Jobams Vol.2 Issue.2

Journal of Business
Administration and
Management Sciences
July 2018
ISSN 2518-8275
Vol.2 Issue No.2
Faculty of Management, Business Administration and Commerce

Sindh Madressatul Islam University Karachi, Pakistan
About Journal
Research Journals play a pivotal role in the dissemination of research outcome between the
researchers & scholarly community & for the advancement of any discipline or profession.
Keeping in view the significance of knowledge building in different academic disciplines, it is

suggested that Faculty of Management, Business Administration & Commerce of SMI University,
publish its own journal providing scholars/researches of SMIU a tool for publishing their research
work & to share their research outcome with other scientific researchers and policy makers.
SMI University invites submission of papers throughout the year. JOBAMS publishes original papers in
both empirical and analytical research papers with basic and applied research examining emerging trends
and concerns in the Management areas.
It has received international standard Serial Number (ISSN Print-2518-8275) from International Centre
website.
Scope of the Journal
SMI University JOBAMS is a peer reviewed bi-annual Research journal of the SMI University,
Karachi, Pakistan. It considers original research papers that contribute significantly in the fields
of:
 Business Studies
 Management Sciences
 Commerce
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of data, plagiarism including duplicate publication of authors’ own work without proper citation,
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Any case of ethical publication misconduct will be treated seriously and dealt with in accordance
of HEC guidelines.
July 2018
Volume 2, Issue No. 2
SMIU Journal of
Business Administration and Management Sciences
Prof. Dr. Mohammad Ali Shaikh, Vice Chancellor

Parton In-Chief
SMI University.
Prof. Dr. Zahid Ali Channar, Dean Faculty of

Chief Editor Management, Business Administration & Commerce,
SMI University.
Dr. Saima Tabassum, Associate Professor / In-charge

Managing Editor Chairperson, Department of Business Administration,
SMI University
Mr. Shahid Obaid, Lecturer, Department of Business

Administration, SMI University
Mr. Avtar Bachani, Lecturer, Department of Business
Associate Editors
Ms. Sundus, Lecturer, Department of Business
Mr. Muhammad Danish Mujtaba, Lecturer, Department
of Business Administration, SMI University
Manager Publications & Communication ORIC, SMI

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University
Faculty of Management Business Administration and Commerce

Sindh Madressatul Islam University Karachi,
Pakistan
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EDITORIAL BOARD
International Members
1. Dr. Rathin Rathinasamy

Professor Department of Accounting and Finance, Ball State University Muncie, Indiana,
USA.
2. Professor Wallace Ford

Department of Public Administration, School of Business, Medgar Evers College, City
University New York, USA
3. Dalia Streimikiene
Chief Researcher & Full Professor, Institute of Sport Science and Innovations Lithuanian
Sports University Sporto Str. 6, LT-44221 Kaunas, Lithuania
4. Dr. Mita Bhattacharya

Senior Lecturer, Department of Economics, Monash University Australia.
5. Dr. Fayyaz Hussain

Associate Professor, Center for Integrative Studies Michigan State University, USA
6. Dr. Theodore Koutroukis

Department of Financial Management Engineering, Faculty of Business, Aegean
University, Chios, Greece
7. Dr. Jo-Ann Rolle

Dean School of Business, Medgar Evers College, City University New York, USA
8. Dr. Jolita Vveinhardt

Chief Researcher & Professor, Ph.D. Faculty of Economics and Management, Vytautas
Magnus University, Daukanto str. 28, 44248 Kaunas, Lithuania
9. Dr. Venesser Fernandes

Researcher and Supervisor-Leadership Studies and Organizational Structure &
Development, Monash University, Victoria 3800, Australia
10. Dr. Maria Dos-Santos

Ph.D. in Economics, Assistant Professor ESCS – IPL Assistant Research ISCTE-
University of Lisbon, DINÂMIA´CET, Lisbon, Portugal
National Members
1. Professor Dr. Iqbal A Panhawar

Former Pro Vice Chancellor, University of Sindh, Jamshoro.
2. Professor Dr. Abuzar Wajidi

Former Dean Public Administration, University of Karachi.
3. Professor Dr Rizwan Raheem

Indus University ST-2D, Block 17, Gulshan-e-Iqbal, Karachi
4. Professor Dr. Khalid Shaikh

Department of Management Sciences, Bahria University Karachi.
5. Dr. Asif Khan

Head of Human Resource Department, National Bank of Pakistan, Karachi.
6. Dr. Riaz Hussain Soomro

Director and Associate Professor, Institute of Health Management, Dow University of
Health Sciences
7. Dr.Zahid Ali Memon

Associate Professor, Mehran University Jamshoro Hyderabad
8. Engr. Dr. Amir Manzoor

Senior Assistant Professor Department of Management Sciences Bahria University
Karachi
9. Dr. Mohammad Nawaz Shahni

Assistant Professor, Sindh University Laar Campus, Badin
10. Dr. Mohammad Asim

Associate Professor, Karachi University Business School, Karachi
11. Dr. Jawaid Ahmed Qureshi

Associate Professor, Management Sciences, SZABIST Karachi
12. Dr. Abdullah Tahir

Deputy Director, Monetory Policy Department, State Bank of Pakistan
13. Dr. Mubashir Ali Khan

Assistant Professor, Management Sciences Department, Bahria Uniuversity, Karachi
Table of Contents
S No Description Page No
1 Role of Digital Marketing as a Platform for Promoting Consumer Products/Brands 268-283

Farrukh Naseem Qureshi
Aadil Rehman
2 Measuring Customers’ Perception and Expectation of Quality in Retail Stores 284-292

Services
Areeba Bhutto
Summya Khatoon
Wajiha Saghir
3 Credit Risk Management’s Influence on Loan Performance in Commercial Banks in 293-304

Pakistan
Syed Hasan Raza Naqvi
Zahid Ali Channar
Quratulain Nazeer Ahmed
4 Effects of Transformational Leadership Style on Employee Well-Being 305-315

Shahid Obaid
Saima Tabassum
Avtar Bachani
Sundus
5 Brain Drain of Business and IT Graduates In Pakistan 316-326

Aamir Abbas
Subhash Guriro
6 Role of Charm Pricing in Purchase Decision – A Study of Online Consumers of 327-336

Pakistan
Asif Hussain Samo
Hadeeqa
Yusra Asif
Muhammad Danish Mujtaba
Journal of Business Administration and Management Sciences
July 2018 Vol. 02 Issue No. 02
ROLE OF DIGITAL MARKETING AS A PLATFORM FOR PROMOTING

CONSUMER PRODUCTS/BRANDS
Farrukh Naseem Qureshi* Aadil Rehman**
ABSTRACT
Digital marketing is not only fast paced but has impacted many businesses positively that
totally depends on this efficient medium to reach their target audience. Consumer brands that
have been using conventional methods of marketing have started depending on digital
marketing and blended it well within their marketing mix. This paper highlights the multiple
dimensions of Digital marketing in generating brand awareness, recognition and recall and
also becoming an imperative part of business strategy. The guiding framework discusses the
important role of digital techniques in revolutionizing the marketing and becoming a vital part
of marketing strategy for businesses irrespective of their size and sector they deal in, holding
a significant role for the provision of promotion of consumer brands/ products. Various Issues
involved with brands focusing on Digital Marketing keeping in view Local Preference, Brand
Engagement Level, Brand loyalty & Brand Attachment are also considered to evaluate the
data and viewing effects of consumers & local businesses. This study also highlights various
level of satisfaction involved in using Digital Marketing as an online business tool. One of the
aims of the research is to understand how Digital Marketing can impact on Consumer Brand
Perception. Findings are discussed with regard to their practical and scholarly implications
to understand that “Digital Marketing” can create a positive impact on promoting consumer
brands.
Keywords: Digital Marketing, Brand Loyalty, E-commerce, Social media marketing,
Consumer brands
JEL Classification: M31, M39
1. INTRODUCTION
“It is true that the Internet will change everything. It is not true that everything will change.”
Paul Deninger, CEO of Broadview Capital Partners, quoted by Useem (2000)
Since the birth of Internet & Online Services, Digital Marketing has played a major role in promoting brands
online globally, it is said that when online searches got available soon businesses started offering services online.
Role of Digital Marketing proved to be a huge success globally ad since its induction in Pakistan it has shown to
grow business at a higher rate as compared to conventional marketing techniques (Urban Cities).
Digital Marketing as we all know is an “Online platform where organizations market their brands/products on the
Internet using digital media channels which manages various brands and brings maximum reach to consumers not
just nationally but cross border marketing”. The 21st century brought in the era of digital/online marketing, selling
& procurement. According to a survey by ‘Focus Works’ a total of 115 million users are actively doing business
online in US which accounts for roughly 53% of their total population as well as 40% of global internet users.
Digital Marketing Services started off in Pakistan in early 2009 and is rising at a steady pace. According to
countless several researches done in Pakistan statistics shows that a total of 23% of the population were using
internet in 2010 and as of 2016 report the percentile has increased to 49% of literate internet users. Many global
& national brands are now using digital marketing channels to market their brands.
Our point of research will be focused on metropolis city Karachi which has a total of 14.9 million population and
internet access to almost 70% of the residents. Our research is mostly limited to online shoppers and businesses
using digital marketing as a median to promote their brands and giving a comparison between traditional
marketing & digital marketing tools with major point of focus being the Online Marketing process whether
customers are buying products that are being marketed online.
We also have used a model of Brand Management and this model will also result in one of the pillar foundations
of our research report. The model defined is Keller Brand Equity Model, this model was introduced by Kevin
Lane Keller a marketing professor at the Tuck School of Business at Dartmouth College. The basic concept about
this model is “How your customers think and perceive about your product, building a strong brand and creating
the right type of experience around brand”. Here in this model we will only be analyzing and viewing the 4 th and
final stage of the model that is “Resonance”, according to (Keller, 2012) Brand Resonance sits at the top of the
Brand equity pyramid and thus is the most difficult & the most desirable stage for any organization to want for its
* Corresponding Author, Lecturer, Shaheed Zulfiqar Ali Bhutto Institute of Science & Technology – SZABIST,
Karachi, Pakistan Email: farrukh.qureshi@szabist.edu.pk
** Sr. Business Development Executive- Skills International Pakistan
268
brand, he broke down this resonance factor into four stages;

 Customer Behavioral Loyalty – Repeat Purchase
 Attitudinal Attachment – Brand is being seen as something special by the customers
 Sense of Community Belonging – Association with the brand
 Active Engagement – Customers being actively engaged with your brand
Figure 1.1: (Keller) Brand Equity Model
1.1 Problem Statement

 To study the effects of Internet on Digital Marketing Channels for promoting & marketing physical brands
online.
 To measure the intensifying competition as there are countless digital marketing channels that are relatively
cheaper than traditional advertisements which makes harder to gather business but easier in capturing
customers
 What perceived quality does a consumer thinks while shopping or looking at a particular brand online & will
that information be justified to shop online?
 To measure the level of safety and security, do the various Digital marketing channels define to make their
customers into potential users?
 To study if digital marketing channels can help in promoting local brands in international regions by placing
Global Integrated Online Marketing tactics?
1.2 Research Questions

Q1: Digital Marketing is an Effective tool in promoting Consumer Products/Brands?
Q2: In recent years increase in E-mail marketing, text messages & pay per click activities used by various
organizations in brand promotions, discounts has increased the customer base & sales?
Q3: Digital Marketing tools like Search Engine Optimization & Pay per Click helps create brand recognition
more vividly and promotes other organizations products to all available online channels?
Q4: In Pakistan both Global & Local companies are using Digital Marketing Tools to promote their brands,
mostly using E-Commerce as a median?
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1.3 Research Objectives

The primary objective of our research is to:
 To point the importance of digital marketing in today’s society as well as what level of effectiveness does
digital marketing platform plays in promoting various brands.
 Various Issues involved with brands focusing on Digital Marketing keeping in view Local Preference, Brand
Engagement Level & Brand Attachment (Repurchase Intention).
 Viewing effects of consumers & local businesses demographics that are involved in using Digital Marketing
techniques.
 Various level of satisfaction involved in using Digital Marketing as an online business tool.
 Over view on How Digital Marketing can create Brand Awareness & Recognition through various tools
 To understand how Digital Marketing can impact on Consumer Brand Perception.
1.4 Scope
This research is based on finding the benefits that are involved in using Digital Marketing as a medium of
promoting and marketing businesses and products/Brands online. Our views are optimistically based as generally
the Pakistani market is new to Digital Marketing but is rapidly picking pace in moving to the top levels, as our
research is Qualitative in nature, so our findings and justifications would be based on analysis and reviews on
benefits of Digital Marketing platform in promoting and marketing new products.
1.5 Limitations
Our point of research is focused on metropolis city Karachi which has a total of 14.91 million population and
internet access to almost 56% of the residents. Our research is mostly related to those firms using Digital
Marketing as a primary tool for brand image building and marketing using various online channels including
social media & search engine tools, with a limitation such as: being a qualitative study, our research questions
were completely close-ended so respondents were sampled using “Purposive Random Sampling” which made
data analysis easier to obtain.
1.6 Justification
The purpose of this research is to provide useful information to those organizations willing to use Digital
Marketing as a tool to promote their Brands online, getting useful information in knowing what the customers
want and getting customer insights through digital analytics. Digital Marketing is relatively cheap yet more
efficient than conventional form of marketing. Due to shortage of time we will be focusing on prime digital
marketing companies like “Shophive.pk, Daraz.pk, MyCart.pk & Yayvo.com” etc.
2 LITERATURE REVIEW
The chapter includes detailed information, sources & works on major areas related to Digital Marketing as a
platform for promoting consumer brands, by reviewing various past researches, blogs, internet articles and Internet
research. All of these researches will be the pillar for our research done, as said earlier very limited research have
been conducted on digital marketing in Pakistan.
Since the major domain of our research topic consists of Digital Marketing and its role as promoting consumer
product, so the literature review will revolve around the said domain work.
2.1 Digital Marketing

As defined; “Digital marketing is an umbrella term for all of your online marketing efforts. Businesses leverage
digital channels such as Google search, social media, email, and their websites to connect with their current and
prospective customers”. 1
In present world consumers are more time online then they used to do a decade ago, it is because organizations
are putting a lot of input in generating online marketing tactics, making as many consumers as possible to be/get
affiliated with their brands.
Previously marketing was used only to find “What the Consumer Wants” & “Using conventional marketing
strategies like ‘Push’, ‘Point Sales Marketing’ & ‘Advertisements’ generally used to provoke customers into using
your products”, now Marketing has completely been changed by simply “Connecting with potential consumers,
At the Right place, At the Right time”.
Organizations are rapidly promoting their products/brands using online digital marketing tools, and trying to
access customers globally, through means of digital marketing channels, this makes the world a global village 2.
1
Alexander, Lucy. 2016. MJN Marketing. https://mjinmkt.wordpress.com/2016/12/08/what-is-digital-
marketing-and-why-it-matters
2
Kotler, Philip, and Kevin Keller. 2006. Marketing Management. Prentice Hall
270
Digital Marketing by far is the most efficient & effective tool to promote an organizations
Services/Brands/Products not just locally but also globally. This is because people are spending more time doing
online search and comparisons as compared to offline median. Use of Social media has promoted both
organizations and customers to meet and decide on what to buy and from where, this has created a battle ground
for different organization marketers to engage customers and trying to influence and change their choice of
decision.
2.2 Digital Marketing of Today

Digital marketing tools and ideas have evolved a lot during the past two decades where transitioning from website
itself to “Online Branding Assets” where conventional digital marketing tools like, ‘online advertising, e-mail
marketing, online brochures’ and beyond, and digital marketer have changed this huge spectrum of tactical plans
and assets that one may find below the digital marketing umbrella, now presenting a clear picture of how each
single tactic/strategy or asset can support the marketers overarching goals.
We gathered information regarding what are Assets under Digital Marketing and what are its Tactics;
2.2.1 Assets
 Own website
 Blogs posts
 E-books and whitepapers
 Infographics
 Interactive tools
 Social media channels (Facebook, LinkedIn, Twitter, Instagram, snapchat etc.)
 Earned online coverage (PR, social media, and reviews)
 Online brochures and look books
 Branding assets (logos, fonts, etc.)
2.2.2 Tactics
2.2.2.1 Search Engine Optimization (SEO)
It relates to the process that affects the viewing visibility of a website, webpage in results that are unpaid on a web
search engine. Setting up algorithms, contents, HTML & analytics knowing what percentage customer traffic is
on the site and customer preference, making SEO a successful digital market tactic.
2.2.2.2 Content Marketing

