Quantitative research on Customer Loyalty of Standard Chartered Bank

Factors Affecting Customer Loyalty of
Standard Chartered Bank
By
Sheikh Ripon Hossain
1030336
An Internship Report Presented in Partial Fulfillment
Of the requirements for the degree
Bachelor of Business Administration
INDEPENDENT UNIVERSITY, BANGLADESH
September 2015

Factors Affecting Customer Loyalty of Standard Chartered Bank, Bangladesh



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Factors Affecting Customer Loyalty of
Standard Chartered Bank, Bangladesh
By
1030336
Has Been Approved
September 2015
____________________
Mr. Md. Rajib Rahman
Senior Lecture, School of Business
Independent University, Bangladesh




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Letter of Transmittal
8th
September 2015
Mr. Md. Rajib Rahman
Academic Supervisor
School of Business
Independent University, Bangladesh
Subject: Submission of internship report.
Dear Sir,
With due respect, as a student of Independent University, Bangladesh, I have prepared my
internship report on- “Factors affecting Customer Loyalty of Standard Chartered Bank”.
It was a great pleasure for me to do this report. During the completion of the research I came
across hosts of practical experiences which will be great supportive for me to do further research
in future. I have tried my level best to follow your guidelines in every aspect of planning of this
report. I am honestly thankful for your guidance during the preparation of report. I have done the
study in a complete form and I have tried my level best to conduct this in a professional manner.
I hope that my works meet approval. I would be eager to assist for the interpreting my report or
any further clarification if required.
Yours sincerely,
____________
1030336




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Acknowledgement
First of all I would like to thank Almighty Allah who blessed me and made it possible for me to
complete this internship report within the scheduled time.
I wish to express my profound gratitude to my supervisor Mr. Md. Rajib Rahman for his
relentless guidance, keen advice and unremitting encouragement. He allowed me in his valuable
time generously whenever I was in needs of his guidance till the completion of this report. I have
no uncertainty to say that without his constant supervision and precious advices and suggestions
it would have been impossible for me to complete the report.
I am also grateful to Standard Chartered Bank for providing me an internship opportunity. I
would also like to thank my office supervisor Mr. Ehteshamul Haque (Senior Manager) and S.M.
Ismail (Manager) who helped me to understand the bank and its operations. Moreover I would
also like to thank every one of those people who contributed through their comments and
suggestions to prepare this paper in a comprehensive manner.




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Table of Contents

Executive Summary................................................................................................................................7
Introduction.............................................................................................................................................8
Part1. Company Profile
Standard Chartered Bank ........................................................................................................................9
Backgrond of Standard Chartered Bank ...............................................................................................10
Emergence of Standard Chartered Bank in Bangladesh .......................................................................11
Governing Body of Standard Chartered Bank ......................................................................................12
Organizational Structure of Standard Chartered Bank..........................................................................14
Business Operations of Standard Chartered Bank ................................................................................15
Mission and Vision of Standard Chartered Bank..................................................................................18
Goals and Values of Standard Chartered Bank.....................................................................................19
Objectives and Strategies of Standard Chartered Bank ........................................................................20
Details of the Department I Worked With............................................................................................22
Part 2. Internship Outcome
Location of Employment within the Organogram ................................................................................23
Duties and Responsibilities...................................................................................................................24
Copetencies ans Skills Acquired on the Job .........................................................................................28
Part3. Research Component
Problem Statement................................................................................................................................29
Purpose of the Study.............................................................................................................................30
Literature Review and Related Studies.................................................................................................31
Conceptual Framework.........................................................................................................................34
Research Questions and Hypothesis .....................................................................................................39
Methodology of the Research ...............................................................................................................41
Research Findings.................................................................................................................................43
Limitation of the Study .........................................................................................................................48
Recommendation ..................................................................................................................................49
Conclusion ............................................................................................................................................50




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Reference ..............................................................................................................................................51
Appendix...............................................................................................................................................56




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Executive Summery
The key purpose of the study is to find out the impact of different factors on customer loyalty in
the context of Standard Chartered Bank, Bangladesh. There are some key factors that have an
important influence on customer loyalty of Standard Chartered Bank. The main findings of the
study will indicate that how the factors- service quality, brand image, trust, customer relationship
management, switching cost and value-added service affect customer loyalty. In the report, the
factors are being treated as the independent variables and customer loyalty as the dependent
variable. It will be a causal study aimed to measure that, the existence of or a change in
Independent variables causes or leads to a change in the Dependent variable.
This paper is organized in three sections in an attempt to portrait a clear understanding of its
content for the readers. The first section is focused on Standard Chartered Bank, its origin,
business operations and details of the department (BTPO) I worked in as an intern. In the second
section internship outcome is described along with duties and responsibilities and lessons that
have learnt on the job. The last section of this report is prepared by conducting a descriptive
research.
In the research section, purpose of the research, problem statement of the paper is given and a
research model is developed and several hypotheses are proposed. A literature review is drawn to
give an extensive base of theories and other research works in order to support the hypotheses.
The methodology section explains the type of research design drawn, the sampling procedure
chosen and the analysis conducted. A sample of 50 respondents (customers of Standard
Chartered Bank) was used and convenience sampling method was applied. A thorough analysis
is conducted in the analysis part followed by the assessment of the research hypotheses. Finally,
the report concludes with limitation of the study and conclusion which describe the importance
of customer loyalty and future implications.




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Introduction
Customer loyalty is critical to gain in today’s competitive marketplace, and banks are no
exception. Commercial banks have, thus, embarked on different management strategies as ways
to encourage customer loyalty. With the government influence by allowing more commercial
banks to open, the banking industry of Bangladesh in recent years became more competitive than
ever before. Currently, there are four state-owned commercial banks, five specialized
banks, thirty eight private commercial banks, one land development bank and nine foreign
commercial banks operating their business in Bangladesh. In order to stay in this competitive
industry, every bank must focus on retaining the existing customers by earning their loyalty.
Indicated increasing competition among the commercial banks, each bank has opted for
innovative access, marketing, service, and technology to attract customers and further enhanced
their service quality in order to gain a competitive advantage. Some banks are looking up to the
new customers and started providing many different services to attract and to create new
customers. And some other banks are trying to improve their existing service quality to ensure
the retention of customers. Depending on each bank’s goals, financial service providers are
developing their strategies.
Standard Chartered Bank is well reputed bank among its customers and in the market as well. As
recently published news says, this bank is providing financial services for more than hundred
years till now in Bangladesh. Off course, this much of experience of doing business in such
emerging economy gives them a group of loyal customers, which furthermore, a great
competitive advantage for this bank. Certainly this loyal group of customer helps them to
generate a bigger amount of profits than its competitors.




