'Relationship marketing success through investments in customers'. In T. Hennig- Thurau, & U. Hansen (Eds.), Relationship Marketing: Gaining Competitive Advantage Through Customer Jackson, B. B. (). Lee, M. J. (). Competitive Marketing Strategy (CMS) has relationship marketing (RM) as one . towards strong, lasting relationships with individual accounts (Jackson, ). Two research traditions, relationship marketing (Morgan and Hunt ; Sheth and .. As Jackson rightly points out, if a customer is in this category .. Marketing, Amjad Hadjikhani and Jan Johanson and Lee Joong-Woo, Eds. Seoul : Doo.
The few empirical studies that test the relationship between satisfaction and perceived or actual buying behavior or loyalty have suggested a moderate to low relationship compared with studies assessing attitudinal and intentional loyalty Szymanski and Henard, In addition, most studies testing the moderator effect between satisfaction and loyalty use an attitudinal or intentional assessment of loyalty.
According to Bowen and Chen, customer should feel more than satisfaction and just making customers satisfied could not be enough. This will result customer loyalty. Making loyalty is going to be one of obligation for each business to achieve competitive advantage. Generating loyalty is one of major marketing objective which is followed by key players in different industries and deliver to business customers Bansal and Gupta, Fornell, believed that more customer satisfaction leading to more loyal customers for businesses also encouraging customers to not leave the competition.
There are other views in this aspect such as Anton, who argued that satisfaction has a positive relationship with repurchase decision, also could lead customers to recommend it to others, making loyalty and increasing market share.
Customers who feel loyalty towards the firm will purchase again and again over a long time Evans and Berman, It is also predicted that satisfied customers might repeat and become loyal Guiltinan et al, On the other hand, there is also another view by Sivadas and Baker-Prewitt, who argued that satisfaction can lead to recommendation of department store and repurchasing from it but cannot directly affect loyalty.
According to this satisfaction will not lead to loyalty by itself. However, satisfaction can trigger desirable attitude like recommending and repeated purchasing of store which those behavior are related to loyalty. While customers recommend a store to others increase the chance of re- patronage and loyalty for that store. Therefore, it seems recommending a store to others will lead to loyalty. Customers will recommend the store to others if they feel satisfied and experiencing favorable attitude towards the store.
Evans and Berman, believed that there is a likelihood companies with more satisfied customers can experience more loyal customers who spend over long time. Switching Cost Switching cost is referred to the perceived cost customers would bare once they change their service provider Porter,Jackson, indicated this cost includes physical, economical and psychological cost together.
The switching cost is supposed to be a cost of non-loyal customers who defect the brand to competitors for switching to another brand. It is not only about the financial and monetary cost customers should bare through changing service providers but also is related to all effort and time they spent to find a better deal Kim et al, Switching cost could be assumed as partly consumer specific Shy, The economic cost also is known as sunk cost which is those cost customers have to bare while change to new brand.
One example of sunk cost is when once customers close a bank account and open a new one in other bank. Switching cost is assumed as an important factor due to its power to trigger loyalty and maintain the firm stable during constant changes of service quality in short time.
There is much evidence of studies which claim switching cost has an important role to retain current customers loyal and bolster loyalty as a competitive advantage among existing and new customers Farrell and Shapiro, Therefore, there are also many researches have been done to control the cause of such cost Burnham et al.
While the switching cost increase the customers lose their sensitivity regarding satisfaction Hauser et al. Although there are some environmental and situational factors affect the influence of switching cost. It is supposed that high switching cost will decrease the positive impact of satisfaction on loyalty. Switching cost can make customers to maintain their relationship with firm in fluctuation of their satisfaction regardless of in what extent they are satisfied with firm Bansal et al, ; Burnham et al, ; Jones et al, Fornell, indicated that the association between customer satisfaction and loyalty could be affected by different factors such as the type of industry itself, the degree of product differentiation and switching cost.
There are other studies shows that the relationship between customer satisfaction and loyalty is lessen while switching cost perceived high in that segment in compare of the situation with less perceived switching cost Jones et al. Therefore, from mentioned studies can conclude that switching cost could have an impact as a moderator on customer loyalty due to making customers less sensitive to satisfaction when it goes high Hauser et al.
Switching cost has been mentioned in many previous studies as a moderator in satisfaction —loyalty association. As long as switching cost is perceived substantial and irresistible those customer are even dissatisfied do not tend to switch the firm Jackson, Research has suggested that switching cost has a moderating impact on customer loyalty through customer satisfaction.
Lee, Lee and Feickin their study of mobile phone service located in France has investigated the influence of switching cost on the correlation between loyalty and satisfaction and found the role of switching cost as a moderator on customer loyalty. The proposed research from work based on literatures would like the Figure1. Research Hypothesis Based on review of literatures the following hypothesis outlined the propositions to be investigated: The relationship between satisfaction and customer loyalty weakens as the switching costs increase Research Methodology The measurement technique used in this study was the self-administered survey technique.
