perception of customers towards cross-buying bank's products

Perception of ‘Malayalee’ customers in Birmingham and Dubai towards cross-buying bank’s products: Analysis of cross-selling activities in HSBC

Perception of ‘Malayalee’ customers in Birmingham and Dubai towards cross-

buying bank’s products: Analysis ofcross-selling activities in HSBC

Dissertation submitted to Birmingham City University in

partial fulfilment of the requirements for the degree of

Master of Business Administration

International Business

Prepared By : LijoChirackalManavalan Varghese

Student ID : S11531298

Submission Date: 31st August 2012

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TABLE OF CONTENTS

Title page................................................................................................................................i

Table of contents....................................................................................................................ii

List of Figures........................................................................................................................v

List of Abbreviations............................................................................................................. vi

Acknowledgement.................................................................................................................vii

Abstract.................................................................................................................................. viii

Chapter One – Introduction................................................................................................... 1

1.0 Introduction........................................................................................................... 1

1.1 Background of the study....................................................................................... 1

1.2 Research Objectives.............................................................................................. 2

1.3 Rationale of the research....................................................................................... 2

1.4 Methodology......................................................................................................... 3

1.5 Limitations............................................................................................................ 3

Chapter Two – Literature Review..........................................................................................4

2.0 Introduction...................................................................................................................... 4

2.1 Customer Retention and Cross-Buying............................................................................ 4

2.1.1 Customer Retention...................................................................................... .4

2.1.2 Customer’s perception towards cross-buying............................................... .5

2.1.3 Conceptual Model...........................................................................................5

2.1.3.1 Base models for the research.......................................................................8

2.1.4 Factors influencing customer retention.......................................................................... 9

2.1.4.1 Brand, firm’s reputation and expertise....................................................9

2.1.4.2 Service quality, satisfaction and customer retention...................................................9

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2.1.4.3 Location convenience. ..............................................................................................10

2.1.4.4Employee’s cultural similarity and Customer retention.............................................10

2.1.5 Factors influencing cross-buying...............................................................11

2.1.5.1 Product quality and cross-buying...........................................................11

2.1.5.2 Perceived convenience............................................................................11

2.1.5.3 Trust and Confidence..............................................................................11

2.1.5.4 Customer’s loyalty towards banks..........................................................12

2.1.5.5 Switching banks and multi-brand loyalty...............................................12

2.1.5.6 Customer relationship with bank............................................................ 13

2.2 Marketing Activities of banks........................................................................................... 13

2.2.1 Marketing Strategy......................................................................................................... 13

2.2.2 Market segmentation.......................................................................................................14

2.2.3 Focus on ethnic groups and cultures...............................................................................14

2.2.4 Branding and relationship..............................................................................................15

2.2.5 Demographic features.....................................................................................................15

2.2.6 Cross-selling activities of banks.................................................................15

2.3 Conclusion..............................................................................................................16

3. Chapter Three – Research Methodology.............................................................................18

3.0 Introduction............................................................................................................18

3.1 Quantitative and qualitative research methods.......................................................18

3.2 Data collection........................................................................................................19

3.2.1 Primary data.................................................................................................20

3.2.2. Secondary data............................................................................................20

3.3 Questionnaire design...............................................................................................20

3.4 Sample method.......................................................................................................22

3.5 Data validity and reliability....................................................................................22

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3.6 Limitations..............................................................................................................23

3.7 Ethics in research....................................................................................................23

4. Chapter Four – Research findings and analysis...................................................................24

4.0 Introduction.............................................................................................................24

4.1 Factors influencing customer retention and cross-buying......................................24

4.1.1 Customer retention........................................................................................33

4.1.2 Cross-buying from banks...............................................................................40

4.2 Analysis of HSBC bank’s cross-selling activities...................................................51

Chapter Five – Conclusions and Recommendations................................................................55

5.1 Conclusion..............................................................................................................55

5.2 Recommendations..................................................................................................58

5.3 Limitations of the study..........................................................................................59

5.4 Future research direction........................................................................................60

List of References.....................................................................................................................62

Appendices................................................................................................................................67

Appendix One – Questionnaire forwarded to Banking Customers (Questionnaire 1)..67

Commentary about the Questionnaire1………………………………………..73

Appendix Two – Questionnaire forwarded to HSBC bank (Questionnaire 2)……….78

Commentary about the Questionnaire1……………………………………….78

Appendix Three – Data gathered through Questionnaire 1…………………………..79

Appendix Four – Data collected From HSBC bank through Questionnaire 2……….82

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LISTOF FIGURES

Figure 2.1.....................................................................................................................................7

Figure 2.2.....................................................................................................................................8

Figure 2.3.....................................................................................................................................8

Figure 4.1...................................................................................................................................25

Figure 4.2...................................................................................................................................25

Figure 4.3...................................................................................................................................25

Figure 4.4...................................................................................................................................26

Figure 4.5...................................................................................................................................27

Figure 4.6...................................................................................................................................27

Figure 4.7...................................................................................................................................28

Figure 4.8...................................................................................................................................29

Figure 4.9...................................................................................................................................29

Figure 4.10.................................................................................................................................30

Figure 4.11.................................................................................................................................30

Figure 4.12.................................................................................................................................31

Figure 4.13.................................................................................................................................31

Figure 4.14.................................................................................................................................32

Figure 4.15.................................................................................................................................32

Figure 4.16.................................................................................................................................33

Figure 4.17.................................................................................................................................34

Figure 4.18.................................................................................................................................35

Figure 4.19.................................................................................................................................35

Figure 4.20.................................................................................................................................36

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Figure 4.21.................................................................................................................................36

Figure 4.22.................................................................................................................................37

Figure 4.23.................................................................................................................................38

Figure 4.24.................................................................................................................................39

Figure 4.25.................................................................................................................................39

Figure 4.26.................................................................................................................................40

Figure 4.27.................................................................................................................................40

Figure 4.28.................................................................................................................................41

Figure 4.29.................................................................................................................................41

Figure 4.30.................................................................................................................................42

Figure 4.31.................................................................................................................................43

Figure 4.32.................................................................................................................................43

Figure 4.33.................................................................................................................................44

Figure 4.34.................................................................................................................................44

Figure 4.35................................................................................................................................45

Figure 4.36.................................................................................................................................46

Figure 4.37.................................................................................................................................46

Figure 4.38.................................................................................................................................47

Figure 4.39.................................................................................................................................47

Figure 4.40.................................................................................................................................48

Figure 4.41.................................................................................................................................48

Figure 4.42.................................................................................................................................49

Figure 4.43.................................................................................................................................49

Figure 4.44.................................................................................................................................50

Figure 4.45.................................................................................................................................50

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LIST OF ABBREVIATIONS

Malayalee Community- People from the Kerala state in India

UK- United Kingdom

UAE- United Arab Emirates

CRMS- Customer Relationship Management System

INR - Individual Needs Review

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ACKNOWLEDGEMENTS

First of all, I give glory to the Almighty God, for granting me the grace, mercy and aptitude to complete this research.

I would like to express my gratitude to my supervisor Dr. Chris Lewis for his quality guidance and encouragement throughout this project.

Finally, I sincerely appreciate all the people participated in the research, for their kind contribution to this research.

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EXECUTIVE SUMMARY

Banking customer shold certain perception towards the services of banks and this perception

can influence the banking activities. However, banks have to craft their plans and approaches

in the corporate and national level to become competitive in the industry. The study

investigated the perception of ‘Malyalee’ community in Birmingham and Dubai towards

customer retention and cross-buying from banks. The study also tried to understand the cross-

selling activities of HSBC bank and how they utilise the views of Indian expatriates for

crafting their strategies.

Several literatures of significant studies have reviewed to understand the factors that are

associated with customer retention and cross-buying intentions. The conceptual framework

was created and performed with a critical evaluation of all the models and the factors included

in the conceptual model. This model included bank’s reputation and expertise, service quality,

satisfaction, employee’s cultural similarity and location convenience and tested the impact of

all these factors on customer retention. The association of factors such as bank’s reputation

and expertise, perceived convenience, trust, switching cost and product attributes with cross-

buying are also thoroughly analysed. Bank’s marketing and cross-selling activities, their focus

on ethnic communities, branding and relationship marketing were critically examined through

literature review.

Research administered questionnaires to gather data from banking customers and HSBC bank.

Quantitative data from 61 participants from Birmingham and Dubai were collected and

included the response of a manager in HSBC bank Dubai, which was gathered as qualitative

data through a questionnaire. All these samples selected were self-selection samples and the

questionnaires were forwarded online. Research also made use of some secondary data to

strengthen the research. The views of customers from Birmingham and Dubai are analysed

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and compared to know the similarities and differences in their perceptions. The responses

from HSBC bank were also critically examined to generate positive recommendations.

The research revealed that bank’s reputation and expertise, service quality, satisfaction,

employee’s cultural similarity and location convenience have positive association with

customer retention. Cross-buying intentions of customers are positively influenced by bank’s

reputation and expertise, perceived convenience, trust, switching cost and product attributes.

Even many of the satisfied customers are getting annoyed by the improper product offering

methods but most of these satisfied customers trust their banks. The results of this study are

similar to some of the previous studies that tested the same hypothesis and factors in other

countries. This research proposes further research opening in the banking industry to test and

compare the same model in other countries.

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1. CHAPTER -ONE 1.0 INTRODUCTION

Globalization has been creating a complete transformation on the world business structure for

the past few decades. In this present scenario, people from different cultures have mixed up in

almost all the regions in the world due to job opportunities in other countries. So in the

banking industry, in order to be very competitive, banks should craft separate business

strategies according to the needs and wants of people from different cultures. Expatriates from

different countries have perceptions towards the banking services; they would be receiving

from foreign banks that are international in nature. The influence of this perception of these

customers has been lifted up by the severe competition between the banks in the international

level. Expatriates have the opportunity to do business with multiple banks, in which they are

satisfied with.

