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The Effect of Perception Management on Customer Loyalty, Profitability, and Average Company Lifespan

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The Effect of Perception Management on Customer Loyalty, Profitability, and Average Company Lifespan Revista Argentina de Clínica Psicológica 2020, Vol. XXIX, N°5, 1382-1386 1382 DOI: 10.24205/03276716.2020.1135 The Effect of Perception Management on Customer Loyalty, Profitability, and Average Company Lifespan Yunus Emre KAYABASa, Ahmet ERTUGANb Abstract Longer life expectancy of a business organization is a desired quality for its stakeholders. Such a phenomenon is a result of certain factors which need to be investigated and well understood for the long-term sustainability of a business organization. The surveys applied in the research, which aims to determine whether perception management has an effect on customer loyalty, company profitability, and average company lifespan, were conducted with 100 volunteer executives in the companies located in the Bursa province. It was concluded that perception management influences the most customer loyalty and that the independent variable that affects perception management the most is company profitability. The study used statistical reasoning to test for correlations and regression. The findings show that there is a positive effect on the life expectancy of the firm. Keywords: Business organization life expectancy, Customer loyalty, Customer perceptions, Company profits, Perception management, Company profitability Introduction Literature Review and Hypothesis Development One of the main essential tasks of company Individuals make decisions based on not only managers is to be able to analyze the financial facts but also their perceptions whether they are performance of the company and the economic true or not (Fombrun and Riel, 2004). Businesses environment the company is in (Garih, 2007). The are in much closer contact with customers to company manager should improve the funding ensure emotional and cognitive satisfaction. power of the company as much as possible. This, he Businesses want their relationships with their should do with the retained earnings of the customers not only to exist during the purchase but company. If retained profits fail to be added to to endure for the long-term. Therefore, the concept company funds, then the company will not be able of loyal customers becomes very important for to grow which will affect its life expectancy. Apart businesses. Customer loyalty is the emotional bond from others, maintaining customer loyalty is one of that customers develop with the business due to the factors that make sustained profitability and the perceived quality of service (Kandampully, the funding of the company possible. 1998). Loyalty programs developed for customers, Companies not adapting modern technological by establishing long-term relationships with developments carry the risk of falling behind customers, enable companies to know customers competition bear high costs of production resulting better, their requests to be uttered more clearly, in poor profitability. Technical qualities of products and more effective and efficient use of marketing and services are essential means of satisfying efforts (Yazici, Ayyildiz and Dinler, 2020). One of the customers’ wants. When the product quality suffers most important elements of loyalty programs is so will be the perceptual quality of the product in perception management. the eyes of the customers, hence a flow of Perception management is a communication customers towards competing products (Zaltnan, process based on interaction; it is the process of 2014). In this study, customer loyalty, customer shaping the messages in accordance with the perception, and the effect of profit on average perception level of the target audience and thus company lifespan will be explained. creating the desired attitude and behavior change in the target audience (Garfield, 2002). Corporate reputation (Bekis et al., 2013), which is the general aNear East University, Graduate School of Social Sciences, effect of the ability to create value for customers, [email protected] bAsst. Prof., Faculty of Economics and Administrative Sciences, shareholders, suppliers, media, government, Department of Business Management, Near East University, Nicosia, environment, society and other stakeholders, is of Cyprus great value in perception management. Along with REVISTA ARGENTINA 2020, Vol. XXIX, N°5, 1382-1386 DE CLÍNICA PSICOLÓGICA 1383 Yunus Emre KAYABAS, Ahmet ERTUGAN corporate reputation, customer loyalty and company profitability, and average lifespan of the customer perception constitute the most important company." has been developed for this purpose. infrastructure of perception management. Therefore, in our research, hypothesis 1 Method including the proposition "Perception management Participants and Procedure has an effect on customer loyalty." has been The study sample consists of volunteer developed. Apart from the intangible elements of managers working in SMEs in the private sector in the companies and the subjects of organizational the Bursa (Turkey) province. 110 out of 286 behavior and the elements mentioned briefly managers in the 100 targeted SMEs participated in above, the profitability ratios that are directly the interviews. The data required for the research related to the existence of the company but can be were collected by face-to-face (personal interview) calculated after a certain accounting process are questionnaire method, as it provides great also the most important factors affecting the advantages in terms of high response rate and sustainability of the company. Profitability ratios allowing to ask many questions (Ayten, 2016). are indicators of the extent to which the company A total of 110 respondents were interviewed makes a profit compared to its assets or equity in a face-to-face in 11 months. The sample of period. convenience included 20 construction firms, 20 The rates used in the firm's profitability analysis textile firms, 5 tourism firms, 6 automotive firms, 20 are the ratios that show the relationships between construction material producer firms, 10 insurance profit and capital, the ratios that show the services firms, 10 sub-contracting firms, 10 fuel-oil relationships between profit and sales, the ratios firms and 9 firms working in the household used to determine whether the business provides appliances sector. The firms the sample had been in sufficient income to its partners, and the ratios used the industry for a minimum of 3 and a maximum of to determine whether the business has earned 46 years. enough income to meet its financial obligations (Batchimeg, 2017; Pando et al., 2018; Guo and Measures Wang, 2019). To investigate how these issues are Customer Loyalty affected by perception management, hypothesis 2 The 5-point scale developed by Narayandas including the proposition "Perception management (1996) was used. Cronbach’s Alpha of the scale was has an effect on company profitability." has been calculated 0.896. developed. Today's business world witnesses a period in Perception Management which global integration exists, rapidly changing The scale developed by Atalay (2016) was used. technologies and the demand for them increase, Cronbach’s Alpha of the scale was calculated 0.884. the boundaries of the industry begin to blur, and Although the scale is formed by two factors, which the product life cycle is shortened (Grand and are “Organizational Strategy and Tactics” and Baden-Fuller, 2004). While intense competition, “Perceptual Action and Applications”, it was complexity and uncertainty, rapidly changing included in the analyses as one-factor. customer demands and expectations, and changing technologies are factors that threaten the success Company Profitability of businesses, globalization offers businesses many It is analyzed on the basis of how companies opportunities such as easy and cheap access to new evaluate themselves as loss, low profit, average markets and production factors (Yesil, 2010). Many profit and high profit. According to one or more of factors such as the reputation of the companies in the rates mentioned in the literature, companies the market, their position in the market and their can evaluate their profitability conditions financial situation affect the lifespan of the subjectively. During the research, businesses company. In our research, to examine this issue, preferred to express their profitability status with hypothesis 3 including the proposition "Perception ratings such as low profitability or average management has an effect on average lifespan of profitability instead of giving figures. According to the company." has been developed. these preferences, profitability conditions are Given all the above explanations, it is expected included in the regression and correlation analysis. that there will be a correlation between the Fit indices of the scales mentioned briefly above are variables. Hypothesis 4 including the proposition " given in the Table 1. There are meaningful correlation between In addition, a semi-structured interview method perception management, customer loyalty, was used in the research to collect data. The REVISTA ARGENTINA 2020, Vol. XXIX, N°5, 1382-1386 DE CLÍNICA PSICOLÓGICA 1384 Yunus Emre KAYABAS, Ahmet ERTUGAN interview questions were first examined by experts relations managers. Questions also attempted to and revised again. The questions were directed at measure the degree of awareness of perception the interviews to company owners, senior management amongst the respondents. In executives, sales and marketing managers, public addition, the usefulness of perception management was also asked. Table 1. Fit indexes of scales
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