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Factor affecting customerFactor affecting customerloyalty in retail bankingloyalty in retail banking
Presenter: Wong Yan YeeNg Kai XinHo Suk KuanMichelle Lim Pei WenLoh Su HuiTan Kah Hou
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Introduction
Why do your customer leave you?Death- 1%
Move or relocating-3%Buy from friend-5%Sold by competitor-9%
Price-14%Perceived indifference-68%(Webb, C. R. ,2009)
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Research Background Retail banking refers to banking in which
banking institutions execute transactionsdirectly with customer, rather thancorporation or other banks.
(Retail Banking,2010) 4 types- Commercial bank
Community development bank
Private bankSavings bank
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Problem Statement
To what extent has the service quality,relationship banking, online channel,
appropriate technology on customerloyalty in retail banking
Sub problem- Rude services
- Ignore customer feedback
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Research ObjectivesGeneral objectiveIdentify the factor that affecting customer loyalty in retail
banking
2 Specific Objectives
To determine whether there is a significant positive relationshipbetween service quality and customer loyaltyTo determine whether there is a significant positive relationshipbetween relationship banking and customer loyaltyTo determine whether there is a significant positive relationship
between availability of online channel and customer l
oyalty.To determine whether there is a significant positive relationshipbetween appropriate technology and customer l
oyalty
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Research Question
Is there any significant relationship between service
quality, relationship banking, online channel,technology(independent variables) and customerloyalty(dependent variables)?
Hypothesis of the Study
H1: There is a significant positive relationship betweenservice quality and customer loyalty
H2: There is a significant positive relationship betweenrelationship banking and customer loyalty
H3: There is a significant positive relationship betweenavailability of online channel and customer loyalty.
H4: There is a significant positive relationship betweenappropriate technology and customer loyalty
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Significance of thestudy customer loyalty may boost market
share and profitability
Conclusion
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Literature review
prevents researchers from copying previous
researchers
answer all research questions
clarification of problem
develop understanding
Improvement
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Service loyalty refers the degree towhich a customer exhibits repeatpurchasing behavior from a serviceprovider, possesses a positive attitudinal
disposition toward the provider, andconsiders using only this provider when aneed for this service arises
Gremler and Brown (1996)
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Review ofLiterature
rival in marketing increase gradually and makesexisting loyalty customers difficult (Anderson &Ponnalovu, 2002)
online banking is an important distribution channel(Daniel Singer, 2008)
customers who receive the relationship banking offerare more loyalty (Louis Johannes, 2005)
internet based application plays an important role forprogressing and delivering information (Ram N.Acharya, 2007)
design on the technology should be flexible and user-friendly (Dabholkar ,1994)
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Theoretical Models
How s rvi lit ts t stomers loyalty How is t e relations i ankingaffects customers loyalty Howonlinechannel affects customers loyalty
How anking technologyaffects customer loyalty
Customerloyalty
OnlinechannelRelationshi
anking
Service uality
BankingtechnologyH1
H2
H3
H4
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Conceptual Framework
Service quality
Bankingtechnology
Online channel
Relationshipbanking Customer
loyalty
Independent variables Dependent variables
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Hypothesis Development H1: There is a significant positive relationship
between service quality and customer loyalty
H2: There is a significant positive relationshipbetween relationship banking and customer loyalty
H3: There is a significant positive relationshipbetween availability of online channel and customerloyalty.
H4: There is a significant positive relationshipbetween appropriate technology and customer loyalty
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Research Methodology - Introduction
Business research is basically the applyingscientific methods to find the answer orproof of the problems and also hypothesis.
Firstly, we will specify the type ofresearch. Secondly, we will continue to specify our
data collection methods.
Explain on the target population, samplingframe and sampling location, samplingelements, sampling technique, and alsosample size.
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Research Design
Qualitative research mostly used inexploratory research and the researcher goingto observe and interpret their data from what
they observed. We choose quantitative method in our study. By using quantitative methods, the results are
more objective since we do not involve inobserver.
This is causal research since we want to findout the cause-and-effect relationship oncustomer loyalty in the retailing bank industry.
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DataCollection Methods
3.2.1 Primary DataPrimary data is those data that we obtainedfirst hand. This means that we obtained thedata by ourselves.Questionnaire3.2.2 Secondary DataSecondary data are gathered and recorded bysomeone else; they are already assembled and
usually are historical.Databases, text books, reference book, and somearticles .
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Sampling Design
The process of sampling involves usinga portion of a population to makeconclusions about the whole population.
Reasons for having sampling : Pragmatic reasons- We need to be
efficient in term of money and time
Accurate and Reliable results- Itmight be inaccurate when conducting aresearch on large population
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Target Population
Target population is our concern foridentify the right person for thisresearch.
Those always involve in the retailingbank and understand the proceduresdealing with banking.
Students , housewives, professional,working adults, businessmen or businesswomen.
