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International Journal of Management (IJM)– 6502(Print), ISSN 0976 – 6510(Online)
International Journal of Management (IJM), ISSN 0976
ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME                            IJM
Volume 2, Number 1, Dec - Jan (2011), pp. 15-29
© IAEME, http://www.iaeme.com/ijm.html                         ©IAEM                 E

DETERMINANTS OF CUSTOMER LOYALTY FACTORS AND
      ITS IMPACT IN CONSUMER DURABLE WHITE GOODS
      MARKET IN CHENNAI CITY, TAMILNADU-A STUDY
                                    A.R.Krishnan
                     Research Fellow, SRM School of Management
                            SRM University, Chennai, India
                            Email: arkrish555@yahoo.com

ABSTRACT
       This study is initiated on determinants of customer loyalty factors in consumer
durable white goods in Chennai city, Tamilnadu, India. The questionnaire is designed by
the researchers a seven item scale from strongly disagree (-3) to strongly agree (+3) to
identify variables of customer loyalty. In the present study therefore used cronbach’s
alpha scale as a measure of reliability. Its value is estimated 0.947. Sophisticated
statistical model ‘Regression analysis’ has been used. The factors of deliver on promises,
provides accurate brand information, value for me, good brand choice, handles critical
problem well, consistence in service, lowest price, less transaction time, need fulfillment,
rewards programs and properly settled complaints constituted the key factors of customer
loyalty in white goods in Chennai city. Finally outcome of this research would be helpful
to the practitioners, planners, policy makers and academicians who are involved in the
concerned area.
Keywords: Customers, Customer Loyalty, CRM.
1.0    INTRODUCTION
       Customer Relationship Management (CRM) is about developing learning
relationships in which companies exchange personalized service for the loyalty of their
customer. Customers convey their preferences, explicitly and implicitly, to the company
through communications and purchasing behavior. Companies track and act upon these
preferences with customized products and personalized service. The company
understanding of customer preferences is hard won over time by both the company and




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

the customer. This learning relationship becomes a unique and valuable service offered
by the company and the customer’s response with loyalty and repeat business.
        The consumer durables industry consists of durable goods and appliances for
domestic use such as refrigerators, air conditioners and washing machines. Products that
aren't consumed or quickly disposed of and can be used for several years are durable
goods also called hard goods.
        White goods are generally machines which perform housekeeping tasks, such as
cooking, food preservation, and cleaning clothes. The consumer durable white goods
industry is heavily influenced by various energy-saving regulations, affecting not only the
appliances themselves, but the manufacturing facilities as well.
1.1 Need and Importance of CRM
        The customer relationship approach realizes that the marketing risk is important
but at the same time the focus is on shifting efforts solely from customer acquisition to
customer retention as well as to ensure the optimality and equality of resources viz, time
money and manpower. Thus the focal point of customer relationship marketing is
disciplined, holistic approach in identifying the taste and preferences on individual basis
to develop and enhance relationship over the customer life.
        As promise and trust are the two key elements in the customer relationship
management, the responsibility of the marketer does not pre-dominantly include
promising and persuading customers as passive counter parts in the market place, but it is
with the help of these promises that he can build and maintain the relationship with the
customers. Hence is important to fulfill promises to achieve customer satisfaction,
customer retention and customer base building and long term profitability. However in
customer relationship management, every customer is viewed on the terms of his lifetime
value as equivalent to a market.
1.2 CRM Objectives
        CRM is not a short term phenomenon. The adoption of relationship requires sheer
patience and the result bear fruit after a few years.
     • To develop strongest relationship with the customer by the marketers have to
         identify, built a data base of current and potential customers with lots of
         information about their needs and preferences.


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

     • To enhance the relationship with the customers on long term basis in order to
         ensure long term relationship marketing, do not get the customer forget about
         over the life time.
2.0 LITERATURE REVIEW
        Customer relationship management managing the customers has become one of
the central ways to make the companies’ operations more effective and profitable
(Raulas, 2005). Customers should be seen as investments, because without customers a
company will not have any profits, no revenues and consequently no market value.
Customers are without a question the life-blood of any organization (Gupta and
Lehmann, 2005). The underlying assumption of CRM is that by nurturing the existing
customer relationships and keeping the lucrative customers satisfied and loyal it is
possible to make the business more profitable. The relationship should however benefit
both the company and the customers, so that a mutually beneficial relationship is
generated (Raulas, 2005).
        Loyalty is defined as “a state of mind, a set of attitudes, beliefs, desires and so on”
stone, (2000). Kotler (2008) said that delighted customers become loyal to the
organization and customer relationship management plays an important role in making
customers loyal. Further among the satisfied customers, completely satisfied customers
only can be a delighted one. Thus CRM has to focus on customer delight rather than
satisfaction. However, Hill and Alexander 2006, argue that misunderstanding of customer
loyalty by the senior managers and marketing executives have mislead strategies for
securing the customer loyalty and also criticized that many of them take afford to attract
the customers by giving some bribe to customers.
        Reliability, serviceability and energy-saving features were the attributes
consumers desired most. Brand name communicated quality to them, but was not an
important choice criterion. However, consumers were willing to pay more for an air-
conditioner with a reputation for quality. It is also indicated that consumers searched for
product information from friends and family, manufacturers' websites and brochures, but
not from the Yellow Pages or through salespeople. However, dealers were highly
influential during the decision-making process by helping consumers to refine their




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

choice criteria and choose systems that satisfied their end goals Victoria Seitz, Nabil
Razzouk, David Michael Wells, (2010).
        Raulas (2005) underlines, that regular contact is the critical factor in the
development of the relationship. There is a positive effect on customer relationships if the
company manages to keep the optimal contact with its customers. One of the
cornerstones of CRM is to perform intentional, measurable and an adequate amount of
communication that is conducted in right time, and with the right customization and
through the right channel. Previous research has proved that the most important reason
why customers switch to competitors is the lack of contact or insufficient communication
from the company (Raulas, 2005).
        In simple terms, customer loyalty from Czepiel’s (1990) perspective is a notion to
describe the end result of a relationship between the company and the customer. In order
to gain loyalty, the company can provide incentives that will increase the value for the
customers and in that manner create buying fidelity among them (Blomqvist et al., 2000).
From that point of view, a loyal customer engages the company over a long-term to
satisfy his/her needs or a part of the need (Blomqvist et al., 2000). Customer loyalty is
although a more complex concept than that. By screening the theories, the authors have
chosen to focus on three different theories: Three drivers of retention (Gustavfsson,
Johansson and Roos, (2005), Relative attitude and behavior relationship (Dick and Basu,
1994) and the conceptualization of customer loyalty (Dowling et al., 2003).
        Loyalty programme, quality is important for relationship quality; however, efforts
to assure personal interaction quality with customers are needed to improve relationship
quality as well as customer loyalty (Patrick Vesel, Vesna Zabkar, 2010).
3.0 STATEMENT OF THE PROBLEM:
        The factors determining customer loyalty have been brought to light by marketing
research. But this information still is far away for some producers engaging in the
productions and services. Consequently producers are unable to exploit this information
for their success. However white goods in Chennai are one of most competitive segments
and also pointed out this competition will create more challenging environment in
maintaining their market share. This encouraged the researchers to do this research.




