CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction
This chapter discusses the methodological approach for the study and it comprises
the research design, target population of the study, sampling design, research
instruments used, data collection procedure, data analysis methods, ethical
considerations and validity of the research instruments to be used in the study.

3.2 Aim and Objective of the Study

The study aims to determine the factors influencing the retention of customer at
Standard Bank in Mzuzu. It was guided by the following specific objectives;

3.2.1 To establish how customer satisfaction affects retention.

3.2.2 To establish how perceived corporate (bank) image affects retention.
3.2.3 To determine how perceived competitive advantage affects retention.
3.2.4 To determine factors preventing customers from switching to other banks.

3.3 Participants and Location of the Study

According to Kombo and Tromp (2006) a population can be a set of people,
elements, services or groups of things or households from which information is
obtained which allows for the generalization of the results. A population can be
homogenous or not homogeneous. The target population of this study was about
fifty. This consisted thirty five customers and fifteen Mzuzu standard bank staff both
current customers and ex-customers for Standard Bank. The researcher settled on
Standard Bank because the information regarding the target population could easily
be accessed as most banks do not want this kind of information in public domain.

3.4 Data Collection Strategies

A survey data collection method was employed to collect primary data. A
survey is defined as a method of collecting data from people about who they are,
how they think (motivations and beliefs) and what they do (behavior). The subjects
in the sample in the survey will be questioned by means of a standardized
procedure for the answers to be compared and analyzed statistically.
Questionnaires were the most effective way of data collection tool for the survey of
this study. Closed ended questions formed the major instrument of data collection
in this study. A questionnaire was suitable because it collected a lot of information
over a short period of time. A five-point Likert-type scale and rankings will be used
(ranging from strongly agree to strongly disagree) to reflect the appropriate
levels of measurement necessary for statistical analysis.

3.5 Research Design and Methods

According to Green and Tull (2009), a research design is the specification of
methods and procedures for acquiring the information needed. It is the over-all
operational pattern or framework of the project that stipulates what information is to
be collected from which source by what procedures. Research design is important
as it prepares proper framework within which the research work/activity will be
actually carried out. The study applied descriptive design, this was used since the
study gathered quantitative and qualitative data that described the nature and
characteristics of the factors that influence customer retention at Standard Bank in
Mzuzu.

3.5.1 Construction of the Instrument

The questionnaire was used and had clear instructions and an attractive layout.
According to Mugenda and Mugenda (2003), questionnaires give a detailed answer
to complex problems. Additionally, questionnaires are also a popular method for
data collection in deduction because of the relative ease and cost-effectiveness with
which they are constructed and administered. Questionnaires give a relatively
objective data and therefore, are most effective. In this study, Questionnaire was
used as the main instrument of data collection from the Customers. The
questionnaire questions were constructed using valid wordings with logical
sequencing of questions to ensure logical flow of information and thought process
of respondents. The research instrument was also reviewed and amended by
experts in the area of study.
3.5.2 Pretesting and Validation
According to Best and Kahn (2003) an instrument is valid when it measures what it
claims to measure. That is, validity refers to the extent to which an instrument
measures what it purports to measure. From the data collected from piloting of the
study instruments the researcher was able to evaluate and rate on the validity of
instruments with the help of supervisors and experts. The feedback from the
supervisors and the experts helped in modifying the instruments. Data need not only
to be reliable but also true and accurate. If a measurement is valid, it is also reliable
(Joppe 2000). The content of validity of the data collection instrument was
determined through discussing the research instrument with the research
supervisor and experts. The valuable comments, corrections, suggestions given by
the research experts assisted in the validation of the instrument. The questionnaire
was prepared and administered to at least 4 respondents to ensure the
objectivity and clarity of the items. The questionnaires were pre-tested and any
suggestions for improvement encountered during the piloting process were
incorporated in the final questionnaire.

3.5.3 Administration of the Questionnaire

Questionnaires were distributed to randomly selected customers and staff in their
respective offices. It was distributed to the respondents physically. This enhanced
the speed of data collection. Since the questionnaires were self-administered they
were pre-tested to ensure elimination of vague questions for ease of understanding.
The questionnaire contains two major subsections; general information about the
staff members and customers’ feelings towards the factors influencing customer
retention. The questionnaires were self-administered to all the respondents where
they had to fill at their own time and were later picked for analysis.It provided an
opportunity for respondents to think through their answers and consult where
necessary.

3.5.4 Analysis of Data

The collected data will be coded and entered into the Microsoft Excel Computer
Package according to each variable of the study for analysis. This study used
descriptive statistics, which involves a process of transforming a mass of raw data
into tables, charts, with frequency distribution and percentages, which are a vital
part of making sense of the data. In this study, the descriptive statistics such as
percentages and frequency distribution were used to analyze the data. The data
was presented using tables and figures to give a clear picture of the research
findings at a glance. Conclusions and recommendations were made basing on the
interpreted data.

3.5.5 Ethical Considerations

By Ethical consideration the researcher refers to moral standing that should be held
and practiced during the research process. When conducting the research, the
researcher was fully aware that the banking environment is very competitive and
therefore some respondents would withhold some crucial information. The
respondents were assured that strict confidentiality would be maintained in dealing
with their identities by not writing their names. The researcher sought permission
through an introductory letter obtained from the Malawi College of Accountancy and
presented to the Management of Mzuzu Standard Bank before collection of data.
The researcher also obtained consent from the prospective respondents and further
sought their co-operation. Confidentiality was observed and further the researcher
respected the culture and practices of the various respondents and only engaged
on the activities that are relevant to the study.
The study was also limited to the pieces of information that the respondents were
willing to disclose due to the fact that the researcher happens also to be an
employee from the bank, there was therefore a general concern involving
employees as research participants.

3.6 Chapter Summary

This chapter described the research method and procedures that was used in
conducting the research. The section discussed among others the research type,
the research design, population of the study, the research methodology discussed
the sample technique and the sample size used in this research, data collection
instrument used, the research procedure used to gather the data, the data analysis
and ethical considerations have been addressed with the key issue being
confidentiality. The next chapter will present the findings of the primary data
collected from the field using the questionnaire as the tool.