Consumers’ Bank Selection Criteria in Selected Cities in Ethiopia
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Date
2015-05
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Addis Ababa University
Abstract
Due to the policy of free domestic competition in the financial (Banking) Service sector that is followed by government of Ethiopia, currently the banking sector shows high competition. Because of the competition, banks use different strategies to attract new and to retain the existing customers. However, before selecting marketing strategy executives have to understand the need of consumers and the effect of different demographic factor in their preference. Identifying consumers’ selection criteria helps bank executives and marketers to make decision by considering the real need of customers. Identifying the bank selection criteria of consumers and identifying if there is any selection criteria difference between genders, cities, income levels and educational status was the main objective of the study. The data have been collected by using structured questionnaire. The consumers' gave their value to the importance of 47 listed bank service attributes to their bank selection by using five point likert-type scale. 301 samples were proportionally selected from four cities: Addis Ababa, Adama, Hawassa and Bahir Dar by using a non-probability convenience sampling technique. The Descriptive statistic, mean score and inferential statistics, Mann-Whitney and Kruskal-Wallis test used to analyze rank of selection variables and to test significance of mean score difference between groups. The study found out that "Core Service", "Convenience" and "Service Encounter" are the top important variables to consumers' bank selection decision and the importance of "Recommendation of Others" and "Marketing Promotion" are found low. The study reveals that there is significant difference between genders, cities, education levels and income level on some selection variables. Based on findings, the paper recommends wide product delivery, increasing branches, increasing working hours and ATM booth, controlling advertisement expenses and designing marketing strategies to specific market segment.
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Keywords
Bank Selection Criteria, Consumer Behavior, Decision Process