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Company Profile
Standard Chartered Bank (SCB)
Standard Chartered is a leading international banking group committed to building a sustainable
business over the long-term. They operate in some of the world's most dynamic markets and
have been for over 150 years. They mainly provide a wide-range of products and services for
personal and business customers across 70 markets.1 More than 90 percent of their income and
profits are derived from Asia, Africa and the Middle East. In the last nine years Standard
Chartered Bank has reported record income and profits. Twenty-four of their markets now
deliver over US$100 million of income, fourteen over US$100 million in profit. Listed on the
London, Hong Kong and Mumbai stock exchanges, they rank among the top 20 companies in the
FTSE-100 by market capitalization.
Standard Chartered Bank in Bangladesh
The first branch of the Chartered Bank was established in Chittagong in 1948, followed by
another branch in Dhaka in 1966. Since the formation of Standard Chartered Bank in 1969, the
bank has gone for expansion in the country. According to SCB’s Bangladesh website, in 2000,
SCB acquired Grind lays Bank’s business in Bangladesh and in 2006 it acquired American
Express Bank’s commercial banking business, which has allowed the bank to become the biggest
foreign bank operating in Bangladesh.
SCB has invested heavily in people, technology and infrastructure to sustain the growth of the
bank. The bank provides both consumer banking and wholesale banking services in Bangladesh
and uses market knowledge and experience to serve institutional and corporate clients in the best
way possible. SCB focuses on improving technology and this has allowed the bank to offer
customers services such as Phone Banking, I-Banking and E-Lending. Standard Chartered
currently has 26 branches, 57 ATMs and 7 financial kiosks and employs over 1300 people. The
bank has branches in six cities-Dhaka, Chittagong, Khulna, Sylhet, Bogra and Narayanganj as
well as branches in Dhaka EPZ and Chittagong EPZ.




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Background of Standard Chartered Bank
Standard Chartered Bank was formed in 1969 through the merger of two separate banks, the
Standard Bank of British South Africa and the Chartered Bank of India, Australia and China.
These banks had capitalized on the expansion of trade between Europe, Asia and Africa.
The Chartered Bank
The Chartered Bank was founded by James Wilson following the grant of a Royal Charter by
Queen Victoria in 1853. The bank opened in Mumbai (Bombay), Kolkata and Shanghai in 1858,
followed by Hong Kong and Singapore in 1859. The traditional trade was in cotton from
Mumbai, indigo and tea from Kolkata, rice from Burma, sugar from Java, tobacco from Sumatra,
hemp from Manila and silk from Yokohama. The bank played a major role in the development of
trade with the East following the opening of the Suez Canal in 1869 and the extension of the
telegraph to China in 1871. In 1957 Chartered Bank bought the Eastern Bank, together with the
Ionian Bank's Cyprus Branches and established a presence in the Gulf.
The Standard Bank
The Standard Bank was founded in the Cape Province of South Africa in 1862 by John Paterson,
and started business in Port Elizabeth in the following year. The bank was prominent in
financing the development of the diamond fields of Kimberley from 1867. It later extended its
network further north to the new town of Johannesburg when gold was discovered there in 1885.
The bank expanded in Southern, Central and Eastern Africa and had 600 offices by 1953. In
1965, it merged with the Bank of West Africa, expanding its operations into Cameroon, Gambia,
Ghana, Nigeria and Sierra Leone. In 1987 Standard Chartered Bank sold its stake in the Standard
Bank, which now operates as a separate entity.




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Emergence of Standard Chartered Bank in Bangladesh
The Chartered Bank started operating in Bangladesh in 1948, opening a branch in Chittagong.
The branch was opened mainly to facilitate the post-war reestablishment and expansion of South
and Southeast Asia. The Chartered Bank opened another branch in Dhaka in 1966, where it is
still headquartered.
After the merger of the Chartered Bank with the Standard Bank in 1969, the Standard Chartered
Bank took up a program of expansion. It increasingly invested in people; technology and
premises as its business grew in relation to the country's economy. In 1993, there was an
organizational re-structuring, which led to a substantial expansion of the Bank's business.
Bangladesh is under the Middle East and South Asia (MESA) region, with the controlling office
in Dubai. Its correspondent relationship with Sonali Bank, the largest bank in Bangladesh, gives
its customers access to all major centers in the country. Standard Chartered Bank's worldwide
network facilitates convenient connections with foreign trade and remittance business. Standard
Chartered Bank's branch banking license in Bangladesh allows it to offer a full range of banking
services.
Standard Chartered currently has 26 branches, 57 ATMs and 7 financial kiosks and employs over
1300 people. The bank has branches in six cities-Dhaka, Chittagong, Khulna, Sylhet, Bogra and
Narayanganj as well as branches in Dhaka EPZ and Chittagong EPZ.
In the year 1999, Standard Chartered has acquired the operation of Grindlays Bank in the Middle
East and South East Asian countries. Former Grindlays Bank started its journey in Bangladesh in
1905 under the name of Grindlays Bank. Standard Chartered Bank took-over the operation of
ANZ Grindlays Bank in Bangladesh as a part of acquisition of the South East Asian and Middle
East operation of the Australia and New Zealand Banking Group. SCB with its 18 branches and
booths across Bangladesh had employed more than 600 people. The acquisition of ANZ has
enabled Standard Chartered Bank (SCB) to access 500,000 new customers and 40 branches in




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India, and this made them one of the biggest banks in this region and in Bangladesh it is the
largest foreign bank.
After acquisition, Grindlays Bank is a part of Standard Chartered Group. The Bank presently has
26 outlets in 6 cities in the country3. SCB engages itself for providing best quality banking
service in retail, commercial and corporate banking segments. The countries top enterprises,
multinational, large local corporations and many financial institutions are served by SCB. With
total asset based of BDT 17.5 billion and annual turnover of BDT 1.78 billion, SCB in
Bangladesh is amongst the top performing multinational bank.
Governing Body of Standard Chartered Bank
The SCB group board of directors has 17 members, consisting of one chairman, 5 executive
directors, 10 non-executive directors and a company secretary. John Peace is the chairman of the
board, while Peter Sands is the group CEO. SCB has six board level committees, each with a
specific role and responsibilities. The committees and their purposes are:
• Audits: The Committee shall review, on behalf of the Board, the company’s internal
financial controls to identify, assess, manage and monitor financial risks and to act as the
Audit Committee of the Company, Standard Chartered Bank and any other subsidiary, as
appropriate
• Board Risks: The Committee shall exercise oversight on behalf of the Board of the key
risks faced by the Group and shall make recommendations to the Board on the Group’s
overall risk appetite. Key risks subject to the Committee’s oversight are those listed in the
Appendix to these terms of reference.
• Brand and Values: The Brand and Values Committee shall oversee the brand, values
and good reputation of the Group, ensuring that reputational risk is consistent with the
risk appetite approved by the Board and the creation of long term shareholder value. In
particular, the Committee’s role will cover: brand positioning, culture and values,
reputational risk management and all aspects falling within the Group’s sustainability




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agenda. This includes the Group’s social, economic and environmental contribution. The
Committee will also ensure the Group appropriately manages its delivery of our brand
and values’ commitments, including our client/customer focus, to employees, external
stakeholders and society at large.
• Remunerations: The Committee shall review, on behalf of the Board and be responsible
for setting the principles parameters and governance framework of Standard Chartered
PLC and its subsidiaries (the “Group”) remuneration policy and more specifically for
managing executive remuneration.
• Nominations: The Committee is authorized to obtain, at the Company’s expense, outside
legal or other professional advice on any matters within its terms of reference.
• Governances: To maintain oversight of existing and emerging corporate governance
principles, practices and processes with a view to maintaining a culture within the
Company and its subsidiaries whereby high standards of corporate governance are
embraced holistically.




