Sample area is an important factor for conducting a research. I have taken Rajshahi Metropolitan City as my research area.
Sample size
Sample size means the range of sample that is how many samples are collected. Sample size is the great factor for getting tremendous result. The more sample size indicates the more accuracy of the research. I have tried to collect more samples as much as possible. My samples are shown in the below chart.
Table: Number of Different Sample Size
Sample unit | Number of sample |
Branch managers | 4 |
Executives | 16 |
Officers | 20 |
Clients | 60 |
Total | 100 |
Sample Selection Method
Firstly, I have taken stratified sampling method. Stratified sampling means- Population is classified according to their characteristics. I have classified my population as strata, company, deader and businessman. Finally, I have used purposive sampling method.
Data collection period
The necessary data have been collected from 10 March to 2 July. The study covers five years period from 2001-2006 of four Banks.
Techniques of analysis
The data have been tabulated and analyzed with the help of different financial ratios, statistical tolls and computer.
Data Presentation
I have used graph, chart, table and diagram to analyze the data.
Data collection area
Data have been collected from the Four Banks of Rajshahi Metropolitan area.
Rationale of the study
The world is changing rapidly. We have to adjust with the changes. But these changes have not come in day night. Different industries are responsible for this. In this regard banking service has been changed the world from the different corner like life style of the people, business system, production system, investment system, government policy, technological improvement, etc. for this I have selected this field.
Limitation of the study
In undertaking this study, a number of problems were faced. Thus the study has several limitations. The limitations are:
a) Lack of knowledge:
As a student, in the research field, I have no past practical experience of data collection, data processing, data analyzing, integrating and presenting. So it is a limiting factor for obtain accurate information.
b) Lack of time
For the time limitation I could not gather more information to justify exact condition. The time constraints are limiting factors.
c) Small sample size
The study is limited by the size of the sample. As the sample size is very small, geographical and regional differences could not be included.
d) Fund unavailability
I don’t have much financial support to conduct this study. I could not interview with more respondents covering the survey area.
e. Customers willingness
Most of the customer of the banks businessman and employee. So, they could not give me enough time to fill up questionnaire. Also they are not willing or afraid to provide appropriate data.
CONCEPTUAL FRAME WORK OF MARKETING MIX
Marketing for Banks
Marketing is a total system of business activities designed to Plan, Price, Promotion and distribution satisfying goods and services to present and potential customers. According to the official definition of the American Marketing Association Marketing is the performance of Business activities that direct the flow of goods and services from producer to customer or user.
The concept of Banks Marketing has been defined by various Banks Marketers as that part of management activity that seeks to direct the flow of banking service profitability to selected customers. The adoption of the marketing concept will recognize that Banks Customers are changing in terms of their wants, needs; desires, expectations, and problems Banks must define these in explicit terms and then evaluate their offering in customer’s terms. That is satisfying customers’ needs at a profit to the Banks.
Marketing Mix Adopted by the Banks
Marketing mix is the mixture of controllable marketing variables that the firm uses to pursue the sought level of sales in the target market. We cam say that the 4P’s are interrelated and must be blended into one integrated whole to satisfy some target markets needs and performances. So, marketing mix is a set of product, price, promotion and place which are interrelated.
The Banking Product
The products of Banks are essentially services. Any satisfaction the customer gets from the performance of the service rather than from the ownership of goods. Banks are in the Business of marketing cash security, cash accessibility, monetary transfers and time to enable customers wants to be satisfied to day without waiting until tomorrow when their own savings are higher. So, Banking product means services, which are able to satisfy the present and potential customers. Banks offer the following services.
a) Deposits
1. Current Account
2. Saving Account
3. Short term deposit
4. Fixed deposit receipt
5. Ajibon pension scheme
6. Double benefit scheme
7. Mashik munafa prakalpa
8. Special savings scheme
b) Credit facilities
1. Cash credit (Hypo)
2. Project Loan
3. Working capital loan
4. Export loan
5. Commercial loan
6. Small and Cottage industry loan
7. Lease finance
8. Staff loan
9. Various credit scheme
I. Consumer credit scheme
II. Small loan project
III. Doctors credit scheme
IV. Rural credit scheme
c) Foreign service (Export, Import)
d) Banks Remittance (DD, TT)
Product Strategy
Customer Product | Existing | New |
Existing | Market Penetration | Market Development |
New | Service/ Product Development | Diversification |
There are four alternative planning product strategies.
