Impact of Branding on Customer Satisfaction in Banking Industry:

A survey on Rizal Commercial Banking Corporation Iloilo

Abstract

Branding is defined as the practice of promoting the brand name of a business entity. It involves the
process of building reputed image that attracts and retains targeted customers. A successful branding
provides confidence for the customers to use the products or services offered by the entity. The impact
of continuous branding effort of corporations on the level of customer satisfaction has not been explored,
specifically in banking institution

[ Insert hypotheses] Paragraph 2

[ Insert Contradiction] Paragraph 3

[ Insert Method] Paragraph 4

[ Insert Partial Analysis of Data] Paragraph 5

Introduction

One of the most discussed phenomena of marketing research and strategy, is branding. It has become
a significant concept in almost all organization. Branding is the process involved in creating a unique name
and image for a product or service into the consumers mind, mainly through advertising campaign with
consistent theme (Business Dictionary Online, 2009). It has been around for centuries as means to
distinguish the goods or services of one producers/providers to another. (Kotler, 2001). In the competitive
market, branding is considered a valuable intangible asset of the company. It plays an important role in
business success, as positive branding will enable customers to better visualize and understand products
and reduce the customers perceived risk in buying services (Kim et al, 2008), thus helping the company
achieve sustained superior performance. Customer Satisfaction, on the other hand, is a marketing term
that measures how products or services supplied by a company meet or surpass a customers expectation.
(Ross Beard, 2014). It is a leading indicator of consumers repurchase intentions and loyalty and reduces
customer aversions

The value of these two important concepts in banking industry may be unique, as banking have a
different kind of nature compared to common business entities. Banking is a service industry. It runs in
entirely on the customers trust to endow his/her hard-earned money to a bank with or without any
collateral security in return. Therefore, building trust with customers, potential users of bank services is
one of the most important functions of marketing in banking industry, that can only be accomplished
through proper branding.

The importance of branding is brought into sharper focus by the fact that in terms of services that bank
offers, there is no much scope for differentiation per se. The nature of depository services and loan service
in terms of interest rates offers are identical across all banks.

Banks needs to provide consistent brand experience to prevent customer from switching to other
banks. Hence, the industry is now focused on the importance of customer-oriented marketing. Banks
endeavor to establish marketing strategies which can promote a brand image among customer for
improving satisfaction as well as extensive promotion of performance.
Although bank image branding is becoming increasingly important in the competitive banking industry,
there are only few studies available in this aspect as for the current academic research here in the
Philippines.

This study aims to dig a deeper understanding on the relationship between bank branding efforts and
customer satisfaction. The key question on this study is: What impact does bank branding image have in
customer satisfaction, retention, and loyalty?

Objectives of the Study

This study will be conducted to assess the impact of branding in customers satisfaction, specifically on
banking industry.

This study aims to:

1. To identify the effects of branding in customer satisfaction in banking industry

2. To measure/assess the degree of the impact branding in customer satisfaction

Theoretical and Conceptual Framework

Branding

Branding is making that individual specialty in the customer's mind and owning it. Something other
than promoting, Branding is the whole impact that makes a paramount personality [1]. In a period of
financial instability with client trust disintegrating and buy practices producer harder to anticipate acing
this capacity has turned out to be much more basic to remaining applicable, focused and beneficial [3].
Fig.1 demonstrates the different parts of Branding which incorporate Customer benefit, Pricing, Company
Name, Logo, Strong Impression, Repetition, Product Benefit, and Value Preposition.

Figure I
 Quality is important, but not as important as the perception of quality.

Be consistent and patient. Building a strong brand takes time.

Put your brand definition in writing, otherwise youll get off course.

Brand orientation and customer empowerment capture the effect of market orientation on customer
satisfaction. Given the focus of market orientation on customers, brand focus and co-opting customer
involvement in the marketing effort is important, if the firm wants to translate the understanding of
market intelligence into superior customer satisfaction (Jeewan Kumar Dhingra. 2013)

Customer Satisfaction

The focus of work and efforts regarding customer satisfaction should be on the collection of best
practices and the preparation of guidelines for questionnaires to measure customer satisfaction.
Measuring satisfaction is one thing; managing satisfaction is another and should be the aim [2].
Customers expectations and thinking establish the service quality gap which is shown in fig. 2.

Figure 2
Hypotheses of the Study

1. Efforts in branding, image building in Banking Industry presents a notably positive relation with
Customer satisfaction
2. Degree of expectation is relative to branding status in Banking Industry

Significance of the study

This study will assess the importance of branding in banking industry, despite of diminutive
differentiation of services between banking institutions. The users of the data and conclusion drawn from
research will be able to determine the degree of branding efforts needed for their specific institution.