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Organizational Structure of Standard Chartered Bank
Bank is conservative by nature and activities. Since it is financial institution, conservativeness is
important here. Standard Chartered Bank follows top down approach in communication. The
hierarchical ladder of the chain of command of Standard Chartered Bank is shown below:
Chain of Command
Continued with Chief Operating Officer
Chief Executive Officer
Head of Consumer Banking HeadofFinance&
Administration
Head of Corporate&
External Affairs
HeadofLegal&
Compliance
Head of Corporate&
Institutional Banking
Head ofHuman
Resources
HeadofGlobal
Market
HeadofInformation
Technology
HeadofCredit
Department
Head of Financial
Institution
HeadofCreditCards Chief Operating Officer




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Business Operations of Standard Chartered Bank
SCB Bangladesh has two main functional areas which are:
• Business
• Support
SCB Bangladesh can be divided into the following business areas
• Consumer Banking
• Wholesale Banking
• Treasury
• Institutional Banking
• Custodial
In Bangladesh, corporate banking division has historically contributed more to revenue and
profits compared to the consumer banking division.
The support division of the bank contains following departments
• Operations
• Finance
• Administration and Risk Management
• Information Technology
• Human Resource
• Legal and Compliance
• External Affairs
• Management
Branch managers of SCB Bangladesh mutually agree to targets with the Head of Consumer
Banking and they are responsible for the performance of their specific units.




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Details of functions of business areas are as follows
Consumer Banking: SCB Bangladesh offers a wide range of retail banking services comprising
of loans, deposits and other services. The consumer banking division consistently develops new
products and services so that it is able to meet the needs of each individual domestic and foreign
customer. SCB Bangladesh offers deposit products such as savings accounts, current accounts,
fixed deposits and savings schemes.
SCB Bangladesh also offers a wide range of credit, debit and prepaid cards for the convenience
of customers. Auto Loan, Personal Loan and Home Loan are also offered by the bank. Islamic
variants of these products and services exist under the brand name Saadiq. Special privilege is
provided by the bank to priority banking customers who are selected based on net worth.
SME Banking products and services such as Loan against Property (LAP), Business Installment
Loan (BIL), Trade and Working Capital (TWC) products and transaction services are also
implemented by the consumer banking division. Details of SME Banking of SCB Bangladesh
will be provided later
Wholesale Banking: SCB Bangladesh offers its corporate clients (top local companies and
MNCs) a wide range of financial services. All corporate clients are assigned relationship
managers (RM) so that the bank can better understand and satisfy their financial needs and build
up better relationships with them. The division takes help and advice from Financial Institutions
and Treasury Services division as and when required.
SCB Bangladesh provides project financing, investment consultancy, syndicated loans, bonds
and guarantees and local and international treasury products to corporate clients. Export and
import financing services are also provided to corporate clients by trade finance department.
Treasury Division: SCB is famous all over the world for its operations in foreign exchange and
money market. The bank has dealing centers placed all over the world and is thus able to
facilitate 24 hour services to clients in Bangladesh. The department offers solutions to customers
who manage to control interest rate and currency exposures that arise from trade, investment and




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financing activities in other parts of the world. According to BAFEDA, SCB Bangladesh
controls around one third of volume of country’s foreign exchange market.
Institutional Banking: The institutional banking division of SCB Bangladesh provides a wide
range products and services to other banks and financial institutions including a wide variety of
clearing, payment collection and import-export handling services. The bank offers current
accounts in taka and other foreign currencies and convertible accounts in taka to foreign
missions, voluntary organizations, consultants, airlines, shipping lines, and their personnel.
Custodial Services: SCB’s custodial service customers are mainly global brokers/dealers who
require cross-border information and sub-custodian services. SCB Bangladesh is responsible for
the planning process but the overall management of the business takes place from Singapore
Details of functions of some of the support areas are as follows
HR Division: HR department manages recruitment, training and career progression plan and
develops organizational culture within the bank.
IT Department: IT department handles all computerized operations of the bank and makes sure
all hardware and software are up-to-date and working properly.
Central Operations: The operations unit processes works of the business units, and detects
mistakes or problems and provides reports. The unit ensures that the bank runs smoothly and in a
controlled manner.
Legal and Compliance: SCB Bangladesh is governed by laws and regulations set by the
Ministry of Finance and Bangladesh Bank. The legal and compliance department deals with any
legal issues, advises the CEO and management regarding any legal and regulatory issue,
corresponds regulatory issues regularly to group and carries out internal audit.




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External Affairs: The external affairs department looks after advertisements, promotions, public
relations, partial marketing for disseminating new products and services to customers and
ensuring service quality.
Mission and Vision of Standard Chartered Bank
Mission of Standard Chartered Bank
Leading the way (Being proactive) Standard Chartered Bank wants to be proactive in the sense
that they want to exceed customers’ expectations, that is they want to come up with products and
services having such features, before customers can start expecting them from SCB.
Vision of Standard Chartered Bank
The vision of Standard Chartered Bank is TO BUILD A WORLD CLASS BANK. Beside this
they also have the following vision:
• To be trusted and respected around the world.
• To deliver services that will continuously delight our customers.
• To treat every customer with respect and integrity.
• To share a vision of the future and work together to realize it.




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Goals and Values of Standard Chartered Bank
Goals of Standard Chartered Bank
Goals are numerical targets, which are financial goals.
• Translate financial goals into activity goals.
• Ensure the ownership of your goals.
• Set daily and weekly goals.
• How much, what and when.
• Manage goals daily
Values of Standard Chartered Bank
Standard Chartered Bank has five values and these values are keys to their success. These values
determine how the employees achieve their goals, the way they work together and how it feels to
be a part of Standard Chartered Bank. In brief these values are:
• Responsive: How we response to our customer will influence their belief in our
commitment to them. A proactive response is often unexpected and more effective for that.
It clearly demonstrates our willingness to go beyond the unexpected.
• Courageous: Being courageous is about confidently doing what’s right. Often the task
truly courageous act both inspires and builds character.
• International: As a member of global village we view the world from the widest
perspective. We are all global citizens and the world is full of new opportunities and
exciting possibilities. We also deliver world-class products and services.




