Sofia Redwan

ST.
MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES
FACTOR AFFECTING CUSTOMER LOYALTY - IN CASE OF

AWASH BANK IN ADDIS ABABA
BY: SOFIA REDWAN
DECEMBER, 2020
ADDIS ABABA, ETHIOPIA
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FACTOR AFFECTING CUSTOMER LOYALTY - IN CASE OF
AWASH BANK IN ADDIS ABABA
BY: SOFIA REDWAN
ATHESIS SUBMITTED TO ST.MARY’S UNIVERSIY

COLLEGE, SCHOOL OF GRADUATE STUDIES IN PARTIAL
FULFIIMENT OF THE REQUIREMENT FOR THE DEGREE OF
MASTER OF MARKETING MANAGEMENT
DECEMBER, 2020
ADDIS ABABA, ETHIOPIA
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ST.MARY’S UNIVERSITY
FACULTY OF BUSINESS
FACTOR AFFECTING CUSTOMER LOYALTY - IN CASE OF AWASH

BANK IN ADDIS ABABA
By: SOFIA REDWAN
APPROVED BY BOARD OF EXAMINERS
_____________________
Dean, Graduate Studies Signature
______________________
Advisor Signature
_______________________
External Examiner Signature
________________________
Internal Examiner Signature
iii
DECLARATION
I, the undersigned, declare that this thesis is my original work, prepared under the guidance of Dr
Asfaw Yilma. All sources of materials used for the thesis have been duly acknowledged. I
further confirm that the thesis has not been submitted either in part or in full to any other higher
learning institution for the purpose of earning any degree.
____________________________ ________________________
Name Signature
St.Mary’s University, Addis Ababa December,2020
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ENDORSEMENT
This thesis has been submitted to St.Mary’s University, School of Graduate Studies for
examination with my approval as a university advisor.
__________________________ _________________________
Advisor Signature
St.Mary’s University, Addis Ababa December, 2020
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Acknowledgment
First I thank almighty GOD for unfailing love and making it possible. Many people generously
have contributed for this research to materialize successfully. Dr. Asfaw Yilma, my advisor,
provided me with the overall guidance and professional support throughout this research. I would
like to thank him first for making invaluable comments and advice.
Special thanks goes to all my friends, who enlightened me at every stage of this study program
with their unreserved overall support, guidance, professional and critical comments on the
research., for their enthusiasm in encouraging and supporting me from the very beginning of my
study. They are behind my success, with their endurance and understanding.
I am also grateful to the customer of Awash bank participate in this study for their willingness
and for the information they provided me. Specially, I would like to extend my thanks to the staff
of Awash bank.
There are a number of people in the list of my acknowledgement who have contributed for
successful completion of this research. I thank all of them.
Sofia Redwan
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Contents
ACKNOWLEDGMENT ............................................................................................................... I
ABSTRACT ...................................................................................................................................V
CHAPTER ONE ........................................................................................................................... 1
INTRODUCTION......................................................................................................................... 1
1.1.BACKGROUND OF THE STUDY ....................................................................................... 1
1.2.STATEMENT OF THE PROBLEM .................................................................................... 3
1.3.RESEARCH QUESTION ...................................................................................................... 4
1.4.OBJECTIVES OF THE STUDY........................................................................................... 4
1.4.1.General Objectives ......................................................................................................................... 4
1.4.2.Specific Objectives ........................................................................................................................ 5
1.5.SCOPE OF THE STUDY....................................................................................................... 5
1.6.LIMITATION OF THE STUDY ........................................................................................... 5
1.7.SIGNIFICANCE OF THE STUDY ...................................................................................... 6
1.8.ORGANIZATION OF THE STUDY .................................................................................... 6
CHAPTER TWO .......................................................................................................................... 8
LITERATURE REVIEW ............................................................................................................ 8
2.1. CUSTOMER LOYALTY ...................................................................................................... 8
2.2. THEORETICAL REVIEWS ................................................................................................ 9
2.2.1 Behavioral perspective ................................................................................................................... 9
2.2.2 Attitudinal perspective ................................................................................................................. 10
2.2.3 Cognitive perspective ................................................................................................................... 10
2.2.4 Repurchase intent ......................................................................................................................... 10
2.2.5 Mixed perspectives ...................................................................................................................... 11
2.3. IMPORTANCE OF CUSTOMER LOYALTY ................................................................ 12
2.4. EMPIRICAL LITERATURE REVIEW ........................................................................... 12
2.5. CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESIS ........................... 15
2.5.1. Customer Satisfaction and Customer Loyalty ............................................................................. 15
2.5.2. Commitment and Customer Loyalty ........................................................................................... 15
2.5.3. Switching Cost and Customer Loyalty ........................................................................................ 16
2.5.4. Trust and Customer Loyalty ........................................................................................................ 17
2.5.5. Service quality and Customer Loyalty ........................................................................................ 17
CHAPTER THREE .................................................................................................................... 19
RESEARCH METHODOLOGY .............................................................................................. 19
3.1. RESEARCH AREA ............................................................................................................. 19
3.2. RESEARCH DESIGN ......................................................................................................... 19
3.3. DATA TYPE AND SOURCE ............................................................................................. 19
3.4. DATA COLLECTION METHODS AND INSTRUMENTS ........................................... 20
3.5. SAMPLE SIZE DETERMINATION AND SAMPLING METHODS ........................... 20
3.6. METHODS OF DATA ANALYSIS ................................................................................... 21
3.7. DATA PROCESSING AND PRESENTATION ............................................................... 22
3.8. DESCRIPTION OF VARIABLES ..................................................................................... 22
3.8.1. Dependent Variable..................................................................................................................... 22
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3.8.2. Independent Variables ................................................................................................................. 22
3.8.3. Model Specification .................................................................................................................... 23
CHAPTER FOUR ....................................................................................................................... 24
RESULTS AND DISCUSSION ................................................................................................. 24
4.1. VALIDITY AND RELIABILITY OF THE INSTRUMENT .......................................... 25
4.1.1. Content validity ........................................................................................................................... 25
4.1.2. Reliability Analysis ..................................................................................................................... 25
4.2. CHARACTERISTICS OF RESPONDENTS.................................................................... 26
4.2.1. Respondent gender, marital status, education and occupation ..................................................... 26
4.2.2. Respondents age and income ...................................................................................................... 27
4.2.3. Time in using the bank ................................................................................................................ 28
4.3. VARIABLES DESCRIPTIVE ANALYSIS ....................................................................... 29
4.3.1. Trust ............................................................................................................................................ 29
4.3.2. Customer satisfaction .................................................................................................................. 30
4.3.3. Switching cost ............................................................................................................................. 31
4.3.4. Commitment ............................................................................................................................... 31
4.3.5. Service quality ............................................................................................................................ 33
4.3.6. Customer loyalty ......................................................................................................................... 34
4.4. GENDER AND MARITAL STATUS DIFFERENCE ON CUSTOMER LOYALTY . 35
4.5. CORRELATION ANALYSIS ............................................................................................ 36
4.6. MULTIPLE REGRESSION ANALYSIS AND MODEL SUMMARY RESULTS ...... 38
4.6.1. R square ...................................................................................................................................... 38
4.6.2. ANOVA ...................................................................................................................................... 39
4.6.3. Multi-collinearity ........................................................................................................................ 39
4.6.4. Normality and Homoscedasticity ............................................................................................... 40
4.6.5. Multiple regression Coefficients ................................................................................................. 41
4.6.6. Multiple Regression Model ......................................................................................................... 43
CHAPTER FIVE ........................................................................................................................ 45
SUMMERY OF FINDINGS, CONCLUSION AND RECOMMENDATION ...................... 45
5.1. SUMMARY OF FINDINGS, .............................................................................................. 45
5.2. CONCLUSION .................................................................................................................... 47
5.3. RECOMMENDATION ....................................................................................................... 49
REFERENCES .......................................................................................................................... XII
ANNEXES ............................................................................................................................. XVIII
RESEARCH QUESTIONER ............................................................................................................. xviii
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INDEX OF TABLES AND FIGURES
TABLE No. DESCRIPTION PAGE
Table 3.1 Sample size------------------------------------------------------------------------------ 21
Table 4.1 Respondents number ------------------------------------------------------------------ 24
Table 4.2 Reliability test -------------------------------------------------------------------------- 25
Table 4.3 Gender marital status, education and occupation----------------------------------- 26
Table 4.4 Age and income ----------------------------------------------------------------------- 27
Table 4.5 Time of use ----------------------------------------------------------------------------- 28
Table 4.6 Trust mean ----------------------------------------------------------------------------- 29
Table 4.7 Customer satisfaction mean ---------------------------------------------------------- 30
Table 4.8 Switching cost mean ----------------------------------------------------------------- 31
Table 4.9 Commitment mean ------------------------------------------------------------------- 32
Table 4.10 Service quality mean ------------------------------------------------------------------ 33
Table 4.11 Customer loyalty mean ---------------------------------------------------------------- 34
Table 4.12 Gender mean --------------------------------------------------------------------------- 35
Table 4.13 Marital status mean ------------------------------------------------------------------- 36
Table 4.14 Correlations ---------------------------------------------------------------------------- 37
Table 4.15 R square -------------------------------------------------------------------------------- 38
Table 4.16 ANOVA --------------------------------------------------------------------------------- 39
Table 4.17 Multi collinearity result---------------------------------------------------------------- 40
Table 4.18 Regression analysis coefficients ---------------------------------------------------- 42