1.1 BACKGROUND OF THE STUDY

Indian expatriates living in UK and UAE, especially ‘Malayalee Community from Kerala state

in India’, are relatively large in number with sufficient income. According to UK labour force

survey 2006, there were 578600 Indian migrants worked in UK (mighealth). It is estimated

that about 1.4 million Indian expatriates residing in UAE and it is over 50% of the total work

force in UAE (Embassy of India), with a high contribution from Kerala people. Banks should

consider these expatriates as long term customers. So it is very significant to perform a

research to investigate about the factors, the ‘Malayalees’ from Birmingham and Dubai

consider for retaining business with a bank and for cross-buying products from the same bank.

Several significant studies have been done to investigate the factors influencing the cross-

buying intentions. Liu & Wu (2007) conducted a research in Taiwan, with the participation of

bank customers who had opened bank accounts. The study by Ngobo (2004) performed in

France analysed the factors, customers consider for retaining relationship with banks and

buying more products from the bank. These researches added value to researcher’s new

investigation to find the perceptions of Malayalee community towards bank’s activities.

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Researcher found the importance of analysing the bank’s services for the customers from this

particular group. Banks can improve financial performance by keeping a long term

relationship with these customers. Banks have their own strategies to do business with ethnic

groups. Banks try to cross-sell products that create maximum benefits, and it is significant to

investigate whether banks consider the view of customers for that. Within this context, as an

example the researcher analyses, whether HSBC bank cross-sell their products to the

Malayalee community by considering the expectations of these customers.

The selection of HSBC bank for the research worth, since the excellent performance of HSBC

bank in providing services such as commercial banking, investment banking and wealth

management for its customers enhanced its development in International level (HSBC, 2012).

The motive and interest behind this study is that researcher is a member of ‘Malayalee

community’ and researcher can make use of the work experience in the financial service sector

for the benefits of this community and recommend the best possible ways to HSBC Bank and

other banks, for improving their relationship with customers.

1.2RESEARCH OBJECTIVES

The research has mainly four achievable objectives.

1) To investigate the factors that customers consider as important for retaining banking

with the current bank.

2) To understand the perception of customers towards Cross-Buying bank’s products.

3) Recognize the strategies that has been implemented by HSBC bank, for retaining

customers and for cross-selling its products.

4) To analyse whether HSBC bank make use of the ‘perception of Indian Expatriates

towards bank’s activities’, for retaining them and for cross-selling bank’s products.

1.3RATIONALE FOR THE RESEARCH

Banks are organizations responsible to serve the community, but basically have high power

over their customers (Dash, Bruning&Acharya, 2009). Ethnic minorities living in different

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countries have their own views about the banking services. The results of the ample researches

performed in some of the European and Asian countries clearly highlights the important

aspects, customer consider for retaining business with banks and cross-buying. This study

facilitates the banking customers from Malayalee community to express their expectations

about banking services. The perception of these customers towards customer retention and

cross-buying has a great impact on bank’s operations and services. This study is looking

forward to make some theoretical and practical propositions for banks and banking customers.

It is expected that the findings of this research facilitate an opportunity for banks to understand

about the expectations of Malayalee community, to segment this community and craft

marketing strategies specifically for them. Banks can evaluate their existing methods, used for

product offering, customer retention and cross-selling. This would be an opening for banks to

successfully compete in the banking industry and keep these customers loyal, for long term.

1.4METHODOLOGY

This is a concise form of the proposed methodology for this dissertation. To successfully

achieve the objectives of this research, it is intend to collect quantitative data from banking

customers using questionnaire. The research will also gather qualitative data from banks about

their marketing activities and cross-selling strategies, using questionnaire with open ended

questions. The support of relevant secondary data can improve the quality of the research

analysis.

1.5 LIMITATIONS

Researcher is concerned about the anticipated limitations of the study. The first limitation is

expected to be due to usage of self-selection sample, which may lead to biased responses. The

researcher only got the approval for sending questionnaire to HSBC bank, not for an

interview, which will affect the quality of information from the bank.

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2. CHAPTER TWO - LITERATURE REVIEW

2.0 INTRODUCTION

This chapter tries to ascertain an understanding of the literature and the major factors that

drive the behaviour of customers for retaining business with banks and cross-buying financial

products from banks. This chapter also performs a critical analysis of the literatures that

describe the marketing and cross-selling strategies of banks.

The important modules covered in the first section of literature review are the influence of

brand on customers, firm’s reputation and expertise, service quality and satisfaction, which are

considered to be the important aspects for customer retention in banks. The literature review

discussed the customer’s trust and confidence on banks, customer’s attractions towards bank’s

innovative products, switching costs, customer’s relationship with banks, loyalty towards

banks and multi-brand loyalty, which are known to be the main factors customers consider for

cross-buying.

The second section of the literature review, basically discussed about the marketing and cross-

selling activities of banks. The literatures that discussed about the branding and marketing

strategies of banks, the segmentation process and relationship banking with the ethnic groups

are extremely integrated in this chapter.

2.1 CUSTOMER RETENTION AND CROSS-BUYING

2.1.1Customer Retention

Customer’s purchase of financial services is based on some important features of customer

behaviour and they consider their own experience and the experience of others in decision

making (Farquhar &Meida, 2010). Customer retention is the measurement of the continuation

of relationship (Liu & Wu, 2007) and appears as the result of recurring decisions by clients.

Kassim&Souiden (2007) discussed the demonstration of customer retention in many ways,

which is to prefer a bank over others and continue business with it or enhancing the deals with

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the company in the future with frequent purchasing. The factors influencing the customer

retention are analyzed in details in this literature review.

2.1.2 Customer’s perception towards Cross-Buying

Cross-buying can be explained as the customer’s interest of accepting additional products

from the existing financial service provider (Ngobo, 2004) and cross-buying can be mainly

achieved by extending the firm’s relationship with its customers (Liu & Wu, 2007).Kumar et

al(2008) analysed the drivers for cross-buying with help of the study by Verhoef et al., (2001)

and found the motives as ‘customer’s perception and attitude towards an organization and its

products, socio-demographic characteristics and the marketing effort by the firm’.

Perception of customers on services varies and it can be the perception on a single transaction

as well as the overall perception towards a bank. Zeithaml, Bitner&Gremler(2009). Kumar et

al., (2008) suggests that cross-buying intentions of customers depends on some factors like

customer’s interest on the brand, perceived service quality and the offered value for the

products. Kumar et al., (2008) say that the total cost can be reduced by one-stop shopping,

which influence the customers for cross-buying. Trust and confidence gained by the customers

on the brand and the products are aspects to cross-buy.

2.1.3 Conceptual Model

Many important studies had performed to identify and analyse the factors that influence the

customer retention and cross-buying behaviour of customers. The study conducted by Ngobo

(2004) in France with the participation of 257 clients of major retailing banks in France,

revealed the relation of customer’s cross-buying with the high quality services for different

service actions, customer satisfaction, image conflicts, switching cost and the convenience

received for cross-buying.

Another research conducted by Liu & Wu (2007) in Taiwan, by participating 470 individuals

who had savings accounts with banks, which mainly focused on customer retention and cross-

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buying in banking sector. Liu & Wu (2007) found that the aspects such firm’s location,

satisfaction, convenience of single time shopping, firm’s reputation and expertise were significant

for retaining business with the banks. The intentions of cross-buying were based on firm’s

reputation and expertise and customer’s trust on the banks.

Herjanto& Gaur (2011) disclose that customers also consider the cultural similarity of the

banks and the sales person for maintaining the relationship. Since the research is basically

performed with the participation of Indian expatriates living in Birmingham and Dubai, author

is interested to find out the significance of cultural similarity of employees on customer

retention.

Although little has been done to investigate the impact of product attributes and customer’s

cross-buying behaviour, Liang & Wang (2004) states the value of product attributes in

creation of customer satisfaction with the support of research conducted in Taiwan. By

considering this study author is testing the influence of product attributes on cross-buying in

banking industry.

However, the conceptual model for this study has been developed, with the support of these

above mentioned researches. All the major aspects selected from other studies are critically

evaluated in the literature review to highlight the significance of each factor in this particular

context.

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Conceptual Model

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LOCATIONAL CONVENIENCE

CUSTOMER RETENTION

SERVICE QUALITY

SATISFACTION

CULTURAL SIMILARITY

FIRM'S REPUTATION AND EXPERTIZE

PRODUCT ATTRIBUTES


PERCEIVED CONVENIENCE

Figure: 2.1Factors influencing customer retention and cross-buying in banking industry.

2.1.3.1Base models for the research

The conceptual model for this research was developed mainly by critically evaluating the

studies by Ngobo (2004) and Liu & Wu (2007).

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CROSS-BUYING

TRUST

SWITCHING COST


Figure 2.2: Conceptual Model created by Ngobo(2004) to identify the customer’s cross-

buying intentions.

Figure 2.3:Conceptual Model used by Liu & Wu (2007) to investigate about customer

retention and cross-buying.

2.1.4Factors influencing customer retention

2.1.4.1 Brand, Firm’s Reputation and Expertise

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Brand is a strong symbol that pushes the customer to purchase goods and services

(Papasolomou&Vrontis, 2006) and the reliance on the same brand will be high for the

customers (Farquhar &Meidan, 2010). This habit of purchase can be assured by keeping

successful brand relationship (Petruzzellis, 2011), which can be achieved through customer

experience and brand knowledge. Tong (2012) states that brand image can be considered as a

switching barrier for the customers.

The reputation of a firm (Liu & Wu, 2007) can be the degree to which a customer feels a

service provider showing the honesty and loyalty towards its customers. Reputation helps

service providers to maintain relationship with customers. Bontis& Booker (2007) reveal the

positive association of customer satisfaction with the corporate reputation.

The level to which a customer recognize sales person to have the required knowledge and

skills to offer products to customers is described as firm expertise (Liu & Wu, 2007). In

contrast to the previous view, Jamal & Anastasiadou (2007) found the result of their study

conducted in Greece that the firm’s expertise is negatively related to customer loyalty . They

realized the customer switching due to the higher expertise level.

