Preview

What Drives Customer Loyalty and Profitability? Analysis of Perspectives from Retail Customers in Ghana's Banking Industry

Powerful Essays
Open Document
Open Document
22113 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
What Drives Customer Loyalty and Profitability? Analysis of Perspectives from Retail Customers in Ghana's Banking Industry
[pic][pic] School of Management
Blekinge Institute of Technology

What Drives Customer Loyalty and Profitability? Analysis of Perspectives from Retail Customers in Ghana's Banking Industry

By: Daniel Nukpezah & Cephas Nyumuyo

Supervisor: Prof. Anders Hederstierna

[pic] Thesis for the Master’s degree in Business Administration Spring, 2009

ABSTRACT
Customer loyalty as a concept is a critical strategic option in today’s competitive environment. It is no surprise therefore that managers and researchers have increased their study and understanding of the concept as a strategic marketing imperative over the past decades to capture market share and improve profitability. Indeed the theoretical perspective is that competitive pricing as well as company image and reputation contribute to customer satisfaction and that service quality along a number of pathways drives customer loyalty and profitability thus: service quality--> customer satisfaction--> customer loyalty --> market share --> profitability. A few empirical studies have found these linkages to be true. However these factors differ in importance based on the cultural setting. We investigate (1) whether these relationships exist and (2) which of these factor(s) is/are important in motivating consumer loyalty from the perspectives of retail banking customers in Ghana.

The study draws on customer behaviour and attitude premised on the SERVQUAL and SERVPERF models originated by Parasuraman et al., (1988), Cronin and Taylor (1992), and Brady and Cronin (2001) respectively as well as other researches based on the literature on customer satisfaction and loyalty. We used both quantitative and qualitative research approaches in our study and have drawn from both primary and secondary sources of data. We made use of a 7 point

You May Also Find These Documents Helpful

  • Good Essays

    As a Manager, we all know customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and even bring you more customers,…

    • 594 Words
    • 3 Pages
    Good Essays
  • Good Essays

    VBD Brief

    • 686 Words
    • 3 Pages

    Hallowell, R. (1996). The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study. International journal of service industry management, 7 (4), p. 27-42.…

    • 686 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Parasuraman, A., Zeithaml, V.A. and Berry, L. (1988) ‘SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality’, Journal of Retailing, 64(Spring), p.p.12-40.…

    • 12778 Words
    • 52 Pages
    Powerful Essays
  • Best Essays

    1. Introduction – importance of customer loyalty to a company Customer loyalty is an important thing to be considered by every organization because it can affect the performance of a company, directly or indirectly, and within short-term as well as long-term period. According to Castledine (2011), loyal customers generate more profits and it is also six times cheaper to retain an existing customer rather than winning a new one. Customer loyalty can be obtained by delivering value that creates customer satisfaction. Value is closely related with the ratio between cost and benefit to the customer (Castledine, 2011). Customer satisfaction is created when their experience or perceived performance meets their expectations (Castledine, 2011). A company should strive not only to achieve customer satisfaction one at a time, but also try to make a consistent creation of it. In the context of service industry, the challenge of making consistent customer satisfaction is bigger than the challenge faced by…

    • 2100 Words
    • 9 Pages
    Best Essays
  • Good Essays

    CUSTOMER LOYALTY DRIVES PROFITABILITY AND GROWTH: To maximize profit, managers have pursued the Holy Grail of becoming number-one or -two in their industries for nearly two decades. Recently, however, new measures of service industries like software and banking suggest that customer loyalty is a more important determinant of profit (see Frederick F. Reichheld and W. Earl Sasser, Jr., “Zero Defections: Quality Comes to Services,” HBR September–October 1990). Reichheld and Sasser estimate that a 5% increase in customer loyalty can produce profit increases from 25% to 85%. They conclude that quality of market share, measured in terms of customer loyalty, deserves as much attention as quantity of share.…

    • 860 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Keywords: Services marketing; Personal values; SERVQUAL; SERPVAL; Means end chain approach; Measurement; Satisfaction; Loyalty; Repurchase intent…

