____________________________ Research topic Customer Satisfaction Case study Bank of Khartoum MBA Thesis Geneva business school Master in International Management Submitted by


____________________________
Research topic
Customer Satisfaction
Case study Bank of Khartoum
MBA Thesis
Geneva business school
Master in International Management
Submitted by:
Ali Esameldin Siddig Ahmed
Geneva, Switzerland
Approved on the application of:
Dr Nasreen Khan
And
Dr Brahim GacemJune 2018
Declaration of Authorship
“I hereby declare
that I have written this work on my own without other people’s help (copy-editing, translation, etc.) and without the use of any aids other than those indicated;
that I have mentioned all the sources used and quoted them correctly in accordance with academic quotation rules;
that the topic or parts of it are not already the object of any work or examination of another course unless this has been explicitly agreed on with the faculty member in advance;
That my work may be scanned in and electronically checked for plagiarism.”
Student Full Name: Ali Esameldin Siddig Ahmed
Student ID: 625
Date: 03/06/2018
Acknowledgments
In the name of Allah, the Most Gracious, the Most Merciful.

Alhamdulillah who gave me the ability and wisdom to conduct and complete this project, and to my mentor and supervisor Dr.Nasreen Khan for the advices, guidance, and great support in my academic path.I am deeply thankful for all our colleagues who helped me through, the bank of Khartoum who provided me with valuable information, my cousin Saad Faisl who works at the bank of Khartoum and for all the members of our population who kindly answered my questions and provided me with feedback.

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List of contents
Content Page
Declaration of Authorship 2
Acknowledgement 3
List of contents 4
List of tables 5
List of figures 7
Abstract 9
Chapter one: Research problem,
objectives and methodologies
1.1 introduction 10
1.2 statement of the problem 10
1.3 importance of the research 10
1.4 research objectives 10
1.5 hypothesis 11
1.6 Research methodology and sources of data 11
1.7 limitation of the study 12
1.8 organization of the study 12
Chapter two: literature review
2.1 service marketing 13
2.2 relationship management 14
2.3 service quality 14
2.4 satisfaction 16
2.5 loyalty 20
2.6 measuring service quality 22
Chapter three: background on bank of Khartoum
And Data Collection and Analysis
3.1 overview 25
3.2 the vision of the bank 26
3.3 the mission of the bank 26
3.4 nature of the business 27
3.5 type of accounts 27
3.6 financial services 27
3.7 loyalty program 27
3.8 corporate banking 28
3.9 financial products 30
3.10 electronic banking 31
3.11 express reporting 32
3.12 Data Collection and Analysis 32
3.12.1 Introduction 32
3.12.2 data collection tools 32
3.12.3 the sample 33
3.12.4 data analysis 33
Chapter four: Findings
4.1 Findings 74
Chapter five: Recommendations and Hypothesis result
5.1 recommendations 76
5.2 Hypothesis result 77
Appendix 78
References 88
List of tables
table Page
Retailer’s sample by gender 33
Retailer’s sample by age 33
Retailer’s sample by occupation 34
Retailer’s sample by income 35
Length of time period of being a bank client 36
Reasons for choosing bank of Khartoum (Retailers) 37
Account types 38
Application for the bank’s financial services 39
Type of financial services 40
Reasons for maintaining relationship with the bank 41
Frequency of interaction with ATMs 42
Frequency of interaction with the bank’s branches 42
Frequency of interaction with internet banking 43
Frequency of interaction with mobile banking 44
Frequency of interaction with the contact center 45
Awareness of respondents about the discount plus service 45
Satisfaction level with the discount plus service 46
Telling others when having positive experience with the bank 48
Telling others when having negative experience with the bank 48
Recommending the bank services to others 49
Satisfaction level with the overall services received 59
Further plans to expand relations with the bank of Khartoum 50
Suggestions for the bank to improve its services 51
Correlation between recommendation of bank services to others, and satisfaction level with the overall services received by the bank of Khartoum. 51
Service quality measurement (Tangibility) 52
Service quality measurement (reliability) 52
Service quality measurement (responsiveness) 52
Service quality measurement (assurance) 53
Service quality measurement (empathy) 54
Correlations results of customer satisfaction and service quality dimensions (Tangibility, Reliability, Responsiveness, Assurance, empathy) 55
Number of employees 56
Annual sales 57
Type of business 58
Type of financial products obtained from the bank 59
Length of time period of being a bank client 60
Reasons for choosing the bank of Khartoum (Corporates) 61
Reasons for maintaining relationships with the bank 62
Opinions about bank of Khartoum services 63
Opinions about the business advisor services at the bank of Khartoum 64
Ease and comfort when dealing with the bank of Khartoum 64
Satisfaction with the distribution of profits 65
Satisfaction with the risk burden distribution 66
Overall satisfaction with the services received 67
Reasons for being satisfied 68
Readiness to recommend the bank to others 69
Suggestions for the bank to improve its services 70
List of figures
Figure Page
Retailer’s sample by gender 33
Retailer’s sample by age 34
Retailer’s sample by occupation 35
Retailer’s sample by income 36
Length of time period of being a bank client 37
Reasons for choosing bank of Khartoum 38
Account types 39
Application for the bank’s financial services 40
Type of financial services 41
Frequency of interaction with ATMs 42
Frequency of interaction with the bank’s branches 43
Frequency of interaction with internet banking 43
Frequency of interaction with mobile banking 44
Frequency of interaction with the contact center 45
Awareness of respondents about the discount plus service 66
Satisfaction level with the discount plus service 47
Telling others when having positive experience with the bank 47
Telling others when having negative experience with the bank 48
Recommending the bank services to others 49
Satisfaction level with the overall services received 50
Further plans to expand relations with the bank of Khartoum 51
Suggestions for the bank to improve its services 52
Service quality measurement (Tangibility) 53
Service quality measurement (reliability) 54
Service quality measurement (responsiveness) 55
Service quality measurement (assurance) 55
Service quality measurement (empathy) 56
Number of employees 58
Annual sales 59
Type of business 60
Type of financial products obtained from the bank 61
Length of time period of being a bank client 62
Reasons for choosing the bank of Khartoum 63
Ease and comfort when dealing with the bank of Khartoum 64
Satisfaction with the distribution of profits 65
Satisfaction with the risk burden distribution 66
Overall satisfaction with the services received 67
Reasons for being satisfied 68
Readiness to recommend the bank to others 69
Suggestions for the bank to improve its services 70
Abstract
This study attempts to highlight the importance of service quality and the impact of its different dimensions on customer satisfaction, to investigate the benefits of satisfying customers, how clients come to choose their bank and on which basis they decide to continue dealing with the same bank.

This study is designed to understand customer’s preferences, needs and wants of a service, also reveals shortcomings of the service and this helps in improving the bank service accordingly to exceed expectations and achieve higher levels of satisfaction.

The bank of Khartoum is the oldest bank in Sudan serving the market for 100 years; it was also awarded the best retail bank and the best microfinance bank in Africa by the annual Africa banker. Such achievement made bank of Khartoum the best candidate as a case study to serve as a benchmark for it represents the best banking and marketing practices.

Chapter One
Research problem, objectives and methodologies
Introduction
The term customer is derived from the word “Custom” which reflects the habitual nature of human beings, to be part of that nature modern organization strives to satisfy customer needs, and create the repurchase behavior.

Customers form judgments about the value of marketing offers and make their buying decisions based upon these judgments. Customer satisfaction with a purchase depends upon the product performance relative to a buyer’s expectation. A customer might experience various degrees of satisfaction. If the products performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. (Kotler 2008)
Customer satisfaction is used to measure the organization performance as perceived by customers. It has been established as a key performance indicator as organizations recognize that satisfied customers are the key to their success.

Achieving high levels of customer satisfaction requires that organizations continually monitor and examine the experiences, opinions, and suggestions of their current and potential customers, and improving service quality to meet customer’s standards in this way customers drive the market and the organization.

Service quality is the mean to achieve satisfaction as it enhances the service experience. The American society for quality control defines quality as “the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs”.

Customer satisfaction for which service quality is a key input forms the foundation for customer loyalty. Highly satisfied customers are bound to come back, loyal customers are a consistent source of revenue over period of many years says (Frederick Reichheld 1996).

At the same time that organization’s act to attract and satisfy customers, customer satisfaction depends on both their expectation and treatment. Through their choices, customers determine which organization flourish, what goods and services to be produced.

In addition to using their purchasing power, informed customers can shape the marketplace by communicating their preferences and standards to organizations that are ready to respond.

Statement of The Problem
This research attempts to investigate the impact of service quality dimensions on the customer satisfaction level. In addition, to assess the degree of customer satisfaction among the different categories of the bank of Khartoum’s customers, reasons behind choosing to deal and continue to deal with the bank of Khartoum.

Importance of the Research
Measurement of the organization performance from the customer point of view gives insight on how the organization is perceived by customers, its performance and shortcomings.

Marketing is about getting better business rather than just more business, by making the most of each customer and turning them to loyal and profitable customers by providing for their stated and unstated needs.

Research Objectives
1.4.1 General Objective
To measure service performance in Bank of Khartoum, the extent to which customer needs are taken care of and the strength of customer satisfaction.

1.4.2 Specific Objectives
To investigate why customers choose bank of Khartoum.

To investigate which channels are mostly used to interact with the bank of Khartoum.To measure service quality in Bank of Khartoum as perceived by customers.

To relate satisfied customers and loyal customers.

To assess the effectiveness of bank of Khartoum ‘discount plus’ loyalty program.

Hypothesis
H1 service quality has a direct impact on customer satisfaction.

H0 service quality has no direct impact on customer satisfaction.

H1 BOK customers are satisfied with the service provided.

H0 BOK customers are not satisfied with the service provided.

H1 satisfied customer is most likely to recommend the bank to others.

H0 satisfied customer will not necessarily recommend the bank to others.

Research Methodology and Sources of Data
This research is descriptive and analytical in nature.

1.6.1 Sources of data and samples:
1.6.1.1 Secondary data:
The information and data of this research will be collected from the following secondary sources e.g.: internet, previous studies, and references.

1.6.1.2 Primary data:
Primary data will be collected through questionnaires distributed randomly to the two categories of Bank of Khartoum customers, which are retailers with a sample size of 50 clients and corporates with a sample of 10 clients.

1.6.2 Data analysis:
The results of the questionnaires will be presented in the form of tables and charts by using simple statistical methods and graphs will be analyzed using SSPS.

Limitation of the study:
This research was conducted during the semester courses, time was a big issue and a constraint, and lack of financial support affected the scope of the research population and of the study.

Organization of the study:
This research paper consists of five main chapters.

Chapter One: Research problem, objectives and methodologies.

First chapter is an introductory part that represents the research problem, importance, objectives and the hypothesis.

Chapter Two: Literature review.

Second chapter is the literature review, which summarizes previously existing data on the same field of this research paper.

Chapter Three: Case study background.

Third chapter provides information about the bank of Khartoum and the variety of services it provides.

Chapter Four: Data collection and analysis.

Fourth chapter focuses on presentation and analysis of data obtained from the questionnaires.

Chapter Five: Findings and recommendations.

Fifth chapter is a summary of the data gathered results and recommended solutions.

Chapter Two
Literature Review
This chapter presents definitions of the basic concepts related to the research, and results of previous studies conducted.

2.1. Service Marketing:
According to (Christopher Lovelock and Jochen Wirtz, 2007) Services are economic activities, rather than tangible products, offered by one party to another. Rendering a service to recipients, objects, or other assets depends on a time-sensitive performance to bring about the desired result. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved
There are 5 widely used fundamentals of Services Marketing.