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• Creative: Creativity belongs to those of us who are excited by challenges and engage them
in fresh thinking and an open mind. Creative thinkers are not limited by convention but
allow their minds to soar beyond predictable solutions.
• Trustworthy: Trust is the foundation of every successful relationship. We trust because we
believe in the sincerity of our promise. Building trust can take forever. Losing takes only
moments
Objectives and Strategies of Standard Chartered Bank
Objectives of Standard Chartered Bank
According to SCB’s annual report 2010, for consumer banking, SCB’s objectives are to:
• Provide friendly fast and accurate services.
• Provide solutions to financial needs.
• Provide recognition and reward overall banking relationship.
• Become the bank that customers recommend to their family, friends and colleagues.
Strategies of Standard Chartered Bank
To achieve the objectives, Standard Chartered has underlined some strategic pillars in their
annual report 2010, which are as follows:
• Geographic focus on Asia, Middle East and Africa- SCB is trying to focus on these fast
growing markets by creating and utilizing existing completive advantage built up through
superior insight and deep, direct local relationships.




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• One bank with two strong businesses supporting each other- SCB’s consumer banking
and wholesale banking divisions are both strong businesses in their own right and work
together to complement and support each other.
• Client-focused rather than a product-focused approach- SCB focuses activities and
creates capabilities focusing on clients rather than seeking rapid returns on products or
creating unnecessary products.
• Distinctive culture and values- The bank’s unique culture and values provide it with a
distinct advantage, as it has allowed to build brand value among customers, and to attract
talented employees and to create good relationship with governments and regulators.
• Conservative and disciplined on risk, capital and liquidity- SCB puts more importance on
its balance sheet quality than its income statement and is willing to sacrifice profits to
ensure quality of the balance sheet.
• Scale positions in significant local markets- SCB wants to become an important part of
the banking system in whichever country they operate.
• Organic growth: the primary driver for strategy and value creation- SCB believes that
organic growth creates greatest value for shareholders and only explores acquisitions if
organic growth does not happen within reasonable time.




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Details of the Department I Worked with
Bonds Transaction Processing Operation (BTPO) Department
The BTPO department deals all kinds of bonds sold by Bangladesh Bank. Especially, there are
four kinds of bonds which BTPO dept. deals with the most. These are 5 Year Bangladesh
Sanchayapatra, 3 Monthly Sanchayapatra, Pensioner Sanchayapatra and Family Sanchayapatra.
According to the Bangladesh Bank, Standard Chartered Bank is the second largest seller of
government bonds next to Sonali Bank, and is the largest seller amongst private banks. To meet
the specific requirements and guidelines provided by Bangladesh Bank. The total procedure has
been divided into three sections; Issuance, Encashment and Reconciliation.
Issuance section receives applications for bond purchase, a debit instruction from the customer
and other related documents which are authenticated by the Branch officials and then process the
application. Issuance section complies with the purchasing requirements and conditions set by
Bangladesh Bank and SCB.
Encashment section receives customer instruction for crediting with his/her proceeds of Bonds
or coupons of Bonds. The instruction is verified and then processed. Encashment section
complies with the encashment requirements and conditions set by Bangladesh Bank,
Sanchayapatras Bureau and SCB. After encashment, the coupons/bonds are claimed to
Bangladesh Bank.
Reconciliation section receives the transaction details and then verifies whether correct amounts
are credited and claimed to Bangladesh Bank and whether Bangladesh Bank has paid it at the
correct amount. Reconciliation section complies with the requirements and conditions set by
SCB.




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Internship Outcome
In the internship program, I have learnt about the practical field. I experienced what it feels like
working under someone’s supervision within the given space. However, I joined Standard
Chartered Bank on June 14. My office was located in Kawran Bazar at Monem Business District,
111 Bir Uttom C. R. Dutta Road, Dhaka-1215. I was posted in BTPO dept. from the head office
of Standard Chartered Bank. This (BTPO) department deals with bonds that are products of
Bangladesh Bank.
Location of Employment within the Organogram
This is the organogram of the department that I worked in through my entire internship program.
Organogram of BTPO
For first forty days of my internship program I worked with the Issuance team which is shown in
the left of the organogram. There were four people (including myself) in that team. This team is
responsible for issuing bonds. Later on, I was asked to join the Encashment team which is shown
in the middle of the organogram. At the time of working with the encashment team I also had the
responsibilities of some work of the issuance team, since I was able to do those work without any
supervision by then.




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Duties and Responsibilities
As it has been mentioned earlier, I worked with different teams of BTPO department during my
internship program it gave me the opportunity to carry out different kinds of responsibilities at
different times. All my responsibilities while I was part of the Issuance team are shown below:
1. Applications Sorting: When customer wants to buy a government bond, he/she has to
get an application from a branch and submit it along with required legal documents like
Sample Sign Card, a copy of the National ID; Payment Slip etc. (may requires many
other documents depending on the situations). The way customer puts these papers
together it is not the right order for the bank to work on it and issue the bond. So, my job
was to unpin the applications and putting them in a right order and finally writing the
account number at the bottom as well as on the top of the application form. So that the
issuance team can work faster and better.
2. Batch Making: The batch making was one of my daily duties. It (batch making) is a
process of rechecking the issued bonds and matching the information (like name, amount,
account number and bond’s registration number) written on the application form with the
help of a instruction paper made by the Maker (the person issued the bond). After
rechecking and matching I had to remove the bank slip from the application and bundle
them all together and lastly staple them with the batch instruction.
3. Applications Dividing in Kinds: From June to July, there would come 300 to 500
applications a day. This two month is the most intense time for BTPO department.
Applications dividing in kinds meaning after issuing process (on system), it is time to
attach the bonds with applications. But in order to make easier the bond attaching process
it is wise to separate the applications in their own kinds. There are nine different kinds of
bonds that Bangladesh Bank offers. Like
• 3 Monthly Profitable Sanchayapatra (3MSP)
• 5 Years Bangladesh Sanchayapatra (BSP)




