Study Of Innovation Differentiation Strategy And Technology In Perspective Of Consumer Behavior In Banking Sector Of Pakistan

This study focuses on the importance of innovation, technology, and differentiation strategy in the banking sector of Pakistan. Now days, only the organizations that provide unique products or services and differentiate themselves from competitors can survive in this dynamic global market. In present circumstances, the organizations that are truly involved in providing innovative products or services, and provide timely solutions of the demands of customers will lead the market. The questionnaire was developed according to the conceptual model focusing on the objectives of this study. Accordingly the questionnaire was divided into ten groups; innovation, organizational commitment, Success factors, customer involvement, service quality, consumer banking, market potential, effect, technology, and differentiation strategy. The questionnaires were self administered; and the response rate received for this study is 87.25%. This study tried to identify; why innovation is important in banks? How innovation affects consumer behavior and to what extent it is important for banks in Pakistan? Does differentiation strategy affect consumer behavior and its importance for banks in Pakistan? How technology affects consumer behavior and to what level of extent it is important for banks? What are the success factors and their importance in banks? What are the most important variables in the success of commercial banks in Pakistan?This study used factor analysis technique, descriptive statistics, and hierarchical linear regression modeling. On the basis of survey results a model was developed of innovation, differentiation strategy, technology, consumer banking, market potential, success factors, and effect. This model would be useful for banking sector organizations in Pakistan. This model would also be helpful for the new banks interested to serve consumer segment as well as from academic point of view.The theoretical contribution of study includes the impact of innovation on consumer behavior and its possible effects on banks in Pakistan. Another contribution is that what type of impact differentiation strategy has on consumer behavior and how it affect banks in Pakistan? The third theoretical contribution is that how and to what extent technology affects consumer behavior, and its possible effect on banks in Pakistan? Fourth contribution of this study is that which success factors are of critical importance for banks. The implication of this study includes; the first implication is that innovation is critical for banks in Pakistan. The banks in Pakistan must adopt innovation approach to remain competitive. The banks that do not take innovation in their priority domain have big chances of failure. The second implication is that the banks using only differentiation strategy to persuade customers pose very serious problems to the performance of banks in Pakistan. Third the bank that adopt combination of cost leadership and differentiation strategy or a mix of these strategies have better future prospects to achieve high market share, big profits, and customer satisfaction. Fourth the role of technology is also critical for banks in Pakistan. Due to the deregulation of telecommunication, and banking sector in Pakistan the customers are well informed about the technological products/services offered by banks. Therefore, the banks with latest technological tools and equipment have better future prospects. On the other side, the banks with obsolete technological equipments have meager chances to flourish in future. Further research is required to investigate the innovation, differentiation strategy, and technology from consumer behavior point of view. This research results can be more generalized, if a comparative study about innovation, differentiation, and technology in banking sector done by including some other countries.