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CHAPTER IV
RESEARCH METHODOLOGY
p.8). This means research methodology is used to give a clear cut idea on what and how to
do the study which depends on the target population, and ease of access it. As indicated
earlier this study is making efforts to solve problems of customer lapsing. This is also can
1. Research design
2. Research methods-Secondary and primary
3. Questionnaire Design
4. Sample design
5. Validation of scales
6. Data organization and statistical treatment
Nargundkar (2010) research design is classified into three as: (1) Exploratory research, (2)
Exploratory research is often conducted when a problem has not been clearly defined as
yet. It is the initial research. The results of exploratory research are not usually useful for
decision-making by themselves, but they can provide significant insight into a given
phenomenon being studied. It addresses the "what" question (What are the characteristics
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explanatory research and cannot be used to as the basis of a causal relationship, where one
prevalence study) form a class of research methods that involve observation of all of a
population, or a representative subset, at one specific point in time (Wikipedia, the free
observations of the same subjects over a period of time, sometimes lasting many years
(3)Causal Research explores the effect of one thing on another and more specifically, the
In this study the influence of independent variables (service quality, customer satisfaction,
customer trust and switching cost) on the dependent variable, customer loyalty is assessed.
The study aims at to determine solutions to problems of customer lapsing, so that the study
factors for customer loyalty in insurance sector of Ethiopia. Based on the sample studies
the study generalized the findings to the population. The general procedure of the research
differentiate between what should be and what is in the actual situation of the
insurance marketing director (July 2012) showed that in 2010/11, (3.7%) and in 2011/12,
(6%) customers were lapsed. The consequence of such customer churn out from the
company has negative effect on the performance of the company .Thus; this problem
attracted me to launch investigation the driving forces for making customers to be loyal
to the company. What prevents insurers from reaching their goals was listed. Objectives
and problems identified. Objectives and problems are two sides of the same coin. We can
start either with objectives or problems and come to the same conclusions. Anyway, we
reviewed literatures and set objectives and hypothesis. From the review of literature, we
draw what studies have been conducted in the past, how these studies were conducted, and
the conclusions in the problems area. The information discovered during this stage helps us
Then, objectives of the research to be achieved developed. These objectives are closely
related to the research problem. The general objective of the study states what to be
expected to achieve by the study in general terms. Specific objectives specify what will be
Thus, efforts were made to delineate how data is to be collected, what instruments will be
employed, how the instruments will be used and the intended means for analyzing the
data. In this study as other studies, collecting quality data is a critical step in providing
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the information needed to answer the research questions. The data analyzed to determine
antecedents of customer loyalty and conclusions are made .The result of the study is
In nutshell, the purpose of the study can be considered as descriptive and comparative of
cross sectional design. Attempts are made to explain an understanding of the level of
loyalty in public and private insurance companies. This is done by comparing level of
loyalty in public and private insurance companies. Hence, the research design employed
for this study is descriptiveanalytical in nature. The descriptive study identifies patterns
descriptive part involves identifying the characteristics and exploring possible correlations
among variables. The analytical study focuses on establishing relationships between the
purpose is description. Therefore, for the purpose of this study, a single cross sectional
descriptive study was used to obtain a picture of policyholders opinions of their status of
loyalty to their respective insurance companies. The survey was carried out in a natural
field conditions and data collected pertaining to respondents attitudes and perceptions
.The survey items are statements on which respondents will be asked to indicate the extent
of their agreement or disagreement, using five points, Likert-scale items. The data for this
survey are derived from primary and secondary sources. The sources of data are depicted
below.
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There are different methods for data collection .Sometimes the information required can
be collected entirely from published sources those which have already been collected by
someone else and which have already been passed through the statistical process are
secondary sources. On the other hand, information can be collected afresh and for the first
time and thus happen to be original in character and such are termed as primary data.