Intangibility: This is perhaps the most important of all the fundamentals. Intangibility describes the lack of physical evidence that the customer will receive, particularly in what are known as “pure services” (eg, legal services). Therefore managers have to create tangibility through the Services cape (Bitner, 1992)
Heterogeneity: Also known as variability, this fundamental explains how each service encounter is different. This can be due to situational factors (e.g. weather) or personal factors (e.g. personality traits). That is, not only may different people react to the same situation in different ways, and not only may the same person react to different situations in different ways, but also the same person may react to the same situation in different ways, entirely for personal reasons unidentifiable by the service industry employee. Because of this, employees need to be able to cope with an array of responses. Customers are the only people who can judge their satisfaction, and due to this subjective nature it can be difficult to standardize a service.

Simultaneous Production and Consumption: Refers to the inseparability in the service environment between the production and consumption of the service. Both employees and customers affect the service outcome, implying that the customer is a co-producer of the service. For the service company, this emphasizes the importance of both employees and customers, so internal and external marketing are vital, as well as interactive marketing between customers and employees. It is therefore important to manage customer-employee interactions and keep employees well trained.

Perishability: The immediate and time-bound nature of services means that they cannot be reused, returned or resold, unlike product-based companies. Without careful planning and market research, perishability can lead to over-demand or alternatively unused capacity. To overcome this, part-time employees, just-in-time production and reservation systems can be used.

Lack of Ownership: Services are experiential in nature, especially pure services. There is often nothing physical to take away from the service, relating back to intangibility. This can make it difficult for customers to compare brands, so it is important for managers to differentiate their service offering through physical evidence. For example, at a theme park, you might get a ride photo to take home. By creating enduring memories for customers, the company can try and build customer loyalty and help to overcome the lack of differentiation.

2.2. Relationship management:
Relationship marketing is a strategy designed to foster customer loyalty, interaction and long-term engagement. It is designed to develop strong connections with customers by providing them with information directly suited to their needs and interests and by promoting open communication (Steve Olenski, 2013).

According to (Kotler, 2008) One of the things of most value to a company is its relationships with customers, employees, suppliers, distributors, dealers, and retailers. The company’s relationship capital is the sum of the knowledge, experience, and trust a company has with its customers, employees, suppliers, and distribution partners. These relationships are often worth more than the physical assets of a company. Relationships determine the future value of the firm.

Traditional transaction marketing (TM) tended to ignore relationships and relationship building. The company was viewed as an independent agency always maneuvering to secure the best terms. The company was ready to switch from one supplier or distributor to another if there was an immediate advantage. The company assumed that it would normally keep its current customers, and it spent most of its energy to acquire new customers. The company neglected the interdependence among its main stakeholders and their roles in affecting the company’s success.

2.3. Service quality:
The service management literature argues that customer satisfaction is the result of a customer’s perception of the value received . . . where value equals perceived services quality relative to price. . . (Hallowell, 1996, p. 29).The first determinant of overall customer satisfaction is perceived quality . . . the second determinant of customer satisfaction is perceived value. . . (Fornell et al., 1996, p. 9).Customer satisfaction is recognized as being highly associated with ‘value’ and . . . . Is based, conceptually, on the amalgamation of service quality attributes with such attributes as price. . . (Athanassopoulos, 2000, p. 192).One major contribution of Parasuraman, Zeithaml and Berry (1988) was to provide a terse definition of service quality. They defined service quality as ‘a global judgment, or attitude, relating to the superiority of the service’, and explicated it as involving evaluations of the outcome (i.e., what the customer actually receives from service) and process of service act (i.e., the manner in which service is delivered).

Research has indicated that service quality has been increasingly recognized as a critical factor in the success of any business (Parasuraman et al., 1988) and the banking sector in this case is not exceptional. Service quality has been widely used to evaluate the performance of banking services (Cowling and Newman, 1995). The banks understand that customers will be loyal if they receive greater value than from competitors (Dawes and Swailes, 1999) and on the other hand, banks can earn high profits if they are able to position themselves better than their competitors within a specific market (Davies et al., 1995). Therefore, banks need focus on service quality as a core competitive strategy (Chaoprasert and Elsey, 2004). Moreover, banks all over the world offer similar kinds of services, and try to quickly match their competitors’ innovations. It can be noted that customers can perceive differences in the quality of service (Chaoprasert and Elsey, 2004). Moreover, customers evaluate banks’ performance mainly on the basis of their personal contact and interaction (Gronroos, 1990).

There have been several studies and debates on the concept of service quality because of the difficulties in both defining and measuring it with no overall consensus emerging on either (Wisniewski, 2001). Service quality can be defined as the difference between customer expectations of service and the perceived service. It is the extent to which a service meets customer’s needs and expectations (Lewis and Mitchell, 1990). If the perceived service falls below the expected service, customers are dissatisfied and if the perceived service quality is above the expected level, it creates satisfied customers (Andreassen, 1995).

In today’s world of fierce competition, a firm’s ability to deliver high quality service those results in satisfied customers is the key to a sustainable competitive advantage (Shemwell et al. 1998). These because banks all over the world are constantly innovating their products and services and thus sometimes similar products and services are offered by rivals. Muffato and Panizzolo (1995) also suggested that customer satisfaction will provides competitive edge other rivals banks for the future, and will be the best indicator of a firm’s profit ability. Further, they state that companies will try at all costs to improve their service quality, relationship with customers, reputation and image in order to bolster their turnover and market share. Therefore, to deliver high quality service to customers, bank managers must have knowledge of how customers perceive and evaluate the services, (Parasuraman et al. 2005). Perceived service quality can be described as customers’ view or judgment of a service that contributes to his/her satisfaction, buying intentions and performance of companies (Zeithaml et al. 1996). Parasuraman et al. (1985) consider that a customer’s assessment of overall service quality depends on the gap between the expected and perceived service. While it is recognized that most organizations have financial and resource constraints under which service is provided, bank managers must recognize that it is important that customer expectations are properly understood and measured. Furthermore, it is also imperative that any gaps in service quality be identified from the point of view of customers. Thus, the key to managing perceived service quality is to minimize this gap. Expected service quality is the level of quality customers’ demand and expect from service providers (Deming and Gale et al.1994). Expectations are viewed by customers what they feel a service should offer rather would offer. Consumer behavioural intentions are also influenced by the standards of service quality (Choi et al., 2004). Schneider and White (2004) noted that “service quality judgments were viewed as global evaluations that were composites of consumers’ experiences with an organization (global-level evaluation),” thus consumers’ perceptions are mainly used to analyze service quality.

There are various benefits to be gained from service quality and as argued by Wolfinbarger and Gilly, (2003), quality has an impact customer satisfaction, retention, loyalty and thus service quality is pivotal to the success of all service industries, and banking services. Al-Hawari and Ward (2006) also demonstrate that service quality impacts on customer satisfaction which in turn affects the financial performance of banks. In addition, several studies found that there is a relationship between service quality, customer satisfaction, and profitability. Chang and San’s (2005) carried a study in the Taiwanese banking industry and found that quality is an antecedent of customer satisfaction and customer satisfaction is an antecedent of profitability. Moreover, Heskett et al. (1997), Zeithaml et al. (2000) and Vimi and Mohd (2008) note the same relationship i.e. impact of high level of quality of service and customer satisfaction on profits of firms. Thus service quality and customer satisfaction must be taken into consideration when developing marketing tools and strategies. High service quality and level of satisfaction are the main attributes contributing to retaining customers and attract new ones. Consequently, higher customer satisfaction leads to greater customer loyalty (Yi, 1991; Anderson and Sulivan, 1993 Boulding et al., 1993). It is the main key to long term success of banks (Zeithaml et al. 1996; McColl-Kennedy and Schneider, 2000).

Service-based components of quality:
Researchers argue that the nature of services requires a distinctive approach to defining and measuring service quality.

The intangible, multifaceted nature of many services makes it harder to evaluate the quality of a service compared to a good. Because customers are often involved in service production, a distinction needs to be drawn between the process of service delivery (what Christian Gronroos calls functional quality) and the actual output (or outcome) of the service, what he calls technical quality. Gronroos and others also suggest that the perceived quality of a service is the result of an evaluation process in which customers compare their perceptions of service delivery and its outcome to what they expect.

From focus group research, Valarie Zeithaml, Leonard Berry, And A. Parasuraman identified 10 criteria used by consumers in evaluating service quality. In subsequent research they found a high degree of correlation between several of these variables and so consolidated them into five broad dimensions:
Tangibles (appearance of physical elements)
Reliability (dependable, accurate performance)
Responsiveness (promptness and helpfulness)
Assurance (competence, courtesy, credibility, and security)
Empathy (easy access, good communications, and customer understanding)
To measure customer satisfaction with various aspects of service quality, Valarie Zeithaml and her colleagues developed a survey research instrument called SERVQUAL. It’s based on the promise that customers can evaluate a firm’s service quality by comparing their perceptions of its service with their own expectations
.

2.4. Satisfaction:
In today’s competitive environment delivering high quality service is the key for a sustainable competitive advantage. Customer satisfaction does have a positive impact on a bank’s or organization’s profitability. The Satisfied consumers shape the foundation of any successful business because customer satisfactions make them repeat purchases, loyal to the brand, and use positive word of mouth. There are numerous studies that have looked at the impact of customer satisfaction on repeat purchases, loyalty and retention. Many researchers indicate the fact that satisfied customers share their past experiences with other customers to the order of maybe five or six people. On the contrary, dissatisfied consumer are more likely to tell another ten people of their experience with product or service.

Customer satisfaction is the outcome felt by those that have experienced a company’s performance that have fulfilled their expectations. Many researchers and academicians highlight the importance of customer satisfaction. Many researchers see that customer satisfaction has a positive effect on organization’s profitability. Much empirical evidence also shows the positive connection between customer satisfaction, loyalty and retention. Nowadays all organizations are realizing the importance of managing and delivering service quality, which leads to customer satisfaction. Service quality that is delivered can meet or exceed customers’ expectations are mainly influenced by customer’s prior expectations.

Satisfaction is a great feeling that you get when you get something you wanted, or when you have done something you supposed or wanted to do.

Customer assessments of product performance depend on many factors, especially the type of loyalty relationship the customer has with the brand.9
Buyers form their expectations from past buying experience; friends’ and associates’ advice; and marketers’ and competitors’ information and promises. If marketers raise expectations too high, the buyer is likely to be disappointed. However, if the company sets expectations too low, it won’t attract enough buyers (although it will satisfy those who do buy).10
Some of today’s most successful companies are raising expectations and delivering performance to match. Korean automaker Kia has been successful in the U.S. market by offering low-priced, high-quality cars reliable enough to be backed by 10-year warranties.

According to Hansemark and Albinson (2004) “satisfaction is a customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive, regarding the fulfillment of some needs, goals or desire “. On the other hand customer loyalty means a deeply held commitment to re-purchase a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior (Oliver, 1997).

However, high customer satisfaction is not the ultimate goal. If the company increases customer satisfaction by lowering its price or increasing its services, the result may be lower profits. The company might be able to boost its profitability by means other than increased satisfaction (for example, by improving manufacturing processes). Also, the company has many stakeholders, including employees, dealers, suppliers, and stockholders. Spending more to increase customer satisfaction might divert funds from increasing the satisfaction of other “partners.” Ultimately, the company must try to deliver a high level of customer satisfaction subject to delivering acceptable levels of satisfaction to the other stakeholders, given its total resources.

2.4.1. Customer Satisfaction
Researchers have tried to define customer satisfaction and in general they have defined it as transaction process. Kotler (2000) defined satisfaction as: “a person’s feelings of pleasure or disappointment resulting from comparing a product perceived performance (or outcome) in relation to his or her expectations
Customer Satisfaction has been a central concept in marketing literature and is an important goal of all business activities. Today, banks and companies are facing their toughest competition, because they move from a product and sales philosophy to a marketing philosophy, which gives a company a better opportunity of outperforming competition (Kotler, 2000).

