CHAPTER ONE
INTRODUCTION
- BACKGROUND OF STUDY
Higher Education is critical to the development of a country (Annamdevula & Bellamkonda, 2016).It is desirable to offer high-quality education to students. In the current scenario, Higher Education Institutes (HEIs) are facing severe competition to attract new students and retain them.it is important for policymakers to device ways to increase student loyalty (Austin & Pervaiz, 2017). Loyalty is not restricted to the duration of students stay at university but continues even after their graduation (Giner & Peralt Rillo, 2016). Student Loyalty helps in increasing student enrollment (Taecharungroj, 2014). Consequently, HEIs are increasingly following marketing strategies to attract a large pool of students to their respective universities (Hemsley-Brown & Oplatka, 2010). Academics are also capturing this development. Andreasen and Kotler (2008) referred to extending marketing concept to not for profit organizations such as hospitals, churches and universities. Ivy (2008) studied 7 Ps of Marketing. Lau (2016) studied eight Ps of Marketing. In addition to 3 Ps of services marketing (People, Process, Physical Evidence), Productivity and Quality of education was taken as 8th P. Universities are devising marketing strategies to keep students loyal to them. Ogunnaike, Borishade, Sholarin and Odubela (2014) in their study applied seven P’s of marketing to find their impact on student loyalty. Universities are striving to establish a bond with students which they wish to continue even after their graduation reaping benefits for both of them.
It is vital for university management to know what factors lead to student loyalty. The antecedents of loyalty will guide management of universities to devise policies aiming at retention of students. The main determinants of student loyalty are perceived service quality (Douglas et.al, 2006), student satisfaction (Alves & Raposo, 2007a) and university image (Nguyen & LeBlanc, 2001). Determining which facets of university experience are crucial for student satisfaction and their magnitude of impact, are the continuous subject of inquiry (Elsharnouby, 2015).Though there is an adequate number of research studies on determinants of student loyalty but there are some following knowledge gaps identified in this study: (1) There are studies on student loyalty conducted in one university (Mohammad Hani Al-Kilani & Naseem Twaissi, 2017; Austin & Pervaiz, 2017) and also in multiple universities (Pradeep Kumar Nair, & Neethiahnanthan Ari Ragavan, 2016; Hsu, Wang, Cheng, & Chen, 2016; Annamdevula & Bellamkonda, 2016; Choudhury, 2015) but generally were limited to few antecedents of student loyalty except few studies (Helgesen & Nesset, 2007; Hennig-Thurau et al., 2001; Sultan & Yin Wong, 2012; Schlesinger, Cervera, & Pérez-Cabañero, 2016), which have captured a holistic view of students’ loyalty and measured the impact of the multiple determinants of student loyalty simultaneously. This study will be an addition to such sparse studies which will not only look at various antecedents of student loyalty but also their interrelationships.
Another aspect is that management of universities hardly keeps a formal relationship with their alumni by forming their alumni bodies. In contrast to it, the students in the USA automatically become alumni members (Hoffmann & Müller, 2008) while in Germany and Russia, graduating students are offered to become alumni members (Iskhakova, Hilbert, & Hoffmann, 2016). Considering very low tendency of universities in Pakistan to maintain a long-lasting relationship with its students, there is a need to find out the level of attachment or loyalty students feel for their universities so that management of universities may reconsider the orthodox pattern of terminating their relationship with students as soon as they graduate.
Competition in the higher education sector is intensifying (Berry and Cassidy, 2013). In the USA for instance, a number of universities have been consistently rising as barriers to entry continue to decline. Universities increasingly resemble one another and are finding it difficult to attract quality students due to lack of a differentiating factor. Off late, the bargaining power has tipped toward students as they have more options to select from. Thus, the competitive advantage of universities is eroding.
A key strategy for universities to maneuver a difficult competitive environment is to create a distinct brand image for themselves. A unique brand image can positively influence their reputation which can have major influence on the student’s experience at the university (Berry, 2000). Good reputation acts as positive signals to prospective students, creating a differentiating factor for the university. A combination of good brand image and sound reputation shall contribute to enhanced level of student satisfaction, which will eventually result in positive word of mouth and brand loyalty. In the process, the university would have created a differentiating factor for itself, contributing to its competitive advantage.
While there has been some research about branding and reputation in the higher education context, these two streams of research have been largely independent. Given that there are substantial marketing investments in building brand image and company reputation, this is an area that requires investigation. Also, the effect of these factors on the satisfaction level of students needs to be investigated, so that universities can develop a strategic approach to satisfy the needs of this key stakeholder. A strategic approach shall help universities allocate their scarce resources in an optimal manner, thereby enhancing their capabilities, resulting in better returns. The satisfied stakeholders the students in turn give back in both tangible and intangible forms. They remain loyal they recommend their alma mater to other prospective students, propagate the brand name through positive word of mouth and come back for other degrees. Eventually, successful alumni give back through endowments, donations and other forms of funding.
