Transcript Trust and Commitment of Cooperative System Financial Institutions

Trust and Commitment
of JA Bank in Retail
Shinri Murakami
Research student
Graduate School of Social Science
Hiroshima University
Introduction
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The financial system reform referred to as the Japanese
Big Bang was tentatively completed with the removal of
the full deposit guarantee in April 2005.
By offering greater flexibility of business among financial
institutions, this deregulation has led to much severer
competition.
A distinctive trend has shown that some are trying to find
ways to use marketing methodology to run business in
retail; however, financial institutions in many aspects are
not able to apply marketing like other businesses.
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Research question
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Nowadays many JA Bank are actively focusing on retail
marketing.
Yuri（2002）stated that cooperative system financial
institutions are aiming at establishing a good customer
relationship in retail by recognizing that the customers are
not only one-time trading partners but potential
permanent partners.
However, it could be too hasty for these institutions to
adopt the same marketing approach used by the other
financial institutions.
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Framework of study
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Therefore this study focuses on relationship marketing
which aims at a long-term and consecutive relationships
with the customers.
The main concepts “trust” and “commitment” are made
operable to verify the effectiveness of this marketing
approach for JA Bank.
Because the constructive concept of relationship
marketing has many common features with the
organizational philosophy of JA Bank, it is considered an
appropriate marketing theory.
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Theoretical frame
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Relationship marketing focuses on the relationships
between businesses and the outside world, and its
fundamental framework starts from defining the objects of
relationship formation and the contents of the relationship
itself (Wada, et al. 2006).
What is stressed in relationship marketing is a way of
thinking that is summed up in the phrase “In the
beginning, there was a relationship.” (Ishii, et al. 2004，
p392)
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Forming process
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Arndt’s “Domesticated Markets Model” (1979) is well
known as a pioneering achievement in relationship
marketing.
The Dwyer, Schurr, and Oh (1987) model is famous for
focusing on sellers and buyers. Dwyer, et al explained
the consumers who were ignored by Arndt in terms of a
five-step developmental phased business relationship.
Morgan and Hunt (1994) recognize a consecutive
trading relationship as the connection of “trust” and
“commitment.”
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The importance of measurement
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A central element of relationship marketing is an abstract
concept whose measurement cannot be avoided.
Many preceding studies examined relationship quality,
where, above all, trust and commitment were particularly
valued as measurement scales.
Then it was discovered that exploring causal relationship
with an inner index of businesses with these
measurement scales could lead to grasping the status of
relationship in terms of the economic aspects.
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Hypothetical Model
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As stated above, Morgan and Hunt (1994) made trust
and commitment the central concepts seeking very
simple relationships to explain a consecutive trading
relationship. Here they set up precedent and result
variables for both concepts demonstrating that their
movement will influence both concepts.
The research of this paper follows this point. Among
constructive concepts of relationships, trust and
commitment are selected to survey the relationship
between these and customer data using a covariance
structure analysis.
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Analysis Results
Trust and Commitment of JA Bank in Retail / Total data analysis
e1
Retention rate of full members
.16
Trust
.45***
Retention rate of fixed deposit accounts
e4
Average manpower cost of system members
e5
Number of households using utilities
e6
Designated rate of payroll account
e7
Designated rate of annuity account
e8
.62***
.67
Percentage of full members
.43***
Percentage of associate members
.40***
Commitment
.23***
.37***
e2
9
e3
.13
-.45***
.14
Average amount of customers’ savings
.30***
.72***
Retention rate of associate members
.76
.91***
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Review
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In the analysis of this model the factor loading from the
latent variables regarding trust and commitment to the
business indexes has obtained virtually the same results
as assumed in the hypothesis.
Regarding the degree of influence between mutual latent
variables, the amount of factor loading that would lead to
a significant interpretation was detected by assuming not
correlation but single-way path.
Therefore, with this presentation, I believe that the
relationship marketing approach is effective.
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Problems
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The paths to latent variables from the retention rate of
system members and the percentage of system members
for the purpose of exploratory intention did not acquire as
much amount of factor loading as expected.