This study will also determine the consumer behavior towards bank branding in this industry that
can help improve their strategy to gain competitive advantage

Scope of the study

This study will use data gathered from RCBC Iloilo patrons, specifically from RCBC Jalandoni, RCBC
Lapaz, RCBC Iznart, and RCBC Jaro, RCBC Mabini, pulling 25 respondents from each branches.
 II Review of Related Literature

2.1 Branding

A brand is an emotional and physiological relationship a firm has with a customer, strong brands
elicits thoughts, emotion and sometimes-physiological responses from a customer. A brand is a source of
a promise to its customers. It promises relevant differentiated benefits. It does so not only to place itself
into the purchase consideration set, but even more importantly, to be the brand chosen from that
purchase consideration set. This is also sometimes referred to as the brands unique value proposition.
Whether it is called a unique value proposition or a promise of relevant differentiated benefits, it is very
important that the promise or proposition be delivered consistently at each point of customer contact,
time after time. (Lynn B Upshaw 1995, 1.)

2.1.1 Internal Branding

Internal branding is the process that guides a company to implement the brand promise to reality,
this process involve planning and action at all organizational level in the company, it is a process that start
with awareness of the brand and ends at changing employees behavior, it engages employees with the
brand value, internal branding is describe as the inside-out approach by communicating to employees the
brand value, aligning employees with the brand promise, then employees will deliver consistent message
to customers and the message is projected to the market, this inside-out approach result in a stronger
brand and better brand-customer relationship. (Bjerke & In 2007, 31.) Bulsho has to communicate the
brand to its employees first, let the employees know what the brand value and image the company wants
to present to the public, what strategies need to be put in place to achieve these goals, who is in charge
to communicate this message to the employees from top to bottom and how to engage employees to
better communicate this idea, brand to the customers.

2.1.2 Brand value and attributes

A brand is a collection of perceptions, which creates an interaction in the mind of a consumer; the
brand value is not the logo or an advertising campaign or goods and services a company offers to
customers. This is why it is called the total brand because it is the result of the consumers total
experience. Good brands are assets to the company; they create wealth for their companies, communities
and countries. The value of a brand delivers changes in behavior, securing a future stream of profits for
the company and creates business value. Many customers experience the value of a strong brand in their
daily consumption of goods and services. (Kapferer 2008, 9.) There are four ways in which a strong brand
can create value to customers: a strong brand gives peace of mind to customers because the consumers
trust the owner to produces the right goods with the quality they desire, this trust is basis for their own
experience with the product and also the stories they have heard about the brand, this help to give the
buyer a 18 peace of mind knowing that they are buying what they ask for or want and the owner has to
uphold this trust. A strong brand save time and transform the consumption experiences, consumers are
busy nowadays and so they rely on the product they trust and know better which makes it easy to decide
on what to buy and move on and also helps to tap into the imaginary fantasy of the product thus making
it more rewarding. A strong brand helps to express our attitude, value and place in the society as such it
is natural for us to seek meaning and significant in our behavior including the goods and services we utilize,
a good example is an American expressing the value and important of an IPhone been made in the United
States (Kapferer 2008, 18-22.) This is the function of designing and executing marketing activities to
measure and manage the brand equity of a company. This can be done in four different ways. By
identifying and establishing brand positioning which is to distinguish all the attributes that makes the
brand different from that of competitors and then emphasizing on the particular attributes so that it
occurs a distinct and value place in the mind of target consumers. Positioning also covers convincing the
customers of the importance of the brand with respect to that of others. By planning and executing brand
marketing campaigns to build a strong brand that consumers are aware of and have a strong favorable
and unique association with, this will include, choosing the brand elements, integrating the brand into the
marketing activities and exploiting secondary associations such as company, country of origin, channel of
distribution and other brands. By measuring and interpreting brand performance through auditing the
brand positioning, brand audit is an inclusive assessment of a brand involving activities to evaluate the
health of a brand to reveal it sources of equity and suggestion for the improvement of the equity from
both the consumer and firms point of view. By growing and sustaining brand equity through design and
execution of marketing campaign to gain a strong leadership position in the market for the brand.
Preserving and increasing on the brand equity can be challenge. (Keller et al. 2008, 35-37.)

