Investigating the Impact of Barriers to Customers' Switching on Their Loyalty: A Case Study of Mellat Bank Customers in Tehran

Document Type : Research Paper

Authors

1 Coach, Strategic Management Unit, Hormozgan University, ACECR

2 Professor, Department of Management, Faculty of Management and Economics, Tarbiat Modarres University

3 Assistant Professor, Department of Management, Faculty of Management, Bahonar University of Kerman

Abstract

The growing increase of commercial banks has raised some concerns about customer switching especially for well-known and old banks. Among these banks, Mellat bank has a history of 38 years and a capital of 50 trillion. The problem of customer switching may result in decreased loyalty of its customers and their increased tendency for other banks. The present research focuses on the switching barriers and their impacts on the loyalty of Mellat bank customers in Tehran. It is a functional study based on description and correlation. The population of the study consists of all the customers of Mellat banks inTehran who have at least once used the services of this bank. According to the Cochran equation, the sample size was determined to be 385. The sampling method was clustering. A designed questionnaire was distributed among 480 customers of different branches of the bank in Tehran. The model fitness and the study hypotheses were dealt with by modelling structural equilibriums. The results showed the significant effects of different variables related to switching barriers (i.e. Switching Cost, Availability and Attractiveness of Alternatives, Social Benefits, Confidence Benefits and Special Treatment) on the customers’ loyalty to Mellat Banks of Tehran.