Market Penetration
Offering more existing service to existing customer or client, that is market penetration Banks are offering more service to existing customers.
Market development
Offering more existing service to new client that is market development tries to attention new client.
Service/ Product Development
Development New services/ Products to existing customer what is service/ product development. Banks are following this strategy.
Diversification
Develop new service for new customers, that is, diversification. Bank has more diversify products to new customer.
The Banking Price
Banks interest rate means Banking Price. Price is important since it represents the only element of marketing mix that creates revenue. The Banking system does not in fact price all its services. Since some are offered free to customers. The most important prices in the Banking system relate to interest rates. The government controls basic interest rates.
BANKS provides various interests to deposits and receiving interest from various creditors which are showed in the table:
Types of Product/service | Rate of interest |
Current account | 0% |
Saving account | 6.5% |
Short term deposit | 6.0% |
Fixed deposit receipt | 7 to 10% |
Cash credit loan (Hypo) | 14.5% |
Project loan | 14.5% |
Working loan | 14.5% - 15% |
Various credit scheme | 15% |
Consumer Credit Scheme | 14.5% |
Small loan scheme | 14.5% |
SOD Against Earnest Money | 14.5% |
SOD Against PAD | 14.5% |
SOD Against LTR | 14.5% |
SOD Against SS | 14.5-15% |
SOD Against work order | 14.5% |
SOD Against SP | 12.5% |
Banks Remittance (DD. TT) | 0.1% |
The Banking Promotion
The term promotion is used to refer to the use of persuasive information which in conjunction with other elements of marketing mix, relates to the target market. The Banks has to decide how information about the organization and its services will be disseminated. Four elements of the marketing communications mix are generally recognized.
Place (The Banking channel of distribution)
Channel of distribution performs all of the activities to move a product and its title from production to consumption. Some private Banks Ltd. in Bangladesh are following channel of distribution, which are shown below:
Some of the private Banks Limited in Bangladesh are using credit cards, Banks branch etc. to provide Banks service to customer. But Bank provides their service through Bank branch.
PROFILE OF FOUR BANKS
Dhaka Bank Limited
A private sector commercial bank. It was incorporated as a public limited company on 6 April 1995 under the companies act 1994. It started commercial banking operations on 5 July 1995 with an authorized capital of Tk 1000 million, divided into 10 million ordinary shares of Tk 100 each. The issued, subscribed, and paid up capital of the bank in 1995 was Tk 100 million, which was paid fully by the sponsors. In 2004, the paid up capital of the bank increased to Tk 275.88 million. In 2004, the bank's total equity (capital and reserves) was Tk 338.30 million the amount of its reserves (statutory and general reserves and dividend equalization fund) was Tk 62.42 million. The reserves declined to Tk 44.22 million in 2004. Every year the Dhaka Bank, like other scheduled commercial banks in Bangladesh, provides a general provision @ 1% on unclassified loans. The provisions are treated as supplementary capital of the bank.
In addition to all sorts of traditional banking activities, Dhaka Bank provides on-line tele-banking services and a comprehensive range of financial services to national and multinational companies in the country. It also underwrites shares and debentures, works as issue manager, and participates in other operations in moneymarket and capital market. As a member of the Dhaka and Chittagong stock exchanges, the bank participates in the day-to-day transactions of the stock exchanges.
The bank has established a large network of foreign correspondents covering important business centers in 107 countries around the world and now has 325 foreign correspondents in these countries. The bank introduced Reuter's screen since 1998, which has accelerated its foreign exchange dealings. Of its 39 branches, 20 are authorized to deal in foreign exchange. The aggregate quantum of import business handled by the bank in 2004 stood at Tk 9,075 million while the export business handled by the bank that year was worth Tk 3,299.30 million.