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Target population
Sampling frame
Conduct research
Sample size
Plan procedures
Probability or nonprobability sampling method
Select actual sampling units
Sampling Frame&
Sampling Location
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Sampling frame (working population)Sample may be drawn
Banking customer-students,housewives, and academic workers,working adults, businessmen and alsobusiness women
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Sampling
Kampar area
Kuala Lumpur areas Different areas (working adults ,
businessmen or business women )
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Sampling Elements
Student(younger group ) Deal with bank (0nline) Different view (retailing bank industry)A
cademic workers & adult workers Knowledge (bank industry ) Information (royalty in that bank industry)Businessmen and businesswomen (Kampar
areas ) Experiences (dealing with the retailing bank
industry)
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SamplingTechnique
Probability sampling
Population is known
Nonzero probability of selection Probability sampling
Nonprobability sampling
Population is unknown Personal judgment or convenience
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Four methods of non-probability
sampling
Convenience sampling
Judgment sampling
Snowball sampling
Quota sampling
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Five types of probability sampling
Simple random Systematic sampling
Stratified sampling
Cluster sampling
Multistage sampling
Probabilitysampling
- Combinationmethod of simple randomsamplingand clustersampling
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Samplingsize
30 respondents have been
selected for the pilottest
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Research InstrumentAccording to Micuda Ion dan, servicequality can divided into fivedimensions which are :
Tangible Reliability Responsiveness Assurance Empathy
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According to Nicolae A.P., philosophy of
relationship marketing relays on gainingcompetitive advantages for the company.
Four dimensions of relationship banking Management
Instrumental
Informational organizational
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According to GIS & Geospatial
Technology,they provide seven technology dimensions:
Utility service based
Custom application services Engineering R & D services Enterprise application services IT infrastructure management Business process outsourcing
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Harry Gold outline four dimensions in
online channel
Targeting
compensation Advertising units
Metrics
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Construct Measurement
Measures the variables in this study would affectthe relationship of customer loyalty in retailingbanking
Operationalization is the process of identifying
scales that correspond to variance in a concept Nominal scale - most elementary level of
measurement Interval scale - having both nominal and ordinal
properties and also differences in quantities of aconcept Ordinal scale - a ranking scales
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DataProcessing
After getting questionnaire fill byrespondents, we will coded, key in, and edit alldata.
Checking for any blank answers and
inconsistencies Editing process include double check the
questionnaires to confirm no missing data andensure respondents are understand questionsin our questionnaire
Enter data into SPSS version 16.0 to help usanalysis data in later stage
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Data Analysis
Descriptive Analysis
Maximum
Minimum
Mean
Standard deviation
Variance
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Age of Respondents
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Ages frequency distribution
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Frequency ofAge
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Occupation of Respondents
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Respondents occupation frequency distribution
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Frequency of Respondents occupation
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Gender of Respondents
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Respondents gender frequency distribution
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Frequency of Respondents gender
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Respondents choice of bank
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Respondents choice of bank frequency distribution
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Frequency of Respondents choice of bank
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Years of Respondents become customer of bank
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Years of Respondents become customer of bank frequency
distribution
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Frequency ofYears of Respondents become customer of
bank
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Scale Measurement
Reliability consistency & stability
Low reliability Problem checking
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Variable of service quality
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Variable of relationship banking
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Variable of online channel
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Variable of banking technology
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Inferential Analysis
Independent sample t-test between male andfemale in retailing banking industry
: There is a significant difference of customer loyaltybetween
male and female customers
: There is a significant difference of customer loyaltybetween
male and female customers
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Conclusion
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References:
Daniel S. , Albert A. & Babu M. (2008). Management innovation and culturaladaptivityin international online banking. Retrieved March16, 2010, fromhttp://www.emeraldinsight.com/Insight/viewPDF.jsp?contentType=Article&File
name=html/Output/Published/EmeraldFullTextArticle/Pdf/0210310403.pdfMohammadSuhainyAbdul Rahim. (2009). Service Quality, CustomerSatisfaction AndLoyaltyTowards JKR Malaysia. RetrievedMarch 22, 2010,fromhttp://dspace.fsktm.um.edu.my/bitstream/1812/550/1/Service%20Quality%20Customer%20Satisfaction%20and%20Loyalty%20towards%20JKR%20Malaysia%20(Mohammad%20Suhainy%20Abdull%20Rahim%20CGA%20060082).p
dfRamN. Acharya & Albert Kagan (2007). Online bankingapplications andcommunitybank performance. RetrievedMarch16, 2010, fromhttp://www.emeraldinsight.com/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0320260603.pdf
Retail Banking. (2010,March). RetrievedMarch 16,2010,from
http://en.wikipedia.org/wiki/Retail_bankingWebb, C. R. (2009, December 30). Whydoour customer leave us? RetrievedFebruary6, 2010, fromEzine Article: http://ezinearticles.com/?Why-Do-Our-Customers-Leave-Us?&id=3493881
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Q & A