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The following chapter on Methodology will describe different research methods used in this study and explain the chosen methods. It will further describe the research purpose, research approach, research strategy and data collection methods and analysis approach. Furthermore, this chapter describes the chosen sampling technique, the way the data for the study has been collected and techniques used to analyze the data.

3.1 Purpose of Research

Different techniques can be used to carry out the research based on research problem area. When dealing with research problem, one can use any of the three classification of research (Yin, 1994).

Exploratory research Explanatory research Descriptive research

3.1.1 Exploratory Research

Exploratory research is often conducted when problem is not well known or it has not been clearly defined as yet, or its real scope is as yet unclear. It allows the researcher to gather the information as much as possible concerning a specific problem. Exploratory research helps determine the best research design, data collection method and selection of subjects, and sometimes it even concludes that the problem does not exist. Exploratory research is quite informal, when it relying on secondary research such as reviewing available literature, data, or qualitative approaches such as informal discussions with consumers, employees, management or competitors, and more formal approaches through in-depth interviews, focus groups, projective methods, case studies or pilot studies (Yin,


3.1.2 Explanatory Research

This is a research type in which the primary goal is to understand the nature or mechanisms of the relationship between the independent and dependent variable. This approach is used when its necessary to show that one variable causes or determines the value of other variable. This research is good to use when there is no clear apprehension about what model that should be used and what qualities and relations that is important (Zikmund, 1994).

3.1.3 Descriptive Research

Descriptive research is used to obtain information concerning the current status of the phenomena to describe "what exists" with respect to variables or conditions in a situation. Descriptive research is used when the objective is to provide a systematic description that is as factual and accurate as possible or when the problem is well structured and there is no intention to investigate cause/effect relation. It provides the number of times something occurs, or frequency, lends itself to statistical calculations such as determining the average number of occurrences or central tendencies (Yin, 1994). One of its major limitations is that it cannot help determine what causes a specific behavior, motivation or occurrence. In other words, it cannot establish a causal research relationship between variables.

3.1.4 Research strategy

There are five key research strategies, in the social sciences; experiments, surveys, archival analysis, histories and case studies Yin (1994). Each strategy has its own advantages and disadvantages depending on three conditions: The nature of research question. The degree of control and researcher has over actual behavioral actions. The extent of focus on contemporary, as opposed to chronological, events.

According to Yin (1994) a case study is a comprehensive description and analysis of a single situation. In case studies the aim of the research is to seek conformity between the results and the

theory. This means that the theory helps to identify other similar events to the result that can only be generalized after further studies. A researcher can choose to conduct research on a single case or to conduct multiple case studies. The single case study is appropriate when the single case represent (1) an extreme or unique case, (2) a critical case meeting all the conditions for testing a formulated theory, or (3) a revelatory case when the researcher has the opportunity to observe and analyze a phenomenon previously inaccessible to scientific investigation (Ibid). Wiedersheim-Paul and Eriksson (1999), note that the possibilities of comparisons between the cases are added in a multiple case study. Miles and Huberman (1994) continue by explaining how the multiple-cases make it possible to specify how, where, and sometimes also, why a certain phenomena has a specific behavior. They conclude that multiple-case sampling also adds to the validity, precision and the stability of the findings. In order to address the research questions of this study, two case studies will be conducted. By conducting case studies the results can be compared and the study seen as more convincing. This enables us to compare the results from each case in a cross-case analysis. Using a multiple-case study it can also make my findings more strong and possible make it easier to notice possible similarities and/or differences. How the case study is preceded? is presented in the next section. Particularly in this study researchers have adopted only survey and case studies strategies, in order to find out the electronic marketing impact on the banking sector of Pakistan with respect to customer acceptance, online environment and online services.

Purpose of this research

Study is exploratory, explanatory as well as descriptive in nature and it aims at discovering nature of problems in functions of management and variables related with it. The study is based on both primary and secondary data, supplemented by information secured through informal interviews, and the talk and walk around target population. The key intention of this research thesis is to evaluate those factors that manipulate the nature of customers towards online banking and their impact towards the online financial institutions. Therefore main objective of the study is to find out:

To find out the descriptive statistics for related variables of online banking acceptance. To see the correlation among variables and its impact on customer acceptance of online banking.

How online banking environment can be described? How online banking services can be described?

3.2 The population:

The population of this research can be defined as:

Element: Sampling unit: Extent:

All individuals related to online banking use. Individual online banking user. Provincial capitals and the capital of Pakistan (Lahore, Karachi, Peshawar, Quetta and Islamabad).



3.3 Sample Selection:

Initially in quantitative research, while in survey research effort "Convenience Sampling" has been used. This method is used to make research procedure faster by obtaining a large number of accomplished questionnaires rapidly and efficiently. The platform which helped us to choose the banking sector is the website of State bank of Pakistan and the respective websites of banks. These websites provide all essential information of the online banking.

Secondly In qualitative part, researchers have used multiple cases sampling, because multiple case could add confidence to findings. By looking at the range of similar contrasting cases, one can understand the case findings, grounding it by specifying how and where and, possibly, why it carries on as it does (yin, 1994). Keeping in mind the research questions authors chose websites of different banks working in Pakistan (Online commercial bank). These banks are providing the Internet banking services . Table 3.1: Distribution of Sample Respondents

Serial No. 1 2. 3.








