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CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction

Research in common parlance refers to a search for knowledge. Once can also define

research as a scientific and systematic search for pertinent information on a specific topic.

In fact, research is an art of scientific investigation. The Advanced Learner’s Dictionary of

Current English lays down the meaning of research as “a careful investigation or inquiry

specially through search for new facts in any branch of knowledge.”

Redman and Mory define research as a “systematized effort to gain new knowledge.”

Some people consider research as a movement, a movement from the known to the

unknown. It is actually a voyage of discovery. We all possess the vital instinct of

inquisitiveness for, when the unknown confronts us, we wonder and our inquisitiveness

makes us probe and attain full and fuller understanding of the unknown. This

inquisitiveness is the mother of all knowledge and the method, which man employs for

obtaining the knowledge of whatever the unknown, can be termed as research. Research is

an academic activity and as such the term should be used in a technical sense.

According to Clifford Woody research comprises defining and redefining problems,

formulating hypothesis or suggested solutions; collecting, organising and evaluating data;

making deductions and reaching conclusions; and at last carefully testing the conclusions

to determine whether they fit the formulating hypothesis.

D. Slesinger and M. Stephenson in the Encyclopaedia of Social Sciences define research as

“the manipulation of things, concepts or symbols for the purpose of generalising to extend,

correct or verify knowledge, whether that knowledge aids in construction of theory or in

the practice of an art.”

Research is, thus, an original contribution to the existing stock of knowledge making for its

advancement. It is the persuit of truth with the help of study, observation, comparison

and experiment. In short, the search for knowledge through objective and systematic

method of finding solution to a problem is research. The systematic approach concerning

generalisation and the formulation of a theory is also research. As such the term ‘research’

refers to the systematic method consisting of enunciating the problem, formulating a

hypothesis, collecting the facts or data, analysing the facts and reaching certain

conclusions either in the form of solutions(s) towards the concerned problem or in certain

generalisations for some theoretical formulation.

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3.2 Objectives of the Study

Neuman (2006) states that when a researcher embarks on a study, he or she is contriving to

explore a new topic, describe a social phenomenon or explain why something occurs.

Research methodologists, such as Saunders et al (2007), generally classify the purpose of

research into three – exploratory, descriptive and explanatory but authorities such as

Cooper and Schindler (2006) present two research purposes – descriptive and causal

(although they place exploratory study under a different heading) while Sullivan (2001),

on another hand, names four goals of research – descriptive, predictive, explanatory, and

evaluative. Each purpose or goal specifies a particular objective and format. Yet, according

to the renowned marketing researchers, Malhotra and Birks (2006), the distinctions among

them are not absolute. They observe that exploratory research is usually advanced by

descriptive or causal research. A single study may incorporate more than one of these

purposes (Sullivan 2001; Saunders et al 2007).

A descriptive purpose, according to Sullivan (2001), is an “attempt to discover facts or

describe reality” (page 15). He evidently conceptualizes description to encompass

exploration. Saunders et al (2007) consider descriptive research as an extension of

exploratory research presupposing that the researcher of a descriptive study has a grasp of

the phenomenon under investigation. This type of study focuses on profiling persons,

events or situations. Descriptive studies are geared towards finding answers to questions

other than cause and effect relationships. Sullivan continues: “It is a picture or account of

what exists, sometimes summarized in numbers, percentages, or some other statistics”.

(page 15). The descriptive research, explains Malhotra and Birks (2006), differs from

exploratory research in that “descriptive research is characterized by the prior formulation

of specific research question or hypotheses. Thus, the information needed is clearly

defined. As a result, descriptive research is pre-planned and structured … a descriptive

research design specifies the methods for selecting the sources of information and for

collecting data from those sources” (page 65). Neuman (2006) report that exploratory and

descriptive study share many similarities and blur together in practice. “In descriptive

research,” Neuman states, “the researcher begins with a well-defined subject and conducts

research to describe it accurately. The outcome of a descriptive study is a detailed picture

of the subject. For example, results may indicate the percentage of people who hold a

particular view or engage in specific behaviours”. Our study naturally falls under

descriptive purpose. In answering the research questions, we need to describe the level of

internet banking (products and services) visà-vis level of customer value perception by

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adopters and users of internet banking in Gujarat. For this purpose the objectives planned

for the study were

1) To know whether there is no significant difference between the perceptions of

the respondents that indicates the Prospectiveness of Internet Banking across

the cities such as Ahmedabad, Baroda, Bhavnagar, Rajkot and Surat City of

Gujarat State.

2) To determine the most salient internet banking criterias which have the greatest

impact on behavioural intentions and satisfaction thereby indicating

prospectiveness of internet banking in Gujarat State.

3) To understand whether Internet Banking Services provided by the banks are

prospective or not in Gujarat State.

3.3 Research Approach

The description of the types of research brings to light the fact that there are two basic

approaches to research, viz., quantitative approach and the qualitative approach. The

former involves the generation of data in quantitative form which can be subjected to

rigorous quantitative analysis in a formal and rigid fashion. This approach can be further

sub-classified into inferential, experimental and simulation approaches to research. The

purpose of inferential approach to research is to form a data base from which to infer

characteristics or relationships of population. This usually means survey research where a

sample of population is studied (questioned or observed) to determine its characteristics,

and it is then inferred that the population has the same characteristics.

Experimental approach is characterised by much greater control over the research

environment and in this case some variables are manipulated to observe their effect on

other variables. Simulation approach involves the construction of an artificial environment

within which relevant information and data can be generated. This permits an observation

of the dynamic behaviour of a system (or its sub-system) under controlled conditions. The

term ‘simulation’ in the context of business and social sciences applications refers to “the

operation of a numerical model that represents the structure of a dynamic process. Given

the values of initial conditions, parameters and exogenous variables, a simulation is run to

represent the behaviour of the process over time.” Simulation approach can also be useful

in building models for understanding future conditions.