This digital marketing tool is used to promote brand awareness and growth in customer’s followings, content
marketing is a management process using various digital channels to increase Brand to Customer awareness and
forecasting and customers change in behavior. Primary responsibility is to promote customers interaction with the
organization and increasing brand viewership which simultaneously increases brand sales.
2.2.2.3 Inbound Marketing

Promoting brand/products through using “Full-Funnel Approach” for attracting lead customers and converting
them as potential users, through using Digital contents.
2.2.2.4 Social Media Marketing

As said before people usage of online internet tools like Social media has increased at a rapid growth and users
spends quite a lot time using Online Social channels like (Facebook, twitter, Instagram etc.) and organizations can
use these as a platform for promoting their brand to customers online, this tactic is by far the most used and
successful for any organization to promote consumer brands/products or services fast and cheap.
2.2.2.5 Pay per Click (PPC)

Basic form of driving traffic to one’s website is through using pay-per-click (PPC) where a user visits a website
and sees a brand advertisement which seems pleasing, eye catching and the person click on that advertisement
only to be taken to that specific brand web page, as soon as the person click the advertiser need to pay a agreed
amount to the website owner through two PPC variants (Google AdWords & Microsoft Bing Ads).
2.2.2.6 Affiliate Marketing

Type of a digital ‘Performance-Based’ advertising where a website, webpage owner markets other organizations
brands and receives a percentage commission on promoting the brand maximum time.
271
2.2.2.7 Native Advertising

Online Brands advertisements that are non-paid and usually done on various social media channels like (Facebook,
Twitter etc.) to promote the brand through series of Advertorial Pictures or Videos, like we currently are
experiencing any brands or service company advertisement in the middle or start of an online video that we are
streaming.
2.2.2.8 Marketing Automation

A type of digital marketing software that sends automated brand messages for awareness or promotion to various
persons through automated E-mail, Social media or other relevant marketing actions to convert those persons into
potential buyers/users of that brand.
2.2.2.9 Email Marketing

Usually nowadays every organization uses this digital marketing channel to interact with their potential customers
or users to talk about their brands and communication their brands advantages to those users. Email Marketing is
also used to promote brands discount coupons, and or new promotions and work.
2.2.2.10 Online Public Relations (PR)

Normally used as Digital Marketing Channel used through various Public Blogs, websites, Content Pages &
Digital Publications to interact and convey organizations Brand messages to customers and users, usually a forum
where Brand Ambassadors & Customers interact and talk about the brands usages and perceived value.
2.3 Digital Marketing as a Tool for Promoting Brands

With the Launch & Introduction of Internet and back in the 90s gave in new opportunities to organizations to
promote their brands, soon came the World Wide Web (WWW) and other portals where organization Brands and
Customers can interact and do online transactions, with the Introduction of Web 3.0 (The Mobile Era) things have
become much easier as well as complexed, now it is reality that organizations and consumers both can access to
information at any place anywhere with 24/7 accessibility. Technology plays a vital role in improving business
units’ service quality which determines the end product be like. In today’s world Brands are getting closer and
simultaneously being more attached to consumer’s everyday life and this is being done increasingly by marketers,
making customers the “Co-Producers” of Brands Value is getting increasingly important 3. Internet Web has
created a bigger opportunity to be able to reach niche market buyers easily and with a fraction of a cost form
conventional marketing tools (advertising), this brings in advantage to tap untouched markets even before your
competitors through means of digital marketing tools4.
Digital marketing investment would be to upgrading commerce experience through Social Media, Content
Management & Creation and Mobile marketing activities. Primary research findings also showed that globally
organizations rely on their Web sites, Social media sites & Digital Marketing Advertising to promote their brands
successfully example Samsung Electronics & Apple both uses digital marketing experience for finding their brand
demands and getting customer attention even before pre-launching their brands.
As said by R.Kay Green, that presently a brands online presence equals to brand awareness to its targeted
customers, knowing what and when the customers want. Brands online presence can be described as the brands
credibility and visibility to its customer, as mostly today majority or all customers are technologically savvy and
brands online presence gives them a chance to ensure purchase safety and getting customer retention 5, in order
for a brand to succeed it must have to induce high in recognition, relation and authentication for that Green
presented “Seven (07) effective ways for maximizing online brands presence”;
2.3.1 Being Consistent with Branding

Developing a consistent online marketing strategy across all digital channels would result in high brand
recognition and reinforce.
2.3.2 Website Optimization

Primary responsibility for any organization having online web services is to bring in maximum customer traffic,
for that one must adhere in optimal site performance (zero Lag), creating attractive contents and visuals and
3
Prahlad, C.K, and Venkat Ramaswamy. 2004. "Co‐creating unique value with customers." Strategy &
Leadership 32 (3): 4-9. https://doi.org/10.1108/10878570410699249
4
Scott, David Meerman. 2017. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News
Releases, Online Video, and Viral Marketing to Reach Buyers Directly. 2nd. Wiley.
5
Green, R Kay. 2013. 7 Highly-Effective Ways to Maximize Your Online Brand Presence. April.
https://www.huffingtonpost.com/r-kay-green/online-brand-presence_b_3140951.html
272
maintaining performance across various electronic devices for optimal customer viewership result (desktops,
laptops, Mobile & Tablets)
2.3.3 Social Media

One of the most efficient and cost-effective way to promote both bigger and smaller brands, this in ways enhances
the brands visibility in front of the customers. Most customers have access to social media sites and brands
presence means customer-brand attachment which brings in maximum revenue back to the organization.
2.3.4 Quality Content (Produce & Distribute)
Creating quality contents makes a good Viral Marketing in terms brings Brand recognition and attachment from
customers. Creating a quality content has become essential part of brand promotion tool.
2.3.5 Press Release Marketing

An inexpensive and an effective way of delivering & promoting the brand to target customers, it’s a way to
enhance the brand’s recognition and if online Digital marketing tools like Google AdWords, Adds, Google
Advertising & Microsoft Advertising gets to pick your brand it results in additional coverage of the brand across
borders.
2.3.6 Video Marketing

Business both Small & Big can get benefits from using online video sites like YouTube as it drives traffic to your
websites and results in increase in brand selling. Best example is that of Blend Tec. A small blender manufacturing
company started promoting its new blender by crushing various renowned electronic devices like Mobile, Tablets
etc. the video increased its viewership to almost 2 billion views making it the most watched video and
simultaneously increasing the company sales profit.
2.3.7 Blogging
If a brand needs to be successful it needs to have blog access where customers can reach and share their
experiences while also attaching themselves with the brand. Blogging enhances brands visibility and can also
improve the search engine rank while also being able to retain customers through various means.
2.4 Social Media Marketing

“Social media marketing is a type of online marketing that exploit websites of social networking as tool of
marketing. It drives the aim to deliver the content that consumers will recommend to their social network to give
benefit to the firm by increasing brand equity and reach broad segment of consumers.” Social media also helps
create a brands Word Of Mouth Marketing (WOMM) which acts as the most highly sought after by organizations
as this creates a marketing type where customers themselves are promoting the brands value to other potential
customers, this is the moment where consumers are open to various choices and marketers at that time tend to
promote their brands via using social media tools, this also allows consumers to have opinion on new product
development, choices preferred and issues/complaints, this makes the popularity of that social media site
(Facebook, Twitter, LinkedIn etc.) to become the most important social media tool to develop consumer brand
perception to brand equity6. The prime invention of the century is the Internet which has revolutionized the process
of Buying & Selling, Internet’s influence and diversified features has prompt us all to go Global by creating a
bridge and eliminating any barriers to digital innovation & marketing, organizations using internet services are
constantly modifying and changing their strategies of better understanding their customers7. The most valuable
service of the internet is considered to be the Social Media Platform and soon it will cause a drastic change in the
consumer buying behavior all over the world. Social media is considered as a main attraction for any organization
brand as well as customers, this has an influence in changing customer decision in a blink of an eye.
2.5 Social Media Influence on Consumer Purchase Decision

According to a survey social media users on PC (Personal Computers) accounts for almost 20% of their time spent
on using social sites, 30% on using social sites on Mobile devices, and other devices like gaming consoles, tablets
and e-readers also accounts for a positive addition to the social sites usage, in addition it is also discussed that
social media usage is not solely based in homes but also in office with different gatherings like users aged 22-36
6
Abu-Rumman, As'ad H, and Anas Y Alhadid. 2014. "The Impact of Social Media Marketing on Brand Equity:
An Empirical Study on Mobile Service Providers in Jordan." Review of Integrative Business and Economics
Research 3 (I): 315-326. http://www.sibresearch.org
7
Olsen, Camilla Ina. 2014. Brand Loyalty on social media - can images make you more loyal? Master Thesis,
Copenhagen: Copenhagen Business School.
http://studenttheses.cbs.dk/bitstream/handle/10417/5152/camilla_ina_olsen.pdf?sequence=1
273
are more into social sites usage in office and discussing their purchase decisions with their colleagues, friends etc.
8
It was also stated that the conventional consumer thistle funnel that was linear has been ended and replaced with
the new broader funnel process, this is due to the reason that consumers have greatly changed their purchase
decision journey.
Neilsen survey (2012-13) also discussed that now the social media sites carry a great influence over consumer
purchase decision choices all over the world, carrying a strong hold in Asia pacific, Middle East, Latin America
& Africa, approximately 30% of the users on an average daily basis use social media sites to discuss various
brands and ask recommendations from other users for that brand and based on that do purchases.
This means that social media sites holds great opportunity for organization brands to interact with consumers and
influence them with their purchase decision bringing in greater brand equity and broader brand identity, below
shown in the figure is related to the Neilson survey in the US market for consumer purchase decision using social
sites which strongly proves that social sites does play a vital role in influencing consumer purchase decision. The
survey was conducted on various consumer goods like Apparel, Fashion, Restaurants, Food & Beverages, Travel
& Electronic goods.
Figure 2.1: Social Media’s Influence on Purchase Decision in all Regions
This results in a greater opportunity for brands to engage with customers via social media sites and tools, also by
Neilsen (2012) the survey stated results of the US market where customers tend to purchase online just by seeing
the brand in social media sites the research was done in 2012 and now the figures have increased by 150%.
Figure 2.2: Advertising in Social Media
2.6 Digital Marketing in E-Commerce

As we all know that electronic commerce (E-Commerce) refers to the online transactions for buying and selling
of different products using internet services with overtime purchase. The important fact defined here is that the
8
A.C. Nielsen. 2012. "State of the Media: The Social Media Report." Womseo. https://womseo.com/wp-
content/uploads/2012/12/The-Social-Media-Marketing-Report-2012.pdf.
274
transaction takes place at any time of the day (24/7) as compare to traditional physical transaction practices here
the buyer and the seller are both doing online business services.
Digital marketing is becoming increasingly popular with online shopping sites, as most customers in their free
hours tend to spend it using mobiles to check and compare different products on e-commerce mobile sites here
digital marketing can play quite helpful role in promoting brands on e-commerce platforms as well as driving
consumer analytics and findings on to which products/brands consumer purchase often.
As per blogger (Jonathan Lacoste, 2015) he discussed that digital marketing can focus on retail and e-commerce
trends solely on mobile by using three (03) key trends like:
2.6.1 Micro Moment Marketing

These moments analyze on how much time a consumer spends on using mobile for checking various brands on e-
commerce sites on daily basis, and brings in the intent of how a brand can successfully tap the consumer decision
for purchasing that brand. This is to find out what the customer wants to get/take out from the site and how the
brand can deliver that moment to the customer – satisfying customers need.
2.6.2 Location based Marketing

This is generally a digital marketing strategy where users get notifications (Push Based) using their mobile data
and telling what promotion, discounts or new arrivals is available in that particular location specifically based on
customer preference
2.6.3 On-Site Personalization

A primal to successful marketing where e-commerce sites (mobile Based) can be personalized using consumer
preferences, many brands are doing it using e-mail personalization and proving to be successful, for e-commerce
sites they can have on-site personalization access to consumers and the consumer can decide on to which brand
area specifically suits their preference, being shown products based on their past searches and finding the
consumer relevant point – style of purchase.
2.7 Digital Marketing in Pakistan

Digital marketing has already started taking roots in Pakistan and almost all organizations big or small are using
it as a platform to promote their brands. He also stated that various challenges are faced by developing economies
for not falling behind, to meet with the pace of the digital revolution the developing economies need to adapt to
changing technologies and create a need for its people to acquire the knowledge. 9
The author recommended that for developing economies the best way by far is to adapt to ICT (Information &
Communication technologies) identified through using Schumpeterian concept having a nonlinear creative
destruction in a path-dependent world through investing in various areas like Human Capital, Skills development
and Technologically advancement in society tends to promote and gives an advantage of becoming a developed
world society by bringing in various investment business (Digital marketing arenas).
Internet users in Pakistan in 2000 were limited to only 133,900 internet users but due to advancement in
technologies and introduction of Digital Marketing tools the numbers have been increasing at an increasing rate
since then, Pakistan is one of the most highly admired markets in the world as a result consumer purchasing
patterns have changed drastically as per World Stats Reports10;
Table 2.1: Consumer Purchasing Patterns in Pakistan
Population Internet Internet Users Penetration Users Facebook

Asia
(2017, est.) Users (2000) (June,2017) (% Population) % Asia Users (2017)
Pakistan 196,744,376 133,900 44,608,065 22.7% 2.3% 27,000,000
E-Commerce and Digital Marketing in Pakistan has matured over the years since back in 1995 there were on 0.1%
of the total population as internet users now in 2008 the percentage has rapidly increased to 14.1% of the total
population11, seeing the 2017 world stats the total users have now reached an astounding 22.7% of the population
9
Khan, M.S., S.S. Mahapatra, and Sreekumar. 2009. "Service quality evaluation in internet banking:an
empirical study in India." Int. J .Indian Culture and Business Management 2 (1): 30-46.
10
Internet World Stats. 2017 n.d. https://www.internetworldstats.com/stats.htm.
https://www.internetworldstats.com/stats.htm.
11
Ahsan, Iqbal. n.d. E-Commerce: Need of Hour! Checklist for an E-commerce Store, Green and White – Coffee
Sessions for the Industry. http://greenwhite.org.
275
and increasing. The number of internet users as well as online businesses have been growing fast (PK Government
Economic Survey, 2012/2013) states that internet services have been increasing a lot and Optical Fiber based
system is now reached to almost 23 cities of the country with many other expansions on way, while organizations
(Consumer based) have been converting to online digital marketing channels for promotion of their brands and
cities like Lahore & Karachi have picked up pace related to international standards and many consumers reported
purchasing online (2012) figures of 1.2 Million and as presently crossing over 3 million online buying and selling.
2.9 Digital Marketing on Brand Loyalty