1. Survey
2. Observation
3. Experimentation
4. Qualitative techniques
5. Other specialized techniques
Survey is a method of data collection (e.g., a questionnaire) and individual questions or
items that become data that can be analyzed statistically. A survey may focus on different
types of topics such as preferences (e.g., for a presidential candidate), opinions (e.g.,
should abortion be legal?), behavior (smoking and alcohol use), or factual information
(e.g., income), depending on its purpose (Wikipedia, the free encyclopedia, August 2013).
Survey data collection can be carried out by telephone, mail, or in person and by internet.
Observational research (or field research) is a social research technique that involves the
spurious factors, and where at least one of the variables is manipulated as part of the
technique where the consumer behavior is recorded, usually without his knowledge. In
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experiments we try to measure the effect of one or more variables by changing the level of
Sometimes the research objectives call for more indirect methods of questioning, either
probe the minds of respondents may be used. The emphasis can be interview, or
For the purpose of this research, secondary and survey data collection methods are used.
The primary data required for this study collected through structured questionnaires from
sample respondents via enumerates for distribution and collection of questionnaires.. The
The secondary data sources include: books, journals, reports, previous studies, and
electronic sources relevant to the study. Secondary data contributed toward the formation
of back ground information, analysis & conclusion. The table 4.1 below listed sources for
As indicated in the above table 4.1, questionnaires are the main primary data collection
instrument for this research. In questionnaires we tried to elicit accurate answers from
decisions .Using the primary instrument of data collection in marketing research, is vital to
the usefulness of the study ( Nargundkar 2010,p.65). Therefore, the data collection
instrument designed for this study is structured questionnaire which is illustrated in the
next section.
Questionnaire design refers to the design of the questions used to obtain the data needed
for the survey. According to Kothari (2011) questionnaire is considered as the heart of
survey operation for data collection. Thus, questionnaires are designed to elicit information
from respondents for this study. The questionnaires to be used for this research are
Demographic, service quality, Customer satisfaction, customer trust, switching cost and
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customer loyalty .The questions are designed in a manner so as to glean the maximum
According to Fairfax County (12August 2012) questionnaires with questions that measure
previous studies. Using previous research questionnaires can make the user more
advantageous because the questions have been extensively tested at the time of first use.
Although, these previous research questions were tested before application, it is also
validity and consistency were tested on pilot test. Before questionnaires distributed for pre-
test the questionnaires were reviewed by colleagues and insurance professionals including
enumerates and collected by enumerates but only 1000 questionnaires were found fit and
taken for analysis. Data also collected through insurance company marketing directors
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interview. The interview was conducted with EIC, Nile, Global, and Ethio-life insurance
companies marketing directors. Apart from questionnaire method for data collection effort
are made to gather primary information through informal conversations with the
policyholders.
The questionnaires are adapted from previous researches used for collecting information
about people's beliefs, attitudes, and behavior and designed for self-administered by the
respondents in that to elicit genuine information; the respondents were assured of complete
anonymity and confidentiality of responses .The respondents also told their participation is
purely voluntary.
A sample design is a definite plan for obtaining a sample from a given population. It
refers to the technique or the procedure the researcher would adopt in selecting items for
the sample. Sample design may as well lay down the number of items to be included in the
sample that is the size of the sample. (Kothari 2011, p.55). When conducting research, it
is almost always impossible to study the entire population that we are interested in. If we
take the entire customers of insurance for our survey, it would be extremely timely and
It is implicitly known that a sample is a subset of the population being studied as, limited
number of customers out of the total of insurance customers. It represents the larger
population and is used to draw inferences about that population (customers). It is also a
research technique widely used in the social sciences as a way to gather information about
a population without having to measure the entire population. Thus, the sample design and
procedures for this study were done in five procedures as delineated below.
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Population is the collection of elements or objects that possess the information sought by
the researcher and about which inferences are to be made ( Mahlotra (2008: 366). This
hence the population for this study is insurance company policyholders who are
currently getting service from these insurance companies. The table below specifies
As the above table 4.2 shows, there are 15 insurance companies including the newly
established one. In these companies there are 306,855 policyholders who are currently
getting service. Thus, sample of companies and customers are taken from the population
listed above.