The paths to latent variables from the items of system
members cannot be denied only with this result; however,
it is difficult to say whether the marketing approach is
effective in this part of the hypothetic model.
Some reasons are considered for the lower level of factor
loading. But at present any of them is a matter of
speculation.
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Conclusion
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This research has focused on relationship marketing
aiming at a long-term and consecutive relationship with
customers, verifying the effectiveness of a marketing
approach by making operable the major concepts of trust
and commitment.
As a result, it was confirmed that the two concepts, trust
and commitment, have influenced the business indexes
regarding savings and loans virtually as assumed in the
hypothesis.
In this sense I believe that the relationship marketing
approach is effective.
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The next challenge
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It is expected that the JA Bank will continue to function as
part of Japanese financial systems in a healthy manner.
An important future discussion should consider whether
the system characteristics such as the cooperative
system would be an obstacle to compete with others.
But presence or absence of the cooperative system
cannot be judged only from the viewpoint of economic
rationality.
A marketing approach based on an appropriate way of
thinking can certainly help pave the way for a new
business model.
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A request
Thank you very much for your kind attention. I am honored
that I was able to give presentation for you today.
However I am very weak in English hearing.
Therefore, I cannot reply it well even if you give a significant
question to me. If it is an E-mail, I think some answer to be it.
My e-mail address is as follows.
Please send a question without hesitation.
e-mail: [email protected]
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References
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Anderson,Erin, and Barton Weitz （1992）“The Use of Pledges to Build and Sustain
Commitment in Disutribution Channels,”Journal of Marketing Research, 24（February），
pp.18-34
Arndt,Johan（1979）“Toward a Concept of Domesticated Markets,”Journal of Marketing, 43
（Fall），pp.69-75
Den Gyosou（2004）“Relationship Marketing ni okeru rironkenkyu no houkou,” Mita
Syogaku Kenkyu,47(5), pp.129-150
Dwyer,F.Robert,Paul H Schrr,Sejo Oh （1987）“Developing Buyer-Seller Relationships，”
Journal of Marketing, 51（April），pp.11-27
Hennig-Thurau,Thorsten and Alexander Klee(1997) “The Impact of Customer Satisfaction
and Relationship Quality on Customer retention : A Critical Reassessment and Model
Development,”Psychology & Marketing,14（8），pp.737-764
Ishii Jyunzoh, Kuriki Kei, Shimaguchi Mitsuaki, and Yoda Takuroh (2004) Marketing
Nyumon, nihon-keizai-shinbunsya
Kubota Michihiko（2001）“Relationship Gainen no Saikentou,”Chukyo Syogaku Ronsou,48
(1), pp.121-177
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References
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Moorman,Christine, Gerald Zaltman, and Rohit Deshpande（1992）“Relationships Between
Providers and Users of Marketing Research; The Dynamics of Trust Within and Between
Organizations,” Journal of Marketing Research, 29（August），pp.314-329
Moorman,Christine,Rohit Deshpande, and Gerald Zaltman（1993）“Factors Affecting Trust
in Market Research Relationship,”Journal of Marketing, 57（January），pp.81-101
Morgan,Robert M. and Shelby D Hunt（1994）“The Commitment-Trust Theory of
Relationship Marketing,” Journal of Marketing, 58（July），pp.20-38
Nishiura Yuji(1998) Financial Marketing, Toyokeizai-sinpousya
Ono Jyoji（1997）“Trust in Marketing,” Japan Marketing Journal, 63, pp.93-100
Wada Ｍitsuo, Miura Toshihiko, and Onzou Naoto（2006）Marketing Strategy 3rd edition,
Yuhikaku Arma
Weitz,Barton A.and Kevin D Bradford（1999）“Personal Selling and Sales Management: A
Relationship Marketing Perspective,”Journal of the Academy of Marketing Science, 27（2），
pp.241-254
Yuri Muneyuki（2003）Relationship Banking Nyumon, kinnyu-zaisei jijyo kenkyukai
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