Académique Documents
Professionnel Documents
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By
Prasanga A.W.R.P.S
An Integrated Research Project submitted to the Sri Lanka Institute of Marketing in partial
fulfilment of the requirements for the Postgraduate Diploma in Marketing
Prasanga AWRPS
Registration Number
0000017969
Criteria
Allocated
Marks
Awarded
Marks
10
10
15
10
Methodology of perspective
5
5.1
Conceptual framework
15
5.2
Operationalisation
10
10
Total
10
100
Special Remarks:
Signature of Examiner
By
Prasanga A.W.R.P.S
0000017969
This is to certify that I have examined and supervised the above integrated research project
and have found that it is complete and satisfactory in all respects and that all revisions
required by the evaluation/examination committee have been made.
TABLE OF CONTENT
1. Background of the company.......8
2. Background of the problem....9
2.1 Problem statement......11
3. The significance of the exploration of the problem.... 12
4. The objective of the research... 14
5. Brief literature review......16
5.1. Customer Retention...16
5.1.1 Relationship marketing and customer loyalty.........17
5.1.2. Relationship Marketing and Customer Satisfaction.......17
5.1.3. Relationship Marketing and Customer Trust ....18
5.1.4 Customer Satisfaction, Customer Trust and Customer Loyalty.18
5.1.5 Customer loyalty influences customer retention.........19
6. Methodology perspective.20
6.1. Operationalization.21
7. The approach to data collection....22
7.1. Quantitative design22
7.2. Primary data......22
7.3. Secondary data..22
7.4. Sampling design22
7.4.1. Research population...22
7.4.2. Sampling techniques..23
7.4.3. Sampling size.....23
7.5. Research instruments.23
7.6. Method of data analysis.....24
8. Data presentation and Analysis25
8.1. Surveyed respondents25
8.2. Demographic analysis of respondents.......25
8.2.1. Gender analysis..25
6
LIST OF FIGURES
1. Customer satisfaction index rating . 10
2. Credit card usage limit.12
3. Gender analysis25
4. Age analysis.25
5. Income analysis26
6. Experience analysis..26
7. Card type analysis27
LIST OF TABLES
1. Hypothesis testing .. 15
2. Methodology framework. 20
3. Operationalization customer retention.....21
4. Gender analysis25
5. Age analysis.25
6. Income analysis26
7. Experience analysis..26
8. Card type analysis27
CUSTOMERS
2260; 26%
Charted
Accountants
IESL Engineers
6290; 74%
10
Source: internal annual portfolio report of NTB plc (primary card holders)
CHARTED ACCOUNTANTS
600
400
200
0
2013
2014
2015
New Customers
Discontinued Customers
CHARTED ACCOUNTANTS
600
400
200
0
2013
2014
2015
New Customers
Discontinued Customers
Source: internal
annual portfolio report of NTB plc (primary card holders)
Source: internal annual portfolio report of NTB plc (primary card holders)
Figure No. 1
So to keep the position and dominate the market share, it is important to track the customer
feedbacks and take appropriate actions to develop business. Be the best one is not the hardest
part, but keeping the position as it is, the hardest. Customer retention is a series of activities
and/or strategies aimed at keeping customers from defecting to their competitors.
This research study is mainly focused to find out the factors which are affecting to the
decline of customer retention level of Amex Card of Nations Trust Bank. The satisfaction
11
of the customer is directly affected to the Customer Loyalty and it leads to customer retention
in the period of the service economy, improving the service quality has always been
considered as one of the effective ways to improve customer satisfaction.
12
13
Going by Central Bank of Sri Lanka data, however, there is an observable upward trend. As
of September 2015, there are 1,115,299 active credit cards in use. Of these, 31,289 are
accepted only locally, while 1,084,010 (over 97%) are accepted globally.
As well as, professional customer segments demand better quality service from banks; it
has bested the competition among various credit card issuers particularly those private
sectors. Therefore, this study found outs will helpful to find out factors caused to the decline
of retention of product and ways to maintain it without dropping of existing customers.
14
H2
H3
H4
H5
H6
15
H2
RELATIONAL
MARKETING
TACTICS
H3
CUSTOMER
SATISFACTION
H1
CUSTOMER
TRUST
H4
CUSTOMER
LOYALTY
H5
Table No. 1
Relationship Marketing and Customer Loyalty: Do Customer Satisfaction and Customer Trust Really Serve as
Intervening Variables? Mohamad Rizan1, Ari Warokka2 and Dewi Listyawati
16
Content shoppers also tend to become loyal clients (Sheth, Mitral, & Newman, 1999).
Through the following research framework the researcher has discussed how the factors of
hypothesis testing affects to the customer retention.
A brief explanation of these dimensions is given below.
