The Effect of Relationship Marketing on Customers’ Loyalty (Evidence from Zemen Bank)

Authors

  • Cherinet Boke Chakiso

DOI:

https://doi.org/10.5195/emaj.2015.84

Keywords:

Key words, Relationship marketing, Trust, Commitment, Conflict Management, Communication, Gratitude, Management Commitment, Customers Loyalty.

Abstract

Abstract

Every firm without good marketing team and strategies is bound to fail. In order to be competitive and profitable in the industry, bankers should acquire and retain profitable customers. Definitely this is done with Relationship marketing. Relationship marketing is a philosophy of doing business, a strategic orientation that focuses on keeping and improving current customers rather than acquiring new customers. The aim of this study is to investigate the influence of Relationship marketing underpinnings on customers‟ loyalty. The study also investigated the mediating role of top management commitment between relationship marketing and customers‟ loyalty. The study is based on information collected from both primary and secondary sources of data. The sample for this study is taken from customers of Zemen bank in Addis Ababa. Data analyses were done using frequencies, percentages, means, standard deviations, cross-tabulations, and tables followed by discussions. Moreover, inferential statistics of bivariate correlations and simple and multiple regressions were used. Findings of this study reveal that there is a significant and strong correlation between relationship marketing and customers‟ loyalty. Moreover, the study reveals that there is significant effect of trust, commitment, communication, and gratitude on predicting customers’ loyalty. Of these relationships, Gratitude emerged as the strongest factor which influences customers’ loyalty while conflict management remained statistically insignificant and negligible influence on customers’ loyalty in the cumulative model. However, all underpinnings had statistically significant influence on customers’ loyalty as individual. Moreover, management commitment had mediating effect between relationship marketing and customers’ loyalty. Depending on the findings, practical implications of this study is in order to ensure loyalty among bank customers; bankers should build a better relationship marketing strategy. Therefore, banks competitiveness and profitability will depend on their ability to build strong relationship bonds with their customers continuously. Furthermore, future research directions were also suggested on this study.

Author Biography

Cherinet Boke Chakiso

Mr. Cherinet Boke is senior lecturer in department of management, Debre Berhan University, Ethiopia. Mr. Cherinet Boke has vast experience in teaching and advising, conducting researches, and providing community service.

References

Achour, M. Said, N.P. & Boerhannueddin, A. (2009). Customer Loyalty: the case of mobile phone users in Universiti utara Malaysia, Unpublished material.

Ahmed Kelil, (2010). Employees’ perception towards compensation and benefit policy: the case of some selected Government higher education institutions in Addis Ababa, Addis Ababa university, MBA thesis.

Ahmed, R. & Buttle, F. (2001). Customer retention: a potentially potent marketing management strategy, Journal of Strategic Marketing 9, p.29–45.

Anabila, P Narteh, B. Tweneboah-Koduah, E. (2012). Relationship Marketing Practices and Customer Loyalty: Evidence from the Banking Industry in Ghana. European Journal of Business and Management, Vol 4, No.13.

Annual Report of Zemen Bank, (2012).

Aryan Hellas Limited (2005). Relationship Marketing: Understanding and Implementing the Concept. IBRH, Athens.

Ballantyne, D. Christopher, M. and Payne, A. (2002), Relationship marketing: Creating Stakeholder Value; Butterworth-Heinemann, Oxford, Britain.

Ballantyne, D. Christopher, M. and Payne, A. (2003). Relationship marketing: looking back, looking forward. Marketing Theory Articles, Volume 3(1): 159–166, www.sagepublications.com

Bekezela Ncube, (2009). Basic Information about Ethiopia.

Bhattacherjee, A. (2012). Social Science Research: Principles, Methods, and Practices, (2nd edition). The Global Text Project.

Brahmbhatt M. (2008). An Assessment of Service Quality in Banks. Vol.2, Issue 4, Page no.37-41.

Brito, C. (2008). Relationship Marketing: From Its Origins to the Current Streams of Research. FEP Working Paper; University De Porto.

Christopher Lovelock and Lauren Wright (2006). Principles of service marketing and management.

Chung Lo S., (2012). A Study of Relationship Marketing on Customer Satisfaction. Journal of Social Sciences 8 (1): 91-94.

Clow K.E. and Kurtz L.,(2003). Service Marketing, Operation, Management and Strategy. (second edition)

Cohen, L. Manion, L. and Morrison, K., (2007). Research Methods in Education. (6th edition), Routledge Taylir & Francis publications Group, London and New York.

Creswell J.W (2003). Research Design- Qualitative, Quantitative, and mixed methods approaches. (2nd edition),Customer Loyalty Programs, (2011).

Darley W.K, and Blankson C, (2008). African culture and business markets: implications for marketing practices. Journal of Business & Industrial Marketing 23/6, 374–383, Emerald Group Publishing Limited.

Dawkins, R. (2008) Microsoft® Encarta® 2009 [DVD]. Redmond, WA: Microsoft Corporation.Development Bank of Ethiopia report, (May, 2012).