Overall customer satisfaction adds more profits for companies and market share increase. The importance of customers has been highlighted by many researchers and academicians. The principal concern of marketing is to connect with customers by building a strong customer relationship in order to meet their expectations. Therefore, managers who see customers as the only way of profit, they consider the traditional chart in Figure 1 a pyramid with the president at the top, management in the middle, and front-line people and customers at the bottom.

Furthermore, researchers differentiate between attitude and satisfaction. So an attitude is a perceived service quality whereas, satisfaction is related to a specific transaction. Oliver (1981) summarizes the transaction-specific nature of satisfaction, and differentiates it from attitude, as follows: Attitude is the consumer’s relatively enduring affective orientation for a product, store, or process (e.g., customer service) while satisfaction is the emotional reaction following a disconfirmation experience which acts on the base attitude level and is consumption-specific. Parasuraman et al. (1988) distinguish service quality and satisfaction:
Customer satisfaction has a positive impact on banks and companies profitability. With more customers satisfied with services or products offered to them, the more opportunities for any successful business as customer satisfaction leads to repeat buying, brand loyalty, and great word of mouth marketing. Customer satisfaction helps to repeat purchases, loyalty and to customer retention (Zairi, 2000). Satisfied customers repeat buying products or services. They would also tend to say good things and to recommend the service or product to others. On the other hand dissatisfied customers respond differently. Dissatisfied customers may try to decrease the dissonance by returning the product, or they may try to reduce the dissonance by looking for information that might confirm its high value (Kotler, 2000). Companies need to develop strategies of how to handle dissatisfied customers. Businesses are unable to afford under any situation to lose customers, because the cost of replacing the lost customer with a new customer is higher. Therefore, banks and companies must find ways of winning back the unsatisfied customers by designing special programs for service recovery. Organization should handle customer complaints with care and not seeing only as a time consuming.

2.4.2. Customer Expectations
Expectations play a significant role in the satisfaction formation. The extent to which a service or product fulfills a customer’s need may play a significant role in forming feelings of satisfaction because of the effect of confirmation or disconfirmation that have on satisfaction. Consumers expect to be delivered quality products and services; therefore companies try to offer quality products and services. The term expectation is really important to banks and companies because they want to figure out what customers’ expectations are. The term “expectations” has many uses, in the satisfaction literature, it is viewed as a prediction made by a customer about what is likely to happen during a transaction or exchange. Oliver (1981) “… expectations are customer-defined probabilities of the occurrence of positive and negative situation if the customer engages in some behavior” (pp.25-48).

In the contrast, in the service quality literature it is defined as wants and desires, what a service provider should offer not what would offer. Customers shape their expectations from their friends’, past experience, marketers’, competitors’ information and promises (Kotler, 2000). Therefore, perceived service quality is viewed as the difference between customers’ perceptions and expectations for the service provided. Organizations in order to keep expectations from rising, they have to perform services properly from the first time (Parasuraman et al. 1988). Thus, customer expectations for the service are likely to rise when the service is not performed as promised. Expectations serve as reference points in customer’s assessment of performance (Cronin& Taylor, 1992). Thus, retailers can increase customer satisfaction by decreasing customer expectations.

2.4.3. Customer Perception
Perception is an opinion about something assessed and viewed, and it differs from customers to customers, as every client or customer has different beliefs towards certain products and services that play a significant role in determining customer satisfaction. Customer satisfaction is determined by the customers’ perceptions and expectations of the quality of the products and services. In many cases, customer perception is subjective, but it provides some useful insights for organizations to develop their marketing strategies. Offering high level of quality service has become the selling point to attract consumers’ attention and is the most significant driver that leads to customers’ satisfaction. Therefore, consumer perception and consumer satisfaction are very closely linked together, because if the perceived service is close to customer’s expectations it leads to satisfaction. Satisfied customers give recommendations; maintain loyalty towards the bank or company and are willing to pay price premiums (Reichheld, 1996).

2.4.4. Factors that Influence Customer Satisfaction
There are many factors that affect customer satisfaction, which include friendly employees, knowledgeable employees, courteous employees, helpful employees, accuracy of billing, billing timeliness, competitive pricing, good value, service quality, billing clarity and fast service (Hokanson, 1995). From the researches that have been done in many countries, factors like: service quality, and perceived value, are the key constructs affecting the customer’s satisfaction. Studies also point out that customer satisfaction results ultimately in trust, price tolerance, and customer loyalty. Therefore, building customer relationship is a backbone for all organizations in general, and companies in service industries in particular. Issues like: consumer satisfaction, service quality, consumer perception, consumer loyalty, are the main concerns of these days service companies, which improves banks and companies’ performance and increase profits.

2.4.5. Monitoring Satisfaction
Many companies are systematically monitoring how well they treat their customers, identifying the factors that shape customer satisfaction, and making changes in their operations and marketing as a result.

A highly satisfied customer normally stays loyal longer, buys more as the company introduces new products and upgrades existing products, talks positively to others about the bank or company and its products, pays less attention to competing brands and is less sensitive to price, offers product or service ideas to the firm, and costs less to serve than new customers because transactions become routine.

More customer satisfaction has also been linked to bigger stock-market returns and lower market risk.

The link between satisfaction and loyalty, however, is not proportional. Suppose customer satisfaction is rated on a scale from one to five. At a very low level of customer satisfaction (level one), customers are likely to abandon the company and even bad-mouth it. At levels two to four, customers are fairly satisfied but still find it easy to switch when a better offer comes along. At level five, the customer is very likely to repurchase and even spread good word of mouth about the company. High satisfaction or delight creates an emotional bond with the brand or company, not just a rational preference. Xerox’s executives found out that their “completely satisfied” customers were six times more likely to repurchase Xerox products over the following
18 months than their “very satisfied” customers.

When consumers rate their satisfaction with an element of the organization’s performance say, delivery, they may vary in how they define good performance. Two customers can report being “highly satisfied” for different reasons. One may be easily satisfied most of the time and the other might be hard to please but was pleased on this occasion.

Most companies pay more attention to their market share than to their customers’ satisfaction. This is a mistake. Market share is a backward-looking metric; customer satisfaction is a forward-looking metric. If customer satisfaction starts slipping, then market share erosion will soon follow.

Companies need to monitor and improve the level of customer satisfaction, the higher the customer satisfaction, the higher the retention. Here are four facts:
Acquiring new customers can cost 5 to 10 times more than the costs involved in satisfying and retaining current customers.

The average company loses between 10 and 30% of its customers each year.

A 5% reduction in the customer defection rate can increase profits by 25 to 85%, depending on the industry.

The customer profit rate tends to increase over the life of the retained customer.1
2.5. Loyalty:
Philip Kotler defined loyalty as “A deeply held commitment to repurchase or re-patronize a preferred service or product in the future regardless of situational influences and marketing efforts having the potential to cause switching behavior”.

“Loyalty is an old-fashioned word that has traditionally been used to describe fidelity and enthusiastic devotion to a country, a cause, or an individual. More recently, it has been used in a business context to describe a customer’s willingness to continue patronizing a firm over the long term, preferably on an exclusive basis, and recommending the firm’s products to friends and associates. Customer loyalty extends beyond behavior and includes preference, liking, and future intentions
(Christopher Lovelock and Jochen Wirtz, 2007)
2.5.1. Customer loyalty:
According to Dick and Basu(1994) customer loyalty has been defined as the “strength of the relationship between the individual’s relative attitude and repeat patronage towards the products”.

Oliver (1999,p.34) Brand loyalty will have great impact on the purchasing behavior and commitment to repurchase the product or service in the future, thus it help to causing repetitive purchasing behavior among the customers even though it affect the situational influences and marketing efforts to cause switching behavior .

Customer loyalty is one of the most significant customer metrics in marketing due to the profit impact of maintaining a loyal consumer base (Oliver 1999).

2.5.2. Loyalty and profitability:
In a classic study, Reich held and Sasser analyzed the profit per customer in various service businesses, as categorized by the number of years that a customer had been with the firm. They found that customers became more profitable the longer they remained with a firm in each of these industries.

Reich held and Sasser identified are four factors that work to the supplier’s advantage to create incremental profits:
Profit derived from increased purchases (or, in a credit card or banking environment, higher account balances) :
Over time, business customers often grow larger and so need to purchase in greater quantities. Individuals may also purchase more as their families grow or as they become more affluent. Both types of customers may be willing to consolidate their purchases with a single supplier who provides high-quality service.

Profit from reduced operating costs :
As customers become more experienced, they make fewer demands on the supplier (for instance, they have less need for information and assistance). They may also make fewer mistakes when involved in operational processes, thus contributing to greater productivity
Profit from referrals of other customers :
Positive word-of-mouth recommendations are like free selling and advertising, saving the firm from having to invest as much money in these activities
Profit from price premium :
New customers often benefit from introductory promotional discounts, whereas long-term customers pay regular prices, and when they are highly satisfied they are even willing to pay a price premium.

Moreover, customers who trust a supplier may be more willing to pay higher prices at peak periods or for express work (Christopher Lovelock and Jochen Wirtz, 2007).

Customer loyalty leads to firm profitability because customer loyalty positively influences firm product-marketplace performance (Anderson and Mittal 2000;
Fornell 1992) and financial performance (Anderson et al. 1994; Gupta and Zeithaml 2006), and creates shareholder wealth (Anderson et al. 2004).

2.5.3. Assessing the Value of a Loyal Customer:
It’s a mistake to assume that loyal customers are always more profitable than those who make one-time purchases. On the cost side, not all types of services incur heavy promotional expenditures to attract new customers. Sometimes it is more important to invest in a good retail location that will attract walk-in traffic. Unlike banks, insurance companies, and other “membership” organizations that incur costs for review of applications and account setup, many service firms face no such costs when a new customer first seeks to make a purchase. On the revenue side, loyal customers may not necessarily spend more than one-time buyers, and in some instances they may even expect price discounts finally, revenue does not necessarily increase with time for all types of customers. In most mass market business-to-customer (B2C) services such as banking, mobile phone services, or hospitality, customers can’t negotiate prices. However, in many business-to-business (B2B) contexts, large customers have significant bargaining power and therefore will nearly always try to negotiate lower prices when contracts come up for renewal, which forces suppliers to share the cost savings resulting from doing business with a large, loyal customer.

Recent work has also shown that the profit impact of a customer can vary dramatically depending on the stage of the service products life cycle. For instance, referrals by satisfied customers and negative word of mouth by defected customers have a much greater effect on profit in the early stages of the service product’s life cycle than in later stages. One of the challenges that you will probably face in your work is to determine the costs and revenues associated with serving customers in different market segments at different points in their customer life cycles, and to predict future profitability. (Christopher Lovelock and Jochen Wirtz, 2007).2.5.4. Effect of Customer Satisfaction on Customer Loyalty:
Bowen and Chen (2001) said that having satisfied customers is not enough, there has to be extremely satisfied customers. This is because customer satisfaction must lead to customer loyalty.

Bansal and Gupta (2001): “Building customer loyalty is not a choice any longer with businesses it’s the only way of building sustainable competitive advantage.

Building loyalty with key customers has become a core marketing objective shared by key players in all industries catering to business customers. The strategic imperatives for building a loyal customer base are as:
Focus on key customers
Proactively generate high level of customer satisfaction with every
Interaction
Anticipate customer needs and respond to them before the competition does
Build closer ties with customers
Create a value perception”.

Fornell (1992) said “high customer satisfaction will result in increased loyalty for the firm and that customers will be less prone to overtures from competition”
This view was also shared by Anton (1996) who said that “satisfaction is positively associated with repurchase intentions, likelihood of recommending a product or service, loyalty and profitability”.

McIlroy and Barnett (2000): “An important concept to consider when developing a customer loyalty program is customer satisfaction. Satisfaction is a measure of how well a customer’s expectations are met while customer loyalty is a measure of how likely a customer is to repurchase and engage in relationship activities.

