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Mba Revised Final

Mba Revised Final

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Published by: mahbub sddq on Dec 04, 2009
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School of ManagementBlekinge 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
Thesis for the Master’s degree in Business AdministrationSpring, 2009
 
ABSTRACT
Customer loyalty as a concept is a critical strategic option in today’s competitiveenvironment. 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 pastdecades to capture market share and improve profitability. Indeed the theoretical perspectiveis 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 --> marketshare --> 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 motivatingconsumer loyalty from the perspectives of retail banking customers in Ghana. The study draws on customer behaviour and attitude premised on the SERVQUAL andSERVPERF models originated by Parasuraman et al., (1988), Cronin and Taylor (1992), andBrady and Cronin (2001) respectively as well as other researches based on the literature oncustomer satisfaction and loyalty. We used both quantitative and qualitative researchapproaches in our study and have drawn from both primary and secondary sources of data.We made use of a 7 point likert scale to develop indexes for the main constructs measured inthis study and applied correlation, chi square (χ 
2
) and regression analyses to evaluate thehypothesised relationships. Further we qualitatively analysed aspects of the data hinging onexplanatory aspects of our research.
 
The results among other things reveal that whilst servicequality (especially empathy and reliability) and bank image and reputation are importantinstigators of customer satisfaction and loyalty, competitive pricing showed a weak linear relationship with customer satisfaction and loyalty (r < 0.5). On the other hand, increasedmarket share was found to influence banks’ profitability. Finally we discuss the managementimplications of the study in terms of customer retention and profitability strategies for the banks in Ghana. We emphasise that management strategies that are service quality conscious,use
 person-organisation fit 
approaches to recruitment and effectively communicate strategiescould help institutionalise a culture that is customer relation centred, help banks survive thecompetition, retain their customers and in the long run increase their profitability.2
 
Key words:
Service quality, customer satisfaction, competitive pricing (price satisfaction),customer loyalty, brand image and reputation, customer switching, profitability, market share,SERVPERF, SERVQUAL.
ACKNOWLEDGEMENTS
A work of this nature could not have been produced without assistance of some sort. We wishto therefore acknowledge a few people and institutions that helped in the realisation of thisresearch work. First and foremost we extend our gratitude to Prof. Anders Hederstierna for supervising this work. We thank him especially for his critique of our original proposal. Thishelped re-aligned our originally diffused ideas into perspective. The School of Management,Blekinge Institute of Technology, Sweden gave us the opportunity to enrol in this longdistance online MBA programme and we extend a heart of gratitude to the school for theopportunity. The course design and structure facilitated team work and made it possible for we the authors, who have never met physically before, to collaborate and produce this thesis.Daniel would like to thank his wife Sylvia and mother in law Christine Kwawu for their  particular interest in this research and also for helping with relevant data collection. Cephaswould also like to thank Wisdom Nyumuyo and Mark Teittey for helping with data collection.Further we wish to acknowledge Mr Edward Lumor, Julius Najah Fobil and Julius Nukpezahfor spotting errors in our original research questionnaire which helped improve it a great deal.We acknowledge also the over 200 respondents of our questionnaire for their time.Additionally, we extend thanks too, to our colleagues Bertha Kyere-Frempong and OlakunleLemboye for critiquing our work. Finally, we wish to state that any shortcoming associatedwith this work remains ours.
 Daniel Nukpezah & Cephas Nyumuyo
August, 2009
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