Drivers of Customer Loyalty towards Islamic Subsidiary Banks in the Northern States of Peninsular Malaysia

  • Authors

    • Maria Abdul Rahman
    • Mona Fairuz Ramli
    2018-09-12
    https://doi.org/10.14419/ijet.v7i4.1.28240
  • Islamic banking subsidiary, Customer loyalty, Image, Partial Least Squares, Perceived value.

  • It is undeniable that customer loyalty contributes to the sustainability and success of the banking industry. With the intense competition in the industry, banks are now trying to retain their customers with the aim to increase their revenues. As there are disagreements among the variables that influence customer loyalty, this study examined the relationships between perceived value, image, satisfaction and loyalty in an integrative model. Analysis was done on data collected from 139 bank customers in the northern states of Peninsular Malaysia using Partial Least Squares. The results of the study revealed that perceived value and bank image led customers to experience greater satisfaction, resulting in customers to be more loyal to their banks. The research outcome contributes to the body of knowledge by integrating the four variables into one model and by testing the model in the banking industry. The findings from this study may assist bank managers to formulate strategies to increase their revenues through customer loyalty.

     

     


     

  • References

    1. [1] Rizwan M, Yaseen G, Nawaz A & Hussain L, “Incorporating Attitude towards Islamic Banking in an Integrated Service Quality, Satisfaction, Trust and Loyalty Modelâ€, International Journal of Accounting and Financial Reporting, Vol.4, No.2, (2014), pp.456-477.

      [2] Al-Tamimi HAH, Lafi AS & Uddin MH, “Bank Image in UAE: Comparing Islamic and conventional banksâ€, Journal o Financial Services Marketing, Vol.14, No.3, (2009), pp.232-244.

      [3] Hossain M & Leo S, “Customer perception on service quality in retail banking in Middle East: the case of Qatarâ€, International Journal of Islamic and Middle Eastern Finance and Management, Vol.2, No.4, (2009), pp.338-350.

      [4] NA, (2016), Inside the Mind of the Malaysian Banking Customer Research-based insights into the future of Malaysian banking, from https://skrs.page.link/qL6j

      [5] Tariq AN & Moussaoui N, “The main antecedents of Customer Loyalty in Moroccan Banking Sectorâ€, International Journal of Business Management Science, Vol.2, No.2, (2009), pp.101-115.

      [6] Keisidou E, Sarigiannidis L & Maditinos DI, “Customer satisfaction, loyalty and financial performance: A holistic approach of the Greek banking sectorâ€, International Journal of Bank Marketing, Vol.31, No.4, (2013), pp.259-288.

      [7] Asutay M, “Conceptualisation of the Second Best Solution in Overcoming the Social Failure of Islamic Banking and Finance: Examining the Overpowering of Homoislamicus by Homoeconomicusâ€, IIUM Journal of Economics and Management, Vol.15, No.2, (2007), pp.167-196.

      [8] Amin H, Explaining the terms Islamic window and Islamic subsidiary, The Borneo Post, (2017).

      [9] Han H, Kim Y & Kim EK, “Cognitive, affective, conative, and action loyalty: Testing the impact of inertiaâ€, International Journal of Hospitality Management, Vol.30, No.4, (2011), pp.1008-1019.

      [10] Frank RE, “Is brand loyalty a useful basis for market segmentation?â€, Journal of Advertising Research, Vol.7, No.2, (1967), pp.27-33.

      [11] McConnell JD, “The development of brand loyalty: an experimental studyâ€, Journal of Marketing Research, Vol.5, No.1, (1968), pp.13-19.

      [12] Anderson RE & Srinivasan SS, “E-satisfaction and e-loyalty: A contingency frameworkâ€, Psychology & Marketing, Vol.20, No.2, (2003), pp.123-138.

      [13] Dick AS & Basu K, “Customer loyalty: toward an integrated conceptual frameworkâ€, Journal of The Academy Of Marketing Science, Vol.22, No.2, (1994), pp.99-113.

      [14] Han H & Back KJ, “Relationships among image congruence, consumption emotions, and customer loyalty in the lodging industryâ€, Journal of Hospitality & Tourism Research, Vol.32, No.4, (2008), pp.467-490.

      [15] Oliver RL, “Whence consumer loyaltyâ€, Journal of Marketing, Vol.63, No.4, (1999), pp.33-44.

      [16] Han H & Ryu K, “The roles of the physical environment, price perception, and customer satisfaction in determining customer loyalty in the restaurant industryâ€, Journal of Hospitality & Tourism Research, Vol.33, No. 4, (2009), pp.487-510.

      [17] Amine A, “Consumers' true brand loyalty: the central role of commitmentâ€, Journal of Strategic marketing, Vol.6, No.4, (1998), pp.305-319.

      [18] Back KJ & Parks SC, “A brand loyalty model involving cognitive, affective, and conative brand loyalty and customer satisfactionâ€, Journal of Hospitality & Tourism Research, Vol.27, No.4, (2003), pp.419-435.

      [19] Oliver RL, Satisfaction: A Behavioral Perspective on the Consumer, New York: McGraw-Hill, (1997).

