A Comparison of Relationship Marketing in Public and Private Sector Banks in India

Abstract

Relationship Marketing is a new phenomenon in marketing. It is a multifunctional approach, describing marketing as “an integrative activity involving functions across the organization, with emphasis on facilitating, building and maintaining relationship over time.” This trend has been catalyzed by the general shift to information highway, IT, database management, whereby marketers have leveraged this new technology to create closer ties with their customers. The overall objective of relationship marketing is to build and facilitate longterm/ life-time customer relationships. The present study examines Relationship Marketing in the context of banking. The primary objective of the study is to analyze customer perceptions of Relationship Marketing in public and private sector banks in India. It further discusses various barriers to the implementation of Relationship Marketing in Indian Banking Sector. The study is based on a survey of a random sample from the of customer databases of five public sector and five private sector banks. The data was collected using a structured questionnaire, pertaining to five dimensions of Relationship Marketing, viz. Trust, Bonding, Communication, Relationship Quality, and Conflict-handling, and the overall Customer Satisfaction with the service. The findings of the study indicate that Relationship Marketing in both public sector and private sector banks has to go a long way to go to become effective. There was found to be a significant gap between expectations and perceptions in the Bonding, Communication, and Conflict-handling aspects of Relationship Marketing. Further, Communication and Conflicthandling aspects were found to be significant drivers of overall Customer Satisfaction.