Effects of technology on customer retention : a study on Tesco Malaysia
Date
2015
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Abstract
The main purpose of this study is to explore the effects of information technology on business, focusing on how information technology had enabled TESCO Malaysia to improve customers’ satisfaction and customers’ retention. The conceptual framework for this research was deduced from past researches (Lindh, 2005; Daneshvar and Ramesh 2010), it comprises of five independent variables which are, cost reduction, speedy process, communication and relationship, accessibility and convenience and two dependent variables which include, customers satisfaction and retention. The study adopted descriptive and explanatory research designs. Also this study used a case-study survey methods using a survey questionnaires containing 35 items with Likert Scale (Disagree -1 and 5 for Agree). The sample of 253 respondents (customers) from various TESCO retail outlets were recruited using self-selection sampling. The collected data was analysed using descriptive means and regression via SPSS.20. To ensure reliability and validity of the data set, the sample size only includes TESCO Malaysia’s Customers’ who had made use of TESCO Grocery Home Shopping Service. The Bivariate multiple regression result shows that all the IT enabled elements has a significant and positive impact on customers’ satisfaction except accessibility, which we found no significant influence on customer satisfaction. Also this research found a positive and significant influence of IT enabled elements on customer retention except cost and accessibility. Also this research shows that improved customer satisfaction has a significant and positive impact on customer retention. This study concluded that adoption of advanced information technology will maintain TESCO Malaysia’s competitive edge through customer satisfaction and retention. Therefore managers working in retail sector should take initiatives to promote the use of IT in order to enhance customers’ satisfaction and retention. Future research should involve several organizations from different sectors and make use of a larger sample that will improve the generalization of the effects of information technology on business.
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Management of Marketing