ABSTRACT

This study was on the effect of physical environment on the service purchase behavior in the banking sector. The study was guided by the following objectives:to evaluate the effect of the socio-economic characteristics of the target respondent in customers choice of a bank, to determine the effect of image on the buyer behavior of customers in the banking sector, to determine the significance of color in retaining bank customers, to ascertain the effect of space in the number of bank customers. The study population was made up 150 people whose opinion generated data for the study and it includes 20 of ECOBANK management staff, 30 of the bank employees and 100 of the bank customers. 110 people were derived as the sample size using Taro Yamane’s scientific method. The study employed multiple regression and simple percentages in analyzing the data collected; and questionnaire was used to collect the primary data.  Primary and secondary data sources were used. The study findings reveal that, physical evidence, layout, and the interior design of the bank has positive influence on the patronage of the bank customers; the annual income, in the form of salary to the bank employees serves as source of motivation to the employees’ performance; the employee performance, age of the employee and marketing experience all contribute to productivity of the employee and later to profitability of the bank; the image, colour and space of a bank influences customers’ patronage positively. However, the cost of equipment and maintenance as well as technology affected productivity negatively. The study therefore recommends that these areas including the image, colour and space of the bank should be developed in a way that it will not only influence customer patronage and satisfaction but also enhance customer loyalty and improve the employee performance. The bank management should also be recruiting people at their youthful age; and also there should be prompt payment of their salaries such will be morale booster and a motivational factor for employee performance and productivity. There should be good budget for the purchase and maintenance of equipment; with cost reduction techniques and provision for depreciation such will enhance adaptableness to existing technology that will enhance corporate performance.

TABLE OF CONTENTS

Title page i

Declaration ii

Certification iii

Dedication iv

Acknowledgement v

Table of Contents vi

List of Tables ix

Abstract x

CHAPTER ONE 

INTRODUCTION

1.1 Background of the Study                                              1

1.2 Statement of Problems 3

1.3 Objectives of the Study 5

1.4 Research Questions 6

1.5 Research Hypotheses 6

1.6 Significance of the Study 7

1.7     Limitation of the study 7

CHAPTER TWO 

REVIEW OF RELATED LITERATURE

2.1 Conceptual framework 9

2.1.1 Service Defined 9

2.1.2 The Purpose Of Service Environment 9

2.1.3 Image, Positioning, and       Differentiation 10

2.1.4 Facilitating the Service Encounter and Enhancing Productivity 12

2.2  Consumer Responses to Service Environments 13

2.2.1 Feelings as a Key Driver of Customer Responses to Service

      Environment 13

2.2.2 Behavioral Consequences of Affect 16

2.3  Theoretical Framework 17

2.3.1 Servicescape Theory    17

2.4   Empirical Framework 18

2.4.1 The Impact of Ambient Conditions 18

2.4.2  Special Layout and Functionality 21

2.4.3 Signs, Symbols, and Artifacts 22

2.5 Summary 23

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design 25

3.2 Area of Study 25

3.3 Study Population 25

3.4 Sampling Techniques 26

3.5      Sample Size 26

3.6 Method of Data Collection 27

3.6.1 Instrument 27

3.6.2 Data Sources 27  

3.7 Data Analysis 28

3.8 Model specification 28

3.9 Validity 29

3.10 Reliability 29

CHAPTER FOUR 

RESULTS AND DISCUSSIONS

4.1 Questionnaire Distribution 30

4.2 Socio-economic Characteristics of Management and Employee 30

4.2.1 Distribution of Respondents according to Age 31

4.2.2 Distribution of Respondents according to Marital Status 32

4.2.3 Distribution of Respondents according to Household size 32

4.2.4 Distribution of Respondents According to Level of Education 34 

4.2.5 Distribution of Respondents According to Years of Experience 34 

4.2.6 Distribution of Respondents According to Annual Income 35

4.3 Correlation Analysis 41

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary 45

5.2 Findings and Conclusion 45

5.3 Recommendations 46

REFERENCES

APPENDIX