Quantitative Modeling of Customer Retention in Context of Indian Retail Market

Dr. Mallika Srivastava ., Shubhanshu Naik ., Dr. Anupam Narula .

Abstract


The short term strategies like low cost items and frequent sale put heavy burden on retailers’ operating costs resulting in shrinkage of their profits. Thus, Customer retention and Customer lifetime value has become an issue of prime concern in Indian retail market. The purpose of the study is to identify the underlying factors responsible for Customer retention, propose and test a quantitative model of the same for Indian retail market.

In order to find variables of Customer retention, the study commences with review of extant literature and appreciative inquiry. It assumed a linear relationship between Customer retention and Customer satisfaction, Customer trust and switching barriers. The underlying factors were derived employing factor analysis. A theoretical framework was devised with pragmatic approach and tested using statistical techniques.

The study findings confirm that Customer satisfaction, Customer trust and switching barriers are positively related to the overall Customer retention in retail market. Wherein, Customer satisfaction has a positive effect on Customer trust but unlike traditional belief Customer trust has emerged as more prominent factor than Customer satisfaction.

The study reveals prominent role of Customer trust this paradigm shift is helpful for Indian retail sector to devise improved strategies for Customer retention. Though the study findings are in-sync with the findings of prominent studies but the same needs to be further validated for another socio-demographic setup in India.

The study ventures into new domain, it tests whether traditional approaches are relevant for Indian retail segment in today.

Keywords


Customer satisfaction, Customer trust, Switching barriers, Customer retention.

Full Text:

PDF

References


Anderson, E., & Sullivan, M. (1993). The Antecedents and Consequences of Satisfaction for Firms. Marketing Science, 12(2), 125-143.

Bansal, H. S., & Taylor, S. F. (1999). The service provider switching model (spsm) a model of consumer switching behavior in the services industry. Journal of service Research, 2(2), 200-218.

Chatura, R., & Andy, N. (2003). Some moderating effects on the Service Quality- Retention link. International Journal of Operations & Production Management, 2, 230-248.

Cronin, J. J., Brady, M. K., & Hult, G. T. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of retailing, 76(2), 193-218.

Dawkins, P., & Reichheld, F. (1990). Retention as a Competitive Weapon. Directors & Boards, 14(4), 42-47.

Doney, P. M., & Cannon, J. P. (1997). An Examination of the nature of Trust in Buyer–Seller Relationships. Journal of Marketing, 61(2), 35–51.

Fornell, C. (1992). A National Satisfaction Barometer: The Swedish Experience. Journal Of Marketing, 56(1), 6-21.

Garbarino, E., & Johnson, M. S. (1999). The different roles of satisfaction, trust, and commitment in customer relationships. The Journal of Marketing, 70-87.

Gounaris, S. P. (2005). Trust and commitment influences on customer retention: insights from business-to-business services. Journal of Business research, 58(2), 126-140.

Hart, C. W., & Johnson, M. D. (1999). Growing the trust relationship. Marketing Management, 8(1), 8.

J. b. Shao, Z. W., & X. X. Long. (2008). The driving factor of retention: Empirical study on bank card. International Conference on Management Science and Engineering 15th Annual Conference Proceedings, Long Beach, CA, 558-564.

Jones, M. A., Mothersbaugh, D. L., & Beatty, S. E. (2000). Switching barriers and repurchase intentions in services. Journal of retailing, 76(2), 259-274.

Jyh-Fu Jeng, D., & Bailey, T. (2012). Assessing customer retention strategies in mobile telecommunications: Hybrid MCDM approach. Management Decision, 50(9), 1570-1595.

Manoj, E., & Sunil, S. (2011). Role of switching costs in the Service Quality, Perceived Value, Satisfaction and Retention linkage. Asia Pacific Journal of Marketing And Logistics, 3, 327-345.

Oliver, R. L. (1980). A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions. Journal of Marketing Research (JMR), 17(4), 460-469.

Ranaweera, C., & P., J. (2003). On the Relative Importance of Satisfaction and Trust as Determinants of Retention and Positive Word-of-Mouth. Journal of Targeting, Measurement and Analysis for Marketing, 12(1), 82-90.

Rauyruen, P., & Miller, K. E. (2007). Relationship quality as a predictor of B2B Loyalty. Journal of Business Research, 60(1), 21–31.

Rucci, A. J., Steven, P. K., & Richard, T. Q. (1998). The employee-customer-profit chain at Sears. Harvard Business Review, 76, 82-98.

Rust, R., & Subramanian, B. (1992). Making complaints a management tool. Marketing Management, 1(3), 41-5.

Schiffman, L., & Kanuk, L. (2000). Customer Behaviour. New Jersey: Seventh Edition, Prentice Hall, Upper Saddle River.

Sheth, J. N., & Parvatiyar, A. (2002). Evolving relationship marketing into a discipline. Journal of relationship marketing, 1(1), 3-16.

Stauss, B., Chojnacki, K., Decker, A., & Hoffman, F. (2001). Retention effects of a Club. International Journal of Service Industry Management, 1, 7-19.

Valenzuela, F., Pearson, D., & Epworth, R. (2005). Influence of switching barriers on service recovery evaluation. Journal of Services Research.

Žvireliene, R., & Bučiuniene, I. (2008). The role of relationship marketing dimensions in the retention. Business: Theory And Practice, 9(4), 272-280.


Refbacks

  • There are currently no refbacks.




Editorial Office:

Educational Research Multimedia & Publications,
S.N. 21, Plot No 24, Mirza Ghalib Road Malegaon Nasik,
Maharashtra India - 423203.
+919764558895 (whatsapp),
editor@scholarshub.net, www.scholarshub.net

Copyrights © 2010-2020 - ERM Publications, India     

This work is licensed under https://creativecommons.org/licenses/by-sa/4.0/