2.1.4.2 Service Quality, Satisfaction and Customer Retention

Studies proved that quality perceived by the customer for a product or service and satisfaction

have effect on the repurchase or cross-buying of financial products (Awan et al., 2011). But

there are variations in the views of authors in explaining the relation between service quality

and customer satisfaction. Awan et al., (2011) and Jham& Khan (2009) explained customer

satisfaction is the result of comparison of customer anticipation and the actual attitude after

using the product or service. Awan et al., (2011) cited the concepts of LeBlanc and Nguyen

(1988) to project that the level of customer satisfaction is a factor, which generates the

perceived service quality for a customer. In contrary to the above concept, another view by

Petruzzellis(2011); Yao(2011) that the perceived quality by customer can increase the degree

of satisfaction, and this idea is supported by Ngobo(2004), says that the perceived value

through service quality from firms leads to customer satisfaction.

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Kumar et al., (2008) used the study of Verhoef et al., (2001) to state that there is no impact of

differences in satisfaction from multiple firms and the cross-buying intentions of customers.

And analysis of customer satisfaction cannot be done only on the basis of service quality,

since other non-quality dimensions such as needs, equity and self-esteem can create

satisfaction in customers (Awan et al., 2011). These literatures does not make clear that which

aspects mostly lead to customer satisfaction and many of the researches had been performed

by using the most accepted feature “service quality” for analysing customer satisfaction.

2.1.4.3 Location convenience

Location convenience for customers is the perceived level of duration and effort needed to

reach a financial service provider (Liu & Wu, 2007).Liu & Wu (2007) state the direct impact

of location convenience on customer retention. Dusuki and Abdullah (2007) described the

Malasian banking customer’s selection and retention of banks according to the location

convenience. The findings of the research by Jones, Mothersbaugh& Beatty(2003) were against

the previously mentioned view and state that location convenience did not have an impact on the

repurchase intentions of customers in the financial industry

2.1.4.4 Employee’s cultural similarity and customer retention

Customers are interested to do business with banks that hold employees of customer’s own

culture (Herjanto& Gaur, 2011).The similarity of the bank personal in appearance, language,

religion and the social and economic class with the customers make them more relaxed to

amplify the level and number of interaction, which ultimately direct to customer satisfaction.

One of the important studies by Woodside &Devenport (1974) states the impact of similarity in

appearance of sales person and the purchase intentions of customers.

2.1.5Factors influencing cross-buying

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2.1.5.1 Product Quality and cross-buying

Customers will purchase new innovative as well as existing products according to the

convenience in purchase, reliability of the product, flexibility, security and easiness of usage

(Marfo-Yiadom, 2012). For instance some customers prefer to cross-buy single as well as

some hybrid insurance products from banks because of the simplicity of products

(Konstantinos, Ioannis&Madalini, 2004). But customers are expected to know about the

product quality, features and availability (Petruzzellis, 2011), banks should define the product

features, differentiation and provide training for using some products to ensure the product

awareness for customers. Papasolomou-Doukakis& Kitchen (2004) say, the chances of

switching the product are high, if the customers are not fully convinced about the quality of

the product.

2.1.5.2 Perceived Convenience

The convenience of one-stop shopping is significant that many clients, who seeks the easy and

cheap method to get the products from the same source (Liu & Wu, 2007). Ngobo(2004) says

the customers are expected to receive the products faster and easier through cross-buying. The

interest of Malasian customers to do business with banks, according to the convenience

created by banks was explained by Dusuki and Abdullah (2007). Customers focused at the

location convenience, convenience and comfort in the office, the product price and overall

cost to retain the bank.Maenpaa&Voutilainen (2011) reveal that the SME customers were not

convinced with the benefits of one-stop shopping convenience offered by banks using their

combined offerings.

2.1.5.3Trust and Confidence

Trust is important in customer relationship and building long term relationship by banks with

its customers minimizes defection levels, reduces cost and maximizes the revenues (Harrison,

2003). Trust can be established and maintained by creating confidence in customers, by

reducing the perceived risk for customers and through communication (Harrison, 2003) with

consistency and integrity (Adamson, Chan &Handford, 2003). Howcroft& Hamilton (2007)

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states that customer’s involvement, also the interaction between the bank and customers can

increase confidence in the customers in three different levels. Firstly motivates the person

towards that product, secondly create interest in the differentiable characteristics of that

product and finally increases the significance of product in that particular situation. The

confidence of the customer in their ability can be increased by their participation, which helps

them to purchase the ‘good’ financial products.

Adamson, Chan, &Handford (2003) say that many Hong Kong based banks, including HSBC

have identified the importance of building trust by relationship marketing and diversifying into

personal banking from their conventional style of operations, which was highly corporate and

commercial.

2.1.5.4Customer’s loyalty towards Bank

Insurance is a vital product for the banks and other financial organizations, so in relation to

this literature, Konstantinos et al., (2004) reveal cross-selling insurance products, entirely

depends on the interest and needs of customer’s and banks cannot even change this with their

aggressive style of selling. Tong (2012) insists that loyalty of customers towards banks is

getting reduced due to the chance of maintaining accounts with multiple banks, and customers

seek banks that are service loyal and this notion is supported by Dutta&Dutta (2009). Satisfied

customers are mostly loyal to the banks (Tong, 2012). The loyalty of customers towards a

bank is also determined by the cost to switch (Zeithaml, Bitner&Gremler, 2009) the products

or banks.

2.1.5.5 Switching Banks and Multi-Brand Loyalty

The execution of firm’s strategy may disturb their customers and can move to others, if they

perceive the service quality does not meet their expectations. This concept is been supported

by Sajtos&Kreis (2010) and states that customers shift from single-provider to multi-provider

by considering financial and other relational factors such as satisfaction and switching cost.

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Tong (2012) used the concepts of (Beerli et al, 2004) to reveal that customers become more

unwilling to switch to another bank due to the complexity they feel. Switching cost is known

to be one of the reasons to hold dissatisfied customers from switching banks. Colgate & Hedge

(2001) explains the reasons for the switching the firms such as pricing, inconvenience, failures

in core services, service encountering and services recovery and does not explains switching

cost as a motive for switching banks.

2.1.5.6 Customer Relationship by Banks

Banks have to maintain long-term relationship with the customers to increase the satisfaction,

which result in loyalty and repurchases (Martin-Consuegra, Molina & Esteban, 2006). Chantal

Rootman, Tait& Bosch (2008) reveal that bank customers consider the attitude of the

employee in performing the transaction and knowledge of the bank employee in building the

relationship with the banks. Also the customer’s expectation for benefits from the banks will

be high (Martin-Consuegra, Molina & Esteban, 2006) as the result of good relationship.

However Huang & Chia-Yu (2005) cited Kambil and Nunes(2001) to suggests that customers

show doubts and even negative feeling towards the personalization in banking sector. More

over the application of personalization is complex for large number of customers, since it is

difficult to spend much time on single customer and understand their personal needs.

2.2MARKETING ACTIVITIES OF BANKS

2.2.1 Marketing Strategy

There are mainly three competitive marketing strategies used by the banks such as defensive

strategy, offensive strategy and rationalization (Farquhar &Meidan, 2010). Offensive strategy

was commonly used by the banks and experiencing a shift due to the changing economic

conditions. Lymperopoulos (2008) states that bank’s marketing strategy should be proactive

and the price elasticity can be reduced by focusing on quality in service, satisfaction for

customers and customer loyalty. Banks need to analyse their strategic elements such as

technology, bank assurance services and other services that can add value for the customers.

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Strategy to increase the quality to these services can improve bank’s overall performance by

cross-selling products, creating employee and thus customer satisfaction (Lymperopoulos,

2008). Papasolomou-Doukakis& Kitchen (2004) reveal that competition between banks

happened through product features, differentiation strategy and also by establishing brand

loyalty.

2.2.2 Market Segmentation

Cameron, Cornish, & Nelson (2006) emphasize the drivers of segmentation in financial

services. They are motives of demand, consumption of financial services and attitudes and

values hold by the customers. The segmentation has to be done individually and in the house

hold level but the performance of the segmentation will be reduced without key data of the

customers. Meadows &Dibb (1998) disclose the claim of many banks that they used

segmentation as a means for discriminating profitable and non-profitable customers. Some

banks even did not attempt to maintain the unbeneficial customers. Meadows &Dibb(1998)

argue that banks can easily collect the necessary information of clients and need to target the

customer’s desires requirements.

2.2.3 Focus on Ethnic Groups and Cultures

Chaudhry& Crick (2004) disclose HSBC banks marketing strategy towards the ethnic Asian

groups. HSBC bank had given the priority to fulfil the needs of Indian and Chinese

communities and the strategy was to target on sub-cultures in those countries. HSBC bank

tried to keep personalized relationship with the customers. Creation of this strong relationship

between employee and customer has been influenced by the national culture of buyer, and the

sub-cultural aspects such as ‘power distance, uncertainty level, individualism/collectivism and

masculinity/feminism (Herjanto& Gaur, 2011). Buyers from these ethnic cultures perform

some assessment on the current experience from the bank and also some enquiry with the

other members. Bankers have to realize this important period of perception building process.

Dash, Bruning&Acharya (2009) states that allocation of service quality factors in banking

sector has been influenced by the customer’s cultural values. At the same time Dash,

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Bruning&Acharya (2009) cited Donthoo and Yoo(1998) to say that in most of the cases banks

have high power over their customers. Indian people keep high power distance and banks

should identify the factors such as tangibles time (Dash, Bruning&Acharya ,2009), empathy

and reliability to create satisfaction in Indian customers (Dutta&Dutta, 2009).

2.2.4 Branding and Relationship

Banks have already realized that branding drives the customer’s interest in purchasing

products. UK retail banking performs internal marketing with the help of employees to create

brand awareness and brand differentiation to the employees (Papasolomou&Vrontis, 2006).