Dongmei Zhang (2009). Customer Switching Behaviour in the Chinese Retail Banking Industry. Research thesis, Lincoln University, Canterbury, New Zealand.

Dwyer, F. R., Schurr, P.H., & Oh, S. (1987). Developing Buyer-Seller Relationships. Journal of Marketing.

Field, A., (2005). Discovering Statistics Using SPSS. (2nd edition). Sage Publications Limited.

Flambard-Ruaud, S. (2005). Relationship Marketing in Emerging Economies: Some Lessons for the Future. Vikalpa; volume 30.

George and Mallery, (2003). Business Research Methods, Oxford University Press, p.19.

Gilmore, A. (2003). Services, Marketing and Management. SAGE Publications Ltd.

Grönroos, C. (1994). From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing. Management Decision, Vol. 32 No. 2, 1994, pp. 4-20. MCB University Press Limited.

Hanover Research, (June, 2011). Customer Loyalty Programs. 1101 Connecticut Ave. NW, Suite 300, Washington, DC 20036 P 202.756.2971 F www.hanoverresearch.com

Hennig-Thurau, H. & Hansen, U. (2003). Relationship Marketing – Some Reflections on the State-of-the-Art of the Relational Concept. University of Hanover.

Izah Mohd Tahir, I.M. & Zulkifli, Z. (2011). A Preliminary Analysis of CRM Practices among Banks from the Customers’ Perspectives. Journal of Public Administration and Governance . Vol. 1, No. 1.

Izquierdo, C.C. Cilla´n, J.G. & Gutie´rrez, S.M. (2005). The impact of customer relationship marketing on the firm performance: a Spanish case. Journal of Services Marketing, Volume 19, p.234–244, Emerald Group Publishing Limited.

John Williams, (2004). Marketing Research and Information. Elsevier Ltd, Great Britain.

Kanagal, N. (2009). Role of Relationship Marketing in Competitive Marketing Strategy. Journal of Management and Marketing Research. Indian Institute of Management, Bangalore.

Kaur G., Sharma R.D., and Mahajan N., (2012). Exploring customer switching intentions through relationship marketing paradigm. International Journal of Bank Marketing Vol. 30 No. 4, pp. 280-302, Emerald Group Publishing Limited.

Kidane Assefa, (2012). Relationship Marketing in the Hotel Industry: The Nexus between Concepts and Practices (A case of Ghion Hotel, Addis Ababa Branch, Ethiopia). Unplished MA Project. Addis Ababa University.

Kothari, C.R. (2004). Research Methodology Methods and Techniques. (2nd edition). New Age International Publishers, India.

Kotler, P. & Keller K.L., (2012). Marketing Management. (14th edition). Pearson Education, Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458.

Kotler, P. and Keller, K.L. (2006). Marketing Management (12th edition). Pearson Education, Inc., Upper Saddle River, New Jersey.

Liu, M.T. Chu, R. Wong, I.A. Zúñiga, M.A. Meng, Y. & Pang, C. (2012). Exploring the relationship among affective loyalty, perceived benefits, attitude, and intention to use co-branded products. Asia Pacific Journal of Marketing and Logistics, Emerald Group Publishing Limited.

Marczyk, G. DeMatteo, D. Festinger, D. (2005). Essentials of Research Design and Methodology. John Wiley & Sons, Inc., Hoboken, New Jersey.

Marshall, N.W. (2010). Commitment, Loyalty and Customer Lifetime Value: Investigating The Relationships Among Key Determinants. Journal of Business & Economics Research – . Volume 8, No. 8.

Morgan, R. & Hunt, S. (1994). The Commitment-Trust Theory of Relationship Marketing. Journal of Marketing; Vol. 58, p.20-38.

Mosavi, S.A. and Ghaedi, M. (2012). A survey on the relationships between customer satisfaction, image, trust and customer advocacy behavior. African Journal of Business Management Vol. 6(8), pp. 2897-2910.

Muge Arslan, F. and Altuna, O.K. (2010). The effect of brand extensions on product brand image. Journal of Product & Brand Management 19/3 (2010) 170–180. Emerald Group Publishing Limited.

Mudie, P. and Pirrie, A. (2006). Services marketing management. (Third edition). Published by Elsevier Ltd.

National bank of Ethiopia Report, 2012.

Ndubisi, N. O. and Wah, C.K. (2005). Factorial and Discriminant analysis of the underpinnings of relationship marketing and customer satisfaction. International Journal of Bank Marketing, vol. 23, No. 7, pp. 542-557.

Ndubisi, N.O. & Madu, C.N. (2009). The association of gender to firm-customer relationship. International Journal of Quality & Reliability Management. Vol. 26 No. 3, 2009 pp. 283-301, Emerald Group Publishing Limited.

Ndubisi, N.O. (2005). Effect of gender on customer loyalty: a relationship marketing approach. Marketing Intelligence & Planning Vol. 24 No. 1, 2006 pp. 48-61 Emerald Group Publishing Limited.

Oliver, R. L. (1999). Whence Consumer Loyalty? (Special Edition). Journal of Marketing, 63(5): 33-44.