Qualitative approach to research is concerned with subjective assessment of attitudes,

opinions and behaviour. Research in such a situation is a function of researcher’s insights

and impressions. Such an approach to research generates results either in non-quantitative

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form or in the form which are not subjected to rigorous quantitative analysis. Generally,

the techniques of focus group interviews, projective techniques and depth interviews are

used. The research approach to the study is informed by a review of the forms of data

approach – qualitative and quantitative data. Sullivan (2001) indicates that another step of

refining the research problem is to decide whether qualitative or quantitative data or even

both are appropriate for the research. Our study covers the questions which measures

objective facts, focuses on variables, reliability is key, independent of context and subject

to statistical analysis. Thus research approach adopted for the study is Quantitative

Approach.

3.4 Types of Research Design

The formidable problem that follows the task of defining the research problem is the

preparation of the design of the research project, popularly known as the “research

design”. Decisions regarding what, where, when, how much, by what means concerning

an inquiry or a research study constitute a research design. “A research design is the

arrangement of conditions for collection and analysis of data in a manner that aims to

combine relevance to the research purpose with economy in procedure.” In fact, the

research design is the conceptual structure within which research is conducted; it

constitutes the blueprint for the collection, measurement and analysis of data. As such the

design includes an outline of what the researcher will do from writing the hypothesis and

its operational implications to the final analysis of data. Research design is needed

because it facilitates the smooth sailing of the various research operations, thereby making

research as efficient as possible yielding maximal information with minimal expenditure

of effort, time and money. Just as for better, economical and attractive construction of a

house, we need a blueprint (or what is commonly called the map of the house) well

thought out and prepared by an expert architect, similarly we need a research design or a

plan in advance of data collection and analysis for our research project. Research design

stands for advance planning of the methods to be adopted for collecting the relevant data

and the techniques to be used in their analysis, keeping in view the objective of the

research and the availability of staff, time and money. Preparation of the research design

should be done with great care as any error in it may upset the entire project. Research

design, in fact, has a great bearing on the reliability of the results arrived at and as such

constitutes the firm foundation of the entire edifice of the research work. Even then the

need for a well thought out research design is at times not realized by many. The

importance which this problem deserves is not given to it. As a result many researches do

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not serve the purpose for which they are undertaken. In fact, they may even give

misleading conclusions. Thoughtlessness in designing the research project may result in

rendering the research exercise futile. It is, therefore, imperative that an efficient and

appropriate design must be prepared before starting research operations. The design helps

the researcher to organize his ideas in a form whereby it will be possible for him to look

for flaws and inadequacies. Such a design can even be given to others for their comments

and critical evaluation. In the absence of such a course of action, it will be difficult for the

critic to provide a comprehensive review of the proposed study. Different research designs

can be conveniently described if we categorize them as: (1) research design in case of

exploratory research studies; (2) research design in case of descriptive and diagnostic

research studies, and (3) research design in case of hypothesis-testing research studies.

3.4.1 Research design in case of exploratory research studies: Exploratory research

studies are also termed as formulative research studies. The main purpose of such studies

is that of formulating a problem for more precise investigation or of developing the

working hypotheses from an operational point of view. The major emphasis in such

studies is on the discovery of ideas and insights. As such the research design appropriate

for such studies must be flexible enough to provide opportunity for considering different

aspects of a problem under study. Inbuilt flexibility in research design is needed because

the research problem, broadly defined initially, is transformed into one with more precise

meaning in exploratory studies, which fact may necessitate changes in the research

procedure for gathering relevant data. Generally, the following three methods in the

context of research design for such studies are talked about: (a) the survey of concerning

literature; (b) the experience survey and (c) the analysis of ‘insight-stimulating’ examples.

The survey of concerning literature happens to be the most simple and fruitful method of

formulating precisely the research problem or developing hypothesis. Hypotheses stated

by earlier workers may be reviewed and their usefulness be evaluated as a basis for further

research. It may also be considered whether the already stated hypotheses suggest new

hypothesis. In this way the researcher should review and build upon the work already done

by others, but in cases where hypotheses have not yet been formulated, his task is to

review the available material for deriving the relevant hypotheses from it. Besides, the

bibliographical survey of studies, already made in one’s area of interest may as well as

made by the researcher for precisely formulating the problem. He should also make an

attempt to apply concepts and theories developed in different research contexts to the area

in which he is himself working. Sometimes the works of creative writers also provide a

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fertile ground for hypothesis formulation and as such may be looked into by the

researcher.

3.4.2 Descriptive Research

Descriptive research studies are those studies which are concerned with describing the

characteristics of a particular individual, or of a group, whereas diagnostic research studies

determine the frequency with which something occurs or its association with something

else. The studies concerning whether certain variables are associated are examples of

diagnostic research studies. As against this, studies concerned with specific predictions,

with narration of facts and characteristics concerning individual, group or situation are all

examples of descriptive research studies. Most of the social research comes under this

category. From the point of view of the research design, the descriptive as well as

diagnostic studies share common requirements and as such we may group together these

two types of research studies. In descriptive as well as in diagnostic studies, the researcher

must be able to define clearly, what he wants to measure and must find adequate methods

for measuring it along with a clear cut definition of ‘population’ he wants to study. Since

the aim is to obtain complete and accurate information in the said studies, the procedure to

be used must be carefully planned. The research design must make enough provision for

protection against bias and must maximize reliability, with due concern for the economical

completion of the research study. The design in such studies must be rigid and not flexible

and must focus attention on the following:

a) Formulating the objective of the study (what the study is about and why is it being

made?)

b) Designing the methods of data collection (what techniques of gathering data will

be adopted?)

c) Selecting the sample (how much material will be needed?)

d) Collecting the data (where can the required data be found and with what time

period should the data be related?)

e) Processing and analyzing the data.

f) Reporting the findings.