The quantitative phase of this study employed a self-administered, cross-sectional survey design. The survey technique has several strengths that provide rationale for its use in this study. First, surveys are particularly effective when used for descriptive, explanatory, and exploratory purposes.
Furthermore, survey research is probably the most frequently used method of data collection in the retail industry Mason et al. Also, the use of survey is an effective vehicle for collecting information from a wide range of respondents. In addition, surveys, especially self-administered ones, make large samples more feasible Babbie, The ability to consider large number of data from a wide variety of respondents also enhances the potential generalizability of findings.
Moreover, survey research allows for a direct and systematic measurement of large number of variables simultaneously. In summary, a survey design is deemed to be the most suitable methodology for this phase of the study. Survey research allows for: Moreover, questionnaires distributed through face-to-face method. A logical explanation of why this method appears to be so effective is that the face-to-face nature or personal contact between interviewer and respondent usually facilitates and enhances communication.
Moreover, the fact is that the interviewer's mere presence motivates the respondent to cooperate Mayer, For these reasons, a survey design is most suitable for addressing the overall research question and hypotheses developed in this thesis.
Sampling procedure and Design Step 1: Define the Target Population Individual in-house restaurant hotels customers in Kuala Lumpur and Putrajaya will be targeted, in which these are the two big states of Malaysia. This targeted population will be divided into four categories of age groups: Select the Data Collection Method The primary data are gathering through self-administered survey questionnairepersonal interview and email.
In this research, the 7-point Likert scale is used for respondent to rank important of the variables and its attributes. A 7-point scale was used in an endeavor to improve the reliability of the scales Churchill and Peter, The 7-point scale was also encouraged because it was hoped that it would discourage respondents from using the mid-point, by making it less obvious than a five-point scale, On the other hand, a midpoint is provided for respondents who were neutral on the scale, and this eliminated any anxiety that may have been caused by forcing respondents to select a predisposition.
Consequently, 7 or 9-point numerical scales are recommended for structural equation modelling, as a sufficient range of score values introduces variance Schumacker and Lomax, Hence, a consistent scoring procedure was maintained throughout the questionnaire, and negatively worded statements were scored post data collection by reversing the scale. The secondary data source was used through collected information from journals, articles, reference books, websites and etc.
Select the Appropriate Sampling Method The sampling design that was being selected is the convenience sampling method with clustering based on location. The justification of selecting the convenience sampling is because this method satisfactorily meets the sampling needs, primary virtue of low cost and the easiest to conduct within the short research period Cooper and Schindler, Determine Necessary Sample Sizes and Overall Contact Rates McQuitty, suggested that it is important to determine the minimum sample size required in order to achieve a desired level of statistical power with a given model prior to data collection.
Schreiber et almentioned that although sample size needed is affected by the normality of the data and estimation method that researchers use, the generally agreed-on value is 10 participants for every free parameter estimated. In other words, as a rule of thumb, any number above is understood to provide sufficient statistical power for data analysis. Method of Analysis The procedures used to analyze the data for the purposes of addressing and answering the research question and hypotheses of this study range from simple correlation analysis to more sophisticated structural equation modeling and path analysis.
Preliminary univariate statistical analysis was conducted to screen the data, while initial statistical analyses were conducted using SPSS version In addition, further statistical analyses such as correlation analysis, exploratory and confirmatory factor analyses were conducted to explore the relationships between the constructs in the research proposed model.
In other words, in this research structural modeling analysis enables researcher to examine the hypothesized relationships. Structural equation modeling SEM was employed because it is generally considered more suitable for the model that involves complicated variable relationships.
SEM allows analysis of both the measurement model and the structural model. It cannot only address measurement errors but also allows the examination of the factor analysis and hypothesis testing together Gefen et al.
Next step of this research is to examine the relationship between customer satisfaction and loyalty by considering the moderating role of switching cost component.
Accordingly this research used Sunghyup S. Many customers have multiple memberships in various branded restaurants or hotels Mattila, To assess switching barrier study used mostly the work by Zhilin Yang and Robin T.
Although this research tries to cover the effect of CSR on customer satisfaction at in-house restaurant hotel as a kind of fine dining restaurant, the whole restaurant industry has not been investigated regarding research objective. In addition, there are some other variables of corporate social responsibility which could be evaluated in future studies.
In relationship between customer satisfaction and loyalty this study examined switching cost as a moderator while there are some other moderating variables still could influence this linkage. New Directions in Theory and Practice. Business research methods Ninth Ed. The firm that will provide the case study is a UK SME specializing in the development of chemical products.
The company has used licensing as its primary strategy for international expansion. The research project is part of a partly government funded research program. Research findings — In applying relationship marketing techniques in new remote and culturally distant markets, these techniques need to be adapted to the local culture.
Main contribution — The contribution of the research is to refine the current criteria used by companies, and recommended by literature, to select prospective parties to licensing and franchising agreements; and further refine the thinking on how relevant the relationship marketing context is to the creation and later management of these relationships. International relationship marketing; entry strategies; licensing; collaborative arrangements Introduction There is currently scant research on International Relationship Marketing IRM.
