Satisfaction Trust and Commitment in Term Paper

Excerpt from Term Paper :

Research Aim

The purpose of this research is to investigate customer's loyalty throughout the dimensions of satisfaction, trust and commitment for mobile phone industry in Bangkok, Thailand. In addition, this research also provides practical knowledge which customers are dissimilar in satisfaction and look for different levels of relationship with mobile phones. To sum up briefly, it is completely useful for marketers to comprehend which paradigms affect customers to create good relationship with companies in order to sustain the customer's loyalty.

Research Objectives

These are research objectives which are needed to be accomplished in order to reach the above research aim which are stated as following:

To study the relationship marketing to the mobile phone industry in Thailand.

To study the customer satisfactions factor to the mobile phone.

To identify the relationship between various component satisfaction and trust.

To identify the relationship between various component satisfaction and commitment.

To identify the effect of trust and commitment over customer's loyalty.

Research Questions

From the research aim, there are research questions which are relevant to this research. The research questions are as following:

What are the main factor of customer's satisfaction in the area of trust and commitment to mobile phone?

How are the relationship between satisfaction, trust and commitment?

Are satisfaction, trust and commitment lead to customer's loyalty in mobile phone industry in Thailand?

Chapter Two: Critical Review of the Literature

Background and Overview

Companies competing in the mobile phone industry today are faced with both new opportunities as well as challenges as they seek to maintain their existing market share and grow their businesses in domestic and international markets. Developing products that are capable of being used in the global marketplace requires careful planning and analysis of the target markets, and while increasing initial development costs are required, carefully managed, target marketing can provide increased international sales (Jacko and Sears, 2003). In some countries, though, the nature of the domestic market itself may constrain awareness of and incentives for innovations in technology and new applications for existing products (Jacko and Sears, 2003).

In order to compete in this dynamic and increasingly competitive marketplace, careful positioning of products and services is required. According to Mckenna (1991), "Many companies can establish unique positions in the marketplace for themselves, their products, and their services. This capability is a powerful force in marketing. Indeed, at the heart of every good marketing strategy is a good positioning strategy" (p. 44). This aspect of marketing, though, should not be confused with advertising or other initiatives, because it directly relates to the need for developing effective ways to identifying what customers want and need at a particular point in time, and in being able to predict with some degree of accuracy what past and current trends may portend for the future. In this regard, Mckenna points out that, "Positioning does not concern so much what you say about your products or company as much as it is what your customers say about you. It is not what you say to your customers but rather what you do with your customers that creates your industry position" (1991 p. 44). Indeed, "What you do with your customers" is the heart and soul of relationship marketing theories, and these issues are discussed further below.

Relationship Marketing Theories

There are a number of working definitions of relationship marketing, the majority of which tend to emphasize the need to develop long-term relationships with customers and sometimes other stakeholders; in addition, relationship marketing is often contrasted to transaction marketing, the one-shot approach that is based on a short-term perspective (Varey and Lewis, 2000). In its most basic form, Varey and Lewis define relationship marketing as "marketing seen as relationships, networks and interaction or marketing based on interaction within a network of relationships'. In the broadest sense of total relationship marketing, all management, the whole society, and even life itself, form networks of relationships within which we interact in our roles of business executives, employees, consumers, citizens and human beings" (p. 29).

According to Kolter et al., (1999) in order to successfully gain competitive advantages, companies have to place high value in satisfy customer's needs and also attempt to develop relationships with their customers rather than focusing on only development of product. Moreover, the relationship marketing is also stated as a fundamental factor of marketing by Gronroos (1997 cited in Little and Marandi, 2003) that the marketing in relational terms means to establish, maintain and enhance relationships with customers and other partners, at a profit so that the objectives of the parties involved are met. In this regard, the growing body of research into relationship marketing suggests that the longer the relationship with a customer, the higher the profit will be. This phenomenon is attributable in large part to the dual effects of customer loyalty: (a) reduced marketing costs when fewer customers defect; and (b) increased 'customer share' or 'share of wallet' (a higher share of the customer's purchase of a product or service goes to a single supplier), a goal that is achieved by mutual exchange and fulfilment of promise (Varey and Lewis, 2000). Relationship in marketing therefore refers to voluntary repeat business between suppliers and customers where the behaviour is planned, cooperative, intended to continue for mutual benefit and is perceived by both parties as a relationship (Little and Marandi, 2003).

The relationship marketing has been defined by many researchers. It means to attract, maintain, and enhance customer relationships. Hawkin, Best and Coney (2001) stated that relationship marketing is an attempt to develop an ongoing, expanding exchange relationship with a firm's customers. Little and Marandi, (2003) believe that the relationship marketing is the most effective way to retain customers on a mutually beneficial basis and over a period of time. It focuses on customer keeping, rather than purely customer getting. It is offered as an alternative strategy to the traditional marketing mix approach, a means of obtaining sustainable competitive advantage and the best way to retain customers in the long run. Most of the research findings support the theory that long-term relationship is beneficial to the relationship between service providers and service users (Michell and Sanders 1995; Reinchheld and Saaser 1990; Czepiel 1990; So, 2005).

In the following figure of Egan (2004), it shows the development of marketing strategies. The relationship marketing is firstly introduced in 1990s. Before that there are many areas of marketing which includes consumer marketing, industrial marketing, non-profit and societal marketing, service marketing.

From the following figure, the comparison between the marketing mix and the relationship marketing theories, however, are shown the main focused areas.

The key differences between these two theories are that the relationship marketing focuses mainly on relationships, network and interaction while Marketing Mix focuses mainly on production, price, promotion and place.

Besides, the comparison to marketing mix, Little and Marandi (2003) also compare the relationship marketing with the transaction marketing. The transaction marketing focuses on single sale, orientation on product features, short timescale, and little emphasis on customer service, limited customer commitment, moderate customer contact and quality is primarily a concern of product. On the other hand, the relationship marketing chiefly focuses on customer's retention, orientation on product benefits, long timescale, high customer service, high customer commitment, high customer contact and quality are the concern of all.

Furthermore, alongside the relationship marketing, customer's loyalty also emphasise on customer retention as the following model (Little and Marandi, 2003).

Little and Marandi (2003) illustrated a formula to create loyalty. From the model, customer's satisfaction, trust and commitment are main factors to make customer's loyalty. The customer's loyalty is also constructed by other factors that are not only satisfaction alone will create loyalty but also trust and commitment are key factors to create customer's loyalty (Little and Marandi, 2003).

Commitment and trust theories

Trust. Trust is defined in various ways in several marketing literatures. Morgan and Hunt (1994) defined the trust as confidence in the exchange partner's reliability and integrity. In addition, Blois (1997 cited in Egan, 2004) defined the trust as an acceptance of vulnerability to another's possible, but not expected, will or lock of goodwill. Trust is also shown to be a psychological state comprising an intention to accept this vulnerability based upon the positive expectations of the intentions or behaviour of others (Rousseau et al., 1998 cited in Egan, 2004). Most definitions of the trust involve a belief that one relationship partner will perform in the best interests of the others. It is a willingness to rely on an exchange partner in whom one has confidence (Moorman et al., 1992 cited by Sheth and Parvatiyar 2000).

Egan and Harker (2005) defined the trust as a marketing tools and relationship marketing is build on the foundation of trust. And Zikmund et al., (2002) defined it as the willingness of the customer to rely on the organization or brand to perform its stated function. Trust reduces uncertainty or risk and viewed as a carefully…

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