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

4.0 OBJECTIVES OF THE STUDY:
    1. To examine key factors of customer loyalty in consumer durable white goods in
        Chennai city
    2. To determine the factors of customer loyalty in leading consumer durable markets
        of Chennai city
    3. To suggest certain measures in order to improve the customer loyalty in leading
        brands of white goods.
5.0 RESEARCH DESIGN AND STRATEGY:
5.1 Period of study
        This research was conducted from October to December 2010.
5.2 Sampling strategy
        The study was conducted for 1050 respondents using convenient sampling, non
probability method.
5.3 Data sources
        The study was complied with the help of primary data. Primary data were
collected through questionnaire survey. Secondary sources were collected from journals,
magazines, and hand books.
5.4 Measures:
        The questionnaire was administered to 1050 respondents in the city of Chennai.
Based on the literatures and experts advice questionnaire is designed. In the questionnaire
a seven point likert’s summated rating scale from strongly disagree (-3) to strongly agree
(+3) was adopted to identify the variables of customers loyalty.
5.5 Statistical Tools used
        In the present study, we analyzed our data by employing regression model. For
the study entire analysis is done by personal computer. A well known statistical package
of Statistical Package for Social Sciences (SPSS) 13.0 versions was used in order to
analyze the data.
6.0 ANALYSIS AND THEIR FINDINGS:
        To identify the potential underlying dimensions of the customer loyalty of the
durable white goods respondents are used in the present section. Responses of the


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

variable are subjected to regression model method. Before applying regression model,
testing of the reliability of the scale is very much important as it shows to which a scale
procedures consistent result if measurements are made repeatedly. In this section,
researches therefore, used cronbach’s Alpha scale as a measure of reliability. Its value is
estimated to be 0.849 for Audio brands, 0.891 for Washing machine, 0.922 for Air
conditioner, and 0.836 for refrigerator of customer loyalty variables. If we compare our
reliability value with the standard value alpha of 0.6 advocated by Cronbach’s (1951), a
more accurate recommendations Nunnally & Bernstein(1994) or with the standard value
of 0.6 as recommended by Bagozzi & Yi’s (1988) researchers find that the scales used by
us are highly reliable for regression model.
6.1 Regression Model On Customer Loyalty
        An in depth study of loyalty would not be complete without the identification of
the key indicators of customers loyalty. Assuming the existence of linear relationship
between the independent variables and dependent variable, multiple regression analysis
has done between the level customer loyalty of the different predictor variables of loyalty
and overall loyalty of the service.
6.1.1 Regression model on Customer Loyalty Audio Brands.
        This study attempted to develop a model to analyze loyalty of audio brands.
Stepwise regression analysis of loyalty (Y) is performed with the variables X1- Deliver
on promises; X2- Provides accurate brand information , X3- Value for me; X4- Good
brand choice; X5- Handles critical problem well; X6- Consistence in service; X7- Lowest
price; X8- Less transaction time; X9- Need fulfillment;X10- Rewards programs, X11-
Properly settled complaints for the audio brands.




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

                           Table 1.1 Regression Model-Loyalty-Audio Brands
Model R             R Square        Adjusted R Square               Std. Error of the Estimate
1           .776a .602              .596                            .227
            b
ANOVA
Model                    Sum of Squares    df           Mean Square           F             Sig.
1 Regression             65.335            11           5.940                 114.994       .001a
    Residual             43.283            838          .052
    Total                108.618           849
                a
Coefficients
                                             Un standardized               Standardized
                                             Coefficients                  Coefficients          t        Sig.
Model                                        B               Std. Error Beta
    (Constant)                               2.799           .055                                51.149   .000
    Deliver on promises                      -.054           .010          -.143                 -5.250   .001
    Provides accurate brand information      -.065           .014          -.159                 -4.480   .001
    Value for me                             -.017           .013          -.040                 -1.335   .182
    Good brand choice                        -.108           .015          -.222                 -7.298   .001
    Handles critical problem well            -.031           .012          -.085                 -2.643   .008
    Consistence in service                   -.011           .010          -.033                 -1.118   .264
    Lowest price                             .028            .011          .081                  2.639    .008
    Less transaction time                    -.085           .012          -.239                 -7.395   .001
    Need fulfillment                         -.036           .012          -.093                 -3.132   .002
    Rewards programs                         -.048           .012          -.146                 -4.075   .001
    Properly settled complaints              .004            .010          .014                  .408     .683
a. Dependent Variable: overall audio loyalty
Source: Field Survey 2010            level of significance (0.05%)
         The R value (0.776) indicates the multiple correlation coefficients between all the
entered independent variables and dependent variables. The R square value in the model
summary table shows the portion of the variance accounted for by the independent
variables that is approximately 60% of variance in loyalty is accounted for by. The
ANOVA table indicates the p-level to be 0.001.This indicates that the model is
statistically significant at a confidence level of 99.999. The P-level indicates the
significance of the F value. Also note that t- tests significance of individual independent
variables indicate that Deliver on promises; Provides accurate brand information ;Good
brand choice; Handles critical problem well, Lowest price, Less transaction time, Need
fulfillment, Rewards programs for the audio brands are the independent variables are
statistically significant in the model. The standardized coefficients Beta column, gives the