Management of the bank is vested in an 18-member board of directors that includes the chairman and a vice-chairman. The managing director is the chief executive of the bank. He is assisted by 3 executive vice presidents, 9 senior vice presidents, 7 vice presidents, 8 senior assistant vice presidents, 12 first assistant vice presidents, and 9 assistant vice presidents. Total number of regular employees working in the bank is 247. The bank had 14 branches in December 2004.
Total deposits with Dhaka Bank on 30 June 2004 accounted for Tk 7554.7 million. The bank introduced some innovative deposit schemes such as the marriage deposit scheme and gift cheque. It disbursed a total of Tk 5,414.9 million in loans and advances in 2004. The average growth rate of loans and advances disbursed during 2003-2004 was 18.71%. The bank extends credit facilities to the private sector for trade as well as to meet working capital needs and it offers some project loans to industries such as textile, ready made garments, shipping, ship-breaking, steel and engineering, and edible oil. The bank also extends credit facilities under lease financing and hire purchase schemes as well as through syndication with other banks. In December 2004, classified loans of the bank stood at Tk 93.2 (1.72% of total) and the bank had a deficit in statutory liquidity reserve.
Total investment of the bank stood at Tk 813.73 million on 31 December 2004. The investment portfolio was made up of treasury bills (Tk 720 million), debentures of Investment Corporation of Bangladesh (Tk 20 million), prize bonds (Tk 0.98 million), shares (Tk 55.03 million), debentures of corporate bodies (Tk 1.20 million) and other investments (Tk 16.52 million). Total assets of the bank enhanced to Tk 11,646.4 million in December 2004, when its off-balance sheet transaction amounted to Tk 4,798.2 million.
In 2004, the bank earned a net profit (after tax) of Tk 173.12 million. Its operating incomes were net interest income (Tk 201.38 million), interest on investment (Tk 60.47 million), commissions, exchange earnings and brokerages (Tk 246.51 million), and incomes from other sources (Tk 18.92 million). Operating expenses in the year was Tk 231.71 million. During 2004, the bank's earning per share, return on assets, and return on equity were Tk 34.30 and 0.99%, and 27.98% respectively.
Islami Bank Bangladesh Limited (IBBL)
An Islami Bank is a financial institution that operates with the objective to implement and materialize the economic and financial principles of Islam in the banking area. The Organization of Islamic Conference (OIC) defined an Islami Bank as “a financial institution whose statutes, rules and procedures expressly stated its commitment to the principles of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operations”.
According to Islami Banking Act 1983 of Malaysia, “an Islami Bank is a company which carries on Islamic banking business; Islamic banking business means banking business whose aims and operations did not involve any element which is not approved by the religion Islam”. Bangladesh is one of the largest Muslim countries in the world. Its people are seriously committed to Islamic way of life as enshrined in the Holy Quran and the Sunnah. Naturally, It remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 30, 1983, is torture reflection of this inner urge of its people. This Bank is the first of its kind of South-East Asia. It is committed to conduct all banking and investment activities on the basis of interest free Profit-Loss Sharing System (PLS). In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transaction in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islami Banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh.
In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah.
In January 1981, Shaheed President Ziaur Rahman while addressing the 3rd Islamic Summit Conference held at Makkah and Taif suggested, “The Islamic countries should develop separate banking system of their own in order to facilitate their trade and commerce”.
This statement of Shaheed President Ziaur Rahman indicated favorable attitude of the Government of the People’s Rupublic of Bangladesh towards establishing Islamic bank and financial institutions in the country. Earlier in November 1980, Bangladesh Bank, the country’s Central Bank, sent a representative to study the working of several Islami banks abroad.
In November 1982, a delegation of IDB visited Bangladesh and showed keen interest participate in establishing a joint venture Islamic Bank in the private sector. They found a lot of work have already been done and Islamic banking was in a ready form for immediate introduction. They came forward to provide training on Islamic banking to top bankers and economists to fill-up the vacuum of leadership for the future Islamic banks in Bangladesh. They also held seminars, symposiam and workshops on Islamic economics and banking throughout the country to mobilize public opinion in favor of Islamic banking.