The idea of Petruzzellis (2011) agrees this view and suggests that customer’s commitment

and loyalty towards a brand can be achieved by good relationship, rewards and with better

product offers. Lymperopoulos, Chaniotakis&Soureli (2006) highlight the importance of

keeping customer relationship and suggest it as a crucial element of marketing strategy. A

long-term relationship with customers enables bank to get the detailed and valuable

information about the customers to segment and target the customers. A research conducted by

Hanson, Robison & Siles (1996) reveal that the aim of performing advertising and

personalization is to build a perception on the customers that banks care the people of the

community.

2.2.5 Demographic Features

Based on other studies Konstantinos et al., (2004) says that there are aspects such as

customer’s income, education, life cycle; age and gender have impact of customer’s desire of

buying multiple products from financial firms. Even though banks know the importance to

mould their activities based on the views and interests of customers, they have to follow

strategies that creates maximum benefits to them.

2.2.6Cross-selling Activities of Banks

Liang (2008) found the direct relation between the perception of customers and financial

performance of a financial service provider through cross-selling products. This occurs mainly

by retaining the customers who are loyal and encouraged them to cross-buy products by

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creating customer’s confidence on the activities of the financial service provider. Ngobo

(2004) support this aspect and says banks should consider the perceptions of customers

towards their products, while offering multiple products. In contrarily to the above concept

Kumar et al.,(2008) suggests that banks generally identify the potential customers from their

existing customer data base for cross-selling, also consider characteristics of products and

customers, firm’s marketing efforts and exchange characteristics. Banks perform these

activities by giving focus to their own strategy to cross-sell the products than giving attention

to the customer interests.

Ngobo (2004) explains that success of the cross-selling is based on the strength of internal

activities and the acceptance of customers for cross-buying from the same financial firm. The

same concept is being explained by Kumar et al.,(2008) says the chances for improving the

effectiveness of cross-selling of products is according to the identification of factors that

motivate the customers to cross-buy the products, also by the efficient marketing activities.

Customers expect valuable and beneficial services from banks (Ngobo, 2004) and it is really

important to make new products and strategic alliances with other financial service providers

to provide the facility of one-stop shopping (Liu & Wu, 2007).

2.3CONCLUSION

Banks judge retaining customers as their strength to improve their overall performance.

Customers are different in nature, characteristics and with their possession; they think and

interpret the activities of these firms in different ways. Customers make use of their

perceptions towards banking activities to select and retain banks and to buy more products

from the same bank.

Several important studies have been done in different countries to identify and analyse the

aspects of customer retention and cross-buying. The research conducted by Liu & Wu (2007)

in Taiwan, by participating 470 individuals, who had savings accounts with banks and the study

conducted by Ngobo (2004) in France with the participation of 257 clients of major retailing

banks in France, tried to investigate the factors that influence the customer retention and cross-

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buying behaviour of customers. Soureli& Lewis (2008) study was performed in Greece,

participated 316 real customers to investigate the impact of some factors on customer’s cross-

buying intentions.

The study conducted in UAE by Kassim&Souiden (2007), selected a convenient sample of

600 banking customers to examine the customer retention process. Hong and Lee (2012)

performed the investigation to bring out the main aspects of cross-buying intentions of the

customers from collectivistic cultures.

Even though there were several studies performed related to this research topic, no research

was conducted to understand the interests of Indian Expatriates, mainly Malayalee

community. So it is very significant to fill the existing research gap and to understand the

perception of Malyalee community towards retaining business with their banks and cross-

buying. The research is conducting with the participation of banking customers from

Birmingham and Dubai. This research provides an opportunity for Malayalee community to

express their needs, interests and perception towards banking activities.

Banks are firms which carries high responsibility to serve the community, while achieving the

financial strength. So the effort of Chaudhry& Crick (2004) to identify HSBC bank’s

marketing strategies towards the Asian Ethnic cultures contributed knowledge to the

academics. The attempt to analyse the way in which HSBC bank craft their strategies for

doing business with the Malaylee community in Birmingham and Dubai, add great value to

this research.

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3. CHAPTER THREE – RESEARCH METHODOLOGY

3.0 INTRODUCTION

Different forms of research methods are suggested by academics for performing successful

researches. This chapter discusses various approaches that the researcher had used for

conducting the research work and the justification for the application of those methodologies.

This research used a mixed application of both quantitative and qualitative research methods.

Researcher collected primary data using questionnaires, also collected relevant secondary data

to support the research (Saunders et al., 2009).

The main achievable objectives of this research are listed below.






4) To analyse whether HSBC bank make use of the ‘perception of Indian Expatriates

towards bank’s activities’, for retaining them and for cross-selling bank’s products.

Research methodology chapter is developed by consider the best ways to achieve the

objectives.

3.1 QUANTITATIVE AND QULAITATIVE RESEARCH METHODS

Quantitative data are output of research strategies and the application of data varies from

counting some frequencies to multifaceted statistical comparisons (Saunders et al., 2009;

Creswell, 2009). Quantitative data may not always ensure the meaning which is expected but

the quantitative data collected for this research was useful and provided meaning to the

figures.

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Saunders et al., (2009) reveal that qualitative data should be used to provide meaning for more

uncertain, flexible concepts. Qualitative data are collected as non-standardised data, which are

classified and analysed later. The analysis part mainly includes summarising, categorising and

structuring the collected data.

The participants of this research are the banking customers from Birmingham, Dubai and one

manager from HSBC bank Dubai. In order to achieve the first and second objectives of this

study, that is to understand the view of customers about retaining the bank and cross-buying

products from the same bank; author used a self-administered questionnaire to collect the

responses quantitatively. Saunders et al., (2009) explained that the application of questionnaire

for collecting opinions or attitudes will facilitate the researcher to identify and explain the

variation in different incidents.

In the second part of the research, for accomplishing the research objectives three and four,

that is to collect a detailed information about the marketing approaches and cross-selling

activities of HSBC bank, qualitative data were gathered from the HSBC bank manager using a

questionnaire that included open ended questions. Even though ‘semi-structured one–one

interview’ with many HSBC bank managers from Birmingham and Dubai was the best option for

data collection from HSBC bank, the inaccessibility to the senior employees for the interview

forced the researcher to forward questionnaire to only one manager in Dubai.

3.2 DATA COLLECTION

Data can be collected for researches from primary and secondary sources in the form of

primary and secondary data. Many valid documents such as Government publications,

previous research or any service records can be used as secondary sources. Primary data can

be collected with different methods such as Observation, Interviewing and Questionnaire

(Kumar, 2005).

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3.2.1 Primary Data

Research was based on the customers’ perception towards services of banks and therefore a

primary data collection was necessary to achieve the objectives. Even though, for this study,

researcher was not experienced in primary data collection process, availability of reliable and

valid data from a reasonably strong sample, boosted confidence of the researcher to perform

the primary data collection. Quantitative and qualitative data were collected through

questionnaires.

3.2.2 Secondary Data

Kumar (2005) categorizes the secondary sources of data collection mainly as Government or

semi-government publications, previous research, personal information and Mass media.

Kumar (2005) also reveals the disadvantages of secondary data. There might be problems in

the validity and reliability of secondary data collected.

The merits and demerits of using primary and secondary data for this research had been

analysed and focused mainly on the primary data collection sources. Questionnaires were used

to collect primary data from both banking customers and one bank manager, also made use of

HSBC bank’s website and other relevant information sheet from HSBC as secondary data.

3.3 QUESTIONNAIRE DESIGN

Saunders et al. (2009) suggest that questionnaires can be used for descriptive research which

includes ‘attitude and opinion questionnaires’ and to understand the organizational

approaches.

Research used self-administered questionnaires (Saunders et al., 2009) for understanding the

view of banking customers about cross-buying financial products. Firstly, for analysing the

attitudes of customers on services, researcher used ‘rating questions’ to get the necessary data.

This questionnaire was mainly included with ‘Likert-style rating scale’ questions and some

‘category’ questions (Saunders et al., 2009).

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Finally for collecting the response of HSBC bank on their cross-selling activities, researcher

made use of a questionnaire with only ‘open-ended questions’ to get detailed information on

the particular aspect.

An online survey method ‘Google Document’ was utilized for creating questionnaires to gather

data. Two questionnaires were created, the first one for collecting the views of banking customers

and the second questionnaire for gathering information from HSBC bank. The permission to use

the e-mail addresses of the participants was collected through telephony conversation and e-

mails.The web links of the questionnaires were then forwarded through e-mail along with a

covering letter to the focused respondents in Dubai and Birmingham and HSBC bank in

Dubai. This online method facilitated an opportunity to reach more number of respondents.

The proper and regular follow-up through telephone calls and e-mails helped the researcher to

achieve a good response rate for a successful research, within the limited time period.

Some of the most important questionsfrom questionnaire ONEis included in the methodology

chapter. All the details of questionnaire ONE and questionnaire TWO with the supporting

studies are included in the Appendices.

Question 9: My bank’s reputation and expertise create interest to continue with the bank.

Liu & Wu (2007) researched the relationship of location convenience, firm reputation and firm

expertise with customer retention and confirmed that there is a direct relationship between them.

Question 13: Overall, I am satisfied with my bank and I expect to use this bank in future.

Ngobo(2004) studied the relationship of service quality and satisfaction with the repurchase

intentions.Liu& Wu(2007) also states that there is a positive relation between satisfaction and

customer retention.

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3.4 SAMPLE METHOD

The self-selection sampling method was used (Saunders et al., 2009) for selecting the

participants for the survey, which gathered customer’s view on cross-buying. Self-selection

sampling is a non-probability sampling technique and researcher had published the needs to

the respondents by e-mails and telephone and requested them to participate in the survey.

From the responded people, 60 customers were selected from Birmingham and included 50

participants from Dubai for the research. The main advantages due to self-selection sampling

are the choice of employed customers, participation of enough male and females and a fixed

sample size for the research.