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Figure 2.1 Conceptual framework of the study ------------------------------------------------- 18
Figure 4.1 p-p plot for normality ----------------------------------------------------------------- 40
Figure 4.2 scatter plot for homoscedasticity----------------------------------------------------- 41
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ABSTRACT
Customer loyalty has been a real concern in banking industry, because making customer loyal is
potentially an effective tool that banks can use to gain a strategic competitive advantage and
voluntary user solution for a long time to build relationships. The main initiative force for this
paper was the large number of inactive accounts in the bank and lack of studies in customer
loyalty in Ethiopia specifically in Awash bank. This research is more of explanatory research
conducted on factor affecting customer loyalty, with objective of assessing the influence of
factors on customer loyalty in Awash bank, by taking a sample of 375 customers with non-
probability sampling from selective four branches in Addis Ababa city. The study used customer
loyalty as dependent variable and customer satisfaction, commitment, switching cost, trust and
service quality as independent variables. Data were collected through questioners analyzed by
using SPSS and multiple regressions and correlation analysis was used to test the hypothesis
developed and to show the relationship among the dependent variable and the independent
variables. The study found that four variables of customer loyalty (customer satisfaction,
commitment, trust and service quality) have positive and significance influence on customer
loyalty but the influence of switching cost is insignificance. Therefore, this research suggested to
Awash bank to keep their focus on the variables affecting customer loyalty and take them into
consideration in formulating strategies for developing and improving customer loyalty.
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CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
According to National Bank of Ethiopia official website Modern banking in Ethiopia were
introduced in 1905, (National Bank of Ethiopia, 2012). Banks in Ethiopia include both public
sector as well as private sector banks. According to the report of NBE (2012), there are 16
private and 3 government-owned banks, operating in the country. There is highest competition
between banks to stay in the sector successfully. Existing banks to cop up with the competitors
they open new branches in different area of the country and also try to offer different kind of
product to their customer. There are also banks which are on establishment phase.
Customer loyalty has been a real concern in banking (Muhammad et al. , 2015), different banks
in Ethiopia to differentiate their service from their competitor try to come up with new service
and they try to increase their availability by opening branches, but this activities easily copied
by other competing banks. Currently they provide nearly identical services, so they try to use
different methods to distinguish themselves and make their customer loyal
Making customer loyal is potentially an effective tool that banks can use to gain a strategic
competitive advantage and to survive in today’s ever-increasing banking competitive
environment. Many scholars stated that the key strategy for the success and survival of any
business institution is achieving customer loyalty; according to kotler and keller (2006) Creating
loyal customers is at the heart of every business, Huseyin et al. (2018),says It is one of the most
significant contemporary strategies, helping to ensure the company's business success and banks
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to remain competitive would be retain as many customers as possible. To improve their market
and profit positions, many banks need to direct their strategies towards increasing customer
loyalty, because it can assist in developing reliable plans and tactics and also it provide reliable
and effective marketing strategies (Maroofi, 2013).
Studying and understanding customer’s loyalty is crucial in today’s dynamic world and new way
of banking service delivery. according to Muhammad H et al. (2015) The emergence of phone
banking, Internet banking and Automated Teller Machines (ATM), have constrained bankers to
explore the importance of customer loyalty. Customer loyalty is a voluntary user solution for a
long time to build relationships with the company (Huseyin et al.2018). According to Huseyin et
al. (2018), those customers who purchase goods/services of the company from time to time can
be consider as loyal customer.
To make customers loyal banks need to know the factors that affect their customer loyalty and
they need to also asses which factor is more important and which one is less important. Different
study used different factors as a measurement variable to study customer loyalty factors. The
study in Tanzania commercial banks uses customer service, quality of the products provided by
banks, pricing of bank products as well as services and customer satisfaction in examined
determinants of customer retention (Caroline and Elizabeth 2014), Muhammad et al. (2015) to
measure customer loyalty in Pakistan used trust, customer satisfaction and service quality as a
base. Maroofi (2013) used service quality, observed value, trust and reputation of the bank to
examine factors effecting customer loyalty. Study in Tigray uses service quality, customer
satisfaction, customer complain handling, and commitment as Customer loyalty determinants
(Aregawi 2018).
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Observation of higher percentage inactive accounts in the bank, lack of enough research in the
topic in Ethiopia and specifically in Awash bank are the main initiatives for this research. This
research expects to identify the factors that influence customer loyalty in case of Awash bank.
The finding of this research will expect to help decision maker to understand the factors and their
level of influence on customer loyalty. Such understanding will help the bank to retain loyal
customer and improve bank competitive position.
1.2. Statement of the Problem
The importance and size of the service sector in the globe and each country become increase, and
it contribute significant amount for economy grows. One of the major service sectors is bank,
there is high development in Ethiopia banking sector. There are many private banks enter the
sector and acquire some share in the market. The increasing in number of banks and their
branches creates high competition among banks. Banks highly competes each other to get and
retain customers with the aim of sustaining long term relationships with their customer. Awash
bank is one of the leading private banks in Ethiopia and serve large number of customers.
Recently the number of inactive account in the bank is increased highly, according to the
branches data, the current status of the inactive account in selective four branches are more,
about 46%, this indicates that the bank needs to work hard in making customer to be remain
loyal. Retaining customer can be done easily if the bank knows what make the customer loyal.
Additionally There are different empirical studies conducted to show what make customer loyal,
but there is little studies conducted in Ethiopia, like; Aregawi (2018), use Service quality,
customer satisfaction, customer complain handling, and commitment to measure customer
loyalty in Dashen Bank Adigrat area. Sata (2012) in banks and Omer (2015) in insurance
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companies try to measure the relationship between customer satisfaction and customer loyalty .
As far as the researcher knowledge there is no research conducted in banks by using five
variables satisfaction, service quality, trust, switching cost and commitment, and also there is no
research that conducted specifically in Awash bank that show which factors affect the customer
loyalty.
This study try to reduce the above two gaps, gap in studies in Ethiopia specifically in Awash
bank and use of the five variables to measure effect on the customer loyalty . The main motive
for selecting the title factors affecting customer loyalty was the observation of higher percentage
of inactive account in Awash bank. This paper expected to answers the following questions;
Which factor is more influential in customer loyalty? And which customer group highly affected
by which factor?
1.3. Research Question
This paper answered the following questions;

