bus 485 final report.dochygth
TRANSCRIPT
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Abstract
This study will propose a conceptual framework which will investigate the importance ofcustomer satisfaction to brand equity Nandoos in Bangladesh. It will be a co relational study
which will depict the correlations among variables relationships among the variables. To test the
framework and structural equation modeling techniques will be applied to the data collected
from 20 customers of the restaurants. The researchers will use SPSS as the statistical software.
Introduction
The world famous South African Nandoos is in Dhaka as the first franchise obtained by MGH
Restaurants Private Limited. Nandoo's has been running in Bangladesh since 2007. The first
restaurant was opened in Dhanmondi area.Now there also an outlet in Gulshan & many other
places. It is running there as a franchised business. All of the outlets in Bangladesh sell halal
foods. Currently it is operated in the prominent locations of Dhaka and Chittagong.
Today there are signs of Nandoos life over the world& Nandoo's is spreading like wild fire
around the world. Nandoo's believe their flame-grilled Peri-Peri Chicken, is the best in the world.
To keep their promises to customer they always serve excellent flavor & quality food. The
customer who likes nandoos chicken they enjoy the same test wherever they are in the world.
Nandoos is an up scale restaurant targeting the upper middle class, the high and elite class.
Nandoos is famous for its peri-peri Chicken, which is marinated by a sauce with perfect blend of
flavor and fire. It is now here in Bangladesh to give our guests the Nandoos taste of the peculiar
mingles of herbs, spices, lemon and vinegar. Nandoo's is a casual dining restaurant group
originating from South Africa with a Portuguese/Mozambican theme. In 1987, Nando's operates
in 30 countries on 5 continents. Nando's specializes in chicken dishes with both lemon and herb,
medium, hot or extra hot Peri-Peri marinades in some countries; Nando's has other flavor options
like mango and lime or Mediterranean. Nandoo's manufactures a range of sauces which are sold
in Nandoo's restaurants and in supermarkets. They include Peri-Peri sauces, marinades, cooking
sauces and a Peri-Peri. Nando's has locations in Australia, Bangladesh, Bahrain, Botswana,
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Canada, Cyprus, Fiji, India, Ireland, Kuwait, Lebanon, Lesotho, Malawi, Malaysia, Mauritius,
Namibia, New Zealand, Nigeria, Oman, Pakistan, Qatar, Singapore &many other countries. In
this study we assess the relative importance of many of the known understanding to customer
loyalty, including brand equity. Hence, in the current study, the researchers intend to examine
whether there are relationships among service quality, customer satisfaction, trust, and customer
loyalty in Nandoos in Bangladesh or not.
Purpose of the Study
The purposes of this research paper are to find out the influences of brand equity on customer
loyalty. For this purpose this research are conducted on customer ofNandoos in Bangladesh.
This has lead to the development of following hypothesis.
The rationale behind developing five hypotheses is that satisfaction, value, change, effect &
brand trust combine develop brand equity. The method of inquiry is basically primary in nature
as the researcher of this paper used a purchased list deriving from licensing information for
recently purchased equipment. It was also the source for their sampling.
Finally this research paper will allow people to better understand the relationship between brand
equity & trust with both behavioral & attitudinal forms of customer loyalty. Our research paper
deals with the importance of brand equity & trust are consistently the most important to both
behavioral & attitudinal form of customer loyalty.
Statement of the problem
This research paper tries to find out the appropriate relationship between brand equity &
customer loyalty. More elaborately it tries to find out the impact or influences of satisfaction,
value, resistance to brand effect, trust &brand equity or perception of customer loyalty.
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Review of literature
Satisfaction
Brand management is an area of increasing importance to marketers today as organizations are
moving toward attempts to communicate the complex and intangible messages of brand
management strategies (Davis, 2000; Goodchild and Callow, 2001). One of the many interesting
questions facing todays brand managers concerns how to develop a better understanding of the
appropriate relationship between constructs such as brand equity and customer loyalty,
particularly in relation to the myriad of known antecedents to customer loyalty in the marketing
literature.
It is important to understand Loyalty because in a business scenario understanding loyalty
means understanding customers better which is and should be a prime objective for everyorganization Taylor (2004, p 217). Another very important aspect is that loyalty is an elusive
concept. We all think we know what we mean when we talk about a loyal customer. But, when
we are asked to explain our thoughts dry up and we fall back on generalizations and
assumptions. However, this elusive concept must be understood by the organizations so they can
make their customers think that there is no superior or preferable supplier of goods and services
than their respective organizations. And, if they are to reach this state, they need to develop some
definitions and identify the factors that contribute to making a customer loyal.
Taylor (2004), Celuch and Goodwin for instance investigated the importance of brand equity to
the development of the loyal customer. In doing so they reviewed the usual antecedents to
loyalty which is basically satisfaction, value, resistance to change, affect and finally trust. Taken
individually these antecedents do not create loyalty. Plenty of research and practical experience
says that customer satisfactions do not make loyal customers. But its also true that dissatisfied
customers are less likely to become loyal. Similarly, value (however we define it) does not
always make a contribution to loyalty. Loyalty, in many ways, is an irrational and emotional
concept.