5.1.1. Relationship marketing and customer loyalty
The basic philosophies of relationship marketing are based on the assumption that
company-customer interactions and strategies can earn and keep the loyalty of customers
(Berry, 1995).
Relationship marketing refers "to all marketing activities aimed at forming, increasing, and
maintaining winning relational contacts". The management of customer relationships is
precious for the company (Morgan &Hunt, 1994; Webster, 1992).
Relationship marketing is targeted at improving long run profitability by deemphasizing
captivating fresh clients and emphasizing customer retention through efficient management
of customer relationships (Christopher, Payne, & Ballantyne, 1991). Relationship marketing
refers "to all marketing activities aimed at establishing, budding, and maintaining booming
relational
exchanges"
(Morgan
&
Hunt,
1994).
Prior studies confirm that service companies have received incredible benefits of loyal
customers (Bagherzad, Chavosh, and Hosseinikhah, 2011). Moorman, Zaltman, and
Deshpand (1992) stated that customer loyalty was an intention to keep a valued relationship.
In the banking sector, it is the main job of manager and marketers to create and develop
customer loyalty if they want to maintain their company and increase its profitability.
Therefore, we hypothesize the association between relationship marketing and customer
loyalty as follows:
clients may look for other options if they think they can get improved services in another
place
So, some techniques to maintain and improve satisfaction must be considered. An effective
complaint handling system is an excellent defensive tool. Ongoing surveys to measure
customer satisfaction and loyalty, and capture the voice of the customer are also essential.
The well-satisfied customer will bring the repeat sale that counts. James Cash Penney
Therefore, based on those empirical findings, hypothesis 2 is proposed as below:
H2: Relationship marketing tactics influence customer satisfaction.
5.1.3. Relationship Marketing and Customer Trust
The final concept necessary to build relationships is trust. In business, trust refers to the
confidence that one partner, the customer, has in the businesss reliability and integrity to
deliver goods and services (Proctor, 2000).
Branding is not merely about differentiating products; it is about striking emotional chords
with consumers. It is about cultivating identity, attachment, and trust to inspire customer
loyalty. Chinese brands score low on attributes such as 'sophisticated,' 'desirable,' 'innovative,'
'friendly,' and 'trustworthy.' (Nirmalya Kumar)The development of trust between salespeople
and their customers has traditionally been considered a critical element in developing and
maintaining a successful sales relationship.
Relationships with customers and in maintaining a companys market share. Therefore,
based on the prior empirical findings, hypothesis 3 is proposed as below:
19
human dignity. It is a force which leaps into being only when conditions are exactly right for
it-and it is a force very sensitive to betrayal. Maurice Franks
If people believe they share values with a company, they will stay loyal to the brand.
Howard Schultz
Based on those empirical findings, we proposed the following hypothesis:
More than half of bank customers believe that having a relationship of trust with their
financial institution is more important than getting the best value for money according to the
study of Coulter and Coulter (2003). It describes that when the customers have trust on the
services and products of a company, then it will lead them towards loyalty (Ribbink,
Liljander, and Streukens, 2004).
Get closer than ever to your customers. So close that you tell them what they need well
before they realize it themselves (Steve Jobs).
We see our customers as invited guests to a party, and we are the hosts. Its our job every
day to make every important aspect of the customer experience a little bit better. Jeff
Bezos
The role of trust is a crucial one (Harris and Goode, 2004). It affirms that customer loyalty
begins with trust. Based on those prior findings, the hypothesize the relation between
customer trust and customer loyalty can be mentioned as follows,
20
Retaining customers also make it difficult for competitors to enter the market or to increase
their market share, and loyal customers often refer new customers to the service provider,
which is very beneficial, as there is no expenditure in gaining the new customers (Du Plessis
2010: 63; Kuusik 2007: 5; Rootman 2006: 36).
6. Methodology of Perspective
Survey method will be used for this study using questionnaire as data collection
instrument. The questionnaire will be adapted from scales already used for previous studies in
the literature. Systematic sampling technique used to select the individuals from membership
directory data collection was done through telephonic questionnaire survey.
Table No. 2
The framework above shows proposed framework to serve as foundation of this study. The
purpose of this study is to examine how above mention factors affect to customer retention of
Nations Trust bank American Express card.
21
6.1. Operationalization
Operationalization of customer retention
Table No.3
22
23
24
Questionnaire survey has been used in this study. Questionnaires are defined as the series
of questions aim to gather prompt and accurate information from respondents. Thus, in order
to perform a good research, a good questionnaire must be designed. Hair, Babin, Money, and
Samuel (2003) mentioned that effectiveness and high response rate are the reasons for
researchers use questionnaire widely to collect primary data if the population of respondents
is well-educated. The main data collection instrument of this study is structured questionnaire
based on the literature review.
