Ron Garland

Estimating customer defection in personal retail banking

Using Juster’s probability scale, this study examines a sample of 881 customers’ self‐reported estimates of probable defection from their main bank. One year later these customers’ statuses with their main bank were reviewed, allowing comparison of intended with actual defection. This methodology allows not only investigation of the Juster scale’s performance in a “subscription” type market but also identification of those customers with a predisposition to switch banks. Bank management can then decide if and how they might address their switch‐prone customers. Respondents were asked to allocate their probability of closing all accounts at their main bank in the next 12 months. The sample estimate was 10 percent while the actual defection result was 5 percent. While this may seem somewhat inaccurate, similar studies in the literature report the tendency of the Juster scale to over‐estimate switching behaviour, but its estimates have consistently proved superior previously to those derived from attitudinally based intention‐to‐buy scales and at least the equal of the Conversion Model.

Grocery shopping: list and non‐list usage

“Scripted behaviour” underpins many repetitive and routine tasks, such as grocery shopping, where it is observed that some shoppers take a list and others do not. The notion of “scripts” is used to examine the underlying reasons for the presence and absence of grocery shopping lists on major weekly or two‐weekly shopping trips to supermarkets. Little if any current information exists in marketing literature to fully explain the reasons for the presence or absence of lists, though it is known that such behaviour affects purchase activity in supermarkets. Set in New Zealand, this exploratory and preliminary study examines the shopping list being a moderator of purchase behaviour. It confirms previous research into the differences between list and non‐list grocery shoppers and suggests that far more planning occurs amongst all grocery shoppers than might be expected. The study reveals that some grocery shoppers, regardless of the presence or absence of a written shopping list, have a flexible approach to gro...

Testing Dick and Basu's Customer Loyalty Model

Abstract A widely cited model of customer loyalty is the typology proposed by Dick and Basu (1994) that depicts loyalty as a two-dimensional construct involving relative attitude and repeat patronage. However, while Dick and Basu conceptualise the loyalty construct, they do not operationalise it or provide empirical evidence of its predictive ability. This paper reports a test of the predictive ability of Dick and Basus model in personal retail banking. The study is a replication of East, Sinclair and Gendalls (2000) research on loyalty in supermarket shopping, from which these authors concluded there was little support for Dick and Basus loyalty typology. Our study found that, in some circumstances relative attitude was a better predictor of bank loyalty than banking behaviour, while in others share of wallet (a proxy measure for repeat patronage) was better. Like East et al. (2000), we found no evidence that the prediction of customer loyalty was enhanced by the inclusion of a term for the interaction between attitude and behaviour. Nevertheless, our findings suggest that Dick and Basus model may have some validity in subscription-type markets, like banking, where brand portfolios tend to be small and customer churn rates are relatively low.

The effect of odd pricing on demand

Presents the findings of a study designed to investigate the effect of odd pricing on respondents’ purchase probabilities for six products ranging in price from

The use of a specific non-response option on Likert-type scales.

5 to

SUPERMARKET SHOPPING LISTS: THEIR EFFECT ON CONSUMER EXPENDITURE

100. The products tested were a block of cheese, a frozen chicken, a box of chocolates, a hair dryer, an electric kettle and a food blender, and the data were collected in a mall intercept of 300 household shoppers. For each product a demand curve was estimated and the differences between expected and actual purchase probabilities at each odd price level examined. For all six products, demand was higher than expected at one or both of the odd price points tested. This effect was particularly marked for the lower‐priced food items (cheese, chicken and chocolates) and for prices ending in the digit 9. Provides support for the assumption that odd pricing generates greater than expected demand and for the common practice of setting retail prices which end in 99 cents or

PRICING ERRORS IN THE SUPERMARKET: WHO PAYS?

99.

Service Quality in the New Zealand Market for Construction Hardware

Abstract The paper argues that the use of non-response options in questionnaires relating to attitudinal research offers various advantages. First, if non-random patterns of response on individual items within a questionnaire occur, such patterns may hold valuable information for the researcher. Second, the provision of the non-response option may mean that any resultant analysis is based upon a sample with appropriate knowledge or opinions, thereby aiding discrimination. To support this view, various pieces of past research by the authors are presented where patterns of non-response are analysed. In each case it was found that the existence of the non-response option offered some new insight. Such insights could help to improve subsequent questionnaires, if used at the pilot study stage, or illustrate specific aspects of a sample’s attitudes – for example, in one case, about uncertainty over a council’s tourism policies.

Price Accuracy in New Zealand's Scanning Supermarkets

The presence of a written shopping list on a major grocery buying trip to the supermarket is tangible evidence of out‐of‐store planning by the shopper. This pre‐planning may influence both time spent in store and grocery expenditure, two factors of importance to supermarket retailers. Set in a New Zealand city, examines the extent to which a written grocery shopping list affects these two factors by comparing the behaviour of two matched samples, one with lists and one without. The findings are conclusive: written shopping lists significantly reduce average expenditure; the presence of children accompanying the shopper significantly increases expenditure and time spent in store. While supermarket retailers cannot dissuade customers from bringing a written shopping list to the store, they can encourage customers to spend more time in‐store, and to shop with someone else, thereby increasing average expenditure.

The Widespread Use of Odd Pricing in the Retail Sector

Electronic scanning check‐out systems now operate in most New Zealand supermarkets, and three‐quarters of all grocery products bought by New Zealand households are optically scanned. With the introduction of optical scanning technology at point‐of‐sale comes the debate on price accuracy. Based on a sample of 18,129 products bought in 86 New Zealand supermarkets, the level of pricing errors and the monetary value of pricing errors are examined. Previous research in the USA has suggested that consumers suspect pricing errors may disadvantage them rather than the retailer. However, the monetary consequences of price inaccuracy resulted in a net average undercharge to the consumer of 31 cents in every NZ