Factors Affecting Customers Brand Loyalty an Empirical Study in Ethiopian Private Banking Industry
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Date
2014-06
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Addis Ababa University
Abstract
Customer loyalty is one of the most important issues organizations face today. Considering
highly competitive, complex and dynamic environment of the banking industry together with
slight differences which exist in financial products and services, brands become a key
differentiator to enable the bank to gain a competitive advantage in the industry. Accordingly, it
has become increasingly important for the banks to identify the factors that keep their customers
brand loyal to them. Therefore, the present study focuses to comprehensively identify and
measure the most important determinants of the brand loyalty in Ethiopian private banking
industry. To meet the purpose of the study, Explanatory, cross sectional, quantitative survey
method is used. The population in this research consist only individuals who have experience
using banking services in any one of the private banks.. Considering the large population of
bank service users, a stratified random sampling method is used to collect data in view of time
and cost constraints and a sample size of 384 is selected from the defined target population
accordingly. The data collection process is done using self-administered questionnaire filled by
customers and it has taken place in different branch premises of the selected banks. A five -page
standardized survey questionnaire was employed. Descriptive analysis, factor analysis,
reliability analysis and correlation analysis are used for purpose of analyzing the data. Finding
of factor analysis revealed that all the identified influences as true influences of brand loyalty
and most of the statements selected for each influence were indeed valid. The correlation study
showed that there is a positive relationship between all of the variables considered under the
study. The percentages of responses for each question along with their respective mean value
confirm that influences culture, switching cost and relationship Propones are less important
factors and they have week influence on Brand loyalty of banking customers whereas Perceived
Value, Customer Satisfaction, Brand Trust, Repeat Purchase and Involvement are the most
important factors and has a strong influence on Brand loyalty of banking customers. Given the
findings, it is recommended that management should focus their managerial actions on the more
important brand loyalty influences first, once these render the best results, managerial input can
focus on those influences of lower importance.
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Keywords
Brand Loyalty, Loyalty Influences, Conceptual Framework