In this context Taylor (2004, p 217) et al. are right to advise that marketers should look beyond
customer satisfaction. They should focus on integrated marketing strategies that foster brand
equity and trust in the customer base which ultimately support customer loyalty programs. At the
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same time, marketers should try to get away from seeing loyalty promotions as an exercise in
sales pushing.
If we look into each variable individually then we will see that loyalty is a sophisticated
construct. Oliver (1999b, p. 33) asserts that it is time to begin the determined study of loyalty
with the same fervor that researchers have devoted to a better. Oliver suggests that ultimate
customer loyalty is a function of perceived product superiority, personal fortitude, social
bonding, and their synergistic effects. His arguments generally support the assertion that
measures of loyalty that are constrained only to repurchase considerations fail to capture the
richness of the loyalty construct. The movement from purchase loyalty (e.g. repurchase
intentions) toward more holistic conceptualizations of the loyalty construct appears supported in
the emerging literature. Keller (1998) acknowledges that brand loyalty has historically often
been simplistically measured behaviorally simply via repeat purchase behaviors.
However, he also acknowledges that customer loyalty can be viewed more broadly than reflected
by simple purchase behaviors. Baldinger and Rubinson (1996) suggest that the use of loyalty
definitions that include both attitudinal and behavioral components will be superior in terms of
their predictive ability to conceptualizations of loyalty that are purely behaviorally based.
Chaudhuri and Holbrook (2001) recently proposed a model of brand loyalty that suggests that
purchase loyalty tends to lead to greater market share, while attitudinal loyalty leads to higher
relative brand pricing. Morgan (2000) similarly suggests that the term loyal can be interpreted
in different ways, ranging from affective loyalty (what I feel) to behavioral loyalty (what I
do). Narayandas (1998) and
White and Schneider (2000) propose laddering models that appear consistent with this emerging
orientation. Consequently, we operationalize customer loyalty in the current research as a
function of both behavioral (i.e. purchase intentions) and attitudinal loyalty.
Satisfaction is unique from other closely related concepts such as quality, loyalty, and
attitude [2], and has been hypothesized in the literature to have a direct influence on customer
loyalty (Mittal and Lassar, 1998; Oliver, 1997) and repurchase intentions/behaviors (Kumar,
2002; Mittal and Kamakura, 2001). We test the relationship between satisfaction and loyalty in
our research to ascertain whether the relationships identified in previous studies can be supported
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in an industrial setting when simultaneously considering all of the relevant constructs in a single
research model.
Customer satisfaction is becoming an increasingly salient topic in many firms and in academic
research (Sderlund, 1998). Anderson et al. (1994) affirmed that satisfaction is a post
consumption experience which compares perceived quality with expected quality.
Correspondingly, Oliver (1996) defines satisfaction as an emotional post-consumption response
that may occur as the result of comparing expected and actual performance (disconfirmation), or
it can be an outcome that occurs without comparing expectations
On the other hand, some previous researchers have explained customer satisfaction in terms of
expectation. They define if expectations are exceeded by performance; satisfaction is generated
(Churchill & Surprenant, 1982; Bearden & Tell, 1983; LaBarbera & Mazursky, 1983). Equally,
Buswell (1983) identified customer satisfaction as a combination of five key attitudes. Those are
knowledge of staff, communications, expertise of staff, willingness to lend and branch design.
Consequently, Berry, Zeithaml, and Parasuraman (1985) argued that customer satisfaction can be
defined as the attributes of search, experience, and credence. Yi (1990) believes customer
satisfaction should mean evaluation, symbolizing a type of consuming experience. Avkiran
(1994) recognized customer satisfaction by customer conduct, credibility, communication, access
to teller services.
Simultaneously, according to Anderson and Fornell (1994), customer satisfaction is the term
which may lower the chance of customers being driven away due to the poor quality of products
or services. Fornell (1992) noted that the more satisfied customers are the one that are greater in
their retention while, Anderson and Sullivan (1993) added that satisfied customer would intend
to repeat purchase which would enhance organizations profitability. In association with this
Jones and Sasser (1995) acknowledged that completely satisfied customers are those who are
much more loyal than merely satisfied customer
Spreng, MacKenzie, and Olshavsky (1996), alternatively, defined satisfaction as the emotional
reaction to a product or service experience. Oliver (1997) defined satisfaction as the customer's
fulfillment response. It is a judgment that a product or service feature, or the product or service
itself, provides a pleasurable level of consumption- related fulfillment.
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The most common interpretations reflect the notion that satisfaction is a feeling which results
from a process of evaluating what was received against that expected, the purchase decision
itself and the fulfillment to needs or want (Armstrong & Kotler, 1996: Berkowitz, Kerin, Hartley,
& Rudelius, 1999). Kotler (1999) also noted that satisfaction is a function of perceived
performance and expectations which identifies feelings of a person resulting from comparing a
products perceived performance in relation to his or her expectations.
Wong (2000) believes that a customers total satisfaction is an emotional perception. Evaluation
is based on the customers reaction from using the product or service. Customer satisfaction then
is a total satisfaction that leaves a good perception. The perception of this wholeness is very
similar to the meaning of customer value package brought up by Fredericks and Salter (1995).
The customer value package includes: price; product quality; service quality; innovation; and
corporate image. Moreover, Martensen, Grnholdt, and Kristersen (2000) also discovered that
expectation, product quality, and corporate image are three facilitating factors in ensuring
customer satisfaction.
