Okan Veli afakli (Turkey)
A research on the basic motivational factors in consumer bank selection: evidence from Northern Cyprus Abstract
Commercial banks need to identify the criteria on which potential customers determine their bank selection decision in order to plan an appropriate marketing strategy for keeping present customers and attracting new ones. The study focuses on examining bank selection criteria employed by customers residing in various cities of Northern Cyprus. The findings reveal that the chief factors determining customers’ bank selection are: “Service Quality and Efficiency”, “Bank Image”, “Convenient Location”, “Parking facilities”, “Financial factors” and “Affected opinion”. The findings also show that it may be necessary to deal with different demographic characteristics of respondents as distinctive segments with different priorities in their bank selection process. Keywords: Northern Cyprus, bank selection, motivational factors. JEL Classification: G21.
Introduction Considerable amount of studies related to the factors effective in consumer bank selection is observed (Anderson et al., 1976; Evans, 1979; Kaynak and Yavas, 1985; Ross, 1989; Kazeh and Decker, 1993; Hegazi, 1995; Metawa and Almossawi, 1998). This information is essential for banks to identify the appropriate marketing strategies needed to attract new customers and retain existing ones (Kaynak and Kucukemiroglu, 1992). With growing competitiveness in the banking industry (Grady and Spencer, 1990), and similarity of services offered by banks (Holstius and Kaynak, 1995), it has become increasingly important that banks identify the factors that determine the basis upon which customers choose between providers of financial services. In this regard, the basic aim of the study is to research the basic motivational factors in consumer bank selection in Northern Cyprus. 1. Literature review The issue of bank selection criteria for broad categories of customers has been extensively researched (Yue and Tom, 1995). These studies usually put forward similar factors but more importantly ranking importance of these factors varies among the studies. In this respect, the most influential factors designated in the relevant researches will be refereed. According to literature on the subject, the ranking importance of bank selection factors unique to each study can be listed in descending order as “convenient location to home or place of business, length of bank-customers relationships and quality of services offered by the bank” (Kaufman, 1967); “convenient location, friendly personnel, favorable loan experience; advice of friends; and influence of relatives” (Mason and Mayer, 1974); “full service bank, customer orientation, a pleasant banking experience, convenience of time, shopping accessibility, and personal influence” (Fitts, 1975); “fast and
efficient services, speed of transactions, friendliness of bank personnel, and confidentiality of bank” (Riggall, 1980); “reception at the bank, fast and efficient services, lower service charges, friendliness of personnel, and perceived confidentiality” (Holstius and Kaynak, 1995); “efficiency of services offered, bank’s reputation, bank fees, convenient location, and interest rates on saving accounts and loans” (Yue and Tom, 1995); “location convenience and quality of service detailed as attention to customers, personalized service and no queues” (Mylonakis et al., 1998); “technology and speed” (Coyle, 1999); “convenience, price, product selection, service and ambience” (Driscoll, 1999); “convenient ATM locations, availability of ATM in several locations, bank’s reputation, 24-hours availability of ATM services and available parking space nearby” (Almossawi, 2001); “competitive prices, long-term business relationship and efficiency in day-to-day operations” (Jones et al., 2002); “convenience to home and work” (Bowers, 1969); “societal factors,...