CHAPTER-3 RESEARCH METHODOLOGY This chapter gives the Research Methodology

followed in the study. It shows the significance of the study, objectives of the study,
research design of the study, description, hypothesis and limitations of the study. 3.1
FOCUS OF THE STUDY The resent years have witnessed significant developments in
international banking. Competition, disintermediation, new services and unique
promotion schemes are some of the emerging features of changing international
banking scenario. The globalization of financial markets has been further accelerated by
the development of technology particularly in the field of information technology and
electronic banking system. Now the customers are also more informed and learned to
choose a better bank for themselves. Again, on the managerial side, the Narasimham
Committee has made a strong plea for full autonomy of the commercial banks in India
with RBI as supervising and controlling authority. So, the major problem before the
commercial banks is their long-run survival and forging way ahead by retaining their
valued customers. 3.2 SIGNIFICANCE OF THE STUDY With the entry of new generation
tech-savvy private banks and expansion of operations of foreign banks, the banking
sector has become too competitive. The ‘one for all’ and ‘all for one’ syndrome is being
a go-by. To deal with the emerging situations, bankers have to shed a lot of old ideas,
change their practices, develop customer loyalty programmes, and adopt a distinct
approach to meet the challenges ahead. It is desirable for banks to develop a customer-
centric approach for future survival and growth. The awareness has already drawn that
prompt, efficient and speedy customer service alone will tempt the existing customers
to continue and induce new customers to try the services offered by a bank. In the light
of the research findings, interest in service quality is, thus, unarguably high. Poor quality
places a bank at a competitive disadvantage. If customers perceive quality as
unsatisfactory, they may be quick to take their Research Methodology 129 businesses
else where. Thus, it is clear that service quality offers a way of achieving success among
other competing services. Bank employee’s commitment and concern for customers
needs can make or mar the growth of the bank. This is where the bankers have an
important role to play. It is necessary that the customers should be made educated on
new services introduced by the banks. 3.3 OBJECTIVES OF THE STUDY The present study
mainly focuses on the Marketing of Financial Services. So the main objectives are:  To
identify various financial services provided by the two private sector banks viz. ICICI
Bank and HDFC Bank.  To determine the customers’ awareness level and opinion about
new financial services.  To examine the satisfaction level of customers’ regarding
quality and price of financial services provided by the banks.  To identify the problems
faced by the banks.  To find out the significance of difference between the
expectations and experiences of customers about financial services of the banks
selected for the study. 3.4 RESEARCH METHODOLOGY Research methodology comprises
defining and redefining problems, formulating hypothesis or suggested solutions;
collecting, organizing and evaluating data, making deductions and reaching conclusions;
and at last carefully testing the conclusions to determine whether they fir the
formulating hypothesis. A useful research methodology must be systematic, logical,
empirical and replicable. The researcher should follow certain systematic methods,
steps and stipulation in designing, planning and execution of the research. Research
Methodology 130 3.4.1 RESEARCH DESIGN A research design is simply the frame work or
plan for a study that is used as guide in collecting and analyzing the data. It is a blue
print used for completing a study. PILOT STUDY A pilot study can refer to many types of
