This study presents the most important factors influencing customers in respect of
selecting a bank by customer in Tanga City council in Tanga Tanzania. In particular, it
finds those criteria, which have become significantly important in motivating the choice.
There are more than five banks in Tanga which offer different services to the people of
Tanga. These banks have and continue to rely on the attrition of customers from other
existing banks and also sourcing for new ones in the market. This calls for a need to
improve customer retention techniques by establishing the factors that influence a
consumer choice of bank in the banks to avoid the existing customers from switching
to competition.
Both quantitative and qualitative methods were used in this study, responses given by
200 customers in Tanga City from different occupation (students, other employees, bank
staffs and businessmen), was employed in the analysis. A non probability convenience
sampling was used and data was factor analyzed to reduce the total variables in to
manageable way.
The Questionnaire was piloted so as to improve its validity. The collected data was
coded and analyzed by the aid of Statistical Package for Social Scientists and
Microsoft excels computer software and presented in tables and a narrative summary.
From the findings, consumer choice of a bank is very highly affected by economic
factors. The amount of income of an individual determines the amount he or she has
to save in a bank. Age and lifecycle stage, role and status and social class have a high
effect on consumer choice of a bank. Easy account opening procedures, operating
balance of an account and the ATM efficiency/technology also has high effects on
consumer choice of a bank. Culture, sub culture, and group‟s influences consumer
choice of a bank with a low effect. Personality, lifestyle and family have a very low
effect on consumer choice of a bank
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We observe that the Commercial Bank of Tanzania, NMB Bank and CRDB Bank
are the top most preferred banks by customers. Users frequently choose the two
former banks perhaps because of their wider operation and quality of service
provision respectively.
Looking at the specific banking services, customers are widely noticed using a
saving account, money transfer services and current account. The respective
numbers of beneficiaries are about 71 percent, 42 percent and 29 percent
across males and females due to convenience, we see that males prefer bank image
to service provision. The reverse holds true for female customers in Tanga
The top two factors that found in the listing were “convenience/ security” (mean=
3.2513) and “service provision” (mean= 3.1008). It also intended to present an
analysis and understands of banks officials of the choices criteria in respect to their
customer‟s selection for their banking services and to elicit the option of bank customers
on any extra services needed to be offered by banks.
As customers place more emphasis on factors like convenience, service
provision, employers‟ influence and bank image such factors should be considered
seriously by the commercial banks in designing their marketing strategies by
widening their branches and providing good customers services to customers.