2.6 Measuring service quality
SERVQUAL is seen as a generic measurement tool that can be applied across a broad spectrum of service industries. Based on their empirical work, they identified a set of 22 variables/items tapping five different dimensions of service quality construct.

SERVQUAL measures service quality as the discrepancy (gap) between a customer’s expectations for a service offering and the customer’s perceptions of the service received. The SERVQUAL customer perception tool requires customers to answer questions about both their expectations and their perceptions and to assign a numerical weight to each of the five service quality dimensions (Parasuraman, Berry, & Zeihaml, 1988).

The study of Newman and Cowling (1996) reports that two British banks used the SERVQUAL model and this model improved quality of service, as well as both banks enjoying substantial increases in profit. Moreover, Zeithaml (2000) also found evidence about the influences of service quality on profits and Heskett et al. (1997) argued that a “direct and strong” relationship exists among service quality, customer satisfaction and profitability. Vimi and Mohd (2008) undertook a study of the determinants of performance in the Indian retail banking industry based on perception of customer satisfaction. The finding of the study reinforces that customer satisfaction is linked with performance of the banks. Berry (1980) along with Booms and Bitner (1981) argue that, due to intangible nature of services, customer use elements associated with the physical environment when evaluating service quality. Levitt (1981) proposes that customers use appearances to make judgments about realities. Hostage (1975) believes that a service firm’s contact personnel comprise the major determinants of service quality, while Lewis and Booms (1983) propose that service quality resides in the ability of the service firm to satisfy its customer needs i.e. customer satisfaction. Fisk et al., (1993) in tracking the extensive literature on service quality, stated that “The single most researched area in services marketing to date is service quality. The interest in service quality parallels the focus on quality, total quality management, and satisfaction in business” (Fisk et al., 1993, p.77).This concept has attracted a lot of interest and further triggered a series of debates, especially in the area of marketing research literature due to the difficulties both in defining and measuring it, and further, with no overall consensus emerging on either (Wisniewski, 2001a; 2001b).

The importance of Parasuraman, Zeithaml and Berry’s (1988) scale is evident by its application in a number of empirical studies across varied service settings (Brown and Swartz, 1989; Carman, 1990; Kassim and Bojei, 2002; Lewis, 1987, 1991; Pitt, Gosthuizen and Morris, 1992; Witkowski and Wolfinbarger, 2002; Young, Cunningham and Lee, 1994). Despite its extensive application, the SERVQUAL scale has been criticized on various conceptual and operational grounds. Some major objections against the scale relate to use of (P-E) gap scores, length of the questionnaire, predictive power of the instrument, and validity of the five-dimension structure (e.g., Babakus and Boller, 1992; Cronin and Taylor, 1992; Dabholkar, Shepherd and Thorpe, 2000; Teas, 1993, 1994). Validity of (P-E) measurement framework has also come under attack due to problems with the conceptualization and measurement of expectation component of the SERVQUAL scale. While perception (P) is definable and measurable in a straightforward
manner as the consumer’s belief about service is experienced, expectation (E) is subject to multiple interpretations and as such has been operationalized differently by different authors/ researchers (e.g., Babakus and Inhofe, 1991; Brown and Swartz, 1989; Dabholkar et al., 2000; Gronroos, 1990; Teas, 1993, 1994). Initially, Parasuraman, Zeithaml and Berry (1985, 1988) defined expectation close on the lines of Miller (1977) as ‘desires or wants of consumers,’ i.e., what they feel a service provider should offer rather than would offer.

These finding don’t undermine the value of Zeithaml, Berry and Parasuraman’s achievement in identifying some of the key underlying constructs in service quality, but they do highlight the difficulty of measuring customer perceptions of quality, and the need to customize dimensions and measures to the research context. As Asunbonteng’s said “Until a better but equally simple model emerges, SERVQUAL will predominate as a service quality measure”.

Cronin and Taylor (1992) were amongst the researchers who levelled maximum attack on the SERVQUAL scale. They questioned the conceptual basis of the SERVQUAL scale and found it confusing with service satisfaction. They, therefore, opined that expectation (E) component of SERVQUAL be discarded and instead performance (P) component alone be used. They proposed what is referred to as the ‘SERVPERF’ scale. Besides theoretical arguments, Cronin and Taylor (1992) provided empirical evidence across four industries (namely banks, pest control, dry cleaning, and fast food) to corroborate the superiority of their ‘performance-only’ instrument over disconfirmation-based SERVQUAL scale.

Methodologically, the SERVPERF scale represents marked improvement over the SERVQUAL scale. Not only is the scale more efficient in reducing the number of items to be measured by 50 per cent, it has also been empirically found superior to the SERVQUAL scale for being able to explain greater variance in the overall service quality measured through the use of single-item scale. This explains the considerable support that has emerged over time in favor of the SERVPERF scale (Babakus and Boller, 1992; Bolton and Drew, 1991b; Boulding et al., 1993; Churchill and Surprenant, 1982; Gotlieb, Grewal and Brown, 1994; Hartline and Ferrell, 1996; Mazis, Antola and Klippel, 1975; Woodruff, Cadotte and Jenkins, 1983). Though still lagging behind the SERVQUAL scale in application, researchers have increasingly started making use of the performance-only measure of service quality (Andaleeb and Basu, 1994; Babakus and Boller, 1992; Boulding et al., 1993; Brady et al., 2002; Cronin et al., 2000; Cronin and Taylor, 1992, 1994). Also when applied in conjunction with the SERVQUAL scale, the SERVPERF measure has outperformed the SERVQUAL scale (Babakus and Boller, 1992; Brady, Cronin and Brand, 2002; Cronin and Taylor, 1992; Dabholkar et al., 2000). Seeing its superiority, even Zeithaml (one of the founders of the SERVQUAL scale) in a recent study observed that “…Our results are incompatible with both the one-dimensional view of expectations and the gap formation for service quality. Instead, we find that perceived quality is directly influenced only by perceptions (of performance)” (Boulding et al., 1993). This admittance cogently lends a testimony to the superiority of the SERVPERF scale.

Chapter three
Background on bank of Khartoum
In this chapter we will discuss the background of the bank of Khartoum (case of the study), and the relevant services the bank provides.

3.1 Overview
Bank of Khartoum (BOK) is Sudan’s leading Islamic Bank offering its customers a full range of innovative financial products and services. It is also the oldest bank in the nation; celebrating in 2013 its 100th year of serving the Sudanese people. With its roots deeply integrated in the country, BOK has been a primary supporter and driver of the nation’s economic and social development over the past century. During this time, BOK, like a country, has gone through many changes and weathered many economic and political storms. It has grown and evolved, through its acquisitions and mergers of other banks. BOK is renowned for its ability to manage change, while continuing to strengthen, innovate and lead the banking industry toward international best banking practices, products and services.

BOK offers services to Corporate, Retail, Microfinance and investment Business Segments; it also owns various subsidiaries in Trade, Exchange, Brokerage, and Commercial Real-estate. The equity of the bank as of Dec 2012 is SDG 860 Million. Headquartered in Khartoum, BOK has 1300 employees, with 55 bank branches and the largest ATM and CDM network expand to over 200 locations in the coming six months. The Bank also has a 24 hour call center, and a full suite of e-services which include online banking, SMS alerts and mobile banking which will be launched soon Its major shareholders include predominate local and regional Businessmen and various institutions such as Dubai Islamic Bank (DIB), the Islamic Development Bank Jeddah, Abu Dhabi Islamic Bank, Sharjah Islamic Bank, United Arab Emirates Etisalat.

BOK’s achievements to date are significant. It continually challenges the norm, as it continues to achieve strong financial performance and business growth, exercise prudent risk management, while operating in the context of a conflicted and complex business environment.

It has worked to strengthen the Bank’s processes, people and products to ensure international standards are being met. BOK has also introduced innovation, as a key strategic pillar. This is reflected in its mindset, culture and service offers, across the banking group. BOK’s staff is trained and its products designed, to anticipate the professional and personal needs of its diverse client base.

In fact, BOK has been the leader in the market, introducing true retail banking in the Sudan in 2006. Its strategy and delivery evolved the market from ad hoc products offered by other banks, to a focused and innovative service offer that introduced a full suite of innovative and tailored consumer products, designed to enhance and support every aspect of their customer’s financial life.  It has by far, the largest market share in retail banking and the Bank that others follow.

In 2008, BOK merged with Emirates and Sudan Bank, making it the largest Bank in the Sudan, in terms of capital, and market share. Especially significant was its achievement in 2011 when the Bank was delisted from the OFAC sanctions list despite the fact that the sanctions on the Sudan remain. Additionally, it received an –AA rating by the International Islamic Rating Agency, making it the first bank in the Sudan to be rated. Its correspondent banking partnership network has grown substantially and now includes international and regional banks from Asia Pacific, Europe and the Middle East. The expanded partner network increases the bank’s credit line facilities and capabilities.

BOK has always been a primary driver of the economic and social development of the country.

Its corporate bank provides financing to support some of the nation’s largest infrastructure and development projects that have in turn, created services, industries and jobs for the Sudanese people. It is the bank of choice for governments, local corporate, MNCs, UN, NGOs , Embassies and consumers in Sudan in large part due to its very solutions focused mindset, its strong balance sheet, flexibility and capability to deliver in line and in time, with its customer’s needs.

3.2 The Vision of the bank
Bank of Khartoum vision is to be a leading Islamic bank, a model of excellence in providing innovative financial services and the partner of choice both locally and internationally.

3.3 The Mission of the bank
Bank of Khartoum strives for excellence in all that they do:
Endeavor to be a trusted partner exceeding expectations in the delivery of a comprehensive range of world-class financial products and services.

Aim to create value by building a strong and diversified financial institution focused on prudent risk management while delivering competitive returns.

Seek to be the employer of choice by empowering people to succeed in a meritocracy that rewards professionalism, leadership, teamwork and initiative.

Aim to be a leader among BOK peers by implementing global best practices adapted to a local context.

Seek to be a model institution in adhering to the laws and regulations of the markets in which they operate.

Aim to be a responsible partner by making a positive social impact in the communities in which they work.

3.4 Nature of the business
As a commercial bank, Bank of Khartoum carries on all commercial bank activities: acquire, lease, modify and sell assets appropriate for business; participate in forming companies for dealing in any field or sector of business. The Bank’s revenues mainly come from short-term and medium-term investments, corporate banking, and retail banking.

3.5 Types of accounts
Current Accounts.

Savings Account.

Safety Lockers.

Salary Transfer Account.

Saving Plus Accounts.

Investment / Fixed Deposit.

3.6 Financing services
Auto Finance.

Home Construction.

Education Finance.

Home Purchase.

Home Renovation.

3.7 loyalty programDiscount PlusIts features are 5% -50% discounts on branded items and outlets that carry Discount + sign customers can get discounts on Cash purchases or at POS
Service is available only for Bank Khartoum activated ATM card holder
3.8 Corporate banking
BOK Services include financing solutions for agriculture, industry, infrastructure, export finance, local trade and project finance.

Their aim is to work with customers to ensure that they achieve their goals and guarantee their success.

3.8.1 General Services
Online Centralized Branches
With BOK fully Online Centralized branches in the Capital, Corporate clients can seamlessly use any branch within Khartoum Region for all their day-to-day operations including Cash Deposits, Withdrawals and cheque payment. In addition, most of Bank of Khartoum’s regional branches are connected online; transactions processed in the regions are effected instantly on the account in the capital or any other online branch.

Corporate Service Desks
A single telephone number, a single fax number and a single email address to answer all customers’ needs with Bank of Khartoum across Sudan.

Corporate Services Unit’s Representatives are responsible for answering incoming calls quickly and efficiently.

Account Information Services
Single Processing Point
Transaction Information & Follow-up
General Inquiries
ATM
Corporate companies with intensive number of staff in its premise can use ATM to save time and effort of cash withdrawal with no charge.