Which factor is more influential in Awash bank customer loyal decision?
Which customer group highly affected by which factor?
1.4. Objectives of the Study
1.4.1. General Objectives
The overall objective of this paper is to analyze the factors which influence the customer loyalty
in the case of Awash banks (selective four branches in Addis Ababa).
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1.4.2. Specific Objectives
This paper has three specific objectives this are
To analyses the influence of satisfaction, commitment, trust, service quality and
switching cost on customer Loyalty,
To analyze customer background (gender and marital status) effect on customer loyalty factors
Provide recommendation based on findings
1.5. Scope of the study
The scope of the study is geographically limited to the city of Addis Ababa, Ethiopia as a case
study. It mainly focused on assessing the major determinants that affect the customer loyalty in
Awash bank (selective four branches in Addis Ababa). The study used independent variables
related to customer loyalties; satisfaction, commitment, trust, service quality of the bank and
switching cost to measure dependent variables that is customer loyalty. The study considered
only selective four branches that found in Addis Ababa.
1.6. Limitation of the study
The researcher wants to conduct a survey of the whole Addis Ababa Awash bank branches on
determinant that affect the customer loyalty. But because of resource constraint and width of the
concept the researcher were planned to conduct the research in selective four branches only.
Moreover, the research was a limitation of time, and finance. Thus, the study was designed to
focus on and use mainly the primary data source for its analysis though it uses some secondary
data. However, it was not simple due to the reasons that most of the respondents are not willing
to answer questions.
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1.7. Significance of the Study
Firstly, in this current competitive banking industry customer loyalty is the heart of success. This
paper will help for the bank in conducting managerial decisions to improve things to make more
customer loyal, by providing the information about loyalty factors and their relative important
for customers it also expect to help managers in reducing the resources and effort the bank
required to make the customer loyal. Secondly, it will help as a means/method or resource in
conducting similar study in other branches of the bank and also it will help managers to make a
decision related to this study like employee training and other program. Finally, from an
academic perspective this study's insights should contribute to the future development of this line
of research, particularly in a developing country like Ethiopia. Therefore, the present study will
have significant value to practitioners and scholars alike.
1.8. Organization of the Study
To achieve the above stated objectives, the study structured in to five chapters, including the
introduction part as chapter one; which includes background of the study, statement of the
problem, objective of the study, significance of the study, scope of the study and problem
/limitation of the study. The second chapter of this research report revealed theoretical and
conceptual frame work on the determinants of customer loyalty. Methodology of the research,
which includes research design, the data collection and the sources of data, sampling design,
methods used in the analysis of data and the constructions of the research model to test the
hypotheses was presented in the third chapter. The fourth chapter presents the results and
discussions of the research study, based on data collected by the researcher from primary sources
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of data to accomplish the study. The final chapter summarized the findings of the research work,
concludes the results and forwards recommendations based on the findings of the study.
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CHAPTER TWO
LITERATURE REVIEW
2.1. Customer Loyalty
Customer loyalty research classified in to two major parts. One is the loyalty consumers display
towards tangible products and is often termed brand loyalty, the other is loyalty consumers
display towards intangible products (service) and is often termed service loyalty. brand loyalty
definition used by many scholars was given by Jacoby and Kyner, (1973): “the biased (i.e.,
nonrandom) behavioral response (i.e., purchase) expressed over time by some decision making
unit with respect with one or more alternative brands out of a set of such brands, and is a
function of psychological (decision-making, evaluative) process”.
by presenting distinctiveness of service, scholars contend the construct The concept differs from
brand loyalty that extends to service organizations. According to Gremler and Brownb (1996)
Service loyalty is the degree to which a customer exhibits repeat purchasing behavior from a
service provider, possesses a positive attitudinal disposition toward the provider, and considers
using only this provider when a need for this service arises. Based on J Rowley (2005) Customers
may demonstrate their loyalty by staying with a provider or by increasing the number of
purchases or the frequency of their purchases or even both.
loyalty has been defined as repeat purchasing frequency or relative volume of same-brand
purchasing (Beerli et al. 2004), and Huseyin et al. (2018), explains those customers who
purchase goods/services of the company from time to time can be consider as loyal customer.
According to Išoraitė (2016), customer Loyalty can be treated as a customer desire, willingness
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to be a regular customer for a long time, buying and using the goods of the chosen companies by
recommending them to friends and colleagues.
2.2. Theoretical Reviews
There are different studies conducted on loyalty and Researchers try to see loyalty by focusing
on different perspective. In this part five different perspective of loyality was discussed
2.2.1 Behavioral perspective
J Rowley (2005). Behavioral loyalty means consumers’ repurchase behavioral or intension of
specific brand Consumer’s disposition to rebuy is an essential element of loyalty (Gremler and
Brown, 1996). While behavior can be measured in number of ways, Jones and Sasser (1995),
have argued that share of wallet is a key indicator of loyalty and stated that “the ultimate
measure of loyalty, is share of purchases in the category”. behavioral measures simply estimate
frequencies with no examination of the reasons for purchases or the factors that may influence
choices (Dick and Basu, 1994). behavioral measures are insufficient to explain how and why
brand loyalty is developed and/or modified, high repeat purchase may reflect situational
constraints, such as brands stocked by retailers, whereas low repeat purchase may simply
indicate different usage situations, variety seeking, or lack of brand preference within a buying
unit. It is clear that behaviour is insufficient as a measure of store or brand loyalty, as a result, the
extent to which behavioural measures are of benefit in developing long-term loyalty strategies is
clearly questionable (O´Malley, 1998).
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2.2.2 Attitudinal perspective
Shih-I C (2011), attitudinal loyalty means consumers’ sense of specific products or service.
Attitude denotes the degree to which a customer’s disposition towards a service is favorable
inclined (Azjen and Fishbein, 1980). This is reflected in the willingness to recommend a service
provider to other consumers or the commitment to repatronize a preferred service provider
(Gremler and Brown, 1996). Based on a favourable attitude towards a service provider,
customers may develop preference loyalty (Ruyter et al., 1997). This approach also sees a loyal
customer as attached to a brand, and when their positive beliefs are reinforced, these customers
are said to buy a brand more often (Riley et al., 1997).
2.2.3 Cognitive perspective
In addition to attitude, it has been argued that the loyalty may also be based on cognition (Lee
and Zeiss, 1980; Oliver, 1996) showed that the degree to which consumers are exposed to
information, advertising increases providing more the opportunity ability for and confidence
product related to process elaboration resulting in product commitment. Customer loyalty is
frequently operationalised as a conscientious evaluation of the price /quality ratio or the
willingness to pay a premium price, or alternative price indifference (Fornell, 1992).
2.2.4 Repurchase intent
This final component of service loyalty is often used as the primary measure of service loyalty
(Fornell, 1992). Including repurchase intent as a separate component of service loyalty seems
justified, as it is not well understood how predictive repurchase intent of actual purchase
behaviour (Anderson and Fornell 1994;
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2.2.5 Mixed perspectives
Scholars see Loyalty as multi-dimensional. Išoraitė (2016), says customer Loyalty is a
voluntary user solution for a long time to build relationships with the company and it covers
behavioral( a frequent and regular shopping, purchase quantity, size, range, availability, etc )and
positional components (customers' approach to business), Touzani and Temessek,(2009) express
that there are three approaches of brand loyalty behavioral (Repetitive purchase over Time),
attitudinal (Strong positive attitude toward the brand relative to competing brands) and the
composite approach (examine simultaneously both components). Gremler and Brownb (1996)
also identify three separate dimensions behavioral loyalty, attitudinal loyalty, and cognitive
loyalty. Dick and Basu (1994) argue that loyalty is determined by the strength of the relationship
between relative attitude and repeat patronage, and that it has both attitudinal and behavioral
elements. Bowen and Chen (2001) describe three approaches for the evaluation of customer
loyalty: (1) behavioral measurement, (2) attitudinal measurement, and (3) composite
measurement (a combination of behavioral and attitudinal measurements).
Customer loyalty is also considered a dual-dimensional construct, comprised of calculative
(cognitive) and one emotional (affective). Cognition is the process of understanding and affect is
the emotional feeling that arises out of such knowledge. Ranganathan et al (2013),), affective
components play major role in creating customer loyalty ( Touzani and Temessek, and 2009),
and (Yu. and Dean,.2001),)
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2.3. Importance of customer loyalty
Customer loyalty is critical to the conduct of business in today’s competitive market. Creating
loyal customers is at the heart of every business (kotler and keller, 2006). the benefit of customer
loyalty to provider of either service or products include lower customer price sensitivity, reduced
expenditure on attracting new customers, improved organizational profitability (J Rowley, 2005)
and also Loyal customers helping to ensure the company's business success, also enable it to
maintain costs lower than those associated with attracting new customers. Consistently assuring
high level of customer loyalty not only creates tremendous competitive advantage but also boost
employee morale and productivity (Lam et al. 2004).
The importance of loyalty is higher in service organizations, so that service organizations should
take extra effort to attain higher level of customer loyalty (Ahmed and Abdulrab , 2017).
Developing customer loyalty is central particularly in the service sectors because it generate
positive word-of-mouth. it is an important factor of market share and profitability. Hence,
customer loyalty has a powerful impact on firm’s performance and is considered by many
companies as an important source of competitive advantage.
2.4. Empirical Literature review
There has been a growing interest in recent years in analyzing the factors that influencing
customer loyalty. As a result, there are numerous works in marketing which have attempted to
explain the relationships between customer loyalty and various variables regarded as
antecedents. The following table shows how authors show those relationships
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Customer loyalty is the basic requirement in different area, so authors try to measure customer
loyalty by focusing on different variables. Akhter,et Al (2011) conducted a research on factors
influencing customer loyalty by using Customer satisfaction, customer relationship, image of the
product, trustworthiness as a determinant variable around the globe in general and in Pakistan in
particular and they founds positive relationship among customer satisfaction, customer
relationship, image of the product, trustworthiness and customer loyalty. Ahmed, And Abdulrab
(2017) exploring the influence of factors on customer loyalty by using customer satisfaction,
service quality, trust, perceived value, perceived enjoyment, and technology leads as variables in
service sector and they founds that customer satisfaction, service quality, trust, perceived value,
perceived enjoyment, and technology have more significant as well as positive Influence on the
customer loyalty.
Studies also conducted in banks on factors affecting customer loyalty to see which variable have
effect on customer loyality in different area, Phong (2017) investigate customer loyalty factors
in Vietnam Retail Banking Industry by using customer satisfaction, switching cost and trust and
found Strong and positive relationship between customer loyalty and its determinants customer
satisfaction, switching cost and trust. Muhammad et al. (2015) used trust, customer satisfaction
and service quality to measure Factors affecting Customer Loyalty in Banking Sector in
Bahawalpur (Pakistan), they founds Trust, customer satisfaction and service quality has
significant effect on customer loyalty. Maroofi (2013) found Trust, habit and reputation have a
remarkable effect on customer loyalty on their study on Factors Affecting Customer Loyalty of
Using Internet Banking in Iran. Akhter,et Al. (2011) conducted a research around the globe in
general and in Pakistan in particular on factors which influence customer loyalty by using
Customer satisfaction, customer relationship, image of the product, trustworthiness and they founds
13
that positive relationship among customer satisfaction, customer relationship, image of the
product, trustworthiness and customer loyalty. Chunnoo, and Chen (2019) use Service quality,
corporate image, trust and switching cost to measure Customer Loyalty determinants on Foreign
Banks in Malaysia and found service quality, corporate image and switching costs, are the main
factors most likely to influence customer loyalty of foreign banking customers.
in Sub-Saharan African banking industry Magasi (2016) conducted research to measure
Determinants of customer loyalty by using perceived quality, customer satisfaction switching
cost, trust and commitment as a variable and he found perceived quality, customer satisfaction
and trust are the major determinants of customer loyalty.
There is little research conducted in Ethiopia in measuring the factors affecting customer loyalty
in banking sector. Aregawi (2018), conducted a research on Factors Affecting Customer
Loyalty in Dashen Bank Adigrat area Branch by using Service quality, customer satisfaction,
customer complain handling, and commitment as a determinant factors and he founds that
Perceived service Quality, customer Satisfaction, customer and Complaint Handling were the
factors that influence customer Loyalty of the bank customers
To generalize the results of the studies there are two groups of loyalty antecedents should be
taken into consideration. They are loyalty’s major factors , which include, customer’s
satisfaction, trust , and service quality. And also loyalty’s other factors , those loyalty factors
added based on the research nature and context like commitment, switching cost, customer habit,
technology… for this paper customer’s satisfaction, trust, commitment, switching cost, and
service quality will be used to measure customer loyalty factors in Awash bank.
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2.5. Conceptual Framework and Research Hypothesis
2.5.1. Customer Satisfaction and Customer Loyalty
The extent of satisfaction is usually high when the customer provides minimum value and gets
most of usage and profit (Jamal & Kamal, 2004), it is characterized as a client's general
assessment of the performance of an offering to date. Different scholars consider customer
satisfaction as one of the determinant factor for the customer loyalty. Customer loyalty decision
is related with weather they are satisfied or not satisfied by the service. It is utilized to clarify
loyalty as behavioral purposes. Different study Aregawi (2018),Muhammad et al.(2015)and
Huseyin et Al. (2018), found that there is positive relationship between satisfaction and
customer loyalty. satisfaction can be measured in different ways Aregawi(2018),used Four items
to measure satisfaction as factor affects loyalty in the banking industry those are positive post
purchase behavior, expectation, promised values and awareness creating efforts in particular. As
a result, the first hypothesis is stated as follows:
Hypothesis 1
Ho: Customer satisfaction has positive and significant influence in determining customer loyalty
Ha: Customer satisfaction has no positive and significant influence in determining customer loyalty
2.5.2. Commitment and Customer Loyalty
Meyer and Allen (1997) defined Commitment as a force that binds an individual to buy from a
supplier that can be affective, normative or instrumental. According to Morgan and Hunt (1994)
Commitment is defined as a desire to maintain a relationship. Commitment steams from trust,
shared values and the belief that it will be difficult to find partners that can offer the same value.
Commitment inspires customers to be loyal for a given service provider. Company commitment
is one of the variable that have an impact on customer loyalty, results from studies shows that
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commitment is one of customer loyalty Aregawi (2018), and Afsar et Al. (2010) and . According
to Aregawi (2018), commitment can be measured by using 5 items service adjustment effort,
personalized service delivery effort, effort to change service, ability to be flexible and effort to
give special attention in serving individual customer need. Therefore, a second hypothesis is
proposed:
Hypothesis 2
Ho: Commitment has positive and significant influence in determining customer loyalty
Ha: Commitment has no positive and significant influence in determining customer loyalty
2.5.3. Switching Cost and Customer Loyalty

