Main Article Content
Bundling and Perceived Customers’ Risk Behaviour in the Purchase of A New Bank Product in South African banks
Abstract
Influencing potential bank customers to purchase a brand-new intangible bank product is usually a mission for bank marketers because of the reality that bank customers generally perceive a new bank product as psychological due to its intangibility. The easing of developments in the global banking industry has allowed entry of new financial institutions. This has led to an increase in competition since banks provide nearly identical products or services, thus, granting bank clients with an opportunity to choose their preferred bank. As banking clients and depositors became more service- and price-conscious in their purchasing behaviour of financial services, their banking behaviour increasingly became prone to change. With this uncertain feeling, customers tend to delay or cancel a new product purchase reflecting an excessive failure rate for new bank products. Therefore, the study sought to assess whether bundling techniques would help reduce customers’ perceived psychological risk and uncertainties associated with a purchase of a new bank product. This was a cross-sectional study conducted using conjoint analysis to gather and analyse data. The top five South African retailing banks in the Eastern Cape and KwaZulu-Natal were selected. Cluster sampling was used to select study participants with any customer banking with top five retaining bank in South Africa afforded an equal chance to be selected giving a total of 411 participants. The results indicated that bank customers preferred to use a new bank product which is anchored by a well-known established existing bank product in a bundle, as this has helped to lower customers’ perceived risk associated with the purchase of a new bank product. The study concludes that bundling strategy is a risk reduction strategy that can benefit both bank customers and retailing banks in South Africa.