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• Pensioner Sanchayapatra (PSC)
• Family Sanchayapatra (FSP)
• Wage Earner Development Bond (WEDB)
• Dollar Investment Bond (DIB)
• Dollar Premium Bond (DPB)
• Pratirakkha Sanchayapatra (PSP)
• 6 Monthly Profitable Sanchayapatra (6MSP)
Out of this nine, the first four (3MSP, BSP, FSP and PSC) kinds are most issued. So my job was
to divide the applications and sequence them in numeric order according to the registration
number given on them at the time of issue.
4. Denomination: Sometimes, when there too many applications are coming from branches
and there is not enough hands/time to meet the daily goal of BTPO department, I would
be asked to write denominations on the customer part of the applications. They would
give me a laptop/computer and connect me with the system through SPMS (Sanchaypatra
Management System). All I had to do was putting the registration number (which is
written on the application) in SPMS to find out the bonds serial number (which actually
the bonds number given by the Bangladesh Bank) regarding an application. Then I would
have to write the bonds number in the customer part of the application form and in the
bank’s part of the application as well.
5. Bonds Attaching: In most of the days after 4pm, it was my time to attach the bonds with
application’s customer part (the bottom part of the application that customer receives
along with the bond). As dividing the applications step is done along with denominations
writing; now the applications are ready to attach bonds with them. I would have given
printed bonds sequentially according to registration number and I would need to attach
those bonds with the applications that I already prepared in numeric order. Now I would
need to match the registration number written on the customer copy with the bond and
attach them with a pin.




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6. Separating Customer-copy: The next step after attaching the bond with customer-copy
is separating them depending on the branches they came from. Now these customer-
copies will go back to where they came from. The process of sending customer-copy
back to the branch is done by software called CMS (Courier Management System).
Separating customer-copy is important because this makes the sending process through
CMS easier and less time consuming.
Duties/Responsibilities while working with the Encashment team: At the end of the July
when applications were coming in the rate of usual days and the pressure on Issuance team went
off, my supervisor gave me the opportunity to work with a new team called Encashment team.
The responsibility of this team was quite the opposite from the Issuance team. The encashment
team is responsible for processing the payments. When customers want to cash bonds or coupons
(Coupon-which carries the interest payment against the investment made through buying a
bond) they submit the necessary papers along with bonds/coupons in the branch and the branch
sends those paper through CMS to processing unit which is the BTPO department under which
the encashment process is completed by the this team.
7. Receiving Couriers: As BTPO (Bonds Transaction Processing Operation) is an
operation department, so everyday there more than hundred couriers are coming in. My
duty was to open up the packets and to match what is inside with the courier slip upon
which everything is written whatever is inside that packet. If every paper/files are right
inside as it says in the courier slip, then I need to count those papers and write the number
on top of the courier slip with a red pen and put my sign there. And if anything was
missing, I had to mark that account/registration number and write “Not found” beside.
8. Sorting: Everyday customers are claiming their interest’s money by submitting coupons
along with the photocopy of their bonds receipt and bank’s instruction paper. My job was
to sort these papers in right order. For the ease of work, the bank has developed their own
way to order these papers. First, I had to sequent the coupons in numeric order and staple
those coupons onto the right side of bonds receipt photocopy and staple again the




27

instruction copy of the bank with receipt photocopy of the bonds. If there was more than
one receipt, I would need to check the denominations written on the receipt and match
with coupons to sort out which coupons belong to what receipts.
9. Calculations: Calculation was the most frequent job that I done in my whole internship
program. As I mentioned earlier, encashment team receives hundreds of coupons from
customers claiming their money, everyday. My responsibility was to write the amount of
money on coupons. I had been given an interests instruction page (where interests rate
was given for all sorts of sanchaypatra). I had to calculate the interest amount and write
that amount on the coupon.
Cross-checking with Different Departments
In my entire internship program, I never get the privilege or opportunity of working with other
departments of standard Chartered Bank. But I was privileged with the opportunity of working
with different teams of the same department. First I worked with Issuance tem. Later I was
posted to Encashment team in their needs. These two teams have completely different
responsibilities with a same goal, indeed. As I mentioned earlier, I had to do different work in
different time.
Competencies and Skills Acquired on the Job
1. As a fully customer oriented organization, the Standard Chartered Bank operates great
customer service where the communication skill is one of the fundamental factors.
Treating every customer in bank’s customized unique way is a challenging thing as I
observed while working with the staffs of BTPO dept. I have achieved significant amount
of knowledge about customer service and I have realized that great communication skill
is the fundamental requirement of serving the customers with great service.
2. I also learned how commercial banks work on behalf of Bangladesh Bank.




28

3. How commercial banks sell the products of Bangladesh Bank and how they earn
commissions by selling them.
4. During the internship period I have learnt about two software SPMS (Sanchaypatra
Management System) and CMS (Courier Management System).
5. I have acquired the knowledge of working within the given time with professionalism.
6. I have learnt about Maker and Checker.
However, everything that I have learnt from the entire internship program was really important. I
had the opportunity during the program to get a closure at the various processing activities of
bond along with all other activities of encashment and issuance in the Standard Chartered Bank
BTPO dept. Moreover, this internship gave me the opportunity to deal with risky work within
specific time.




29

Research Component
Problem Statement
During the last decade, the financial service sector has undergone drastic changes, resulting in a
market place which can be characterized by intense competition, little growth in primary demand
and visible increased in financial service providers. Government of Bangladesh has authorized
quite a number of banks which further increases the competition and complexity among the
banks. Finding a handsome figure of profits under this heating sun seems questionable and
ultimate goal becomes survival for a bank. Currently, there are four state-owned commercial
banks, five specialized banks, thirty eight private commercial banks, one land development bank
and nine foreign commercial banks operating their business. With this increased competition
comes increased opportunity for customers to switch banks easily if dissatisfied with a service
provider (Dube & Maute, 1998). Research suggests customer switching can have devastating
effects on an organization’s profitability.
Most of the time service providers in Bangladesh want to peruse or focus on acquiring new
customer rather than gaining the loyalty of their existing customers. Although new customers are
also important but a considerable number of customer with loyalty can help a company to
generate more astonishing profit. With each loyal customer, a business is likely to win many
more customers through recommendations and word of mouth. Moreover, if you are not taking
care of your customers, your competitors will (Peppers et al, 2004). Unnoticed customers usually
switch to a competitor if they get better priority.
Attracting new customer is always more costly as it requires various promotional activities;
whereas by improving the reliability of the service and relationship with the customer can easily
influence the customer to stay and result loyalty. In some cases satisfying customer is not enough




30

to make them loyal rather the service provider should look for strategies like switching barriers
which can be profitable for the bank. Lack of loyalty factors knowledge and customer switching
tendency may result sufferings of the service provider.
Purpose of the Study
In recent years, drawing attention to customer satisfaction has increased, and today customer
loyalty can be proposed as an instruction for profitability. Intense competition in the markets and
understanding the importance of customer loyalty for organizations caused them to take step
towards building and maintaining long-term relationships with customers; in viewpoint of
scholars, relationship oriented marketing is the most proper choice for realization of this fact
(Ranjbarian and Barari, 2009). In this research I tried to analyze factors that affect the customer
loyalty of Standard Chartered Bank, Bangladesh. The purpose of the study is to find out how
service quality, brand image, trust, customer relationship management, switching cost and value-
added service affect the customer loyalty in the context of Standard Chartered Bank. How much
impacts these factors have on customers to make them loyal to Standard Chartered Bank.