2.2 Customer satisfaction

Satisfaction can be separated into two approaches either as a transaction-specific satisfaction

(Olsen & Johnson, 2003) or as a cumulative satisfaction/post-consumption satisfaction (Oliver, 1997).
After 1990s, many researchers view satisfaction as customers cumulative, after purchase, and overall
judgment about purchasing behavior (Johnson, Anderson & Fornell, 1995; Engel & Blackwell, 1982; Hunt,
1977; Oliver, 1997). According to Oliver (1997), satisfaction is defined from the mixture of both affection
(emotion) and cognition approach as the consumers fulfillment response. It is a judgment that a product
or service feature, or the product or service itself, provided (or is providing) a pleasurable level of
consumption-related fulfillment, including levels of under- or over-fulfillment (Oliver, 1997). Customer
satisfaction is viewed as influencing repurchase intentions and behavior, which, in turn, leads to an
organizations future revenue and profits. However, Bowen and Shoemaker (2003) stated that satisfied
customers might not return to the firm and spread positive word-of-mouth communications to others.
One of the reasons is that the firm does not deliver what customers need or want (Roig, Garcia, Tena &
Monzonis, 2006). Woodruff (1997) further identified that customer satisfaction measurement without
fulfillment of customer perceived value could not really meet the customers expectations. Therefore,
other variables should exist to further explain the relationship between satisfaction and customer loyalty.
2.3 Customer loyalty

Customer loyalty can be classified as brand loyalty, service loyalty, and store loyalty (Dick &
Basu, 1994). Customer loyalty is a strategy that creates mutual rewards to benefit firms and customers
(Reichheld & Detrick, 2003). One benefit is that firms can increase the revenue. With loyal customers,
companies can maximize their profit because loyal customers are willing to (1) purchase more
frequently; (2) spend money on trying new products or services; (3) recommend products and services
to others; and (4) give companies sincere suggestions (Reichheld & Sasser, 1990). Thus, loyalty links the
success and profitability of a firm (Eakuru & Mat, 2008). Customer loyalty is commonly distinguished in
three approaches including behavioral loyalty approach (Grahn, 1969); attitudinal loyalty approach
(Bennett & Rundle-Thiele, 2002; Jacoby, 1971; Jacoby & Chestnut, 1978), and integration of attitudinal

and behavioral loyalty approach (Dick & Basu, 1994; Jacoby, 1971; Jacoby & Chestnut, 1978; Oliver, 1997).
The attitudinal loyalty helps to examine the factors of loyalty, to avoid switching behavior (Caceres &
Paparoidamis, 2007), and to predict how long customers will remain loyal (Jacoby & Chestnut, 1978).
Therefore, viewing loyalty as an attitude-behavior relationship allows integrated investigation of
antecedents and consequences of customer loyalty (Dick & Basu, 1994). Corporate brand image, customer
satisfaction and loyalty: Corporate image has been assessed as an important antecedent of customer
satisfaction and loyalty (Wu, 2011). In the previous study, Davies et al. in 2003, has shown a positive
relationship between corporate brand image and satisfaction, and this result is consistent with the theory
proposed by Davies et al. Martineau (1958) stated that if consumers favor image of the store, they will
probably develop a certain degree of loyalty, and Selnes (1993) also confirmed the influence of corporate
brand image on brand loyalty. However, Davies and Chun (2002) found that corporate brand image had
an indirect influence on brand loyalty via customer satisfaction when personality traits are used to portray
corporate brand image in an off-line setting. Customer satisfaction is an important driver to customer
loyalty and the success of businesses (Oliver, 1997).

Studies have found positive evidence on the direct relationship between customer satisfaction
and loyalty of repeat purchase, less price sensitive, cross-buying behavior, and profit (Bloemer &
Odekerken-Schroder, 2002; Ibrahim & Najjar, 2008; Oliver, 1997). However, several studies (Dimitriades,
2006; Jones, 1996; Woodruff, 1997) show that satisfied customers do defect. For example, when
customers say they are satisfied, they still purchase elsewhere (Jones, 1996
 III Methodology

Research Design

This study is casual in nature. Survey method will be used for data collection. Demographic
variables will be used in this study.

Demographic Variables

The survey will divide and analyze the data using these following demographic variables

1. Gender
2. Age-bracket
3. Financial Capacity
4. Income Source
5. Years with RCBC Bank

Sampling

The subjects will be taken from the internal and external customers of banking industry
specifically on major branches of Rizal Commercial Banking Corporation located at Jalandoni, Iznart, Jaro,
and Lapaz in Iloilo City. 25 respondents will be picked from each of the branches. Online survey forms will
be utilized for further brand value computation, a total of 50 non-patrons will be asked.

Analysis and Measurement Method

Branding/ Branding will be divided into 2 different aspects name: Brand name and Perceived quality. To
measure customer satisfaction, the data that will be used will be segregated into 2 sections: Brand
experience and Brand Loyalty.

Each section for both variables will have at least 2 questions each. Likert scaling will be used in this study

Pearsons correlation analysis will be used in measuring the degree of influencing between the two
variables.
Name ___________________ Age bracket: (0-15) (15-25) (25-35) (35-50) (50-up)

Gender: M, F

Financial Capacity: (optional)

0-90k per annum

90k-120 per annum
120k-180 per annum
180k-320 per annum
320k-500 per annum
500k-up

Source of income:

Business
Employment
Allotment