Researcher targeted the participants as the ‘Malayalee community’ from Indian Expatriates,

who living in Birmingham and Dubai. For completing the second section of the research,

according to the convenience, permission was taken from one manger from HSBC bank to

forward a questionnaire. Main aspects considered for selecting these fixed sample sizes

include the ‘time constraints’, the need of quick results (Saunders et al., 2009), the confidence

to test the research results and to maintain the accuracy level for the research (Kumar, 2005).

The data validity is considered to be high, since the participants from targeted group have

sufficient income, regularly performs banking transactions and had the previous experience of

cross-buying from banks.

The disadvantage of using non-probability sample is that the findings cannot be generalized to

the total sampling population and the accessible individual may not truly represent the total

sample population.

3.5 DATA VALIDITY AND RELIABILITY

There are mainly three types of validity to be considered for a research (Saunders et al., 2009;

Kumar, R., 2005). They are mainly content validity, predictive validity and construct validity.

Saunders et al. (2009) state that internal validity of a research is the capability to appraise the

intended output, which can be achieved either through questionnaires. The predictive validity

of the research is very low since the research does not focussed entirely on the future activities

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of customers and banks to predict the real outcome. Research examined the contribution of

different factors that motivates the customers for cross-buying bank products and calculated a

high variance towards the construct.

Kumar (2005) says that the reliability of a research tool is the consistency and the stability in

predicting accurate data for achieving the objectives. Saunders et al. (2009); Kumar (2005)

suggests the main approaches to determine the reliability of data collection tool. They are

‘test-re-test approach, internal consistency approach and alternative form approach.

3.6 LIMITATIONS

The responses from the self-selection sample, which includes the friends and relatives of

researcher, might generate a biased view. The responses might not be true, but exaggerated to

demonstrate their strength on their opinions. HSBC bank responded to the questions related to

their present marketing strategies and researcher doubts the chances of amendments by bank,

in their responses.

The application of questionnaire instead of semi-structured one-one interviews, affected the

coverage and quality of the collected data from HSBC bank that ultimately reflected on the

final objectives. The incapability of the researcher to perform the ‘test re-test and alternative

form’ approaches (Saunders et.al., 2009; Kumar, 2005) for ensuring the reliability of research,

limited its reliability and validity.

3.7 ETHICS IN RESEARCH

Research ethics are related to “the questions about how we formulate and clarify our research

topic, design our research and gain access, collect data, process and store our data, analyse data

and write up our research findings in a moral and responsible way” (Saunders et.al., 2009 : 184).

The personnel information and research data collected from the participants have been highly

private, protected and can be destroyed immediately after the necessary period. The participants

have had the right to withdraw the complete information if necessary. The research survey would

be completed inside the Birmingham City University’s ethical procedures.

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4 CHAPTER FOUR–RESEARCH FINDINGS AND DATA ANALYSIS

4.0INTRODUCTION

The primary data collected using the questionnaire and the secondary data gathered are examined

to test the conceptual model created for this research. Author refers to the relevant sections of

literature review to compare its results with the findings of the previous studies.

Two questionnaires were created using the ‘Google Documents’ and the web links were forwarded

to collect the responses. First questionnaire was used to gather the views of bank’s customers

about cross-buying products. This questionnaire included 23 relevant questions to get the answers

to achieve the research objectives. The questionnaire had sent to a convenient group of

respondents, about 110 from Dubai and Birmingham.

A questionnaire with 10 valid questions was used to gather the response from HSBC bank, Dubai.

Even though HSBC bank only answered SIX questions, their responses included answers for all

the 10 questions and the support of relevant secondary data had improved the credibility of the

analysis of HSBC bank’s cross-selling activities. Microsoft office was used to represent and

analyse the collected data.

4.1 FACTORS INFLUENCING CUSTOMER RETENTION AND CROSS-BUYING

The research intensely analyses all the 23 questions from the ‘First questionnaire’ to interpret

the factors customers consider for retaining banks and cross-buying products. From the overall

61valid responses, the participation of customers from Birmingham was 34 and 27 participants

responded from Dubai.

However, the charts below show that there were 21 male customers and 13 female customers

from Birmingham and 17 males and 10 females participated in the research, which enhances

the strength of the research.

Question 1: Please specify your gender. Below shown figures are responses to Question 1 in

the questionnaire.

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62%

38%

Customers from Birmingham

Male Female

63%

37%

Customers from Dubai

MaleFemale

Figure 4.1 and 4.2 Participation of Customers in the survey

Question 2: Employment status

In Birmingham 82% of customers was full time employed and 18% respondents were part-

time employed. The Dubai customers include 81% of full time employees and 19% of part –

time employees.

Full-Time Employed

Part-Time Employed

Retired

Unemployed

Student

0 5 10 15 20 25 30

Employment Status- UK Customers

Figure 4.3 Response to question 2.

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Full-Time Employed

Part-Time Employed

Retired

Unemployed

Student

0 5 10 15 20 25

Employment Status- Dubai Customers


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Question 3: Which country, do you live in?

Birmingham56%

Dubai44%

Participation in the Survey


Question 4: How many banks, do you currently use?

Total

Less than 6 months

7-12 months

1-3 years

4 or more years

0 2 4 6 8 10 12 14 16

Customer's Loyalty towards Banks(UK)


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As we can see from the charts, there are customers who show multi-brand loyalty towards

banks. In Birmingham, 55% of customers maintain relationship with more than one bank and

in Dubai it is 51% of customers. Very interestingly 45% of customers in Birmingham continue

to do business with a single bank for more than one year and in Dubai, the customer’s

proportion of this category is 49%.

Total

Less than 6 months

7-12 months

1-3 years

4 or more years

0 2 4 6 8 10 12 14

Customer's Loyalty towards Banks(Dubai)


Question 5: Which of the following products do you have from your main bank? Please rank these in which you received first.

Bank account is the first product offered by all banks, so that every customer in Birmingham

and Dubai received a bank account. Banks tried to offer most of their profitable products to

customers from Birmingham and Dubai.

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Bank account

Credit cards

Mortgages & Loans

Insurance

0 5 10 15 20 25 30 35

Product selling by banks in Birmingham


Bank account

Credit cards

Mortgages & Loans

Insurance

0 5 10 15 20 25 30

Product selling by banks in Dubai


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Question 6: How did your bank offer these products?

It is very clear from the chart that, banks offer products to customers in Birmingham, mainly

through face to face conversations. Other methods such as post, e-mail and telephones are

using comparatively less number of times by banks to offer products.

Face to face

Telephone

E-mail

Post

0 5 10 15 20 25 30 35

Products offering methods for UK customers


In Dubai, banks use the personalization practices such as face to face conversation, telephone,

e-mail and postal offers almost similarly to offer their products.

Face to face

Telephone

E-mail

Post

0 2 4 6 8 10 12 14 16 18

Products offering methods for Dubai customers


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Question 7: I am more likely to accept a new product/service sold --------. Please specify.

In Birmingham, 70% of the banking customers prefer to accept products offered face to face

and for Dubai customers, 74% of the respondents reveal their preference of face to face

conversation. Most of the customers from ‘Malayalee community’ prefer face to face offering

to cross-buy products from banks.

71%

6%

9%

15%

UK Customer's Interest towards offering methods

Face to faceBy TelephoneThrough E-mailBy post


74%

7%

19%

Dubai Customer's Interest towards offering methods

Face to faceBy TelephoneThrough E-mailBy post


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Question 8: How long you have been banking with the current bank?

As shown in the graph below, 53% of the customers from Birmingham and 48 % of customers

from Dubai participated in the survey are continuing with their main bank for at least 4 years,

which increase the credibility of research.

15%

32%

53%

UK customer's experience with their main Bank

Less than 6 months7-12 months1-3 years4 or more years


7% 11%

33%

48%

Dubai customer's experience with their main Bank

Less than 6 months7-12 months1-3 years4 or more years


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4.1.1 CUSTOMER RETENTION

Question 9: My bank’s reputation and expertise create interest to continue with the bank

As the charts shown below, there were 15 (44%) customers from Birmingham agreed and 11

(32%) customers tend to agree with the positive influence of reputation and expertise of banks

on customer retention. From the customers of Dubai, 11 (40%) respondents agreed and 13

(48%) customers tend to agree the same facts.

Overall responses show the direct relation of bank’s reputation and expertise on customer

retention, which is similar to the research performed by Liu& Wu(2007) in Taiwan for bank

customers who had opened bank accounts. Liu& Wu(2007) interpreted the impact of firm’s

reputation and expertise on the interest of bank customers in Taiwan to retain their accounts.

Agree

Tend to agree

Neither agree nor disagree

Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16

Influence of Bank's reputation and expertise on customers in Birmingham


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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Influence of Bank's reputation and expertise on customers in Dubai


Question: 10My bank’s convenient location enabled me to visit the bank frequently and

receive services.

In this research, the chart below shows that 53% of the respondents from UK are looking for the

location convenience in retaining their business deals with banks. The chart previously shown

(Figure 4.12 and 4.13) has explained that 70% of Birmingham customers and 74% of Dubai

customers prefer to accept offers through a face to face conversation and customers consider the

convenience to reach the bank.

However, from customers from Dubai, 9 (33%) respondents agree with the importance of location

convenience for more dealings with the bank and 13 (48%) customers tend to agree with this

concept.The study explained in literature review by Liu& Wu(2007) declared location

convenience of banks have a positive effect on customer retention, which has a close co-ordination

with findings of this research.

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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16 18

Locational Convenience and Customer Retention in UK


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Locational Convenience and Customer Retention in Dubai


Question: 11 I am more likely to accept products offered by bank employees from my own country.

Herjanto& Gaur (2011) disclose that customers also consider the cultural similarity of the

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banks and the sales person for maintaining the relationship. This same concept was tested in a

new sample of Malayalee community and found that 59% of the customers from Birmingham

and 81% of Dubai clients agree that they prefer to buy products offered by bank employees of

same ethnic group.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Influence of bank's employees on customer retention in UK


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Influence of bank's employees on customer retention in Dubai

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Question 12: The quality of service delivered to me by my bank creates interest for

continuing with the bank.