31

Literature Review and Related Studies
Examining the historical course of the studies with the subject of loyalty it is found that the
researchers that try to define why loyalty has a significant place in the banking industry have
discovered few problems. The most basic problem encountered in those studies is the failure to
achieve a shared definition of loyalty because although customer loyalty may be a key variable
that explains keeping the customer at hand (Wong and Zhou, 2006; Pritchard and Howard,
1997), it has been discussed in time whether loyalty is an attitude or combination of attitude and
behavior. According to the approach based on behavior, loyalty is the behavioral reaction based
on prejudice as the function of psychological processes by the decision maker in the existence of
one or more alternative in time (Jacoby and Keyner, 1973).
Behavioral approach explained loyalty based on the criteria including the share in consumption,
consumption probability, probability to consume the product again, repeated consumption
behavior, multidirectional consumption behaviors (Kumar and Shah, 2008).
According to the second approach dealt as the combination of attitude and behavior brand loyalty
is a form of repeat purchasing behavior reflecting a conscious decision to continue buying the
same brand, for brand loyalty to exist, a pattern of repeat purchase must be accompanied by an
underlying positive attitude towards the brand (Solomon et al., 2006). This approach does not
include only the past purchasing behaviors and tendencies but also customer attitude and value
systems (Sudharshan, 1995). Consequently according to this approach which was accepted in
time, the customer realizes loyalty in time through repeated consumption of any good or service
when the customer has a positive attitude toward the good/service or company providing the
good/service (Wong and Zhou, 2006). In addition to the difference in description within the
historical course, it is found that the manner of dealing with loyalty has changed as well. In the
early time studies, (Cunningham, 1961; Tucker, 1964; Day, 1969; Jacoby and Keyner, 1973)
loyalty was used as dimensioning criteria because competition is low in the period and the
thought that activity would be more efficient in a market composed of loyal individuals in terms
of the effectiveness of marketing activities dominates.




32

According to Szwarc, companies failed to understand that the new customers they obtained after
1980’s particularly through price discounts are those customers existing in the market but in the
recession in 1990’s they tended to examine the performance of marketing and sales expenses.
This tendency suggested that it was much more costly to gain new customers than to preserve the
existing ones because it is quite difficult to detect the expectations and behaviors of new
customers and this requires additional costs (Szwarc, 2005). This situation changed the
viewpoint toward loyalty and loyalty started to be perceived by the companies and brands as a
fact that should be achieved because in the existence of innovative products and increased global
competition made customer loyalty a managerial struggle (Dick and Basu, 1994). Consequently
not only the measurement of loyalty but also management thereof came to the agenda and the
effort to search for the factors behind loyalty and achieve loyalty was based upon.
Singh & Sirdeshmukh (2000) believe that customer loyalty is a behavioral tendency -- the
consumer’s willingness to continue to maintain relationships with the service provider. Lee &
Cunningham (2001) believe that customer loyalty is the customer’s intention to frequently
patronize the company that provides the existing services based on the customer’s past
experiences and future expectations.
Jones & Sasser (1995) explained customer loyalty as a customer’s intention to purchase a
product or service again in the future. They believe that there are two types of customer loyalties:
one is long-term loyalty, which is true loyalty and not subject to change, and the other is short-
term loyalty, wherein a customer may choose to leave immediately when he/she finds a better
product or service. Bhote (1996) believes that customer loyalty refers to a consumer’s
satisfaction with the product or service provided by the company and thus the customer is willing
to positively advocate about the company.
According to Srinivasan (2007) within the loyal category there are one who satisfied by the good
quality service and un-satisfied customers. Sometimes unsatisfied customers are also loyal due to
attachment and commitment with the supplier. And satisfied customers, if lack the trust, brand
image and customer relation with the suppliers products and services will always deflect once
they find a competitor with better quality of products and services. This type of loyalty is




33

sometimes called False Loyalty in whish unsatisfied customers remain loyal to their suppliers.
The reason for this false loyalty is the factors due to which the customer feels hurdles and
obstacles in his/her way, which stops him her from switching or choosing another supplier.
These hurdles are called switching costs. In today’s technologically advanced world and due to
arrival of internet, it’s much more difficult to retain a customer.
Storbacka and Gronroos (1994) explored that consumers also rely on a number of other aspects.
Garbarino and Johnson (1999) disclosed trust as a positive effect for keeping the existing
customer. Eppie (2007) explored that brand image and trust is significant factors to increase the
customer loyalty. Brand or organization with a powerful image can enhance customers and
enhance loyalty level of these customers (Bergstrom & Bresnahan, 1996). Christopher et al.
(2006) investigated that higher level of corporate image leads to higher level of the customer
retention and loyalty.
Some researchers described customer loyalty as likely to be repeated in future contracts (lee et al,
2005, P: 32). In another definition the concept of customer loyalty means a desire to continue the
relationship with the brand. A loyal customer is less affected by negative news and more from
other customers who are encouraging. Encouraging and providing special services to customers
to increase loyalty and to prevent absorption by competitors should be a bank's principal
strategies. Formation of mutual trusts between banks and customers another factor affecting the
bank’s customer loyalty.
Existing studies on the customer loyalty in the service industry are mainly focusing on the
service quality and the switching barrier (Dick & Basu, 1994; Gerportt, et al., 2001; Lee &
Cunningham, 2001). Generally speaking, those who provide good quality service have more
repeat purchase tendency among their customers. However, the necessity for the analysis on the
other factors as other studies shows that the service quality is not always significant to explain
the customer loyalty even it is an important factor having positive effect on the customer loyalty
(Anderson et.al, 1994; Jones et al. 2002). Recent studies identified that brand image, trust,
customer relationship management; switching cost and value-added service have a large effect
on the customer loyalty (Gwinner et al., 1998; Maute & Forrester, 1993; Smith & Bolton, 1998).




