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The IUP Journal of Marketing Management
Consumer Complaint Behavior and Defection: The Moderating Role of Demographic Factors and Switching Cost
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The purpose of this study is to investigate the post purchase behavior of Pakistani bank customers. Particularly, the relationship between public complaint actions, private complaint actions and customer defection has been examined. Moreover, the moderation effect of demographics and switching cost has also been studied. Data was collected through a survey of 240 bank customers from all over Pakistan. For data analysis, Hierarchical Multiple Regression has been used. The results of the study indicate that both complaints are strongly associated with customer defection, but private complaint has stronger effect on customer defection. Education, switching cost and ethnicity moderate both the relationships, whether public complaint or private complaint, while ‘others’ moderate this relationship in the case of public complaint. It was also found that education and marital status moderate the complaint behavior. The paper, being a pioneering attempt to investigate customer dissatisfaction in the banking industry, makes a unique contribution to the literature, specifically with reference to Pakistan,

 
 
 

The last two decades have witnessed remarkable changes in the banking industry. The main feature that has been observed is the evolution of the extreme competition in this sector. The banking sector has undergone changes with regard to its regulations, consumer demand for services, technological changes, and the entry of new competitors who switched from businesses other than banking (Edward et al., 1999). Because of this, a competitive framework has been created, and most of the banks are trying to adopt defensive strategies in order to avoid switching of customers. According to Jacoby and Chestnut (1978), firms should make attempt to retain long term relations with their customers for achieving customer loyalty. There is strong econometric evidence that financial sector development fosters economic growth in Pakistan (Jalil and Feridun, 2011). The banking sector constitutes the core of the financial sector in Pakistan. Pakistan has a highly competitive banking industry

(Nawab, 2014). Furthermore, the existence of key foreign players in the form of Deutsche Bank AG, HSBC Bank Middle East Ltd., Standard Chartered Bank Ltd., Dubai Islamic Bank Ltd. Samba Bank, Silk Bank, Burj Bank, AlBarqa, Barclays Bank PLC and The Bank of Tokyo-Mitsubishi UFJ, Ltd. pressurize the local competitors to be highly innovative in order to compete aggressively in development of products and services. In the face of such competition, banks endeavor to offer products and services that satisfy customer need more than the other available options (Ghazanfar and Kazmi, 2009). In addition, the quality of service and customer satisfaction is compulsory. There is no exception for Pakistani banks, where customer satisfaction is an effective tool that banks can use in order to gain a strategic competitive advantage in the banking sector. Due to intensive competition in the Pakistani banking sector, many banks are surrendering their existing customers to their arch rivals as a result of non-victorious attempts to attract customers (Mohsan et al., 2011).

 
 
 

Marketing Management,Public Action/Public Complaint,Defection,Moderation Effect of Gender,Moderation Effect of Switching Cost.