experiments but generally the goal of the study is to replicate the full scale experiment
but only on a smaller scale. A pilot study is often used to test the design of the full scale
experiment. The design can then be adjusted in time. This can turn out to be valuable
should anything be missing in the experiment and chances are that the full-scale
experiment will not have to be re-done. So, a sample of 20 respondents was taken for
each questionnaire on the basis of convenience sampling from the different groups. On
the basis of the answers given and time taken by the respondents, the questionnaires
were redesigned and finalised. DATA COLLECTION The study is based on primary as well
as secondary data. SOURCES OF DATA COLLECTION  Primary data has been collected
through well structured comprehensive questionnaires. The questions were designed
keeping in view of the objectives of the study. Two sets of questionnaires were
developed, one for the bank customers and one for the bank execution. In some cases,
the researcher also had personal discussion with the respondents with the objectives of
soliciting additional information and using this information to supplement the
information collected through questionnaires. The final sets of questionnaires along
with covering letter were then mailed to a total of 1000 bank customers and 60 bank
employees selected via convenient sampling technique from Sonipat and Rohtak
Districts of Haryana state. Following procedure was adopted to collect data from the
targeted respondents. 1. Procedure to collect data from bank customers: in case of bank
customers, 500 customers of each bank, namely ICICI bank and HDFC bank were
approached. To make sample truly representative, customers belonging to different
demographic groups like gender, age, education, occupation and income level,
background were Research Methodology 131 contacted. The numbers of usable
questionnaires collected are shown in the table 3.1. Table 3.1 Bank Customers’ Survey
Response Name of Bank Total Questionnaires Sent Total no. of filled questionnaires
received ICICI 500 414 HDFC 500 334 Total 1000 748 It is evident from the table 3.1 that
out of total 500 questionnaires administered to each bank, namely, ICICI and HDFC
Bank, 414 and 334 usable responses were received respectively. In all, 748 filled
questionnaires were collected. Table 3.2 Customer Profile by Type of Banks Parameters
ICICI HDFC Total F %age F %age F %age Gender Male 316 76.33 256 76.65 572 76.47
Female 98 23.67 78 23.35 176 23.53 Age Less than 25 110 26.57 104 31.14 214 28.61
25-35 Years 174 42.03 72 21.56 246 32.89 35-60 Years 75 18.12 98 29.34 173 23.13 60 &
above 55 13.29 60 17.96 115 15.37 Background Urban 309 74.64 252 75.45 561 75 Rural
105 25.36 82 24.55 187 25 Education Up to HSC 15 03.62 21 6.29 36 4.82 Professional
85 20.53 43 12.87 128 17.11 Graduate 116 28.02 134 40.12 250 33.42 Post-graduate
198 47.83 136 40.72 334 44.65 Research Methodology 132 Occupation Business 75
18.12 58 17.37 133 17.78 Service men 166 40.10 132 39.52 298 39.84 Professional 54
13.04 26 7.78 80 10.70 Student 95 22.94 79 23.65 174 23.26 Retired 24 5.80 39 11.68 63
8.42 Income Less than ` 2 Ls 252 60.87 175 52.40 427 57.09 Between ` 2 to 5 Ls 133
32.13 100 29.94 233 31.15 More than ` 5 Lacs 29 7.00 59 17.66 88 11.76 Research
Methodology 133 SAMPLE DESCRIPTION: Various demographic factors have been
analyzed. A detailed description of the sample is as follows: DESCRIPTION OF ICICI BANK
RESPONDENTS Gender-wise Distribution Table 3.3 Distribution of ICICI Bank
Respondents according to their Gender Parameter ICICI Bank F %age Gender Male 316
76.33 Female 98 23.67 Total 414 100 Fig. 3.1 Gender-wise Distribution of ICICI Bank
Respondents Gender-wise Distribution Female 24% Male 76% The table 3.3 & figure 3.1
shows that 76.33% respondents were male and the remaining 23.67% were female.