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

coefficients of independent variables in the regression equation including all the predictor
variables.
        Customer Loyalty Y = -0.143 x1-0.159 x2 -0.040 x3 -0.222 x4 -0.085 x5 -0.033 x6
+0.081 x7 -0.239 x8 -.093 x9 -0.146 x10 +0.014 x11                                  (1.1)
6.1.2   Regression model on Customer Loyalty Washing machine Brands.
        This study attempted to develop a model to analyze loyalty of washing machine
brands. Enter method regression analysis of loyalty (Y) is performed with the variables
X1- Deliver on promises; X2- Provides accurate brand information , X3- Value for me;
X4- Good brand choice; X5- Handles critical problem well; X6- Consistence in
service;X7- Lowest price;X8- Less transaction time; X9- Need fulfillment;X10- Rewards
programs,X11- Properly settled complaints for the washing machine brands.
               Table 1.2 Regression Model-Loyalty-Washing machine Brands
  Model      R        R Square     Adjusted R Square            Std. Error of the Estimate
  1          .842a    .710         .706                         .206
                                                   b
                                          ANOVA
         Model          Sum of Squares df             Mean Square F                 Sig.
  1        Regression 93.595               11         8.509             199.637     .000a
           Residual     38.273             898        .043
           Total        131.868            909
                                            Coefficientsa
                                              Unstandardized      Standardized
                                               Coefficients        Coefficients
                 Model                        B       Std. Error       Beta          t     Sig.
     (Constant)                                 3.141        .054                 57.991     .000
     Deli Deliver on promises                   -.042        .011          -.103 -3.963      .001
     Provides accurate brand                                                           -
                                                -.181        .012          -.400             .001
     information                                                                  14.588
     Value for me                               -.066        .013          -.134 -5.031      .001
     Good brand choice                          -.039        .012          -.081 -3.306      .001
     Handles critical problem well               .020        .011           .054 1.824       .069
      Consistence in service                    -.036        .008          -.101 -4.386      .001
     Lowest price                               -.014        .008          -.037 -1.662      .097
     Less transaction time                      -.070        .010          -.177 -6.752      .001
     Need fulfillment                           -.018        .014          -.041 -1.297      .195
     Rewards programs                           -.033        .012          -.097 -2.759      .006
     Properly settled complaints                -.009        .011          -.027 -.841       .401
  a. Dependent Variable: overall washing machine loyalty
Source: Survey 2010      level of significance (0.05%),


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

        The R value (0.842) indicates the multiple correlation coefficients between all the
entered independent variables and dependent variables. The R square value in the model
summary table shows the portion of the variance accounted for by the independent
variables that is approximately 71% of variance in loyalty is accounted for by. The
ANOVA table indicates the p-level to be 0.001.This indicates that the model is
statistically significant at a confidence level of 99.999. The P-level indicates the
significance of the F value. Also note that t- tests significance of individual independent
variables indicate that Deliver on promises; Provides accurate brand information , Value
for me; Good brand choice; Consistence in service; Less transaction time; Rewards
programs, Properly settled complaints are the independent variables are statistically
significant in the model. The standardized coefficients Beta column, gives the
coefficients of independent variables in the regression equation including all the predictor
variables.
        Customer Loyalty Y = -0.103 x1 -0.400 x2 -0.134 x3 -0.081 x4 +.054 x5 -0.101 x6 -
0.037 x7 -0.177 x8 -0.041 x9 -0.097 x10 -0.027 x11.                         (1.2)
6.1.3 Regression model on Customer Loyalty -Air conditioner Brands.
        This study attempted to develop a model to analyze loyalty of air conditioner
brands. Enter method regression analysis of loyalty (Y) is performed with the variables
X1- Deliver on promises; X2- Provides accurate brand information , X3- Value for me;
X4- Good brand choice; X5- Handles critical problem well; X6- Consistence in
service;X7- Lowest price;X8- Less transaction time; X9- Need fulfillment;X10- Rewards
programs,X11- Properly settled complaints for the air conditioner brands.




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

               Table 1.3 Regression Model-Loyalty-Air conditionner Brands
Model R               R Square     Adjusted R Square          Std. Error of the Estimate
1     .865a           .748         .745                       .213
                                                    b
                                           ANOVA
        Model           Sum of Squares df              Mean Square F                Sig.
1        Regression     107.297            11          9.754           215.344      .001a
         Residual       36.146             798         .045
         Total          143.443            809
                                         Coefficientsa
                                            Unstandardized Standardized
                                              Coefficients    Coefficients
                                                       Std.
Model                                         B       Error      Beta            t       Sig.
   (Constant)                                 2.706      .048                 56.926      .001
   Deliver on promises                        -.046      .009         -.115 -5.070        .001
   Provides accurate brand information        -.016      .014         -.040 -1.149        .251
   Value for me                               -.017      .014         -.036 -1.199        .231
   Good brand choice                          -.029      .003         -.158 -8.332        .001
   Handles critical problem well               .024      .011          .061     2.299     .022
   Consistence in service                     -.076      .010         -.189 -7.683        .001
   Lowest price                                .031      .011          .074     2.794     .005
   Less transaction time                      -.009      .011         -.022     -.845     .399
   Need fulfillment                           -.022      .012         -.054 -1.847        .065
   Rewards programs                           -.212      .014         -.615 -15.648       .001
   Properly settled complaints                -.013      .012         -.036 -1.121        .263
a. Dependent Variable: overall ac loyalty
Source: Survey 2010      level of significance (0.05%)
        The R value (0.865) indicates the multiple correlation coefficients between all the
entered independent variables and dependent variables. The R square value in the model
summary table shows the portion of the variance accounted for by the independent
variables that is approximately 75% of variance in loyalty is accounted for by. The
ANOVA table indicates the p-level to be 0.001. This indicates that the model is
statistically significant at a confidence level of 99.999. The P-level indicates the
significance of the F value. Also note that t- tests significance of individual independent
variables indicates that deliver on promises, good brand choice, consistence in service,
lowest price, rewards programs are the independent variables are statistically significant
in the model. The standardized coefficients Beta column, gives the coefficients of
independent variables in the regression equation including all the predictor variables.


