Recently in Japan, where the reform of financial systems has brought a
greater flexibility in business marketing, competition of financial institutions
has been tightening. This does not exclude the cooperative banks. However,
while the credit associations and agricultural cooperatives share features
of the cooperative system, which is different from commercial banks; they
are all exposed to severe competition indiscriminately. Some are aggressively
pursuing marketing efforts. In spite of this, how the cooperative system
will influence marketing activities has not been examined yet.
This study pays particular attention to life time value among various
marketing theories, and examines the effectiveness of a marketing approach
for the cooperative banks. Life time value, based on long-term and consecutive
relationships with the customers has become a central issue in marketing.
In addition, the constructive concept of life time value seems to share
many common features with the cooperative membership system of cooperative
banks.
In this study a hypothetic model based on the above is verified using covariance structure analysis. The hypothetic model considers “Prospective profitability” “switching cost” and “customer royalty”as latent variables, and “cooperative member retention rate” and “cooperative member rate” as observed variables mainly. In terms of the analysis data, 13 agricultural cooperatives were asked to supply its customer data, which was collected by branch.
This analysis proves that the cooperative membership system itself includes
the elements of life time value. It also demonstrates that these elements
have a considerable impact on business performance. In conclusion, this
paper shows that the marketing approach based on relevant viewpoints will
create new possibilities within the traditional cooperative system.
|