CHAPTER ONE

INTRODUCTION

1.1   Background to
the study

It
is believed that the goal of every organization is to meet the needs and the
requirements of its stakeholders. Meeting the needs and the requirements of the
stakeholders will not only ensure the survival of the organization but also
allow it to flourish. Customers are presumed to be one of the most important
stakeholders in any organization because without them, organizations are not
likely to succeed. Hence, marketers emphasize on research in the area of
consumer behaviour and particularly behavioural intention. Knowledge of
consumer behaviour will go a long way in ensuring effective marketing policies
towards the interest of customers which will eventually facilitates positive
customer attitude towards the organizations. More especially, since customer behavioural
intention is a strong indication of his actual behaviour

As
a result of financial sector liberalization in Nigeria in the 1980s, the
banking sector experienced a boom. Low entry requirements by the regulatory
authority and the high premiums that could be earned through foreign exchange
business led to the quick entry by new players into the lucrative banking
industry. Between the period of 1985 and 1993 the number of licensed banks rose
astronomically from
41 to 120 (Central Bank of Nigeria, 1995). And this led to the increase of the
sector’s contribution to GDP and employment. Given that banks are important
constituents of the sector, it can therefore be argued that banks in Nigeria
contribute significant percentage of the country’s GDP in the recent past.
(Adeoye, 2007). For instance, the sectoral reconstitution of service industry
to the growth of GDP for 2004, 2005, 2006, 2007 and 2008 were 8.8, 8.0, 9.2,
9.9 and 10.5 respectively (CBN, 2009) The importance of the Nigerian banking
sector does not limited to Nigeria alone but also spill over to most. This
significant contribution of the services industry and specifically banking
sector in Nigeria really warrant investigation in order to enhance the sector’s
continuous growth which will eventually result in the better performance of the
economy It is however noted that one of the ways through which banks can meet
the expectations of their customers who are the back-bone of the banks’
business is via the understanding of the customers’ behaviour.

The
customer service unit has become important in many ways for most organizations,
but the general view is that many organizations do not take it too seriously.
Customer service may be provided by a person, group or by an automated means
called “Self Service”. The customer service management is a compulsory section
of the bank. Commercial banks form the largest and are the country’s most
important group of financial institutions. With stiffer competition among
domestic and foreign banks, therefore it is important for the commercial banks
in Nigeria to improve the quality of their services. The growth of competition
in banks has led to the customer being stronger because he or she has many
options to choose from. It is those banks that have excellent customer
satisfaction levels that succeed in this environment of hyper competition.
Success of a service provider depends on the high quality relationship with
customers which determines customer satisfaction and loyalty. The corporate
objective of any bank which is “maximization of shareholders wealth” can only
be achieved if customers are retained and satisfied. This is in line with the
perception that the key to successful marketing of financial services is
identification and packaging of customers’ needs to their satisfaction.

Customer
service therefore involves the means through which there would be a mutually
beneficial satisfaction of non-tangible product needs of the people who have a
will to satisfy these needs. It’s focused on the predicted upon concept which
involves a proper identification and understanding of needs of potential and
actual consumers as well as adaptation of organizational operations to deliver
the right customer service more effectively and efficiently

1.2
  STATEMENT OF PROBLEM

Over
the years in developing economy like Nigeria banks are faced with the problem
of distress lack of public confidence, inability of banks to meet up with customer’s
satisfaction in terms of granting of credit facilities spending an average time
in the bank halls for transactions, inadequate capital base, etc. In Nigeria,
the customer service unit is more effective in the banks than in all other
organizations of the economy. Yet, the banks still have a long way to go in
order to satisfy the customers of banks worldwide. The banking business today
has gone beyond arm- chair banking era where the customers had to look for the
banker to transact business. It is now the era of highly competitive business
among banks. These financial institutions now engage in aggressive search of
the customer to patronize their products and services.

The
researcher is of the view to carry out an investigation into these remote
causes of banks inability to meet up with customers’ needs and requirements and
how this had affected the banks performance over the years, after this
investigation the result from this study should be able to proffer to solutions
to banks inability to satisfy their customers in Nigeria, hence how to impress
its performance through total quality management.

1.3
  OBJECTIVES OF THE STUDY

i.     
To ascertain the extent of relationship between service quality and bank
performance

ii.    
To examine if there is a positive relationship between customer’s level of
loyalty and performance.

iii.   
To find out how quality customer satisfaction affects bank performance

1.4 RESEARCH HYPOTHESES

In
order to achieve the stated objectives of this study, the following hypotheses
are formulated:

Hypothesis
One

HO:  
There is no positive relationship between service quality and bank performance

H1:    There is a positive relationship
between service quality and bank performance

Hypothesis
Two

HO:
  There is no positive relationship between
customer level of loyalty and bank performance.

H2:    There is a positive relationship between customer
level of loyalty and bank performance

Hypothesis
Three

HO:   There is no positive relationship
between customer satisfaction bank performances.

H3:   
There is a positive relationship between customer satisfaction bank
performances.

1.5  
SIGNIFICANCE OF THE STUDY

This
research work will attempt to examine the performance of bank in Nigeria. The
significance of this study is to examine the extent to which bank performance
has geared up the growth of the Nigeria economy through loan and advances for
investment.

Hence,
the research is interested in the effect of the customer’s satisfaction and
dissatisfaction, characteristics of service, assessment and measurement of
customer’s satisfaction in bank for more clarity of the study.

1.6
SCOPE AND LIMITATIONS OF THE STUDY

This
study covers customer’s satisfaction in bank performance. A sample of one
hundred and thirty three (133) was taken from the total population of the
study. This study was conduct amongst staffs of a selected bank in Benin City
to know how customer’s satisfaction has implication on bank performance for a
period between 2010 – 2013.

In
carrying out research work, a number of constraints have militated against this
research work. Every human endeavour is said to be limited by some factor and
this research work is not on exceptional to the rule. There was low response
rate. There was difficulty in obtaining information from respondent as they
often referred to height schedule and fatigue in fitting the questionnaire.
This being that the researcher cannot administer the questionnaire to other
respondent form other part of the country.

1.7     
DEFINITION OF TERMS

Organization: This
is a social unit of people that is structured and managed to meet a need or to
pursue collective goals.

Stakeholders: These
are persons or group or organization that has interest or concern in an
organization.

Customer’s
Satisfaction: A business term, is a measure of how
products and services supplied by a company meet or surpass customer.

Brand
Loyalty: When consumers become committed to your brand and
make repeat purchases over time.

Profitability: This
is the primary goal of all business ventures. Without profitability, the
business will not survive in the long run. It is measured with income and
expenses.

Competition: The
existence within a market for some good or service of a sufficient number of
buyers and sellers such that no single market participant has enough influence
to determine the going price of the good or service.

Defensive
Strategy: A management approach designed to reduce the risk
of loss.

Service
Quality: An assessment of how well a delivered service
conforms to the clients expectations.

Reliability: The
ability of a system or component to perform its required functions under stated
conditions for a specified period of time.

Empathy: This
is the capacity to recognize emotions that are being experienced by another
sentiment or fictional being.

1.8
ORGANIZATION OF THE STUDY

This research work is organized in five chapters,
for easy understanding, as follows Chapter one is concern with the
introduction, which consist of the (overview, of the study), statement of
problem, objectives of the study, research question, significance or the study,
research methodology, definition of terms and historical background of the
study. Chapter two highlight the theoretical framework on which the study is
based, thus the review of related literature. Chapter three deals on the
research design and methodology adopted in the study. Chapter four concentrate
on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and
recommendations made of the study.

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