Brand Loyalty exists when a customer tends to purchase the brand from the same organization with repetitive
purchase, maintaining a Brand to Customer relationship. All corporate entities primary objective is to make
maximum profits out from their brands and this can only be achieved once the customers are being loyal to their
brands and repeat purchases, this means for profit growths organizations try to engage the customers with their
brands as much possible and convert regular ones as potential buyers and finally bringing out brand loyalty
statuses through various online (Digital Marketing) modes, it is a necessary process that all organizations do for
their brands so that customers may/can avoid substitutes and competitors12. Maintaining the activity of Brand
loyalty or even enhancing it, the brands need to hold a significant competitive edge over its competitors by
engaging loyal customers to promote their brands in the open market, by providing its customers with quality
brands, best price practices, efficient supply chain, placing barriers to entry for same product businesses and
providing extended product/brand category for customer choice making and preference 13.
Loyalty in digital marketing as a self-commitment to purchase and repurchase the organizations brands as a point
of brand attachment and reflection, despite all these it is also about the brand recommendation that nowadays
consumer get online through various modes 14. Primarily there are two different types of brand loyalist, Active &
Passive loyalist. Active loyalist are those that purchase that brand despite the prices being high and attach
themselves as the self-brand ambassador of that organization, whereas Passive loyalist are those that are
considered as loyalist but they also consider other same brands while or before purchasing, reason can be for the
quality, satisfaction and prices. Organizations want also these brand passive loyalists to become active and
promoting their brands to other same side consumers. This brings in three major steps in any brand that is
Repurchase, Commitment & Recommendations which once achieved can bring in maximum ROI (Return on
Investment) for that organization.
3 RESEARCH METHODOLOGY: THEORETICAL & CONCEPTUAL FRAMEWORK

Most of the researches conducted are related to global digital marketing research work, as mentioned earlier that
in Pakistan digital marketing research is extremely limited to only mobile application and search devices, local
research and findings are mostly related to consumer cultural changes and economic classification and would not
be able to provide us with authentic results pertaining to consumer influence and digital marketing role for
promoting brands. Our research is mostly based on digital marketing as global promotor for brands as well as
what local presence digital marketing can give in for promoting consumer brands. One of the major reason to
conduct research in the local market is based on the fact that Pakistani consumer’s socio economic classifications
are changing/upgraded and based on that their presence and taste also changes, this in terms brings organizations
to shift from conventional form of marketing to digital marketing, gone are the time when brands just wanted us
to see what they want us to show now customers can verify, check online about that very brand and gets to decides
based on his/her own individual preference, as digital media is now pervasive in terms of providing customer with
their specific researches. One of the secondary purpose for this research is to know that: How Digital Marketing
a tool for promoting brands in a more efficient, cost effective manner and sustainable ways? Other findings will
be how a brand can create awareness and loyalty while also maintaining high customer engagement levels in the
12
Erdogmus, Irem Eren, and Mesut A Cicek. 2012. "The Impact of Social Media Marketing on Brand Loyalty."
Procedia: Social Sciences and Behaviorial Sciences 58: 1353-1360.
13
Julian, Lindsey. 2012. "Using Social Media to Increase Consumer Loyalty to a Brand." Bachelor's Degree
Report, Department of Journalism, California Polytechnic State University, San Luis Obispo .
https://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?referer=https://www.google.com.pk/&httpsredir=1&arti
cle=1049&context=joursp.
14
Fallon, Megan. 2012. "“Like” to Loyalty: A study on whether or not social media promotions lead to a
lifetime of consumer brand loyalty." UW-L Journal of Undergraduate Research 1-10.
https://www.uwlax.edu/urc/jur-online/PDF/2012/Fallon.Megan.pdf.
276
research. Empirical findings would be of Brand Loyalty through digital marketing and its effect on consumer
(long term).
As we all know that consumer decision journey has changed a lot and has shifted from traditional marketing funnel
to a new broader and circular marketing funnel where choices are unlimited and consumer decision tends to
change, becoming both more complexed and effective for brands to reach its target customers. So once we
conducted our research and reviewed past researches done on digital marketing and investigated the brand equity
model specifically for online and digital marketing we got to know that every research is done on their own aspects
of findings and limited brands to consumer interaction, so our research would be based on the perception that how
consumer creates brand equity online and how brands can create better visibility, attachment, recognition,
awareness and loyalty through digital marketing channels. For that we first need to understand the consumer
decision journey (traditional & new), below the funnel figures describe best of the consumer purchase decisions;
Figure 3.1: Traditional Consumer Disposition Funnel: Linear in Nature (100% to 0%)
Figure 3.2: New Consumer Disposition Funnel: Circular in nature (percentage tends to increase or decrease at
any given stage)
For our research we have taken 7 key dimensions of Digital Marketing for promoting brands which will help
better in understanding and effectively engaging customers into buying the product/brands; All these dimension
will fall under Brand Loyalty as to our perception and understanding that this is one the most key areas for any
organization brands to be successful and the optimal marketing strategy once achieved through brand marketing
would be the Word of Mouth Marketing (WOMM), where brands each active loyalist would act as an individual
brand ambassador and would promote the brands both Online and Offline, our understanding of the research
would develop better as we find result of each of these dimensions and finally relate it with digital marketing as a
brand loyalty platform.
1. Social Media
2. Text Messages
3. E-Commerce Marketing
4. Search Engine Optimization (SEO)
5. Pay Per Click (PPC)
Figure 3.3: Conceptual Framework
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3.1 Research Design

The primary purpose of this research is to find out that “Digital Marketing” can create a positive impact on
promoting consumer brands (Online).This research comprises of data related to Brand perception, Brand
Recognition & Awareness and Brand Loyalty, where how a brand can actively engage its consumers online
through using various Digital Marketing tools. Our focus of research would be based on our theoretical framework
which comprises of mostly used digital marketing tools. Research Design is indicated in a way to know why more
organizations are promoting their brands using digital marketing tools like ‘Social Media, E-Commerce, SMS &
E-mail Marketing’.
As in the past not many researches about Digital Marketing & E-Commerce services in Pakistan have been made.
Our point of research would be based on optimism and views on benefits attached with digital marketing for
business and consumers, giving primarily a holistic approach to our research findings. Countless academic papers
and foreign researches will be used to determine the process of our research also various marketing tools and
global & regional marketing concepts will be applied to determine the relevance of our study. For better
understanding regarding the brand we have used Keller Brand Model CBBE (Consumer Based Brand Equity) and
focus would be on the 4th pyramid stage that is “Brand-Resonance” which is the ultimate desirable position for
any organization where consumers are actively engaged with their brands both online and offline.
The primary data collection used to conduct the research was through surveys, past global researches conducted
& Questionnaires using “Likert Scale” and secondary data collection method by reviewing Blogs, research related
Articles, Scholarly Articles & Journals, Magazines, online portals, social media & websites. Data analysis was
done through using SPSS (Basic SPSS models, charts and graphs).
3.2 Target Population

As already discussed that the topic of our research is ‘Digital Marketing as a platform for promoting consumer
products/brands’ so our target population for our research was primarily residents of Karachi (specifically posh
areas like DHA, Clifton, PECHS & Nazimabad). Data collected was only from those participants who had
understanding and experience of using online portals like social media, e-commerce sites & mobile applications,
just for the purpose to know that our target population knew regarding digital marketing and brands promotion
and brand engagement activities being done online.
Heterogeneous population was selected for our research study where target population was primarily from Karachi
with age bracket from 18 – 50 years of age and education criteria from Bachelors till Doctorate programs while
also having different scale of experience, as we could confirm that the participants from these age brackets are
actively engaged in using online media channels and can confirm regarding our research study on digital
marketing.
3.3 Sample Size

Our research report being Qualitative research and our total number of respondents selected for the research
questions were 110 (61 Male & 49 Females) all randomly selected from 2 different universities (SZABIST &
MAJU) as well as 2 different organizations/institutes (City & Guilds and Nixor College) while also varying is the
participants education, work experience and marital status as digital marketing tools are usually seen working
online using various online channels like social media, ecommerce etc. so we had to select our respondents based
on the research topic. Our sampling strategy selected for these respondents was “Purposive Random Sampling”
(Non-Probability), because as said by (Laurate, 2010) qualitative research simply starts with an specific group,
individual, type of process or an event, having characteristics relevant to the scope of research.
3.4 Instrumentation & Measurement Selection

Our research was majorly based on secondary data collection mentioned in Research Objectives and Literature
review. Each dimensions of the questionnaire were developed while viewing our research literature review and
objectives to develop better understanding and method for making the research based questions.
Our research questions instrumentation are based on Two (2) sections, where section One (01) defines the
participants demographics which includes Age, Gender, Income, Education, Marital Status & Social Media
Account being operated by the each participants. Our Secondary section represents questions that are Scale rated
developed under ‘Likert Scale’ to analyze the various variables in the questionnaire, the scale usually provides
rating on the basis of Agreement or Disagreement starting from “Strongly Disagree, Somewhat Disagree, Neither
Disagree nor Agree, Somewhat Agree & Strongly Agree”, ratings are given from 1 till 5 describing the selection
and behavior of the respondents.
Our research questions were focused towards digital marketing tools, brand loyalty, brand promotion &
recognition.
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3.5 Variables
For measuring and calculating the data we generated Two (02) variables that is Brand Loyalty & Digital Marketing
(general), for digital marketing Likert scale ratings was acceptable and we were able to gather relevant information
from our surveys and research questions, for Brand Loyalty it was technically difficult to gather data related to
customer brand loyalty from digital marketing so we further extracted some digital marketing tools like “Social
Media, Email, E-commerce, Text messages, PPC & SEO” that mixed well with brand loyalty as well as other
brand dimensions like “Brand Recognition & Brand Promotion” and based on that we measured that on spss and
got relevant results.
3.6 Hypothesis
Our research hypothesis was generated on the basis of our research theoretical framework, our model as shown
as under;
The above-mentioned figure is briefly explained in the theoretical framework chapter. Our research hypothesis is
developed keeping in view the above model and based on that we were able to determine our research hypotheses
which are;
H1: There is a significant impact of Digital Marketing through Social Media & Ecommerce
H2: Digital Marketing holds a significant impact on Brand Awareness & Recognition
H3: Digital Marketing does create a significant impact on Consumer – Brand Engagement
H4: Digital Marketing does create a significant impact on Business for Online Brand Promotion
3.7 Statistic Analysis & Software used

For analyzing our research data, we used the SPSS 21 (Statistical Package for Social Sciences) software and on
that we derived various results like;
 Frequency Analysis for categorical explanation
 Graphical Explanation, Pie Chart
 Standard Deviation, Mean & Median
 Linear Regression Analysis & Chi-Square Test for finding the variables relationship of dependent &
independent variables
3.8 Reliability & Validity

Our research reliability test was conducted in SPSS where we initially analyzed our research questions through
data input and got significantly reliable result that our questions were qualified for SPSS data entry and results.
Finalization was done within a week and successfully gathered result from our 110 test participants using
purposive random sampling.
4 DATA ANALYSIS AND FINDINGS

4.1 Data Pilot Testing
We initially had to select 25 test respondents to check the compatibility and reliability of our questionnaires, we
used “Cronbach alpha” on the test responses data and received a result greater than 0.60 which concluded the
reliability factor of our questionnaires and proved effective in testing on SPSS for various frequencies and tables.
We then proceeded to conduct our data analysis survey to finalize our research report.
4.2 Demographics of Respondents

As discussed before due to some limitations our selected respondents were from Karachi and we selected our
respondents based on the Five Factors Process “Age, Gender, Education, Income & Marital status”, our age
bracket comprising from ages 18 – 50, education from under graduation to doctorates. This was to know that does
any of these five factors represent any significant impact in digital marketing on brand loyalty as most of these
respondents from these factors use various digital marketing tools like “Social Media, Text Messages, E-
commerce & Email” to name a few and most important tools where we can easily engage with preferred brand
online & offline.
4.3 Frequencies of Respondents

As discussed above on the five factors of our research questionnaires, we determined the frequencies of our
respondents giving a graphical explanation and determining from which factors each of our respondents belong
to and what impact they can create for organizations to start promoting their brands online. These have been
explained below;
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Table 4.1: Gender
Frequency Percent Valid Percent Cumulative Percent

Male 61 55.5 55.5 55.5
Valid Female 49 44.5 44.5 100.0
Total 110 100.0 100.0
Table 4.2: Age
Frequency Percent Valid Percent Cumulative

Percent
18-30 53 48.2 48.2 48.2
31-39 38 34.5 34.5 82.7
Valid 40-49 15 13.6 13.6 96.4
50 or over 4 3.6 3.6 100.0
Total 110 100.0 100.0
Table 4.3: Educational qualification

Doctorate 3 2.7 2.7 2.7
Post Graduates 52 47.3 47.3 50.0
Valid
Under Graduates 55 50.0 50.0 100.0
Total 110 100.0 100.0
Table 4.4: Monthly Income

Less Than 30,000 29 26.4 26.4 26.4
30,000 – 50,000 35 31.8 31.8 58.2
51,000 – 70,000 27 24.5 24.5 82.7
Valid
71,000 – 90,000 11 10.0 10.0 92.7
More than 90,000 8 7.3 7.3 100.0
Total 110 100.0 100.0
Table 4.5: Marital Status
Frequency Percent Valid Percent Cumulative

Percent
Single 66 60.0 60.0 60.0
Valid Married 44 40.0 40.0 100.0
Total 110 100.0 100.0
4.4 Respondents Data Findings & Results
Table 3.6: Descriptive Statistics
N Minimum Maximum Mean Std.

Deviation
Digital Marketing on Brand Promotion 110 3 5 4.34 .970
Digital Marketing on Online Brand to Consumer 110 3 5 4.12 0.011
responses
E-Mail, Text Message & PPC Marketing 110 3 5 4.25 .872
E-Commerce on Brand Awareness & Recognition 110 2 5 4.34 .770
Digital Marketing on Mobile Application marketing 110 1 5 4.23 .797
Trends changing to Digital Marketing for Brand 110 2 5 4.35 .735
Promotions
Consumer Satisfaction & Brand Engagement (Online) 110 1 5 3.88 0.163
Valid N (list wise) 110
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As we can see that all of the above responses were gathered using Likert scale that is 1=strongly disagree,
2=somewhat disagree, 3=neither disagree nor agree, 4=somewhat agree, & 5=strongly agree. As shown in the
table we can see the minimum and maximum column were some respondents have given ranking 1 – 3 and
majority of the respondents have given results of 5 which means that digital marketing does hold a significant
impact on promoting consumer brands, and based on our sample respondents we can easily say that brand loyalty,
awareness & consumer engagement role is being played by digital marketing. Here we can also see the standard
deviation column which is greater than 0 and less than 1, stating that there is less variation in between the
respondent’s answer/opinion and that it is closer to the mean value.
4.5 Chi-Square Test

We conducted chi square tests on our research data based on two factors that is ‘Age to Monthly Income & Age
to Education’ our second factor being ‘Gender to Monthly Income & Gender to Education’. The requirement was
simple to know on what education, age, income & gender factors our respondents used digital marketing activities
like social media channels etc. and based on that to inquire that does education & income play a role on brand
loyalty;
Factor 1: for Age to Monthly Income & Age to Education the Significance model is = 0.000 & 0.004 < 0.05 and
Pearson chi square value = 112.216 & 19.423which means there is a significant impact of age to income and
education as people tend to prefer more brands and are more brand loyal when their income level is high.
Factor 2: for Gender to Monthly Income & Gender to Education the significance model is = 0.525 & 0.276 >
0.05 which means that there is no significant impact of gender to income and education, it means that both male
& female tends to be Loyal with those brands which they prefer and have past good experiences, as customers
choose those brands that have great value and can create a positive attachment with the customers.
4.6 Regression Test

H1: There is a significant impact of Digital Marketing through Social Media & Ecommerce
In the table of ANNOVA it indicates that the significance model is = 0.01 < 0.05 and f value is 12.195, so we can
accept the hypothesis H1 that digital marketing creates a significant impact on social media & e-commerce where
organizations can promote their brands and based on that we can conclude that marketers can promote their brands
using digital marketing-social media channels.
H2: Digital Marketing holds a significant impact on Brand Awareness & Recognition
In the table of ANNOVA it indicates that the significance model is = 0.01 < 0.05 and f value at 25, so we can
accept the hypothesis H2 that there is a significant impact of digital marketing on Brand Awareness & Recognition
when organizations use online digital marketing tools. We could also say that brand managers & marketers can
social media channels to actively use brand awareness strategies and gain brand popularity.
H3: Digital Marketing does create a significant impact on Consumer – Brand Engagement
In the table of ANNOVA it indicates that the significance model is = 0.000 < 0.05 and f value at 15.291, so we
can accept the hypothesis H3 that digital marketing does creates a significance impact on consumer brand
engagement and can say that digital marketing tools like Social Media Channels can actively engage customers
with brand through various means (blogs, games, preference & festivities etc.).
H4: Digital Marketing does create a significant impact on Business for Online Brand Promotion
In the table of ANNOVA it indicates that the significance model is = 0.008 < 0.05 and f value at 5.073, so we can
accept that the hypothesis H4 that digital marketing does create a significant impact on businesses to go for online
brand promotion more often, one reason is because digital marketing advertisement is relatively cheap then
conventional marketing advertisement and it can also be used to promote your brand globally plus where ever
there is availability of online portals or internet.
4.7 Statistical Answers Discussions