Palmatier R.W., (2008). Relationship Marketing. Published by Marketing Science Institute, 1000 Massachusetts Ave., Cambridge, MA 02138, USA.

Palmatier, R.W. Jarvis, C.B. Bechkoff, J.R. & Kardes, F.R. (2009). The Role of Customer Gratitude in Relationship Marketing. Journal of Marketing Vol. 73. American Marketing Association.

Parvatyar A. and Jagdish, N.S (1999). Hand book of Relationship Marketing. Thousand Oaks, CA.

Parvatyar, A. and Jagdish, N.S (2001). Customer Relationship Management: Emerging Practice, Process, and Discipline. Journal of Economic and Social Research 1-34.

Peter Lok, John Crawford, (2001). Antecedents of organizational commitment and the mediating role of job satisfaction. Journal of Managerial Psychology, Vol. 16, pp. 594 – 613.

Pezeshki, V. Mousavi, A. and Rakowski, R.T. (2005). Profitability through Customer Relationship Marketing. Proceedings of the International Conference on Computer and Industrial Management, ICIM, October 29-30, Bangkok, Thailand.

Saiz, B.S. & Pilorge, P. (2010). Understanding customer behavior in retail banking- the impact of credit crisis across Europe. Earnest and Young.

Shifera Bekele, (2011). The impact of relationship marketing on customer loyalty in banking industry, the case of bank of Abyssinia. Unpublished Master’s Thesis. Addis Ababa University.

Sorce P., (2002). Relationship Marketing Strategy. Printing Industry Center at Rochester Institute of Technology.

Taleghani, M. Gilaninia, S., and Mousavian, S.J. (2011). The Role of Relationship Marketing in Customer Orientation Process in the Banking Industry with focus on Loyalty (Case Study: Banking Industry of Iran), International Journal of Business and Social Science Vol. 2 No. 19.

Tyler, K. and Stanley, E. (2007). The role of trust in financial services business relationships. Journal of Services Marketing. 21/5 (2007) 334–344, Emerald Group Publishing Limited.

Zeithaml, V.A. and Bitner, M.J (2003). Service marketing: Integrating customer focus across the firm. (Third edition). Tata McGraw-Hill, India.

Zemen Bank - http://www.zemenbank.com/

Zulkifli, Z. & Tahir, I.M. , (2011). A Preliminary Analysis of CRM Practices among Banks from the Customers’ Perspectives. Journal of Public Administration and Governance. Vol. 1, No. 1.

Downloads

Published

2015-11-12

Issue

Vol. 5 No. 2 (2015)

Section

Articles

License

Authors who publish with this journal agree to the following terms:

  1. The Author retains copyright in the Work, where the term “Work” shall include all digital objects that may result in subsequent electronic publication or distribution.
  2. Upon acceptance of the Work, the author shall grant to the Publisher the right of first publication of the Work.
  3. The Author shall grant to the Publisher and its agents the nonexclusive perpetual right and license to publish, archive, and make accessible the Work in whole or in part in all forms of media now or hereafter known under a Creative Commons Attribution 4.0 International License or its equivalent, which, for the avoidance of doubt, allows others to copy, distribute, and transmit the Work under the following conditions:
    1. Attribution—other users must attribute the Work in the manner specified by the author as indicated on the journal Web site;
    with the understanding that the above condition can be waived with permission from the Author and that where the Work or any of its elements is in the public domain under applicable law, that status is in no way affected by the license.
  4. The Author is able to enter into separate, additional contractual arrangements for the nonexclusive distribution of the journal's published version of the Work (e.g., post it to an institutional repository or publish it in a book), as long as there is provided in the document an acknowledgement of its initial publication in this journal.
  5. Authors are permitted and encouraged to post online a prepublication manuscript (but not the Publisher’s final formatted PDF version of the Work) in institutional repositories or on their Websites prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work. Any such posting made before acceptance and publication of the Work shall be updated upon publication to include a reference to the Publisher-assigned DOI (Digital Object Identifier) and a link to the online abstract for the final published Work in the Journal.
  6. Upon Publisher’s request, the Author agrees to furnish promptly to Publisher, at the Author’s own expense, written evidence of the permissions, licenses, and consents for use of third-party material included within the Work, except as determined by Publisher to be covered by the principles of Fair Use.
  7. The Author represents and warrants that:
    1. the Work is the Author’s original work;
    2. the Author has not transferred, and will not transfer, exclusive rights in the Work to any third party;
    3. the Work is not pending review or under consideration by another publisher;
    4. the Work has not previously been published;
    5. the Work contains no misrepresentation or infringement of the Work or property of other authors or third parties; and
    6. the Work contains no libel, invasion of privacy, or other unlawful matter.
  8. The Author agrees to indemnify and hold Publisher harmless from Author’s breach of the representations and warranties contained in Paragraph 6 above, as well as any claim or proceeding relating to Publisher’s use and publication of any content contained in the Work, including third-party content.

Revised 7/16/2018. Revision Description: Removed outdated link.