Customer loyalty as a concept is a critical strategic option in today’s competitive environment. It is no surprise therefore that managers and researchers have increased their study and understanding of the concept as a strategic marketing imperative over the past decades to capture market share and improve profitability.
Indeed the theoretical perspective is that competitive pricing as well as company image and reputation contribute to customer satisfaction and that service quality along a number of pathways drives customer loyalty and profitability thus: service quality--> customer satisfaction--> customer loyalty --> market share --> profitability. A few empirical studies have found these linkages to be true. However these factors differ in importance based on the cultural setting. We investigate (1) whether these relationships exist and (2) which of these factor(s) is/are important in motivating consumer loyalty from the perspectives of retail banking customers in Ghana.
The study draws on customer behaviour and attitude premised on the servqual and servperf models originated by Parasuraman et al., (1988), Cronin and Taylor (1992), and Brady and Cronin (2001) respectively as well as other researches based on the literature on customer satisfaction and loyalty. We used both quantitative and qualitative research approaches in our study and have drawn from both primary and secondary sources of data. We made use of a 7 point likert scale to develop indexes for the main constructs measured in this study and applied correlation, chi square (?2) and regression analyses to evaluate the hypothesised relationships.Further we qualitatively analysed aspects of the data hinging on explanatory aspects of our research. The results among other things reveal that whilst service quality (especially empathy and reliability) and bank image and reputation are important instigators of customer satisfaction and loyalty, competitive pricing showed a weak linear relationship with customer satisfaction and loyalty (r < 0.
5). On the other hand, increased market share was found to influence banks’ profitability.Finally we discuss the management implications of the study in terms of customer retention and profitability strategies for the banks in Ghana. We emphasise that management strategies that are service quality conscious, use person-organisation fit approaches to recruitment and effectively communicate strategies could help institutionalise a culture that is customer relation centred, help banks survive the competition, retain their customers and in the long run increase their profitability.
A work of this nature could not have been produced without assistance of some sort. We wish to therefore acknowledge a few people and institutions that helped in the realisation of this research work. First and foremost we extend our gratitude to Prof. Anders Hederstierna for supervising this work. We thank him especially for his critique of our original proposal.
This helped re-aligned our originally diffused ideas into perspective.The School of Management, Blekinge Institute of Technology, Sweden gave us the opportunity to enrol in this long distance online MBA programme and we extend a heart of gratitude to the school for the opportunity. The course design and structure facilitated team work and made it possible for we the authors, who have never met physically before, to collaborate and produce this thesis. Daniel would like to thank his wife Sylvia and mother in law Christine Kwawu for their particular interest in this research and also for helping with relevant data collection. Cephas would also like to thank Wisdom Nyumuyo and Mark Teittey for helping with data collection.
Further we wish to acknowledge Mr Edward Lumor, Julius Najah Fobil and Julius Nukpezah for spotting errors in our original research questionnaire which helped improve it a great deal. We acknowledge also the over 200 respondents of our questionnaire for their time. Additionally, we extend thanks too, to our colleagues Bertha Kyere-Frempong and Olakunle Lemboye for critiquing our work. Finally, we wish to state that any shortcoming associated with this work remains ours.