    • 8982 Words
    • 36 Pages
    Powerful Essays
  • Good Essays

    John, T., Bowen, & Shiang, Lih., Chen. (2001). The relationship between customer loyalty and customer satisfaction. International Journal of Contemporary Hospitality Management, 13(5), pp. 213-217.…

    • 685 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Dempere, J., (2011). Factors that impact customer loyalty in the investment banking industry. Review of Business Summer, 31, 51-68.…

    • 2382 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    • SERVQUAL Model • 22 items for assessing customer perceiption and expectations • Based on 5 dimensions…

    • 379 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Top organizations know that the road to success runs through their customers. Hence in today’s world, the companies who do not provide value to their customers bring an opportunity for the competitors to steal these customers. Same rule applies in banking sector hence this research focuses on finding the impact of service quality, customer satisfaction and loyalty programs on customer’s loyalty in banking sector of Pakistan. A questionnaire was designed and survey was conducted to collect the data from 331 customers having bank accounts in different banks of Pakistan. The research concluded that service quality, customer satisfaction and loyalty programs are the important factors that can increase the loyalty of a customer so banks must focus on providing loyalty programs to their loyal and valued customers. Research also indicates that banks should focus on improving the quality of their services for better and greater customer satisfaction and customer loyalty.…

    • 5813 Words
    • 24 Pages
    Powerful Essays
  • Good Essays

    It is believed that with the Customer Loyalty, the company can achieve profitability and continuous growth. According to an article “Zero Defections: Quality Comes to Services”, it indicated that a 5% increase in customer loyalty can produce profit increase from 25% to 85%.…

    • 1173 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    ✓ Ahmed, I., Nawaz, M., Usman, A., Shaukat, M., Ahmad, N., and Iqbal, H. (2010). Impact of Service Quality on Customers ' Satisfaction…

    • 3713 Words
    • 15 Pages
    Powerful Essays
  • Powerful Essays

    The authors capture our attention by asking why some companies succeed at going multinational while others continue to struggle inspite of making significant efforts to gain market share by investing time and human and financial resources. For example, despite its presence in India since 1993, Coca-Cola has yet to bypass the popularity of the local Indian drink, Thumps Up. Conversely, there are success stories: General Motors’ performance in Brazil, McDonald’s ability to create niches in China and India. This article has more than 20 concise findings (what to dos/what not to dos) for a company to do achieve “Profitable Customer Loyalty”. The study highlighted in this article was a qualitative study interviewing 42 managers of multinational companies from US, Canada, Asia, Europe and Australia to glean insights that identify possible factors that drive the creation of both a profitable and loyal customer base (termed “profitable loyalty” in the study) in emerging economies. The finding related to “innovation” was “Incremental and adaptive innovations are more likely to create PCL in emerging economies than radical innovations”. This article proposes a conceptual framework that can be used to establish profitable customer loyalty in emerging economies. It focuses on the key factors namely- Customer specific, Marketing Mix, Firm specific as well as Moderating variables that can help the MNCs to establish profitable customer loyalty in the long run.…

    • 2437 Words
    • 10 Pages
    Powerful Essays
  • Powerful Essays

    Measuring services quality

    • 4617 Words
    • 19 Pages

    Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988). “SERVQUAL: a multiple item scale for measuring consumer perceptions of service quality”. Journal of Retailing. Vol. 64. No. 1. pp. 12-40.…

    • 4617 Words
    • 19 Pages
    Powerful Essays
  • Powerful Essays

    Business need to attract and establish a customer market and would need to retain it through satisfaction. That is the key to its business performance (Johnson et al. 2000). In order to attain this goal, a company should have a high satisfaction rate from its clients. The increasing competition, whether for profit and non profit purposes, is forcing the business sectors to pay much and more attention to satisfying customers (Management library, 2008). Indian banking sector have undergone intense competition and a change in customers’ expectations over the last few years (Cheng et al., 1996). Intense competition and endlessly evolving customer demands have led Indian banks to identify drivers of customer satisfaction and loyalty (Lanka et al., 2009).…

    • 1897 Words
    • 8 Pages
    Powerful Essays

Related Topics