Furthermore, if university students highly identify with schools, will they have high brand loyalty to the schools? After students have high brand loyalty, will they lower their intention to transfer and then continue studying in the school’s master program? This study attempted to find if university students’ loyalty to schools would influence their selection of schools. However, universities are non-profit organizations and they are more conservative in their marketing and advertising. In a severely competitive environment, they should be concerned about the measures used to attract students. Word-of-mouth behavior is the most common and natural way. The cost is low and the effect is significant. Word-of-mouth plays a significant role in customers’ consumption behavior and influences their purchase decision-making of products (Gelb & Sundaram, 2002). Thus, with limited funds, word-of-mouth is the most proper marketing technique for universities. Students are the subjects of word-of-mouth. Loyal customers will create positive word-of-mouth for firms and help the firms resist rivals’ strategies.
So therefore, satisfied students are more likely to tell people about their experiences, more so, dissatisfied students will also tell people about their experiences. Customer satisfaction is one of the business objectives, and can be achieved through understanding the needs of the target market, and the provision of needs satisfying packages in meeting and satisfying these needs at a greater extent, thus, building and maintaining long lasting and favourable relationship with the target market to ensure loyalty.
- STATEMENT OF THE PROBLEM
One of the marketing challenges of most organization is how to design appropriate strategy to improve the perception of its product by the customers. Likewise, creating a value for money for its consumer and increasing the utility of its product becomes paramount because these factors increase the loyalty of the customer to the product. Lack of many loyal customer signals a bleak future for the organization and the university because other universities in the market are vigorously competing to win more customers (students). Therefore, customer loyalty becomes the ingredient that boost the probability of repurchasing the product after use and this has implication for the profitability and sustainability of the business.
In the case of universities, Switching cost as a very important antecedent of customer loyalty concept has not been used in the context of university education, though it had been used by earlier studies (Blut, Beatty, Evanschitzky, & Brock, 2014; Blut, Frennea, Mittal, & Mothersbaugh, 2015; de Matos, Henrique, & de Rosa, 2013; Minarti & Segoro, 2014; Stan, Caemmerer, & Cattan-Jallet, 2013) as a determinant of customer loyalty. Considering the Nigerian education system not having a unified grading system, the different stream of courses in different universities and highly diverse eligibility criteria for admitting students result in some switching costs to students thinking of changing their universities. This antecedent is quite relevant to intense competition among universities. The switching cost to change university is relevant to Nigeria in particular and the world in general. It is going to contribute to the literature of student loyalty.
More so, the image of a university contributes a lot to students’ choices in choosing a university. In Nigerian universities today, some universities have higher number of applicant while others even go as far as reducing their cut off marks just to get students admitted in to their universities in order to keep the university running. Hence, the reason for this study to find out the effects of university image on customer loyalty using the Lagos state university ojo, Lagos as a case study.
- AIMS AND OBJECTIVES
The main aim of the study is the effects of university image on customer loyalty. Other specific objectives include:
1. to determine the relationship between university image and customer royalty to Lagos State University.
2. to examine the effects of university image on customer loyalty to Lagos State University.
3. to identify factors that can maintain customer loyalty .
4. to determine the influence of a university image in choosing universities of study by students.
5. to investigate the challenges of maintaining a good and reputable university image and customer royalty.
6. to proffer solution to the challenges of maintaining a good and reputable university image and customer royalty.
- RESEARCH QUESTIONS
1. what is the relationship between university image and customer royalty to Lagos State University?
2. what is the effects of university image on customer loyalty to Lagos State University?
3. what are the factors that can maintain customer loyalty?
4. what is the influence of a university image in choosing universities of study by students?
5. what are the challenges of maintaining a good and reputable university image and customer royalty?
6. what is solution to the challenges of maintaining a good and reputable university image and customer royalty?
- STATEMENT OF RESEARCH HYPOTHESIS
1. H0: university image has no significant effects on customer royalty.
2. H1: university image has significant effects on customer royalty.
- SIGNIFICANCE OF STUDY
This study will help management of universities to take measures to optimize student choice of their universities and ensure student loyalty even after school.
The findings of this study will give a strategic approach to help universities allocate their scarce resources in an optimal manner, thereby enhancing their capabilities, resulting in better returns. The satisfied stakeholders which are the students in turn will give back in both tangible and intangible forms. They will remain loyal and also recommend their alma mater to other prospective students, propagate the brand name through positive word of mouth and come back for other degrees. Eventually, successful alumni give back through endowments, donations and other forms of funding.
Lastly, the study will be used for further study by other researchers on the subject matter.
- SCOPE OF STUDY
The scope of this study will cover the effects of university image on customer loyalty (a study of Lagos state university ojo, Lagos).
- LIMITATION OF STUDY
1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
- DEFINITION OF TERMS
Effects: a change which is a result or consequence of an action or other cause.
University: a high-level educational institution in which students study for degrees and academic research is done. is an institution of higher (or tertiary) education and research, which awards academic degrees in various academic disciplines.
Image: a representation of the external form of a person or thing in art.
Customer loyalty: Customer loyalty is a measure of a customer's likeliness to do repeat business with a company or brand. It is the result of customer satisfaction, positive customer experiences, and the overall value of the goods or services a customer receives from a business.
Customer loyalty is an ongoing positive relationship between a customer and a business. It's what drives repeat purchases and prompts existing customers to choose your company over a competitor offering similar benefits. One way to look at loyalty is in the context of brand.