Hackl and Scharitzer (2000) have identified customer satisfaction as economic goals and have
considered customer satisfaction as a prerequisite for customer retention and loyalty, and
obviously that tend to help in realizing economic goals like profitability, market share, return on
investment.
Sureschandar et al. (2002) introduced different approach of customer satisfaction and defined
customer satisfaction as multidimensional construct. According to Bitner and Zeithaml (2003),
satisfaction is the customers evaluation of a product or service in terms of whether that product
or service has met their needs and expectations. The researchers reveal that satisfaction can as
well be viewed as contentment, pleasure, delight, and relief. Thus they noted customer
satisfaction as a dynamic and moving target that may evolve over time, influenced by variety of
factors.
Guenzi and Pelloni (2004) use the following definition of satisfaction in their study: Overall
satisfaction is the consumers dissatisfaction or satisfaction with the organization based on all
encounters and experiences with that particular organization (Bitner & Hubbert, 1993). Fe and
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Ikova (2004) added that the perception of the word satisfaction influences the activities which we
conduct to achieve customer satisfaction.
Boselie, Hesselink, and Wiele (2002) defined satisfaction as a positive, affective state resulting
from the appraisal of all aspects of a firms working relationship with another firm. Thisdefinition purported that satisfaction (understood as affective) can be contrasted with an
objective summary assessment of outcomes thereby forming a target-performance comparison
mechanism. Therefore, the appropriate definition of customer satisfaction for this study would
be the one by Boselie et al. (2002).
Value
In spite of the attention devoted to this concept, the term value has proven to be a difficult
concept to gain a handle upon for marketers (Oliver, 1999a). Cronin et al. (1997) states that there
is little disagreement on the conceptualization of value in the marketing literature as value. Such
conceptualizations tend to focus on what is relatively perceived as received versus given up
in a marketing exchange (see the following studies for examples supporting this
conceptualization: Blackwell et al., 1999; Brady and Cronin, 2001; Carmon and Ariely, 2000;
Cronin et al., 2000; Kumar, 2002; Sharma et al., 2001; Sweeney and Soutar, 2001; Zeithaml,
1988). However, such conceptualizations of value appear incomplete given Holbrooks (1999)
more holistic conceptualization/typology of the construct. Oliver (1999a) recently addressed this
issue by suggesting that the traditional conceptualization of value identified above has been
largely constrained to the self-oriented, reactive, and extrinsic cell in Holbrooks typology.
Oliver (1999a) asserts that value is indeed a unique construct from satisfaction and quality. He
proposes a nomonological net model depicting satisfaction and value as existing both prior to
consumption as well as post-consumption. He envisions these constructs as coexisting and
influencing one another, as well as outcome variables such as loyalty, as consumers make
consumption judgments across time. He suggests that such a conceptualization is not inconsistent
with the traditional conceptualization of value in the service literature, only that such a
conceptualization ignores the other dimensions of Holbrooks typology. As such, value is
traditionally modeled as subordinate to the formation of loyalty judgments.
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Resistance to change
The next variable in our research model involves resistance to change. The extant literature
generally accepts that commitment is central to relationship marketing (Morgan and Hunt, 1994).
Gilliland and Bello (2002) propose a model that attempts to link commitment to trust and loyalty
by envisioning trust as an antecedent to calculative commitment and loyalty commitment.
Pritchard et al. (1999, p. 334) define commitment as . . . the emotional or psychological
attachment to a brand. These authors extend considerations of commitment by arguing that
resistance to change is the root tendency of commitment as well as the primary evidence of
commitment. These authors further present evidence that resistance to change is a key antecedent
to loyalty.
Organizational change is an empirical observation in an organizational entity of variations in
shape, quality or state over time (Van de Ven and Poole, 1995), after the deliberate introduction
of new ways of thinking, acting and operating (Schalk, Campbell and Freese, 1998). The general
aim of organizational change is an adaptation to the environment (Barr, Stimpert and Huff, 1992;
Child and Smith, 1987; Leana and Barry, 2000) or an improvement in performance (Boeker,
1997; Keck and Tushman, 1993). This definition encompasses many situations that should be
distinguished by applying certain dimensions to establish typologies of change. We will refer to
the scope of change, because it is one of the most used variables in literature to design change
typologies. That way, changes can be defined along a continuum starting in lowscope or
evolutionary changes to high-scope or strategic ones. With the aim of making the use of this
dimension (scope) easier, we will describe both extremes of the continuum, but we should
always keep in mind that real changes are not a pure type but a mixture. First, we will describe
evolutionary, incremental, or first order changes. These are small changes that alter certain small
aspects, looking for an improvement in the present situation, but keeping the general working
framework (Blumenthal and Haspeslagh, 1994; Goodstein and Burke, 1991; Greiner, 1972;
Levy, 1986; Mezias and
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Glynn, 1993; Nadler and Tushman, 1989; 1990). The second type of changes are strategic,
transformational, revolutionary or second order ones. They are radical transformations, where the
organization totally changes its essential framework (Blumenthal and Haspeslagh, 1994; Ghoshal
and Bartlett, 1996; Goodstein and Burke, 1991; Marshak, 1993; Nadler and Tushman, 1989,
1990), looking generally for a new competitive advantage (Hutt, Walker and Frankwick, 1995)
and affecting the basic capabilities of the organization (Ruiz and Lorenzo, 1999).