The other factor that affect customer loyalty is Switching cost, it makes difficult or costly for
customer to change providers. It can be defined as the technical, financial or psychological
factors which make it difficult or expensive for a customer to change brand Shergill and Bing
(2006). Porter (1998) defines switching cost as one-time cost facing the buyer when switching
from one supplier’s product to another’s. In addition to objectivity measurable monetary costs,
switching costs may also pertain to the time and psychological effort involved in facing the
uncertainty of dealing with a new service provider (Bloemeret al. 1998). Studies show that
switching cost has one of the influencing factors in customer loyalty. Study by Afsaret Al.
(2010), and Chunnoo, and Chen (2019),founds that When switching costs are high, customers
generally are more likely to be compelled to stay with their current service provider. To measure
switching cost the paper will use three items that are related to information or searching cost,
relationship cost and opportunity cost. Therefore, the third hypothesis is proposed as below:
16
Hypothesis 3
Ho: Switching cost has positive and significant influence in determining customer loyalty
Ha: Switching cost has no positive and significant influence in determining customer loyalty
2.5.4. Trust and Customer Loyalty
Trust causes devotion because it reduces the cost of negotiating agreements and lessens
customer’s fear of opportunistic behavior by the service provider. According to Morgan and
Hunt (2004) trust has been defined as the willingness of customers to rely on an exchange
partners in who one has confidence or confidence in an exchange partners reliability and
integrity. Research by, Muhammad et al.(2015)found trust has positive relationship with
customer loyalty, Afsar et Al.(2010)also found that trust is one of the influencing factor of
customer loyalty. Muhammad et al. (2015) use banks confidentiality, honesty, reliability. And
ability to meets customer needs, as four measurement item. As a result, the fourth hypothesis is
stated as follows:
Hypothesis 4
Ho: Trust has positive and significant influence in determining customer loyalty
Ha: Trust has no positive and significant influence in determining customer loyalty
2.5.5. Service quality and Customer Loyalty

Service quality is one of a profound input on customer loyalty . Service quality happens when a
service association gives benefit that fulfills the consumer's needs (Metters et al., 2003).
Basically service quality is characterized as the satisfaction of client expectations(Muhammad et
Al., 2015). Almost all paper uses service quality as customer loyalty determinant and found that
it influence positively. Therefore, the following hypothesis is stated as:
17
Hypothesis 5
Ho: service quality has positive and significant influence in determining customer loyalty
Ha: service quality has no positive and significant influence in determining customer loyalty
Independent variables Dependent variable
Customer satisfaction
service quality
Customer loyalty
Trust
Switching cost
Commitment
Figure 2.1. Conceptual Framework
18
CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Research Area
This study was carried out in Addis Ababa City which is the capital city of Ethiopia. for the
purpose of addressing different group of customer the researcher select purposely four different
Awash bank branches;- Merkato Mehal Gebeya branch, Urael branch, Mehal Arada branch and
Jacros Branch, which is one branch from each district.
3.2. Research Design
This study employs an explanatory survey research study design following more of quantitative
approach to examine the determinants of customer loyalty in Awash bank. The research design
in this study also used a descriptive analysis, to describe the customer characteristics and
variables. Also It examine the independent variables and dependent variables and how they
interrelated to each other. It uses a multiple regression analysis to test the hypothesis drown and
their relationship.
3.3. Data Type and Source
This paper uses primary and secondary data. The primary data was collected from the customer
by using questioner that includes three major parts and it used to address the objectives.
Secondary data were collected from different articles and bank reports; it was used to support the
argument in developing the variable and statement of the problem.
19
3.4. Data Collection Methods and Instruments
The primary data were collected from customer through questioner. The questioner have two
parts the demographic questionnaire (DQ), and the customer loyalty questionnaire (CLQ). The
DQ used to gather information about respondents’ sex, age, educational level, and loyalty status,
The CLQ were consist of 24 items related to the customer loyalty factors , based on the
literature. The statements were phrased with a possible response continuum based on a Likert-
scale, five-point scale (1 = strongly disagree to 5 = strongly agree).
3.5. Sample Size Determination and Sampling Methods
Sampling is process of selecting a smaller group of people that have the same characteristics and
preferences as the total group (Wrenn. B et,al. 2002). Sampling of this study aimed at reaching
the repeated customers who use Awash bank service in selective four branches in Addis Ababa.
The sampling procedure used in the study were non-probability convenient sampling. As
obtained from the bank documents, currently Awash bank has about 29,359 active bank service
customers served by the selected four branches. According to Krejcie and Morgan (1970) table
for sampling decision, a sample of 379 can used to represent 30,000 populations. from each
branches to represent the population, the sample were selected proportionally related to their
population or customer size. Based on Krejcie and Morgan (1970) table Sample customers of the
study was, 379. To eliminate the sampling errors and ensure the representation of the population
under study all sampling customer filled the questioner within two week intervals
20
Table 3.1.. Sampling table from four branches Based on April 2020, branches data
Branch name Over Inactive Percentage Current branch sample

all account of inactive active population size
account customer accounts proportion
1 Mehal Gebeya 7781 3338 42.9 4443 15.13 57
2 Urael 9532 4626 48.5 4906 16.71 63
3 Jackross 4454 1392 31.3 3062 10.43 40
4 MehalArada 32644 15696 48.1 16948 57.73 219
Total 54411 25052 46 29,359 100 379
Source , Awash bank branches 2020
3.6. Methods of Data Analysis
In this study descriptive statistics were used as the first stage of the analysis of data to provide
detail information about each relevant variable used. At this stage, mean, standard deviation,
maximum and minimum values of the required variables were computed.
The study used the Pearson Correlation method to test the hypotheses and to show the
relationship between independent variables (satisfaction, commitment, trust service quality of the
bank and switching cost ) and customer loyalty as a dependent variable. It also uses a multiple
regression analysis to show the simultaneous impact of the independent variables on the
dependent variable.
21
3.7. Data Processing and Presentation
to process and analyzed the data collected from the customers, IBM SPSS statistics version 20
software were used, and the processed data were presented by using tables.
3.8. Description of Variables
3.8.1. Dependent Variable

In this study, the dependent Variable is customer loyalty. According to Išoraitė (2016),
customer Loyalty can be treated as a customer desire, willingness to be a regular customer for a
long time, buying and using the goods of the chosen companies by recommending them to
friends and colleagues.
3.8.2. Independent Variables
Customer Satisfaction it is characterized as a client's general assessment of the performance of
an offering to date.
Commitment a force that binds an individual to buy from a supplier that can be affective,
normative or instrumental (Meyer and Allen 1997). According to Morgan and Hunt
(1994) Commitment is defined as a desire to maintain a relationship.
Switching Cost the technical, financial or psychological factors which make it difficult
or expensive for a customer to change brand (Shergill and Bing 2006).
Trust; trust has been defined as the willingness of customers to rely on an exchange
partners in who one has confidence or confidence in an exchange partners reliability and
integrity (Morgan and Hunt 2004)
22
Service quality Service quality happens when a service association gives benefit that
fulfills the consumer's needs (Metters et al., 2003).
3.8.3. Model Specification

The following general econometric model was used to estimate quantitatively the customer
loyalty in selective four branches of Awash bank.
Yi = β0+ β1X1+ β2X2+ β3X3+ β4X4+ β5X5
Where
Y is the dependentvariable - loyalty
,X1= trust , X2 =satisfaction, X3=swiching cost , X4=commitment, X5=service quality
are the independent variables;
β0is the intercept term-it gives the mean or average effect on Y of all the variables
excluded from the equation, although its mechanical interpretation is the average value of
Y when the stated independent variables are set equal to zero.
Β1, β2, β3 β4and β5 are also refer to the coefficient of their respective independent
variables which measure the change in the mean value of Y, per unit change in their
respective independent variables.
23
CHAPTER FOUR
RESULTS AND DISCUSSION
This chapter presents the results and analysis of data that were gathered from Awash bank
customers through questionnaire. As per the sampling design 379 questionnaires were distributed
to Awash bank customers in four branches. From the total distributed questionnaires which
distribute to customers 375 or 99% questionnaire were found to be completed correctly and used
for further analysis and the remaining 4 questionnaires were found invalid.
Table 4.1. Respondent number
respondent branch used Total