Insurance business operates all over the country and it is overwhelming to conduct
attitude survey of all policyholders in the country .Thus, the study of attitude survey
focused on policyholders who get insurance service in Addis Ababa , capital city of
Ethiopia.
4.4.3. Sampling
examining only a part of it (Kothari (2011, p.152). All this is done on the assumption
that the sample data will enable the researchers to estimate the population parameters.
The items selected constitute what is technically called a sample, their selection process
or technique is called sample design and the survey conducted on the basis of sample is
characteristics without any bias so that it may result in valid and reliable conclusions.
Therefore, in assessing policyholders attitude towards the providers studying the whole
population could not be done due to so many reasons as illustrated above. Thus, for this
study sampling was appropriate methods and so that four companies needed to be taken
the only public owned company and also it is a market leader (42%) market share (as
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Furthermore, in order to compare the level of customer loyalty between public & private
Samples from private insurance companies were taken based on their major business
area. The table below shows the number of insurance companies by their licensed
business area.
Table 4.3: List of Private Insurance Companies by Their Major Business Area
three companies from each category (Nonlife, Life & Composite) using probability
approach of simple random sampling were taken as sample of the study. Therefore, Nile,
Global & Ethio-life companies were selected by using simple random sampling approach.
Mahlotra . (2008, p. 370) classified sampling techniques as probability and non probability
Sampling technique
Probability Non-probability
1.Simple random sampling 1.Convience sampling
2. Systematic sampling 2.Judgmental sampling
3. Stratified sampling 3. Quota sampling
4. Cluster sampling 4. Snowball sampling
As presented in the above figure probability sampling units are selected by chance while
non probability sampling relies on the personal judgment of the researcher rather than
chance to select sample elements (Mahlotra 2008). The aim of this study is to make
inference about the whole insurance policyholders attitude in Addis Ababa from the
companies of Ethiopia. Therefore, probability sampling was appropriate for this study
rather than non probability sampling. Consequently, for this study in which its respondents
by Kothari (2011) if a population from which a sample is to be drawn does not constitute
representative sample(p.62).
According to Mahlotra (2008, pp. 368-369) Sample size refers to the number of elements
to be included in the study. Thus, the policyholders attitude & perception survey
sample size is based on Nargundkar (2010) formula for sample size calculation which is
depicted below:
n=(Zs/(0.05))2
Where:
n= the sample size required
Z = represents the z score from the standard normal distribution for the confidence level
desired by the researcher. In this case a 95% confidence level is taken which is equivalent to z
score of 1.96
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s= represents the population standard deviation for the variable which we are trying to
measure. As the population standard deviation is unknown, we took the standard deviation of
the pilot test (.85) and estimate the population standard deviation.
researcher. In this study the variables are measured using 5-point Likert scale, the highest 5
and lowest 1.So that we have to decide how much error (on scale of 1 to 5) we can tolerate.
The lower the tolerance the higher will be the sample size. For this survey e= .05was taken as a
tolerance error.
Nargundkar formula assumption is that the data is assumed to be normal distribution and
the data of customer attitudinal survey is also assumed normal distribution. This indicates
Nargundkar formula is appropriate for determining sample size. Therefore, the sample size
n= (1.96*.85/(0.05))2
n= 1,110
The sample size required for the survey is 1,110, though we selected a sample of 1,110
respondents for this study to conduct the attitude and perception survey of insurance
companies. The table 4.4 below precisely delineated the proportionate allocation of the
process in which the population is partitioned into strata (company). In the group every
population element assigned one and only one stratum and no population element was
omitted. Next elements were selected from each group based on proportionate stratified
sampling, in that the size of sample drawn from each group is proportionate to the relative
Then after the size of proportion is identified the systematic Sampling procedure is
customers so that from this, based on proportionate stratified sampling method 173 sample
respondents were needed .We needed to select a random starting point and then picking
every ith element from the list. The sampling interval is obtained as:
26,428 /173= 152.Then a random number between 1 and 152 was selected as 50 by way
of simple random sampling methods. Therefore, the sample consists of the numbers
Based on the allocated samples as shown in the above table (4.4), the following sampling
procedure developed.