Research Methodology 134 Age-wise Distribution Table 3.4 Distribution of ICICI Bank
Respondents according to their Age Age F %age Less than 25 110 26.57 25-35 Years 174
42.03 35-60 Years 75 18.11 60 & above 55 13.29 Total 414 100 Fig. 3.2 Age-wise
Distribution of ICICI Bank Respondents Age-wise Distribution Less than 25 27% 25-35
Years 42% 35-60 Years 18% 60 & above 13% The table 3.4 & figure 3.2 shows that
26.57% respondents were in the age group of less than 25 years. 42.03% respondents
were in the age group of 25-35 years, 18.11% respondents in the age group of 35-60
years and 13.29% respondents in the age group of 60 & above. Research Methodology
135 Residential Status -wise Distribution Table 3.5 Distribution of ICICI Bank
Respondents according to their Residential Status Residential Status F %age Urban 309
74.64 Rural 105 25.36 Total 414 100 Fig. 3.3 Residential Status - wise Distribution of ICICI
Bank Respondents Background-wise Distribution Urban 75% Rural 25% Table 3.5 and
figure 3.3 shows that 74.64% of total respondents were from urban area and rest
25.36% are from rural background. Research Methodology 136 Education-wise
Distribution Table 3.6 Distribution of ICICI Bank Respondents according to their
Education Education F %age Up to HSC 15 03.62 Professional 85 20.53 Graduate 116
28.02 Post-graduate 198 47.83 Total 414 100 Fig. 3.4 Education-wise Distribution of
Respondents Education-wise Distribution Up to HSC 4% Professional 21% Graduate 28%
Postgraduate 47% Table 3.6 and figure 3.4 shows that out of 414 respondents 3.62%
were up to HSC, 20.53% were professional, 28.02% were graduate and 47.83% were
postgraduates. Research Methodology 137 Occupation-wise Distribution Table 3.7
Distribution of ICICI Bank Respondents according to their Occupation Occupation F %age
Business 75 18.12 Service men 166 40.10 Professional 54 13.04 Student 95 22.94 Retired
24 5.80 Total 414 100 Fig. 3.5 Occupation-wise Distribution of ICICI Bank Respondents
Occupation-wise Distribution Business 18% Service men 40% Professional 13% Student
23% Retired 6% From the table 3.7 and figure 3.5 it is clear that 18.12% respondents
were doing their own business, 40.10% were service men and 13.04% belonged to
professional category. 22.94% of the respondents were students and only 5.8% were
retired. It can be concluded that majority of the respondents belonged to service class.
Research Methodology 138 Income-wise Distribution Table 3.8 Distribution of ICICI Bank
Respondents according to their Income Income (Annual) F %age Less than ` 2 Lacs 252
60.87 Between ` 2 to 5 Lacs 133 32.13 More than ` 5 Lacs 29 7.00 Total 414 100 Fig. 3.6
Income-wise Distribution of ICICI Bank Respondents Income-wise Distribution Less than
` 2 Lacs 61% More than ` 5 Lacs 7% Between ` 2 to 5 Lacs 32% Table 3.8 and figure 3.6
shows 60.87% respondents had annual income less than ` 2 Lacs per annuam, 32.13%
respondents had income between ` 2-5 lacs and 7% had annual income of ` 5 lacs or
above. So majority of the respondents had less than ` 2 lacs income. Research
Methodology 139 DESCRIPTION OF HDFC BANK RESPONDENTS Gender-wise Distribution
Table 3.9 Distribution of HDFC Bank Respondents according to their Gender Parameter
HDFC Bank F %age Gender Male 256 76.65 Female 78 23.35 Total 334 100 Fig. 3.7
Gender-wise Distribution of HDFC Bank Respondents Gender-wise Distribution Female
23% Male 77% From the table 3.9 and figure 3.7 it is clear that 76.65% respondents
were male and the remaining 23.35% were female. Research Methodology 140 Age-
wise Distribution Table 3.10 Distribution of HDFC Bank Respondents according to their
Age Age F %age Less than 25 104 31.14 25-35 Years 72 21.56 35-60 Years 98 29.34 60 &
above 60 17.96 Total 334 100 Fig. 3.8 Age-wise Distribution of HDFC Bank Respondents
Age-wise Distribution Less than 25 31% 25-35 Years 22% 35-60 Years 29% 60 & above
18% From the table 3.10 and figure 3.8 it is clear that 31.14% respondents were in the
age group of less than 25 years. 21.56% respondents were in the age group of 25- 35
years, 29.34% respondents in the age group of 35-60 years and 17.96% respondents in
the age group of 60 & above. Research Methodology 141 Residential Status -wise
Distribution Table 3.11 Distribution of HDFC Bank Respondents according to their