Mehal Gebeya Mehal Arada Urael Jackross
Sample plan 57 219 63 40 379
Actual collected
57 217 62 39 375
data
Invalid response 0 2 1 1 4
Source , sample survey 2020
The questionnaire data were analyzed using SPSS. Simple descriptive statistics, correlation
analysis and multiple regressions formed the major part of quantitative data analysis. Firstly,
descriptive statistics were used to study the sample profile and variables. Pearson correlation
coefficients matrix was used, to study the relationship between customer loyalty (dependent
variable) and the independent variables (trust, customer satisfaction, commitment, service quality
and switching cost) of the study, Then multiple regression analysis ware performed to see the
relationship between customer loyalty and customer loyalty factor variables (trust, switching
cost, satisfaction, service quality and commitment ) and to test the hypothesis.
24
4.1. Validity and reliability of the Instrument
4.1.1. Content validity
Involves the degree to which the study is measuring what it is supposed to measure. More
simply, it focuses on the accuracy of the measurement (John et.al, 2007). All measures used to
construct the instruments have shown acceptable level of construct and content validity in
previous studies and are used in this study with slight modification. The questioners are adapted
from journal of Muhammad et al. (2015) and Aregawi (2018), under related research title.
Additionally, several measures were employed Such measures are clarity of instructions, clarity
of the questions to ensure that the results are free from errors.
4.1.2. Reliability Analysis
To check the internal reliability of the instrument, Cronbach’s Alpha (CA) was run and tested.
Table 4.2. reliability test

Reliability Statistics
Cronbach's Alpha N of Items
Trust .871 4
Satisfaction .936 4
Swiching cost .788 3
commitment .886 4
Service quality .921 5
Customer loyalty .921 6
over all 0.968 26
The overall value of Cronbach’s Alpha comes to 0.968, which is above the standard value
proposed by Nunnally (1978) that is 0.70. This shows that the instrument used to measure
customer loyalty is reliable. It implies we can apply different statistical tests and interpret the
results with confidence.
25
4.2. Characteristics of Respondents
4.2.1. Respondent gender, marital status, education and occupation

Table 4.3. Respondent gender, marital status, education and occupation
Number Percentage
Male 201 53.6

Respondents
gender Female 174 46.4
Total 375 1
Married 170 45.33
Marital
Single 199 53.07
status
Divorce 6 1.6
Total 375 1
8 and below grade 8 8 2.13
Respondents TVET 22 5.87
Educational Certificate 28 7.47
level Diploma 111 29.6
degree completed 149 39.73
masters and above 19 5.07
Total 375 1
business man 141 37.6
Respondents
Employee 224 59.73
Occupation
Student 10 2.67
Total 375 1
According to the survey, 46.4% (174) of the respondents are female and 53.6% (201) of the
customers are males. This figure signifies that most of the respondents are men & this implies
that more men are visiting the bank than female.
26
Moving on to marital status, the table above shows that 199( 53.07 %) are single, 170(45.33 %) got
married, and 6 (1.6 %) are divorced . This figure signifies that most of the respondents are single &
this implies that more single are visiting the bank compare with other.
According to the survey result the respondent’s educational levels shows ; 8 (2.13 %) of
respondents are less than grade 8, whereas 26 (6.93 %) are less than 10 grade , 12 (3.2 %)less
than 12 grade, 22 (5.87 %) of respondent’s are TVET level , 111 (7.47 %) , 28 (29.6 %)
respondents are certificate holder, respondents are diploma completed,149 (39.73 %)
respondents are degree level completed , and 19 (5.07 %) are masters and above holders. The
above result indicates clearly that majority of the banks customers are educated.
Regarding respondent occupation type from the overall respondents based on the survey result
141(37.6 %) of the respondents are business man, 224 (59.73 %) of the respondents are
employees and 10 (2.67 %) of them are students. The result indicates that majority of the
respondents are employees, it implies majority of the customers visiting the bank are employees.
4.2.2. Respondents age and income
Table 4.4 shows the collective average or mean income and Age value of the total respondents.
Based on the survey result the average or mean value shows income of 19,320 birr and age of
31. The result implies that most respondent that participate in this study are young with the
average income of 19,320 birr per month.
27
Table 4.4. Respondents age and income
Descriptive Statistics
N Minimu Maximum Mean
m
Respondents Monthly income 375 600.000 500000.000 19320.08533
Respondents Age 375 19.0 55.0 31.144
Valid N (listwise) 375
4.2.3. Time in using the bank
Table 4.5. Time of use
Total percentage
Below 1 year 22 5.87
1 – 5 years 180 48.
Time in using Awash 5 - 10 years 104 27.73
banks service
10 – 15 years 46 12.27
Above 15 years 23 6.13
Total 375 1
The above table show the loyalty time of the respondent, from the overall respondents asked to
indicate how long they have been using the bank service, 22 (5.87%) are selected below one
year 180(48.%) lie under 1-5 years, 104(27.73%) under 6-10 years, 46(12.27%) under 11-15
years and 23(6.13%) above 15 years. The result indicates majority of respondents are a loyal
customer with experience of using the bank service for years.
28
4.3. Variables descriptive analysis
4.3.1. Trust
Table 4.6. Trust mean result
Tota Std.
trust items SA D N A SA Mean
l Deviation
This bank keeps Frequency 38 10 45 176 106 375 3.81 1.178
my information 10.1 2.7 12.0 46.9 28.3
Percentage 100
confidential.
This bank is Frequency 43 20 78 113 121 375 3.66 1.291
honest. Percentage 11.5 5.3 20.8 30.1 32.3 100
This bank is Frequency 42 2 44 171 116 375 3.85 1.198

reliable. Percentage 11.2 .5 11.7 45.6 30.9 100
This bank meets Frequency 33 60 48 118 116 375 3.60 1.308

my needs. Percentage 8.8 16.0 12.8 31.5 30.9 100
Over all Frequency 39 23 53.75 144.5 114.75 375
average Percentage 10.4 6.13 14.33 38.53 30.6 100 3.728 1.243935
SD=Strongly Disagree, D=Disagree , N=Neutral, A=Agree And SA= Strongly Agree
The above table shows summary frequency, mean and standard deviation analysis result for
items or questions related to trust factors,. The mean is the average value of participants‟
response, and the standard deviation is the measure of dispersion from the mean. The overall
mean of trust related factors is 3.73. Regarding the frequency result even if more than half of the
respondents selected agree (38.5%) and strongly agree (30.6%) to all trust items, but there are
also significant number of respondents says neutral(14.3%), disagree(6.1%) and strongly
disagree(10.4%) for all trust item. This result shows us large number of the respondents has
good level of trust by which the average result is above the average, 3.73 level that is
approximates to agree level.
29
4.3.2. Customer satisfaction
Table 4.7 customer satisfaction mean

Std.
Satisfaction items SD D N A SA total Mean
Deviation
I am satisfied with the Frequency 38 16 24 199 98 375
decision to choose this 3.81 1.173
Percentage 10.1 4.3 6.4 53.1 26.1 100
bank
This bank leaves me a Frequency 29 58 89 114 85 375
3.45 1.216
pleasant impression Percentage 7.7 15.5 23.7 30.4 22.7 100
I want to return to this Frequency 38 24 42 192 79 375

3.67 1.176
bank in the future Percentage 10.1 6.4 11.2 51.2 21.1 100
I will advise about this Frequency 39 32 46 175 83 375

3.62 1.216
bank to my friends. Percentage 10.4 8.5 12.3 46.7 22.1 100
Frequency 36 32.5 50.25 170 86.25 375
Over all average Percentage 9.575 8.675 13.4 45.35 23 100 3.6375 1.19525
the above customer satisfaction items table result shows 45.35 % and 23% of the respondent
agree and strongly agree that, they are satisfied with the decision to choose Awash bank, bank
make them pleasant impression, they want to be loyal and willing to advise Awash bank to their
friends, but still respondents of9.57% and 8.67 % are strongly disagree and disagree
respectively, while the remaining 13.4% are neutral. from the mean value 3.64 which shows that
customers have good level of satisfaction because the mean value is considered as moderate.
Therefore, we can conclude that customers’ of Awash Bank have good level of satisfaction
because the mean value shows 3.64 that is close to agree or 4.
30
4.3.3. Switching cost
According to table 4.8. result summary frequency, mean and standard deviation analysis result
for questions related to customer switching costs , from the over all respondents only 14.07%
and 22.97% respondents says strongly agree and agree respectively, it means less than 50% of
respondents. The overall mean result shows 3.01 that is the average, it implies large number of
the respondents believes that there are low level of switching costs and it indicates the costs
(information, relationship and dissatisfaction) related to switching from Awash bank to other
competitive banks for respondents are minimum
Table 4.8 switching cost mean result

Switching cost Tot Mea Std.
SD D N A SA
Items al n Dev
To change to another bank Frequency 53 115 88 55 64 375
involves investing time in
searching for information
2.9 1.3
Percentage 14.1 30.7 23.5 14.7 17.1 100
about other banks
To change to another bank Frequency 51 87 112 91 34 375
will lose a lot of personal
relationship with current bank
2.92 1.17
Percentage 13.6 23.2 29.9 24.3 9.1 100
employee and management
To change to another Frequency 39 79 85 112 60 375
involves a risk in choosing
another bank which might
3.2 1.24
Percentage 10.4 21.1 22.7 29.9 16 100
turn out not to satisfy me
Frequency 47.67 93.67 95 86 52.67 375
Overall average Percentage 12.7 25 25.37 22.97 14.07 100 3.01 1.24
4.3.4. Commitment
According to The table 4.9 result summary frequency, mean and standard deviation analysis
result for questions related to commitment, from the overall respondents 20.87% and 34.2%
respondents says strongly agree and agree respectively, it means above average .but
31
significance number of the respondents believes that there are low level of commitment. The
overall mean result shows 3.5 that is above the average , which shows that good level of
commitment because the mean value is considered as moderate. Therefore, we can conclude that
Awash Bank have good level of commitment because the mean value shows 3.5 that is close to
agree or 4
Table 4.9 commitment mean result