Affect
Affect represents a construct that is known to operate in general marketing models such as
studied herein, and represents . . . an umbrella for a set of more specific mental processes
including emotions, moods, and (possibly) attitudes (Bagozzi et al., 1999, p. 184). Oliver (1997)
identifies the role of affect in general models of customer satisfaction. Mattila and Enz (2002)
present results identifying that customers evaluations of service encounters correlate highly with
their displayed emotions during the interaction as well as post encounter mood states. Kim et al.
(1998) present results suggesting that affect can influence consumer attitudes even in the absence
of product beliefs. Bagozzi et al. (1999) provide a discussion of the role of emotions in
marketing that helps frame the incorporation of affect in the current research. These authors
assert that emotions are ubiquitous throughout marketing. They are known to influenceinformation processing, mediate responses to persuasive appeals, measure the effects of
marketing stimuli, enact goal-directing behaviors, and serve as ends and measures of consumer
welfare. However, these authors further assert that an area neglected by marketers is the role of
emotions in marketing exchanges and relationships. The current research attempts to fill this void
by modeling emotions as part of our research model.
Trust
Fukuyama (1995, p. 26) defines trust as . . . the expectation that arises within a community of
regular, honest, and cooperative behavior, based on commonly shared norms, on the part of
members of that community. Fukuyama argues that the technological revolution will make trust
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ever more important in understanding business behaviors like marketing. Marketers have been
interested in trust for some time, however, based on a more focused definition: Trust is defined
as a willingness to rely on an exchange partner in whom one has confidence (Mooreman et al.,
1992, p. 315). These authors hypothesize that trust is an antecedent to commitment (also see
Morgan and Hunt, 1994). However, specifically where trust might fit in a relatively
comprehensive model of customer loyalty remains unresolved. Hart and Johnson (1999) argue
for seeking total trust in a manner similar to TQM initiatives. As such, they see trust as
mediating the satisfaction l loyalty relationship. Singh and Sirdeshmukh (2000) present a model
suggesting that trust is an antecedent to satisfaction (which in turn is subordinate to loyalty). This
model of trust as an antecedent to loyalty is supported by the work of Chaudhuri and Holbrook
(2001) in their model explaining brand loyalty (also see De Ruyter et al., 2001). Sirdeshmukh et
al. (2002) most recently present evidence that value mediates the trust l loyalty relationship. De
Ruyter et al. (2001) present evidence that trust and attitudes play important roles in competitive
advantage in service. Given the myriad of evidence, and our desire to ascertain the relative
importance of our exogenous antecedents to loyalty via standardized loadings, we model brand
trust simply as an antecedent to loyalty in our research model.
In business studies, trust has been found to be important for building and maintaining long-term
relationships (Geyskens, Steenkamp, Scheer, and Kumar1996; Rousseau, Sitkin, Burt, &
Camerer, 1998; Singh & Sirdeshmukh, 2000). According to Moorman, Zaltman, and Deshpande
(1992), trust is the willingness to rely on an exchange partner in whom one has confidence. This
definition is in accordance with early research (Meyer 1981), which associated trust with a
confidence in the others intentions and motives.
Lewicki and Bunker (1995) defined trust three different types of investigations: first, as an
individual characteristic, second, as a characteristic of interpersonal transactions, and finally, as
an institutional phenomenon i.e., business to business or business to consumer context.
Fukuyama (1995) defines trust as the expectation that arises within a community of regular,
honest, and cooperative behavior, based on commonly shared norms, on the part of members of
that community. He further argued that the technological revolution will make trust ever more
important in understanding business behaviors like marketing.
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Morgan and Hunt (1994) conceptualized trust as existing when one party has confidence in a
partners reliability and integrity. Moreover, the authors also proposed that communication was
an antecedent of trust, along with shared values and lack of opportunistic behavior in
interpretation of the construct in their seminal study of the commitment-trust theory of
relationship marketing.
Anderson and Narus (1990) postulated that, if one party believes that the actions of a third party
will bring positive outcomes to him, trust could be build. Doney and cannon (1997) added that
the third party also must have some ability to continue to meet its obligations within the cost-
benefit relationship. Therefore, the customer should not only perceive positive outcomes but
also believe that these positive outcomes will continue in future.
Bhattacharya, Rajiv, Timothy, and Madan (1998) offer a more generalizable and integrative view
of trust that recognizes three key aspects: first, trust is not a simple expectation, rather it can
embodyan expectation, second, the degree of trust is related, statistically, to the magnitude of
this expectancy, and finally, the strength of the trust will be related to the uncertainty, or
precision, the individual has in his trust. Gwinner, Gremler, and Bitner (1998) suggested trust as
a relational benefit. More specifically, they proposed trust as a confidence benefit rated highly
by customers in long-term relational exchanges with service firms.
According to Lau and Lee (1999), as one party trusts another and develop positive behavioral
intentions towards the other, when customers trusts brands they also form positive buying
intentions towards those brands. Trust is sometimes conceived of having two components,
performance, or credibility trust and benevolence trust, as Ganesan (1994) pointed out in a
business-to-business context.
