Academic journal article IUP Journal of Marketing Management

Location and Educational Background: A Comparison of Their Moderating Role in Customer Awareness regarding Banking Services

Academic journal article IUP Journal of Marketing Management

Location and Educational Background: A Comparison of Their Moderating Role in Customer Awareness regarding Banking Services

Article excerpt

Liberalization, deregulation and increasing competition have made the Indian banking industry a buyer's market and therefore the banks have started to extend their customer base to areas which were leftunattended earlier. Irrespective of rural or urban areas, banks are trying to diversify their services to masses, and customers should be informed about these services so that they can avail them without any fear and hesitation. Due to lower literacy level and scarce sources of information in rural areas, customers do not possess sufficient knowledge about the services offered by banks. Therefore, the present research work has been carried out to find gaps in the awareness level of customers on account of their location and educational background and comparatively analyze the sources of information influencing customer awareness. The study reveals that location and educational background of the customers influence their level of awareness regarding banking services. Location has a very powerful impact on customer awareness as compared to their educational background and significant differences exist in the opinions of rural and urban customers regarding sources of awareness.

Introduction

The knowledge and understanding of a purchaser regarding products/services/institution/ company/etc. is called customer awareness. It is the awareness of the customer regarding products or services, their characteristics, substitutes, quality, price, producer/service provider, etc. It helps the customer to get the most from what he buys, get more choices, more understanding and safety. Consumer awareness, which refers to a buyer's knowledge of a particular product or company, allows the buyer to get the most from what he buys.1 "Customer awareness is a market function that influences how individuals make choices between comparable goods and services." Therefore, customer awareness helps the customer to buy from the available choices which can satisfy his needs.

As far as the banking services are concerned, banks provide financial services to the customers. They have a greater responsibility to safeguard the personal or corporate funds on one hand, and to perform the services in the interest of society and nation on the other. Due to liberalization, deregulation and increasing competition, the Indian banking industry has become the buyer's market, and hence, banks have started to extend their customer base to areas which were leftunattended earlier. Therefore, irrespective of urban or rural areas, banks are trying to diversify their products and services to the masses. Customer awareness is essential to enable them to avail these services without any fear and hesitation. Today's customer is presumed to be aware of all kinds of financial services offered by the various financial institutions (Arora, 2005). But due to lower literacy level and scarce sources of information in rural areas, the customers do not possess sufficient knowledge about the services offered by the banks. A large chunk of the Indian population does not even know that bank account is a necessity in day-to-day activities involving monetary transactions, and for many people, a bank account does not play any role other than safe-keeping of money (Dhrupad Buch, 2010).2 Therefore, in urban areas too, customers lack awareness regarding banking services available to them. This paper is an attempt to study and compare the level of awareness with respect to banking services between the customers of rural and urban branches in Jalandhar district of Punjab. The paper also investigates the association between customer awareness and their educational level. A comparative analysis of the sources of information used by rural and urban customers for awareness regarding banking services is also done.

Review of Literature

Review of literature is very useful in giving the background, identifying the research gap and the need for the study and specifying its objectives. …

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