Students Business man General Public Total

25 25 50 100 Source:

30 30 65 125

10 10 30 50

10 10 30 50

35 35 80 150

110 110 255 475

Field Survey 2009

3.4 Data Collection and using Instruments

Management science research studies have used above mentioned mail, interview and telephone etc. survey methods of information gathering. We followed the similar approach. Due to the lack of time and inadequate budget, we primarily used mail survey for data gathering. Through this method we collected a good number of responses from the students of different fields, but few problems condensed the response rate efficacy. Therefore the data collection was slow. To deal with this confront, one to one interviewing method was started, as a result response rate was getting faster with high quality, but there were other problems as well, like time consumption and traveling. For eliminating too much traveling, telephonic interviewing method was used. This technique was reasonably more fruitful. For the survey, questionnaires designed supporting the literature and considering five-point Likert scale, 5 for strongly agree, 4 for agree, 3 for neutral, 2 for disagree and 1 for strongly disagree. Many a time, it happened that the customers/ students were not clear about the terminologies used in the questionnaire but this matter was solved through detailed explanation and by one to one discussion.

Within the scope of the research, authors will use email, voice chat via internet, and observation (interaction with website) as sources of data collection. They will also use documentation as a mean to supplement evidence from other sources. For example, such data are available mainly in form of the bank information material (annual reports, articles, brochures, online information presentation, etc.), and this documentation will provide us with an overall view of the present

situation of the banks.

Secondly in case study approach, the goal of analyzing data is to handle the evidence fairly, to produce convincing logical conclusion and to rule out alternative interpretations. Data analysis involves turning a series of recorded observations into descriptive statements (Yin, 1994). Before the data actually can be analyzed, the researcher carries out a case study, can choose between two general analytical strategies, relying on theoretical propositions or developing a case description.

Our data analysis will be based on three steps. We will use the within-case analysis and the crosscase analysis stated by (Miles & Huberman, 1994). The data will first be reduced through a within-case analysis where the cases will be compared with the frame of reference. The data will then be further reduced by being displayed through a cross-case analysis where the cases will be compared with one another.

3.5 The Research Models 3.5.1 The Research Model for online banking acceptance:
This Customer Acceptance research model is developed on the basis of previous research studies and variables included are, perceived usefulness, perceived ease of use, perceived enjoyment, the amount of information, security and privacy, internet connection. Equation tested is following: Equation: y = + 1 (x1 + 2(x2) + 3 (x3) + 4 (x4) + 5 (x5) + 6 (x6) + CA = + 1 (U) + 2(EU) + 3(E) + 4(IO) + beta;5(SP)) + beta;6(QI) + Where as : 1. 2. 3. X1 = U = Usefulness X2 = EU = Ease of Use X3 = E = Enjoyment

4. 5. 6.

X4 = IO = Information of online banking X5 = SP = Security and Privacy X6 = QI = Quality of Internet


H1. Perceived usefulness (PU) has a positive effect on consumer acceptance of online banking (Davis et al., 1989; Pikkarrainen, T et al, 2004).

H2. Perceived ease of use (PEOU) has a positive effect on consumer acceptance of online banking (Davis et al., 1989; Pikkarrainen T et al, 2004).

H3. Perceived enjoyment (PE) has a positive effect on consumer acceptance of online banking (Davis et al., 1992; Igbaria, M., et al., 1995; Teo et al., 2000; Pikkarrainen T et al, 2004).

H4. The amount of information a consumer has about online banking has a positive effect on consumer acceptance of online banking (Sathye, 1999; Pikkarrainen T et al, 2004).

H5. Security and privacy have a positive effect on consumer acceptance of online banking (Charles et al, 1998; Sathye, 1999; Hamlet et al, 2000; Tan et al, 2002; Black et al., 2002; Giglio, V., 2002; Howcroft, B,. et al., 2002; Pikkarrainen T et al, 2004).

H6. The quality of the Internet connection has a positive effect on consumer acceptance of online banking (Sathye, 1999; Pikkarainen T et al, 2004).

3.5.2 Online banking environment:

In the previous section, we have studied the online environment (website), including the design, models, development and strategies. We found that there were quite many items overlapped. In order to find out how web site designs in Internet banking should be, I think that model of Jayawardhena & Foley (2000) is the suitable one as it is specifically related to internet banking industry.

Speed to download
Simple graphics Animation and/or multimedia plug-in

Content and Design

Product information content Amount of product information Product information format Language alternatives Layout features

Technical banking facilities: Loan calculators, exchange rate converters, mortgage calculator etc

Homepage hyperlinks Links Consistent navigation. Search engine in the site. Site maps/guides

Encryption Purchase /operation confirmation Automatically log off


Online banking services:

Web-based customer service level and nature of customer participation, they should be integrated with website design to be intact and leading to enhance customers services. Cai & Jun (2003) discussed service quality in online retailing. Joseph, McClure & Joseph (1999) investigated the influence of technology such as ATM, telephone and Internet, on the delivery of banking services. Their study acknowledged six dimensions of electronic banking customer service. In order to find out how websites could be used for enhancing customer service in Internet banking, the theories of Cai & Jun (2003), as well as from Joseph, McClure & Joseph (1999) are deemed appropriate for this study, as they are both more recent.

Trustworthiness (Cai & Jun, 2003)

Security Trust/risk Privacy

Communication (Cai & Jun, 2003)

Communication tools Frequently asked questions Information updated Information understandable

Convenience/accuracy (Joseph, McClure & Joseph, 1999)

Convenient Accurate Easy to use

Feedback/complaint management (Joseph, McClure & Joseph, 1999)

Feedback service Friendly environment Complaint management

Efficiency (Cai & Jun, 2003)

Menu options Demo Exchange rate conversion Calculators

Accessibility (Joseph, McClure & Joseph, 1999)

Connectivity Special service for disables Language options

Customization (Joseph, McClure & Joseph, 1999)

Personalized service