On continuation of the previous definitions, Garbarino and Johnson (1999) demonstrated trust as
a driver of customer behavioral intentions building long-term relationship with the service
provider. According to Chatura, Ranaweera, and Prabhu (2003), customers trust can be viewed
in his/her service provide reliability, deeds and tasks which undertaken for the benefit of
customers.
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Therefore, the appropriate definition of trust for this study would be the one that would
encompass the trust in individual, business-to-business, and business-to-customer levels in
commitment-trust theory of relationship marketing. Hence, the current study will use the
definition of Morgan and Hunt (1994) to define trust.
Brand equity
Our final construct involves brand equity. Aaker (1991, p. 15) defines brand equity as:a set of
brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from
the value provided by a product or service to a firm and/or to that firms customers. Keller (1998,
p. 45) argues that brand equity is unique from customer loyalty, and can be defined as: . . . the
differential effect that brand knowledge has on consumer response to the marketing of that
brand. He argues that a brand possesses positive customer-based brand equity when customers
react more favorably to a (brand identified) product and the way that it is marketed as compared
to when it is not. Brands can also possess negative customer-based brand equity, expressed when
consumers react less favorably to the marketing activities associated with a brand, as compared
to an unnamed or fictitious named version of the product. Keller (1998) further states that one of
the characteristics of brands possessing strong brand equity is stronger brand loyalty. This
position appears consistent with that of Aaker (1991) who argued that brand loyalty could be
considered both a dimension and an outcome of brand equity.
According to Beerli et al (2002), loyalty has been, and continues to be defined as repeat
purchasing frequency or relative volume of same-brand purchasing. This, Oliver (1999)
considered as an inadequate definition. He posits that most definitions of the concept in the
literature suffer from the problem that they record what the consumer does, and none taps into
the psychological meaning of loyalty. He thus defined loyalty as: . . . a deeply held commitment
to rebuy or repurchase a preferred product/service consistently in the future, thereby
causing repetitive, same-brand or same brand-set purchasing, despite situational influences and
marketing efforts having the potential to cause switching behaviour. Jacoby and Kyner (1973)
from a different perspective saw loyalty as the biased (i.e. non-random) behavioural response
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(i.e. purchase), expressed over time, by some decision-making unit, with respect to one or more
alternative www.ccsenet.org/ibr International Business Research Vol. 4, No. 1; January 2011
Published by Canadian Center of Science and Education 231 brands out of a set of such brands.
This means that it is necessary to distinguish between exclusivity and loyalty and a function of
psychological processes which involves the evaluation of different alternatives using specific
criteria. Thus in the view of Day (1969); Jacoby and Kyner (1973) and Berne (1997), loyalty is a
concept that goes beyond mere repurchase behaviour as it presents two perspectives - behaviour
and attitude, with all leading to commitment. Accordingly the combination of these two
components enables us to distinguish two types of customer loyalty
Relationship between customer satisfaction and loyalty
During past decades, customer satisfaction has frequently been advanced to account for customer
loyalty (Oliver & Linda, 1981; LaBarbera, & Mazursky, 1983; Anderson & Fornell, 1994;
Oliver, 1996; Jones & Suh, 2000). In a number of cases a positive link has been observed
between customer satisfaction and loyalty (Anderson & Sullivan, 1993; Fornell, 1992; Rust &
Zahorik, 1993; Taylor & Baker, 1994). Indeed, this link is fundamental to the marketing
concept, which holds that satisfying customer needs and wants is the key to repeat purchase
(Kotler, Armstrong, & Cunningham, 2002). There is a common assumption in the literature that
satisfaction is likely to increase loyalty as there is a link between these two variables (Bolton,
1998; Oliver, 1980; Page & Eddy, 1999; Patterson, Johnson, & Spreng, 1997). For instance,
studies conducted by Cronin and Taylor, (1992) in service sectors found that customer
satisfaction has a significant positive effect on purchase intentions in all four sectors.
Pragmatic research findings offer robust evidence of positive relationship between customer
satisfaction and behavioural intentions (Oliver, 1999; Bitner & Hubert, 1994). The
disconfirmation-of-expectation paradigm (Oliver, 1980) argues that customer loyalty (e.g.
Repurchase intentions, willingness to provide positive word-of-mouth) is a function of customer
satisfaction. Similarly, Anderson and Sullivan, (1993) found that stated repurchase intentions
are strongly related to stated satisfaction across product categories. Researchers in the
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professional services area have also suggested that customers of business services tend to remain
with the same provider if continually satisfied (Davidow & Uttal, 1989; Woodside, Wilson, &
Milner, 1992)
In general, past research has demonstrated that satisfaction is strongly associated with re-
purchase intentions (Bitner, 1990; Cronin & Taylor, 1992; Dabholkar & Thorpe, 1994; Fornell,
1992; Patterson, 1995). Hart and Johnson (1999) have added that one of the conditions of true
customer loyalty is total satisfaction. They argue that the presence of satisfaction reflects a
relationship commitment and loyalty.