      [20] Kandampully J & Suhartanto D, “The role of customer satisfaction and image in gaining customer loyalty in the hotel industryâ€, Journal of Hospitality & Leisure Marketing, Vol.10, No.1-2, (2003), pp.3-25.

      [21] Evanschitzky H, Iyer GR, Plasmann H, Niessing J & Meffert H, “The relative strength of affective commitment in securing loyalty in service relationahipsâ€, Journal of Business Research, Vol.59, (2006), pp.1207-1213.

      [22] Bandyopadhyay S & Martell M, “Does attitudinal loyalty influence behavioral loyalty? A theoretical and empirical studyâ€, Journal of Retailing and Consumer Service, Vol.14, No.1, (2007), pp.35-44.

      [23] Ladhari R, Ladhari I & Morales M, “Bank Service quality: comparing canadian and Tunisian customer perceptionsâ€, International Journal of Bank Marketing, Vol.29, No.3, (2011), pp.224-246.

      [24] Reichheld FF, Teal T & Smith DK, The loyalty effect (Vol. 1), Boston, MA: Harvard Business School Press, (1996).

      [25] Hallowell R, “The relationships of customer satisfaction, customer loyalty, and profitability: an empirical studyâ€, International Journal of Service Industry Management, Vol.7, No.4, (1996), pp.27-42.

      [26] Campo AM, Alves H & Hernandez JM, (Eds.), Loyalty Measurement in Tourism: A Theoretical Reflection, Physica -Verlag Haidelberg, (2013).

      [27] Slater SF & Narver JC, “Market orientation, customer value, and superior performanceâ€, Business Horizons, Vol.37, (1994), pp.22-28.

      [28] Holbrook M, The nature of customer value. In R. Oliver & r. Rust (Eds.), Service quality: New directions in theory and practice. Thousand Oaks: Sage Publications, (1994).

      [29] Hasan H, Kiong TP & Ainuddin RA, “Effects of perceived value and trust on customer loyalty towards foreign Banks in Sabah Malaysiaâ€, Global Journal of Emerging Trends in e-Business,. Marketing and Consumer Psycholgy, (2014), pp.311-317.

      [30] Sweeney J & Soutar G, “Consumer perceived value: The development of multiple item scaleâ€, Journal of Retailing, Vol.77, No.2, (2001), pp.203-220.

      [31] Zeithaml V, “Consumer Perception of Price, Quality, and Value: A Means-End Model and Synthesis of Evidenceâ€, Journal of Marketing, Vol.52, (1988), pp.2-22.

      [32] Chen PT & Hu HH, “The effect of relational benefits on perceived value in relation to customer loyalty: An empirical study in the Australian coffee outlets industryâ€, International Journal of Hospitality Management, Vol.29, No.3, (2010), pp.405-412.

      [33] McDougall GHG & Leveque T, “Customer satisfaction with services: putting perceived value into equationâ€, Journal of Service Marketing, Vol.14, No. 5, (2000), pp.392-410.

      [34] Chen Z, Consumers' Value Perception of An e- Store and Its Impact on e-Store Loyalty Intention, Purdue University, West Lafayette, (2003).

      [35] Sanchez J, Callarisa L, Rodriguez RM & Moliner MA, “Perceived value of the purchase of a tourism productâ€, Tourism Management, Vol.27, (2006), pp.394-409.

      [36] Chen CF & Chen FS, “Experience quality, perceived value, satisfaction and behavioral intentions for heritage touristsâ€, Tourism Management, Vol.31, No.1, (2009), pp.1-7.

      [37] Liat CB, Mansori S, Chuan GC & Imrie BC, “Hotel Service Recovery and Service Quality: Influences of Corporate Image and Generational Differences in the Relationship between Customer Satisfaction and Loyaltyâ€, Journal of Global Marketing, Vol.30, No.1, (2017), pp.1-10.

      [38] Nguyen N & LeBlanc G, “The mediating role of corporate image on consumers' retention decisions: an investigation in financial servicesâ€, International Journal of Bank Marketing, Vol.16, No.2, (1998), pp.52-65.

      [39] Kandampully J & Suhartanto D, “Customer loyalty in the hotel industry: the role of customer satisfaction and imageâ€, International Journal of Contemporary Hospitality Management, Vol.12, No.6, (2000), pp.346-351.

      [40] Kang GD & James J, “Service quality dimensions: an examination of Gronroos’s service quality modelâ€, Managing Service Quality, Vol.14, No.4, (2004), pp.266-277.

      [41] Hoq HZ & Amin M, “The role of customer stisfaction to enhance loyaltyâ€, African Journal of Business Management, Vol.4, No.12, (2010), pp.2385-2392.

      [42] Vesel P & Zabkar V, “Managing customer loyalty through the mediating role of satisfaction in the DIY retail loyalty programâ€, Journal of Retailing and Consumer Services, Vol.16, No.5, (2009), pp.396-406.

      [43] Hennig-Thurau TH & Klee A, “The impact of customer satisfaction and relationship quality on customer retention: a critical assessment and model developmentâ€, Psychology & Marketing, Vol.14, No.8, (1997), pp.737-765.