The main purpose of our research was to know and gather information that whether digital marketing holds some
sort of impact on Brand promotion and for this reason we viewed and reviewed various past researches, research
articles & journals that we could find but to our astonishment we were only able to get foreign country digital
marketing researches and not researches done in Pakistan on digital marketing, so there was a great limitation and
availability & accessibility of information, so after excruciating hard work we came to a result that our research
point of focus would be generalized and mostly based on general views and global findings for that we selected a
qualitative research method and for local market data we purchased data findings conducted by AC Nielsen in
Pakistan. We needed to know that is brand loyalty also linked with various digital marketing tools and does this
create a positive impact on brand promotion to customer purchase decision.
As currently seeing an evolution phase of digital marketing we can see that Social Media & E-Commerce has
taken up a step further and by that we can see various or almost every organization now globally promoting its
brand, this process has truly made the earth a Global Village where having any brand to any place is now possible.
Even in Pakistan digital marketing trends has taken up pace and majority organizations are shifting now towards
281
digital marketing in hopes for promoting their brands and creating a brand equity value. Initially we decided not
to run SPSS test as this was a qualitative research work but as soon as we started our works on literature review
we found that there is a particular need to run a statistical model and we needed to know that how many active
internet users are there in Pakistan and specifically Karachi as our primary focus was on Karachi markets and
trends, we also needed to know that what number of users are on social media and how much time do they spend
using social media sites (on weekly basis) also what level of brand interaction and awareness do they find using
social media sites. This tempted us all to do a basic level statistical research using frequencies, chi square &
regression test to better understand what our respondents wanted to say. But all these statistics that we wanted
were not easily available in Pakistan, so we purchased what we needed and conducted market research to know
what is happening in digital media marketing in the country. As we all know that a while back one the most
famous domestic banks United Bank Limited (UBL) started digital marketing by introducing complete online
banking experience form mobile and this created a good demand. Based on our research questionnaires we got to
know that majority of the respondents gave rating 4 to 5 on digital marketing tools being used to promote brands
and also that majority respondents had experiences personally or through friends or relatives of using e-commerce
sites and purchasing their preferred or chosen brand (online) also through social medial channels like “Facebook,
Twitter, YouTube, etc.” they have seen brands trying to actively engage customers and converting them as active
loyalist while also making them their brand ambassador which is the ultimate marketing strategic tool for any
organization in their brands being promoted by their consumers. We also got to know that social media is actively
using digital marketing tool both by consumers and organizations where they can build their brand relationship
with their customers and also building Brand awareness & Brand promotion which in terms of conventional
marketing tool is more efficient and cost effective.
One of the main reason we have seen digital marketing becoming a trend a reason that we personally think can
also be online customer complaints and surveys which is more fast and accurate, as more customers tend to register
their complaints online via sending through e-mails or social media channels and response rate is astonishingly
good as compared to telephonic or physical complain courier. As discussed before that based on our research
objective and theoretical framework we found our important tools that we had used in generating research
questions and getting statistical results and based on that we concluded that yes all of our hypothesis carried a
significant impact on digital marketing for promoting brands online. Our important research factor was also the
brand equity model which gave us more insights that why organizations dream of reaching the “Resonance” stage,
it is because here at this stage the organization tends to create a customer – brand relationship which is directly
proportional to brand loyalty and can help create a positive long-term brand perception and attachment. We know
that we haven’t found various other factors which could help in promoting brands using digital marketing tools as
time constraint and resource limitation was also a problem, but we think that what information we are providing
further researches can easily be conducted in future with improved results and findings.
5. CONCLUSIONS & RECOMMENDATIONS

5.1 Research Conclusion
Digital Marketing is one of the efficient and cheapest form of marketing a brand through various digital marketing
tools, as proven through hypotheses and their subsequent results which clearly shows the importance and
relevance of digital marketing as a promotional tool. Digital marketing has impact through social media, E-
commerce, Brand awareness, Brand recognition and Brand promotion. The statistical results and the presented
literature in this paper clearly shows the relevance of Digital marketing. We have seen earlier the conventional
marketing channels and its drawbacks, here we have digital marketing as a new channel, as per researches done
people tend to spend a big amount of time online using various social media channels and this could make them
an active participant in brand development (online). One of the major advantage of using digital marketing for
brand promotions is it tends to reach the target customer with ease. It is becoming an essential part of business
strategy for many organizations, even SMEs are using digital marketing tools rather than conventional form of
marketing as this is more effective in reaching out to customers without any boundaries or limitations.
Organizations can use digital marketing techniques in various forms and can use any device for digitally marketing
their brands like “Laptops, Tablets, Smart Phones, Game Consoles, Digital Billboards, PPCs, SEOs, video
channels, e-mail, social media and a lot many more, in financial terminology just think of major cost cutting &
expenses you could do (Saving a big chunk of money from conventional marketing tools) there are literally endless
possibilities.
For sure one must test the possibilities achieved from digital marketing as this is relatively new and would take a
little time in understanding, but one may succeed in using digital marketing tools if he/she considers consumers
need as primarily top priority. This would help brand managers gain possible ROI (Return on Investments) on
digital marketing spending while also be able to attract, retain customers and create Positive Brand Equity.
5.2 Research Recommendations

Some recommendations that we found from our research;
282
 Organizations should create innovative and attractive customer/user experiences and set specific strategies
for digital marketing to identify best possible ways to driving greater performance
 Digital Marketing should be made integral in promoting and overall brand strategy where end process should
be focused on converting the users into active brand loyalist by creating an attractive content.
 WOMM (word of Mouth Marketing) one of the most efficient form of brand building and loyalty,
organizations should create strategy to actively engage its users and once achieved users would automatically
start discussions and brand marketing on various forums.
 Social Media has become one of the most successful tool of Digital marketing; organizations should actively
update, participate & promote their brands on these social media sites as consumers could take interest in
knowing what the brand is and may reach a purchase decision.
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Releases, Online Video, and Viral Marketing to Reach Buyers Directly. 2nd. Wiley.
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MEASURING CUSTOMERS’ PERCEPTION AND EXPECTATION OF QUALITY

IN RETAIL STORES SERVICES
Areeba Bhutto* Summya Khatoon** Wajiha Saghir***
ABSTRACT
This study aims to achieve the gap in overall service quality level that retail stores proposed and
to discover Service Quality impact factors on satisfaction level of customer. Quantitative study on
Likert scale is used. Data was collected from 300 customers of retail stores via Quota sampling.
The study covered Karachi, Lahore and Islamabad region. Gap scores analysis was carried out.
We found that overall Service Quality is low than desired level. The result of gap analysis
concludes that customers are not satisfied fully with Services of Retail Stores. The study also
identifies that Perceived Service Quality Level in Store is 3.6, which is less than Expected Level.
The study examine that the retail stores have to upgrade their performance in order to increase
satisfaction level. The reliability results of the RSQS scale concludes that model is sound for our
study.
Keywords: RSQS Model, Retail stores, Satisfaction of Customer, Service Quality.
JEL Classification: M, M1
1. INTRODUCTION
People from every walk of life visit retail stores to make their purchases. A large retailing business unit in which
wide variety of shopping goods and specialty goods are handled under one roof is known as retail stores. The
pattern of development to the grocery stores and retail stores has pulled in the clients and producers. The main
goal of these companies is to raise gains/profit and to cut down amount. Maximization of profit leads to add in
sales with reduced in cost.
Satisfaction of customer is the only factor that help to add sales, because satisfaction is directly proportional to
loyalty of customer, recommendations, word of mouth and again purchase1. The difference between service
perceived by the customers and their expectation about services. Customer expectations are based on past
experiences. Whereas, the evaluations of actual service while it is rendered are known as customer perception. In
order to gain competitive advantage, it is very necessary for every organization to deliver quality services and
satisfy customers. It is observed that higher the service quality, higher will be the satisfaction and vice versa.
For creating satisfaction of customer premium service quality is required. Customer perceptions and customer
expectations is depending on service quality. We can measure service quality by comparing the customer
expectation and the services they received which results that, higher the perception as compared to the expectation
shows that the service quality is excellent, if the service is less than the expectations it will be considered
unsatisfactory.
Achieving target is very necessary in today’s competitive environment, it is a key factor for sustainable
competitive advantage. If the customer is satisfied it will create great impact on company’s success because
satisfied customer must share his/her experience in his circle and vice versa.
We all know very well that for successful business it is very necessary to maintain current customer instead of
making new one because it will take time and efforts to boost the trust of new customers. When we work on the
data and statistics of the company’s service vs. satisfaction of customer we can realize the facts on which we need
to work are not included like number of complains, time and number of products returned etc.
A company must know about the customer requirement and there must be careful stored out supply chain
management and widely studied consumer behavior of an organization, this study will help in decision making.
The relation between study of supply chain management and consumer behavior will definitely be fruitful for
healthy outcomes for organizations success. The remarkable topics which is attempting to give administrative
instruments in basic leadership. This review endeavors to draw out the significance of buyer conduct and store
*Corresponding Author, Institute of Health Management, Dow University of Health Sciences, Karachi,
Pakistan. Email:areebhutto@hotmail.com
**Institute of Health Management, Dow University of Health Sciences, Karachi, Pakistan
***Institute of Health Management, Dow University of Health Sciences, Karachi, Pakistan
____________________________
1
Wilson A., Zeithaml V.A., Bitner M.J., Gremler D.D. Services Marketing. McGraw Hill Higher Education,
(2012)
284
network administration in connection to guaranteeing consumer loyalty15. Particularly, this study focuses on retail
stores of Pakistan, to expose such connections.
Pakistan has a huge potential in retailing, particularly in organized retailing including retail stores. The globally
growth rate of this industry is increasing and same as in Pakistan. Current competition of accruing Shelf space
and noticeable spot at retail outlet and retail stores will increase in future. Those retailers who take initiatives to
formulate strategies and implementing them in order to define their objective will get first mover advantage.
1.1. Problem Statement

Retail providers face challenges in construction and to grasp great association with the clients by giving to them
as fantastic service is a challenge. Gap in service quality exists when there is a deficiency. Fulfilling customers’
needs through astounding service quality given by sales representatives of customer-oriented stores will improve
the probability of clients coming back to shop and in the long run prescribing the stores to others, in this manner
enabling the retailer compete in market efficiently.
Every single important measurement of retail condition ought to be assessed and examined in request to create
awareness about retail service quality performance and to highlight important issues regarding services.
Furthermore, analysis of perception of customers towards service quality head to delivering excellent services in
stores for consumers and this topic is significant to be studied.
1.2. Research Objective

According to our research question, objectives brought forward are as follows:
 To determine the impact of service quality factors on satisfaction of customer level.
 To find the gap in overall service quality level that retail stores proposed.
By assessing every one of the parts of retail administration quality from the client point of view recover through
their service quality discernment contrasted and the normal level, thus conclude in the end that mostly satisfaction
of customer on the store performance.
1.3. Scope of the Study

Every study made up of two parameters, hypothetical commitment and the second one is connected perspectives.
Hypothetical commitment is that it is possible that it is available by or it is commitment to the body of the learning.
Connected angles are that who will profit by this examination, according to Naeem16. The effect of the review is
confined to the research plan i.e. satisfaction of customer is relational to service quality.
Further benefits of this research include:
 This research creates awareness of ccustomers’ perception about quality service provided at retail stores
 This research creates awareness of customer eexpectations about qquality service provided at Retail
Stores.
 This research helps to identify the methods which help to enhance quality of service in order to get
competitive advantage at global market.
 It helps organizations to develop its business activities and improve its services.
 It enables Stores to develop and formulate business strategies which leads them towards success.
 This research helps service provider stores to increase their market share, attract and retain customers
and become a positive word of mouth for others.
1.4. Hypothesis
So as to increase higher satisfaction of customer, the more prominent the service quality of the retail stores is
required. Originator of service quality is satisfaction of customers, found from preceding study’s author. Authors
also analyzed that the physical aspects of the store have strong influence on satisfaction of customer. A satisfied
customer will surely revisit the store. This help to develop the following hypothesis:
Null Hypothesis (H01): There is no significant relationship between physical aspects and satisfaction of customer.
Alternate Hypothesis (HA1): There is significant relationship between physical aspects and satisfaction of
customer.
Null Hypothesis (H02): There is no significant relationship between reliability and satisfaction of customer.
15
Anantadjaya, S. P., Walidin, A., Sari, E., & Nawangwulan, I. M. "Consumer Behavior, Supply chain
management and Customer satisfaction: An investigative study in small and medium enterprises." International
Seminar on Industrial Engineering & Management. Jakarta, Indonesia 10, (2007
16
Naeem, H., Akram, A., & Saif, M. I. "Service Quality and its impact on Customer Satisfaction: An empirical
evidence from the Pakistani banking sector." The International Business & Economics Research Journal, 8(12),
(2009): 99-104.
285
Alternate Hypothesis (HA2): There is significant relationship between reliability and satisfaction of customer.
Null Hypothesis (H03): There is no significant relationship between personal interaction and satisfaction of
customer.
Alternate Hypothesis (HA3): There is significant relationship between personal interaction and satisfaction of
customer.
Null Hypothesis (H04): There is no significant relationship between problem solving and satisfaction of customer.
Alternate Hypothesis (HA4): There is significant relationship between problem solving and satisfaction of
customer.
Null Hypothesis (H05): There is no significant relationship between policy and satisfaction of customer
Alternate Hypothesis (HA5): There is significant relationship between policy and satisfaction of customer
1.5. Research Question