Further support for a view that the effects of customer satisfaction on loyalty are different
depending on the level of satisfaction is offered by Jones and Sasser (1995). Basically, they
stated that the relationship is non-linear, and that the relationship is subject to different patterns
depending on the product in question. That is to say, when the number of alternatives of a
service is high, the satisfaction-loyalty link is strong. Thus, it may be assumed that the form of
the relationship between customer satisfaction and loyalty is different at different levels of
satisfaction.
On the contrary, there is little evidence that the theory has been tested in call centers. An
exception is the study by de Ruyter and Wetzels (2000), which tested the impact of customers
repurchase behaviors on customers satisfaction and trust, using a sample from the mobile
telecommunications industry. They found that both customer satisfaction and trust were
significantly related to the customers repurchase intention to call again, suggesting that
customers responses to service encounters lead to dimensions of loyalty.
In a recent study, next to trust, satisfaction has been brought forward as a precondition for the
development of long-term customer loyalty (Pavlou, 2003). For instance, in a recent work on online
settings, a positive link has been observed between customer satisfaction and loyalty. Preference and
favorable attitudes presume customer satisfaction, which is generally considered as a major driver of
loyalty (Cho, Im, Hiltz, & Fjermestad, 2002; Gummerus, Liljander, Pura, & Van, 2004).
As a consequence, there is a consensus amongst practitioners and academics that customer satisfaction
and service quality are prerequisites of loyalty (Cronin & Taylor, 1992; Gremler & Brown, 1997).
Hence, it can be concluded that there is a positive relationship between customer satisfaction and
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customer loyalty. Conversely, it may be assumed that the form of the relationship between customer
satisfaction and loyalty is different at different levels of satisfaction.
The relationship between value and customer loyalty
Value is an essential factor to be customer loyalty.The concept of value is connected with quality
and customer satisfaction. Customer satisfaction, quality, and value have often been identified as
predominant causes of buying behavior.Value has its root in equity theory, which considers the
ratio of the consumers outcome/input to that of the service providers outcome/ input (Oliver &
DeSarbo, 1988). The equity concept refers to customer evaluation of what is fair, right, or
deserved for the perceived cost of the offering (Bolton & Lemon, 1999). Perceived costs include
monetary payments and nonmonetary sacrifices such as time consumption, 802 YANG AND
PETERSON energy consumption, and stress experienced by consumers. In turn, customer-
perceived value results from an evaluation of the relative rewards and sacrifices associated with
the offering. Customers are inclined to feel equitably treated if they perceive that the ratio of
their outcome to inputs is comparable to the ratio of outcome to inputs experienced by the
company (Oliver & DeSarbo, 1988). And customers often measure a companys ratio of
outcome to inputs by making comparisons with its competitors offerings. Customer value is the
fundamental basis for all marketing activity (Holbrook, 1994, p. 22). And high value is one
primary motivation for customer patronage. In this regard, Sirdeshmukh, Singh, and Sabol(2002) argue that customer value is a superordinate goal and customer loyalty is a subordinate
goal, as it is a behavioral intention. According to goal and action identity theories, a
superordinate goal is likely to regulate subordinate goals. Thus, customer value regulates
behavioral intentions of loyalty toward the service provider as long as such relational exchanges
provide superior value (Sirdeshmukh et al., 2002, p. 21). Prior empirical research has identified
perceived value as a major determinant of customer loyalty in such settings as telephone services
(Bolton & Drew, 1991), airline travel, and retailing services (Sirdeshmukh et al., 2002). Chang
and Wildt (1994) report that customer-perceived value has been found to be a major contributor
to purchase intention. In light of the preceding discussion and findings
The relationship between Resistances to change and customer loyalty
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Resistance to change is an essential factor to be customer loyalty management of resistance is the
key for change success or failure. By resistance to change we understand any phenomenon that
hinders the process at its beginning or its development, aiming to keep the current situation.
Therefore, we will establish a similarity between the concepts of resistance and inertia. Literature
offers many studies with sources of resistance to change. This paper follows the five-group
classification of Rumelt (1995), completing it with other authors contributions. In the empirical
research, our theoretical list has been supported by our investigation of Spanish companies
undergoing a change process.
Furthermore, our research has also allowed us to order the importance of the ources of resistance
to change. Later, we have distinguished how they affect changes ccording to their scope, that is o
say, how they affect evolutionary and strategic hanges. We arrived to the conclusion that
esistance to change is generally higher in trategic changes than in evolutionary ones. ooking
closer at the results, it is fundamental to note that the source of esistance identified as most powerful for
any type of change, dealing with the existence f deep-rooted values, is also one of the sources that
presents the highest differences etween evolutionary and strategic changes. Moreover, four more of the
top anked verall resistance factors present high variations when considering change as volutionary or
strategic. These factors are the different interests among employees and anagement, communication
arriers, organizational silence, and apabilities gap. This onclusion leads to the suggestion that these are he
most significant issues managers eading a strategic change process should be aware of.
The relationship between Resistances to change affect and customer loyalty
Kim et al. (1998) present results suggesting that affect can influence consumer attitudes even in
the absence of product beliefs. Bagozzi et al. (1999) provide a discussion of the role of emotions
in marketing that helps frame the incorporation of affect in the current research. These authors
assert that emotions are ubiquitous throughout marketing. They are known to influence
information processing, mediate responses to persuasive appeals, measure the effects of
marketing stimuli, enact goal-directing behaviors, and serve as ends and measures of consumer
welfare. However, these authors further assert that an area neglected by marketers is the role of
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emotions in marketing exchanges and relationships. The current research attempts to fill this void
by modeling emotions as part of our research model.