In a descriptive/diagnostic study the first step is to specify the objectives with sufficient

precision to ensure that the data collected are relevant. If this is not done carefully, the

study may not provide the desired information. Then comes the question of selecting the

methods by which the data are to be obtained. In other words, techniques for collecting the

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information must be devised. Several methods (viz., observation, questionnaires,

interviewing, examination of records, etc.), with their merits and limitations, are available

for the purpose and the researcher may user one or more of the methods. While designing

data-collection procedure, adequate safeguards against bias and unreliability must be

ensured. Whichever method is selected, questions must be well examined and be made

unambiguous; interviewers must be instructed not to express their own opinion; observers

must be trained so that they uniformly record a given item of behaviour. It is always

desirable to pretest the data collection instruments before they are finally used for the

study purposes. In other words, we can say that “structured instruments” are used in such

studies. In most of the descriptive/diagnostic studies the researcher takes out sample(s)

and then wishes to make statements about the population on the basis of the sample

analysis or analyses. More often than not, sample has to be designed. Here we may only

mention that the problem of designing samples should be tackled in such a fashion that the

samples may yield accurate information with a minimum amount of research effort.

Usually one or more forms of probability sampling, or what is often described as random

sampling, are used. To obtain data free from errors introduced by those responsible for

collecting them, it is necessary to supervise closely the staff of field workers as they

collect and record information. Checks may be set up to ensure that the data collecting

staff performs their duty honestly and without prejudice. “As data are collected, they

should be examined for completeness, comprehensibility, consistency and reliability.” The

data collected must be processed and analysed. This includes steps like coding the

interview replies, observations, etc.; tabulating the data; and performing several statistical

computations. To the extent possible, the processing and analyzing procedure should be

planned in detail before actual work is started. This will prove economical in the sense

that the researcher may avoid unnecessary labour such as preparing tables for which he

later finds he has no use or on the other hand, re-doing some tables because he failed to

include relevant data. Coding should be done carefully to avoid error in coding and for

this purpose the reliability of coders needs to be checked. Similarly, the accuracy of

tabulation may be checked by having a sample of the tables re-done. In case of mechanical

tabulation the material (i.e., the collected data or information) must be entered on

appropriate cards which is usually done by punching holes corresponding to a given code.

The accuracy of punching is to be checked and ensured. Finally, statistical computations

are needed and as such averages, percentages and various coefficients must be worked out.

Probability and sampling analysis may as well be used. The appropriate statistical

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operations, along with the use of appropriate tests of significance should be carried out to

safeguard the drawing of conclusions concerning the study. Last of all comes the question

of reporting the findings. This is the task of communicating the findings to others and the

researcher must do it in an efficient manner. The layout of the report needs to be well

planned so that all things relating to the research study may be well presented in simple

and effective style.

3.4.3 Research Design Selected

Thus, the research design in case of our study is descriptive research design throwing light

on all points narrated above and must be prepared keeping in view the objective(s) of the

study and the resources available. However, it must ensure the minimization of bias and

maximization of reliability of the evidence collected. The said design can be appropriately

referred to as a survey design since it takes into account all the steps involved in a survey

concerning a phenomenon to be studied.

3.5 Preliminary Study

A pilot test was conducted on the preliminary questionnaire to assess its comprehension

and the average completion time. The questionnaire was filled up by the 200 users of

internet banking facilities having an account in NSE 50 banks viz State Bank of India,

Punjab National Bank, ICICI bank and HDFC Bank of Ahmedabad city.

The methodology followed by the researcher for the pilot testing is revealed as under

1. Formulation of the Problem Statement

2. Identifying the Research Objectives

3. Defining the Universe and Sample

4. Preparing the Questionnaire and Collection & Classification of Data

5. Applying the Statistical Techniques for deriving the outcomes to justify the

objectives of the research

3.5.1 Problem Statement for the Preliminary Survey

Will the Banks be able to capitalize opportunities presented by the Online Banking,

Eliminate the open loop payment mechanism and harness the technology to improve the

products and efficiency as well be cost effective and enhance the profitability. An attempt

was made to answer the aforesaid question by conducting the descriptive research in

context of the primary survey of internet banking users of 5 branches each of NSE 50

banks, i.e. State Bank of India, Punjab National Bank, ICICI Bank and HDFC Bank of

Ahmedabad city.

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3.5.2 Objectives of the Preliminary Study

The purpose of this research was to find out the prospects of internet banking in

Ahmedabad city in different manners. I.e. by gauging perceptions of banks regarding the

strategic and operational value of web-based banking, its benefits to customers and banks,

and the key technology considerations. The results show that Internet banking is in its

nascent stage—only a small number of banks offer web-based banking to customers and

the full benefits of Internet banking are still to be realized by many banks. On the other

hand, a significant number of the banks believe that providing these services to customers

in the new economy is essential for survival and thus, mandatory. Besides this the other

objectives for the study were:

1) To verify that internet banking reduces the physical number of the visits of the

customers to the banks.

2) To ascertain whether internet banking increases accuracy and speed of the

decisions as they are informed about every details on the website

3) To ascertain whether internet banking provides increased number of customers on

account of various services.

4) To verify whether internet banking is reliable, easily accessible and convenient to

avail.

