Academic journal article International Journal of Marketing Studies

A Study on Effect of Brand Credibility on Word of Mouth: With Reference to Internet Service Providers in Malaysia

Academic journal article International Journal of Marketing Studies

A Study on Effect of Brand Credibility on Word of Mouth: With Reference to Internet Service Providers in Malaysia

Article excerpt

Abstract

Service industries have chosen the significance of customers' satisfaction and loyalty in one side, and the retention of these customers in another side. Factors influencing the retention of customers in which brand credibility is one. Despite there have been studies targeting issues of brand, satisfaction and loyalty; this study included word of mouth to fill the existing gap in the Internet service providers in Malaysia. 120 respondents participated in this study, which all were customers of Internet services for at least 2 years. This study found that brand credibility has positive impact on word of mouth through customers' satisfaction and loyalty.

Keywords: Brand credibility, Customer loyalty, Customer satisfaction, Word of mouth

1. Introduction

In today's global market that World Bank tries to build a global free market for offering products and services, the high speed of exchange and communication leads to the creation of a very competitive market for companies which are working not only in the international scale, but also in the local one (Smith & Doyle, 2002). The survival path in this competitive market is trying to attract more customers and retain them (Sweeney & Swait, 2008). Therefore, the more a company attracts customers, the more it generates profit and value for company.

Heskett, Jones, Loveman, and Sasser (1994) believed that attracting more customer is not a key factor to have a successful firm. Their notion was that in the new economics, managers have to focus more on the frontline staff and the technology, because they found that there is a way to make profit in the economy. Heskett et al., (1994) had drawn a chain for a victorious business company. Their chain included a linkage between firm profitability, customer loyalty and pleasure, and yield of employees of the firms. Based on Heskett et al., (1994) value and revenue are outcomes of customer loyalty. Besides, satisfied customer can create loyal customer and satisfaction is influenced by the quality of offered products and services. Heskett et al., (1994) mentioned that retaining customer create more profit and value that attract more new customers.

To write about the importance of customer retention of churn, suffice to say that researchers have worked on this issue during the years. Their studies have shown that preventing customer churn is a key competitive issue in financial and telecommunication industry (Teradata, 2004). Besides, these kinds of service providers must concentrate their efforts on customer retention. Bell, Auh and Smalley (2005) and Evans (2002) examined churn or retention on telecommunication industry and financial sector. There are factors that can influence the retention of customers. Offering product and services with vast names and brand targets today's customers. Question will rise in this point that what the customers' priority is to select these different products and services. This can open new issues such as brand of products and services.

Brand is defined as one of these factors. According to Erdem and Swait (1998) the brand is a summary statistic characterizing the swelling chronological relationship among two groups, the customer and the service provider. Based on Sweeney and Swait (2008) a firm can achieve more customers and keep them for a long time if it follows the trust way with its customers; otherwise, the relationship will be ruined. This explanation can open another meaning under brand name, which is brand credibility. Customers distinguish constructing credibility for a brand, which is considered as an investment to companies, as a long-term plan of companies to offer the products and service that are in major differences with other products and services. According to Erdem & Swait (1998) and Wernerfelt (1988) customers buy a brand because they trust it. Lacking the trust can lead to shift of customers to other brands. Therefore, credibility is the most important reasons that cause people to buy a brand and create a long-term relationship with a company. …

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