Their professional activities were reinforced by a number of Muslim Businessmen Society. The body concentrated mainly in mobilizing equity capital for the emerging Islamic bank. At last, the long drawn struggle to establish an Islami Bank in Bangladesh become a reality and Islami Bank Bangladesh Limited was established in March 1983 in which 19 Bangladesh nationals, 4 government bodies of the Middle East and Europe including IDB and two eminent personalities of the kingdom of Saudi Arabia Joined bank to make the dream a success.
Islami Bank Bangladesh Limited (IBBL) was incorporated on 13.03.1983 as a Public Company with limited liability under the Companies Act, 1913. The Bank started functioning with effect from 30.03.1983. IBBL is the first private sector Islamic Bank in South-east Asia. The establishment of this Bank ushered a new era in Bangladesh, the 3rd largest muslim country of the world. The Bank is committed to run all its activities based on Islamic Shariah. IBBL through its steady progress and continued success has, by now, earned the reputation of being one of the leading private sector banks of the country.
Prime Bank Limited
A private sector commercial bank incorporated in Bangladesh under the companies act 1994. The bank started its operations on 17 April 1995 with an authorized capital of Tk 1,000 million divided into 10 million ordinary shares of Tk 100 each. Initially, the paid up capital of the bank was Tk 100 million fully subscribed by its 22 sponsors. The paid up capital stood at Tk 400 million on 31 December 2004. The bank is registered with the securities and exchange commission and its shares are traded at the Dhaka and Chittagong Stock Exchanges. In 2004, the total shareholders equity of the bank was Tk 897 million which comprised paid up capital Tk 400 million, statutory reserves Tk 221.91 million, other reserves Tk 1.72 million, and surplus in the per profit and loss account Tk 273.37 million.
The management of the bank is vested in a 12-member board of directors with the managing director as the chief executive. In 2006, the bank had 52 branches. The registered head office of the bank is at Dhaka. The bank carries out all types of banking activities and along with traditional commercial banking services; it provides islami banking through two of its branches, one in each Dhaka and Sylhet.
In December 2004, the total deposits of the bank, including bills payable amounted to Tk 10,518.72 million. Innovative savings schemes of the bank include Installment-based Savings Plan, Monthly Profit-based Deposit Scheme, Special Deposit Scheme, Educational Savings Plan, 30-day Term Deposit Scheme, Prime Bank Money Scheme, Prime Bank Insured Deposit Scheme and Multi-currency F/C Account. The deposit-mix of the bank in 2004 comprised savings deposits Tk 1,058.49 million, bearer certificate of deposits Tk 40.68 million, term deposits Tk 7,018.59, and current deposits and other accounts Tk 2,214.25 million. Interest rate offered by the bank on the deposits varied between 8% and 10.5%. On 31 December 2004, total loans and advances of the bank stood at Tk 7,667.74 million. Major lending areas include agriculture, small, medium and large-scale industries, working capital, exports, and other commercial purposes. The lending rates varied between 12% and 16.5%. The classified loans of the bank amounted to Tk 110.1 million or 1.42% up to December 2004. The bank introduced Master Card Credit in 1999 and next year, it commissioned on-line banking facility. The bank has a merchant banking division and an investment division in its head office. To deal in foreign exchange transactions all over the world, the bank established a dealing room equipped with Reuters' Machine and SWIFT (Society for Worldwide Interbank Financial Telecommunications).
On 31 December 2004, total assets of the bank including off-balance-sheet items were valued at Tk 19,007.6 million. Major components of the asset portfolio were cash in hand, balance with bangladesh bank and other banks at home and abroad, money at call and short notice, investments, loans and advances, bills purchased, and fixed assets and other properties. Assets in off-balance-sheet items were valued at Tk 6,161.8 million. Foreign exchange business handled by the bank in 2004 was Tk 17,256 million, of which Tk 6,731 million were in export servicing, Tk 8,775 million in import financing and Tk 1,750 million in remittance service. The bank established correspondent relationships with approximately 250 foreign banks/exchange houses located in different international financial markets.