Account Services
Current & Savings / Deposit Account and Transaction Services
Term Deposits
This is the classic deposit account where profits are calculated on annual basis; Features include:
Completion of a minimum period of three months in order to enjoy profit distribution
Profit on Short Term Deposits is distributed annually
Expected profits range between 8%-9% annually
Short Term Deposits
Customers can now maximize their profits in Bank of Khartoum with opening a short term deposit with minimum period of 7 days. Features include:
Profit are distributed annually as per The Bank Policy
Expected profit rate is 3% – 4% annually
The Bank invests deposited amount along with its equity share and other deposits in a unrestricted Mudaraba pool
Profit is calculated by determining the weekly minimum balance of the deposit
Max Account
With the flexible features that combine between current and deposit account features, customers can now invest and withdraw cash in their account in the same time. Features include:
Only 5 withdrawal transaction per month are allowed
Minimum amount to open an account is SDG 5,000,000
Minimum balance to enjoy profits is SDG 1,000,000
Profit are distributed annually as per The Bank Policy
Expected profit rate is 2% – 3% annually.

Profit calculation is based on minimum balance of the account on monthly basis
Quick Collect Service (Post Dated Cheques)
Reaffirming its commitment to clients’ satisfaction and in view of the increasing demand from existing customers, Bank of Khartoum postdated cheque service, Quick Collect) at a competitive rate for its clients. In this way, clients can avoid the complex and tedious nature of work associated with the validation, storage and presentation associated with PDCs.

3.8.2 Payments
Corporate Cashier
To ensure maximum comfort and ease in business dealing, Bank of Khartoum offers dedicated tellers for corporate customers in a selected number of branches in Khartoum, Omdurman and Bahri.

Direct Debit
Utility or any bill payment processed by debiting customer account and crediting the service provider account automatically ensuring payments are affected in an efficient and timely manner. This service will be offered following the arrangement with the service provider and the customer where both hold accounts with Bank of Khartoum.

3.8.3 Trade Products
Letters of Credit (LCs)
Letters of Credit (LCs) are geared to handle all customer requirements for Imports/Exports. Whether importing for local consumption or for re-export, Bank of Khartoum will offer the best solution for customer’s needs. Based on their requirements, BOK customizes the most appropriate service type whether transferable, revolving, and standby.

3.9 Finance Products
Murabaha.

LC Against Murabaha.

Musharaka.

Istisna – Mugawala.

Mudaraba.

Qard Hasan.

MurabahaThis concept refers to the sale of goods at a price, which includes a profit margin agreed to by both parties. The purchase and selling price, other costs, and the profit margin must be clearly stated at the time of the sale agreement. The bank is compensated for the time value of its money in the form of the profit margin. This is a fixed-income loan for the purchase of a real asset, with a fixed rate of profit determined by the profit margin. The bank is not compensated for the time value of money outside of the contracted term (i.e., the bank cannot charge additional profit on late payments); however, the asset remains as a mortgage with the bank until the default is settled.

Musharaka (Partnership)
The bank enters into a partnership with the customer in an existing or new investment project or in the ownership of an asset, either on a permanent or diminishing basis. The Musharaka gets terminated upon the customer fully acquiring the title to the project /assets in a gradual manner. Musharaka profits are shared as per mutual agreement whereas losses are borne pro-rata.

Mudaraba (Fund Management)
This is an investment contract in which an investor provides the capital and the investment manager carries out the investment activities in a specific project or trade for a defined period. Profit is distributed as per the agreed ratio. However, genuine loss is fully absorbed by the investor. The investment manager is responsible to indemnify the investor in case of negligence.

Mogawala (Istisna, Forward Sale of an Asset)
Istisna (Manufacturing Finance) is a process where payments are made in stages to facilitate step wise progress in the Manufacturing / processing / construction works. Istisna enables any construction company get finance to construct slaps / sections of a building by availing finances in installments for each slap. Istisna also helps manufacturers to avail finance for manufacturing / processing cost for any large order for goods supposed to supply in stages. Istisna helps use of limited funds to develop higher value goods/assets in different stages / contracts.

3.10 Electronic Banking
Corporate Internet Banking
Corporate Internet Banking provides a single customer interface for all transaction reporting, payment initiations and reconciliation requirements.

Services Available:
General Account Services: Statement of Account, Account Summary, and Cheque Book Request.

Payment Transactions: Internal Fund Transfer, Eternal Fund Transfer, Demand Draft Issuance, Salary Transfer, and Vendor Payment.

Customer Cheques Printing.

General Reports.

Bill Payment.

Direct Debit.

3.11 Express Reporting
Customers will have the convenience of receiving information about their account (balances and statements) tailored per their needs and delivered by means of fax, email, SWIFT or any other channel. This will serve as an integration channel to enable automated and streamlined account reconciliation process
3.12 Data Collection and analysis
3.12.1 Introduction
This chapter is devoted to the empirical aspects of the research it contains the tools of data collection; namely the questionnaires and samples, as well as the presentation and the analysis of the data collected.

3.12.2 Data Collection Tools
This research includes two types of data; primary and secondary data. Secondary data was collected from references, internet, and other researches. Primary data was collected by questionnaires.

3.12.2.1 The questionnaires
Two questionnaires were administered for this research, one for retailers and the other is for corporates, as customers of the bank’s service.

1. Retailers questionnaire
The purpose from this questionnaire is to examine client’s motives for choosing bank of Khartoum and the reasons for maintaining relationships, and to assess the quality of services provided by bank of Khartoum by using the servperf service quality measurement tool, and to relate its effects on customer’s satisfaction.

To know the effectiveness of bank of Khartoum efforts to maintain customers through loyalty program ‘discount plus’, and how loyal customers contributes to the bank portfolio over the long term.

2. Corporate questionnaire
The purpose from this questionnaire is to collect information about how corporates come to choose its bank and the reasons for maintaining relationships, how corporates perceive different aspects of services provided by Bank of Khartoum and the level of satisfaction associated, and the loyalty outcome.

3.12.3 The Sample
The target population is compromised, of all Bank of Khartoum clients.

A sample size of 50 retailers has been chosen randomly from the clients of Bank of Khartoum, and a sample size of 10 corporates has been chosen randomly.

3.12.4 Data Analysis
Survey data was collected via questionnaires which were distributed to the selected members of the sample who were requested to fill in the required information. The response rate in both cases was 100%. Data collection has been processed and analyzed using statistical packages (SPSS).

Presentation and analysis of the retailer’s survey:
Table_1:- Retailer sample by gender
Gender Frequency Percent
Male 32 64.0
Female 18 36.0
Total 50 100.0
Figure_1
Figure No. (1) Above showed that 64% of the selected sample of the bank’s customers is male, while 36% is female.

Table_2:-Retailer sample by age groups
Age Group Frequency Percent
Bellow 30 19 38.0
31 – 45 13 26.0
46 – 50 7 14.0
51 – 60 6 12.0
Above 60 5 10.0
Total 50 100.0
Figure_2

Figure No. (2) Above showed the customers ages of the selected sample; 38% of customers are below 30 years, 26% are in the age range (31 to 45), 14% are in the age range (46 – 50), 12% are in the age range (51 – 60), 10% above 60 years.

Table_3:- Retailers sample by occupation
Occupation Frequency Percent
Self employed 9 18.0
Private sector employee 22 44.0
Public sector employee 6 12.0
Student 7 14.0
Unemployed 2 4.0
Retired 4 8.0
Total 50 100.0
Figure_3

Figure No. (3) Above showed the customers’ occupations of the selected sample; 44% of customers are private sector employees, 18% are self-employed, 14% are students, 12% are public sector employees, 8% are retired, and 4% are unemployed.

Table _4: Retailer sample by income
Income Frequency Percent
Less than 2000 SDG 12 24.0
2000 to 5000 SDG 19 38.0
More than 5000 SDG 19 38.0
Total 50 100.0
Figure_4

Figure No. (4) Above showed the customers’ monthly income of the selected sample; 38% of customers have incomes more than 5000 SDG, 38% are in the range (20000 to 5000 SDG), and 24% are less than 2000 SDG.

Table_5:- Length of time period of being a bank client
Time Frequency Percent
1 to 5 years 37 74.0
6 to 10 7 14.0
More than 10 years 6 12.0
Total 50 100.0
Figure_5

Figure No. (5) Above showed the time period of being a bank client, 74% of customers have been a bank client for one year up to 5 years, 14% for 6 years up to 10 years, and 12% for more than 10 years.

Table_6:- Reasons for choosing the Bank of Khartoum
Reasons Frequency Percent
Employer requirement 6 12.0
Image and reputation 14 28.0
Word of mouth 13 26.0
Financing services 9 18.0
Client privileges (discount plus ) 8 16.0
Total 50 100.0
Figure_6

Figure No.(6) above showed the answers of respondents when they were asked about the reasons behind choosing the bank of Khartoum, 28% of a sample of bank customers said “image and reputation”, 26% “word of mouth”, 18% “financing services”, 16% “client privileges”, 12% “employer requirement”.

Table_7:- Account types
Account type Frequency Percent
Current account 23 46.0
Saving account 14 28.0
Saving plus account 10 20.0
Investment / fixed deposit account 3 6.0
Total 50 100.0
Figure_7
Figure No. (7) Above showed customer’s account types, 46% of the sample of the bank’s customers have current account, 28% saving account, 20% saving plus account, and 6% investment fixed deposit account.

Table_8:- Application for the bank financial services (loans)
Answer Frequency Percent
Yes 35 70.0
No 15 30.0
Total 50 100.0
Figure_8

Figure No. (8) Above showed the respondent’s answers when they were asked about applying for loans or a financial service, 70% of customers said “yes”, while 30% said “no”.

Table_9:- Types of financial services received.

Service Frequency Percent
Home construction finance 3 9.0
Home purchase finance 6 17.0
Auto finance 14 40.0
Education finance 6 17.0
Marriage finance 6 17.0
Total 35 100.0
Figure_9

Figure No. (9) Above showed the respondent’s answers when asked about the financial services they received from the bank, 40% of a sample of the bank’s customers receives auto finance, 17% marriage finance, 17% home purchase finance, 17% education finance, and 9% home construction finance.

Table_10:- Reasons for maintaining relationship with the bank
Ranking 1 2 3 4 5 6 Total
Excellent customer service 28 6 6 4 2 4 50
56 12 12 8 4 8 100.0
Employer requirement 8 2 – 24 12 4 50
16 4 – 48 24 8 100.0
I’m not aware of a bank that is significantly better – 2 6 4 10 28 50
– 4 12 8 20 56 100.0
Proximity of branches 2 24 6 6 6 6 50
4 48 12 12 12 12 100.0
Image and reputations 6 12 10 4 16 2 50
12 24 20 8 32 4 100.0
Financial stability 6 10 20 6 4 4 50
12 20 40 12 8 8 100.0
Table No. (10) above showed the respondent’s answers when asked to Rank the reasons for maintaining relationship with the bank, for the first reason 56% of customers of the sample picked “excellent customer service of the bank”, second reason 48% picked “Proximity of branches”, third reason 40% picked “Financial stability”, forth reason 48% picked “Employer requirement”, fifth reason 32% picked “image and reputations”, and sixth reason 56% picked “I’m not aware of a bank that is significantly better”.

Table _11:-frequency of interaction with ATMs
Answer Frequency Percent
Daily 10 20.0
Weekly 25 50.0
At least once every 2 weeks 7 14.0
Once a month 5 10.0
Rarely 3 6.0
Total 50 100.0
Figure_10

Figure No.(10) above showed the respondent’s answers when asked about the frequency of interaction with ATMs of the bank, 50% of the sample of bank customer interact weekly, 20% daily, 14% at least once every 2 weeks, 10% once every month.