The relationship between Trust and customer loyalty
A number of researchers have advocated that trust is fundamental in developing customer loyalty
(Moorman et al., 1992; Morgan and Hunt, 1994). Those who are not willing to trust a vendor in
a competitive marketplace are unlikely to be loyal. The importance of trust in explaining loyalty
is also supported by numerous authors such as Lim, and Razzaque (1997), Garbarino and
Johnson (1999), Chaudhuri and Holbrook (2001), Singh and Sirdeshmukh (2000), and
Sirdeshmukh et al. (2002).
Chow and Holden (1997) studied the relationship between trust and loyal buying behavior and
found positive impact of trust in explaining to customer loyalty. Moreover, they found that trust
is a significant antecedent to not only attitude toward the product, but also to buyers loyalty.
Swan, Bowers, and Richardson (1999) found that trust positively affects favorable customer
attitudes, purchase intentions, and purchase behaviors. Based on a review of the concept of trust
within marketing channels, Geyskens, Steenkamp, and Kumar (1998) developed a casual model
of antecedents and consequences of trust and found strong support for trust as a mediator in
explaining customer loyalty.
Trust is sometimes conceived of having two components, performance, or credibility trust and
benevolence trust, as Ganesan (1994) pointed out in a business-to-business context. Numerous
authors have also suggested the existence of an effect for credibility trust on loyalty (Chaudhuri
& Holbroook, 2001; Garbarino and Johnson, 1999). Recently, however, Singh and Sirdeshmukh
(2000) and Sirdeshmukh et al. (2002) have argued strongly for a component of trust that may
contribute to explaining loyalty.
In a recent study, for example, Corbitt, Thanasankit, and Yi (2003) suggests a strong positive
effect of trust on loyalty to telecommunications firms. Dwayne, Pedro Simoes Coelho, and
Alexandra Machas (2004) further elaborated that in a business-to-consumer context, the
components of trust may be strong in determining loyalty.
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Relationship between Brand Equity and customer Loyalties
Loyalty based on inertia, where a brand is bought out of habit merely because this takes less
effort and the consumer will not hesitate to switch to another brand if there is some convenient
reason to do so. That is, the consumer is buying the same brand, not because of true brand
loyalty, but because it is not worth the time and trouble to search for an alternative; and True
brand loyalty, which is a form of repeat purchasing behavior reflecting a conscious decision to
continue, buying the same brand, must be accompanied by an underlying positive attitude and a
high degree of commitment toward the brand.
Several factors have been identified to influence customer loyalty. As Beerli et al (2002) pointed
out, there has been a growing interest in recent years in analysing the factors influencingcustomer loyalty especially in marketing of services. Among such variables that influence
customer loyalty includes customer satisfaction and switching costs (Oliver, 1999; Berne, 1997;
Bloemer & Kasper, 1995; Anderson & Sullivan, 1993; Boulding et al., 1993; Bloemer
& Lemmink, 1992) In a review of customer defecting patterns, Reichheld et al. (2000) found 60-
80% of customers who defect to a competitor said they were satisfied or very satisfied on the
survey just prior to their defection. Also, Arasil et al (2005) showed that the switching cost factor
directly affects loyalty, and has a moderator effect on both customer
satisfaction and trust. Therefore, it plays a crucial role in winning customer loyalty. In short, it is
a quasi moderator. However, switching cost was measured as a uni-dimensional factor. It was
realised that switching costs contain psychological, financial and procedural sub-dimensions.
Also, customer relationships and switching costs concurrently enhanced customer loyalty.
Moreover, it has also been found that as customers perceptions of switching costs increase, the
longer they remain with a particular service supplier (Aydin & Ozer, 2005; Patterson,
2004). In addition, some other factors contributing to customer loyalty include customer
relationships management strategies, corporate image, communication, and complaint handling.
Zins (2001) posits that corporate image of the service provider is, along with service quality and
customer satisfaction, a powerful and illustrative component for explaining future customer
loyalty. Nguyen and Leblanc (2001) demonstrate that corporate image relates positively
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with customer loyalty in three sectors (telecommunication, retailing and education). The same
relationship is demonstrated by Kristensen et al. (2000) for Danish postal services and by Juhl et
al (2002) for the Danish food retailing sector. As pointed out above, corporate image stems from
all of a consumers consumption experiences, and service quality is a function of these
consumption experiences. Hence, antecedents of customer loyalty and customer perception about
service quality directly affect the perception of corporate image.
Questions and Hypotheses
H1. There is a relationship between satisfaction and customer loyalty.
H2. There is a relationship between value and customer loyalty.
H3. There is a relationship between change and customer loyalty.
H4. There is a relationship between affect and customer loyalty.
H5. There is a relationship between brand trust and customer loyalty.
H6. There is a relationship between customer loyalty and brand equity.
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Development of Conceptual Framework
Figure: Conceptual Framework of Research Variable and their Relationships.
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Operational Definition
Measured Variables Operational Definitions
Customer Satisfaction Will be operationally defined by Boselie. (2002).
Value Will be operationally defined by Oliver (1999).