In 2004, investments of the bank other than the loans and advances amounted to Tk 1,524.54 million which comprised government treasury bills/bonds Tk 1,380 million, debentures Tk 75 million, prize bonds Tk 0.65 million, and shares of companies Tk 68.88 million. That year, the bank earned a net profit after tax and provisions of Tk 360.44 million, which was appropriated as statutory reserves (Tk 105.24 million), and proposed dividend (Tk 220 million).
BRAC Bank Ltd.
BRAC is a famous NGO established in 1972 by Fajle Hasan Abed. It is the largest organization in terms of loan allocation in the world. It provided 1707 crores taka loan. Day by day it expanded its services in various sectors. On the consistence of this expansion it introduced banking service named as BRAC Bank.
BRAC Bank is established at the last of 2000. Now it is operating activities by various divisions. These divisions are as follows:
° SME division
° Retail banking division
° Corporate division
° Remittance banking
° Human resource division
° Marketing and Product Development division
° CID (Channel Infrastructure Development)
° Treasury division
° IT division
° CPC division
° SRS division
° Sales division.
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 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.
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.
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.
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.
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.
| 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.
RECOMMENDATION
Customers are the heart of the business organizations. But the main objective of an organization is to achieve profit. So, banking organizations like other business sectors are engaged in earning profits though customer satisfaction. So, all the strategies of banks are operated to satisfy the customers for earning profits.
From the research I conducted, I find out the strategies and measure the satisfaction level of customers of Brac bank, Dhaka Bank, Islami Bank and Prime Bank. From that research I find some recommendation for that four bank to improve their customers’ satisfaction level and achieve their objective quickly. The recommendations are-
° Brac Bank and Islami Bank have the most product of the bank services. But Dhaka Bank and Prime Bank have some selected products. So, they should increase their product category to attract the more customers.
° Dhaka Bank and Prime Bank have not some modern popular products in their product category like locker service, 24 hour service. So, they should add these products in their product line.
° Prime Bank should launch ATM Card and Debit Card facilities because these are the most modern popular items of bank services at present.
° Dhaka Bank should serve more segments of customers as their target market to increase the numbers of present customers.
° Brac Bank should increase deposit facilities for long period of time.
° Dhaka Bank and Prime Bank should redesign their interest rate.
° Brac Bank, Islami Bank and Prime Bank have better position in the charges on transaction. Dhaka Bank charges higher amount of transaction. So, Dhaka Bank should decrease it.
° Brac Bank should increase their branches in the rural areas. Also Dhaka Bank and Prime Bank should increase the number of branches.
° Islami Bank should increase their modern banking faculties.
° Islami Bank should increase the efficiency of cash counters and Prime Bank should increase the number of cash counters.
° Brac Bank has very few foreign exchange branches. So, they should increase it. Dhaka Bank should also increase foreign exchange facility.
° Brac Bank, Dhaka Bank and Prime Bank should increase their advertising activities through various media. Prime Bank and Islami Bank should follow more marketing strategies to increase their efficiency.
° Islami Bank should develop their inanimate environment, employee dress up, up-to-date equipment, image and total system.
° Brac Bank as a new entrance should increase the efficiency of employees operating time, image, safety and error free record.
° Prime Bank should increase safety, error free record, provide exact knowledge etc.
° Dhaka Bank should try to increase dependency, total system and hold the existing quality of the service factors.
° To meet the intensive competition all the four banks should be modernized and protect their position.
° The four banks should find out new markets to capturing more customers.
° All the four banks should increase the research activities to find out the lacking and to provide better services for better customer satisfaction.
° All the four banks should take active participation in social functions and infrastructure development to develop the economy of the country.
CONCLUSION
Banking service is the most important field of economy’s that make the economy strong, dynamic and develop the life style of citizens. In the banking sector of Bangladesh Islami Bank, Dhaka Bank, Prime Bank, Brac Bank are well established leading banks. So, from the research I find out the movement and future vision of banking sector of Bangladesh.
From the research I also find out the marketing strategies followed by the four banks and measure the satisfaction level of customers of the four banks. I also find out the lackings of the four bank banks for which customers are not completely satisfied. I have recommended some possible solutions to overcome the lackings and to satisfy the customers completely.