5) To verify whether internet banking is cost effective, and advantageous over

traditional banks which does not give the facility of the internet banking to their

customers.

6) To verify whether internet banks are one shop stop for all financial needs of the

customers which in turn leads to increased number of customers for banks as well

as increased profitability for banks

3.5.3 Research Plan for the Preliminary Study

The elements covered by the researcher in the research plan for the preliminary

study are described in the following table.

Table 5

Research Plan for Preliminary Study

Points Elements Description

1 Research Design Descriptive Research Design

2 Universe(bank’s perspective) Top 4 Banks among NSE 50 (S & P CNX

Nifty) companies which has average

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market capitalization of 5 billion rupees

or more during last six months. These

banks are State Bank of India, Punjab

National Bank, ICICI Bank Ltd. and

HDFC Bank Ltd.

3 Universe (e-customer’s

perspective)

E customers of the above mentioned

banks In Ahmedabad City.

4 Sampling Method Non Probability Convenience Sampling

5 Sample Size 200 e-customers

6 Research Tool Questionnaire

7 Survey Method Personal Contact Method

3.5.4 Research Tool

The primary data to be collected for the primary research to be carried out can be through

any one of the following methods. It can be through observation method, interview method

based on personal interview or telephonic interview, Questionnaires, Schedules, Warranty

cards, Distributor or Store Audits, Pantry Audits, Consumer Panels, Use of Mechanical

devices, Projective Techniques, Depth Interview and Content Analysis. The research tool

used in our Research approach is “Questionnaire” covering the dichotomous (yes or no

questions) and the form of the questionnaire is close ended and is in a structured format.

Data is collected using the personal-contact approach and through emailing of the

Questionnaires (whichever would suit the purpose of collecting the information

accordingly) where the purpose of the survey, meaning of the items and what is expected

of the internet banking service users is explained.

For our research study it covers the answers to the under mentioned questions included in

the Questionnaire.

1. Demographic Questions viz, Age, Gender, Income, Occupation, etc.

2. Questions Based on the perceptions of the internet banking users regarding internet

banking.

3. Questions asked to measure the satisfaction level of the internet banking users in

respect of the services offered by the banks.

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4. Questions asked to get the opinion of the internet banking users so as to ensure

whether the internet banking services are profitable to bank as well as affordable to

the customers.

3.5.5 Sample Characteristics

The table 6 hereby reveals the sample characteristics in respect of the preliminary survey

undertaken by the researcher.

Table 6

Sample Characteristics

Characteristics No. of E- customers Percentage

1. Gender

Male 133 66.50

Female 67 33.50

Total 200 100.00

2. Age Group

Years 21-30 85 42.50

Years 31-40 58 29.00

Years 41-50 40 20.00

Above 51 Years 17 8.50

Total 200 100.00

3. Educational Background

Graduates 71 35.50

Post Graduates 56 28.00

Professional Degree Holders 41 20.50

Others 32 16.00

Total 200 100

4. Income(per annum)

Less than Rs. 2,00,000 71 35.50

Between Rs. 2,00,001 – 4,00,000 63 31.50

Between Rs. 4,00,001 – 6,00,000 35 17.50

More than Rs. 6,00,000 31 15.50

Total 200 200

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3.5.6 Data Analysis of the Preliminary Study

Statistical tools such as coefficient of correlation and chi square have been applied in

order to analytically prove the study that has been undertaken. The tests had been used on

selected question as they prove in-depth significance of the research brought out.

Co-efficient of Correlation:

Correlation is used to find out if there is any correlation or co-variance between the two

variables under the study. The attitude of people is classified into specific points with

approximately equal attitude value. The respondents to questions indicate the degree of

agreement or disagreement through their response. Based on the response of all the

questions, the attitude of the respondents is determined. The ranking is given to all the

attidues in following manner:

Strongly Agree: Rank 5

Agree: Rank 4

Neutral: Rank 3

Disagree: Rank 2

Strongly Disagree: Rank 1

Thereafter the summated rating scale has been applied accordingly and the correlation

coefficient (r) is being found between the following.

1) Acceptance of Internet banking and Perceptions of the e-customers relating to

familiarity of the different internet banking services as well as frequent notice of

displays regarding internet banking displayed at banks under study.

2) Acceptance of Internet banking and Perceptions of the e-customers relating to

familiarity of the different internet banking services as well as frequent notice of

displays regarding internet banking displayed on the websites of the banks under

study.

3) Acceptance of Internet banking and Perceptions of the e-customers relating to

familiarity of the different internet banking services as well as explanation of

internet banking services through direct contact or through phone calls by the

employees.

4) Perceptions of the e-customers with regard to “Reliability in Internet Bank” and

Acceptance of Internet Banks as a one-stop for all the financial needs.

5) Perceptions of the e-customers with regard to Easy and Advantageous Banking

over other Traditional Banks and acceptance of Internet Banks as a one-stop for all

the financial needs.

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6) Perceptions of the e-customers with regard to wide range of products & schemes

and acceptance of Internet Banks as a one-stop for all the financial needs.

The results of correlation analysis are mentioned as follows.

Table 7

Results of Correlation Analysis

No Dependent

Variable

Independent Variable Value

of r

Inference

1 Acceptance of

Internet banking

Perceptions of the e-customers relating to

familiarity of the different internet banking

services as well as frequent notice of

displays regarding internet banking displayed

at banks under study.

0.963 Strong

positive

correlation

2 Acceptance of

Internet banking

Perceptions of the e-customers relating to

familiarity of the different internet banking

services as well as frequent notice of

displays regarding internet banking displayed

on the websites of the banks under study.