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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

        Customer Loyalty Y = -0.115 x1 -0.040 x2 -0.036 x3-0.158 x4+0.061 x5-0.189 x6+0.074
x7-0.022 x8 -0.054 x9 -0.615 x10 -0.036 x11                      (1.3)
6.1.4 Regression model on Customer Loyalty -Refrigerator Brands.
        This study attempted to develop a model to analyze loyalty of audio brands.
Stepwise regression analysis of loyalty (Y) is performed with the variables X1- Deliver
on promises; X2- Provides accurate brand information , X3- Value for me; X4- Good
brand choice; X5- Handles critical problem well; X6- Consistence in service; X7- Lowest
price; X8- Less transaction time; X9- Need fulfillment;X10- Rewards programs,X11-
Properly settled complaints for the refrigerator brands.
                  Table 1.4 Regression Model-Loyalty-Refrigerator Brands
Model Summary
Model R       R Square         Adjusted R Square                Std. Error of the Estimate
            a
1      .820   .673             .669                             .192
                                                   b
                                          ANOVA
                                                    Mean
Model                Sum of Squares df              Square     F                   Sig.
1 Regression         71.369            11           6.488      175.262             .001a
  Residual           34.724            938          .037
  Total              106.094           949
                                          Coefficientsa
                                             Unstandardized         Standardized
                                               Coefficients          Coefficients
Model                                         B         Std. Error      Beta            t       Sig.
 (Constant)                                     2.403         .046                   52.091     .000
 Deliver on promises                            -.091         .009          -.250 -10.593       .001
 Provides accurate brand information            -.009         .010          -.024       -.871   .384
 Value for me                                   -.038         .010          -.100 -3.959        .001
 Good brand choice                              -.032         .008          -.089 -3.916        .001
 Handles critical problem well                  -.092         .010          -.238 -9.196        .001
  Consistence in service                         .062         .008            .182     7.767    .001
 Lowest price                                    .070         .007            .222     9.534    .001
 Less transaction time                          -.080         .009          -.220 -8.661        .001
 Need fulfillment                                .041         .012            .094     3.470    .001
 Rewards programs                               -.142         .009          -.477 -15.759       .001
 Properly settled complaints                    -.014         .009          -.041 -1.481        .139
a. Dependent Variable: overall ref loyalty
Source: Survey 2010      level of significance (0.05%)




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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

        The R value (0.820) indicates the multiple correlation coefficients between all the
entered independent variables and dependent variables. The R square value in the model
summary table shows the portion of the variance accounted for by the independent
variables that is approximately 67% of variance in loyalty is accounted for by. The
ANOVA table indicates the p-level to be 0.001.This indicates that the model is
statistically significant at a confidence level of 99.999. The P-level indicates the
significance of the F value. Also note that t- tests significance of individual independent
variables indicates that Deliver on promises, Value for me, Good brand choice, Handles
critical problem well, Consistence in service, lowest price, less transaction time, Need
fulfillment, Rewards programs are the independent variables are statistically significant
in the model. The standardized coefficients Beta column, gives the coefficients of
independent variables in the regression equation including all the predictor variables.
        Customer Loyalty Y = -0.250 x1- 0.024 x2 -0.100 x3 -0.089 x4 -0.238 x5 +0.182 x6
+0.222 x7 -0.220 x8 +0.094 x9 -0.477 x10 -0.041 x11.                    (1.4)
Table shows the Mean and Standard Deviation of dependent variable Customer Loyalty
                                             Table 1.5
               Dependent variable              Mean            Std deviation value
              Loyalty –White goods            value
        Audio brands                              34.22                17.351
        Washing machine                           37.54                16.341
        Air conditioner                           32.98                19.437
        Refrigerator                              39.50                14.433
Findings on Customer Loyalty –Regression model
1. It is inferred that from the regression model on loyalty of audio brands deliver on
    promises, provides accurate brand information, good brand choice, handles critical
    problem well, lowest price, less transaction time, need fulfillment, rewards programs
    for the audio brands are the independent variables are statistically significant. These
    factors have positive impact on customer loyalty and, value for me, consistence in
    service, properly settled complaints are the factors have negative impact on customer
    loyalty.
2. It is inferred that from the regression model on loyalty of washing machine brands
    deliver on promises, provides accurate brand information , value for me, good brand
    choice, consistence in service, less transaction time, rewards programs, properly
    settled complaints are the independent variables are statistically significant. These


                                                 26
International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

      factors have positive impact on customer loyalty and handles critical problem well,
      lowest price, need fulfillment, properly settled complaints are factors have negative
      impact on customer loyalty.
3. It is inferred that from the regression model on loyalty of air conditioner brands
      deliver on promises, good brand choice, consistence in service, lowest price,
      rewards programs are the independent variables are statistically significant. These
      factors have positive impact on customer loyalty and provide accurate brand
      information, value for me, handles critical problem well, less transaction time, need
      fulfillment, and properly settled complaints are factors have negative impact on
      customer loyalty.
4. It is inferred that from the regression model on loyalty deliver on promises, value for
      me, good brand choice, handles critical problem well, consistence in service, lowest
      price, less transaction time, need fulfillment, rewards programs are the independent
      variables are statistically significant. These factors have positive impact on customer
      loyalty and provide accurate brand information; properly settled complaints are
      factors have negative impact on customer satisfaction.
7.0      SUGGESTIONS               AND        RECOMMENDATIONS                        TO        THE
MARKETERS
         1. The marketers must consider taking measure to make consumer durable white
goods customer more customers friendly. There being a strong association between
satisfaction and loyalty, the decision makers must take advantages of this and try to
strengthen the relationship between loyalty and retention too.
         2. It is found that the CRM practices in the consumer durable white goods are still
in its infancy, yet to get a firm foothold. Consequently, the impact of CRM on retention
of customers is also weak. The industry has to move beyond the level of satisfaction and
strive to create loyalty by adopting appropriate strategies like cross selling, up selling
which will have a positive impact on retention
         3. It is observed from the findings; customers are highly dissatisfied with loyalty
programs of audio, washing machine and refrigerator brands. Audio brands marketers
may concentrate more on improving loyalty programs like, buy back offers, promotional
schemes, personalized greetings, reminder of spouse wedding days offer gifts. Washing


                                                 27
International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online)
Volume 2, Number 1, Dec - Jan (2011), © IAEME

machine brands marketers may concentrate more on loyalty programs by special offers,
new schemes. Air conditioner brands marketers may concentrate more on loyalty
programs like, service enhancement by offering more number of years extended AMC.
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    in Social and Management Researches”, Journal of the Institute of Cost of
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                                                 28
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                                                 29

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Determinants of customer loyalty factors and its impact in consumer durable white goods market in chennai city, tamilnadu a study