25
46%
54%
Male
Female
Table
No.4
Fig No.3
Gender
Frequency
Male
32
Female
38
Total
80
Gender Analysis
26
Response to this questioner indicates that (54%) of the total population are Female while rest
(46%) Male
Age Group
Between 21-30
Between 31-40
Between 41-50
Above 50
Total
Fig No.4
Frequency
27
34
12
7
80
9%
15%
Between 2130
34%
Between 3140
Between 4150
Above 50
43%
According to the responses there are 34% responses in between 21-30 age group while 42%
respondents represent in between 31 to 40 age group, 15 % respondents represents in between
41-50 age group and rest 9% represents the above 50 age group.
Income Level
Below RS 50,000
Between RS 51,000 to
100,000
Between RS 101,000 to
150,000
More than RS 150,000
Total
Fig No.5
Frequency
2
29
Below RS 50,000
20%
3%
33
16
80
36%
41%
More than RS 150,000
27
There are only 3% of respondents are having salaries below 50,000 RS while 36% are
representing salary scale in between 51,000 Rs to 100,000 Rs, Majority of respondents are
having salaries between 101,000 Rs to 150,000 Rs its 41% while rest 20% getting more than
150,000 Rs.
Experience
Yes
No
Total
Fig No.6
Frequency
64
16
80
20%
Yes
No
80%
As per survey findings there are 80% respondents are having an experience with credit card
facilities, while 20% respondents are never used credit cards but they have expectation
among the service quality of credit card facilities.
Fig No.7
28
Card Type
American
Express
HSBC
Standard charted
Sampath
Commercial
HNB
BOC
Other
Total
Frequency
45
19
8
24
12
15
5
8
136
4%6%
11%
American
Express
HSBC
33%
9%
Standard
charted
Sampath
Commercial
18%
6%
14%
HNB
BOC
Other
Frequency of having an American express card is high at 33% from total population while
other cards at a level of below 20% Sampath enjoy the 2 nd place by having a share of 17%
.Respectively HSBC, HNB, Commercial and BOC having 14% , 11%, 9% , 6% & 6% while
next 4% goes for other banks.
29
Minimum
Maximum
Mean
Std.Deviatio
n
Relational
marketing
tactics
Satisfaction
Trust
Loyalty
Total
The minimum, maximum, mean and standard deviation scores of Service
Quality indicate that there are great differences in the service of the Leasing
and Finance sector.
30
31
9.2. Recommendations
The basic purpose of this research work is to put forward recommendations of practical nature.
The following recommendations are proposed to American express cards of Nations trust bank
The marketers (Staff) should keep in mind and determine the factors of premium service quality
that enhances the customer satisfaction. Frequent surveys must be conducted to obtain data from
customers regarding their perceptions, suggestions and recommendation to improve the service
quality of the brand.
Innovating the services according to the needs and demands of the customers is very much
important. Customer must be the focus of every strategy. In this regard, Nations trust bank must
think in terms of end result of their service quality innovations. The focus should be on the long
run rather the current situation.
Bank must arrange continues training programs towards Service Quality to their employees to
give a premium service to its customers.
The flexible management environment of a company is highly influence to give a better and
premium service to its customers by its employees. Therefore, in terms of American Express
Nations trust bank should think about the staffs mind set to improve its quality.
The demographical approach could be analyzed in this regard to identify, how the company could
be improved the service quality demography.
32
33
11. References
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Approach. A John Wiley and Sons, Ltd, Publication
Sekaran, U. and R. Bougie (2010). Research methods for business: A skill building approach.
Wiley, London.
Aydin, S., & zer, G. (2005). The analysis of antecedents of customer loyalty in the Turkish
mobile telecommunication market. European Journal of Marketing, 39(7/8), 910-925.
Blery, E., Batistatos, N., Papastratou, E., Perifanos, I., Remoundaki, G., & Retsina, M.
(2009). Service quality and customer retention in mobile telephony. Journal of Targeting,
Measurement and Analysis for Marketing, 17(1), 27-37.
Ismail, I., Haron, H., Ibrahim, D. N., & Isa, S. M. (2006). Service quality, client satisfaction
and loyalty towards audit firms: Perceptions of Malaysian public listed companies.
Managerial Auditing Journal, 21(7), 738-756.
Grnroos, C. (2004). The relationship marketing process: communication, interaction,
dialogue, value. Journal of Business & Industrial Marketing, 19(2), 99-113.
Kotler, P., Keller, K. L., Koshy, A., & Jha, M. (2009). Marketing management: A South Asian
perspective (13th ed.). New Delhi, DL: Pearson Prentice Hall.
Liu, Y., Li, Y., Tao, L., & Wang, Y. (2008). Relationship stability, trust and relational risk in
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Mark N.K. Saunders. (2009). Research Methods for Business Students (5th Edition). Prentice
Hall.
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