To answer the core issue, following questions are formed for this research.
 What is the gap in overall service quality level that retail stores proposed?
 Do service quality factors affect level of satisfaction of customer?
The researcher used tools to measure service quality to know the exact level of satisfaction of customer regarding
their offering retail services.
2. LITERATURE REVIEW
By providing best service quality, satisfaction of customer can be achieved, which influences customer to repeat
purchase in service environment17. Marketers have to find effects that are moderating in the future development
of decision making model of consumers in service environment because the greater the service quality, greater
will be satisfaction of customer.
Service quality and satisfaction of customer are two independent factors but relatively close related with each
other in one factor increase, the other will also increase 18. The research purpose is to research the measurements
of service quality in a retail situation and to build up and approve a scale to gauge retail benefit quality. The
advancement and testing of the Retail Service Quality Scale has suggestions for other service ventures too.
After development of 22 item scale called (SERVQUAL)19, they used to identify quality of service in order to
measure level of satisfaction of the customer. This scale helps to measure the difference between customer’s
perception about service and expectation of service performance.
Sureshchandar20 discovered the satisfaction of customer is a prerequisite of customer relation and loyalty. A retail
chain is retail worries with center in satisfying and broad scope of the individual and lodging solid merchandise,
item needs; an offering. The modified version of RSQS model consist of 27 item scale which is used to measure
the store service quality formed by Yarimoglu21 to conclude that quality of service area directly affects the
satisfaction of customer.
Satisfaction in relation to service quality was explained by Parasuraman22. They argued that service quality is
described as gap between perceived services customer perceptions and predicted or expected services (customer
expectations). In the event that clients, desires are more noteworthy than execution, the apparent quality is
respected not as much as agreeable in an administration quality gap emerges. This in actuality does not really
imply that the administration is of low quality but instead client desires have not been met and there for client
disappointment happens and this gives chances to enhancing administration to meet client desire.
Agbor23 said, it is clear that customers are imperative accomplices in affiliations and their satisfaction is a need to
organization. Buyer dependability has been a subject of staggering eagerness to affiliations and researchers alike.
Starting late, affiliations are obliged to render more organizations despite their offers. The way of organization
has transformed into a piece of shopper faithfulness. It has been exhibited by a couple of researchers that
17
Taylor, S. A., & Baker, T. L. "An assessment of the relationship between service quality and customer
satisfaction in the formation of consumers' purchase intentions." Journal of retailing, (1994): 163-178.
18
Dabholkar, P. A., Thorpe, D. I., & Rentz, J. O. "A Measure of Service Quality for Retail Stores: Scale
Development and Validation." Journal of the Academy of Marketing Science, (1996): 3-16.
19
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. "Servqual: A Multiple-Item Scale For Measuring Consumer
Perc." Journal of retailing. (1988).
20
Sureshchandar, G. S., Rajendran, C., & Anantharaman, R. N. "The relationship between service quality and
customer satisfaction–a factor specific approach. ." Journal of services marketing, (2002): 363-379.
21
Yarimoglu, E. K. "A review on dimensions of service quality models. ." Journal of Marketing Management,
(2014): 79-93.
22
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. "A conceptual model of service quality and its implications
for future research." The Journal of Marketing, (1985): 41-50.
23
Agbor, J. M. "The Relationship between Customer Satisfaction and Service Quality: a study of three Service
sectors in Umeå."(2011)
286
organization quality is related to purchaser reliability. Others used organization quality estimations to survey profit
quality. Shouldn't something be said in regards to the association between buyer unwaveringness and organization
quality estimations; the association between organization quality and its estimations? The audit showed specific
results for the association between organization quality estimations and organization quality/customer fulfillment.
ICA and Forex had gigantic association between organization quality and purchaser faithfulness; yet Umea
University had no significant association between organization quality and shopper devotion. At that point the
social event result showed that: responsiveness, sensitivity and immovable quality were out and out related to
organization quality; reliability and empathy, were generally related to shopper steadfastness yet “responsiveness”
was not basically related to buyer unwaveringness; in the meantime, benefit quality was fundamentally identified
with consumer loyalty.
Anantadjaya24said, it has been broadly witnessed in numerous distributions, both in scholastic subjects and well-
known references that store network administration is critical to convey the items and administrations to end
clients. In any case, it makes the impression that the thoughts on store network administration may just be in a
roundabout way connected with the issues encompassing shopper practices toward keeping up as well as generally
pushing consumer loyalty. As referenced in numerous productions, without a doubt, the part of inventory network
administration is a vital figure boosting the authoritative achievement. On a different point of view, customer
conduct is likewise a basic consider toward hierarchical reasonability years to come. Subjectively, preparatory
reviews have been embraced concerning the association between inventory network administration and consumer
loyalty, and in addition the association between shopper conduct and consumer loyalty, in attempting to perceive
the reasonable qualifications of every theme toward guaranteeing consumer loyalty. This paper endeavors to draw
out the hugeness of both issues joined in connection to consumer loyalty. On the off chance that the preparatory
reviews accentuated in car and nourishment ventures, this paper endeavors to break down the little and medium
undertakings in administration industry. It is normal that the expanding parts of production network administration
and purchaser conduct in little and medium endeavors can enhance the general authoritative execution.
By giving better quality administration, a superior benefit proportion can be accomplished by the retail locations.
Be that as it may, there ought to be assessment and constant change in the administration quality measurements 25.
It is additionally prescribing that unmistakable client benefit targets would be:
 To develop the clients' utility of the fundamental item by expansion of some bolster administrations.
 To make enthusiasm for an exceedingly item group and to expand clients' fulfilment from a purchasing
bargain by showing its application and option potential employments;
 To amplify the cost and estimation of client buys;
 Utilizing administrations to amplify client accommodation; and
 To utilize administration to amplify deals and benefits.
A qualification is made between genuine store steadfastness and spurious store faithfulness and show and inactive
fulfillment with the store. We estimate that the positive connection between show store fulfillment and store
unwaveringness is more grounded than the positive connection between inactive store fulfillment and store
reliability. Besides, we speculate an immediate and also a circuitous impact through fulfillment of store picture
on store steadfastness. Second, the connection between store picture and store devotion is interceded by store
fulfillment. We don't discover confirm for an immediate impact of store picture on store dedication.26
3. METHODOLOGY
In this research descriptive study was applied in order to describe and to recognize the characteristics of the
variables of the customer’s perceptions about the service quality provided by organized retail stores in mean to
identify the relationship of quality of service and customers’ satisfaction. The research design involves collection,
measurement and analysis of data. The research design effectively addresses the research problem. The
discoveries from this exploration are used in managerial decision making. For this study, this is identified that
quantitative study is most suitable to identify the problem. Five points Likert scale has been used to measure the
service quality expected and perceived in order to identify the behavioral intention of the customers. Data was
collected from different retail stores. Most of the retail stores located in these cities so the study covered in
Karachi, Lahore and Islamabad region only. 300 respondents are selected in the combination of 150 from Karachi,
100 from Lahore and 50 from Islamabad. Non-probability quota sampling has been chosen for data collection and
convenience for selecting respondents in each quota. A structured questionnaire was designed and distributed
24
Anantadjaya, S. P., Walidin, A., Sari, E., & Nawangwulan, I. M. "Consumer Behavior, Supply chain
management and Customer satisfaction: An investigative study in small and medium enterprises." International
Seminar on Industrial Engineering & Management. Jakarta, Indonesia 10, (2007)
25
Keevy, M. "Consumer perceptions of service quality of large clothing retailers in the Cape Metropolitan Area."
Doctoral dissertation, Cape Peninsula University of Technology, (2011)
26
Bloemer, J., & De Ruyter, K. "On the relationship between store image, store satisfaction and store loyalty."
European Journal of marketing. (1998): 499-513.
287
among the retail stores and getting them fulfilled by the customers coming to the stores. Various tables and charts
are used in order to analyze and understand results easily. The SPSS is used for analysis and interpretation of data
i.e. reliability, correlation, Regression, Gap Analysis. The reliability of the questionnaire was assessed by applying
reliability test that displays Cronbach alpha as 0.80.
The Retail Service Quality Scale (RSQS) model is useful tool to measure service quality which was proposed
by27. The RSQS has five dimensions each with its own sub dimension. The RSQS Physical aspects broader than
the SERVQUAL dimension28. It represents the appearance and store’s layout. RSQS Reliability aspects are similar
to the SERVQUAL reliability, which means store keeps its promises and doing services at right time. Personal
interaction means employees are helpful and courteous with their customers. Problem solving means to handle
returns exchanges and complains. Policy is related to the advantages offered to customers like operating hours of
stores, credit card offers and parking facilities provided at stores. Dimension of Satisfaction of Customer are
selection from previous researches related to retail industry. After review, four items are selected to predict
customer direction for this study.29 30 31 32
The questionnaire was adopted from original RSQS model and slightly modification is done at our end. 20
respondents are selected for pilot survey that showed questionnaires are reliable and have reasonable correlation.
After this, all the recommended analysis is performed.
4. RESULTS AND DISCUSSION

4.1. Demographic Characteristics of the Study Population
In this study, Male were predominantly higher 215 as compared to females 85, out of total 300 respondents. 150
responses were received from Karachi, 100 from Lahore and 50 from Islamabad. Usually, Respondents 192 lies
between age ranges of 21-30 years, 66 between 31-40 years, 22 between 41-50, 13 below 20 years and 7 are least
respondents which lie between age range of Above 50 years. Majority 109 participants’ monthly income lie
between income range of above Rs.60,000 57 participants’ income lies between Rs.15,000 to 30,000 and 43 are
least participants which lie between income range of Rs.45,001 to Rs.60,000. Participants preferred personal visit
for shopping are 279, 12 prefer by shopping representatives and 9 prefer online purchase. Mostly, 154 pay monthly
visit to store for shopping, 118 visits occasionally and 6 visit the store daily.
4.2. Correlation Analysis

In this study the validity of the RSQS Scale was tested through Correlation and it confirms the validity of RSQS
dimension and variables of Satisfaction of Customer. The significant level of Correlation is 0.01.
The presented results in table 1 represents that the whole RSQS Scale is high with correlation with dimensions of
dependent variable i.e. Satisfaction of Customer. Result shows that, between 0 and 1 correlation coefficient falls,
all the dimensions are not perfectly correlated.
Finally it can be conclude from our result that our review could be consider respectable on the grounds that we
attempted to get fair-minded answers from our respondents and we examine precisely what we had as information
from them without doing any extra to essential information on our part. This implies high level of trustworthiness
was connected in this review.
27
Dabholkar, P. A., Thorpe, D. I., & Rentz, J. O. "A Measure of Service Quality for Retail Stores: Scale
Development and Validation." Journal of the Academy of Marketing Science, (1996): 3-16.
28
Simmers, C. S., & Keith, N. K. "Measuring retail store service quality: the disparity between the retail service
quality scale (RSQS) and comment cards. " Academy of Marketing Studies Journal, (2015)
29
Bloemer, J., & De Ruyter, K. "On the relationship between store image, store satisfaction and store loyalty."
EuropeanJournal of marketing. (1998): 499-513.
30
Mahfooz, Y. "Relationship between service quality and customer satisfaction in hypermarkets of Saudi Arabia.
."International Journal of Marketing Studies, (2014).
31
Jayasankaraprasad, C., & Kumar, P. V. V. "Antecedents and consequences of customer satisfaction in food &
grocery retailing: An empirical analysis. Decision.", (2012).
32
Kitapci, O., Taylan Dortyol, I., Yaman, Z., & Gulmez, M. "The paths from service quality dimensions to
customer loyalty: An application on supermarket customers." Management Research Review, (2013): 239-255.
288
Table 4.1: Correlation
Physical Personal Problem- General Satisfaction

Variables Reliability
Aspects Interaction Solving Policy of Customer
Variables **
1 ** ** .303 ** **
Physical Aspects .433 .523 542 .470
** ** ** **
Reliability ** 1 .678 .583 .593 .531
.433
** ** ** ** **
Personal Interaction .523 .678 1 .602 .676 .648
** ** ** **
Problem-Solving .303 ** .602 1 .439 .603
.583
** ** ** ** **
General Policy .542 .593 .676 .439 1 .601
Satisfaction of ** ** ** ** **
.470 .531 .648 .603 .601 1
Customer
4.3. Regression Analysis
To demonstrate the relationship between qualities of service dimensions with Satisfaction of customer, multiple
regressions test was applied to identify whether hypothesis is significant or non-significant in this study. The
confidence level was taken as 95% (or 5% level of significance).
Table 4.2: Model Summary
Model R R Square Adj. R Square Std. Error of the Estimate

1 .737a .543 .536 .51892
In this study we found that R square = 0.536 which is statistically significant and it helps to evaluate the
relationship between dimension of quality of service dimensions with satisfaction of customer from these results
its observed that the retail service quality dimensions explained 54%of the variance for the criterion measure. It
means that 46% of Satisfaction of Customer was explained by some other factors rather than service quality.
Table 4.3: ANOVA
Model Sum of Squares df Mean Square F Sig.

Regression 94.253 5 18.851 70.004 .000b
Residual 79.168 294 .269
Total 173.421 299
Summary of Regression Analysis treating service quality dimensions as predictors and satisfaction of Customer
factors as criterion variable was shown below table. It was observed that the overall regression model was
significant (F=70.004, p<0.00).
289
Table 4.4: Coefficients
Unstandardized Coefficients Standardized coefficients t Sig.

Model B Std. Error Beta
(Constant) .127 .200 .638 .524
Physical Aspects .129 .050 .125 2.573 .011*
Reliability -.018 .070 -.015 -.258 .797
Personal
.262 .074 .232 3.558 .000*
Interaction
Problem-solving .316 .050 .328 6.335 .000*
General Policy .228 .055 .241 4.186 .000*
Satisfaction of Customer factors was primarily determined in a positive manner by physical aspects (beta=0.125),
Personal Interaction (beta=0.232) Problem-Solving (beta=0.328) and General Policy (beta=0.241). The findings
showed that all RSQS dimensions except reliability dimensions were statistically significant in explaining the variance
of retail satisfaction of Customer.
4.4. Analysis of Service Quality Gap

We had identify the differences between customers perceived and expected quality of service according to individual
extent of RSQS in this section It is been assumed that the data was normally distributed. To conclude individual
service extent respondents were asked according to their perception and expectation about service quality. In this study
we used five-point where point 1,2 and 3 of Likert scale represents less than expected, 4 represents equal to expected
and 5 represents more than expected. Respondents who are satisfied with the services of retailers had chosen the option
4 or 5, which are normal and more than anticipated level. Negative values gap mean that consumers are not satisfied
with the service received.
Table 4.5: Service Quality Gap
Perceived Expected
Service Quality Dimensions Gap (P-E)
Mean Mean
Physical Aspects 1 3.7300 4 -0.27
Avg. Physical Aspects Score 3.7067 4 -0.2933
Reliability 1 3.7000 4 -0.3
Reliability 2 3.7400 4 -0.26
Reliability 3 3.5300 4 -0.47
Reliability 4 3.5633 4 -0.4367
Reliability 5 3.5433 4 -0.4567
Avg. Reliability Score 3.6153 4 -0.3847
Personal Interactions 1 3.8367 4 -0.1633
Avg. Personal Interactions Score 3.6796 4 -0.3204
290
Problem Solving 1 3.6967 4 -0.3033

