Factors Affecting Customers’ Bank Selection Decision: In Case of Commercial Banks in Jimma Town, Oromia Region, Ethiopia

Abstract

The banking sector remains highly competitive. To win the markets, banks should focus more on customer expectations. Exploring such information will help banks to identify the appropriate marketing strategies that needed to attract new customers and retain existing ones. The objective of this study is to examine factors that affect customers’ bank selection decision in private as well as state owned Commercial banks in Jimma town. The study employed descriptive and explanatory research design and mainly conducted based on data collected through questionnaires and interviews. The Sample size of the study was 384. The collected data analyzed through SPSS version (20). The descriptive and inferential statistical tools such as mean, percentage, ANOVA, correlation and multiple linear regressions used to analyze collected data. The regression model summary shows that the all independent variables explain 53.5 % variability on bank selection decision and model explains significant variability of customers’ bank selection intention by five decision variables. Out of five factors, four factors were significant. Such that, technology factors, service quality factors, bank image and reputation factors, and convenience factors have significant and positive relation with bank selection decision while financial factor has insignificant relation with bank selection decision. As customers place more emphasis on factors like convenience, service quality, technology and bank image and reputation, Such factors better to be considered seriously by banks in their marketing strategies which help them to attract new as well as retain the existing customers.