Residential Status Residential Status F %age Urban 252 75.45 Rural 82 24.55 Total 334
100 Fig. 3.9 Residential Status -wise Distribution of HDFC Bank Respondents
Background-wise Distribution Urban 75% Rural 25% Table 3.11 and figure 3.9 shows that
75.45% of total respondents were from urban background and rest 24.55% were from
rural background. Research Methodology 142 Education-wise Distribution Table 3.12
Distribution of HDFC Bank Respondents according to their Education Education F %age
Up to HSC 21 06.29 Professional 43 12.87 Graduate 134 40.12 Post-graduate 136 40.72
Total 334 100 Fig. 3.10 Education-wise Distribution of HDFC Bank Respondents
Education-wise Distribution Up to HSC 6% Professional 13% Graduate 40% Postgraduate
41% Analysis shows that out of 334 respondents 6.29% were up to HSC, 12.87% were
professional, 40.12% were graduate and 40.72% were post-graduates. So majority of the
respondents were either graduate or postgraduate. Research Methodology 143
Occupation-wise Distribution Table 3.13 Distribution of HDFC Bank Respondents
according to their Occupation Occupation F %age Business 58 17.37 Service men 132
39.52 Professional 26 7.78 Student 79 23.65 Retired 39 11.68 Fig. 3.11 Occupation-wise
Distribution of HDFC Bank Respondents Occupation-wise Distribution Business 17%
Service men 39% Professional 8% Student 24% Retired 12% From the above analysis it is
clear that 18.12% respondents were doing their own business, 40.10% were service men
and 13.04% belonged to professional category. 22.94% of the respondents were
students and only 5.8% were retired. It can be concluded that majority of the
respondents belonged to service class. Research Methodology 144 Income-wise
Distribution Table 3.14 Distribution of HDFC Bank Respondents according to their
Income Income (Annual) F %age Less than ` 2 Lacs 175 52.40 Between ` 2 to 5 Lacs 100
29.94 More than ` 5 Lacs 59 17.66 Total 334 100 Fig. 3.12 Income-wise Distribution of
HDFC Bank Respondents Income-wise Distribution More than ` 5 Lacs 18% Less than ` 2
Lacs 52% Between ` 2 to 5 Lacs 30% Table 3.14 and figure 3.12 shows 52.40%
respondents had annual income less than ` 2 lacs per annuam, 29.94% respondents had
income between ` 2-5 lacs and 17.66% had annual income of ` 5 lacs or above. So
majority of the respondents had less than ` 2 lacs income. Research Methodology 145 2.
Procedure to collect data from bank Employees: in case of bank employees, 30 bank
employees, including branch manager, customer relationship manager and other front
line staff, of each bank, namely, ICICI and HDFC bank were approached. Table
summarizes the usable responses obtained: Table 3.15 Bank Employees’ Survey
Response Name of Bank Total Questionnaires Sent Total no. of filled questionnaires
received ICICI 30 25 HDFC 30 25 Total 60 50 It is evident from the table 3.15 that of total
30 questionnaires each distributed to bank employees, namely, ICICI and HDFC bank, 25
from each bank usable questionnaires were collected.  Secondary Data: Secondary data
is the data which is available in published form and which was collected earlier by
people for some purposes. There may be various sources of secondary data such as-
newspapers, magazines, journals, books, reports, documents and other published
information. 1. Banks annual reports -Banks issues there annual reports to get the
people informed with the profitability and growth of the bank. These annual reports
help a lot to get the latest data and other related information for our research. It tells
about the increase or decrease in profits and other facilities. 2. Manuals and Brochures
of banks – manuals and broachers of banks also help in identifying various financial
services provided by the banks. 3.4.2 SAMPLE DESIGN The sample design of the present
study comprises the following elements:  Sampling element: As it is rather impossible
to examine the whole universe, two commercial banks from private sector, namely, ICICI
and HDFC bank have been choose for the present study. The justification behind the
selection of these banks lies in the fact that these are the dominant and leading private
sector banks, and have vast network all over India and very large customer base.