Avg. Problem Solving Score 3.6522 4 -0.3478
General Policy 1 3.7067 4 -0.2933
General Policy 2 3.2400 4 -0.76
General Policy 3 3.8100 4 -0.19
General Policy 4 3.7733 4 -0.2267
Avg. General Policy Score 3.6325 4 -0.3675
Average Overall Services Quality 3.6573 4 -0.3427
It can be situate from the above outcome that all dimensions of service quality demonstrates gap score. It demonstrates
that most reduced gap in service has happened in. Subsequently it can be presumed that, customers are the happier
with Physical Aspect of store. The second positioned personal interaction dimension is critical to the customers. The
apparent score of this dimension is equivalent - 0.3204. General Policy -0.3675 which is closer to expected and
Problem-solving is individually seen from the customers as saw by the gap at - 0.3478. In this way, satisfaction of
customers of the stores are a result of dimensions in any case, the change is required and last dimension as Reliability,
gap score is - 0.3847. This ought to be paid more focus from others dimensions by retailers. Finally, the score shows
the weak areas which required more attention. The more the gap score the more will be dissatisfaction.
5. CONCLUSION AND RECOMMENDATIONS
Concluding up from the outcomes, 4 out of 5 dimensions show significant relationship with customer satisfaction
level i.e. Physical aspects show significance with satisfaction level of customers. Reliability dimension was not
retained in the regression because it did not contribute significantly towards explaining the “Satisfaction of Customer”.
Personal interactions has a significant relationship with customer satisfaction and similarly problem solving along
with general policy also shows satisfactory level of significance contributing towards satisfaction of customers.
Therefore, this study answers about the impact of service quality of retail stores of Pakistan on customer satisfaction.
There are 5 dimensions of service quality as demonstrated. Physical Aspects go about as a noteworthy part keeping in
mind the end goal to decide Service Quality and pursued by Reliability, Personal Interaction, Problem Solving and
Policy.
Furthermore, Customers are not completely satisfied and need more services in Retail stores, as overall perceived
service quality found low approximately 3.6 than desired level, through gap score evaluation. Top-notch service
quality is the way to accomplishing better Satisfaction of Customer. Retail stores need to improve their services to
achieve customer satisfaction. Through, the reliability and conclusions, It is likewise noticed that the model of RSQS
is adequate instrument with a specific end goal to assess Retail Service Quality in Retail stores.
Retailers are proposed to distinguish target gatherings and explore information at various levels like Overall and
measurement level with a specific end goal to perceive the territories where benefit should be moved forward. Retailers
who complete intermittent reviews can utilize approved and dependable "Retail Service Quality Scale" to benchmark
their progressing levels of retail benefit quality. By indicating the weight for each of the five components of service
quality, existing sorted out retailers and new/potential contestants can prescribe fitting activity designs.
The disclosures from this examination are correlated to educational groupings of buyer, specialist and advancing
exploration. Additional data on purchaser investigate on satisfaction is twisting up obviously critical in light of the
way that affiliations are endeavoring to make it possible of expanding more customers by keeping the old customers
and pulling in new customers. This ought to be conceivable by giving the qualities that the customers' longing, and
when this is done, the customers will be satisfied. Satisfying the customers by guaranteeing they procure incredible
quality organizations is the latest method for relationship in the present business condition. Improved Service quality
results buyer determination, which fulfills high ground.
291
References
Agbor, J. M. "The Relationship between Customer Satisfaction and Service Quality: a study of three Service sectors
in Umeå."(2011)
Anantadjaya, S. P., Walidin, A., Sari, E., & Nawangwulan, I. M. "Consumer Behavior, Supply chain management and
Customer satisfaction: An investigative study in small and medium enterprises." International Seminar on
Industrial Engineering & Management. Jakarta, Indonesia 10, (2007)
Bloemer, J., & De Ruyter, K. "On the relationship between store image, store satisfaction and store loyalty." European
Journal of marketing. (1998): 499-513.
Dabholkar, P. A., Thorpe, D. I., & Rentz, J. O. "A Measure of Service Quality for Retail Stores: Scale Development
and Validation." Journal of the Academy of Marketing Science, (1996): 3-16.
Jayasankaraprasad, C., & Kumar, P. V. V. "Antecedents and consequences of customer satisfaction in food & grocery
retailing: An empirical analysis. Decision.", (2012).
Keevy, M. "Consumer perceptions of service quality of large clothing retailers in the Cape Metropolitan Area."
Doctoral dissertation, Cape Peninsula University of Technology, (2011)
Kitapci, O., Taylan Dortyol, I., Yaman, Z., & Gulmez, M. "The paths from service quality dimensions to customer
loyalty: An application on supermarket customers." Management Research Review, (2013): 239-255.
Mahfooz, Y. "Relationship between service quality and customer satisfaction in hypermarkets of Saudi Arabia. ."
International Journal of Marketing Studies, (2014).
Naeem, H., Akram, A., & Saif, M. I. "Service Quality and its impact on Customer Satisfaction: An empirical evidence
from the Pakistani banking sector." The International Business & Economics Research Journal, 8(12), (2009):
99-104.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. "A conceptual model of service quality and its implications for
future research." The Journal of Marketing, (1985): 41-50.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. "Servqual: A Multiple-Item Scale For Measuring Consumer Perc."
Journal of retailing. (1988).
Simmers, C. S., & Keith, N. K. "Measuring retail store service quality: the disparity between the retail service quality
scale (RSQS) and comment cards. " Academy of Marketing Studies Journal, (2015)
Sureshchandar, G. S., Rajendran, C., & Anantharaman, R. N. "The relationship between service quality and customer
satisfaction–a factor specific approach. ." Journal of services marketing, (2002): 363-379.
Taylor, S. A., & Baker, T. L. "An assessment of the relationship between service quality and customer satisfaction in
the formation of consumers' purchase intentions." Journal of retailing, (1994): 163-178.
Wilson A., Zeithaml V.A., Bitner M.J., Gremler D.D. Services Marketing. McGraw Hill Higher Education, (2012)
Yarimoglu, E. K. "A review on dimensions of service quality models. ." Journal of Marketing Management, (2014):
79-93.
292
CREDIT RISK MANAGEMENT’S INFLUENCE ON LOAN PERFORMANCE IN COMMERCIAL

BANKS IN PAKISTAN
Syed Hasan Raza Naqvi* Zahid Ali Channar** Quratulain Nazeer Ahmed***
ABSTRACT
The aim of this study is to examine the current practice of credit risk in commercial banks in
Pakistan. There is no notable empirical evidence found which shows the relationship between
dimensions of credit risk management and loan performance in commercial banks in Pakistan and
discuss the factors of credit risk management that contribute in the loan performance of commercial
banks in Pakistan. Data is collected from primary sources using close-ended questions. There are
35 scheduled commercial banks operating in Pakistan with 12,424 branches across Pakistan,
merely 24 commercial banks are selected for the research according to its market capitalization
and data ability and reliability for the research. Data collected from managers and credit officers
of commercial banks in Pakistan. Data collected by meeting them personally as well as coordinate
with them via emails. Client profile, Credit Risk Policy, and Credit Risk Control have been taken as
the dimensions of credit risk management as independent variables and loan performance (LP) as
the dependent variable. The result showed that the client profile and credit risk control have a
positive and statistically significant influence on loan performance (LP) in commercial banks in
Pakistan. However, credit risk policy has a statistically significant but negative influence on loan
performance in commercial banks in Pakistan. It is recommended that commercial banks in
Pakistan should effectively practice these factors studied in this research to maximize the
profitability by increases the loan performance of the bank
Key Words: Credit Risk Management, Loan Performance, Commercial Banks
JEL Classification: G2
1. INTRODUCTION
Financial institutions play the main role in the growth of the economy of a country. Banks are the financial institutions
essential for the financial transactions either within or between borders and no one can deny the important role they
play in the economic activities of the economy and in the growth of the economy of the country.
The economic growth of the country is not achieved without the flawless financial sector. Banks perform an imperative
role in developing the economy, especially in developing countries. They not only float the credit flow in the country
but also increase the productivity by strengthening the investments. Banking can be defined as generating profit, from
lending and borrowing activities.1
Now a day’s banks are performing more than just the formal banking activities. Banks are funding at government as
well as at corporate level, hence facing credit risk. In Pakistan only not, microfinance banks but also commercial banks
financing from micro to macro level and from individual to institutional level and earning profits by charging high-
interest rate on these financing. In both scenarios individual and institutional financing, banks face the failure rate,
uncertainty, and risk regarding repay.
Credit risk management protects banks from any forthcoming loss or crises that harm the bank financial stability. But
all the financing on the part of the bank is not bad. Banks undergo a customer assessment process before financing,
which is necessary for the survival of the banks. Another side of the customer assessment will ensure banks about the
customer and business activities in which he is involved. Credit risk is one of the primary concerns for the financing
institutes and assessing accurately all risk associated with the financing will enhance the market efficiency of the
bank.2 Banks and other financial institutes in Pakistan and all over the World are affecting from the dilemma of loan
*Corresponding Author, Senior Officer, SME & Commercial, Branch Operation, Dubai Islamic Bank Pakistan
Limited. Email: hasan.naqvi@dibpak.com
**Dean, Faculty of Management, Business Administration & Commerce, Sindh Madressatul Islam University,
Karachi
***Lecturer, Department of Business Administration, Sindh Madressatul Islam University, Karachi
1
Rajaraman, I., & Vasishtha, G. (2002). Non-Performing Loans of PSU Banks: Some Panel Results. Economic and
Political Weekly, 37(5), 429 - 435.
2
McGoven, J. (1993). Why Bad Loans Happen to Good Banks. Journal of Commercial Lending, 75(6), 44.
293
default which decreases the profitability of the bank but also influences the economic conditions of the country. Loan
default is very destructive in the underdeveloped economies like Pakistan which affect very badly the banking sector
in Pakistan but also the economic conditions in Pakistan. 3 Major reasons for loan default are insufficient business
management and monitoring, delayed in loan approvals by financing banks, ineffective credits policies and clients are
not willing to repay loans.4 In Pakistan financing is also based on political interference result in loan default and big
concern in credit risk management.5 Financing is also based on personal relations without proper evaluation of the
institutional projects or individuals profile cause loan default.6 Because of the significant role banks play in economic
activities, banks must evaluate the risk which it faces daily while lending and involve continuously in corporate
governance to monitor, screen and maintenance for better credit performance. 7
Commercial banks performance greatly influences the economic growth of the country, well performing commercial
banks accelerate economic activities while poor performing banks hamper the economic growth and enhance poverty
in the country.8 Credit risk management is one of the critical aspects and issue faced by the commercial banks and
required due attention. Risk management is necessary for the sustainability but also for the development of banking
sector and thus brings stability to local currency and also to the economy of the country. 9 Inefficient provision of credit
risk may cause liquidity risk resulted in the insolvency of the commercial banks. In recent years, credit risk gained
great importance because of the huge losses faced by the big financial institutes.10 Since the financial crises, financial
institutions especially commercial banks have taken special measures to mitigate any forthcoming financial loss
caused by mismanagement in loan offering process and credit recovery.
The risk is an opportunity as well as a threat. Commercial banks introduce various products and thus must face
different risk associated with it and adversely affect the profitability of the bank and harm its financial health.11 Banks
offer loan to individuals as well as to institutes result they face credit risk, which continues until the last and final
installment of the loan is repaid.12 Credit risk approach of the bank may likely change as the financial conditions of
the country, individual or institute changes hence credit risk management is a continuous process and should be
investigated very carefully. Although several studies have been conducted regarding credit risk management and loan
performance in microfinance banks in Pakistan.
1.1. STATEMENT OF THE PROBLEM

Credit risk management is very important for commercial banks to their survival as well as for the profitability and
business development. Credit risk management minimized the probability of losing or failure. Commercial banks
profitability largely depends on the effectiveness of the credit risk management since commercial banks earn most of
their profit from lending and borrowing activities, charged high interest on the credit amount and earn a profit.
Research works carried out in the poor loan performance, non-performing loan and their effects on banking sector
globally. There is also research works done on loan performance in microfinance banks, but no specific research has
done on the influence of credit risk management on loan performance in commercial banks in Pakistan. Commercial
banks invested hugely in credit risk models. The commercialization of the banking industry in Pakistan started the
3
Masood, O. (2009). Determinants of Non-Performing Bank Loans and Bank loan recovery in Pakistan: A survey
approach. Euro-Mediterranean Economics and Finance review, 89 - 104.
4
Awan, A. G., Nadeem, N., & Malghani, F. S. (2015). Causes of Loan Defaults in Pakistani Banks: A case study of
District D.G. Khan. Science International, 27(3), 2593 - 2597
5
Awan, A. G. (2010). Emerging a New Financial Paradigm. IUB Journal of Social Sciences and Humanities, 8(2).
6
Awan, A. G., & Azhar, M. (2014). Consumer Behaviour towards Islamic Banking in Pakistan. European Journal of
Accounting Auditing and Finance, 2(9), 42 - 65.
7
Amidu, M. (2014). What Influences Banks’ Lending in Sub-Saharan Africa. Journal of Emerging Market Finance,
13(1), 1 - 42.
8
Barth, J., Caprio, Jr., G., & Levine, R. (2004). Bank Regulation and Supervision: What Works Best? Journal of
Financial Intermediation, 13(2), 205 - 248.
9
Greuning, H. V., & Bratanovic, S. B. (2003). Analyzing and Managing Banking Risk: A framework for Assessing
Corporate Governance and Financial Risk Management (2nd ed.). Washington DC: The World Bank.
10
Nikolaidou, E., & Vogiazas, S. (2014). Credit Risk Determinants for the Bulgarian Banking System. International
Advances in Economic Research, 20(1), 87 - 102.
11
Chakrabarti, M. (2015). Risk Analysis and Management in Indian Banking Sector: An Overview. International
Journal of Informative & Futuristic Research, 2(7), 2133 - 2143.
12
Moti, H. O., Masinde, J. S., Mugenda, N. G., & Sindani, M. N. (2012). Effectiveness of Credit Management
System on Loan Performance: Empirical Evidence from Micro Finance Sector in Kenya. International Journal of
Business, Humanities and Technology, 2(6), 99 - 108
294
competition among banks and race for the survival. Commercial banks offer new products and financing services with
the objective to increase their profitability. This commercialization not only opened new opportunities for the banking
sector but also new threats as well, which also increases the probability of loss. Hence credit risk management emerges
as the major concern for the commercial banks.
This study investigates the factors of credit risk management that influence the performance of the loans in commercial
banks. The aim of this study is to examine the current practice of credit risk in commercial banks in Pakistan. There
is no notable empirical evidence found which shows the relationship between dimensions of credit risk management
and loan performance in commercial banks in Pakistan and discuss the factors of credit risk management that
contribute in the loan performance of commercial banks in Pakistan. This study will fill that gap and will find the
answer to the influence of credit risk management on loan performance in commercial banks in Pakistan.
In recent years financial institutes developed formal models for quantifying the credit risk, such models are based on
the traditional VAR framework first developed from market risk.13 Study has been made on credit risk management
and loan performance in commercial banks and find that the loan appraisal, financial viability, technical feasibility,
credit rating, risk transfer, risk diversifications, and risk retention has no significant relationship with loan
performance, hence banks must improve their risk appraisal and risk management techniques to improve their loan
performance.14 Commercial banks have adopted the various risk management system to mitigate losses. Banks also
adopted the various tools for minimizing credit losses. These include covenants, collateral, credit rationing, loan
securitization and loan syndication as well as borrower’s capacity, character, conditions, credits history and collateral
are also important in loan appraisal and subsequent approval. 15
The determinants of credit risk taken by Tunisian banks; globalization, deregulation, internationalization technologies
of information and communication have exposed them to several risks and mentioned major challenges for their
sustainability. Results show that public ownership increases the credit risk however prudential regulation of capital
decreases the credit risk. Results also indicate that credit risk decisions also related to bank macroeconomics
indicators.16
Management should focus on risk advisory and development support by upgrading data and construct heftier
probability of default measure. For the best practice funds managers must conduct a full and fair assessment of their
portfolio. Asset-class, size, diversity, exposure to emerging markets, future extension into data-poor environments -
these are all aspects to consider, then the methodology and data necessary to improve risk management capabilities. 17
Credit risk is basically experienced by the investor to forget money from the borrower who is unable to make
payments, result in default risk. This may result in loss of interest and principal that can increase the cost of collection
and decreased cash flow. Previous studies prominent that high credit risk control (CRC) result in fewer chances of
default.18 However human element cannot be eliminated in making decisions in credit risk management practices. 19
Theories antagonistic of implicating restricting the range of banking activities, which are negatively related to bank
development and stability, and as noted with non-performing loans as well. However, the establishment of the bank
allows the bank to diversify income sources and enhance stability. 20 Research finds that Client Appraisal had a
13
Jorion, P. (2007). Value at Risk: The New Benchmark for Managing Financial Risk (3rd ed.). McGraw-Hill
Companies.
14
Lebbe, A., Rauf, A., & Mulafara, A. H. (2016). Influence of Credit Risk Management on Loan Performance:
Special Reference from Commercial Banks of Ampara District in Sri Lanka. International Journal of Advances in
Management and Economics, 5(4), 30-35.
15
Afande, F. O. (2014). Credit Risk Management Practices of Commercial Banks in Kenya. European Journal of
Business and Management, 6(34), 21-62.
16
Zribi, N., & Boujelbène, Y. (2011). The factors Influencing Bank Credit Risk: The Case of Tunisia. Journal of
Accounting and Taxation, 3(4), 70 - 78.
17
Seibel. (2006). Measure of Financial Performance in Loan Lending 5th edition. Journal of Economics and
Management Strategy, 11, 487 - 511.
18
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2008). Essentials of Corporate Finance. Hill International edition.
USA: McGraw-Hill Companies Inc.
19
García, F., Giménez, V., & Guijar, F. (2013). Credit Risk Management: A Multicriteria Approach to Assess
Creditworthiness. Mathematical and Computer Modelling, 57(7 - 8), 2009 - 2015.
20
295
consequence on loan performance and concludes that credit risk management of client appraisal has significantly
influenced loan performance.21 Loans are the main source of profit and have a positive impact on bank performance
and found that size of credit portfolio and non-performing loans have a significant negative impact on bank
profitability.22 Non-performing loans portray a distorted and crawling picture of the economy. Bank specific
dimensions like credit assessment, credit monitoring, and rapid credit growth have a significant effect on non-
performing loan; however, interest has a weak significance on loans. Social factors like political interference and
banker’s incompetence have a significant effect on loan performance. 23
Credit risk management is the key requirement to minimize the chances to get bankrupted. The credit risk management
system includes clear guidelines for the scope and allocation of the bank credit facilities and the mannerism of the
loan orientation, loan approval, supervision and collection policies.24 Since the financial crises, banks are trying to
manage their credit risk effectively and efficiently to overcome any financial loss. As per Basel Committee banks
should establish a convenient credit risk environment; administrating in a flawless granting process, maintaining an
appropriate credit administration, measurement, and audit and ensuring control over credit risk.25 The banking
industry is extremely competitive and constantly changing. Banks must produce new products and services for their
survival consciously banks must manage credit risk as well as their liquidity ratio. Banks and regulatory bodies must
be very conscious in implementing credit risk policies and promote a systematic system of analyzing, processing,
sanctioning, controlling and auditing the credits which simplify credit risk rating in an effective manner.26 The effect
of credit risk management on performance on the bank is invariant; study finds that banks should enhance their
capacity for credit analysis and loan administration. 27 Loan performance has a positive and strong relationship with
loan policy and credit standard.28
Literature review gives details picture of the credit risk management practices around the Globe and its importance in
banking, causes of loan defaults and its consciousness, credit rating and regulatory body’s role in credit management.
Loan appraisal process has a significant impact on loan performance. 29 Based on literature review, it is found that in
the process of the lending client profile, risk control policies and credit risk policies have a significant impact. Credit
manager before grant loan to the client; must take credit risk management measures in the account to counter any lack
or gap in the client profile. Credit risk policies consist of the evaluation committee, internal credit rating system, limit
of the amount of loan and approval limits. Previous research noted that period of the loan is affected by the credit risk,
collateral value, competition in the market and clients profile.30 Banks must adopt clearly defined credit risk
management policies and procedures covering risk identification, acceptance, measurement, monitoring, reporting,
and control. Banks management should establish credit policies and administrative procedures as a part of the credit
21
Kiplimo, K. S., & Kalio, D. M. (2014). Influence of Credit Risk Management Practices on Loan Performance of
Microfinance Institutions in Baringo County. International Journal of Science and Research (IJSR), 3(10), 2260 -
2267.
22
Alper, D., & Anbar, A. (2011). Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability:
Empirical Evidence from Turkey. Business and Economics Research Journal, 2(2), 139 - 152.
23
Hassana, H., Ilyasb, M., & Rehman, C. A. (2015). Quantitative Study of Bank-Specific and Social Factors of Non-
Performing Loans of Pakistani Banking Sector. International Letters of Social and Humanistic Sciences, 43, 192 -
213.
24
Greuning, H. V., & Bratanovic, S. B. (2003). Analyzing and Managing Banking Risk : A framework for Assessing
25
Basel Committee on Banking Supervision. (2000). Principles for the Management of Credit Risk. BIS, Basel,
Switzerland
26
Mohammad, N., & Onni, A. N. (2015). Credit Risk Grading Model and Loan Performance of Commercial Banks
in Bangladesh. European Journal of Business and Management, 7(13), 83 - 91.
27
Kolade, A. R., Ojo, O. M., & Funso, K. T. (2012). Credit Risk and Commercial Banks Performance In Nigeria; A
Panal Model Approach. Australian Journal of Business and Management Research, 2(02), 31 - 38.
28
Kibor, A. M., Ngahu, S. T., & Kwasira, J. (2015). Influence of Credit Risk Management on Loan Performance in
Commercial Banks in Nakuru Town, Kenya. International Journal of Economics, Commerce and Management, 3(10),
884 - 902.
29
Gatimu, E. M., & Frederick, M. K. (2014). Assessing Institutional Factors Contributing to Loan Defaulting in
Microfinance Institutions in Kenya. Journal of Humanities and Social Science, 19(5), 105 - 123
30
296
risk management framework, which provides guidelines for credit evaluation, client appraisal, credit approval, risk
identification and acceptance criteria, loan documentation, roles and responsibilities of the loan staffs. 31
3. METHODOLOGY
The descriptive research design was adopted in this study. The main reason for adopting the descriptive survey design
is to study the entire population and gain as much information from it related to the factors that are under study which
influence the loan performance. Survey design helps the researcher in investigating and analyzing interrelationship
between factors involved and it is effortful to understand the single factor without considering the association with
each other.32 Moreover, descriptive research design defines the present situations and existing conditions more clearly
and attributes more by observation and interpretation. Researchers use other techniques for data collection, but
descriptive research design is best among other in doing research in human contexts because it illustrates the accurate
current facts and figures for testing and getting answers to the research questions. There are 35 scheduled commercial
banks operating in Pakistan with 12,424 branches across Pakistan as per State Bank of Pakistan (SBP) on 30 th June
2016, merely 24 commercial banks are selected for the research according to its market capitalization and data
availability and reliability for the research. Data is collected through primary sources using questionnaire. The
questionnaire is comprised of closed-end questions, which enable the researcher to collect quantitative data. Data
collected from managers and credit officers of commercial banks in Pakistan. Data collected by meeting them
personally as well as coordinate with them via emails.
3.1. Research Variables