34

As a consequence, a lot of studies were accomplished related in this topic. Researcher created
and developed different dynamic models to investigate the relationship between service quality,
brand image, trust, customer relationship management, switching cost, value-added service and
their impact on customer loyalty. Relating all the variables with customer loyalty the conceptual
framework has been designed and then each of the variables is defined as follows and their
relationships are also described in this section giving review of previous studies.
Conceptual Framework
Service Quality
Trust
Brand Image
Customer Relationship Management
Switching Cost
Value Added Service
Customer Loyalty




35

Service Quality
Service quality is defined as the difference between customer’s expectations and perceptions of
service (Parasuraman, Zeithaml and Berry, 1988) and can often be seen as a way to build a
competitive advantage. According to Sargeant and West (2001), it is obvious that the perceptions
of service quality and commitment are related to loyalty, but each of the aforementioned factors,
may have a different impact on customer loyalty in a particular market. There are two kinds of
reasons that can determine relationship breakdown between the customer and the organization -
the natural causes (customer demand extinction) and artificial causes (inadequate product
specifications, insufficient quality of service level) (Sargeant and West, 2001). It is obvious that
in order to increase customer loyalty the organization must seek to eliminate both natural and
artificial customer exit reasons.
Service quality as a multi-dimensional construct commonly regarded as customer judgments
about service supplier and customer interactions and service itself (Cronin and Taylor, 1992;
Babbakus and Boller, 1992; Zeithaml et al., 1996).
Service quality analysis makes an impact on the development of the customer loyalty concept.
Service quality can be regarded as one of the most frequently analyzed customer loyalty
determinants. Tangible and intangible constituents of service quality were important in
evaluating either customer view of an organization or customer trust in an organization (Doney
and Cannon, 1997; Garbarino and Johnson, 1999). It has been defined that service quality is very
important for customer satisfaction, and by it service quality impacts customer loyalty (Cronin
and Taylor, 1992; Oliver, 1999). It can be stated, that the limitation of service quality studies is
the inconsistency in determining the link between service quality and customer loyalty. Some
studies have found that service quality determines customer satisfaction and affects customer
loyalty through satisfaction (Cronin and Taylor, 1992; Rust and Oliver, 1994). Other studies, in
contrast, have justified the influence of customer satisfaction on the quality of service (Bolton
and Drew, 1991).




36

Trust
Trust has been defined as the willingness to rely on an exchange partner in whom one has
confidence (Ostrom and Iacobucci, 1999) or confidence in an exchange partner’s reliability and
integrity (Morgan and Hunt, 2004). Chaudhuri and Holbrook (2002) define brand trust as the
customer’s willingness to rely on the ability of the brand to perform its stated function. Trust
causes dedication because it reduces the costs of negotiating agreements (Berry, 2007) and
lessens customers’ fear of opportunistic behavior by the service provider (Bendapudi and Berry,
1997).
In social psychology trust is considered to consist of two elements: trust in the partner’s honesty,
and trust in the partner’s benevolence (‘Wetzels et al., 1998). Honesty is the belief that a partner
stands by his word, while benevolence is the belief that the partner is interested in the customer’s
welfare, and will not take actions with negative impact on the customer. In the marketing
literature, Morgan and Hunt (1994) also suggest that brand trust leads to brand loyalty and
commitment because trust creates exchange relationships that are highly valued.
Brand Image
Brand image is an imperative relational means in determining customer loyalty. As study of
Erdem and Swait (1998) shows, brand image is made based on information of economic pattern,
is used for product and suggests that brand is valuable for two reasons for consumers: 1.They
decrease risk perceived by customers, 2.They put away costs of decision-making (Erdem and
Swait, 1998). The basis of these statements is that brand image is a useful symbol of marketplace
that corporate enlarged it to consider asymmetry of market information. In other words,
consumers have less knowledge on product or services of a company than company itself.
Reynolds (1965) investigated that "an image is the finding of mental exercise based on
few selected impression among the flood of the total impression and it is developed
through creative process of the organization. Keller (1993) explored that an image benefits can
be classified into functional, experiential and symbolic benefits. Park, Jaworski, & MacInnis,




37

(1986) found that A company or its product/services which constantly holds a favorable
image by the public would definitely gain a better position in the market, sustainable
competitive advantage, and increase market share or performance. In addition, several empirical
study findings confirmed that favorable image will lead to loyalty (e.g. Co, 2003;
Kandampully &Suhartanto, 2000; Nguyen & LeBlanc, 1998).
Customer Relationship Management
Customer relationship management (CRM), is a process businesses use to keep track of customer
contact. CRM can include tasks such as making follow-up phone calls, sending promotional
emails and inviting clients to webinars. Loyal customers are those who give the same place
repeat business because they are satisfied with the products and how they are treated. There is a
connection between CRM and customer loyalty, because having a superb CRM process can help
a business have higher customer satisfaction.
Whether enterprises can make their current customers loyal depends on whether they can
manage the customer relationships well. As customers have grown to be more conscious,
enterprises have had to pay the prices of the errors and faults they do in customer relationships.
The most important quality of the 1990s is that customers revealed their power then. They
realized that they themselves had something to say and have they listened to. The firms, then,
understood that they had to listen to their customers so as to be able to sustain their presence in
the market. (Bozkurt, 2000: 25) After the 2000s, with the increased use and effect of the internet
and such platforms as discussion groups, customers had the opportunity to be more powerful and
effective against the enterprises. Thus, enterprises noticed that they could only be successful if
they adopted customer-based marketing.




38

Switching Cost
As defined by Jones et al. (2002), a switching barrier is any factor that makes it difficult or costly
for customers to change providers. Another brand loyalty determinant is known as switching
costs, which can be defined as the technical, financial or psychological factors which make it
difficult or expensive for a customer to change brand (Shergill and Bing, 2006). For this reason,
a switching cost can be seen as a cost that deters customers from demanding a rival firm's brand
(Aydin and Ozer, 2005). It can be defined as the technical, financial or psychological factors
which make it difficult or expensive for a customer to change brand (Selnes, 2007). When the
costs of switching brand are high for the customer, there is a greater probability that the customer
will remain loyal in terms of repeat purchase behavior, because of the risk or expense involved in
switching and because of the accompanying decrease in the appeal of other alternatives (Kon,
2004).
Value Added Service
Most processes in banks are usually carried out product-driven and less customer-centered. With
neglecting a consistent alignment of the bank’s business processes with the processes of their
customers, most banks forgo the opportunity to gain competitive advantages. By providing Value
Added Services (VAS) to customers banks can differentiate themselves from their competitors.
Value-added services can potentially win customer loyalty by (a) prolonging and intensifying the
relationship and (b) creating satisfaction and barriers to change. With regard to (a), the
relationship between the seller and the buyer is frequently reduced or limited to the transaction
act itself, i.e. the sale of a product or performance of a service. The customer is ultimately the
“cause” of the transaction and the recipient or “external factor” of performed services. Even
where there are repeat purchases, the contact between buyer and seller is limited to individual
transaction episodes.