0.825 Strong

positive

correlation

3 Acceptance of

Internet banking

Perceptions of the e-customers relating to

familiarity of the different internet banking

services as well as explanation of internet

banking services through direct contact or

through phone calls by the employees.

0.868 Strong

positive

correlation

4 Acceptance of

Internet banking

Perceptions of the e-customers with regard to

“Reliability in Internet Bank”

0.696 Moderate

positive

correlation

5 Acceptance of

Internet banking

Perceptions of the e-customers with regard to

Easy and Advantageous Banking over other

Traditional Banks

0.895 Strong

positive

correlation

6 Acceptance of

Internet banking

Perceptions of the e-customers with regard to

wide range of products & schemes

0.691 Moderate

positive

correlation

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Chi Square Test:

Chi-square test has been applied by the researcher as a goodness of fit, in order to know the

association between the acceptance of internet banking in future and the preference of e-

customers for ICICI Bank, HDFC Bank, State Bank of India, Punjab National Bank and

their branches in Ahmedabad city as an internet bank.

Null hypothesis (H0):

There is no significant association between the acceptance of internet banking in future and

the preference of e-customers for ICICI Bank, HDFC Bank, State Bank of India, Punjab

National Bank and their branches in Ahmedabad city as an internet bank.

Alternate hypothesis (H1):

There is significant association between the acceptance of internet banking in future and

the preference of e-customers for ICICI Bank, HDFC Bank, State Bank of India, Punjab

National Bank and their branches in Ahmedabad city as an internet bank.

Table 8

Result of Chi Square Test

Calculated

Value

Tabulated Value Result

34.68 For 1 degree of freedom at

5% level of significance =

3.841

Since calculated value > tabulated value

null hypothesis (Ho) is rejected and

alternative hypothesis (H1) has been

accepted.

Thus There is significant association

between the acceptance of internet banking

in future and the preference of e-customers

for ICICI Bank, HDFC Bank, State Bank of

India, Punjab National Bank and their

branches in Ahmedabad city as an internet

bank.

3.5.7 Findings of the Preliminary Study

1. Though general opinion about internet banking services is pretty good among the

people, most of the respondents are uncertain as to whether internet banking is the safe

option to negotiate all their financial needs.

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2. Though most of the respondents are aware of Internet Banking Services, more

awareness needs to be created about the fact that Internet Banks provide the safe and

reliable services in a cost effective manner.

3. Most of the respondents are cognizant enough with the usage of Internet Banking as

the initiatives taken by Internet Banks have been sufficient enough to retain the

existing e- customers. This is also proved statistically through correlation analysis.

4. Though the other relationship building factors are found satisfactory among most of

the customers, emphasis is needed in the area of Easy and Advantageous banking over

other traditional (Non Internet) banks since it is denied by majority of the respondents.

5. Majority of the respondents are satisfied with the customer services provided by

Internet Banks in respect of Internet banking, which is a positive sign for acceptance

of internet banking even though the fact remains that Internet Banking is still in the

nascent stage in Gujarat

6. 47% of the respondents choice would be availing the Internet banking services through

ICICI, HDFC, SBI and PNB bank’s branches which shows that they are currently

satisfied with the cost effective internet banking services availed from the banks and

will also increase the customer base by the word of mouth which in turn will lead to

more revenue generation for such banks and hence increased profitability. Again out

of 47% customers, 60 respondents are planning to go for internet banking services

fully and try to maximize each and every benefits which they can derive in the

immediate future .The association between this two is also proved through Chi-square

test.

Based on feedback from this preliminary survey, some questions were rephrased for

clarity and thereafter the questionnaire was deemed ready for data collection.

3.6 Survey Methodology Framework

A “survey” is a systematic method of gathering information from (a sample of) entities for

the purpose of constructing quantitative descriptors of the attributes of the larger

population of wich the entities are members. A survey usually originates when an

individual or institution is confronted with an information need and the existing data are

insufficient. The following diagram indicates the survey process to be followed by the

researcher for undergoing the research work.

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Figure 3

Survey Methodology

Source: Neumen 2006

3.7 Survey Questionnaire Design

A self administered questionnaire was devised whereby the questionnaire is subdivided

into four categories’. The target questions focus on the independent variables such as

behavioural intention, service quality aspects and customer satisfaction. The scaling used

in this research is the 5-point Likert scale of 1-strongly disagree, 2-disagree, 3-slightly

disagree, 4-agree, 5-strongly agree. All measures were adapted and modified from

Vacantesh (2000) and Wang et al., (2003). The demographic variables asked are gender,

age, education, occupation and annual income of the respondents.

3.7.1 Variables of Survey Questionnaire

The questionnaire was divided in to four parts consisting of the following variables

Define Research Objectives

Choose Mode of Collection

Choose a Sampling Frame

Construct and Pretest the Questionnaire

Code and Edit Data

Design and Select the Sample

Recruit and Measure Sample

Make Post Survey Adjustments

Perform Analysis

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Part 1

This section was intended to get the e-customers demographic information. The

questions asked pertaining to gender, age group, educational background, occupation,

annual income range are as under.

Table 9

E-customers Demographic Information

No. Variables Description Nature

1 Gender Male / Female Independent

Variable

2 Age Group 18-30, 31-42, 43-54, 55-66,Above 66 Independent

Variable

3 Education Graduate, Post Graduates, Doctorate

and Others

Independent

Variable

4 Occupation Student, Business, Government

Employee, Private Sector Employee

Independent

Variable

5 Annual Income Range Below Rs. 1,00,000, Between Rs.

1,00,001 and Rs. 3,00,000, Between

Rs. 3,00,001 and Rs. 5,00,000, Above

Rs. 5,00,000.