      [44] Zeithaml VA, Bitner MJ & Gremler DD, Service Marketing: Integrated customer Focus across Firm (7 ed.), New York: McGraw Hill Education, (2018).

      [45] Wang Y, Hing PL, Chi R & Yang Y, “An Integrated framework for customer value and customer-relationship-management performance: a customer-based perspective from Chinaâ€, Managing Service Quality, Vol.14, No.2/3, (2004), pp.169-182.

      [46] Leroi-Werelds S, Streukens S, Brady MK & Swinnen G, “Assessing the value of commonly used methods for measuring customer value: A multi-setting empirical studyâ€, Journal of the Academy of Marketing Science, Vol.42, No.4, (2014), pp.430-451.

      [47] Zeithaml VA, Berry LL & Parasuraman A, “The Behavioral Consequences of Service Qualityâ€, Journal of Marketing, Vol.60, No. 2, (1996), pp.31-46.

      [48] Akhter W, Abbasi AS, Ali I & Afzal H, “Factors Affecting Customers Loyalty in Pakistanâ€, African Journal of Business Management, Vol.5, No.4, (2011), pp.1167-1174.

      [49] Fathollahzadeh M, Hashemi A & Kahreh MS, “Designing a new model for determining customer value satisfaction and loyalty towards banking sector of Iranâ€, European Jouranl of Economics, Finance and Administrative Sciences, Vol.28, No.1, (2011), pp.126-138.

      [50] Lai F, Griffin M & Babin BJ, “How quality, value, image, and satisfaction create loyalty at a Chinese telecomâ€, Journal of Business Research, Vol.62, No.10, (2009), pp.980-986.

      [51] Liao KH, “Service Quality and Customer Satisfaction: Direct and Indirect Effects in loyalty in Taiwanese Internet banksâ€, Social Behavior and Personality, Vol.39, No.8, (2012), pp.1127-1140.

      [52] Yang Z & Patterson RT, “Customer Perceived Value, Satisfaction, and Loyalty: The Role of Switching Costsâ€, Psychology & Marketing, Vol.21, No.10, (2004), pp.799-822.

      [53] Cronin J, Brady M & Hult T, “Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environmentsâ€, Journal of Retailing, Vol.76, No.2, (2000), pp.193-218.

      [54] Keshavarz Y & Jamshidi D, “Service quality evaluation and the mediating role of perceived value and customer satisfaction in customer loyaltyâ€, International Journal of Tourism Cities, Vol.4, No.2, (2018), pp.220-244.

      [55] Helm S, Eggert A & Garnefeld I, Modeling the impact of corporate reputation on customer satisfaction and loyalty using Partial Least Squares, (2010), pp.515-534.

      [56] Moliner MA, “Loyalty, perceived value and relationship quality in healthcare servicesâ€, Journal of Service Management, Vol.20, No.1, (2009), pp.76-98.

      [57] Lappiere J, “Customer perceived value in industrial contextsâ€, Journal of Business and Industrial Marketing, Vol.15, No.2/3, (2000), pp.122-140.

      [58] Hair JF, Ringle CM & Sarstedt M, “PLS-SEM: Indeed A silver Bulletâ€, Journal of Marketing Theory and Practice, Vol.19, No.2, ( 2011), pp.139-151.

      [59] Anderson JC & Gerbing DW, “Structural equation modeling in practice: A review and recommended two-step approachâ€, Psychological Bulletin, Vol.103, (1988 ), pp.411-423.

      [60] Ringle CM, Wende S & Will A, Smart PLS, Hamburg, Germany, (2005).

      [61] Ramayah T, Wai CL & Boey CI, “Network collaboration and performance in the tourism sectorâ€, Serv Bus, Vol.5, (2011), pp.411-428.

      [62] Barclay DW, Thompson R & Higgins C, “The partial least squares (PLS) approach to causal modeling: personal computer adoption and use an illustrationâ€, Technology Studies: Special Issue on Research Methodology, Vol.2, No.2, (1995), pp.285-309.

      [63] Nunnally JC & Bernstein IH, Psychometric theory, New York: : McGraw-Hill, (1994).

      [64] Garver MS & Mentzer JT, “Logistics Research Methods: Employing Structural Equation Modeling to Test for Construct Validityâ€, Journal of Business Logistics, Vol.20, No.1, (1999), pp.33-57.

      [65] Preacher KJ & Hayes AF, “SPSS and SAS procedures for estimating indirect effects in simple mediation modelsâ€, Behavior Research Methods, Instruments, & Computers, Vol.36, No.4, (2004), pp.717-731.

      [66] Hair JF, Hult GTM, Ringle CM & Sarstedt M, A Primier on Partial Least Squares Structural Equation Modeling (PLS-SEM), Thousand Oaks, California, USA: Sage Publications, (2014).

  • Downloads

  • How to Cite

    Abdul Rahman, M., & Fairuz Ramli, M. (2018). Drivers of Customer Loyalty towards Islamic Subsidiary Banks in the Northern States of Peninsular Malaysia. International Journal of Engineering & Technology, 7(4.1), 128-133. https://doi.org/10.14419/ijet.v7i4.1.28240