Determinants of Customers Choice of Bank: An Empirical Investigation Customers Preference in Addis Ababa

Abstract

The main idea of the study was to identify the determinants of customer’s choice of bank: in Addis Ababa. The study applied explanatory research design to identify and explain the determinant factors that influence customer’s choice. Both quantitative and qualitative research approaches were used. To collect data, questionnaire in the form of Likert scale, and open ended questionnaire were conducted. A total of 394 questionnaires were distributed to respondents who are selected via systematic sampling techinique and 384 of them were returned back. To generate the output of the study the statistical software for social science version 20.0 were used. The finding of the study revealed that financial factors found the strongest factor that affect customer’s decision followed by service quality. Convenience/security were found the third influential factor followed by reputation factors/bank's image. Lastly technological factor and marketing and promotional factors were play a modest role influencing customers decision. Regarding inferential analysis there were significant correlations existed between bank selection decision and independent variables. Specifically there were strong bank selection decision with service quality, financial factors and convenient and security factors. Due to these the linear combination of the independent variable was significantly related to the dependent variable, R=.867a adjusted R square=.786, F=32.6 (p=0.000). Lastly the researcher recommends Based on the findings of the study, the following recommendations are suggested. Mangers of the bank should consider financial interest of the customer, convenience of banks service to customer and service quality issues seriously