Research Methodology 146  Services Covered: Though banks provide a large number of
financial services, yet it was not possible to include all those services in the study. So
only seven financial services viz. ATM service, home loan, personal loan, internet
banking, phone banking, credit cards and loan against security were included in this
study.  INTERNET BANKING In India, ICICI Bank was the first bank to introduce online
banking website way back in 1996 followed by HDFC bank and Citibank. But as far as
public sector banks are concerned, they remained laggards in the race for adopting
internet banking services. It was only in 2001, when SBI- India’s largest public sector
bank launched its internet banking services. Facilities, with internet banking provided by
the banks were balance enquiry and statement, transaction history, online transfer of
funds, account-to-card fund transfer, link bank/card/demat accounts, use of debit card
online, pre-paid mobile recharge, pay of utility bills, send a smart money order, open
fixed deposits and recurring deposits, order a demand draft / pay order, subscribe for
mobile banking, request a cheque book, request a change of address, stop payment
request, request a debit card, monthly bank account statement by E-mail,
reissue/upgrade of ATM/Debit Card, link bank accounts to ATM/Debit Card, renewal /
premature closure of FD/RD, request a duplicate physical bank statement secure
mailbox etc.  ATM SERVICE Among these new alternate delivery channels, the most
popular is the ATM. Facilities With ATMs given by banks identified as withdraw cash,
balance enquiry, mini statement, fund transfer between accounts, cheque book request,
value added services, complain format, code of commitment change ATM PIN, credit
card payment, deposit cash or cheques, net banking password request, refill prepaid
mobile, pay utility bills etc.  HOUSING LOAN Home loan is a secured loan offered
against the security of a house/property which is funded by the bank’s loan. The
property could be a personal properly or a commercial one. The home loan is a loan
taken by a borrower from the bank issued Research Methodology 147 against the
properly/security intended to be bought on the part by the borrower giving the banker a
conditional ownership over the property i.e. if the borrower failed to pay back the loan,
the banker can retrieve the lent money by auctioning the property. Today most of the
banks offer home loan to their customers in order to solve the housing problem in the
country and enhance the standard of living. The various features of home loan includes:
home improvement loan, home extension loan, land purchase loan etc.  PERSONAL
LOAN A loan that establishes consumer credit that is granted for personal use based on
the borrower’s integrity and ability to pay. This loan is specifically designed to meet the
unexpected financial requirement of the customers. This means that this loan is not
linked to a particular purchase such as other loans but customer can use it for anything.
 CREDIT CARD A credit card allows consumers to purchase products or services
without cash and to pay for them at a later date. To qualify for this type of credit, the
consumer must open an account with a bank or company, which sponsors a card. They
then receive a line of credit with a specified dollar amount. They can use the card to
make purchases from participating merchants until they reach this credit limit. Every
month the sponsor provides a bill, which tallies the card activity during the previous 30
days. Depending on the terms of the card, the customer may pay interest charges on the
amount that they do not pay for on a monthly basis. Also, credit cards may be
sponsored by large retailers (such as major clothing or department stores) or by banks
or corporations (like VISA or American Express). Credits cards are a relatively recent
development. The VISA Company, for example, traces its history back to 1958 when the
Bank of America began its Bank Americard program. In the mid-1960s, the Bank of
America began to license banks in the United States the rights to issue its special Bank
Americards. In 1977 the name Visa was adopted internationally to cover all these cards.