The chart below shows that 85% of the participants from Birmingham expect the high service

quality from banks for retaining their relationship with banks. From the participants from

Dubai, 85% supported the requirement of high quality service from banks for maintaining the

relationship. The study reveals that 53% of the participated customers fromBirmingham and

52% of customers from Dubaihold multiple banks, which shows the possibility for them to

shift their transactions according to their perceived service quality.

The findings of this study is in line with the research conducted by Ngobo(2004) in France

found that bank customers consider Service Quality as important for retaining the relationship

with banks.

Figure: 4.22 Response to question 12.

Agree

Tend to agree


Tend to disagree

Disagree

0 5 10 15 20 25

Service Quality and Customer Retention(UK)

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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Service Quality and Customer Retention(Dubai)


Question:13 Overall, I am satisfied with my bank and I expect to use this bank in future

The influence of ‘Satisfaction’ has been tested by asking this question to the respondents and

68% of the respondents from Birmingham shared their view that customer satisfaction has a

positive association with customer retention. From the customers from Dubai, 89% of clients

are satisfied and shows their interest of using the same bank for future businesses. Overall

result confirms a strong positive impact of customer satisfaction on the interest of customer’s

to retain their main bank.

The same concept, which shows the positive association of customer satisfaction on customer

retention, was discussed by Ngobo(2004) in his study conducted in France.Another study by

Liu& Wu(2007) revealed the positive relation between satisfaction and customer retention through

his researched conducted in Taiwan

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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16

Influence of Satisfaction on Customer Retention in UK


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Influence of Satisfaction on Customer Retention in Dubai


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4.1.2 CROSS-BUYING FROM BANKS

Question: 14 I consider the product’s quality and features before buying more products

from my bank

In total 96 % of Birmingham customers and 96% of Dubai customers entirely supported the

importance of product on cross-buying products from banks. This reveals that product quality

is very significant for cross-selling in banking industry.


Agree

Tend to agree


Tend to disagree

Disagree

0 5 10 15 20 25 30

Product quality and Cross-Buying(UK)


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16

Product quality and Cross-Buying(Dubai)

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Question: 15Sourcingdifferent products/services from different banks gets you the best deals.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16

Dependancy on multiple banks for better deals(UK)


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Dependancy on multiple banks for better deals(Dubai)


From the customers of Birmingham, 44% agree with their dependency on more than one bank

for getting better offers and 25% clients tend to agree with that. However, from the Dubai

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customers, 48% of customers did not show a clear opinion about this and only 15% clients

clearly reveal the importance of sourcing more banks for better offers.

Question: 16It annoys me when my main bank keeps contacting me about extra products

and services.

It was very interesting that even the satisfied customers were annoyed by the frequent and

inappropriate product offerings by banks.

In Birmingham, almost 18% of satisfied customers agreed they were getting annoyed by banks

frequent product offerings and 26% of satisfied customers tend to agree with this view. In

Dubai, though there were 27% of satisfied customers who got annoyed by banks offerings,

41% of satisfied people ‘neither agree nor disagree’ with that and rest of the customers were

happy to receive all the offers from banks.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Response to the frequent product offerings by UK Banks


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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Response to the frequent product offerings by Banks(Dubai)

Question: 17My bank’s reputation and expertise create interest in buying more products from the bank.

As shown in the charts below, almost 52% of the participants from Birmingham, agreed that they consider the reputation and expertise of banks before cross-buying products and nearly 41% of people tend to agree with that opinion.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Reputation and Expertize of banks and Cross-Buying(UK)

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Liu& Wu (2007) confirmed the direct relation between bank’s reputation and expertise with the

cross-buying behavior of customers in Taiwan. From the Dubai customers, 70% of the

respondents agreed or tend to agree with this importance of bank’s reputation and expertise in

cross-buying.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Reputation and Expertize of banks and Cross-Buying(Dubai)


Question: 18 My main bank offers me a good deal to take other products and services from it.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Banks' good deals and cross-buying(UK)

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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Bank's good deals and cross-buying(Dubai)


Question:19I find it more convenient to buy multiple products from the same bank.

The given charts clearly indicate that 59% of customers from Birmingham and 74% of

customers from Dubai almost agree that they are attracted with the convenience created by

banks for cross-buying. Ngobo(2004) state that cross-buying is positively influenced by

perceived convenience.

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Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Convenience created for cross-buying(UK)


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Convenience created for cross-buying(Dubai)


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Question 20: I consider bank as the best place to buy insurance

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16 18 20

Image conflicts - Birmingham customers


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Image conflicts - Customers in Dubai


Question 21: I consider, it is better to buy products from the present bank because of problems in changing banks

Ngobo(2004) declared that the perceived switching cost have a positive association and image

conflicts have a negative association on the cross-buying intentions of customers. Given charts

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specify that 53% of respondents from Birmingham and 85% of Dubai customers support the

same concept of Ngobo(2004)that switching problems and switching cost are strong reasons

for buying additional products from the same bank.

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12

Impact of Switching cost- Birmingham Customers


Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14 16 18

Impact of Switching cost - Dubai customers


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Question 22: I fear my main bank will charge me higher prices if I get all my products and services from it.

Agree

Tend to agree


Tend to disagree

Disagree

0 1 2 3 4 5 6 7 8 9

Confidence in Banks - Birmingham Customers


Agree

Tend to agree


Tend to disagree

Disagree

0 1 2 3 4 5 6 7 8

Confidence in banks - Dubai Customers


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Question 23: I don’t trust my main bank enough to buy all products and services from it

Agree

Tend to agree


Tend to disagree

Disagree

0 2 4 6 8 10 12 14

Trust on banks - Birmingham customers


Agree

Tend to agree


Tend to disagree

Disagree

0 1 2 3 4 5 6 7

Trust on banks - Dubai customers


The impact of trust on cross-buying is analysed by examining the questions 22 and 23 from

the questionnaire. Majority of the customers from Birmingham and Dubai have confidence in

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banks and they trust bank their main bank to receive more products. The research also

analysed the percentage of satisfied people who trust their main bank. It is found that, from the

satisfied customers, 39% of clients from Birmingham and 54% from Dubai trust their main

bank.

SIMILARITIES AND DIFFERENCES IN THE VIEWS

The customers from Birmingham and Dubai have similar views towards the factors that have

impact on customer retention and cross-buying. Customers from both province agreed that the

factors discussed through the conceptual model have positive association with customer

retention and cross-buying. The main difference in opinion happened is that, majority of

Dubai customers did not show a clear judgment towards approaching more banks for right

products. Another variation was that compared to the 59% of the customers from Birmingham

and 81% of Dubai clients agree that they prefer to buy products offered by bank employees of

same ethnic group.

4.2ANALYSIS OF HSBC BANK’S CROSS SELLING ACTIVITIES

HSBC bank responded for SIX questions from the questionnaire, but the answers were a

combination of contents for all the 10 questions to achieve the objectives. HSBC bank

operates internationally and researcher had to presume that bank craft strategies in the

corporate level and holds national level strategies based on the bank’s customer segments.

Question 1: How does the bank decide what extra product or services to offer to the

customers?

Question 6: How does the bank segment the customer group?

As an International bank, HSBC compete with other banks locally and internationally. Staff in

HSBC identifies the needs of customers by creating a profile called ‘Individual Needs

Review’ (INR). INR tells all the needs of customers from bank in long term. The segmentation

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of customers is performed based on INR and customer’s behaviour is regularly monitored to

analyse the benefits and risks involved and offered products.

HSBC bank’s product offering decision making enhances the chances of retaining the

customers and improved the cross-selling opportunities. HSBC bank offers convertible

products that are flexible enough to meet the requirements of customers at the different stages

of their life. A classic example is the Head Start Account offered to kids converting to current

account in the future and bank sell personal loan, credit cards and mortgage, vehicle loan and

other wealth products to that employee.

Question 2: How frequently does bank offer extra products or services?

Question 7: How does the bank use segmentation information for offering products?

HSBC bank is working on a system called ‘Customer Relationship Management System’ and

bank always tries to keep a good relationship with its customers. This CRM System reveals

the requirement of customer segmentation based on aspects such as customer’s nationality,

age, profession, remuneration and the nature of spending money.

This research found that HSBC bank already applied a sales strategy, which does not fix an

interval for offering products to its customers, instead utilize all the opportunities to sell any of

the appropriate products to a customer. Bank always attempts to sell, high income generating

products such as insurance, loans and wealth products according to the potential of different

customer segments.HSBC bank creates a strong relationship with its customers, to ensure that

the right products are discussed at right time based on customer’s behaviour and demographic

features.

Question 3: How does the bank contact customers for offering these services?

The segmentation of customers based on the instruction of CRMS, facilitate bank to identify

the potential of each customer. Bank realized the significance of existing customers for

increasing their product sales, so that a list of customers is created from these particular pre-

decided segments to offer them more products.

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Bank targets the customers with reasonable income and have a high spending. Banks contacts

the customers according to their needs, at the right time through telephones and e-mails to

offers them the right product. HSBC bank also employs public advertising through audio and

video medium and print Medias to attract the customers towards bank’s promotions.The tool

of ‘seasonal marketing’ is applied by HSBC bank for customers who travel for holidays.

Question 4: How does the bank consider the ‘perception of customers’ for crafting cross-

selling strategies?

The application of the profile ‘Individual Needs Review’ supports HSBC bank to understand

the perception and expectations of customers towards the services of the bank. Even though

the perception of customers has influence on bank’s decisions, banks try to suppress this by

impressing customers at the first time with bank’s outstanding service.

HSBC always try to provide outstanding service that helps them to cross-sell products, even

with high benefits for bank. For instance, HSBC bank is successful in cross-selling loans and

credit cards for its customers at a high rate of interest.

Question 5: What are the other factors that bank judges as important for developing cross-selling strategies?

Question 8: How does the bank build relationship with customers?