Table _12:- frequency of interaction with Bank’s branches
Answer Frequency Percent
Daily 1 2.0
Weekly 4 8.0
At least once every 2 weeks 5 10.0
Once a month 20 40.0
Rarely 20 40.0
Total 50 100.0
Figure_11
Figure No. (11) Above showed the respondent’s answers when asked about the frequency of interaction with the Bank’s branches. 40% of the sample of the bank customers interacts once a week, 40% rarely, 10% at least once every 2 weeks, 8% weekly, 2% daily.

Table _13:- Frequency of interaction with internet banking
Answer Frequency Percent
Daily 1 2.0
Weekly 6 12.0
At least once every 2 weeks 1 2.0
Rarely 3 6.0
Never 39 78.0
Total 50 100
Figure_12

Figure No.(12) above showed the respondent’s answers when asked about the frequency of interaction with internet banking; 78% of the sample of bank customers never used internet banking, 12% uses it on a weekly bases, 6% rarely uses the service, 2% at least once every 2 weeks, 2% on daily bases.

Table _14:- Frequency of interaction with mobile banking
Answer Frequency Percent
Daily 8 16.0
Weekly 3 6.0
At least once every 2 weeks 1 2.0
Rarely 3 6.0
Never 35 70.0
Total 50 100
Figure_13

Figure No. (13) above showed the respondent’s answers when asked about the frequency of interaction with mobile banking; 70% of the sample of bank customers never used mobile banking, 16% uses it on a daily bases, 6% uses the mobile service weekly, 6% rarely uses the mobile service, 2% uses the mobile service once every two weeks.

Table _15:- Frequency of interaction with contact center
Answer Frequency Percent
weekly 3 6.0
At least once every 2 weeks 1 2.0
Once a month 3 6.0
Rarely 29 58.0
never 14 28.0
Total 50 100
Figure_14

Figure No. (14) Above showed the respondent’s answers when being asked about the frequency of interaction with the contact center. 58% of the sample of the bank customers interacts rarely, 28% never interact, and 6% interact weekly, 6% one month, 2% at least once every 2 weeks.

Table_16:- Awareness of respondents about the discount plus service
Answer Frequency Percent
Yes 38 76.0
no 12 24.0
Total 50 100.0
Figure_15

Figure No. (15) Above showed the respondent’s answers when asked if they are aware of the service of discount plus, 76% of customers said “yes”, while 24% said “no”.

Table_17:- Satisfaction level with the discount plus program
answer Frequency Percent
No answer 12 24.0
Very satisfied 2 4.0
Satisfied 19 38.0
Neutral 11 22.0
Dissatisfied 6 12.0
Total 50 100.0
Figure_16

Figure No. (16) Above showed the respondent’s answers when asked about the level of satisfaction of the service of discount plus, 38% of customers are satisfied, 24% have no answers (previous question), 22% are neutral, 12% are dissatisfied, and 4% are very satisfied.

Table_18:-Telling others when having positive experiences with the bank service
Answer Frequency Percent
Strongly agree 11 22.0
Agree 28 56.0
Neutral 11 22.0
Total 50 100.0
Figure_17

Figure No. (17) Above showed the respondent’s answers when asked if they would tell others when they have positive experiences with the bank of Khartoum. 56% of customers agree, 22% neutral, 22% are strongly agree.

Table_19:- Telling others when having negative experiences with the bank service
Answer Frequency Percent
Strongly agree 14 28.0
Agree 19 38.0
Neutral 7 14.0
Disagree 10 20.0
Total 50 100.0
Figure_18

Figure No. (18) Above showed the respondent’s answers when asked if they would tell others when they have negative experiences with the bank of Khartoum, 38% of customers are agree, 28% are strongly agree, 20% are disagree, 14% are neutral.

Table_20:- Recommending bank services to others.

Answer Frequency Percent
Strongly agree 11 22.0
Agree 28 56.0
Neutral 10 20.0
Strongly disagree 1 2.0
Total 50 100.0
Figure_19

Figure No. (19) Above showed the respondent’s answers when asked if they would recommend the bank services to others. 42% of customers are neutral, 30% strongly agree, and 28% agree.

Table_21:- Satisfaction level with the overall bank service received
Answer Frequency Percent
Very satisfied 4 8.0
satisfied 38 76.0
Neutral 6 12.0
dissatisfied 2 4.0
Total 50 100.0
Figure_20

Figure No. (20) Above showed the respondent’s answers when asked about the overall level of satisfaction with the service and support from the bank of Khartoum. 76% of customers are satisfied, 12% are neutral, 8% are very satisfied, and 4% are dissatisfied.

Table_22:- Future plan to expand relation with the bank of Khartoum
answer Frequency Percent
Yes 20 40.0
no 4 8.0
May be 26 52.0
Total 50 100.0
Figure_21

Figure No. (21) Above showed the respondent’s answers when asked about the availability of future plans to expand relations with the bank of Khartoum. 40% of customers said “yes”, 52% said “maybe”, while 8% said “no”.

Table_23:- Suggestions for the bank to improve its services
Suggestions Frequency Percent
No suggestions 23 46.0
Aware to customer needs 2 4.0
modern equipment’s 13 26.0
Train the bank staff 12 24.0
Total 50 100.0
Figure_22

Figure No. (22) Above showed the respondent’s answers when asked about their suggestions for the bank to improve its services. 46% of customers have no suggestions, 26% suggested the allocation of modern equipment, 24 % suggested setting training programs to the staff, and 4% suggested giving more awareness to customer needs.

Table_ 24:-Correlation between recommendation of bank services to others, and satisfaction level with the overall services received by the bank of Khartoum.

According to Pearson’s analysis there’s a strong correlation between satisfied customers and the recommendation of the bank to others. This means that if the customers are satisfied they would recommend the bank to others.

H1: Satisfied customer is most likely to recommend the bank of Khartoum to others.

Hypothesis is accepted as proven that a satisfied customer will most definitely recommend bank of Khartoum to others.

Table_25:- Service quality measurement (Tangibility)
Tangible Strongly agree Agree Neutral Disagree Strongly disagree
1-Bank of Khartoum has up to date equipment 5 33 8 2 2
10.0 66.0 16.0 4.0 4.0
2-bank of Khartoum has visually appealing and physical facilities 5 32 10 3 0
10.0 64.0 20.0 6.0 0.0
3-bank of Khartoum has a spacious parking space 1 21 12 14 2
2.0 42.0 24.0 28.0 0.0
4- bank of Khartoum branches are conveniently located 10 30 9 1 0
20.0 60.0 18.0 2.0 0.0
Figure_23
Figure No. (23) Above answers agree and neutral are common answers of customers for statements of tangibles, this means customers have some negative comments about bank’s tangibles.

Table_26:- Reliability
Reliability Strongly agree Agree Neutral Disagree Strongly disagree
1-Employees are sincere in serving customers 11 16 9 10 4
22.0 32.0 18.0 20.0 8.0
2-wwhen you have problem ,BOK is sympathetic and reassuring 4 14 20 10 2
8.0 28.0 40.0 20.0 4.0
3-bank of Khartoum provides services at the time it promises to do so 4 22 12 8 4
8.0 4.0 24.0 16.0 8.0
4- bank of Khartoum is dependable 6 25 12 7 0
12.0 50.0 24.0 14.0 0.0
Figure_24
Figure no. (24) Above, the answers strongly agree, agree, and neutral are common answers for statements of reliability, this means customers comments about bank’s reliability are positive.

Table_27: – Responsiveness
Responsiveness Strongly agree Agree Neutral Disagree Strongly disagree
1.Bank of Khartoum employees are willing to help customers 10 26 9 4 1
20.0 52.0 18.2 8.0 2.0
2.Employees will tell customers exactly when services will be performed 6 18 13 11 2
12.0 36.0 26.0 22.0 4.0
3-mployees are available to respond to customers’ requests 5 27 13 5 0
10.0 54.0 26.0 10.0 0.0
4.Bank of Khartoum provides prompts service to customers 2 31 13 4 0
4.0 62.0 26.0 8.0 0.0
Figure_25
Figure no. (25) Above, the answers agree and neutral are common answers of customers for statements of responsiveness; this means customers have some positive comments about bank’s responsiveness.

Table_28:- Assurance
Assurance Strongly agree Agree Neutral Disagree Strongly disagree
1.Bank of Khartoum’s employees are polite and courteous 11 21 9 9 0
22.0 42.0 18.0 18.0 0.0
2.Employees of bank of Khartoum have knowledge to answer customers ‘ questions 10 30 7 3 0
20.0 60.0 14.0 6.0 0.0
3.Bank of Khartoum tarns action are safe and secure 14 21 11 3 1
28.0 42.0 22.0 6.0 2.0
4.Employees of bank of Khartoum are trustworthy 8 23 15 4 0
16.0 46.0 30.0 8.0 0.0
Figure_26

Figure no (26) above, the answers strongly agree, agree, and neutral are common answers for statements of Assurance. Customer’s comments vary about bank’s assurances; there are negative comments about knowledge of employees to answer customers’ questions easily.

Table_29:-Empathy
Empathy Strongly agree Agree Neutral Disagree Strongly disagree
1.Bank of Khartoum’s employees are friendly 12 22 12 4 0
24.0 44.0 24.0 8.0 0.0
2.Bank of Khartoum has convenient operating hours 7 32 11 0 0
14.0 64.0 22.0 0.0 0.0
3.bank of Khartoum understands customer ‘s specific need 6 23 15 6 0
12.0 46.0 30.0 12.0 0.0
4.Bank of Khartoum staff provides personal attention 2 18 22 6 2
4.0 36.0 44.0 12.0 4.0
Figure_27

Figure no. (27) Above, the answers agree and neutral are common answers of respondents for statements of empathy, this means customers have some negative comments about bank’s empathy.

Table_30:- Correlations results of customer satisfaction and service quality dimensions (Tangibility, Reliability, Responsiveness, Assurance, empathy)
Correlations
Satisfaction Tangibility Reliability Responsiveness Assurance Empathy
Satisfaction Pearson Correlation 1 .449** .484** .306* .522** .710**
Sig. (2-tailed) .001 .000 .031 .000 .000
N 50 50 50 50 50 50
Tangibility Pearson Correlation .449** 1 .402** .428** .323* .313*
Sig. (2-tailed) .001 .004 .002 .022 .027
N 50 50 50 50 50 50
Reliability Pearson Correlation .484** .402** 1 .338* .214 .100
Sig. (2-tailed) .000 .004 .016 .136 .490
N 50 50 50 50 50 50
Responsiveness Pearson Correlation .306* .428** .338* 1 .095 .033
Sig. (2-tailed) .031 .002 .016 .512 .821
N 50 50 50 50 50 50
Assurance Pearson Correlation .522** .323* .214 .095 1 .516**
Sig. (2-tailed) .000 .022 .136 .512 .000
N 50 50 50 50 50 50
Empathy Pearson Correlation .710** .313* .100 .033 .516** 1
Sig. (2-tailed) .000 .027 .490 .821 .000 N 50 50 50 50 50 50
Table (30) showed the correlation between Tangibility, Reliability Responsiveness, Assurance and Empathy. There are strong positive relations between customer satisfaction and Empathy (0.71), positive relations with Assurance (0.52) and tangibility (0.44), and there’s a weak positive relation between satisfaction both responsiveness (0.30) and reliability (0.23).

H1: Service quality has a direct impact on customer satisfaction.

Hypothesis is accepted as the positive relation is proven between customer satisfaction and the service quality dimensions.

Presentation and analysis of the corporate survey:
Table_31:- number of employees
Number of employees Frequency Percentage
Less than 100 2 20.0
100- 200 3 30.0
201 – 400 3 30.0
More than 400 2 20.0
Total 10 100.0
Figure_28

Figure No. (28) Of the corporation above showed classification of corporations served by numbers of staff. 30% corporates with 100 to 200 employees, 30% with 201 to 400 employees, and 20% have less than 100 employees and also 20% have of more than 400 employees.