Resistance to changeWill be operationally defined by Pritchard et al. (1999, p.334)
Affect Will be operationally defined by Oliver (1997)
Trust Will be operationally defined by Morgan and Hunt (1994).
Brand equity Will be operationally defined by Aaker (1991, p. 15)
Figure: Operational Definition of Measured Variables
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The Research Design Methods and Procedures
The Research Design
The graphical representation of the proposed framework (Figure1) presented the outline and
constitution of relationships among the set of measured variables. This figure is supported by
questions and hypotheses. this section has discussed the methods employed the purpose of the
study is to measure correlations among variables.
Here the study explored the relationship between satisfaction, value, resistance to change, affect,
trust and brand equity within the context ofNandoos in Bangladesh. Research that studied the
relationship between two or more variables is known as co relational study. So researcher have
chosen co relational research to find out the appropriate answers to the research questions and to
test the hypotheses. The model (Figure 1) also supports this type of design. Here customer
satisfaction, value, resistance to change, affect, and trust and brand equity are being considered
as independent variables and behavioral/attitudinal loyalty is being considered as a dependent
variable. The research found out relationships between the measured variables.
Sampling:
Unit:
To investigate research questions, researchers gathered information from different customers of
Nandoswhich is situated in Dhaka, Bangladesh. Who have already taken their services. All theparticipants had given a letter from the researchers explaining the context of the research focus.
All participations participated voluntarily. If the participants wanted to withdraw, they were free
to do so at any time.
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Size:
The researcher collected information from only 20 respondents of the customers ofNandoos.
The study will be conducted only in Dhaka city due to time and budget constraints. The
researcher provided 20 questionnaires to each of the respondent to know their opinion about the
service quality of. Nandoos
Procedures:
The researcher used nonprobability sampling to collect information. They used purposive
nonprobability sampling to know the characteristics or experiences, attitudes, perception of
participants. Here, researcher selected participants randomly. they piched up respondendents
randomly to know about their experiencs in Nandoos
Survey instrument:
To collect data the researcher did questionnaire survey among 20 respondents ofNandos. The
questionnaire survey is the most effective method for this study to collect data. It is not possible
to conduct personal interview because of time limitation. Questionnaire survey was the most
appropriate one for this study. Structured questionnaires were used in the research to collect data
from the customers. In the questionnaire, there were five objects, they are: satisfaction, value,
resistance to change, affect, trust, brand equity.
Pilot test of questionnaire
The researchers planned to conduct a pre examination to evaluate the questionnaire for accuracy
of the survey. The researchers selected 5 customers who are to conduct the pilot testing. The
researchers used only 5 respondents in pilot test because of the time limitation.
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Data collection:
The researchers will collect data from primary sources to explore research questions. To collect
data from the primary sources, the researchers will use the questionnaire survey method. This
method is used in surveys to collect data from primary sources. Here, the researcher will
distribute the questionnaire among the customers of Nandoos. Through this method, the
researcher will be able to collect large amounts of information within short time and lower cost.
Possibly the current research is a unique for Nandoos. So secondary sources of data will not be
available for the study. But for supporting the literature review the researchers will use
secondary data. Therefore, the researchers require primary and secondary data to study the
research questions and literature review.
Data Analysis
Limitations of the Study
This study is limited by a numbers of factors. Firstly, the sample population is limited in terms of
its size and composition. First of all, the researchers have limited access to the related literature
review due to lack of journals available on the measured variables. As a result, researchers have
limited resources to deal with. Second, data collection is restricted in an area of Dhaka city only,
which may fail to represent the factual scenario of the relationship between measure
variable.
Time was a major limitation of the study as a limited it was given to conduct the study.
Literature review is not enriched due to time limitation.
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Significance of the Study
The present study is noteworthy in various aspects. First of all, a previous study was conducted
on some of the measured variables (service quality, customer satisfaction, trust, and customer
loyalty) in Thailand in 2005. It was not used in the Indian subcontinent like Bangladesh.
Furthermore, previous research attempted to discover the relationship between service quality
and the customer loyalty in Thailand. The proposed study investigates whether correlations exist
between service quality, value, customer satisfaction, trust, customer loyalty and brand equity in
Nandoos in Bangladesh market. This research attempts to identify the determinants of
customer loyalty towards restaurants organization Nandoos in Bangladesh. This research will
reveal whether consumers make repurchase decisions based on simple heuristic factors such as
customer satisfaction, trust, brand equity and service quality. A further issue will be addressed
by this study, what are the factors driving consumer loyalty towards restaurants organization
Nandoos in Bangladesh . Hence, the present study will enhance the limited research on the
effect of service quality, customer satisfaction, trust, on customer loyalty towards restaurants
organization Nandoos in Bangladesh.
The present study will aid the Nandoos management to enhance better understanding about the
existing customer needs and wants and always recalls the 20/80 rule (which is 20% loyal
customers bring 80% revenue for the company). Therefore, from the companys perspective
they would come up with new ways to satisfy the existing customers for example improving
service quality (which is another measured variable in this study). In addition to it, ultimately it
will push the customer for repeat purchase, to become regular users i.e., to become the loyal
customer for Nandoos. This research also help or assist Nandoos to enhance their
understanding of the actual employee service quality to the response of their work environment.
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