Commitment Std.
SD D N A SA total Mean
items Deviation
The bank makes Frequency 24 48 67 145 91 375
several service
3.62 1.169
adjustments to Percentage 6.4 12.8 17.9 38.7 24.3 100
suit my needs
The bank offers Frequency 18 53 93 156 55 375
personalized
services to meet 3.47 1.057
Percentage 4.8 14.1 24.8 41.6 14.7 100
different customer
needs differently
The bank is Frequency 26 34 127 105 83 375
flexible when its
3.49 1.137
services are Percentage 6.9 9.1 33.9 28 22.1 100
changed
employees give Frequency 32 46 106 107 84 375
you special 3.44 1.206
Percentage 8.5 12.3 28.3 28.5 22.4 100
attention
Frequency 25 45.25 98.25 128.25 78.25 375
Overall average Percentage 6.65 12.075 26.225 34.2 20.875 100 3.505 1.14225
32
4.3.5. Service quality
the service quality items table 4.10 result shows 34.98 % and 27.04% of the respondent agree
and strongly agree that, they easily withdraw money, equipment’s are functional and continuous,
bank staffs are interested in solving problems, error free recording and clear and understandable
information but still 7.46% and 10.54 % respondents are strongly disagree and disagree
respectively, while the remaining 19.6% are neutral on Awash bank service quality level. from
the mean value 3.64 which shows that customers get good level quality service because the
mean value is considered as moderate. Therefore, we can conclude that customers’ of Awash
Bank get good level of service quality because the mean value shows 3.64 that is close to agree
or 4.
Table 4.10 service quality mean result

Std.
Service quality items SD D N A SA Total Mean
Deviation
Ease of depositing and Frequency 26 44 63 139 103 375
withdrawing money from 3.66 1.195
any branch Percentage 6.9 11.7 16.8 37.1 27.5 100
Continuous and ordered Frequency 30 12 88 146 99 375
functionality of equipment
3.73 1.129
such as computer and Percentage 8 3.2 23.5 38.9 26.4 100
printer etc
Staff takes interest in Frequency 28 68 46 134 99 375
3.55 1.261
solving problem Percentage 7.5 18.1 12.3 35.7 26.4 100
Bank Maintains error free Frequency 24 20 122 114 95 375
3.63 1.111
records Percentage 6.4 5.3 32.5 30.4 25.3 100
Information provided by Frequency 32 54 55 123 111 375
bank employees are clear 3.61 1.279
and understandable. Percentage 8.5 14.4 14.7 32.8 29.6 100
Frequency 28 39.6 74.8 131.2 101.4 375
33
4.3.6. Customer loyalty
The table below shows summary frequency, mean and standard deviation analysis result for
items or questions related to customer loyalty. The overall mean of loyalty related factors is 3.52.
This result shows us large number of the respondents went to be remain the customer of Awash
bank because mean result is above the average, 3.52 level that is approximates to agree level.
Table 4.11 customer loyalty mean result

Tota Std.
loyalty items SD D N A SA Mean
l Deviat
I regularly visit Frequency 34 12 30 168 131 375
3.93 1.172
this bank Percentage 9.1 3.2 8 44.8 34.9 100
I seldom think of Frequency 36 64 119 104 52 375
changing this bank 3.19 1.163
Percentage 9.6 17.1 31.7 27.7 13.9 100
to another one
I use this bank Frequency 32 45 74 131 93 375
3.55 1.224
each time Percentage 8.5 12 19.7 34.9 24.8 100
I need to make any Frequency 36 92 46 120 81 375
financial 3.31 1.311
Percentage 9.6 24.5 12.3 32 21.6 100
transaction
I consider this Frequency 36 40 60 161 78 375
bank as my 3.55 1.207
Percentage 9.6 10.7 16 42.9 20.8 100
preferred choice
Each time I want Frequency 34 28 91 127 95 375
to make any
financial
3.59 1.202
transaction, this Percentage 9.1 7.5 24.3 33.9 25.3 100
bank is my first
choice.
Frequency 34.67 46.83 70 135.17 88.33 375
34
4.4. Gender and marital status difference on customer loyalty
Table 4.12 shows, mean and standard deviation of all variables by respondents gender, male and
female. The result indicates male mean value for trust , satisfaction and quality is higher than
female mean value with difference of 0.0554, 0.0049 and 0.1954 respectively, and also for
loyalty questions male mean value is higher than female mean value with 0.1425. but in
commitment and switching cost the female respondent mean value shows higher value than
males with 0.0195 and 0.0956 respectively. the difference is little for all variables with mean
difference 0.2 and less.
Table 4.12 gender mean result

Report
Respondents Customer Service Switching Customer
Trust Commitment
gender Satisfaction Quality cost Loyalty
Mean 3.7537 3.6629 3.7264 3.4963 2.9619 3.5879
Male N 201 201 201 201 201 201
Std.
1.06873 1.08709 1.06346 1.06198 1.10814 1.03683
Deviation
Mean 3.6983 3.658 3.531 3.5158 3.0575 3.4454
Female N 174 174 174 174 174 174
Std.
1.04601 1.10315 1.01336 0.89522 0.9519 1.01501
Deviation
Mean
Total difference 0.0554 0.0049 0.1954 -0.0195 -0.0956 0.1425
(m-f)
The result in table 4.13 shows, mean and standard deviation of all variables by respondents
marital status. Married respondents mean value for trust, satisfaction and quality, commitment
and loyalty is higher than single and divorce, whereas switching cost mean value for single status
respondent higher value than married and divorce respondents.
35
Table 4.13 marital status mean result
Report
Customer
Customer Service Switchin Satisfactio
Marital status Trust Loyalty quality Commitment g cost n
Marri Mean 3.8176 3.6784 3.8447 3.6118 2.8529 3.8176
ed N 170 170 170 170 170 170
Std. Deviation .93493 .98101 1.03037 1.01687 1.00685 .98389
single Mean 3.6508 3.4037 3.4884 3.4447 3.1072 3.5163

N 199 199 199 199 199 199
Std. Deviation 1.16282 1.06340 1.02938 .95549 1.05394 1.17692
Divor Mean 3.7500 3.0000 2.6000 2.5000 4.0000 4.0000

ce N 6 6 6 6 6 6
Std. Deviation 0.00000 0.00000 0.00000 0.00000 0.00000 0.000
Total Mean 3.7280 3.5218 3.6357 3.5053 3.0062 3.6607

N 375 375 375 375 375 375
Std. Deviation 1.05720 1.02786 1.04370 .98686 1.03831 1.09310
4.5. Correlation analysis

Correlation intended to answer the direction and magnitude of relation-ship between the two
variables (Cohen L, et al, 2005), the direction of the relationship can be +1 that is a perfect
positive relationship -1 is a perfect negative relationship (Greener S, 2008). Pearson r is the most
common used statistic for parametric correlation. According to Crano W D and Brewer B.
(2002), Pearson correlation measure the extent to which variation in one measurement is
accompanied consistently by direct or inverse variation in the other measure. Based on the
correlation coefficient The association between variables can be very strong (for correlation
coefficient > 0.7), Substantial (for correlation coefficient From0.50 upto0.69), Moderate (for
36
correlation coefficient From 0.30 up to 0.49), Low (for correlation coefficient From 0.10 up to
0.29),or negligible (for correlation coefficient From 0.01 up to 0.09),
Table 4.14 correlation

Correlations
Customer Trust Service Switchin Commitm Customer
Loyalty quality g cost ent Satisfaction
** ** ** **
Pearson Correlation 1 .812 .832 .307 .786 .849**
Customer
Sig. (2-tailed) .000 .000 .000 .000 .000
Loyalty
N 375 375 375 375 375 375
** ** **
Pearson Correlation .812 **
1 .793 .337 .756 .905**
Trust Sig. (2-tailed) .000 .000 .000 .000 .000
N 375 375 375 375 375 375
** **
.793 **
1 .263 .815 .827**
Service
Sig. (2-tailed) .000 .000 .000 .000 .000
Quality
N 375 375 375 375 375 375
**
.337 **
.263 **
1 .355 .387**
Switchin
Sig. (2-tailed) .000 .000 .000 .000 .000
g cost
N 375 375 375 375 375 375
.756 **
.815 **
.355 **
1 .801**
Commit
Sig. (2-tailed) .000 .000 .000 .000 .000
ment
N 375 375 375 375 375 375
** ** ** ** **
Customer Pearson Correlation .849 .905 .827 .387 .801 1
Satisfacti Sig. (2-tailed) .000 .000 .000 .000 .000
on N 375 375 375 375 375 375
**. Correlation is significant at the 0.01 level (2-tailed).
The Pearson correlation result in the above table shows service quality, commitment, trust and
customer satisfaction are strongly association with loyalty at a correlation result of0.832, 0.786,
0.812 and 0.849 respectively. On the other hand, switching cost has a moderate association with
loyalty at correlation result of 0.307. Study by Pasha A T And Waleed A, (2016), Ali, R Et Al
(2014), And Khokhar Z. Et. Al (2019) support the idea that there is positive relationship
between loyalty and the three variables service quality, customer trust and customer satisfaction.
37
4.6. Multiple Regression analysis and Model Summary results
Regression analysis describes the proportion of variation in one dependent variable accounted for
by the other independent variable (Greener S, 2008). In this paper multiple regression analysis
used to see the relationship between loyalty and its variables and to test the hypothesis stated in
the previous chapter. Crano W D and Brewer B. (2002), states multiple regression method used
to know in what way the combination of several different variables relates to some particular
measure.
4.6.1. R square
Table 4.15 R square
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .886a .784 .781 .48051
a. Predictors: (Constant), Service Quality, Switching Cost, Trust, Commitment, Customer