Enumerates in considering their proximity to respective companies and those who are
voluntaries to participate in data gathering process are selected along with the assistant of
each company marketing directors. Training is given what, when, and how to collect data
from respondents .List of respondents who are selected based on the sampling process
were given for each enumerates .We also designed a cross check mechanisms whether the
right respondents fill the questionnaires. On the short training program for enumerates the
requirements which were needed were illustrated to reduce errors in the data collection
process.
The anticipated problems to be encountered during data collection were evaluated and
solutions were indicated. Attempts are made to aware enumerates how to reduce the
possible source of errors. A detailed briefing of the survey was given to enumerate and the
meaning of each item in the questionnaire was well explained. In addition to this, in order
to improve the quality of response remarks were written in the cover of questionnaire not
Furthermore, the questionnaire was made reader friendly by using good quality paper with
clear and medium fonts. The covering letter also mentioned that the broad findings of the
study will be used for the improvements of the company. For creating trust, message was
The scale validation involves measure of internal consistency of items for the scales,
group resemble test using intra correlation coefficient, validity test , test whether the data is
Although the questionnaires used to measure respondents attitude are adapted from the
previous related studies dry run are conducted to check whether fitting in the new situation,
Ethiopian insurance environment. Hence Pilot test was conducted by the help of three
provided, using 5-point Likert-type scales with 1, to indicate strongly disagree and 5, to
indicate strongly agree in regard to their insurance provider. The items were incorporated
Company keep customers informed about service that have been performed
and price charged
The items listed in the above table 4.5 are designed to measure perception of respondents
quality of service offered by insurers. Moreover, the survey items relating perception of
respondents loyalty to their respective companies are shown in table 4.6 below.
Word of mouth I would encourage friends, relatives and others to purchase policies from
the company
Cross-selling I will use additional policies/ services offered by this company in the
future
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insurance
I am willing to stay with this insurance company even if prices are raised
Based on these and the other unstated here questionnaires, respondents were requested to
indicate their level of agreement or disagreement with the different statements on a five
point scale where 1= strong disagree and 5 = strongly agree .The pre-testing results
indicated that the questionnaires were clearly understandable and unambiguous which
The questionnaires reliability was checked using Chronbachs coefficient Alpha for the
entire 46 statements and the independent and dependent variables were found being of
0.86. According to Nargundka (2010) if the Alpha value for the scale is 0.7 or more, it is
usually, considered a good scale (p. 64) . Therefore, it can be concluded that the
underlying items of these factors were good scale for measuring the constructs. The table
Internal consistency
situation in Ethiopian insurance industry, the result of the pilot study showed
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questionnaires reliability were good. Though, some parts of the questionnaires were
modified after the pilot study and found reliable to measure the variables of the study.
Reliability is the property by which consistent results are achieved when we repeat the
switching cost and loyalty to their respective insurance companies. For this survey five
variables were developed comprised of totally 46 questions ,each of the questions was a
statement followed by a five-point Likert scale ranging from strongly disagree through
neither disagree nor agree to strongly agree. The table below shows the five-point likert
Rate 1 2 3 4 5
It is obvious that data consistency and accuracy are needed for data analysis. It has been
substantive conclusions in most instances (Cohen 1969:p. 226 as cited in David Garson
2012). In this study, correlation and regressions are used for data analysis, but in order to
perform a correlation analysis and more importantly regression analysis the variables in the
research had to be tested their reliability and validity whether the questionnaires asked
relate to the constructs that we intend to measure. So that for this study Cronbachs Alpha
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is used as a testing instrument as it is the most used reliability test among researchers. The
reliability of the instrument means that its results are characterized by repeativeness
(Psarou and Zafiropoulos, 2004). Georg and Mallery provided the following rule of thumb
for judging the acceptability of the internal consistency as cited in Prabhakar (2006:6).
Though, checking reliability of the data was conducted in three levels: variables,
dimensions and the entire items which is depicted in the following paragraphs.