Client profile, Credit Risk Policy, and Credit Risk Control have been taken as the dimensions of credit risk
management. The closed-end questionnaire is used adopted from past studies for the collection of the data for bank
managers and credit risk officers. The questionnaire used in the research for the dimensions of credit risk management
have been adopted from research work of Gatimu and Frederick (2014), Kibor, et al., (2015), Lebbe, et al., (2016)
and Afande. F.O. (2014). Questionnaire for loan performance has been adopted from the research work of Kibor, et
al., (2015).
The client profile is the detailed statistic of the client, consist of the business history of the client, economic and
political background of the client, past records of credit and repayments and the trustworthiness of the client. Banks
consider the capacity of the borrower to meet the scheduled of credit payments. 33 Efficient loan sizes fit borrower’s
repayment capacity.34 Loan appraisal plays the base role in assuring the lender of minimal chances for losing the
credited amount.35
31
State Bank of Pakistan. (2011). Prudential Regulations for Consumer Financing. Banking Policy & Regulations
Department. SBP, Pakistan.
32
Mugenda, O. M., & Mugenda, A. G. (1999). Research Methods: Quantitative and Qualitative Approaches.
Nairobi: ACTS Press
33
Wachira, A. K. (2017). Effects of Credit Risk Management Practices on Loan Performance of Commercial Banks
in Nyeri County, Kenya. European Journal of Economic and Financial Research, 2(2).
34
Adams, D. W., & Pischke, J. V. (1991). Microenterprise Credit Program: Deja VU. Economics and Sociology
Occasional Paper No. 1828, pp. 1463-1470.
35
Boldizzoni, F. (2008). Means and Ends: The Idea of Capital in the West, 1500–1970. New York: Palgrave
Macmillan.
297
Credit risk policies provide a framework for the loan process. They involve credit ration criteria, amount limit,
collateral, evaluation committee, planning, and risk flexibility policies. Credit risk policies must describe the process
to ensure appropriate reporting and strict compliance with credit extension beyond prescribed limits. 36 Credit risk
policies have a significant impact on loan performance. 37 Credit risk control is the detail process involved policies of
how to avoid a credit default. The bank charge penalties on the defaulters, management reports to the directors, even
guarantees are asked to provide to the bank and the bank has the recovery process. Credit risk control may differ from
every bank but it all must be compliant with the law. Banks have recovery department which has the detail policies of
the collection but also the way it should take place.
Loan performance determines the profitability of the bank, an increase in loan performance show the increase in
profitability of the bank.38 Client profile also helps in determining the loan performance.
Efficient loan appraisal is the key to the credit risk monitoring thus result in fewer loan defaults. Loan size also
influences loan performance of the bank. A large amount of loan may result in repayment problems, dissatisfactions,
and high dropouts. Loan performance involved, given a loan to an own customer, recovery measurement in case of
outstanding loans, loan products increase the profitability of the bank, portfolio management and liquidity
management associated with the loan.
3.2. Research Hypothesis

H1: Client profile has significant influences on the loan performance in commercial banks in Pakistan.
H2: Credit risk policy has significant influences on the loan performance in commercial banks in Pakistan.
H3: Credit risk control has significant influence on the loan performance in commercial banks in Pakistan.
H4: Dimensions of credit risk management have significant influence on the loan performance in commercial banks
in Pakistan.
3.3. Research Model

For the research take the loan performance as the function of the dimensions of credit risk management.
LP = f (CP, CRP, CRC)
LP = β0 + β1CP + β2CRP + β3CRC + ε
Where:
LP = Loan Performance
CP = Client Profile
CRP = Credit Risk Policy
CRC = Credit Risk Control
β0 = intercept of the equation
β1 to 3 = Co efficient of the variables
ε = error term.
Using above defined regression model, significant level tested among variables.
3.4. Data Analysis

Data analysis is divided into two phases; descriptive and quantitative, results are being discussed in this section of
research.
3.5. Demographic Data

The targeted population of the research is the scheduled commercial banks in Pakistan. Out of 35 commercial banks,
24 banks are selected based on their market capitalization, data availability, and reliability. Table 3.1 shows the
demographic data of the respondent.
36
Switzerland.
37
Microfinance Institutions in Kenya. Journal of Humanities and Social Science, 19(5), 105 - 123.
38
District D.G. Khan. Science International, 27(3), 2593 - 2597.
298
Table 3.4. Demographic Data
Question Answer Categories Frequency Percentage

Male 158 68.10
1. Gender
Female 74 31.90
18-30 years 52 22.41
30- 40 years 116 50.00
2. Age bracket
40-50 years 35 15.09
above 50 years 29 12.50
Graduate 48 20.69
3. Level of education Masters 137 59.05
Other specify 47 20.26
Less than 1 year 15 6.47
1-2 years 38 16.38
4. Work experience in the industry 2-5 years 45 19.40
5-10 years 117 50.43
Over 10 years 17 7.33
From table 3.1, the response rate. 68.10% of the respondents are males while 31.90% are females and the majority
belong to the 30 – 40 years of age bracket 50.00%, 22.41% from 18 – 30 years age bracket, 15.09%, and 12.50% are
from 40- 50 years and above 50 years age bracket. Most of the respondent’s qualifications are Master 59.05%. Work
experience of the individual in the industry portrays their knowledge of the policies, regulations and market practice.
Most of the respondents 50.43% have 5 – 10 years of work experience. 6.47% have less than 1 year of work experience.
16.38% have 1 – 2 years of experience, 19.40% have 2 – 5 years of experience and 7.33% have above 10 years of
working experience in the industry.
3.6. Descriptive Analysis

In this section, descriptive statistical tools are used to analysis the data, mean, and standard deviation which show the
mean values of the data and deviation from the mean value. We also find the minimum and maximum values of the
variables so getting the picture of the minimum and maximum values. Furthermore, frequency tables indicate the
extent to which the factors influence the dimensions of credit risk management and loan performance.
Table 3.2. Descriptive Statistics
Variables N Minimum Maximum Mean Standard

Deviation
CP 232 1.000 5.000 3.180 0.992
CRP 232 1.000 5.000 2.702 0.839
CRN 232 1.000 5.000 3.084 0.813
LP 232 1.400 5.000 3.825 0.809
From table 3.2, it shows that client profile has a mean of 3.180 and standard deviation of 0.992 with minimum and
maximum mean values of 1.000 and 5.000 respectively. Credit risk profile has a means of 2.702 and deviates from
means by 0.839 with minimum and maximum mean values of 1.000 and 5.000 respectively.
Credit risk control has a mean of 3.084 and deviation of 0.813 with minimum and maximum mean values of 1.000
and 5.000 respectively. However; loan performance has a mean of 3.825 and standard derivation of 0.809 with
minimum and maximum mean values of 1.400 and 5.000 respectively. Loan performance and dimension of credit risk
management are positively skewed or right tailed distributed.
3.7 Reliability Test

Data is collected by primary sources using Likert scale questionnaire, reliability test being the extent to which variables
are internally consistent and are representative of the total populations. Cronbach’s reliability coefficient was used to
check the reliability of the variables. According to Cronbach’s reliability alpha, α ≥ 0.7 is acceptable. Table 3.3 shows
that variables have an alpha value greater than 0.7, which means variables are internally consistent and are reliable
enough to test the research hypothesis.
299
Table 3.3. Reliability Statistics

Variables N of Items Cronbach's Alpha
CP 6 0.862
CRP 7 0.752
CRC 8 0.789
LP 5 0.735
3.8 Quantitative Analysis

Two methods are used for quantitative analysis. First, we used correlation to check the relationship between variables
we consider in this research and then apply regression to the research hypothesis.
3.9 Pearson’s Correlation Analysis

Pearson’s correlation analysis is used to identify the relationship between research variables. The positive relationship
shows a strong association between loan performance and dimensions of credit risk management .
Table 3.4. Pearson's Correlation Analysis between CP & LP

CP LP
CP Pearson Correlation 1 .358
Sig. (2-tailed) .000
N 232 232
LP Pearson Correlation .358 1
N 232 232
**. Correlation is significant at the 0.01 level (2-tailed).
Table 3.4 shows that there is a weak uphill significant relationship (P-value = 0.000) between Client Profile (CP) and
Loan Performance (LP). This significant and uphill relationship shows that there is a positive influence of client profile
on loan performance in commercials banks. It can say that if managers and credit officers of the commercial banks
take interest in client profile analysis then banks can mitigate the risk regarding repaying the loan.
Table 3.5. Pearson's Correlation Analysis between CRP & LP

CRP LP
CRP Pearson Correlation 1 .178
Sig. (2-tailed) - .007
N 232 232
N 232 232
Table 3.5 show a statistically significant but weak uphill relationship (P-value = 0.007) between Credit Risk Policy
(CRP) and Loan Performance (LP). It can be interpreted that if the commercial banks follow the credit risk policies
strictly and smoothly then the probability or risk of default can be minimized. Commercials banks must consider the
credit risk policy before any financing.
300
Table 3.6. Pearson's Correlation Analysis between CRC & LP

CRC LP
CRC Pearson Correlation 1 .221
N 232 232
N 232 232
Table 3.6 shows a weak uphill and statistically significant (P-value = 0.001) relationship between Credit Risk Control
(CRC) and Loan Performance (LP). It can be interpreted that if commercial banks apply the credit risk control
effectively and efficiently than loan performance can be maximized and banks can control the default rate, result in
profitability for the banks. Dimensions of credit risk management are positively and significantly correlated with loan
performance means, they have influenced the loan performance of the commercial banks.
3.10 ANOVA
Analysis of variance (ANOVA) shows the difference of means or variation between variables of the study. The
dimensions of credit risk management (CP, CRP & CRC) as independent variables and loan performance as the
dependent variable for the test of the research hypothesis. From table 3.7, ANOVA is statistically significant at F
(3,228) = 15.883, p-value ≤0.05. From table 3.7, the sum of squares under the regression was 26.104 and residual was
124.911, with a degree of freedom (df) = 3.
Table 3.7. ANOVA
Model Sum of Squares df Mean Square F Sig.

1 Regression 26.104 3 8.701 15.883 .000b
Residual 124.911 228 .548
Total 151.015 231
Dependent Variable: LP
Predictors: (Constant), CRC, CP, CRP
3.11 Model Summary

From table 3.8, correlation coefficient R shows that there is a moderate uphill positive relationship (R = 0.416) between
dimensions of credit risk management and loan performance in commercial banks. The coefficient of determination
explains the variability between model and response variable (R square = 0.173), as a general rule of thumb, that
values are merely predicted equally to mean.
Table 3.8. Model Summary
Model R R Square Adj. R Square Std. Error of the Estimate Durbin-Watson

1 .416a .173 .162 .7402 2.0874
Predictors: (Constant), CRC, CP, CRP
Dependent Variable: LP
Adjusted R square is slightly smaller than R-square (adjusted R square = 0.162), shows that values are merely
predicted equally to mean. Durbin-Watson test is used to check autocorrelation between variables, to check the serial
correlation among the residuals. Durbin-Watson statistic ranges from 0 to 4. As a general rule of thumb, value
approximately to 2, the residuals are uncorrelated; value near to 0 indicates strong positive correlation while a value
near to 4 indicates strong negative correlation39. Durbin-Watson statistic between 1.5 and 2.5 shows the values are
independent. From table 3.8, Durbin-Watson statistic is 2.0874, showing that values are independent.
39
Durbin, J., & Watson, G. S. (1971, April). Testing for Serial Correlation in the Least Square Regression III:
Biometrika, 58(1), 1 -19
301
3.12 Regression Analysis

Table 3.9 shows the influence of dimensions of credit risk management on the dependent variable (LP). From the
table 3.9, the model is statistically acceptable (P value ≤ 0.05). Regression equation demonstrates a positive
relationship between loan performance, client profile and credit risk control, while has a negative relationship between
loan performance and credit risk policy.
LP = 2.579 + 0.385CP - 0.247CRP + 0.223CRC
Table 3.9. Regression Analysis
Model Unstandardized Standardized t Sig.