Independent

Variable

6 Your Internet Bank Name, Branch and City Independent

Variable

Part 2

This section consists of the statements which reflect the behavioral intention of the

customers which indicates prospectiveness of internet banking. Each statement is based

on five point Likert scale ranging from Strongly Agree = 5 to Strongly Disagree = 1.

The respondents are required to show their Agreement / Disagreement with each of the

statements based on the parameters such as

1. Performance Expectancy

2. Effort Expectancy

3. Social Influence

4. Facilitating Conditions

5. Trust

6. Loyalty

55 | P a g e

Part 3

This section consists of the various internet banking services offered by your internet

bank. The respondents are required to rate their perceptions related to various services

provided on Likert scale of 1 to 5. The services provided here are rated as Very Poor =

1, Poor = 2, Neither Poor Nor Good = 3, Good = 4 and Very Good = 5. Please put a tick

mark against your rating. In this way the researcher tried to collect the opinion of their

respondents about the service quality aspects of their internet banks.

Part 4

This section consists of the statements for measuring prospectiveness of internet

banking revealing that the customer is satisfied when it uses internet banking services.

Each statement considered by the researcher is based on five point Likert scale ranging

from Strongly Agree = 5 to Strongly Disagree = 1. The respondents are required to

show their Agreement / Disagreement with each of the statements based on the

parameters such as

1. Responsiveness

2. Fulfillment

3. Security

4. Satisfaction

3.8 Sampling Procedure

3.8.1 Selection of NSE 50 Banks

Successful statistical practice is based on focused problem definition. In sampling, this

includes defining the population from which our sample is drawn. A population can be

defined as including all people or items with the characteristic one wishes to understand.

Because there is very rarely enough time or money to gather information from everyone or

everything in a population, the goal becomes finding a representative sample (or subset) of

that population.

The researcher has considered Top 4 Banks among NSE 50 (S & P CNX Nifty) companies

which have average market capitalization of 5 billion rupees or more during last six

months. These banks are State Bank of India, Punjab National Bank, ICICI Bank Ltd. and

HDFC Bank Ltd. And the respondents who have their internet bank account with such

banks are the persons whose opinions are collected for measuring the prospectiveness of

internet banking in Gujarat state(i.e. across major cities such as Ahmedabad, Baroda,

Bhavnagar, Rajkot and Surat).

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3.8.2 Sample Design

A sample design is a definite plan for obtaining a sample from a given population. It refers

to the technique or the procedure the researcher would adopt in selecting items for the

sample. Sample design may as well lay down the number of items to be included in the

sample i.e., the size of the sample. Sample design is determined before data are collected.

than others. Researcher must select/prepare a sample design which should be reliable and

appropriate for his research study. C.R.Kothari(1990) observes that for developing the

sample design a researcher must carefully consider points such as sampling unit,

sampling frame, size of sample, parameters of interest, budgetary constraintand sampling

procedure, etc.

3.8.3 Sample Unit

A decision has to be taken concerning the sampling unit before selecting sample.

Sampling unit may be a geographical one such as state, district, city, village, etc., or a

construction unit such as a house, flat, etc or it may be a social unit such as a family, club,

school, etc. or it may be an individual. In connection to our research under study the

sampling unit will be five major cities of Gujarat State viz Ahmedabad, Baroda, Rajkot,

Bhavnagar and Surat.

3.8.4 Source List

It is also known as ‘sampling frame’ from which sample is to be drawn. It contains the

names of all items of a universe (in case of finite universe only). If source list is not

available, researcher has to prepare it. Our sampling frame is e-customers who have the

bank account in either the public sector banks or private sector banks of major cities such

as Ahmedabad, Baroda, Rajkot, Bhavnagar, Surat etc of Gujarat State.

3.8.5 Sample Size

This refers to the number of items to be selected from the universe to constitute a sample.

This a major problem before a researcher. The size of sample should neither be

excessively large, nor too small. It should be optimum. An optimum sample is one which

fulfills the requirements of efficiency, representativeness, reliability and flexibility. While

deciding the size of sample, researcher must determine the desired precision as also an

acceptable confidence level for the estimate.

3.8.6 Determining Sample Size (n)

The sample size for our research is based on following considerations based on the

document PEOD6, one of a series of the Agricultural Education and Communication

Department, Florida Cooperative Extension Service, Institute of Food and Agricultural

57 | P a g e

Sciences, University of Florida. Original publication date November 1992. Reviewed

April 2009. EDIS Web Site at http://edis.ifas.ufl.edu

Table 10

Determining Sample Size

No. Parameter Interpretation

1 Level of Precision The level of precision, sometimes called

sampling error, is the range in which the true

value of the population is estimated to be. It is

denoted as e.

2 Level of Confidence In a normal distribution, approximately 95%

of the sample values are within two standard

deviations of the true population value (e.g.,

mean).

3 Sample Size Formulation n = N

1 + N(e) 2

n = sample size.

N = Population Size.

e = Precision level.

4 Sample Size For Ahmedabad

City at ± 5% Precision Levels

Where Confidence Level is

95% and P=.5

n = 1,00,000

1 + 1,00,000(0.5) 2

= 400.

5 Sample Size For Baroda City

at ± 5% Precision Levels

Where Confidence Level is

95% and P=.5

n = 1,00,000

1 + 1,00,000(0.5) 2

= 400.

6 Sample Size For Bhavnagar

City at ± 5% Precision Levels

Where Confidence Level is

95% and P=.5

n = 1,00,000

1 + 1,00,000(0.5) 2

= 400.

7 Sample Size For Rajkot City

at ± 5% Precision Levels

Where Confidence Level is

n = 1,00,000

1 + 1,00,000(0.5) 2

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95% and P=.5 = 400.