HSBC bank realises the importance of relationship marketing and offers products based on

that relationship. One of the important methods applied by HSBC bank to offer products is to

invite customers to the bank for a coffee and solve their concerns. Bank finds this as the best

time to investigate the need of additional products, hence for cross selling.

This research found that, HSBC utilizes seasonal marketing strategy for capitalizing the

market share. The other approaches such as offering credit cards and loans to the customers at

the time of opening a bank account are successfully worked out by HSBC bank. The bank

agents try to sell some products that customers does not have, for the calls from customers to

the bank.

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Question 10: How does the bank provide products and services to the ‘Indian

Expatriates’?

Question 6:What is the role of products and services in building relationship with

customers?

HSBC bank considers the culture of Indian expatriates for crafting the strategies for cross-

selling. HSBC bank found that Indian customers look for discounts, offers and attracted for

lending facilities based on the market economic factors. HSBC bank mainly offers convenient

and secure, savings and current accounts, investment, expat bank cards, foreign exchange and

gives option to take mortgages for the Indian Expatriates (HSBC 2012). Bank offers loans for

Indian customers, when Indian rupee depreciates against other major domestic currencies to

boost the amount of loans. The approaches such as raffle draws, gift vouchers and instalment

plans for loans and credit cards attract Indian customers towards banks at the time of festivals

in India.

However, HSBC bank mainly applies these strategies for the benefits for the bank and pushes

the Indian customers to use credit cards to spend, in order to gain more economic benefits

through high interest rates on credit card purchases. For all the offers to Indian customers,

HSBC bank imposes hidden charges. Indian customers are very keen to ensure the liabilities

are cleared and this increased the HSBC bank’s trust on Indian customers to lend more.

5 CHAPTER FIVE – CONCLUSIONS AND RECOMMENDATIONS

5.1CONCLUSION

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The research critically analysed several aspects of customer’s perception towards banking

activities and bank’s marketing activities to successfully achieve the research objectives. The

existed research gap is filled by the powerful examination of the key aspects influencing cross-

buying.

Objective 1: To investigate the factors that customers consider as important for retaining

banking with the current bank.

The impact of the significant factors such as firm’s reputation and expertise, location

convenience, service quality, customer satisfaction and employee’s cultural similarity on

customer retention was tested. The research found that all these factors have positive

association with customer retention. A major group of customers from Birmingham and Dubai

prefer face to face conversation for accepting products and consider the importance of location

convenience in maintaining relationship with banks. Both the customers of Birmingham and

Dubai expressed bank’s reputation and expertise, service quality and customer satisfaction are

the most important determinants for retaining business with banks. Customers from this ethnic

group are influenced by the bank employees of the same culture.

Objective 2:To understand the perception of customers towards Cross-Buying bank’s

products.

In order to understand the perception of ‘Malayalee’ customers towards cross-buying bank’s

products, the influence of factors such as bank’s reputation and expertise, product attributes,

perceived convenience, trust and switching cost were assessed. Bank’s reputation and

expertise are positively related to cross-buying.Product quality seems to be highly important

for cross-buying. Perceived convenience, switching cost and trust has shown positive impacts

on the cross-buying intentions of customers. The research revealed that most of the satisfied

customers trust their main bank, thus proved the mediating effect of satisfaction on trust and

cross-buying.

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The difficulties and the expenses for shifting banks lead to the intention of buying more

products from the same bank. Research findings highlighted that almost half of the

participants from Dubai and Birmingham continue with their main bank for 4 or more years.

All the research findings related to customer retention and cross-buying intentions of

customers are in line with the results of previous studies that examined the factors influencing

customer retention and cross-selling in banking industry (Ngobo, 2004; Liang & Wang, 2004;

Liu & Wu, 2007; Herjanto& Gaur, 2011). Financial service industry is highly sophisticated and

customers anticipate comfort, confidence and trust from banks for doing business with them

and it seems to be same for the customers from different cultures.

Objective 3:Recognize the strategies that has been implemented by HSBC bank, for retaining


It was necessary to examine all the important factors such as the kind of product offering and

the main methods, its frequency, customer segmentation process, relationship marketing and

influence of products on cross-selling, for achieving this objective. The primary action for

segmentation and other product offering decision is the creation of the profile called

‘Individual Needs Review’. HSBC always tries to offer highly innovative and flexible

products that create interest in customers to retain the products for long time. The ‘Customer

Relationship Management System’ of HSBC bank helps to keep a good relationship with

customers. The applied sales strategy for the bank is to utilise all the opportunities for cross-

selling, especially the high income generating products such as insurance, loans and wealth

products.

Bank is successful in offering and cross-selling products to existing customers through

seasonal marketing. Customers will be contacted through telephone or e-mail, also advertise

through audio, video and printed medium. Bank believes in ‘Relationship Marketing’ and

invite customers for face to face conversation to resolve customer’s concerns and these

conversations would be the opportunities for bank to realise customer needs and cross-sell the

right products.

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Objective 4:To analyse whether HSBC bank makes use of the ‘perception of Indian

Expatriates towards bank’s activities’, for retaining them and for cross-selling bank’s

products.

The task was to interpret the extent to which HSBC bank considers the customer expectations,

needs and wants, for offering more products to existing Indian customers.

HSBC bank clearly considers the culture of Indian Expatriates and their expectations from

bank to craft cross-selling strategies. Bank makes use of ‘Individual Needs Review’ to

recognize the perception and expectations of customers. High quality service has been

delivered by HSBC bank to attract the customers to the bank and retain them for long term.

The successful branding and well positioning of HSBC bank helped it to be successful in

serving more people. Indian customers always seek maximum benefits from the bank, like

discounts, offers and other lending facilities. So the products are delivered in a way that Indian

customers feel high quality and comfort.

However, HSBC bank tries to suppress the influence of customers by perceived service

quality. Bank always tries to leverage operations for maximizing economic benefits from

Indian customers. Hidden charges are applied for all these promotions and discounts offered to

Indian expatriates by the bank. The feature of Indian Expatriates, that is to clear the liabilities

on time, increased the HSBC bank’s trust on Indian customers.

The research found that HSBC follows the same concept of Liang(2008) that the perception of

customers influences the financial performance of the banks. HSBC holds a clear view that the

aspects such as customer’s income, education, life cycle, age and gender have impact of

customer’s desire of buying multiple products from financial firms, same as the result

explained by Konstantinoset al., (2004) and HSBC apply INR for segmentation. Chaudhry&

Crick(2004) disclosed HSBC banks keep separate marketing strategies for ethnic Asian groups

and are similar from the responses from HSBC bank.

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5.2 RECOMMENDATIONS

It is worth to present recommendations based the findings of the research, which are listed

below.

Recommendations based on customer’s perception

1) The participation of customers in the research facilitates them to express their views

and opinions about the banking services that can influence the bank’s decision making

related to customer services.

2) Bank marketers should always focus to create brand awareness and thus build

reputation, which have impact on both customer retention and cross-buying.

3) It will be a wise idea for the banks to offer products to customer through a sales expert,

who resembles cultural similarity with the customer.

4) Since the product quality has a great impact on the cross-buying intentions of

customers, researcher suggests the banks to interpret the needs and wants of customers

and deliver the appropriate products.

Recommendations to HSBC bank based on their responses

5) HSBC bank must follow a system to continuously monitor the customer satisfaction,

since the customer satisfaction have a mediating effect on the customer’s trust on

banks. Trust is one of the most important factors that increase cross-selling in banks

and HSBC agrees with the high competition in the banking industry, managers must

deliver high quality services and must show trust towards their promises to achieve

customer’s trust to avoid multi-brand loyalty.

6) Research found that even the satisfied customers get annoyed by the frequent product

offerings by banks. Customers are always cautious about the cold telesales and HSBC

bank should either stop or reduce telesales and focus on face to face offers by building

relationship. Bank can make use of these face to face conversations to understand the

best offering methods.

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In short, all the factors that were examined to find the association with customer retention

and cross-buying are significant and banks must facilitate the important factors such as

face to face conversations, high quality services and appropriate product offers to achieve

satisfaction and trust, which will reduce customer’s multi-brand loyalty.

5.3 LIMITATIONS OF THE STUDY

1) The number of participants in this study is inadequate and their views and opinions are

not ample to consider as the view of a community.

2) The researcher could not include the sections for finding out the significance of image

conflicts and direct mailings in creating cross-buying intentions on customers, in order

to limit the research to the allowed word count. There should be some more questions

to be added in the questionnaire to identify the relationship between the different

factors that influence customer retention and cross-buying.

3) The methods used to gather data from the bank affected the quality of the information.

Research did not gather any of the information from the HSBC bank in UK. The

responses from the bank in UAE did not reveal whether their strategies are crafted in

the corporate level or national level. Research considered HSBC bank as an

international bank and generalised the information received from the HSBC bank in

Dubai.

4) There was no preliminary test for the questionnaires to check the consistency of

questions.

5) The usage of self-selection sample would have generated biased responses for the

research.

6) Researcher did not properly utilize the opportunity to check whether HSBC bank

considered the perception of ‘malayalee community’ for crafting cross-selling

strategies, instead researcher considered ‘malayalee community’ as a part of Indian

expatriates.

7) The word limit of the research restricted the author to include some of the important

portions into the appendix, which affected the qualityof the research.

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5.4 FUTURE RESEARCH DIRECTION

This research clarifies the aspects related to customer retention and cross buying. Further

research can be done in other industries to investigate on customer retention and cross buying.

The same approaches can be tested on other ethnic community expatriates and can perform

comparison with this study.

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APPENDICES

APPENDIX ONE

Questionnaire 1, forwarded to banking customers in Birmingham and Dubai

Covering Letter

Dear Participant,

My name is Lijo Varghese Chirackal Manavalan. I am a student at Birmingham City University doing MBA-International Business (Master of Business Administration).

I am conducting a research for my dissertation entitled “Customer perception towards cross-buying bank’s products”. I would like to present this questionnaire to gather data for understanding the view of customers and is purely for academic purpose. Your point of view will remain confidential and you have the right to withdraw this information at any time.