Satisfaction
R square measures weighted combination of scores on the “predictor” measures is used to
create a predicted value on the variable of interest (the “criterion” measure)(principle).
According to the above table result , the weighted combination of scores the independent
variables is78.4%. it means the sum of factors of independent variables (trust, switching cost,
customer satisfaction, commitment and service quality) factors explains 78.4% (R2=0.784) of the
dependent variable (loyalty) .From this we can conclude that 78.4% of customer loyalty
decisions are dependent up on the five loyalty factors in this study. Whereas, 21.7% of customer
loyalty decisions are dependent up on other unspecified independent variables.
38
4.6.2. ANOVA
F-ratio shows or tests whether the overall regression method is a good fit for the data (Dhakal c p
(2019)). According to Dhakal c p (2019) if p<0.05 the regression model is good fit of the data.
Based on the respondent ANOVA table result below p=0.000 that is less than 0.05. The result
indicates the regression model is good fit of the data
Table 4.16. ANOVA result
ANOVAa
Model Sum of Squares Df Mean Square F Sig.
Regression 309.930 5 61.986 268.469 .000b
1 Residual 85.197 369 .231
Total 395.128 374
a. Dependent Variable: LOYALTYLL
b. Predictors: (Constant), service quality, Switching cost, Trust, Commitment, Satisfaction
4.6.3. Multi-collinearity
Multi-collinearity occur when the independent variable are too highly correlated with each other.
VIF value shows the degree that the variance in the regression estimates is increased due to
multi- coluniarity. VIF value higher than 10 indicates that multi-colluniarity is a problem. As
indicated in the table above, the VIF value of independent variables are below 10, this indicates
that multi-collenearity is not the problem for the regression analysis.
39
Table 4.17. multi collinearity result
Model Correlations Collinearity Statistics

Zero-order Partial Part B Tolerance VIF
(Constant) .365
Trust .812 .119 .056 .084 .425 2.354
Customer
.849 .265 .128 .453 .229 4.361
1 Satisfaction
Switching cost .307 -.018 -.009 -.011 .821 1.217
Commitment .786 .166 .078 .190 .250 3.996
Service quality .832 .319 .156 .329 .244 4.092
4.6.4. Normality and Homoscedasticity
Hear normality and hetroscedasticity of the multiple regression was checked by using P-P plot
and scatter plot can. Normality of residuals with a normal P-P plot in the picture below shows
that the points generally follow the normal (diagonal) line with no strong deviations; this
indicates that the residuals are normally distributed.
Figure 4.1 p-p plot for normality
40
Figure 4.2 scatter plot for homoscedasticity
Homoscedasticity is the variance of the residual from the model is constant and unrelated to the
independent variable(s), while non-constant variance is called heteroscedasticity. This variance
can be estimated from how far the dots in the above scatterplot lie apart vertically. Therefore, the
height of the above scatterplot should neither increase nor decrease as we move from left to
right. We don't see any such pattern that’s not the case here so linearity also seems to hold here.
4.6.5. Multiple regression Coefficients
According the table 4.17 beta result Customer satisfaction explain strongly the customer loyalty
decision with (Beta=0.349), it means a one unit increase or positive change in customer
satisfaction would lead to a 0.349 unit increase in the level of customer loyalty. service quality
followed customer satisfaction with (B=0.319) and commitment and trust, followed with beta
result of0.149 and 0.133 respectively. But switching cost effect on loyalty is inverse with beta= -
41
0.009, it means for one level increase in switching cost there is a decrease in customer loyalty
with 0.009.
Statistical significance of each independent variables measured to see the usefulness of each
explanatory variable in the multiple regression model (Dhakal c p ,2019). According to Dhakal c
p (2019)if p<0.05 the coefficients are statistically significance.
Table 4.17. Multiple regression Coefficients
Coefficien
ts
Model Unstandardized Standardized t Sig. 95.0% Confidence
Coefficients Coefficients Interval for B
B Std. Error Beta Lower Upper
Bound Bound
(Constant) .179 .108 1.661 .098 -.033 .390
Trust .130 .056 .133 2.303 .022 .019 .241
Customer
Satisfaction .328 .062 .349 5.285 .000 .206 .450
1
Switching cost -.009 .026 -.009 -.352 .725 -.061 .043
Commitment .155 .048 .149 3.242 .001 .061 .249
Service quality .315 .049 .319 6.465 .000 .219 .410
a. Dependent Variable: customer Loyalty
Based on the above table, significant value of service quality, commitment, customer
satisfaction and trust shows 0.000, 0.001, 0.000 and 0.022 respectively, that is below the
significance level (p<0.5), this means the four variables are significant to predict loyalty with
significant coefficient of 0,32, 0.15, 0.35 and 0.133 respectively. Based on the above analysis we
can conclude that the first (satisfaction), second(commitment), forth(trust) and fifth (service
quality) null hypotheses that say there is positive and significant influence in determining
42
customer loyalty are accepted and the alternate hypotheses are rejected, which say there is no
positive and significant influence in determining customer loyalty.
But switching cost result of p value shows 0.725, it is above 0.5, it indicates switching cost is not
significant and not useful for the model. So that the third (switching cost) null hypotheses that
say Switching cost has positive and significant influence in determining customer loyalty is
rejected and the alternate hypotheses are accepted, which is Switching cost has no positive and
significant influence in determining customer loyalty
4.6.6. Multiple Regression Model
The multiple regressions model on this study shows the influencing relationship between
dependent variables (loyalty) and independent variables ( satisfaction, service quality, trust,
commitment and switching cost). The basic objective of using regression equation on this study
is to make the researcher more effective at describing, understanding, predicting, and controlling
the stated variable.
Mathematically,
Yi = β0+ β1X1+ β2X2+ β3X3+ β4X4+ β5X5 it means Y is the dependent variable - loyalty
,X1= trust , X2 =satisfaction, X3=switching cost , X4=commitment, X5=service quality are the
independent variables and β0is the intercept term and also Β1, β2, β3 β4and β5 are also refer to
the coefficient of their respective independent variables which measure the change in the mean
value of Y, per unit change in their respective independent variables.
43
Based on the significant level result because switching cost or X3 influence on loyalty is not
significant, it is not included in the regration model. Therefore, the mathematical formula
becomes.
Loyalty = β0 + β1 (trust ) + β2 (satisfaction) + β3 (commitment ) + β4 (service quality)
Or
Loyalty =0.179+0.130 (trust ) + 0.328 (satisfaction) + 0.155 (commitment ) +0 .315 (service quality)
44
CHAPTER FIVE
SUMMERY OF FINDINGS, CONCLUSION AND RECOMMENDATION
This descriptive and explanatory study assessed the influence of loyalty factors on Awash bank
customer loyalty decision, to make recommendations about how to improve the customer loyalty
level and reduce customer turn over. The discussion centered on the most important findings
regarding the customer loyalty and its determinant variables. The survey method involved 375
respondents for better understanding the factors effect on loyalty. The respondent selected based
on non-probability sampling method. Data were collected based on a structured person assisted
questionnaire from customers of Awash bank. Analysis was done using both descriptive statistics
including tools such as frequency, mean, standard deviation and correlation and a multiple linear
regression analysis to identify the relationship between loyalty and its factors.
5.1. Summary of findings,