Table _32:- Annual sales
Annual sales Frequency Percentage
Less than 2,000,000 SDG 1 10.0
2,000,001- 5,000,000 SDG 2 20.0
5,000,001 – 10,000,000 SDG 3 30.0
More than 10,000,000 SDG 4 40.0
Total 10 100.0
Figure_29

Figure No. (29) Above showed that 40% of companies obtain annual revenue more than (10,000,000 SDG), 30% obtain between (5,000,001 and 10,000,000 SDG), 20% obtain between (2,000,001 and 5,000,000 SDG), and 10% obtain (less than 2,000,000 SDG).

Table_33:- Type of business
type of business Frequency Percentage
Agriculture 1 10.0
Food industry 4 40.0
Infrastructure and construction 2 20.0
Export finance 1 10.0
Pharmacology 2 20.0
Total 10 100.0
Figure_30

Figure No. (30) Above showed that 40% of companies are working on food industry, 20% infrastructure and construction, 20% pharmaceutical, 10% export finance to international markets, and 10% agriculture.

Table _34:- Type of financing product obtained from the bank
type of business Frequency Percentage
Murabaha2 20.0
Musharaka6 60.0
Qard Hasan 2 20.0
Total 10 100.0
Figure_31

Figure No. (31) Above showed that 40% of companies obtained Musharka as a financing product, 20% Murabaha, and 20% Qard Hasan from Khartoum bank.

Table_35:- Length of time period of being a bank client
Time Frequency Percent
1 to 5 years 3 30.0
6 to 10 4 40.0
More than 10 years 3 30.0
Total 10 100.0
Figure_32

Figure No. (32) Above showed that 40% of the corporates have been a client for a time period ranges between 6 to 10 years, while 30% have been a client for over 10 years, and 30% of relatively new clients that range between 1 to 5 years.

Table_36:- Reasons for choosing bank of Khartoum
An attractant Frequency Percent
Image and reputation 4 40.0
Recommended by other business men 1 10.0
Financing services 3 30.0
Innovative product and services 2 20.0
Total 10 100.0
Figure_33

Figure No. (33) Above showed the motives for choosing the bank of Khartoum. 40% of companies chose it because of its image and reputation, 30% chose it because of its financing services, 20% because of its ability to innovate product and services, 10% chose it because it was recommended by other business men.

Table_37:- Reasons for maintaining Relationships with the bank
Ranking 1 2 3 4 5 6 Total
Excellent customer service 1 1 3 1 4 – 10
10.0 10.0 30.0 10.0 40.0 – 100.0
Efficiency of credit processing 1 3 – 4 1 1 10
10.0 30.0 – 40.0 10.0 10.0 100.0
Bank support of business 4 – -‘ 2 1 3 10
40% – – 20.0 10.0 30.0 100.0
Image and reputations – 3 1 2 2 2 10
– 30.0 10.0 20.0 20.0 20.0 100.0
Financial stability 2 2 4 2 – – 10
20.0 20.0 40.0 20.0 – – 100.0
Profit margins 1 – 1 2 2 4 10
10.0 – 10.0 20.0 20.0 40.0 100.0
Table No. (37) Above showed the answers of managers of companies when being asked about reasons for maintaining bank relationships. 40% of managers rated “bank support of business” as the most important, 30% rated “image and reputation” second, 40% rated “financial stability” third, 40% rated “efficiency of credit processing” fourth, 40% mentioned “excellent customer service” fifth, 40% rated “profit margins” sixth.

Table_38:- Opinions about the Bank of Khartoum services
Statement Totally agree Agree Neutral
The relationship with the bank has increased out profitably 5 4 1
50.0 40.0 10.0
The relationship with the bank has strengthen the financial position of my business 3 5 2
30.0 50.0 20.0
The bank provided insights not only into financial matters but also into other areas 1 6 3
10.0 60.0 30.0
The bank of Khartoum has the level Knowledge needed to solve your firm’s financial problems 3 6 1
30.0 60.0 10.0
Bank of Khartoum provide quick and immediate services 2 5 3
20.0 50.0 30.0
The bank credit requirement for granting financial products are reasonable 6 4 0
60.0 40.0 0.0
total 20 30 10
34.0 50.0 16.0
Table No. (38) Above showed options of managers about services of the Bank of Khartoum, 50% of managers agree with above statements, 34% of mangers totally agree, while 16% are neutral.

Table_39:- Opinions about the business adviser services at the Bank of Khartoum
Statement Totally agree Agree Neutral
When we contact the business adviser he/she showed interest in our problem 5 3 2
50.0 30.0 20.0
The business advisor have the time to solve the firm’s problem 2 6 2
20.0 30.0 20.0
When in meetings the business advisor he/she is always well prepared and always familiar with our business problem 3 4 3
30.0 40.0 30.0
Listens and takes points of view into consideration 4 3 3
40.0 30.0 30.0
When our firm is faced with a problem , we always consult our business advisor regarding the possible solutions 3 5 2
30.0 50.0 20.0
Advisor makes decisions based on the policies , procedures and rules of the bank rather than on what is discussed in our meeting 3 5 2
30.0 50.0 20.0
total 20 26 14
33.4 43.3 23.3
Table No. (38) Above showed options of managers about the business advisor of Bank of Khartoum 43.3 % of managers agree with above statements, 33.4% of mangers totally agree, while 23.3% are neutral.

Table_40:- Ease and comfort in dealings with the bank of Khartoum
answer Frequency Percent
Very satisfied 3 30.0
Satisfied 5 50.0
Neutral 2 20.0
Total 10 100.0
Figure_34

Figure No. (34) above showed the level of satisfaction among managers of companies towards bank services and when being asked if it’s easy to deal with bank of Khartoum, 50% of mangers are satisfied, 30%are very satisfied, 20% are neutral.

Table_41:- Satisfaction with the distribution of profits
answer Frequency Percent
Very satisfied 2 20.0
Satisfied 5 50.0
Neutral 3 30.0
Total 10 100.0
Figure_35

Figure No. (35) above showed the level of satisfaction among managers of companies towards bank services and when being asked about the distribution of profits between the corporate and the bank, 50% of mangers are satisfied, 30% are neutral, 20% are very satisfied .

Table_42:- Satisfaction with the risk burden distribution
answer Frequency Percent
Very satisfied 4 40.0
Satisfied 2 20.0
Neutral 4 40.0
Total 10 100.0
Figure_36

Figure No. (36) above showed the level of satisfaction among managers of companies towards bank services and when being asked about satisfaction with risk burden distribution, 40% of mangers are very satisfied, 40%are neutral, 20% are satisfied.

Table_43:- Overall satisfaction with the service received
answer Frequency Percent
Very satisfied 4 40.0
Satisfied 6 60.0
Neutral – 0.0
Total 10 100.0
Figure_37

Figure No. (37) Above shows the level of satisfaction with the overall service received; 60% of mangers are satisfied, 40% are very satisfied.

Table_44:- Reasons for being satisfied
answer Frequency Percent
Good customer services 3 30.0
Bank support of business 4 40.0
Ease to transaction 3 30.0
Total 10 100.0
Figure_38

Figure No.(38) above showed the level of satisfaction among managers of companies towards bank services and when being asked about reasons that make bank of Khartoum’s services are good and make customer satisfaction ,40 % of mangers mentioned “bank support of business”, 30% mentioned “Ease to transaction ” , 30% mentioned good customer services .

Table_45:- Readiness to recommend the bank to others
answer Frequency Percent
Absolutely will 6 60.0
Often will 4 40.0
Total 10 100.0
Figure_39

Figure No. (39) Above showed the readiness of managers to recommend the bank of Khartoum to others; 60% of mangers absolutely will, 40% are often will.

Table_46:- Suggestions for the bank to improve its service
Suggestions Frequency Percent
Making Cooperate banking services widely available among branches 3 30.0
Provide foreign currency to facilitate trading operation 2 20.0
Increase services quality standards 5 50.0
Total 10 100.0
Figure_40

Figure No. (40) above showed the answers of managers when being asked about suggestions for the bank to improve its service; 50% of customers suggested increase services quality standards, 30% suggested make corporate banking services widely available among branches, 20% Provide foreign currency to facilitate imports.

Chapter Four
Findings
In this chapter the main findings of the research will be presented.

4.1 Findings:
For retailers image and reputation was ranked highest followed by word of mouth as the most important reasons for choosing the bank of Khartoum.

When it comes to maintaining relationships with the bank of Khartoum, for retailers the excellence of customer service comes first, and the proximity of branches comes second.

For corporations the most important reasons for maintaining relationships with the bank of Khartoum are Bank support of the business comes first followed by image and reputation.

The most frequently used channel of interaction with the bank is the ATM, for other purposes visiting the nearest branch is next the preferable option.

Mobile and internet banking channels are never used by majority of the respondents.

There is a lack of awareness of the loyalty program (discount plus).

Majority of the retailers population are willing to recommend bank of Khartoum to others, this has a great effect on advertising as word of mouth ranked second most important reason for choosing the bank.

40% of the respondents are willing to expand their future dealings with the bank of Khartoum, and 52% are indecisive about the decision.

Customers are more impressed with the empathy aspect of service more than any other dimension because it has the strongest effect on customer satisfaction, and a strong positive relation is found with the other service quality dimensions.

There is a strong correlation between satisfied customers and their recommendation of the bank to others.

Service quality with its five dimensions is strongly correlated with satisfaction meaning that an increase in the level of service quality will lead to an increase in satisfaction.

Retailers are generally satisfied with the overall service received.

Corporates have a positive perception about the impact services provided by the bank of Khartoum on its financial operations.

The corporates opinion about the consultancy services provided by the Bank is positive.

Corporates are generally satisfied with the ease of transactions with the bank and the profit distribution margins.

Corporates are very satisfied with the risk policies of Bank of Khartoum.

Corporates overall satisfaction levels with bank of Khartoum service range from 60% satisfied and 40% very satisfied with the service.

Corporates and retailers are willing to recommend the Bank of Khartoum to others based on services they have received, and by doing so enhancing the reputation of the bank.

Corporate respondent’s suggestions are to increase the service quality standards, provide foreign currency to facilitate foreign trade, and to provide corporate banking services at more branches.

Chapter Five
Recommendations and Hypothesis result
In this chapter the main Recommendations and Hypothesis result of the research will be presented.

5.1 Recommendations:
Retailers are strongly affected by the bank of Khartoum brand as image and reputation was ranked highest between the reasons for choosing the bank. It can be improved further by using word of mouth as customers are highly affected by it, by using electronic word of mouth and social networks provide great means in doing so, the bank communication reach will increase at a very low cost.

Bank of Khartoum needs to raise awareness about the use of mobile and internet banking as most of the respondents never used the service.

Portion of the respondents had no idea about the discount service, for the loyalty program to be effective all customers must be aware of it, to enhance the service.

Services that add to the value of the bank of Khartoum meaning mobile banking, internet banking and discount plus loyalty program are under-utilized because awareness of those services is minimal and it should be reinforced with advertisement and promotional campaigns.

To improve the service in the Bank of Khartoum to upgrade the equipment’s and train the bank staff to deal with customers more professionally.

Bank of Khartoum should focus on the empathy aspect of service quality as it has the strongest correlation with satisfaction, that doesn’t mean the other dimensions are irrelevant but a small increase in empathy will result the highest increase in satisfaction.

In building relationship with customers, excellence of customer service is the most important. As we broke down the service quality to its five dimensions, empathy dimension has the strongest effect. How employees interact with customers should be closely monitored to enhance the service and ensure consistency in delivery.

For corporation bank support of the business is the base of building long-term relationships with the bank, supporting corporation is achieved by acquiring financial and business experts to provide consultancy and advice.

Due to the strong correlation between satisfied customers and their recommendation of the bank to others, the bank should focus on keeping customers satisfied and fulfil their needs, if it wishes to increase the number of customers.

5.2 Hypothesis result:
H1: Service quality has a direct impact on customer satisfaction.

Service quality with its five dimensions is strongly correlated with satisfaction meaning that an increase in the level of service quality will lead to an increase in satisfaction.