I would appreciate your participation in this study; it will take approximately 5-7 minutes to complete the questionnaire.

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Section A: Background Information (Demographics)

1) Please specify your Gender:Male Female

2) Employment status :Full-Time EmployedPart-Time EmployedRetiredUnemployedStudent

3) Which country, do you live in?UK(Birmingham)UAE(Dubai)

Section B: Experience with Banks

4) How many banks, do you currently use?OneTwo ThreeFour or more

5) Which of the following products do you have from your main bank? Please rank these in which you received first.Bank account Credit cardsMortgagesLoansInsurance

6) How did your bank offer these products? Face to faceTelephoneE-mailPost

7) I am more likely to accept a new product/service sold --------. Please specify.Face to faceBy telephoneThrough E-mailBy Post

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8) How long you have been banking with the current bank?Less than 6 months7-12 months1-3 years4 or more years

Section C: Customer’s Perception

9) My bank’s reputation and expertise create interest to continue with the bank.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

10)My bank’s convenient location enabled me to visit the bank frequently and receive services.AgreeTend to agreeNeither agree nor disagreeTend to disagreeDisagree

11)I am more likely to accept products offered by bank employees from my own country.

Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

12)The quality of service delivered to me by my bank creates interest for continuing with the bank.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

13)Overall, I am satisfied with my bank and I expect to use this bank in future.Agree Tend to agree

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Neither agree nor disagreeTend to disagree Disagree

14)I consider the product’s quality and features before buying more products from my bank.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

15)Sourcing different products/services from different banks gets you the best deals.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

16)It annoys me when my main bank keeps contacting me about extra products and services.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

17)My bank’s reputation and expertise create interest in buying more products from the bank.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

18)My main bank offers me a good deal to take other products and services from it.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

19)I find it more convenient to buy multiple products from the same bank. Agree

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Tend to agreeNeither agree nor disagreeTend to disagree Disagree

20)I consider bank as the best place to buy insurance.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

21)I consider, it is better to buy products from the present bank because of problems in changing banks.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

22)I fear my main bank will charge me higher prices if I get all my products and services from it.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

23)I don’t trust my main bank enough to buy all products and services from it.Agree Tend to agreeNeither agree nor disagreeTend to disagree Disagree

Note: If you would like to receive the results of this survey, please fill in the following details.

Name:

E-mail:

Address:

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Commentary about the relation of Questions with the Objectives and Previous

studies

Research Objectives






4) To analyse whether HSBC bank make use of the ‘perception of Indian Expatriates on

bank’s activities’, for retaining them and for cross-selling their products.

This questionnaire is developed to achieve the objectives ONE and TWO of this research. The

questions 5 to 13 facilitate to successfully accomplish objective ONE. In order to realize the

objective TWO, questionnaire included questions 5 to 8 and 14 to 23.

Question 4:How many banks, do you currently use?

One

Two

Three

Four or more

Question 5:Which of the following products do you have from your main bank? Please rank

these in which you received first.

Bank account

Credit cards

Mortgages

Loans

Insurance

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Question 6:How did your bank offer these products?

Face to face

Telephone

E-mail

Post

Question 8:How long you have been banking with the current bank?

Less than 6 months

7-12 months

1-3 years

4 or more years

A significant research was done in New Zealand and the same questions were used by

Sajtos&Kreis(2010) to understand, how many banks the customers were doing business with

(Question 4), what kind of methods banks mainly using for offering products (Question 5) and the

degree of customer loyalty (Question 8).The details for the creation of Question 6 is collected

from the websites of NatWest and HSBC banks (NatWest Personal Banking, HSBC Personal).

Question 7:I am more likely to accept a new product/service sold --------. Please specify.

Face to face

By telephone

Through E-mail

By Post

Liu& Wu(2007) investigate that effect of direct mailings on cross-buying intentions and states that

the communication between bank and customer increases with direct mailings. Eugenia& Lin

(2005) tried to understand the best personalization practices to facilitate banking services to

customers.

Question 9:My bank’s reputation and expertise create interest to continue with the bank.

Agree

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Tend to agree


Tend to disagree

Disagree

Question 10:My bank’s convenient location enabled me to visit the bank frequently and

receive services.

Agree

Tend to agree


Tend to disagree

Disagree

Liu& Wu(2007) researched the relationship of location convenience, firm reputation and firm

expertise with customer retention and confirmed that there is a direct relationship between them.

Question 11:I am more likely to accept products offered by bank employees from my own

country.

Agree

Tend to agree


Tend to disagree

Disagree

Herjanto&Gaur( 2011) disclose that customers also consider the cultural similarity of the banks

and the sales person for maintaining the relationship. The similarity of the bank personal in

appearance, language, religion and the social and economic class with the customers make them

more relaxed to amplify the level and number of interaction, which ultimately direct to customer

satisfaction.

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Question 12:The quality of service delivered to me by my bank creates interest for continuing

with the bank.

Agree

Tend to agree


Tend to disagree

Disagree

Question 13:Overall, I am satisfied with my bank and I expect to use this bank in future.

Agree

Tend to agree


Tend to disagree

Disagree

Ngobo(2004) studied the relationship of service quality and satisfaction with the repurchase

intentions.Liu& Wu (2007) also states that there is a positive relation between satisfaction and

customer retention.

Question 14:I consider the product’s quality and features before buying more products from

my bank.

Agree

Tend to agree


Tend to disagree

Disagree

Customers will purchase new innovative as well as existing products according to the convenience

in purchase, reliability of the product, flexibility, security and easiness of usage (Marfo-Yiadom,

2012).

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Customers are expected to know about the product quality, features and availability (Petruzzellis,

2011).Petruzzellis (2011) examined that ‘Physical / Technical (product and bank) attributes

directly affect customer choice, and consequently the relationship’.

Question 17:My bank’s reputation and expertise create interest in buying more products from

the bank.

Agree

Tend to agree


Tend to disagree

Disagree

Question 19:I find it more convenient to buy multiple products from the same bank.

Agree

Tend to agree


Tend to disagree

Disagree

Question 23: I don’t trust my main bank enough to buy all products and services from it.

Agree

Tend to agree


Tend to disagree

Disagree

Ngobo(2004) revealed the positive relationship of perceived convenience on cross-buying

intentions.

Liu& Wu(2007) also states that there is a positive relation between firm’s reputation, firm’s

expertise and one-stop shopping convenience with the cross-buying intentions.Liu& Wu(2007)

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also reveal that the trust has direct effect on cross-buying intentions.Soureli& Lewis(2008) tested

the positive effect of Trust on the cross-buying intentions of banking customers.

Question 20:I consider bank as the best place to buy insurance.

Agree

Tend to agree


Tend to disagree

Disagree

Question 21:I consider, it is better to buy products from the present bank because of problems

in changing banks.

Agree

Tend to agree


Tend to disagree

Disagree

Ngobo(2004) says about the impact of perceived switching cost and Image conflicts on the cross-

buying intentions. Author found that cross-buying is positively influenced by switching costs and

the image conflicts have a negative association with cross-buying intentions.

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APPENDIX TWO

Questionnaire 2, forwarded to HSBC bank in Dubai

1) How does the bank decide what extra product or services to offer to the customers?

2) How frequently does bank offer extra products or services?

3) How does the bank contact customers for offering these services?

4) How does the bank consider the ‘perception of customers’ for crafting cross-selling

strategies?

5) What are the other factors that bank judges as important for developing cross-selling

strategies?

6) How does the bank segment the customer group?

7) How does the bank use segmentation information for offering products?

8) How does the bank build relationship with customers?

9) What is the role of products and services in building relationship with customers?

10)How does the bank provide products and services to the ‘Indian Expatriates’?

Commentary about the relation of Questions with the Objectives and Previous studies

Research Objectives



4) To analyse whether HSBC bank make use of the ‘perception of Indian Expatriates on bank’s activities’, for retaining them and for cross-selling their products.

Questions 1 to 3 and 5 to 9 were developed to analyse the factors to achieve the objective three and Questions 4 and 10 were developed to

Question 1:How does the bank decide what extra product or services to offer to the

customers?

Question 2:How frequently does bank offer extra products or services?

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Banks have to consider the customers awareness and interests on the products, at the same

time offer the profitable products. Marfo-Yiadom(2012) studied the perception of users on the

innovative financial products. Banks can make use of this type of studies. Liang(2008) says

the perception of customers influence the financial performance of the banks. So it can be an

option for them to craft bank’s strategies.

Question3: How does the bank contact customers for offering these services?

Eugenia & Lin(2005) tried to understand the good personalization practices for banks with

their customers

Question 4:How does the bank consider the ‘perception of customers’ for crafting cross-

selling strategies?

Ngobo(2004) says banks should consider the perceptions of customers towards their products,

while offering multiple products. Kumar et al(2008) found the perception of customers

towards bank and its products have a positive association with cross-selling. Liang (2008)

reveals that the perception of customers influences the financial performance of the banks.

Question 6:How does the bank segment the customer group?

Based on other studies Konstantinoset al., (2004), it is very clear that the aspects such as

customer’s income, education, life cycle; age and gender have impact of customer’s desire of

buying multiple products from financial firms. The segmentation can be done by banks

according to these demographic features.

Question 7:How does the bank use segmentation information for offering products?

Cameron, Cornish& Nelson(2006) suggest that segmentation has to be done individually and

in the house hold level but the performance of the segmentation will be reduced without key

data of the customers. Meadows&Dibb(1998) disclose the claim of many banks that they used

segmentation as a means for discriminating profitable and non-profitable customers

Question 10:How does the bank provide products and services to the ‘Indian Expatriates’?

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Chaudhry& Crick(2004) disclose HSBC banks marketing strategy towards the ethnic Asian

groups. HSBC bank had given the priority to fulfill the needs of Indian and Chinese

communities and the strategy was to target on sub-cultures in those countries. HSBC bank

tried to keep personalized relationship with the customers.

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