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RELATIONSHIP MARKETING AND CUSTOMER LOYALTY

Extracts from this document...

Introduction

RUNNING HE?D: RELATIONSHIP MARKETING AND CUSTOMER LOYALTY Relationship Marketing and Customer Loyalty [Name of institution] [Name of writer] Abstract The main objective of this research was to examine the impact of relationship marketing strategy on customer loyalty. A questionnaire derived from previous studies and documentation was completed by 100 bank customers. Multiple regression analysis assessed the impact on customer loyalty of the four concepts of relationship marketing (trust, commitment, communication and conflict management). The four variables have a significant effect and predict a good proportion of the variance in customer loyalty. In addition, they are strongly linked. Reports of investigations of this study warrant further investigation. Because the data analyzed were obtained from a sector of the service industry in a country, further studies are needed before drawing conclusions. It is reasonable to conclude, in this test that loyalty can be created, maintained and reinforced by the marketing of plans to build confidence, demonstrate its commitment to service, communicating with customers in a timely timely, reliable and proactive manner, and manage conflicts effectively. Strengthens and expands the body of knowledge related to customer loyalty in service industries. Table of Content Introduction 3 Literature review 4 Foundations of relational marketing 5 Methodology 8 Results 10 Discussion 11 Implications 12 Conclusions and future research 14 References 16 Relationship Marketing and Customer Loyalty Introduction It is undoubtedly ? growing interest in relationship marketing. Th? strong competition that characterizes today's business environment has led to th? establishment of strong relationships with business customers. Webster (1992, pp 34-111) noted that th? phenomenon described by this concept is widely supported by current trends in modern businesses. Ndubisi (2004, pp 121-19) reported that more and more companies ?re capitalizing on th? strong business relationships with clients to obtain valuable information about how to better serve customers and prevent defection to competing brands. Therefore, building relationships with customers creates mutual rewards (Rapp and Collins, 1990, pp 45-189) ...read more.

Middle

extent of th? customer's investment in th? relationship, and evaluation of available alternatives. Ndubisi and Chan (2005, pp 34-78) found ? significant relationship between conflict management and customer loyalty, indirectly through th? trust and perceived quality. Th? ability of th? product or service to manage th? conflict and also ? direct influence on customer loyalty. Therefore, th? research project is that there is ? positive relationship between customer loyalty and (?) trust, (b) commitment, (c) communication and (d) conflict management. Methodology Data were collected through ? field survey of bank customers. All customers in th? city were invited to participate in th? survey, 100 have accepted th? invitation. Th? sampling frame consisted of th? customers so th? bank of volunteers only. Quasi-systematic random sampling, each client to select th? second entry in th? bank every day of th? investigation, starting on th? first pass through th? gates at th? start of th? activity at 9.30. This sampling method was chosen because it allows th? analysis of possible selection bias or error (Sher and Trull, 1996, pp 11-111). Th? questionnaire filled out by customers, which to measure th? dimensions of th? building have been adapted from earlier studies: surprenant and Churchill (1982) for th? size of confidence, Morgan and Hunt (1994, pp 121-19) for communication, commitment and conflict management, and Bloemen et al. (1999 pp 34-189) for th? fidelity. Th? total possible 20 points and 19 questions related to five dimensions as follows: 1. Trust: 2. Th? bank is very concerned about th? security of my transactions; 3. Th? bank promises ?re reliable; 4. Th? bank is to provide quality service; 5. Bank employees to show respect for clients; 6. Th? bank complies with its obligations to its customers and 7. Trust banking services. 8. Commitment: 9. Th? bank has made adjustments for my needs; 10. Th? bank offers personalized services to meet th? needs; 11. Th? bank is flexible when its services ?re changed, and 12. Th? bank is flexible to meet my needs. ...read more.

Conclusion

Banks must recognize th? power of commitment in servicing their customers and act accordingly. They must demonstrate ? genuine commitment to customer relationships, and not words. Predispose clients to keep an effective communication with ? provider of banking services. Loyalty can be fed in timely and reliable information, for example on th? uses and benefits of new banking services or th? state of transactions. It can also be improved by providing accurate information on what th? bank is focusing on existing problems and what we do to prevent potential. Finally, customers tend to be loyal to th? banks that deal with customer complaints (which will always be th? case, whatever) and other conflicts satisfactorily. It is therefore important that mechanisms for resolving conflicts ?re not only in its place, but they ?re proactive, to anticipate potential sources of conflicts and resolve them before problems occur. Effective reaction must also be mobilized in ? timely and decisive manner to resolve problems and protect th? customers of avoidable losses. Sometimes, ? client that causes defects in is not so much th? appearance of ? problem th? way it manages. Banks must be prepared to discuss issues openly with their customers. Conclusions and future research This study showed that th? scope of th? "foundations" of relationship marketing can predict customer loyalty, at least in th? banking sector. Therefore, researchers and strategists to encourage customers should pay special attention to issues of trust, commitment, communication and conflict management. Th? research presented here has not been based on th? influences of socio demographic factors on th? relationship between relationship marketing initiatives and customer loyalty. Previous studies have suggested that women tend to be more faithful than men (Ndubisi, 2005, pp 121-19), and th? elderly more than younger age groups. Furthermore, there is ? tendency for higher income customers to receive better attention from banks, at least in th? Organization, its higher value and higher volume of business they generate for th? banks. This could make them more loyal than other customers. Future research could investigate th? influence of restraint. ...read more.

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