CHAPTER 3 FRAME OF REFERENCE

Transcription

1 CAPTER 3 FRAME OF REFERENCE 3.1 CONCEPTUALIZATION A conceptual framework (Miles & uberman, 1994, p.18): Explains, either graphically or in narrative form, the main things to be studied. stated: ence, in order to reach this research study`s purpose, the following research questions are 1) What are the factors that affect customer loyalty, which is a focus of Customer Relationship Management (CRM) in the banking sector of Pakistan? 2) What is the relationship between the factors that affect customer loyalty in the banking sector of Pakistan? 3) ow to build a customer loyalty model for the banking sector of Pakistan? The researcher has developed following hypotheses based on the purpose of this research: 1: there is significant influence of customer trust on customer perceived value. 2: there is significant influence of customer trust on customer satisfaction. 3: there is significant influence of customer trust on customer loyalty. 4: there is significant influence of customer perceived value on customer satisfaction. 5: there is significant influence of customer satisfaction on customer loyalty. 6: there is significant influence of customer switching barriers on customer loyalty. 7: there is significant influence of customer culture on customer loyalty. 39

2 3.2 PREVIOUS RESEARC AND MODELS RELEVANT TO TIS RESEARC STUDY The researcher now describes previous researches, and models that relates to his research study`s purpose. The customer loyalty model presented by Beerli, Martin and Quintana (2004) is shown in Figure 3.1. They have shown the influence of different factors on customer loyalty. The researcher based on literature review, comments here that the most influencing factor shown in this loyalty model is customer satisfaction. It is also a fact that when a customer is satisfied then the chances of loyalty are higher as compare to when a customer is dissatisfied. In the following model Figure 3.1, Martin and Quintana (2004) have also given another factor that influences on customer loyalty that is switching cost. ere the researcher again based on literature review comments that almost every customer has some switching cost to pay whenever customer wants to switch to another product or service. For instance, times, money, legal restrictions, distance are some of the costs a customer has to pay is customer switches to another product or service. Perceived Quality Satisfaction Switching cost Loyalty Figure 3.1: Loyalty Model (Beerli, Martin & Quintana, 2004) 40

3 The next model The integrated framework for customer value and CRM performance presented by Wang et al. (2004) focuses on four customer values, when these values are fulfilled, customer satisfaction is achieved and customer satisfaction in turn creates customer loyalty as shown in Figure3.2. Figure 3.2: The Integrated Framework for Customer Value and CRM Performance. Source: Wang et al., 2004, p. 171 Model as shown Figure 3.3 presented by Rucci, Kirn, & Quinn (1999) shows the relationships between behaviours of employees and customers. Figure 3.3: Employee-Customer-Profit Chain at Sears 41

4 The researcher based on literature review, comments here that there is cause and effect relationship in banks. If employees are satisfied with the bank then in turn employees make their customers happy, hence, there is a cause and effect relationship here. Relationship of customers with their banks is of two type namely offensive strategy and defensive strategy (Fornell, 1992). Banks try to acquire new customer in offensive strategy whereas when a bank tries to keep existing customer then it is called defensive strategy as shown in Figure 3.4. Figure3.4: Offensive and defensive strategies, Fornell (1992, p.8) As the researcher earlier discussed in the previous chapter on the review of related literature about the following factors affect customer loyalty in the banking sector of Pakistan: 1) Customer trust, 2) Customer perceived value, 3) Customer satisfaction, 4) Customer culture, and 5) Customer switching barriers. 42

5 The researcher predict that the relationship between these factors also affect customer loyalty, customer trust has an influence on customer perceived value, customer satisfaction, and on customer loyalty as shown in the emerged frame of reference Figure 3.5. Customer perceived value also influences customer satisfaction and customer satisfaction in turn influences customer loyalty. Customer switching barriers and customer culture also influence customer loyalty as shown in Figure EMERGED FRAME OF REFERENCE A frame of reference according to Miles and uberman (1994) explains the main things to be studied, the key factors, constructs, or variables and the presumed relationship between them. Consequently, a frame of reference presents the theories and models that are most suitable for the research problem. The researcher anticipates that based on this emerged frame of reference, there will be better CRM utilization in banking sector, and banks will be able to build customer loyalty in order to have a better long-term competitive edge over their competitors. The Figure 3.5 presents the research variables used in the research questions and the chosen operational definitions. According to the above discussions and emerged frame of reference as shown in Figure 3.5, the researcher would be in a better position to study this research study`s questions and hypotheses. 43

6 CUSTOMER PERCEIVED VALUE CUSTOMER SATISFACTION CUSTOMER TRUST CUSTOMER SWITCING BARRIERS CUSTOMER LOYALTY CUSTOMER CULTURE Figure 3.5: Emerged frame of reference Source: Researcher`s own construction 44