When Pakistan was formed agriculture sector was the major contributor to GDP, contributing in

excess of 50% to GDP. However with the passage of time the contribution from agriculture to GDP
has decreased as just 22% and service sector and industrial sector have play a vital role in the
economic growth of the Pakistan, contributing 53% and 25% respectively to the GDP of the country
(OSEC 2011).

At the time of creation agriculture sector was a major contributor in the GDP of the
nation, with a share of more than 50%. However with the passage of time its share in
the contribution to GDP has decreased to just 22%.Whereas the service and the
industrial sector have showed a marked increase with the former now contributing 53%
and the latter contributing 25% respectively to the GDP of the country (OSEC 2011).
This clearly shows that the service and industrial sector are playing a vital role in the
Economic Growth of Pakistan.

The service sector in Pakistan is dominated by the Banking Industry. According to OSEC (2011) over
the period of from years spanning from 2005 to 2009, the total banking sector assets were double
from Rs. 3,660 Billion to Rs. 6,516 Billion. The growth in the industry has been marked by
development of new and improved financial product and also due to improved service quality in the
banking industry.

The Banking Industry dominates the service sector in Pakistan. According to OSEC
(2011), over the period of four years spanning from 2005 to 2009, the total Banking
Sector Assets got doubled from Rs 3,660 billion to Rs. 6,515 billion. A numbers of
factors has created this significant growth in the Banking industry. First of all the
industry has been marked by the development of new banks. Secondly the financial
products offered by the banks have shown considerable improvement. Lastly, the
quality of the service offered by the banks has also been improved.

Levesque and McDougall (1996) states that with the development of the banking sector, it became
very important for banks to offer valuable service than the service being offered by their competitors.
This became important because the products offered by all banks are almost same and achieving
segregation based exclusively on product uniqueness and product development became increasing
hard for banks. This approach by the banks is supported by Levesque and McDougall (1996) who
argued that in a market where competition is extreme, focus on customer satisfaction. The benefits of
having a loyal customer base make sure that a firms market position is not affected

Levesque and McDougall (1996) states that with the development in the Banking
Sector, it has now become of vital importance that the banks offer valuable services to
their customers. In addition these services should be of a much higher quality as
compared to their competitors. This became very important because the products
offered by the different banks have now become homogenous in nature. Furthermore,
achieving segregation based exclusively on product uniqueness and product
development has now become increasingly hard for banks. Levesque and McDougall
(1996) support this approach by the banks, they argue that in a market where
completion has taken has taken on such an extreme form, focus should be on
customer satisfaction. As the benefits of having brand loyal customer base will make
sure that a firms position is not affected in the longrun.



1.2 Satisfaction
The term Satisfaction is described by Oxford Dictionary (2010) as the fulfillment of ones desires,
needs or expectations. Satisfaction is said to be the provision of demand of the individual person or
business organization.

The fulfillment of ones desires, needs or expectations is how the term Satisfaction has
been described by the Oxford Dictionary (2010). It is actually said to be the provision of
demand of the individual person or business organization.




The determinants of satisfaction can be best described by the persons who experience certain
experience. Individuals usually have certain standards against each phenomenon they are exposed
to (Diener et al 1984). If the standards fully match with their demand then satisfaction is declared to
be achieved.



The determinants of satisfaction can be best described by the persons who undergo a
certain experience. Against each phenomenon that they are exposed to indivisuals
usually have some predetermined standards. If the standards are seen to fully match
with their demand then satisfaction is declared to be achieved




1.3 Customer Satisfaction
At the heart of contemporary marketing and customer behavior investigation lies customer
satisfaction. A satisfied customer makes repeat purchases (Nasserzadeh et al 2007). Customers who
are dissatisfied will change the supplier of the product / service and this would create negative
publicity.

Customer satisfaction lies at the heart of contemporary marketing and customer
behavior investigations. A customer who is satisfied is seen to make repeat purchases
(Nasserzadeh et al 2007). Whereas customers who experience dissatisfaction will
change the supplier of the product/service and this will in turn create negative publicity.