.70. Service quality has been measured by 17 items based on Parasuraman et al. (1988)
service quality five dimensions adapted from Deepika Upadhyaya and Manish Badlan
(2011) and the reported reliability is .775. Customer satisfaction has been measured by
using 11 items adapted from Hellier, Gearsen & Rickard (2003) , Chi Bo Wong, (2011)
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and NPL National Physical Laboratory Management limited, a wholly owned subsidiary
of service Group, March 2008 and the reported reliability is .791.Customer trust has been
measured by using 7 items adapted from Kennedy, Ferrell, & Leclair, (2001)and
Sirdeshmukh, Singh, & Sabol (2002) and the reported reliability is .70. Switching cost
has been measured by using 5 items adapted from Wong & Mula (2009) and Jones,
Mothersbaugh & Beaty (2000), and the reported reliability is .751. Since the Cronbachs
Alpha scale is above the acceptable values of .70, the scales are considered to be
consistent. This ensures variables have been measured the same construct generating the
internal consistency.
dimension there are individual items in total of 46. The reliability statistics is depicted
below.
Total 46
The table above shows that the internal consistency (reliability) of questionnaires
measured through Cronbachs Alpha is found to be greater than the threshold .60 for each
dimension. This means the variance of the score can be considered as true score variance
or internal reliability score. We can conclude that the questionnaire has internal
The mean scores of all the variables found to have a range 3.1 to 3.99 and the
the above table some score of standard deviation are small (relative to the mean score)
which indicates that the data points tend to have scores that are very close to the mean and
other scores of standard deviation are farther away from the mean, for example customer
satisfaction in related to their interaction is 3.2 mean while the standard deviation is 1.0
which is relatively farthest of all. Farthest standard deviation from the mean indicates
widely spread-out cases from the mean. However, there is no outlier of SD away from the
.939 46
The table above gives evidence that the internal consistency (reliability) of
than the threshold .70. This means 93.9% of variance of the score can be considered as
true score variance or internal reliability score. Therefore, as the values exceeded the
threshold value of 0.7 we can conclude that questionnaires were in a high level of
consistency. If a particular item was deleted from the scale, the Cronbach Alpha would be
lowered so that there was no any necessity to remove items. Besides this it is helpful to
assess the intra class correlation. The table below illustrates the result of intra class
correlation coefficient.
measurements .It describes how strongly units in the same group resemble each other.
While intraclass is viewed as a type of correlation, unlike most other correlation measures
observations (Wikipedia, the free encyclopedia 18 June 2013). The Intraclass Correlation
measure ICC means a fair to good reproducibility if the test is performed at one of several
repeated the test for several times and calculate the mean value. Thus, the study variables
As the table above exhibits our estimated reliability between the five variables is 0.769,
with 95% confidence interval and bound (0.750, 0.787), which is quite 'wide'. This
indicates that we have evidence to support the reliability of this measurement between the
variables.
moderate standard which means variables are strongly resemble each other in the group.
95% Confidence
Intraclass Interval F Test with True Value 0
Correlati Lower Upper
on Bound Bound Value df1 df2 Sig
Single Measures .250 .233 .269 16.368 999 44955 .000
Average Measures .939 .933 .944 16.368 999 44955 .000
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As the table above reports the reliability analysis - scale (alpha) Intraclass Correlation
Coefficient is:
The single measures of ICC are reported as .250 which is above the threshold of ICC
mentioned above that means fair agreement and indicates items strongly resemble
each other in the group.
4.5.4. Validity Test
previously used items (questions) measuring the same thing ( Nargundka, 2010,p. 62).
In order to test the content validity of the questionnaires, we have gone thoroughly
literature review and we have got confirmation from purposely selected experts before and
on the pilot test. Content validity reflects a complete range of the attributes under study
and is usually undertaken by seven or more experts (DeVon et al. 2007). Furthermore, in
tandem with content validity, the face validity of the questionnaires were evaluated .Face
readability, consistency of style and formatting, and the clarity of the language used (
DeVon et al. 2007). Besides these, we need a test of construct validity whether the
constructs reflect a complete range of attributes. Construct validity refers to the degree to
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which the items on an instrument relate to the relevant theoretical construct (DeVon et al.