Hypothesis is accepted as the positive relation is proven between customer satisfaction and the service quality dimensions.

H1: BOK customers are satisfied with the service provided.

The respondent’s answers when asked about the overall level of satisfaction with the service and support from the bank of Khartoum. 76% of customers are satisfied, 12% are neutral, 8% are very satisfied, and 4% are dissatisfied
Hypothesis is accepted as more than 70% of the customers of Bank of Khartoum are satisfied with the service provided
H1: Satisfied customer is most likely to recommend the bank of Khartoum to others
According to Pearson’s analysis there’s a strong correlation between satisfied customers and the recommendation of the bank to others. This means that if the customers are satisfied they would recommend the bank to others.

There is a strong correlation between satisfied customers and their recommendation of the bank to others
Hypothesis is accepted as proven that a satisfied customer will most definitely recommend bank of Khartoum to others.

Appendix
Questionnaire (1) Retailers:
The purpose of this questionnaire is to collect information regarding the satisfaction level of customers of the bank of Khartoum.

This study is done by a student of Geneva business school, to obtain a Master degree in master of business administration, International management.

Your responses will be much appreciated and used for academic purposes only. The information gathered will be confidential
Please answer the following questions by ticking the relevant answer:
Section A:
Gender
Male
Female
Age
Below 30
31 to 45
45 to 50
51 to 60
Above 60
Occupation
Self-employed
Private sector employee
Public sector employee
Student
Unemployed
Retired
Income
Less than 2000 SDG
2000 to 5000 SDG
More than 5000 SDG
Section B:
How long have you been a client of Bank of Khartoum?
1 to 5 years
6 to 10
More than 10 years
How did you come to choose this bank?
Employer Requirement
Image and reputation
Internet banking service
Word of mouth
Financing service
Client privileges (discount plus)
Other, Specify ________________________
What is your account type?
Current account
Saving account
Salary transfer account
Saving plus account
Investment/fixed deposit account
Safety locker
Have you applied for a loan or a financial service?
Yes
No
If yes, what type of financing are you receiving?
Home construction finance
Home Purchase finance
Auto finance
Education finance
Marriage finance
Other, Specify ________________________
What are the reasons for maintaining banking relationships? Please rate according to the importance. (1 being the highest, 2, 3, 4, 5 being the lowest)
Excellent customer service…….

Employer requirement…….

I’m not aware of a bank that is significantly better……
Proximity of branches……
Image and reputation……
Financial stability…..

How often do you interact with your banks through the following channels?
ATM:
Daily
Weekly
At least once every 2 weeks
Once a Month
Rarely
Never
No response
Branch:
Daily
Weekly
At least once every 2 weeks
Once a Month
Rarely
Never
No response
Internet banking:
Daily
Weekly
At least once every 2 weeks
Once a Month
Rarely
Never
No response
Mobile banking:
Daily
Weekly
At least once every 2 weeks
Once a Month
Rarely
Never
No response
Contact center:
Daily
Weekly
At least once every 2 weeks
Once a Month
Rarely
Never
No response
Section C:
The following statements relate to your feelings about Bank of Khartoum. Please show the extent to which you believe Bank of Khartoum has the feature described in the statement. Here, we are interested in a number that shows your perceptions about Bank of Khartoum.

Criteria Strongly Agree Agree Neutral Disagree Strongly Disagree
Tangibles:
1. Bank of Khartoum has up to date equipment. 2. BOK has visually appealing facilities. 3. BOK has a spacious parking space. 4. Branches are conveniently located. Criteria Strongly Agree Agree Neutral Disagree Strongly Disagree
Reliability:
5. Employees are sincere in serving customers. 6. When you have problem, BOK is sympathetic and reassuring. 7. BOK provides its services at the time it promises to do so. 8. Bank of Khartoum is dependable. Responsiveness:
9. BOK employees are willing to help customers. 10. Employees will tell customers exactly when services will be performed. 11. Employees are available to respond to customer’s requests. 12. BOK provides prompt service to customers. Criteria Strongly Agree Agree Neutral Disagree Strongly Disagree
Assurance:
13. Employees are polite and courteous. 14. Employees have the knowledge to answer customers’ questions. 15. BOK transactions are safe and secure. 16. Employees are trustworthy. Empathy:
17. Bank of Khartoum’s employees are friendly. 18. BOK has convenient operating hours. 19. BOK understands customer’s specific needs. 20. Staff provides personal attention. Section D:
Are you familiar with Discount plus loyalty program?
Yes
No
How would you describe your experience with Discount plus service?
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
Are you willing to upgrade your relationship in the future with Bank of Khartoum to further benefit from the services provided?
Yes
No
Maybe
I am likely to tell my family and friends about a positive experience I had with the bank of Khartoum
Strongly agree
Agree
Neutral
Disagree
Strongly Disagree
I am likely to tell my family and friends about a negative experience I had with the bank of Khartoum
Strongly agree
Agree
Neutral
Disagree
Strongly Disagree
Would you recommend your bank to others?
Absolutely will
Often will
Sometimes will
Absolutely will not
No Response
Overall, how satisfied are you with the service and support you received from the Bank of Khartoum?
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
What would you suggest to help improve bank of Khartoum service quality?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Questionnaire (2) Corporates:
The purpose of this questionnaire is to collect information regarding the satisfaction level of customers of the bank of Khartoum.

This study is done by a student of Geneva business school, to obtain a Master degree in master of business administration, International management.

Your responses will be much appreciated and used for academic purposes only. The information gathered will be confidential
Please answer the following questions by ticking the relevant answer:
Section A:
Number of Employees
Less than 100
100 – 200
201 – 400
More than 400
Annual sales (in millions)
Less than 2,000,000 SDG
2,000,001 – 5,000,000 SDG
5,000,001 – 10,000,000 SDG
More than 10,0000,000 SDG
Type of business
Agriculture
Food Industry
Infrastructure and construction.

Export finance
Local trade
Project finance
Other, please specify__________________________
Which financing product have you obtained from Bank of Khartoum?
MurabahaLetters of credit against MurabahaMusharakaMudarabaIstisna – MugawalaQard Hasan
Other, please specify__________________________
How long have you been a client of Bank of Khartoum?
1 to 5 years
6 to 10
More than 10 years
How did you come to choose this bank?
Advertisement
Image and reputation
Internet banking service
Innovative product and services
Financing service
Recommended by other business men
Other, please specify ________________________
What are the reasons for maintaining banking relationships? Please rank according to the importance. (1 being the highest, 2, 3, 4, 5, 6 being the lowest)
Excellent customer service……..

Efficiency of credit processing…….

Bank support of business…….

Image and reputation…….

Financial stability…….

Profit margins……
Section B: Opinion about the Bank of Khartoum, to what extend do you agree with the following statements? (1 = totally agree, 2 = agree, 3 = neutral, 4 = disagree, 5 = totally disagree)
The relationship with the bank has increased out profitability.

1 2 3 4 5
The relationship with the bank has strengthen the financial position of my business.

1 2 3 4 5
The bank provided insights not only into financial matters but also into other areas.

1 2 3 4 5
The Bank of Khartoum has the level knowledge needed to solve your firm’s financial problems.

1 2 3 4 5
Bank of Khartoum provide quick and immediate services.

1 2 3 4 5
The bank credit requirement for granting financial products are reasonable.

1 2 3 4 5
Section C: Opinion about the business advisor at the bank, to what extend do you agree with the following statements? (1 = totally agree, 2 = agree, 3 = neutral, 4 = disagree, 5 = totally disagree)
When we contact the business advisor, he/she show interest in our problem.

1 2 3 4 5
The business advisor have the time to solve the firm’s problem.

1 2 3 4 5
When in meetings the business advisor he/she is always well prepared and always familiar with our business problem.

1 2 3 4 5
Listens and takes point of view into consideration
1 2 3 4 5
When our firm is faced with a problem, we always consult our business advisor regarding the possible solutions.

1 2 3 4 5
The advisor makes decisions based on the policies, procedures and rules of the bank rather than on what is discussed in our meeting.

1 2 3 4 5
Section D: How satisfied are you with the following:
Comfort and ease in business dealing with Bank of Khartoum?
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
Profit distribution:
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
Risk burden distribution:
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
How satisfied are you with the banking relationship?
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
In case you are very satisfied or satisfied please give reasons for that
_____________________
_____________________
_____________________
In case you are very dissatisfied or dissatisfied please give reasons for that
_____________________
_____________________
_____________________
Would you recommend your bank to others?
Absolutely will
Often will
Sometimes will
Absolutely will not
No response
What would you suggest to help improve bank of Khartoum service quality?
……………………………………………………………………………………………………………………………………………………………………………………
References:
Phillip Kotler, Gary Armstrong, Veronica Wong, John Saunders 8th edition (2008). Principles of Marketing. Prentice Hall publishing.

Christopher Lovelock, Jochen Wirtz 6th edition (2007). Service Marketing: People, Technology Strategy. Pearson/prentice Hall.

Frances Brassington, Stephen Pettit 4th edition (2006). Principles of Marketing. Prentice Hall.

David Jobber 6th edition (2010). Principles and Practices of Marketing. McGraw-Hill Higher Education.

Dennis Acock, Al harbor, Caroline Ross 4th edition (2001). Marketing: Principles and Practices.

Mary Jo Bitner (1992). Services cape: The Impact of Physical Surrounding on Customers and Employees. Journal of Marketing. Vol. 56, No. 2, pp. 57-71. American Marketing Association.

Steve Olenski (2013). This is the most important word when it comes to Relationship Marketing. http://blog.c-suitenetwork.com/important-word-comes-relationship-marketing/Roger Hallowell, (1996) “The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study”, International Journal of Service Industry Management, Vol. 7 Iss: 4, pp.27 – 42.

Chaoprasert, Elsey, (2004). Service quality improvement in Thai retail banking and its management implications. ABAC Journal, 24(1), 47-66.

Muffato and Panizzolo, (1995). Customer Satisfaction in the Mauritian Banking Sector Marketing. http://www.ukessays.com/essays/marketing/customer-satisfaction-in-the-mauritian-banking-sector-marketing-essay.php#ixzz36DTVaIweParasuraman, A., Berry, L. L., ; Zeihaml, V. A. (1991). Refinement and Reassessment of the SERVQUAL Scale. Journal of Retailing, 67 (4), 420-450.

Parasuraman, A., Berry, L. L., ; Zeihaml, V. A. (1988). SERVQUAL: A Multiple Item Scale for Measureing Consumer Perceptions of Service Quality. Journal of Retailing, 64 (1), 12-40.

Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985), “A conceptual model of service quality and its implications for future research”, Journal of Marketing, Vol. 49 No. 3, pp. 41-50.

Carman, J.M. (1990), “Consumer perceptions of service quality”, Journal of Retailing, Vol. 66, pp. 33-55.

Fornell, C., (1992). A National Customer Satisfaction Barometer: The Swedish Experience. Journal of Marketing, Vol. 56 No. 1, pp. 6-21.

Gronroos, Christian (1978), “A Service-Oriented Approach to Marketing of Services,” European Journal of Marketing, Vol. 12 (8), pp 588-601.

Oliver, R. L., Satisfaction: A Behavioral Perspective on the Consumer, New York, McGraw Hill, 1997.

Churchill, G A and Surprenant, C (1982). “An Investigation into the Determinants of Customer Satisfaction,” Journal of Marketing Research, 19(November), pp. 491-504.

Cronin, J and Taylor, S A (1992). “Measuring Service Quality: A Reexamination and Extension,” Journal of Marketing, 56(July), 55-67.

Cronin, J and Taylor, S A (1994). “SERVPERF versus SERVQUAL: Reconciling Performance-based and Perceptions– Minus–Expectations Measurement of Service Quality,” Journal of Marketing, 58(January), 125-31.

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