  • 1. International Journal of Management (IJM)– 6502(Print), ISSN 0976 – 6510(Online) International Journal of Management (IJM), ISSN 0976 ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME IJM Volume 2, Number 1, Dec - Jan (2011), pp. 15-29 © IAEME, http://www.iaeme.com/ijm.html ©IAEM E DETERMINANTS OF CUSTOMER LOYALTY FACTORS AND ITS IMPACT IN CONSUMER DURABLE WHITE GOODS MARKET IN CHENNAI CITY, TAMILNADU-A STUDY A.R.Krishnan Research Fellow, SRM School of Management SRM University, Chennai, India Email: arkrish555@yahoo.com ABSTRACT This study is initiated on determinants of customer loyalty factors in consumer durable white goods in Chennai city, Tamilnadu, India. The questionnaire is designed by the researchers a seven item scale from strongly disagree (-3) to strongly agree (+3) to identify variables of customer loyalty. In the present study therefore used cronbach’s alpha scale as a measure of reliability. Its value is estimated 0.947. Sophisticated statistical model ‘Regression analysis’ has been used. The factors of deliver on promises, provides accurate brand information, value for me, good brand choice, handles critical problem well, consistence in service, lowest price, less transaction time, need fulfillment, rewards programs and properly settled complaints constituted the key factors of customer loyalty in white goods in Chennai city. Finally outcome of this research would be helpful to the practitioners, planners, policy makers and academicians who are involved in the concerned area. Keywords: Customers, Customer Loyalty, CRM. 1.0 INTRODUCTION Customer Relationship Management (CRM) is about developing learning relationships in which companies exchange personalized service for the loyalty of their customer. Customers convey their preferences, explicitly and implicitly, to the company through communications and purchasing behavior. Companies track and act upon these preferences with customized products and personalized service. The company understanding of customer preferences is hard won over time by both the company and 15
  • 2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME the customer. This learning relationship becomes a unique and valuable service offered by the company and the customer’s response with loyalty and repeat business. The consumer durables industry consists of durable goods and appliances for domestic use such as refrigerators, air conditioners and washing machines. Products that aren't consumed or quickly disposed of and can be used for several years are durable goods also called hard goods. White goods are generally machines which perform housekeeping tasks, such as cooking, food preservation, and cleaning clothes. The consumer durable white goods industry is heavily influenced by various energy-saving regulations, affecting not only the appliances themselves, but the manufacturing facilities as well. 1.1 Need and Importance of CRM The customer relationship approach realizes that the marketing risk is important but at the same time the focus is on shifting efforts solely from customer acquisition to customer retention as well as to ensure the optimality and equality of resources viz, time money and manpower. Thus the focal point of customer relationship marketing is disciplined, holistic approach in identifying the taste and preferences on individual basis to develop and enhance relationship over the customer life. As promise and trust are the two key elements in the customer relationship management, the responsibility of the marketer does not pre-dominantly include promising and persuading customers as passive counter parts in the market place, but it is with the help of these promises that he can build and maintain the relationship with the customers. Hence is important to fulfill promises to achieve customer satisfaction, customer retention and customer base building and long term profitability. However in customer relationship management, every customer is viewed on the terms of his lifetime value as equivalent to a market. 1.2 CRM Objectives CRM is not a short term phenomenon. The adoption of relationship requires sheer patience and the result bear fruit after a few years. • To develop strongest relationship with the customer by the marketers have to identify, built a data base of current and potential customers with lots of information about their needs and preferences. 16
  • 3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME • To enhance the relationship with the customers on long term basis in order to ensure long term relationship marketing, do not get the customer forget about over the life time. 2.0 LITERATURE REVIEW Customer relationship management managing the customers has become one of the central ways to make the companies’ operations more effective and profitable (Raulas, 2005). Customers should be seen as investments, because without customers a company will not have any profits, no revenues and consequently no market value. Customers are without a question the life-blood of any organization (Gupta and Lehmann, 2005). The underlying assumption of CRM is that by nurturing the existing customer relationships and keeping the lucrative customers satisfied and loyal it is possible to make the business more profitable. The relationship should however benefit both the company and the customers, so that a mutually beneficial relationship is generated (Raulas, 2005). Loyalty is defined as “a state of mind, a set of attitudes, beliefs, desires and so on” stone, (2000). Kotler (2008) said that delighted customers become loyal to the organization and customer relationship management plays an important role in making customers loyal. Further among the satisfied customers, completely satisfied customers only can be a delighted one. Thus CRM has to focus on customer delight rather than satisfaction. However, Hill and Alexander 2006, argue that misunderstanding of customer loyalty by the senior managers and marketing executives have mislead strategies for securing the customer loyalty and also criticized that many of them take afford to attract the customers by giving some bribe to customers. Reliability, serviceability and energy-saving features were the attributes consumers desired most. Brand name communicated quality to them, but was not an important choice criterion. However, consumers were willing to pay more for an air- conditioner with a reputation for quality. It is also indicated that consumers searched for product information from friends and family, manufacturers' websites and brochures, but not from the Yellow Pages or through salespeople. However, dealers were highly influential during the decision-making process by helping consumers to refine their 17
