Factors Affecting Customer Loyalty in Context of Banglalink in Bangladesh

Table of Contents
Introduction...............................................................................................................................................1
Statement of the Problem.........................................................................................................................2
Literature Review......................................................................................................................................2
Corporate Trust.......................................................................................................................................2
Corporate Image.....................................................................................................................................3
Customer Satisfaction..............................................................................................................................3
Customer Loyalty....................................................................................................................................4
Relationship between a Corporate Trust and Customer Satisfaction...................................................4
Relationship between Corporate Image and Customer Satisfaction.....................................................5
Relationship between Corporate Trust and Customer Loyalty.............................................................5
Relationship between Corporate Image and Customer Loyalty............................................................5
Relationship between Customer Satisfaction and Customer Loyalty....................................................6
Research Questions...................................................................................................................................6
Hypotheses.................................................................................................................................................7
Theoretical Framework............................................................................................................................7
Operational Definitions.............................................................................................................................8
Methodology..............................................................................................................................................8
Research Design......................................................................................................................................8
Research Approach.................................................................................................................................9
Sampling Method.....................................................................................................................................9
Survey Instrument....................................................................................................................................9
To gather data for this study, questionnaire will be used because of these fowling reasons;...................9
Pilot test of questionnaires....................................................................................................................10
Data collection......................................................................................................................................10
Data analysis procedure........................................................................................................................11
Limitation of the study............................................................................................................................11
Significance of this study.........................................................................................................................11
References................................................................................................................................................13
Appendix..................................................................................................................................................17

Factors affecting customer loyalty in context of Banglalink in Bangladesh 1
Abstract
This research intends to investigate identifying corporate image, corporate trust for
Banglalink and the extent they affect customer loyalty moderated by customer satisfaction. The
purpose of this research is to examine the relationship of corporate trust and corporate image on
customer satisfaction and customer loyalty in Banglalink in the context of Bangladesh. It is a
causal study which will measure the correlation among these research variables: Corporate trust,
corporate image that affects customer loyalty through customer satisfaction. An empirical causal
framework was developed through quantitative study. Survey was performed with customers as
well as secondary sources had been used for further understanding. This study was analyzed by
using correlation analysis technique. The result of this research shows that corporate trust and
corporate image along with network quality, pricing structure, value added service are the main
variables that affect customer satisfaction, showing how the customer is more interested in this
core variables other than receiving benefits from Banglalink.
Introduction
Banglalink has started its journey in February 2005. Banglalink has been the catalyst for
making mobile telephony an affordable option for consumers in Bangladesh, with over 33.69
million subscribers over a decade. Banglalink Digital Communications Limited is a fully owned
company of Telecom Ventures Ltd. which is a 100% owned subsidiary of Global Telecom
Holding. It has obtained national GSM license in 1996 to extend its business to cellular mobile
and radio telephone services. VEON owns 51.9% shares of Global Telecom Holding following a
business combination in April 2011, between VEON Ltd. and Wind Telecom S.p.A. (Banglalink,
2005).
Banglalink is facing intense competition from other mobile operators in the market. The
top management noticed that since 2017 the company is losing its market share. Therefore, the
top management is interested to investigate the reasons behind this decrease in market share, and
need to explore the factors affecting customer loyalty in Bangladesh. This study commences to
appraise a framework for customer loyalty in telecommunication service industry in context of
Bangladesh.

Factors affecting customer loyalty in context of Banglalink in Bangladesh 2
Statement of the Problem
The purpose of researchers is to investigate the effect of network quality, pricing
structure, value added service, trust, and corporate image to customer loyalty mediated by
customer satisfaction within the context of Banglalink in Bangladesh. In an earlier (Shafei &
Tabaa,2016) conducted a study in context of mobile telecommunication industry in Egypt to
investigate customer loyalty in relation to network quality, pricing structure, and value-added
service where customer satisfaction was a moderating variable. Authors further suggested that to
better understand the customer loyalty, future researchers should include trust and corporate
image in the above relationships.
Customer loyalty towards the firm is recognized as a the most influential factors in the
business organization success and it is also important for future survival of service industry
according to (Kandampully & Suhartanto ,2000), loyal customer is a customer who repurchases
from the same service provider whenever possible, and who continues to recommend or maintain
a positive attitude towards the service provider. Bhote’s (1996) studies indicate that the firm’s
corporate image may influence customer enthusiasm: value, delight, and loyalty. In addition,
there is some evidence that loyalty may also be determined by corporate image (Mazursky &
Jacoby, 1986; Murphy, 1996; Osman, 1993).
Therefore, this study will investigate the affect among network quality, pricing structure,
value added services, incorporate with trust and corporate image, and customer loyalty where
customer satisfaction works as a mediating variable.
Literature Review
Corporate trust
Anderson and Narus (1990) emphasize that trust occurs when one party believes that the
other party’s actions would result in positive outcomes for itself. Consequently, in order to trust a
brand, customers should perceive quality as being positive.
Trust has been recognized as an important role in affecting relationship commitment
(Morgan & Hunt, 1994) and so customer loyalty (Gundlach &Murphy, 1993). It appears that if
one party trusts another, it is likely to develop some form of positive behavioral intention
towards the other party. Accordingly, when an EJM 39, 7/8912 customer trusts a brand, this