There is also a dearth of research into the application of the relationship marketing framework in the management of relationships such as licensing and franchising agreements. IRM is a term used to describe instances where relationship marketing is implemented in an international, even global context Palmer, ; Conway and Swift, International businesses have been increasingly adopting collaborative entry strategies, such as licensing and franchising Townsend, over the years.
Two issues companies using these methods face are the process of selecting suitable partners to franchise or license their business to; and the monitoring and management of the relationship with these partners once it has been established. In fact, the success of the case study company depends largely on their ability to select the most suitable partners to its business in the selected markets; and to effectively manage them in order to maximise their performance.
This paper is concerned with the former. The effectiveness of the IRM model is investigated to determine its ability to initiate, develop and maintain standardized collaborative agreements such as licensing and franchising in an international context.
This paper examines the relevance of the relationship marketing concept and relationship development processes in establishing and managing international franchising and licensing agreements. This is an under-researched area.
We use a case study to produce recommendations for best practice of relationship development and management of franchising and licensing partners. The paper also discusses the constraints to the applicability of relationship marketing in that context, and aims at recommending a diagnostic tool to measure prospective franchisees and licensees against in order to select them as business partners.
The research takes as a context the market for chemical road repair products supplied to the building, construction and maintenance industry, and uses as a case study a manufacturer of chemical products based in the South East of the UK.
The contribution of the research is to refine the current criteria used by companies, and recommended by literature, to select prospective parties to licensing and franchising agreements; and further refine the thinking on how relevant the relationship marketing context is to the creation and later management of these relationships.
Market Entry Strategies The range of market entry modes available to firms entering foreign markets can be grouped into three broad categories: The latter are entry modes that incorporate some of the characteristics of both hierarchical and export modes, e.
Examples of these modes include licensing and franchising. Although it may be argued that they afford a tighter control and a better protection of their proprietary know how Brouthers and Nakos,hierarchical entry modes are not always superior to non-equity entry modes.
Because of this, it can be argued that non equity modes are generally more suitable to small and medium enterprises SMEs with limited resources. Non equity entry modes include various types of collaboration with intermediaries based in the foreign target market. These vary from exclusive distributorships, to intermediate Hollensen, forms of collaboration such as licensing and franchising.
Licensing and franchising can be considered strategies that foster medium to long term relationships. Therefore it follows that relationship marketing is the relevant conceptual domain to describe how these relationships are managed. When these relationships develop in an international context, the use of relational marketing methods is subject to specific constraints.
This extra value is not only achieved through maintaining existing sales, but also by cross-selling and up-selling products and services Selnes, This allows for personalized — not personal - communication to be addressed automatically to a large number of individuals, thereby allowing saving on the costs of a sales force. In addition, concerns have been raised e. Palmer, ; Conway and Swift, about the feasibility of the uniform implementation of RM across different international markets.
International relationship marketing IRM is a term used to describe examples where RM is implemented in an international, even global context. Conway and Swift, ; Samiee, Walters and Peter, In this context, the relationship is conditioned by the cultural context in which it takes place Palmer, IRM offers a paradox, in that businesses in countries such as Japan and China, have long adopted relational approaches, so that it can be argued that in these cultures RM has been a familiar pattern of business behaviour for a number of decades Palmer, Psychic and cultural distance is a constraint in relationship building Conway and Swift, In several business cultures the trust which is an essential component of a RM approach is developed by means of face-to-face rituals Palmer, This is the case for high context cultures, defined as those cultures where communication has implicit contents and emotional values Hall, in Usunier and Lee, The need for an implicit, non-verbal content in the communication process in high context cultures would create difficulties in implementing personalized, non personal communication Usunier and Lee,i.
Face to face contact would also be necessary in high femininity and high uncertainty avoidance cultures, where business is associated with caring face to face communication and risk is reduced by cultivating relationships Hofstede, a, b, ; Batonda and Perry, On the contrary, westerners tend to be more businesslike because of a higher level of masculinity Batonda and Perry, The development of trust is also made harder by communication barriers created by cultural distance and languages Conway and Swift, A positive relationship atmosphere can be difficult to create when the interaction takes place between people from different backgrounds, cultures and expectations Leonidou, Katsikeas and Hadjimarcou, There are also cultures where business ethics do not require necessarily a win-win situation, and it is seen as natural when one of the parties to a transaction seems to be seeking a better return than their counterpart Palmer, IRM is often concerned with intermediaries rather than final buyers and users because of the constraints, barriers and costs deriving from marketing across barriers Samiee, Walters and Peter, A further constraint to the implementation of IRM is the diffidence which exists between parties belonging to different cultures.
This is even more so when the mutual feelings between the parties are affected by Consumer Animosity, negative attitudes towards products or companies belonging to a particular country stemming from political, economic and military unrest Amine, Chao and Arnold,