2007).
The assumption of a normal model for a population of responses will be required in order
to perform certain inference procedures. Normal distribution takes the form of bell-shaped
values for hypothesis testing typically is based on the assumption that the population
distribution is normal. Therefore, test of normality check has undergone using different
The table above 4.15shows skewness and kurtosis distribution for variables. It is obvious
that in order to make inferences the data need to be normal or nearly normal distribution.
Skweness and kurtosis are helpful for testing of normality. Skewness is a measure of the
measure of symmetry, or more precisely, the lack of symmetry. A distribution, or data set,
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is symmetric if it looks the same to the left and right of the center point. The skewness is 0
for the normal distribution and it should be close to zero for any symmetrical distribution
The amount of skewness tells us how highly skewed data is, the bigger the number, the
higher the probability (Bulmer, 1979) .In other words, according to Bulmer (1979)kurtosis
is a measure of whether the data are peaked or flat relative to a normal distribution. That is,
data sets with high kurtosis tend to have a distinct peak near the mean, decline rather
rapidly, and have heavy tails. Data sets with low kurtosis tend to have a flat top near the
mean rather than a sharp peak. Here below is rule of thumb for making decision if the data
Table 4.16 above presents the rule of thumb for normality. When we interpret the rule to
the real data set, and when we compare the data in table 4.15 above under skweness ,
some of the data are between -0.5 and 0.5 which tells us the distribution is normally
while some others are beyond that i.e. moderately skewed. In related to kurtosis most of
the data set met the criteria while two of the data set are not fit. Despite of this, normality
can be checked using mean, median and mode. When there is normality, mean, median and
mode are equal but when there is moderate symmetry all these three indicators will be
closely distributed.
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Figure: 4.3: Normal distribution Adapted from Wikipedia, the free encyclopedia, 17 August 2013
The figure 4.4 above shows normal distribution of data for reference and when data is
normal mean, median and mode are equal. The table 4.16 below shows means median and
As it can be seen from the above table 4.16 mean, median and mode are somewhat
Furthermore, we can proceed for checking normality of the research data using Q-Q plot..
The above pictorial representations of the points in the Q-Q plots lie closer to the line y =
x. This means observations are approximately normal distributions and the Q-Q plot
positive slope except for some large outliers that should be further investigated. From this,
analysis is used. Exploratory Factor Analysis (EFA) is used to explore the underlying
dimensions that could have caused correlations among the observed variables. Here, our
interest is to explore the underlying dimensions that could have caused correlations among
the variables. The table below shows the result of KMO & Bartletts test of sphericity
As the above table exhibits, KMO and Bartletts test of sphericity produces the Kaiser-
sample adequacy varies between 0 and 1, and values closer to 1 are considered better. High
values (close to 1.0) generally indicate that a factor analysis may be useful with your data.
If the value is less than 0.50, the results of the factor analysis probably won't be very
useful. The KMO value as in the table above illustrates sampling adequacy of .923is a
good indicator. The value should be greater than 0 .5 if the sample is adequate (Field
2005). Hence, as it can be seen from the above table KMO is greater than 0. 5 which
shows the sample size is appropriate. This means the sample data are suitable for the
undergoing analysis.
According to Business analytics (2012) the Bartletts Test of Sphericity relates to the
significance of the study and thereby shows the validity and suitability of the responses
collected to the problem being addressed through the study. For Factor Analysis to be
recommended suitable, the Bartletts Test of Sphericity must be less than 0.05.
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The Bartletts test of sphericity is found to be with approximate Chi-Square value of 47.60
degree of freedom 1035 at 95% level of significance. The significance level of Bartlet test
value is <.05. Hence, the null hypothesis is rejected and alternative hypothesis is accepted.
This means the data is suitable for factor analysis; the data needs to be reduced.
Statistical data analysis is the process of converting data into useful information.