  • 4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME choice criteria and choose systems that satisfied their end goals Victoria Seitz, Nabil Razzouk, David Michael Wells, (2010). Raulas (2005) underlines, that regular contact is the critical factor in the development of the relationship. There is a positive effect on customer relationships if the company manages to keep the optimal contact with its customers. One of the cornerstones of CRM is to perform intentional, measurable and an adequate amount of communication that is conducted in right time, and with the right customization and through the right channel. Previous research has proved that the most important reason why customers switch to competitors is the lack of contact or insufficient communication from the company (Raulas, 2005). In simple terms, customer loyalty from Czepiel’s (1990) perspective is a notion to describe the end result of a relationship between the company and the customer. In order to gain loyalty, the company can provide incentives that will increase the value for the customers and in that manner create buying fidelity among them (Blomqvist et al., 2000). From that point of view, a loyal customer engages the company over a long-term to satisfy his/her needs or a part of the need (Blomqvist et al., 2000). Customer loyalty is although a more complex concept than that. By screening the theories, the authors have chosen to focus on three different theories: Three drivers of retention (Gustavfsson, Johansson and Roos, (2005), Relative attitude and behavior relationship (Dick and Basu, 1994) and the conceptualization of customer loyalty (Dowling et al., 2003). Loyalty programme, quality is important for relationship quality; however, efforts to assure personal interaction quality with customers are needed to improve relationship quality as well as customer loyalty (Patrick Vesel, Vesna Zabkar, 2010). 3.0 STATEMENT OF THE PROBLEM: The factors determining customer loyalty have been brought to light by marketing research. But this information still is far away for some producers engaging in the productions and services. Consequently producers are unable to exploit this information for their success. However white goods in Chennai are one of most competitive segments and also pointed out this competition will create more challenging environment in maintaining their market share. This encouraged the researchers to do this research. 18
  • 5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME 4.0 OBJECTIVES OF THE STUDY: 1. To examine key factors of customer loyalty in consumer durable white goods in Chennai city 2. To determine the factors of customer loyalty in leading consumer durable markets of Chennai city 3. To suggest certain measures in order to improve the customer loyalty in leading brands of white goods. 5.0 RESEARCH DESIGN AND STRATEGY: 5.1 Period of study This research was conducted from October to December 2010. 5.2 Sampling strategy The study was conducted for 1050 respondents using convenient sampling, non probability method. 5.3 Data sources The study was complied with the help of primary data. Primary data were collected through questionnaire survey. Secondary sources were collected from journals, magazines, and hand books. 5.4 Measures: The questionnaire was administered to 1050 respondents in the city of Chennai. Based on the literatures and experts advice questionnaire is designed. In the questionnaire a seven point likert’s summated rating scale from strongly disagree (-3) to strongly agree (+3) was adopted to identify the variables of customers loyalty. 5.5 Statistical Tools used In the present study, we analyzed our data by employing regression model. For the study entire analysis is done by personal computer. A well known statistical package of Statistical Package for Social Sciences (SPSS) 13.0 versions was used in order to analyze the data. 6.0 ANALYSIS AND THEIR FINDINGS: To identify the potential underlying dimensions of the customer loyalty of the durable white goods respondents are used in the present section. Responses of the 19
  • 6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME variable are subjected to regression model method. Before applying regression model, testing of the reliability of the scale is very much important as it shows to which a scale procedures consistent result if measurements are made repeatedly. In this section, researches therefore, used cronbach’s Alpha scale as a measure of reliability. Its value is estimated to be 0.849 for Audio brands, 0.891 for Washing machine, 0.922 for Air conditioner, and 0.836 for refrigerator of customer loyalty variables. If we compare our reliability value with the standard value alpha of 0.6 advocated by Cronbach’s (1951), a more accurate recommendations Nunnally & Bernstein(1994) or with the standard value of 0.6 as recommended by Bagozzi & Yi’s (1988) researchers find that the scales used by us are highly reliable for regression model. 6.1 Regression Model On Customer Loyalty An in depth study of loyalty would not be complete without the identification of the key indicators of customers loyalty. Assuming the existence of linear relationship between the independent variables and dependent variable, multiple regression analysis has done between the level customer loyalty of the different predictor variables of loyalty and overall loyalty of the service. 6.1.1 Regression model on Customer Loyalty Audio Brands. This study attempted to develop a model to analyze loyalty of audio brands. Stepwise regression analysis of loyalty (Y) is performed with the variables X1- Deliver on promises; X2- Provides accurate brand information , X3- Value for me; X4- Good brand choice; X5- Handles critical problem well; X6- Consistence in service; X7- Lowest price; X8- Less transaction time; X9- Need fulfillment;X10- Rewards programs, X11- Properly settled complaints for the audio brands. 20
  • 7. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME Table 1.1 Regression Model-Loyalty-Audio Brands Model R R Square Adjusted R Square Std. Error of the Estimate 1 .776a .602 .596 .227 b ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression 65.335 11 5.940 114.994 .001a Residual 43.283 838 .052 Total 108.618 849 a Coefficients Un standardized Standardized Coefficients Coefficients t Sig. Model B Std. Error Beta (Constant) 2.799 .055 51.149 .000 Deliver on promises -.054 .010 -.143 -5.250 .001 Provides accurate brand information -.065 .014 -.159 -4.480 .001 Value for me -.017 .013 -.040 -1.335 .182 Good brand choice -.108 .015 -.222 -7.298 .001 Handles critical problem well -.031 .012 -.085 -2.643 .008 Consistence in service -.011 .010 -.033 -1.118 .264 Lowest price .028 .011 .081 2.639 .008 Less transaction time -.085 .012 -.239 -7.395 .001 Need fulfillment -.036 .012 -.093 -3.132 .002 Rewards programs -.048 .012 -.146 -4.075 .001 Properly settled complaints .004 .010 .014 .408 .683 a. Dependent Variable: overall audio loyalty Source: Field Survey 2010 level of significance (0.05%) The R value (0.776) indicates the multiple correlation coefficients between all the entered independent variables and dependent variables. The R square value in the model summary table shows the portion of the variance accounted for by the independent variables that is approximately 60% of variance in loyalty is accounted for by. The ANOVA table indicates the p-level to be 0.001.This indicates that the model is statistically significant at a confidence level of 99.999. The P-level indicates the significance of the F value. Also note that t- tests significance of individual independent variables indicate that Deliver on promises; Provides accurate brand information ;Good brand choice; Handles critical problem well, Lowest price, Less transaction time, Need fulfillment, Rewards programs for the audio brands are the independent variables are statistically significant in the model. The standardized coefficients Beta column, gives the 21