Factors affecting customer loyalty in context of Banglalink in Bangladesh 3
means that he is also likely to form a positive buying intention towards the brand (Lau & Lee,
1999).
Doney and Cannon (1997) suggest that the construction of trust involves a calculative
process based on the ability of a party to continue to meet its obligations and on an estimation of
the costs versus rewards of staying in the relationship. In this case the definition of (Anderson &
Narus, 1990), the researcher will use this as construct.
Corporate image
Corporate image is described as the overall impression made on the minds of the public
about a firm (Barich & Kotler, 1991). Nguyen and Leblanc (2001, p. 228) claim that corporate
image is related to the physical and behavioral attributes of the firm, such as business name,
architecture, variety of products/services, and to the impression of quality communicated by each
person interacting with the firm’s clients. Corporate image is the result of a process (MacInnis &
Price, 1987). The process stems from ideas, feelings and consumption experiences with a firm
that are retrieved from memory and transformed into mental images (Yuille & Catchpole, 1977).
Therefore, corporate image is the result of an evaluation process. Although a customer
may not have enough information about a firm, information obtained from different sources such
as advertisements and word of mouth will influence the process of forming the corporate image.
Fishbein and Ajzen (1975) argue that attitudes are functionally related to behavioral intentions,
which predict behavior. Consequently, corporate image as an attitude must affect behavioral
intentions such as customer loyalty (Johnson et al., 2001, p. 224). Nguyen and Leblanc (2001)
demonstrate that corporate image relates positively with customer loyalty in three sectors
(telecommunication, retailing and education).
Andreassen (1995) found that customers are satisfied with the services rendered; their
attitude toward the company is improved. This attitude will then affect the consumers’ s
atisfaction with the company. In this case the definition of (Barich & Kotler, 1991), the
researcher will use this as construct.
Customer satisfaction
The most common interpretations reflect the notion that satisfaction is a feeling which
results from a process of evaluating what was received against that expected, the purchase

Factors affecting customer loyalty in context of Banglalink in Bangladesh 4
decision itself and the fulfilment of needs or want (Armstrong & Kotler, 1996; Berkowitz et al.
1999). Kotler (1999) also noted that satisfaction is function of perceived performance and
expectations which identifies feelings of a person resulting from comparing a product’s
perceived performance in relation to his or her expectations. Bitner and Zeithaml (2003) stated
that satisfaction is the customers’ evaluation of a product or service in terms of whether that
product or service has met their needs and expectations. Fe and Ikova (2004) added that the
perception of the word “satisfaction” influences the activities which we conduct to achieve it. In
this case the definition of (Armstrong & Kotler, 1996; Berkowitz et al. 1999), the researcher will
use this as construct.
Customer loyalty
Gremler and Brown (1996) defined customer loyalty as follows: “Customer loyalty is the
degree to which the customer exhibits repeat purchase 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.”
Customer loyalty represents the repeat purchase, and referring the company to other
customers (Heskett, 1994). He also stated that customer loyalty is a figure that maybe measured
directly as measuring actual repeated sales to customers. According to Duffy (2003) loyalty is
the feeling that a customer has about a brand which ultimately generates positive and measurable
financial results. Improvements in retention and increasing in the share of the company are the
obvious economic benefits of customer loyalty.
According to (Feick & Lee ,2001) customer loyalty has been measured as the long-term
choice probability for a brand or as a minimum differential needed for switching. In this case the
definition of (Gremler & Brown, 1996), the researcher will use this as construct.
Relationship between a Corporate Trust and Customer Satisfaction
Anderson and Narus (1990) emphasize that trust occurs when one party believes that the
other party’s actions would result in positive outcomes for itself. Consequently, in order to trust a
brand, customers should perceive quality as being positive.
A variety of studies have made it clear that image and consumer trust can significantly
affect individual behavior (Ratnasingham, 1998).

Factors affecting customer loyalty in context of Banglalink in Bangladesh 5
Relationship between Corporate Image and Customer Satisfaction
Corporate image is believed to influence the customers’ perception of value and quality
through a filtering effect. Customer image is believed to influence the customers’ satisfaction
evaluation. Based on this Andreassen (1995) proposed that corporate image through a filtering
effect impacts customers’ perception of value, quality and customer satisfaction for the industry
consolidated.
Customers’ patronage behavior towards a particular store is depended on their image of
that particular stage (Osman, 1993). The more favorable the store image, the higher the valence
of the store to the customer. However, the exact relationship between store image and store
loyalty remained inclusive. There is both evidence of direct relationship and indirect relationship
whereby customer satisfaction acts as a mediator (Doyle & Fenwick, 1974; Houston and Nevi,
1981; Lindquist, 1974; Stanley & Sewall, 1976). Therefore, it would be both theoretical and
managerial interest to see how corporate image and customer satisfaction are related to each
other.
Relationship between Corporate Trust and Customer Loyalty
A customer loyalty to an organization is enhanced by the trust created between the
customer and the service provider (Kassim and Abdullah, 2008; Kishada and Wahab, 2013).
Customers who trust a service provider are more than likely to be loyal to the company
(Garbarino & Johnson, 1999). Trust can lead to long-term loyalty and strengthen the relationship
between the two parties (Singh & Sirdeshmukh, 2000). Therefore, literature review supports to
investigate the relationship between corporate trust and customer loyalty.
Relationship between Corporate Image and Customer Loyalty
An organization’s corporate image is an important variable that positively or negatively
influences marketing activities. Corporate image is considered to have the ability to influence
customers’ perception of the goods and services offered (Zeithaml & Bitner, 1996). This image
will have an impact on customers’ buying behavior.
Service literature identifies a number of factors that reflects corporate image in
customers’ mind. Image is considered to influence customers’ minds through the combined