Commoditization of basic products in business setting, has led to service quality heavily being
dependent on personnel quality and around 40% of customer changed their banks due to non
satisfactory service (Leeds, 1992 cited in Cohen at el. 2006). The importance of the teller are too high
in banking sector, he should be polite and facilitating. As a key concern in the selection of bank and
the study also examine to notice that politeness and good manners not only impacted satisfaction
measures but also led down the switching of customers from their current bank (Leeds, 1992 cited in
Cohen at el. 2006).

Service quality is now heavily dependent on personnel quality because of the
commodization of basic products in business. Due to this, 40% of customers changed
their banks due to the unsatisfactory service (Leeds, 1992 cited in Cohen at el. 2006).
The importance of the teller is very high in the banking sector these days. Teller is the
public face of banking industry. He should be polite and customer friendly.The study
revealed that the quality of service provided by the tellers made people change their
banks (Leeds, 1992 cited in Cohen at el. 2006).


Furthermore achieving product separation in banking sector is nearly impossible due to the
competitive setting of banking industry. With little differences in interest rates banks, bank must be
uise their service provision as customer holding tools (Loanna 2002 cited in Cohen et al., 2006).

Due to the very nature, banking products and interest rates on offer are nearly the
same of every bank. This means, banks must depend on quality of service for
attracting and holding on to customers.(Loanna 2002 cited in Cohen et al., 2006).



The market segmenting and delivering best quality service have become the center focus of private
banking and it involves specifically contouring the products according to individual clients, forecast
the possible customers expectations, having a focus on long term relationship (Molyneus and Omarini
n.d. ).

Focusing on specific business segments and quality customer service have become of
pivotal importance. Banks endeavor to tailor products according to individualized
customer needs and use various tools to, forecast the possible customers expectations
(Molyneus and Omarini n.d. ).



Primarily building customer satisfaction is a long term approach and as difficult as it is to change
views about product quality over a short period of time. Customer satisfaction derive from the
formulation of perceptions about available choices earlier to actual usage and how the actual service
delivery/ consumption actually delivers, if it exceeds the perceived expectation then its leads to
customer satisfaction (Engel & Blackwell 1982 cited in Gautam, and Dhital 2004).

To achieve customer satisfaction a long term approach is required as views about a
product cant be changed over a short period of time. To achieve customer satisfaction,
banks have to perceive customer expectations about their products/services and if the
delivery of their products/services is even better than customer expectations, then it
leads to customer satisfaction (Engel & Blackwell 1982 cited in Gautam, and Dhital
2004).


In any situation customer satisfaction is the importance of the professed value received, value in
terms of quality perceptions in comparison to price and the customer acquiring cost (Zeithaml et al.,
1990 cited in Gautam, and Dhital 2004) .

Customer satisfaction in any situation is the measured by the professed value
received.Value is usually seen to be in terms of quality perceptions as compared to
price and the customer acquiring cost (Zeithaml et al., 1990 cited in Gautam, and
Dhital 2004) .


He further explained that Customer satisfaction has its roots in three different but equally important
variables "Customer Perception", "Customer Expectation" & "Customer Loyalty". Perception is a
function of 3 aspects namely "Product Attribute", "Service Quality" & "Bank Image". Customers
Expectations are the opinions create and the feeling built earlier to usage of the actual service/
product. Customer loyalty is said to occur when customers preference about usage of product or
service in the coming up future is positive after post purchase usage of service/ products.

Customer satisfaction actually has its roots in three varied but equally important
variables namely Customer Perception", "Customer Expectation" & "Customer
Loyalty". Perception is seen to be a function of 3 aspects namely "Product Attribute",
"Service Quality" & "Bank Image". Customer Expectations is the opinion which is
created and feeling built before a product is actually experienced whereas Customer
Loyalty relates to customers continued preference in times to come once he has used
a product.


Privatization and liberalization are also increased the importance of customer price. Thats why all
banks try to increasingly focusing on customer satisfaction (Levesque & Mc. Dougall, 1996).


The importance of customer price has also been increased by privatization and
liberalization. This is the reason that all banks are now increasingly focusing on
customer satisfaction (Levesque & Mc. Dougall, 1996).