8 Sample Size For Surat City

at ± 5% Precision Levels

Where Confidence Level is

95% and P=.5

n = 1,00,000

1 + 1,00,000(0.5) 2

= 400.

3.8.7 Sampling Method:

On the representation basis, the sample design may be probability sampling or non

probability sampling. In the context of our research, the sample design is non proportional

quota sampling.

In quota sampling, you select people non randomly according to some fixed quota. There

are two types of quota sampling: proportional and non proportional. In proportional quota

sampling you want to represent the major characteristics of the population by sampling a

proportional amount of each. For instance, if you know the population has 40% women

and 60% men, and that you want a total sample size of 100, you will continue sampling

until you get those percentages and then you will stop. So, if you've already got the 40

women for your sample, but not the sixty men, you will continue to sample men but even

if legitimate women respondents come along, you will not sample them because you have

already "met your quota." The problem here (as in much purposive sampling) is that you

have to decide the specific characteristics on which you will base the quota. Will it be by

gender, age, education race, religion, etc.?

Nonproportional quota sampling is a bit less restrictive. In this method, you specify the

minimum number of sampled units you want in each category. here, you're not concerned

with having numbers that match the proportions in the population. Instead, you simply

want to have enough to assure that you will be able to talk about even small groups in the

population. This method is the non probabilistic analogue of stratified random sampling in

that it is typically used to assure that smaller groups are adequately represented in your

sample. As in our study the focus is on Non proportional quota sampling, the Quotas

are stratified in following manner.

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Figure 4

Stratification of Quotas

GUJARAT STATE

AHMEDABAD BARODA BHAVNAGAR RAJKOT SURAT

The above figure shows that for the research purpose in Gujarat State, the major

concentration is on 5 cities namely Ahmedabad, Baroda, Rajkot, Bhavnagar and Surat.

From Each city the Quota is the representative of NSE 50 banks * 5 respective branches *

20 e- customers from each branch giving us 400 e customers for our research purpose. In

this context the sampled size based on Non proportional quota sampling would be 2000 e-

customers of 5 different cities.

3.9 Collection of Data

As data collection method is highly influenced by the methodology, which is chosen

(Saunders and Thornhill, 2000), questionnaire is used to collect the empirical data for this

research in order to identify the issues that affect the prospects of Internet banking services

in NSE 50 Banks. As this research’s main concern is examining the issues that have

influence on the identification of prospects of Internet banking from Nse 50 banks in

Gujarat, the questionnaire is designed based on the requirements for identification.

Based on feedback from the pilot survey the questionnaire was rephrased and primary data

was collected from the 2000 respondents by meeting them personally and making them

understand the purpose of the research. Not only this researcher also resorted to the online

filling of the questionnaires to solicit the responses in the given time frame. A reliability

technique was used to check the reliability of the tool developed for collecting primary

data. Validity of the tool was checked on the basis of comparing the result success of the

criteria used in tool with that in reviewed literature. After a primary data collection

exercise through pilot study, only those parameters were segregated as final criteria of

performance measurement whose information was easily available and shared by the e-

NSE 50 Banks *

5 Branches each *

20 e-customers =

400 e-customers

NSE 50 Banks *

5 Branches each *

20 e-customers =

400 e-customers

NSE 50 Banks *

5 Branches each *

20 e-customers =

400 e-customers

NSE 50 Banks *

5 Branches each *

20 e-customers =

400 e-customers

NSE 50 Banks *

5 Branches each *

20 e-customers =

400 e-customers

60 | P a g e

customers. Moreover, some criteria whose information could not be gathered

quantitatively were converted into qualitative form and then information was collected on

the same.

3.10 Statistical Tools and Analysis Tests

Analysis for fulfilling all the objectives of the study was done with the help of suitable

tools and techniques. The techniques and tests such as Confidence Interval Test, One Way

Anova Variance Analysis for Hypothesis Testing, T Test along with the Descriptive

Statistics, Cluster Analysis and Cross Tabulation was used to analyze the perceptions of

the e-customers to ascertain the prospectiveness of Internet Banking in Gujarat State.

The research instrument used by the researcher for the study purpose is divided in to four

parts. The Part 1 consists of questions about demographic profile of the respondents;

continue with Part 2 about the Behavioural Intentions which indicates the prospectiveness

of internet banking, Part 3 describes the perceptions which indicate the prospectiveness of

internet banking and Part 4 examines the prospectiveness of internet banking on basis of

customer satisfaction.

1) The Demographic variables covered under the study are Gender, Age, Education,

Occupation and Income of the Internet Banking users. The researcher resorts to the

cross tabulation to derive the results through the survey. The demographic variables

are covered under Question 1 to Question 8 by the researcher in the research tool.

2) For testing the various perceptions of the internet banking users towards its

prospectiveness the researcher uses One-way Annova analysis of variance which

involves only one categorical variable in respect of Question 9 and Question 11 from

view point of different cities.

3) The researcher has taken the help of the descriptive statistics, ranking of the

descriptive statistics and t test to know the important determinants that justify the

objective of finding out the most salient factors, which if concentrated upon will

ensure that the internet banking is prospective and banks can have increased number

of the consumers accessing the internet banking services.

4) Cluster Analysis is the other analytical technique which the researcher uses for his

study over the statements given in question 9, 10 and 11. As the study is conducted

among the respondents of 5 different cities viz, Ahmedabad, Baroda, Bhavnagar,

Rajkot and Surat, the researcher tries to group similar kind of objects (respondents)

based on their perceptions.