Keywords

References

1-   Al-hawari, M.A. (2014). Emotional stability and switching barriers in the retail banking context. Journal of Managing Service Quality, 24(5), 469-486.
2-   Amirshahi, M,. Barari, M,. Alhayari, A,. and Hakimi, H. (2014). The Effect of Relational Benefits on Encouraging Customers to Recommendational Relationships (Case Study: Mellat Bank Customers). Journal of Business Management Perspective, 17:139-121.
3-   Anderson, J.C., Narus, J.A. (1990). A model of distributor firm and manufacturer firm working partnerships. Journal of Marketing, 54, 42–58.
4-   Baumann, C., Elliott, G. and Hamin, H. (2011). Modelling customer loyalty in financial services: ahybrid of formative and reflective constructs, International Journal of Bank Marketing, 29(3), 247-267.
5-   Beerli, A, Martin, J & Quintana, A. (2004). A model of customer loyalty in the retail banking market. European Journal of Marketing, 38(1/2), 253-275.
6-   Colgate, M & Lang, B. (2001). Switching barriers in consumer markets: An investigation of the financial services industry. The Journal of Consumer Marketing, 18(4/5), 332-347.
7-   Dhewi, T,SH., Solimun, A, & Rohman, F. (2014). Gender as Moderating Effect of Switching Barriers on Customer Satisfaction and Word-of-Mouth Behavior (Studies on BlackBerry Mobile Phone Customer in Malang). International Journal of Business and Behavioral Sciences, 4(4), 8-16.
8-   Dick, A.S., Basu, K. (1994). Customer loyalty: toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22 (2), 99–113.
9-   El-Manstrly, D., Paton, R., Veloutsou, C. and Moutinho, L. (2011). An empirical investigation of the relative effect of trust and switching costs on service loyalty in the UK retail banking industry. Journal of Financial Services Marketing, 16(2), 101-110.
10-   Fornell, C. (1992). A national customer satisfaction barometer: the Swedish experience. Journal of Marketing, 56, 6–21.
Hashemzehi, Ali; Moghimiyan Boroujani, O,. and Sajedifar, A. (2014). The study of the impact of Switching Barriers on the repurchase intention of dissatisfied customers (Case study: Mellat Bank). First National Conference on Money and Bank Management, Tehran.
11-   Henning -Thurau T, Gwinner KP, Gremler, D.(2002). Understanding relationship marketing outcomes: an integration of relational benefits and relationship quality. Journal of Service Research, 4(3): 230-47.
12-   Hirschman, A. (1970). Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States, Harvard University Press, Cambridge, MA.
13-   Huang L, Chang W, Chen CW (2017) Do Switching Barriers Exist in the Online Travel Agencies? J Tourism Hospit, 6: 1-7.
14-   Jones, M.A., Mothersbaugh, D.L., Beatty, S.E. (2000). Switching barriers and repurchase intentions in services. Journal of Retailing, 76 (2), 259–274.
15-   Kim, M., Kliger, D & Vale, B. (2003). Estimating switching costs: The case of banking. Journal of Financial Intermediation, 12(1), 25-56.
16-   Kinard, B.R. & Capella, M.L. (2006). Relationship marketing: The influence of consumer involvement on perceived service benefits. Journal of Services Marketing, 20(6):359-368.
17-   Klemperer, P. (1995). Competition When Consumers Have Switching Costs: An Overview with Applications to Industrial Organisation. Macroeconomics and International Trade’ Review of Economics Studies, 62: 515-539.
18-   Kordnaeej, A,. Zarepour, Z,. and Shahabi, E. (2015). Investigating the Impact of Switching Barriers on Customer Loyalty and purchase intention. Conference on Key Issues in Management and Accounting Sciences, Gorgan.
19-   Mohammadi, R,. Khabiri, M and Barari, M. (2014). The Benefits of Creating Relationship with the customer and its Effect on positive Mouth to mouth (Case Study: Pools Customers of Tehran). Journal of Sports Management Studies, 19: 220-205.
20-   Ngo, V., & Pavelkova, D. (2017). Moderating and mediating effects of switching costs on the relationship between service value, customer satisfaction and customer loyalty: investigation of retail banking in Vietnam. Journal of International Studies, 10(1), 9-33.
21-   Oliver, R, L. (1999). Whence consumer loyalty?. Journal of Marketing, 63 (Special issue), 33-44.
22-   Patterson, P.G. and Smith, T. (2003). A cross cultural study of switching barriers and propensity to stay with service providers. Journal of Retailing, 79(2), 107-120.
23-   Bendapudi, N. and Berry, L.L. (1997). Customers’ Motivations for Maintaining Relationships with Service Providers. Journal of Retailing, 73, 15-37.
24-   Ping, R.A. (1993). The effects of satisfaction and structural constraints on retailer exiting, voice, loyalty, opportunism, and neglect. Journal of Retailing, 69, 320–352.
25-   Porter, M. E. (1980). Competitive Strategy, New York: Free Press.
26-   Ranaweera, C., Prabhu, J.(2003). The influence of satisfaction, trust, and switching barriers on customer retention in a continuous purchasing setting. International Journal of Service Industry Management, 14 (4), 374–395.
27-   Ranjbarian, B,. Kaboli, M,. Sanayee, A,. and Haddadian, A. (2011). Analysis of the relationship between perceived value, perceived quality, customer satisfaction and re-purchase intention in chain stores in Tehran. Journal of Business Management, 4(11): 70-55.
28-   Ringold, D. J. (1988). Consumer Response to Product Withdrawal: The Reformulation of Coca-Cola. Psychology & Marketing, 5(3), 189-210.
29-   Ruiz-Molina, M., Gil-Saura, I. and Berenguer-Contrı, G. (2009). Relational benefits and loyalty in retailing: an inter-sector comparison. International Journal of Retail & Distribution Management, 37(6), 493-509.
30-   Seyed Javadin, S.R,. Barari, M,. and Saatchian, Vahid. (2014). Relationship marketing in the sports industry. Journal of Sports studies, 23: 34-15.
31-   Sharma, N., Patterson, P.G., 2000. Switching costs, alternative attractiveness and experience as moderators of relationship commitment in professional consumer services. International Journal of Service Industry Managemen,t 11 (5), 470–490.
32-   Shy, O. (2002). A quick-and-easy method for estimating switching costs. International Journal of Industrial Organization, 20(1), 71-87.
33-   Siswoyo, B,K & Supriyanto, S. (2013). Switching barriers strategy in improving patients loyalty of inpatient muhammadiyah Surabaya hodpital. Jurnal Administrasi Kesehatan Indonesia, 1(1), 91-98.
34-   Tavakkoli, A,. Kafashpour, A,. and Niko, H. (2017). The Effect of Perceived Services Quality on Customer Loyalty by Corporate Image and Customer Satisfaction Considering the Moderator Role of Switching Costs (Case Study: Sina Bank Branches in Mashhad). Journal of Strategic Management Researches, 65: 207-185.
35-   Tesfom, G. and Birch, N. (2011). Do switching barriers in the retail banking industry influence bank customers in different age groups differently?. Journal of Services Marketing, 25(5), 371-380.
36-   Valenzuela, F. (2010). Switching barriers used to retain retail banking customers: some empirical evidence from a South American country. Management Research Review, 33(7), 749-766.
37-   Wang, W. and Wu, L. (2012). Customer loyalty and the role of relationship length. Managing Service Quality, 22(1), 58-74.
38-   Weiss, A. and Kurland, N. (1997). Holding distribution channel relationships together: the role of transaction-specific assets and length of prior relationship. Organization Science, 8(6), 612-623.
39-   White, L. and Yanamandram, V. (2007). A Model of customer retention of dissatisfied business services customers. Managing Service Quality, 17(3), 298-231.
40-   Yen, H. J., Gwinner, K.P. (2003). Internet retail customer loyalty: the mediating role of relational benefits. International Journal of Service Industry Management, 14(5):483-500.
Journal of Business Administration Researches
Volume 11, Issue 21
September 2019
Pages 115-140

Files

Share

How to cite

Statistics