Relationship Banking: An Empirical Assessment of Private and Public Sector Banks

Abstract

The changing customer needs, increased competition and a service oriented economy are compelling marketers to rethink their marketing strategy. Marketers are now increasingly adopting relationship marketing as a strategy to acquire and retain customers. Building strong customer relationships offers a significant competitive advantage due to the difficulty of direct imitation by competitors. In view of growing importance of relationship marketing, an attempt has been made in the present paper to study the customer relationships between private and public sector banks with a view to offer suggestions, on the basis of the study results, to make overall bank customer relationships more effective and efficient. The study is based on a sample of one thousand two hundred (1200) customers of four major banks operating in northern India. The responses have been integrated into important factors by applying Exploratory Factor Analysis (EFA) to validate specific measure of relationship banking. The paired sample t-test was performed to study the variation in relationship marketing between private and public sector banks. The empirical findings reveal significant variation (p<0.05) in bank customer relationship between private and public sector banks.