Consumer Preferences in the Indian Banking Industry - An Exploratory Study using Multidimensional Scaling

ABSTRACT
Banks are the essential part of a country’s economy and citizen’s life. Banking promotes saving and uses this money for borrowing purposes. All manner of people from the ordinary laborers and workers to the rich land owners and businessmen can keep their money safely in banks and earn savings on it. People decide which Bank to associate with depending upon its different features or attributes. The importance that customers give to each attribute, however, differs from one consumer to another. The ability to identify the importance of different attributes of banks from the consumers’ perspective is essential for improving an existing bank or establishing a new bank. The purpose of this study is to identify the positioning of major banks in India. The study makes use of the multidimensional scaling technique to identify (a) the dimensions underlying of customers’ evaluation of banks, and (b) the potential opportunities for the new bank in the perceptual map of the consumers’ mind.
Keywords: Multi-Dimensional Scaling, Banks in India
INTRODUCTION
Banks are the heart of a nation’s economy. Firstly they promote savings through offering saving rates. Secondly, they invest this savings either through direct investment or loans to promote the economy of the country. In India, commercial banking has played a vital role in driving the economy for almost 200 years. Pre liberalization, the banks in India where nationalized in order to reach the masses. Later during the post liberalization, retail banking sector saw a rapid growth along with the economy of India. Retail banking is a banking service that is geared primarily toward individual customer (Raghuwanshi, 2012). These offerings are current and saving accounts, debit/credit cards, mortgages and personal