39

Research Questions and Hypothesis
Research Questions
Does service quality have any significant effect on customer loyalty in the case of
Standard Chartered Bank?
Does trust have any significant effect on customer loyalty in the case of Standard
Chartered Bank?
Does brand image have any significant effect on customer loyalty in the case of
Does customer relationship management have any significant effect on customer
loyalty in the case of Standard Chartered Bank?
Does switching cost have any significant effect on customer loyalty in the case of
Does value-added service have any significant effect on customer loyalty in the case of
Hypothesis
Ho1: Service quality does not have any significant effect on customer loyalty in the context of
Standard Chartered Bank.
Ha1: Service quality has significant effect on customer loyalty in the context of Standard
Chartered Bank.
Ho2: Trust does not have any significant effect on customer loyalty in the context of Standard
Chartered Bank.
Ha2: Trust has significant effect on customer loyalty in the context of Standard Chartered Bank.




40

Ho3: Brand image does not have any significant effect on customer loyalty in the context of
Ha3: Brand image has significant effect on customer loyalty in the context of Standard Chartered
Bank.
Ho4: Customer relationship management does not have any significant effect on customer
loyalty in the context of Standard Chartered Bank.
Ha4: Customer relationship management has significant effect on customer loyalty in the context
of Standard Chartered Bank.
Ho5: Switching cost does not have any significant effect on customer loyalty in the context of
Ha5: Switching cost has significant effect on customer loyalty in the context of Standard
Chartered Bank.
Ho6: Value-added service does not have any significant effect on customer loyalty in the context
of Standard Chartered Bank.
Ha6: Value-added service has significant effect on customer loyalty in the context of Standard
Chartered Bank.




41

Methodology of the Research
As shown in the diagram of the conceptual framework of the research there are six independent
variables and one dependent variable. It (Framework) shows that there is a direct relationship
between the Independent variables and the dependent variable. It is my obligation to explore the
intensity of this relationship so that my purpose of the study can be met.
In this research Customer Loyalty is considered as the dependent variable, whereas Service
Quality, Brand Image, Trust, Customer Relationship Management, Switching Cost, Value-added
Service are considered as independent variable.
In order to gather data on the research questions, I have used questionnaire. The rationale behind
using questionnaire to collect data is:
a) Filling up questionnaire is easy and saves a lot of time. Participants feel more comfortable
toward questionnaire than any other method.
b) Personal interview would be both time and cost consuming.
c) The data gathered through questionnaire would be easy to put in quantitative analysis.
Therefore, questionnaire is the most useful method to collect data for this study.
The research done is descriptive in nature and it is a casual study. The type of study that is
carried to answer the research questions is a causal study. This type of study will show a cause
and effect relationship of the independent and dependent variables.
Sampling Method
The sample is the customers of Standard Chartered Bank who are currently buying more than
one offerings. In this research the convenience sampling is being used. Convenience sampling is
a type of non-probability sampling technique that uses participants who are most conveniently
available at the time of surveying. In this research, a total of 70 questionnaires were distributed
out of which 50 questionnaires were taken valid for data analysis and rest were rejected due to




42

incomplete information. Time limitation is the reason behind for choosing the sampling method
and sample size as well. I have found, most of the customers are not willing to participate in such
survey when it is only being made for academic purpose. In my opinion, they would have been
more interested if it was meant to bring them some benefits regarding the service they receive
from this bank.
Measurement Instrument
A set of structured questionnaire was applied in this research for collecting data from the
customers. The questionnaire contains five questions for each of the variables in which one
question was common for all variables. A Likert scale questionnaire has been used to collect
survey data. The respondents had to rate their answers from one to five given point Likert scale.
The questionnaire is intended to evaluate the relation between the dependent and independent
variables.
Data Collection
• Primary source of data is collected from the survey by Likert scale questionnaire.
• Secondary data was gathered from different secondary sources such as books, journals,
newspapers and online databases via internet etc.




43

Research Findings
Data Analysis
As it has to be, the analysis of the questionnaire has been done after the survey. All the data
collected by the 50 questionnaires have been inserted into the SPSS (version 20) software for
analysis. This statistical software has been used for the fulfillment of the analysis with collected
data (primary) to measure relationship between the variables.
The collected data from questionnaires was used for a Reliability Analysis. Five questions for
each variable were tested in Reliability Analysis in order to find out their reliability and validity.
If the Chronbach's Alpha was greater than 0.5 or 50% for the variables they were considered
valid. A Chronbach's alpha value of between 0.5-0.6 indicates sufficient reliability of the scale
for the early stage of any research (Nunnaly, 1978); although a coefficient of 0.7 or above is
desirable (Hair et., 1998).
Descriptive statistic table is shown the mean of all the factors. Regression analysis has been
performed to compute how much the independent variables explain the dependent variable.
Multiple Regression has been performed to compute which independent variable is the better
predictor of dependent variable. In regression null hypothesis (Ho) has to be rejected if p <0.05.
Reliability Analysis
For reliability analysis, first the dependent variable was inserted, as it shown in the conceptual
framework the Customer Loyalty is the dependent variable. The analysis of Table-1 indicates an
Alpha value of 0.805. Therefore, it should be concluded that the items that are taken to measure
the dependent variable (Customer Loyalty) are reliable.
As it is known that the Alpha value should be greater than 0.5, by that measure all the variables
that were undertaken for reliability analysis are came out reliable. A table is shown below with
all the variables and their Alpha values.




44

Table-1
Variables Chronbach Alpha
Customer Loyalty (DV) 0.805
Service Quality 0.829
Trust 0.736
Brand Image 0.729
CRM 0.790
Switching Cost 0.646
Value added Service 0.670
Descriptive Analysis
Descriptive Statistics
N Range Minimum Maximum Sum Mean Std.
Deviation
Variance
Gender 50 1.00 1.00 2.00 64.00 1.2800 .45356 .206
Age 50 3.00 1.00 4.00 112.00 2.2400 .65652 .431
Valid N (listwise) 50




45

Multiple Regression Analysis
From Table-3 the value of R=.870a
which means there is a strong relation among the variables.
And by R Square value it can be concluded that the dependent variable (customer loyalty) is
explained by independent variables at a rate of 75.8 percent.
Table-3
Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .870a
.758 .724 .36194
a. Predictors: (Constant), Value Added Service, Switching Cost, Service Quality,
Customer Relationship Management, Brand Image, Trust
In Table-4 the F-test outcome is highly significant (less than 0.001), so the model does fit the
data, F- test represents at least one factor has influence on customer loyalty.
Table-4
ANOVAb
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 17.600 6 2.933 22.391 .000a
Residual 5.633 43 .131
Total 23.233 49
a. Predictors: (Constant), Value Added Service, Switching Cost, Service Quality,
Customer Relationship Management, Brand Image, Trust
b. Dependent Variable: Customer Loyalty

Quantitative research on Customer Loyalty of Standard Chartered Bank

Quantitative research on Customer Loyalty of Standard Chartered Bank

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