The Influence of Satisfaction, Trust and Switching Barriers on Customer Retention in Malaysia

Title:

The influence of satisfaction, trust and switching Barriers on customer retention in Malaysia

1. Introduction

The reason that many researchers and universities study and concentrate on the importance of customer satisfaction and retention is what we know as customer satisfaction and it has a positive effect on any organization's financial profitability. There are some factors such as trust customer satisfaction and switching Barriers which influence customer retention and in order to know the nature of these factors and their variables we need to study and consider connection and relation of them. Therefore to be success full as a pioneer retailer you need to understand, know and implement appropriately role of these elements.

Customer loyalty and retention is a result of the customer satisfaction, however we cannot insure that any repurchase can lead to customer retention. Customer satisfaction has a direct on customer loyalty, which, leads to customer retention. As a result, any organization should always think and plan to ensure that its customer satisfaction is very high.

1.1 Significance of study

Today every firm and organizations plans to satisfy their customers to keep and retain their customer but the research shows there are many criteria which cause the satisfy customer also don't continue purchasing and switch to the other competitors. If we can identify and classify the most effective factors which have great effect on customer retention, then we can plan and retain our customers.

Having satisfied customers strengthen the profitability of the company and enable them to gain more advantages out of the satisfied customers.

The significant effect on retention comes from interaction between customer satisfaction different findings from the past studies indicating that a good strategy is should focus on trust and satisfaction rather than focusing only on trust or satisfaction alone.

The other important factor which is switching barriers plays a positive role on customer retention as a moderating effect on the relationship between satisfaction and retention. Retailers in Malaysia are also depend on their customers ,in order to progress and going ahead toward a better retail industry, understanding this factors can help retailers to retain their customers and they can plan better to have a good customer satisfaction and loyalty, which give them higher level of profitability in today competitive retail market.

1.2 Research question

To what extend satisfaction, trust and switching opportunities influence on customer retention in Malaysia?

1.3 Research Objectives

* To identify the influence of the satisfaction, trust and switching opportunities on customer retention in Malaysia.

* To determine the development of customer retention in retail market in Malaysia.

* To make recommendations regarding influence of satisfaction, trust and switching opportunities on customer retention in retail market.

2. The literature review

Literature review should provide all researches factors and variables which other researchers found it in their course of study. To do this firstly my supervisor should approve topics of the proposal which enable me to complete my literature review based on the recognized factors and variables.

3. Research Design

In this section we will explain different aspects of our research which we should follow to have a systematic approach to a good research study.

3.1 Frame work and Hypotheses

Based on a review of the literature, we develop a framework linking satisfaction, trust and switching barriers to customer retention.

After preparing the frame work we use this framework to develop our hypotheses such as follows.

H1. Customer satisfaction has a direct positive effect on customer retention.

H2. Switching barriers has a negative effect on customer retention.

H3. Customer trust has a direct positive effect on customer retention.

H4. Customer trust has a direct positive impact on switching barrier

Based on different variable which we have chosen we can expand over frame work as a new frame work which consists of the factors and variables .

3.2 Research approaches and Methods

The methods used for a research can either be inductive or deductive. Inductive methods are those in which theories are proposed from observations without any empirical research while deductive refers to methods in which theories derived from literature review or other exploratory research are tested empirically to arrive at a conclusion.

Figure 1: Inductive Deductive method

Research methods literature distinguishes between deductive research approach and inductive research approach. Deductive approach assumes that the research team will develop a theory or hypothesis and design the research strategy in such a way to test a theory or hypothesis. Deductive approach has much of its essential features from scientific research (Saunders et al. 2009). In contrast, inductive research approach concerned with collecting data and then developing a theory based on data analysis. However, despite significant difference between these two research approaches as stressed by Saunders et al. (2009) it is not only perfectly possible to combine deduction and induction within one research project, but also advantageous to do so.

The research should undertake this research by utilizing both deductive and inductive approaches. Deductive approach will be used in part of testing research hypothesis, which are

Whereas, the inductive approach will be used by building a theory concerned with the research question by collecting and analyzing data and reach research objective, namely, To what extend satisfaction, trust and switching opportunities influence on customer retention in Malaysia?

3.3