Customer Satisfaction and Service Loyalty in Selected BDO Branches

Within Las Pias Area

By Elizabeth Villocino

Title: Customer Satisfaction and Service Loyalty in Selected BDO Branches Within Las
Pias Area
Problem Statement: According to Stafford (1996), In service industries, the
main core of service quality remains a risky one as businesses attempt to maintain a
comparative advantage in the marketplace. Since financial services, particularly banks,
contend in the marketplace with commonly interchangeable products, service quality
becomes a main competitive weapon. Currently, technological developments are causing
banks to reexamine their strategies for services provided to both commercial and
individual customers. Additionally, banks that excel in quality service can have a diverse
marketing edge since improved levels of service quality are related to higher revenues,
increased cross-sell ratios and higher customer retention (Bennett and Higgins, 1993),
and expanded market share (Bowen and Hedges, 1993). As well, the banks understand
that customers will be loyal if they can produce greater value than competitors (Dawes
and Swailes, 1999).
Introduction: The offers of banking industry are mainly of service in nature.
Service is an activity or benefit that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production may or may
not be tied to a physical product (Kotler et al., 1999). Services are economic activities
that create value and provide benefits for customers at specific times and places, as a
result of bringing about desired change in or on behalf of the recipient of the services
(Love lock and Wright, 2002).
Purpose: The aim of the study is to assess and analyze customer satisfaction and
loyalty in the selected BDO branches within Las Pias.
Theoretical Framework: The evaluation of service quality is formed during the
service supply is process. In the figure1 depicting service qualities is focused evaluation
that reflects the customers perception. Showing in the figure that five principal
dimensions that customers use to judge service. Quality-reliability, responsiveness,
assurance, empathy and tangibles. (Fitzsimmons and Fitzsimons 2006, 108)

Research Questions: What are the main service quality dimensions and their
prioritization as perceive by BDO bank customer? Does service quality influence
customer satisfaction and service loyalty? Does customer satisfaction lead to service
loyalty?
Significance: The findings of this research are significant in various respects.
First, from the findings the researcher will be able to distinctly put up the clear gaps in
specific reference to customer satisfaction and service loyalty of BDO banks in selected
branches within Las Pias area. On the basis of the study, the researcher will endorse set
of alternative courses of actions to be considered to enhance the level of satisfaction and
loyalty of the customers towards the BDO bank. Second, this study seeks to contribute to
the growth of conceptual framework that integrates service quality, customer satisfaction,
and service loyalty. Third, the effects for further research will be set and it will be used as
a stepping-stone for similar research works.
Fourth and most important, the
methodologies and the experiences that will be applied in the research can be
disseminated to other banks and financial institutions undertaking similar activities.

Background: BDO is a full-service universal bank in the Philippines. It provides

a complete array of industry-leading products and services including Lending (corporate
and consumer), Deposit-taking, Foreign Exchange, Brokering, Trust and Investments,
Credit Cards, Corporate Cash Management and Remittances in the Philippines. Through
its local subsidiaries, the Bank offers Leasing and Financing, Investment Banking,
Private Banking, Rural Banking, Banc assurance, Insurance Brokerage and Stock
Brokerage services.

Nature of the Study: This will primarily be a descriptive study but the researcher
will also utilize ethnographic and evaluative techniques. The researcher believes that in
order to elicit accurate information from this population, the investigator must have
personal knowledge of this disease. The researcher plans to discover what the participants
believe or perceive they have experienced. The investigator further believes that nothing
can be understood apart from the context within which it was experienced.
Literature/Research Review: Customer Satisfaction, Service Quality Dimension, and
Service Loyalty (15-20 pages for the study)
Scope: The study presents a model of Customer Satisfaction and Service
Loyalty in Selected BDO Branches within Las Pias using the descriptive approach.
This approach would be discussed extensively in Chapter 3, on the studys research

methodology. This study is focused on assessing satisfaction and service loyalty of

customers of BDO banks in selected branches within Las Pias area.
Limitations: Though customer satisfaction and service loyalty are issues that
deserve the involvement of both the service providers and customers, the scope of the
study is limited to the perception of customers only. And, the research sample was
selected from saving, current account, or a person who makes use of BDO bank services.
The sample consists of BDO customers in selected branches with the age range of
18-65 years old. Due to the nature of the sample, the results may not be representative of
the rest of other BDO banks in the Philippines banking industry. Only customers in
selected BDO Las Pias branches served as the respondents of the study. Exempted from
the study are other BDO customers outside of Las Pias area.

Methodology: This study will use a descriptive research design that includes
ethnographic and evaluative components to describe the way things are. Descriptive
research involves observation and description of variables as they are distributed
throughout a population (Campbell & Stanley, 1966). Quality observation (i.e.,
measurement) is at the heart of descriptive research (Heppner & Wampold, 1992). Both
qualitative and quantitative data will be collected.
Operational Definitions: banking sector, customer satisfaction, service loyalty,
and service quality dimension