According to Nargundkar (2010) choice of data analysis depends on scale of data, research
The major objective of this study is to examine the determinants of customer loyalty .A
survey was drawn from independent samples based on interval Likert 5-point scale from
customers. The five independent variables (demographic factors, service quality, customer
satisfaction, customer trust, and switching cost) whether they influence or have association
In this study of data analysis, the descriptive analysis is employed to describe and
Inferential statistical are used to make inferences, or estimates about the population.
Regression analysis and ANOVA are employed to explain customer loyalty based on
dependent variable. To compare the level of customer loyalty in both public and private
insurance companies, an independent test is performed. The data was analyzed with the
help of SPSS software (Statistical Packages for Social Scientists Version 16.0) and AMOS
5.0 (Analysis of Moment Structures) software. Here below is a short summary of statistical
treatments.
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In the process of converting data into useful information different types of analysis were
employed using SPSS and Amos soft wares. The detail is illustrated below.
Table 4.19: Types of analysis & Statistical tools used in the analysis
analysis. More specifically, the detail statistical treatments are delineated below.
3. Purpose of analysis:
Testing for associations/ relationships/influence
Testing for mediation effect
Testing for comparisons of loyalty between private & public insurance
companies
4. Variables:
Independent variable: demographic characteristics , service quality,
customer satisfaction, customer trust& switching cost
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5.3. For associative relationships between IDVs and DV, linear regression analysis is
used to explain the variation in the level of loyalty (DV) based on the variation over the
independent variables; service quality, customer satisfaction, customer trust and switching
And also R, R-squared, the F- statistics and the t-statistics were used to estimate the
Variance Inflation Factor (VIF) to substantiate the absence of any inter correlation among
Baron and Kenny (1986) addressed the steps required for mediation test:
1).The total effect of the independent variable on the dependent variable must be
significant (X Y)
2) The path from the independent variable to the mediator must be significant (X M
(3) The path from the mediator to the dependent variable must be significant
Figure 4.4: Mediation, direct & total effect of variables adapted from Baron and Kenny (1986).
Amos 5.0 software is employed to test the mediation effect in a single analysis instead of
5.5. For test of differences (comparing means of populations), Ho: 1=2, comparing
customer loyalty in public and private insurance companies, Factorial ANOVA test for is
used. In addition to this, the measure of association in the form of Eta-squared, R &R-
In this data processing stage, assigning of codes for the raw survey data including
respondents demographic factors and for all questions on a questionnaire were given. This
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data processing task made clear of the respondents demographic factors as well as made
the data to be ready for further processing as frequencies, descriptive statistics, tables and
so on which enable to draw conclusions. Besides this, measurement scales are assigned for
variables used in this study for further tasks. Thus, based on these widely used
classification of measurement scales data is analyzed through SPSS and Amos soft wares
The main Source of data for this research is policyholders attitude survey through
questionnaires. Based on research guides and research plan respondents were selected. In
respondents it was necessary to recruit enumerates and armed them what, when, and how
to do. So that all such tasks were done on time and 1,110 questionnaires were distributed
through enumerates, but only1000 questionnaires were found valid for this research. Thus,
1000 questionnaires are used for analysis and the response rate can be mentioned as 90%.
According to Wikipedia, the free encyclopedia Research ethic s involves the application of
fundamental ethical principles to a variety of topics involving research. These include the
academic scandal, including scientific misconduct (such as fraud, fabrication of data and
plagiarism), whistle blowing; regulation of research, etc. Thus, in this study a certain moral
There is a duty to protect the rights of people in the study as well as their privacy and
sensitivity. The confidentiality of those involved in the observation is kept and their
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anonymity, privacy is secured. So that participants privacy, feelings and dignity are fully
respected. Most of the ethical considerations are implicitly known. It is considered that
there are so many tasks which the researcher should do and never do instead should be
respected. In this study efforts are made to be objective and logical throughout the whole
research. As this research is based on the theoretical and empirical evidence of previous
work great care was taken for avoiding text plagiarizing and so that sources are cited
or quoted when ideas are taken directly or indirectly. All copy cat approach is avoided in
the whole process of this study. Bearing this in mind data analysis and interpretation are