  • 8. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME coefficients of independent variables in the regression equation including all the predictor variables. Customer Loyalty Y = -0.143 x1-0.159 x2 -0.040 x3 -0.222 x4 -0.085 x5 -0.033 x6 +0.081 x7 -0.239 x8 -.093 x9 -0.146 x10 +0.014 x11 (1.1) 6.1.2 Regression model on Customer Loyalty Washing machine Brands. This study attempted to develop a model to analyze loyalty of washing machine brands. Enter method regression analysis of loyalty (Y) is performed with the variables X1- Deliver on promises; X2- Provides accurate brand information , X3- Value for me; X4- Good brand choice; X5- Handles critical problem well; X6- Consistence in service;X7- Lowest price;X8- Less transaction time; X9- Need fulfillment;X10- Rewards programs,X11- Properly settled complaints for the washing machine brands. Table 1.2 Regression Model-Loyalty-Washing machine Brands Model R R Square Adjusted R Square Std. Error of the Estimate 1 .842a .710 .706 .206 b ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression 93.595 11 8.509 199.637 .000a Residual 38.273 898 .043 Total 131.868 909 Coefficientsa Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta t Sig. (Constant) 3.141 .054 57.991 .000 Deli Deliver on promises -.042 .011 -.103 -3.963 .001 Provides accurate brand - -.181 .012 -.400 .001 information 14.588 Value for me -.066 .013 -.134 -5.031 .001 Good brand choice -.039 .012 -.081 -3.306 .001 Handles critical problem well .020 .011 .054 1.824 .069 Consistence in service -.036 .008 -.101 -4.386 .001 Lowest price -.014 .008 -.037 -1.662 .097 Less transaction time -.070 .010 -.177 -6.752 .001 Need fulfillment -.018 .014 -.041 -1.297 .195 Rewards programs -.033 .012 -.097 -2.759 .006 Properly settled complaints -.009 .011 -.027 -.841 .401 a. Dependent Variable: overall washing machine loyalty Source: Survey 2010 level of significance (0.05%), 22
  • 9. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME The R value (0.842) indicates the multiple correlation coefficients between all the entered independent variables and dependent variables. The R square value in the model summary table shows the portion of the variance accounted for by the independent variables that is approximately 71% of variance in loyalty is accounted for by. The ANOVA table indicates the p-level to be 0.001.This indicates that the model is statistically significant at a confidence level of 99.999. The P-level indicates the significance of the F value. Also note that t- tests significance of individual independent variables indicate that Deliver on promises; Provides accurate brand information , Value for me; Good brand choice; Consistence in service; Less transaction time; Rewards programs, Properly settled complaints are the independent variables are statistically significant in the model. The standardized coefficients Beta column, gives the coefficients of independent variables in the regression equation including all the predictor variables. Customer Loyalty Y = -0.103 x1 -0.400 x2 -0.134 x3 -0.081 x4 +.054 x5 -0.101 x6 - 0.037 x7 -0.177 x8 -0.041 x9 -0.097 x10 -0.027 x11. (1.2) 6.1.3 Regression model on Customer Loyalty -Air conditioner Brands. This study attempted to develop a model to analyze loyalty of air conditioner brands. Enter method regression analysis of loyalty (Y) is performed with the variables X1- Deliver on promises; X2- Provides accurate brand information , X3- Value for me; X4- Good brand choice; X5- Handles critical problem well; X6- Consistence in service;X7- Lowest price;X8- Less transaction time; X9- Need fulfillment;X10- Rewards programs,X11- Properly settled complaints for the air conditioner brands. 23
  • 10. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME Table 1.3 Regression Model-Loyalty-Air conditionner Brands Model R R Square Adjusted R Square Std. Error of the Estimate 1 .865a .748 .745 .213 b ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression 107.297 11 9.754 215.344 .001a Residual 36.146 798 .045 Total 143.443 809 Coefficientsa Unstandardized Standardized Coefficients Coefficients Std. Model B Error Beta t Sig. (Constant) 2.706 .048 56.926 .001 Deliver on promises -.046 .009 -.115 -5.070 .001 Provides accurate brand information -.016 .014 -.040 -1.149 .251 Value for me -.017 .014 -.036 -1.199 .231 Good brand choice -.029 .003 -.158 -8.332 .001 Handles critical problem well .024 .011 .061 2.299 .022 Consistence in service -.076 .010 -.189 -7.683 .001 Lowest price .031 .011 .074 2.794 .005 Less transaction time -.009 .011 -.022 -.845 .399 Need fulfillment -.022 .012 -.054 -1.847 .065 Rewards programs -.212 .014 -.615 -15.648 .001 Properly settled complaints -.013 .012 -.036 -1.121 .263 a. Dependent Variable: overall ac loyalty Source: Survey 2010 level of significance (0.05%) The R value (0.865) indicates the multiple correlation coefficients between all the entered independent variables and dependent variables. The R square value in the model summary table shows the portion of the variance accounted for by the independent variables that is approximately 75% of variance in loyalty is accounted for by. The ANOVA table indicates the p-level to be 0.001. This indicates that the model is statistically significant at a confidence level of 99.999. The P-level indicates the significance of the F value. Also note that t- tests significance of individual independent variables indicates that deliver on promises, good brand choice, consistence in service, lowest price, rewards programs are the independent variables are statistically significant in the model. The standardized coefficients Beta column, gives the coefficients of independent variables in the regression equation including all the predictor variables. 24
  • 11. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME Customer Loyalty Y = -0.115 x1 -0.040 x2 -0.036 x3-0.158 x4+0.061 x5-0.189 x6+0.074 x7-0.022 x8 -0.054 x9 -0.615 x10 -0.036 x11 (1.3) 6.1.4 Regression model on Customer Loyalty -Refrigerator Brands. This study attempted to develop a model to analyze loyalty of audio brands. Stepwise regression analysis of loyalty (Y) is performed with the variables X1- Deliver on promises; X2- Provides accurate brand information , X3- Value for me; X4- Good brand choice; X5- Handles critical problem well; X6- Consistence in service; X7- Lowest price; X8- Less transaction time; X9- Need fulfillment;X10- Rewards programs,X11- Properly settled complaints for the refrigerator brands. Table 1.4 Regression Model-Loyalty-Refrigerator Brands Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate a 1 .820 .673 .669 .192 b ANOVA Mean Model Sum of Squares df Square F Sig. 1 Regression 71.369 11 6.488 175.262 .001a Residual 34.724 938 .037 Total 106.094 949 Coefficientsa Unstandardized Standardized Coefficients Coefficients Model B Std. Error Beta t Sig. (Constant) 2.403 .046 52.091 .000 Deliver on promises -.091 .009 -.250 -10.593 .001 Provides accurate brand information -.009 .010 -.024 -.871 .384 Value for me -.038 .010 -.100 -3.959 .001 Good brand choice -.032 .008 -.089 -3.916 .001 Handles critical problem well -.092 .010 -.238 -9.196 .001 Consistence in service .062 .008 .182 7.767 .001 Lowest price .070 .007 .222 9.534 .001 Less transaction time -.080 .009 -.220 -8.661 .001 Need fulfillment .041 .012 .094 3.470 .001 Rewards programs -.142 .009 -.477 -15.759 .001 Properly settled complaints -.014 .009 -.041 -1.481 .139 a. Dependent Variable: overall ref loyalty Source: Survey 2010 level of significance (0.05%) 25