VISA became the first credit card to be recognized worldwide. Research Methodology
148  PHONE BANKING Phone banking is a telephone banking service that gives
information about the account at any branch, from anywhere, at any time. It allows
making certain requests to the bank regarding particular account. It also provides
information about other products and services of the bank.  LOAN AGAINST
SECURITIES Loan against securities offers a customer instant liquidity. Customer doesn’t
have to sell securities. Bank will then grant customer an overdraft facility up to a value
determined on the basis of the securities pledged by customer. A current account will
be opened and customer can withdraw money as and when they require. Interest will
be charged only on the amount withdrawn and for the time span utilized.  Sampling
Unit: Sampling unit of present study consists of individual bank customers and bank
employees of the banks under consideration.  Area of the study: The present study is
based on the information obtained through a survey process with a geographical focus
on two districts viz. Rohtak and Sonepat in the state of Haryana.  Sample size: Sampling
method adopted is based on convenience sampling 748 respondents were chosen
having different age, education- level, sex, occupation income and background. 3.4.3
DATA ANALYSIS The purpose of analysis was to obtain specific meaning from data
collected. The following steps were taken in the present study in order to meaningfully
analyse the data:  Editing: Data was edited after collection of all filled questionnaires. 
Tabulation: Both simple and cross tabulation were done in the present study. 
Presentation: Bar diagrams, graphs and pie-charts were used to present the facts. 3.4.4
USE OF STATISTICAL TECHNIQUES The hypotheses framed in this respect were tested
statistically for their significance: Chi- square Test probably the most widely used non-
parametric test of significance. Using this technique, we test the significant difference
between the Research Methodology 149 observed distribution of data among
categories and the expected distribution based on null hypothesis. Mathematically, it is
define as: χ 2 = ∑ (O-E) 2 E Where O= Observed Frequency E= Expected Frequency
Degree of Freedom = (C-1) (R-1) Where C refers to columns and R refers to rows. The
test was conducted at 95% confidence level (5% level-of-significance). The calculated
chi-square values were compared with the table value of chisquare at given degree- of-
freedom. If the calculated value of chi-square value worked out to be less than the table
value, the deviation of observed frequency from expected frequency was considered to
be insignificant. Consequently, the null hypothesis was accepted. If the calculated chi-
square value was found to be more than table value, the difference was considered to
be significant and null hypothesis was rejected. Paired T-test has been applied in this
study. The paired T-test has been applied to test the significance of difference of opinion
of the bank customers before availing the service and after availing the service i.e. the
difference between expectations and experiences of the customers about the financial
services provided by the banks. Respondents were asked to respond to the statements
in the SERVQUAL model questionnaire consisted of 22 statements related to the five
dimensions (i.e. tangibles, reliability, responsiveness, assurance and empathy) of service
quality in which the customers of banks responded against their expectations and
perceptions. Question was designed on 7 point numerical scale, where, 1 represents
strongly disagree, 2 for disagree, 3 for somewhat disagree, 4 neutral to the statement, 5
for somewhat agree and 6 for agree and 7 represents strongly agree with the
statements. Hypothesis H0 – There is no difference between the expectation level and
experience of the customers about banks. Hypothesis H1 – There is difference between
the expectation level and experience of the customers about banks. Research
Methodology 150 To know the correlation between the ranks given by ICICI Bank and
HDFC Bank customers the factors of selecting a particular bank, Spearman’s rank
coefficient of correlation method has been used, which is determined as under: R = 1 - 6
{∑ D2 + 1/12(m3 -m)} N 3 -N Where R = Rank Coefficient of Correlation D= Difference
between the ranks of paired of two variables N= Number of pair of observations In some
cases %age, weighted average, ranking method have been applied. 3.5 LIMITATIONS OF
THE STUDY The present study would be conducted by an individual scholar and
therefore, it would be completed under certain constraints in terms of availability of
time, availability financial resources, universe and sample of the propose study. Some
limitations are listed below:  The study was limited to selected branches of ICICI bank
and HDFC bank (in the distt. of Sonepat and Rohtak) because it was not possible to
study the entire universe with the limited resources and time availability at hand. 
Since the time was less the researcher took a sample of 748 respondents and so the
results could not be generalized for all the customers of ICICI bank and HDFC bank in
India.  The study is based on primary data collected from the respondents assuming
that they have given their genuine preferences without hiding anything.  It is hoped
that the results of the present study may gave some insight in the customer opinion/
behaviour/ expectation about the services provided by the banks.