In this part the major findings that found from descriptive statistics, correlation and multiple
regressions were presented in a summarized form, the summery result presented as follows:
Based on the descriptive analysis frequency and arithmetic mean values generated by the
descriptive statistics, it shows that satisfaction (mean=3.64), trust (mean=3.74), commitment
(mean=3.5), and service quality (mean=3.64) are above average closest to agree that is 4 and
switching cost (mean=3.01) it is also above average but closest to the average cut-off point 3.
This figure shows that customers of Awash bank are moderately agreed or satisfied with the
bank performance and practice related to the five variables of loyalty.
45
The mean analysis result of gender and marital status shows. Married respondents mean value
for trust, satisfaction and quality, commitment and loyalty is higher than single and divorce,
whereas switching cost mean value for single status respondent higher value than married and
divorce respondents. The gender result shows the number of male visiting the bank is higher
than female and male mean value for trust , satisfaction and quality is higher than female mean
value but in commitment and switching cost the female respondent mean value shows higher
value than male.
The Pearson correlation result shows service quality, commitment, trust and customer
satisfaction are strongly association with loyalty at a correlation result of0.832, 0.786, 0.812 and
0.849 respectively. On the other hand, switching cost has a moderate association with loyalty at
correlation result of 0.307. Study by Pasha A T And Waleed A, (2016), Ali, R Et Al (2014),
And Khokhar Z. Et. Al (2019)support the idea that there is positive relationship between loyalty
and the three variables service quality, customer trust and customer satisfaction. (14) Found
positive correlation result between satisfaction and loyalty
Based on The multiple regression analysis result, the four variables service quality, commitment,
customer satisfaction and trust are significant to predict loyalty and they have positive and
significant influence in determining customer loyalty with significant coefficient of 0,32, 0.15,
0.35 and 0.133 respectively.. But switching cost is not significant and not useful for the multiple
regression models and it has no positive and significant influence in determining customer
loyalty Pasha A T And Waleed, A (2016) And Khokhar Z. et. al (2019)support the idea that
there is positive and significant influence of the three variables service quality, customer trust
and customer satisfaction on loyalty.
46
5.2. Conclusion
This explanatory study assessed the determinant factors for customer loyalty in awash bank
selective four branches in Addis Ababa to make recommendations about how to other branches
can successfully make customer loyal. The discussion centered on the most important findings
regarding the impact on customer loyalty in Awash bank. Data were collected based on a
structured person assisted questionnaire from CUSTOMERS of the BANK. Analysis was done
using both descriptive statistics including tools such as frequency, mean, and correlation and a
multiple linear regression analysis to identify the relationship between.
The loyalty factors investigated in this study are good, according to the findings customers of
Awash bank are moderately agreed or satisfied with the bank performance and practice related to
the five variables of loyalty. From this result we can conclude that the bank is still not reaching
the highest level to make its customer loyal. Because awash bank is one of the leading bank in
the industry to keep its position still it need improvements to make customer more loyal.
The mean analysis result of gender and marital status shows married respondents mean value for
trust, satisfaction and quality, commitment and loyalty is higher than single and divorce, The
gender result shows the number of male visiting the bank is higher than female and male mean
value for trust , satisfaction and quality is higher than female mean value but in commitment and
switching cost the female respondent mean value shows higher value than male. Based on this
result we can conclude that there is in difference between treatment and focus based on gender
and marital status, this violet the value of the business to treat customer equally irrespective of
their gender and marital status.
47
From the finding service quality, commitment, trust and customer satisfaction are strongly
association with loyalty with value of 0.832, 0.786, 0.812 and 0.849 respectively. This shows
any positive improvement in service quality like improving the Easiness in depositing and
withdrawing money, functionality of equipment, interest in solving problem, providing clear and
understandable information and Maintaining error free records can improve customer loyalty
positively , commitment, trust and customer satisfaction can bring a positive improvement for
customer loyalty. So we can conclude that the four variables are very important for improving
the customer loyalty in awash bank.
Based on The finding on multiple regression the four variables; service quality, commitment,
customer satisfaction and trust are significant to predict loyalty and they have positive and
significant influence in determining customer loyalty. But switching cost is not significant and
not useful for the multiple regression models and it has no positive and significant influence in
determining customer loyalty. From this finding it is found that satisfaction, commitment, trust
and service quality plays a very crucial role towards the customer loyalty in Awash bank. Hence,
all four (4) factors namely satisfaction, commitment, trust and service quality has a significant
direct (positive) relationship on customer loyalty. For example one positive improvement in
service quality like improving the Easiness in depositing and withdrawing money, functionality of
equipment, interest in solving problem, providing clear and understandable information and
Maintaining error free records can improve customer loyalty positively by0.32, this effect is similar
to all the rest three variables commitment, customer satisfaction and trust means one positive
improvement of each variable will improve customer loyalty with value of 0.15, 0.35 and 0.133
respectively for each variable. To generalize any positive change in service quality, commitment,
48
customer satisfaction and trust will significantly and positively affect the customer decision to
be loyal for the bank.
5.3. RECOMMENDATION
Based on the study descriptive findings, the result reveals that the Bank should improve on the
loyalty variable to make customer more loyal for Awash bank. Especially on commitment and
switching cost which have the lowest mean values compare with the other,
The number of women bank customers is lower compared to men and their mean response value
for majority variable is below male. The bank should ensure that all customers are equally valued
by staff to increase loyalty levels.
The study also reveals a significant relationship between service quality, commitment, and trust
and customer satisfaction with loyalty. Therefore, it is highly recommendable for the bank to
work on service quality, commitment, trust and customer satisfaction, especially on satisfaction
and service quality because their effect on customer loyalty is larger.
Results provide evidence that service quality, commitment, trust and customer satisfaction
influences customer loyalty significantly. Therefore, this research could be used as a guide for
Awash bank to keep their focus on the variables service quality, commitment, trust and customer
satisfaction affecting customer loyalty, and the managers need to take them into consideration in
formulating strategies for developing and improving customer loyalty.
49
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ANNEXES 
RESEARCH QUESTIONER
ST.MARY’S UNIVERSIY COLLEGE
MASTER OF MARKETING MANAGEMENT PROGRAM
Research Questionnaire
Dear sir/madam! the following questions are prepared for research purpose to be undertaken on
factor affecting customer loyalty - in case of Awash bank in Addis Ababa for the partial
fulfillment of master’s degree in marketing management from st.mary’s universiy college in
masters of marketing management program. Your participation is greatly appreciated and all
responses will be kept confidential. There are no right and wrong answers. All we are interested
in is your opinion on quality of services about the bank.
Instruction
For the fulfillment of the purpose of this paper you are kindly requested to answer all of the
following questions appropriately as per the requirements listed below. Your answers are
confidential and only use for this master thesis study. No need for write your name.
I would like to thanks for your participation
xviii
Part I- Personal Information questions
Please select your chose and show your choice by making (√) on the box for your choice.
For example √
1. please indicate your gender 1 Male 2 Female
2. Marital status 1. Married 2. Single 3. divorce
3. please indicate your Educational level
1. not learned 2 8 and below grade 8
3 10 and below grade 10 4 12 and below grade 12
5 TVET 6 Certificate
7 diploma 8 degree completed
9 masters and above
4. please indicate your Occupation
1 business man 2 Employee 3. student 4. Other_____________
5. Monthly income __________________
6. Age ______________________________
7. How long have you been using Awash banks service?
Below 1 year 1 – 5 years 5 - 10 years 10 – 15 years Above 15 years
Part two: customer loyalty measurement
Please indicate your choice for the five scale interval statements List below about Awash
Bank. Your choice indicates how you agree or disagree to each statement about the bank
by using the following scale.
Strongly agree (SA) =5 Agree (A) =4 Neutral (N) =3
Disagree (D) =2 and strongly disagree (SD) =1.
xix
Please Show your selected choice by using (√) sign.
Variables and Items SD D N A SA
TRUST Muhammad et
8 This bank keeps my information confidential. al. (2015)
9 This bank is honest.
10 This bank is reliable.
11 This bank meets my needs.
CUSTOMER SATISFACTION
12 I am satisfied with the decision to choose this bank Muhammad et
13 This bank leaves me a pleasant impression al. (2015)
14 I want to return to this bank in the future Aregawi
15 I will advise about this bank to my friends. (2018),
SWITCHING COST
16 To change to another bank involves investing time in
searching for information about other banks
17 To change to another bank will lose a lot of personal
relationship with current bank employee and
management
18 To change to another involves a risk in choosing
another bank which might turn out not to satisfy me
COMMITMENT
19 The bank makes several service adjustments to suit Aregawi
xx
my needs (2018),
20 The bank offers personalized services to meet
different customer needs differently
21 The bank is flexible when its services are changed
22 The employees give you special attention
SERVICE QUALITY
23 Ease of depositing and withdrawing money from any Muhammad et
branch al. (2015)
24 Continuous and ordered functionality of equipment
such as computer and printer etc
25 Staff takes interest in solving problem
26 Bank Maintains error free records
27 Information provided by bank employees are clear
and understandable.
CUSTOMER LOYALTY SD D N A SA
28 I regularly visit this bank Muhammad et
29 I seldom think of changing this bank to another one al. (2015)
30 I use this bank each time
31 I need to make any financial transaction
32 I consider this bank as my preferred choice
33 Each time I want to make any financial transaction,
this bank is my first choice.
xxi

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ST.

FACTOR AFFECTING CUSTOMER LOYALTY - IN CASE OF

BY: SOFIA REDWAN

ADDIS ABABA, ETHIOPIA

BY: SOFIA REDWAN

ATHESIS SUBMITTED TO ST.MARY’S UNIVERSIY

ADDIS ABABA, ETHIOPIA

SCHOOL OF GRADUATE STUDIES

FACTOR AFFECTING CUSTOMER LOYALTY - IN CASE OF AWASH

By: SOFIA REDWAN

APPROVED BY BOARD OF EXAMINERS

St.Mary’s University, Addis Ababa December,2020

successful completion of this research. I thank all of them.

Table 4.8 Switching cost mean ----------------------------------------------------------------- 31

Table 4.9 Commitment mean ------------------------------------------------------------------- 32

Table 4.10 Service quality mean ------------------------------------------------------------------ 33

Table 4.11 Customer loyalty mean ---------------------------------------------------------------- 34

Table 4.12 Gender mean --------------------------------------------------------------------------- 35

Table 4.13 Marital status mean ------------------------------------------------------------------- 36

Table 4.14 Correlations ---------------------------------------------------------------------------- 37

Table 4.15 R square -------------------------------------------------------------------------------- 38

Table 4.16 ANOVA --------------------------------------------------------------------------------- 39

Table 4.17 Multi collinearity result---------------------------------------------------------------- 40

Table 4.18 Regression analysis coefficients ---------------------------------------------------- 42

consideration in formulating strategies for developing and improving customer loyalty.

1.1. Background of the Study

different methods to distinguish themselves and make their customer loyal

competitive advantage and to survive in today’s ever-increasing banking competitive

and effective marketing strategies (Maroofi, 2013).

be consider as loyal customer.

satisfaction, customer complain handling, and commitment as Customer loyalty determinants

customer and improve bank competitive position.

1.2. Statement of the Problem

customer satisfaction, customer complain handling, and commitment to measure customer

1.3. Research Question

This paper answered the following questions;

1.4. Objectives of the Study

1.4.1. General Objectives

in the case of Awash banks (selective four branches in Addis Ababa).

This paper has three specific objectives this are

To analyses the influence of satisfaction, commitment, trust, service quality and

switching cost on customer Loyalty,

Provide recommendation based on findings

1.5. Scope of the study

only selective four branches that found in Addis Ababa.

1.6. Limitation of the study

have significant value to practitioners and scholars alike.

1.8. Organization of the Study

2.1. Customer Loyalty

function of psychological (decision-making, evaluative) process”.

purchases or the frequency of their purchases or even both.

recommending them to friends and colleagues.

2.2. Theoretical Reviews

2.2.1 Behavioral perspective

J Rowley (2005). Behavioral loyalty means consumers’ repurchase behavioral or intension of

clearly questionable (O´Malley, 1998).

provider to other consumers or the commitment to repatronize a preferred service provider

are said to buy a brand more often (Riley et al., 1997).

2.2.3 Cognitive perspective

product related to process elaboration resulting in product commitment. Customer loyalty is