61 | P a g e

3.11 Reliability Test

The researcher has also conducted the reliability test to identify the validity and reliability

of the 53 statements filled up by the 2000 respondents across the major cities of Gujarat

covered under the study. The researcher finds out the Cronbach alpha which is the

measure of the reliability to judge whether the research tool contains the appropriate

statements which can be filled up by the 2000 respondents to arrive at the desired outcome

of the study.

Table 11

Case Processing Summary

Cases N %

Valid 2000 100

Excluded 0 0

Total 2000 100

Source: Spss Output

Table 12

Reliability Statistics

Cronbach’s Alpha N of items

2000 100

0 0

Source: Spss Output

3.12 Confidence Interval Test

The researcher in his research tool uses Likert statements which are based on the

agreement as well as disagreement level. The researcher has undertaken the study on 5

point Likert Scale, wherein the perceptions of the internet banking users are measured.

Confidence Interval test is applied for all the 46 statements under study for each sample

under study. The confidence interval and standard error is computed as follows.

Step 1: P = the % of respondents who show the agreement level.

Step 2: Q = the % of respondents who show the disagreement level.

Step 3: N = Total Number of Samples surveyed.

Step 4: Standard Error = PQ / N

Step 5: At 95% Confidence Limit = P + 1.96 S.E.

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Step 6: The result thus obtained will make the researcher know that at 95 confidence

level what is the range of confidence shown by the respondents for the

statements that they have agreed or disagreed.

Table 13

Confidence Interval Test Statistics

Statements Y N Total P Q SE Min Limit

(Confidence)

Max

Limit

(Confidence)

S1 1700 90 1790 0.95 0.05 0.0049 0.94 0.96

S2 1650 105 1755 0.94 0.06 0.0053 0.93 0.95

S3 1275 310 1585 0.80 0.20 0.0089 0.79 0.82

S4 1386 175 1561 0.89 0.11 0.0071 0.87 0.90

S5 1210 435 1645 0.74 0.26 0.0099 0.72 0.75

S6 1135 425 1560 0.73 0.27 0.0100 0.71 0.75

S7 1320 285 1605 0.82 0.18 0.0085 0.81 0.84

S8 1515 145 1660 0.91 0.09 0.0063 0.90 0.93

S9 1495 155 1650 0.91 0.09 0.0065 0.89 0.92

S10 1455 275 1730 0.84 0.16 0.0082 0.83 0.86

S11 1595 215 1810 0.88 0.12 0.0072 0.87 0.90

S12 1440 290 1730 0.83 0.17 0.0084 0.82 0.85

S13 1160 340 1500 0.77 0.23 0.0094 0.75 0.79

S14 1040 345 1385 0.75 0.25 0.0097 0.73 0.77

S15 1295 325 1620 0.80 0.20 0.0090 0.78 0.82

S16 1360 290 1650 0.82 0.18 0.0085 0.81 0.84

S17 1335 175 1510 0.88 0.12 0.0072 0.87 0.90

S18 1575 90 1665 0.95 0.05 0.0051 0.94 0.96

S19 1580 135 1715 0.92 0.08 0.0060 0.91 0.93

S20 1340 195 1535 0.87 0.13 0.0074 0.86 0.89

S21 1295 325 1620 0.80 0.20 0.0090 0.78 0.82

S22 1650 105 1755 0.94 0.06 0.0053 0.93 0.95

S23 1210 435 1645 0.74 0.26 0.0099 0.72 0.75

S24 1595 215 1810 0.88 0.12 0.0072 0.87 0.90

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S25 1295 325 1620 0.80 0.20 0.0090 0.78 0.82

S26 1700 90 1790 0.95 0.05 0.0049 0.94 0.96

S27 1650 105 1755 0.94 0.06 0.0053 0.93 0.95

S28 1275 310 1585 0.80 0.20 0.0089 0.79 0.82

S29 1386 175 1561 0.89 0.11 0.0071 0.87 0.90

S30 1210 435 1645 0.74 0.26 0.0099 0.72 0.75

S31 1135 425 1560 0.73 0.27 0.0100 0.71 0.75

S32 1320 285 1605 0.82 0.18 0.0085 0.81 0.84

S33 1515 145 1660 0.91 0.09 0.0063 0.90 0.93

S34 1495 155 1650 0.91 0.09 0.0065 0.89 0.92

S35 1455 275 1730 0.84 0.16 0.0082 0.83 0.86

S36 1595 215 1810 0.88 0.12 0.0072 0.87 0.90

S37 1440 290 1730 0.83 0.17 0.0084 0.82 0.85

S38 1160 340 1500 0.77 0.23 0.0094 0.75 0.79

S39 1040 345 1385 0.75 0.25 0.0097 0.73 0.77

S40 1295 325 1620 0.80 0.20 0.0090 0.78 0.82

S41 1360 290 1650 0.82 0.18 0.0085 0.81 0.84

S42 1335 175 1510 0.88 0.12 0.0072 0.87 0.90

S43 1575 90 1665 0.95 0.05 0.0051 0.94 0.96

S44 1580 135 1715 0.92 0.08 0.0060 0.91 0.93

S45 1340 195 1535 0.87 0.13 0.0074 0.86 0.89

S46 1295 325 1620 0.80 0.20 0.0090 0.78 0.82

S47 1650 105 1755 0.94 0.06 0.0053 0.93 0.95

S48 1210 435 1645 0.74 0.26 0.0099 0.72 0.75

S49 1595 215 1810 0.88 0.12 0.0072 0.87 0.90

S50 1295 325 1620 0.80 0.20 0.0090 0.78 0.82

S51 1700 90 1790 0.95 0.05 0.0049 0.94 0.96

S52 1650 105 1755 0.94 0.06 0.0053 0.93 0.95

S53 1275 310 1585 0.80 0.20 0.0089 0.79 0.82