Factors Affecting Customers Brand Loyalty: An Empirical Study in Ethiopian Banking Industry
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Date
2017-05-11
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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 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 Ethiopian banks. Considering the large population of bank service users, a convenience 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 among 384 sample only 297 are correctly respond. 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 three –page standardized survey questionnaire was employed. Descriptive analysis, reliability analysis and correlation analysis are used for purpose of analyzing the data. 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 switching cost, service quality, reputation and commitment are less important factors and they have week influence on Brand loyalty of banking customers whereas Customer Satisfaction and Trust are the most important factors and have 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