  • 12. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME The R value (0.820) indicates the multiple correlation coefficients between all the entered independent variables and dependent variables. The R square value in the model summary table shows the portion of the variance accounted for by the independent variables that is approximately 67% of variance in loyalty is accounted for by. The ANOVA table indicates the p-level to be 0.001.This indicates that the model is statistically significant at a confidence level of 99.999. The P-level indicates the significance of the F value. Also note that t- tests significance of individual independent variables indicates that Deliver on promises, Value for me, Good brand choice, Handles critical problem well, Consistence in service, lowest price, less transaction time, Need fulfillment, Rewards programs are the independent variables are statistically significant in the model. The standardized coefficients Beta column, gives the coefficients of independent variables in the regression equation including all the predictor variables. Customer Loyalty Y = -0.250 x1- 0.024 x2 -0.100 x3 -0.089 x4 -0.238 x5 +0.182 x6 +0.222 x7 -0.220 x8 +0.094 x9 -0.477 x10 -0.041 x11. (1.4) Table shows the Mean and Standard Deviation of dependent variable Customer Loyalty Table 1.5 Dependent variable Mean Std deviation value Loyalty –White goods value Audio brands 34.22 17.351 Washing machine 37.54 16.341 Air conditioner 32.98 19.437 Refrigerator 39.50 14.433 Findings on Customer Loyalty –Regression model 1. It is inferred that from the regression model on loyalty of audio brands deliver on promises, provides accurate brand information, good brand choice, handles critical problem well, lowest price, less transaction time, need fulfillment, rewards programs for the audio brands are the independent variables are statistically significant. These factors have positive impact on customer loyalty and, value for me, consistence in service, properly settled complaints are the factors have negative impact on customer loyalty. 2. It is inferred that from the regression model on loyalty of washing machine brands deliver on promises, provides accurate brand information , value for me, good brand choice, consistence in service, less transaction time, rewards programs, properly settled complaints are the independent variables are statistically significant. These 26
  • 13. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME factors have positive impact on customer loyalty and handles critical problem well, lowest price, need fulfillment, properly settled complaints are factors have negative impact on customer loyalty. 3. It is inferred that from the regression model on loyalty of air conditioner brands deliver on promises, good brand choice, consistence in service, lowest price, rewards programs are the independent variables are statistically significant. These factors have positive impact on customer loyalty and provide accurate brand information, value for me, handles critical problem well, less transaction time, need fulfillment, and properly settled complaints are factors have negative impact on customer loyalty. 4. It is inferred that from the regression model on loyalty deliver on promises, value for me, good brand choice, handles critical problem well, consistence in service, lowest price, less transaction time, need fulfillment, rewards programs are the independent variables are statistically significant. These factors have positive impact on customer loyalty and provide accurate brand information; properly settled complaints are factors have negative impact on customer satisfaction. 7.0 SUGGESTIONS AND RECOMMENDATIONS TO THE MARKETERS 1. The marketers must consider taking measure to make consumer durable white goods customer more customers friendly. There being a strong association between satisfaction and loyalty, the decision makers must take advantages of this and try to strengthen the relationship between loyalty and retention too. 2. It is found that the CRM practices in the consumer durable white goods are still in its infancy, yet to get a firm foothold. Consequently, the impact of CRM on retention of customers is also weak. The industry has to move beyond the level of satisfaction and strive to create loyalty by adopting appropriate strategies like cross selling, up selling which will have a positive impact on retention 3. It is observed from the findings; customers are highly dissatisfied with loyalty programs of audio, washing machine and refrigerator brands. Audio brands marketers may concentrate more on improving loyalty programs like, buy back offers, promotional schemes, personalized greetings, reminder of spouse wedding days offer gifts. Washing 27
  • 14. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME machine brands marketers may concentrate more on loyalty programs by special offers, new schemes. Air conditioner brands marketers may concentrate more on loyalty programs like, service enhancement by offering more number of years extended AMC. REFERENCES: 1. Ather, S.M & Nimalathasan, B, (2009). “Factor Analysis: Nature, Mechanism & Uses in Social and Management Researches”, Journal of the Institute of Cost of Management Accountant of Bangladesh, XXXVII (2), 12-17. 2. Bagozzi, R.P., & Yi, Y(1988). “On the Evaluation of Structural equation Models”, Journal of Academy of Marketing Science, 16(1), 74-95. 3. Butscher, Stephan A, (1998), “Customer Clubs and Loyalty Programmes: A Practical-guide” Publisher: Aldershot, Gower. 4. Cronbach,L.J, (1951),”Coefficient Alpha and the Internal Structures of Tests”, Psychometrica, 6(3), 297-334. 5. Darrel K.Radarigby , Fredrick F. Reich held and Phil Schefter (2002)- Avoid the four perils of CRM, Harvard Business review. 6. Dowling, G. R, and Uncles, M. (1997), Do Customer Loyalty Programs Really Work? Sloan Management Review, Vol. 38, Issue. 4; p. 71 (12 pages) 7. Field, A (2000), “Discovering statistics using SPSS for Windows, London: Sage publications. 8. Gupta, S. and Lehmann, D.R..,(2005), “Managing Customers as Investments, The Strategic Value of Customers in the Long Run, Wharton School Publishing. 9. Gustavfsson, A., Johansson,M.D., and Roos, I. (2005). ”The Effects of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention”, Journal of Marketing, Vol. 69. 10. Hill. N and Allexander J (2006). “The Hand book of customer Satisfaction and Loyalty Measurement”, 3ed, Hampshire:Gower Publishing Limited. 11. Kotler, p., Armstrong G., Wong, V and Saunders, J (2008), “Principles of Marketing”, 5th ed London, Library of congress. 12. Lancaster, G. and Reynolds,P, (2004).”Marketing Creative Print & Design (Wales)”, Ebbw Vale. 13. Madhavilatha K., (2004) Analytical CRM, ICFAI press. 28
  • 15. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online) Volume 2, Number 1, Dec - Jan (2011), © IAEME 14. Nunnally, J.C & Bernstein (1994), “Ira Psychometrics Theory”, New York, Tata McGraw Hill Ltd, New Delhi. 15. Patrick Vesel, Vesna Zabkar, (2010) "Relationship quality evaluation in retailers' relationships with consumers", European Journal of Marketing, Vol. 44 Issue: 9/10, pp.1334 – 1365. 16. Pitta, D.A. (1998). “Marketing one-one-one and its Dependence on Knowledge discovery in Databases”, The Journal of Consumer Marketing, Vol. 15. No 5, pp. 468-480 17. Satyanarayana Chary, et al (2003)., CRM & SCM- The New Business Strategies, Prestige journal of Management and research, Indore. 18. Shajahan S (2006), “Relationship Marketing”, Tata McGraw-Hill Publishing Company LTd, New Delhi. 19. S.M.Jha (1998) Services marketing, Himalaya Publishing House, New Delhi 20. Sudhir Zutshi (July-September 2003) “Relationship Marketing, A real market conditions”, JIMS 8M. 21. Muncy, J.A., (1983), “An Investigation of Two Dimensional Conceptual Brand Loyalty”, Ph.D., Thesis, Texas Tech University. 22. Victoria Seitz, Nabil Razzouk, David Michael Wells, (2010). "The Importance of Brand Equity on Purchasing Consumer Durables: An Analysis of Home Air- conditioning systems", Journal of Consumer Marketing, Vol. 27 Issue: 3, pp.236 – 242. 29