Coefficients Coefficients
B Std. Beta
Error
1 (Constant) 2.579 .221 11.670 .000
2 CP .385 .068 .473 5.707 .000
3 CRP -.247 .089 -.256 -2.774 .006
4 CRC .223 .070 .224 3.195 .002
From regression equation is it clear that loan performance is dependent on dimensions of credit risk management
statistically significant. Quantitatively, client profile has a positive relationship with loan performance, which reveals
that if the increase in client profile by 1% will associate an increase in loan performance of 38.5%. Similarly, 1%
increase in credit risk policy will decrease loan performance by 24.7% and 1% increase in credit risk control will
increase loan performance by 22.3%.
From table 3.9, beta coefficient indicates that a change of one standard deviation in client profile will deviate 0.473
of loan performance from the mean. Similarly, one standard deviation change in credit risk policies will change 0.256
standard deviations in loan performance negatively and one standard deviation change in credit risk control will
deviate 0.224 of loan performance from the mean.
4. CONCLUSION
The main objective of this study is to investigate credit risk management procedures in commercial banks in Pakistan,
to examine the extent to which dimensions of credit risk management influence the loan performance in commercial
banks in Pakistan. The study found effective and efficient credit risk management affect greatly the profitability of
the bank, which includes creating an appropriate credit risk environment, proper and regular training of the managers
and credit officers to provide in-depth knowledge of the products and services, procedures and regulations of the banks
and the regularity bodies, sound and smooth credit granting process, an appropriate credit risk system to monitor,
control and implement credit risk policies and procedures. The study revealed that commercial banks in Pakistan have
adopted various techniques and controls to minimize credit risk. Commercial banks examine applicant’s capacity,
character, credit history, trustworthiness and net worth of the applicant. Commercial banks also applied credit risk
policies like credit rating system, limits on the amount of loan one can get, lender limit as per the board of director’s
approval and flexibility in credit risk policies. Commercial banks in Pakistan also used techniques and tools for credit
risk control, like vetted applicant before financing, penalties are charged on defaulters, agreement between lender and
borrower, reporting to the board of director, securitization, and syndication of loan, applicants ask to provide
guarantees as financing is under personal, social and political influence 40, recovery mechanism from the defaulter and
review the performance and policies of the financing products and services. 41
The study found these factors enable to create an environment where credit officers and managers (banks) act as a
trusted solution provider and financial advisor for the individual as well as corporations. Continuous monitoring of
40
District D.G. Khan. Science International, 27(3), 2593 - 2597.
41
302
the procedures and policies enable banks to remain updated about the gaps or any possible fall in the procedure and
policies, as well as new technologies, rules, and regulation implemented by the regulatory bodies.
The research work concluded that the dimensions of credit risk management (CP, CRP, and CRC) taken as
independent variables have a statistically significant relationship with the loan performance (LP). The study also found
if the commercial banks in Pakistan follow strict compliance in implementing these explanatory credit risk factors
considered in the study in financing, default rate and the non-performing loan can be reduced as a result profitability
of the bank will increases.
5. RECOMMENDATION
The dimensions of credit risk management studied in this study has influenced on loan performance in commercial
banks in Pakistan. It is recommended that commercial banks in Pakistan should effectively practice these factors
studied in this research to maximize the profitability by increases the loan performance of the bank.
This study concentrated on the responses from the credit officer and managers of the commercial banks, it is
recommended to do researches concentrated the general public and customers of the commercial banks to highlight
their opinion and knowledge on credit risk management and loan performance.
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304
EFFECTS OF TRANSFORMATIONAL LEADERSHIP STYLE ON EMPLOYEES

WELL-BEING
Shahid Obaid* Saima Tabassum** Avtar Bachani*** Sundus***
ABSTRACT
Leadership style has been researched extensively for a long period of time. Several factors related
to employees and organizations considered to investigate the relationship and impact of leadership
style on employee and organizational development. Literature reflects significant relations between
leadership styles and behavior factors of employee that further lead towards better organizational
performance. Despite of intense literature on leadership yet there is a thin gap is identified to
empirically examine the effect of leadership style on employee wellbeing in the context of Pakistan.
This study aims to understand the transformational leadership style in the perspective of employee
wellbeing; quality of work life, leadership development, work stress and organizational
commitment. A questionnaire of established constructs is administered to the sample of 209 lower
and middle level administrative employees and faculty members. The results report the significant
predictors of transformational leadership are quality of work life, leadership development and
organizational commitment.
Keywords: Transformational leadership, Employee stress and wellbeing, Organizational
commitment, Quality of work life and leadership development
JEL Classification: M1, M12
1. INTRODUCTION
The theory and concept of transformational leadership is first coined by MacGregor that further extension and
operationalization by Bass considering; “leadership and performance beyond expectations”1 2. The transformational
leadership theory is become most superior among all the theories of leadership as researchers have been scientifically
examining its relation to several organizational factors; employee performance, commitment, engagement, creativity
and efficacy. Transformational leadership style has been immensely helpful for the supervisors to inspire employees
to perform beyond expectations 3. Transformational leader helps employees to fulfil their higher order needs lead
towards the better performance from employees. Several studies compared the effects of transactional leadership and
transformational leadership to employee performance and productivity in organizational structure. It has been reported
that subordinates in the transformational leadership environment are comparatively more self-assured and perceive
more meaning in work.4 It is also elaborated that unlike transactional environment, transformational leaders not only
focus towards the short term needs but future requirements of the employees as well. Therefore, the way
transformational leaders execute their job responsibilities made them “leaders” rather than merely “managers” 5. It is
deduced that under such supervision, subordinates may alter the way of their thinking, become proactive and keen to
share their ideas. Their thought process get enhanced and they become critical thinkers in order to solve problems.6
Numerous prior studies have empirically examined effects of transformational leadership on employee performance,
*Corresponding Author, Lecturer, Department of Business Administration, Sindh Madressatul Islam University,
Karachi. Email: sobaid@smiu.edu.pk
**Associate Professor, Institute of Business Administration, University of Sindh, Jamshoro
***Lecturer, Department of Business Administration, Sindh Madressatul Islam University, Karachi.
1
James MacGregor Burns, Leadership (New York: Harper & Row, 1978).
2
Bernard M Bass, Leadership and Performance (New York: Free Press, 1985).
3
Sahar Qabool and Tariq Jalees, “Transformational Leadership and Employee Attributes,” Market Forces XII (2017).
4
Bernard M Bass, “Two Decades of Research and Development in Transformational Leadership,” European
Journal of Work and Organizational Psychology 8, no. 1 (1999): 9–32.
5
Amarjit S. Gill, Alan B. Flaschner, and Mickey Shachar, “Mitigating Stress and Burnout by Implementing
Transformational‐ leadership,” International Journal of Contemporary Hospitality Management 18, no. 6 (October
2006): 469–81.
6
Timothy R. Hinkin and J. Bruce Tracey, “Transformational Leadership in the Hospitality Industry,” Hospitality
Research Journal 18, no. 1 (August 1994): 49–63.
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305
305
job satisfaction, creativity and efficacy.7 8 Researchers have also been investigating the relation between
transformational leadership style and employee health and job well-being9. Similarly, transformational leadership
and employee psychological well-being having employee trust in leadership as mediator10. Although most of the
studies on transformational leadership are from developed nations and in Pakistan few studies in this regard are
conducted focusing towards employee performance, satisfaction and engagement. Hence, there is a gap found to
empirically investigate the relation between transformational leadership and employee well-being in the context of
Pakistan11. An empirical study in Turkey measuring effects of leadership style on employee wellbeing in
hospitality12. It is reported that transformational leadership style is more effective than transactional leadership by
fostering well -being of employees. Though employee well-being is measured through quality of work life, life
satisfaction, organizational commitment and employee burnout. Therefore, this study is an effort to determine the
effect of transformational leadership style on well-being of employees in Pakistan. The objective of the study is to
further elaborate the aim of this study followed by research questions, literature review, conceptual framework,
methodology, findings and conclusion.
1.1 Objectives
The objectives of this research are; to determine the relationship between transformational leadership and employee
well-being and to examine the effect of transformational leadership on employee well-being.
1.2 Research Questions

The research questions of this study are;
RQ1: What are the factors of employee well-being?
RQ2: What is the relationship between transformational leadership style and employee well-being? RQ3: How can
transformational leadership style effect well-being of employee?
Transformational leadership is when leaders amplify and enhance the interests of their followers to generate awareness
and commitment of the subordinates to the goal of the group. When leaders actually allow the individuals to excel their
own interests for the betterment of that group 13. Transformational leaders may have significant impact on the work
characteristics perceptions of their followers as they provide attention to promote the development through innovative
ideas to work, appreciate problem solving and coaching and encouragement 14. It is also suggested that leaders play
vital role in monitoring the control individuals have over the duties15. It is also added in another study that increased
participation and delegation is associated with the increased level of well-being. Sufficient social support from the
superior may associated towards the lower stress level and burnout16. However, employee well-being is determined
7
Fred O. Walumbwa et al., “Transformational Leadership, Organizational Commitment, and Job Satisfaction: A
Comparative Study of Kenyan and U.S. Financial Firms,” Human Resource Development Quarterly 16, no. 2
(2005): 235–56.
8
Rajnandini Pillai and Ethlyn A. Williams, “Transformational Leadership, Self‐ efficacy, Group Cohesiveness,
Commitment, and Performance,” Journal of Organizational Change Management 17, no. 2 (April 2004): 144–59.
9
Jaana Kuoppala et al., “Leadership, Job Well-Being, and Health Effects—A Systematic Review and a Meta-
Analysis:,” Journal of Occupational and Environmental Medicine 50, no. 8 (August 2008): 904–15.
10
E. Kevin Kelloway et al., “Transformational Leadership and Employee Psychological Well-Being: The Mediating
Role of Employee Trust in Leadership,” Work & Stress 26, no. 1 (January 2012): 39–55.
11
Qabool and Jalees, “Transformational Leadership and Employee Attributes.”
12
Derya Kara et al., “The Effects of Leadership Style on Employee Well-Being in Hospitality,” International
Journal of Hospitality Management 34 (September 2013): 9–18.
13
Karina Nielsen et al., “The Effects of Transformational Leadership on Followers’ Perceived Work Characteristics
and Psychological Well-Being: A Longitudinal Study,” Work & Stress 22, no. 1 (January 2008): 16–32.
14
Bass, “Two Decades of Research and Development in Transformational Leadership.”
15
Cary L. Cooper and Sue Cartwright, “An Intervention Strategy for Workplace Stress,” Journal of Psychosomatic
Research 43, no. 1 (July 1997): 7–16
16
R. T. Lee and B. E. Ashforth, “A Meta-Analytic Examination of the Correlates of the Three Dimensions of Job
Burnout,” The Journal of Applied Psychology 81, no. 2 (April 1996): 123–33
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306
306
through several psychological and physical factors; job satisfaction, work stress 17, quality of work life and
organizational commitment 18, role clarity and opportunities for development 19. Therefore, as per theoretical
groundings transformational leadership is considered as predictor in this study and well-being of employees as
outcome. Four constructs of well-being; quality of work life (QWL), leadership development (LD), work stress (WS)
and organizational commitment (OC) are taken to measure the effect of predictor on them.
2.1 Conceptual Framework

A conceptual framework is established as per literature evaluated in the above section. Leadership is considered as
independent variable and employee well-being and factors as dependent. The conceptual framework can be seen in
figure 1 depicting relationship between the variables.
2.2 Transformational Leadership and Employee Well-being

A meta-analysis has found strong evidence of causal relation between employee well-being, health and several work
characteristics to the leadership style. Organizational psychologists have determined several organizational and
individual variables that influence the stress factor and well-being.20 It is assumed that at workplace particularly a
supervisor of someone can dramatically affect one’s work and feeling about oneself. 21 Further supported argues as
poor relation between supervisor and subordinate characterized by low support, feedback and low quality of feedback
from supervisor reduce well-being of an individual and substantiate stress. 22
H1 Transformational leadership style has positive effect on employee well-being.
2.3 Transformational Leadership and Quality of Work Life (QWL)

Quality of work life refers to the effect of workplace on the quality and satisfaction in work life, non-work or personal
life and satisfaction in overall life. 23 QWL can be defined as the favorable conditions at workplace that elevate
17
Jiayan Liu, Oi-Ling Siu, and Kan Shi, “Transformational Leadership and Employee Well-Being: The Mediating
Role of Trust in the Leader and Self-Efficacy: TRANSFORMATIONAL LEADERSHIP,” Applied Psychology 59,
no. 3 (June 11, 2009): 454–79
18
Kara et al., “The Effects of Leadership Style on Employee Well-Being in Hospitality.”
19
Nielsen et al., “The Effects of Transformational Leadership on Followers’ Perceived Work Characteristics and
Psychological Well-Being.”
20
Dirk van Dierendonck et al., “Leadership Behavior and Subordinate Well-Being.,” Journal of Occupational
Health Psychology 9, no. 2 (2004): 165–75
21
Daniel W. Russell, Elizabeth Altmaier, and Dawn Van Velzen, “Job-Related Stress, Social Support, and Burnout
among Classroom Teachers.,” Journal of Applied Psychology 72, no. 2 (1987): 269–74
22
Cooper and Cartwright, “An Intervention Strategy for Workplace Stress.”
23
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307
307
employee satisfaction by offering rewards, job security and growth opportunities.24 QWL is said to be differ from the
job satisfaction but QWL is considered to lead towards the job satisfaction.25 According to Danna, QWL is considered
as hierarchy of concepts include non-work areas (life satisfaction) at the top, job satisfaction at middle and job-related
aspects i.e. rewards, co-workers and supervisors at the bottom of the hierarchy.26 Work life plays a significant role on
the lives of the individuals, condition of the organization and given resources not only affect the physical well-being
but also spiritual and psychological well-being.27
H2 Transformational leadership has a significant positive influence on employee well-being.
2.4 Transformational Leadership and Leadership Development

Transformational leadership and its facets also refer towards the subordinate’s perceptions of their opportunities to
develop. Transformational leadership as constructing organizational perspectives that allows the followers to expand
their abilities and skills to become more capable independently.28 29 Through intellectual stimulation transformational
leader facilitates development of subordinates with challenging their thoughts and ideas.30 Furthermore,
transformational leaders also encourage the followers to take calculated risks, to look forward actively to solve
organizational problems and to seek growth opportunities. Additionally, motivational leadership may also encourage
the subordinates to take charge of their own self for growth and development.
H3 Transformational leadership has a positive and significant effect on leadership development.
2.5 Transformational Leadership and Work Stress

Stress factor is a state that is negatively associated with the physical and mental state of an individual productivity,
health, quality of work and effectiveness.31 Transformational leadership is a phenomenon where supervisor opens up
communication to the individual that in return reduces the employee work and job related stress.32 The most lethal
effect a stressful work place is to retain the stressor within the organization. It is found in prior studies that leaders
play a significant role towards employee performance; higher delegation and participation is associated to the
increased well-being. Similarly, high level social support from the supervisor is tend to be associated with the lower
level of burnout and stress.33 Therefore, negative relation between transformational leadership style and employee
work stress is expected as per the literature.
H4 The more the leader perceive transformational style of leadership the less will be the work stress.
2.6 Transformational Leadership and Organizational Commitment

The prior studies suggest that organizational commitment has become one of the important implications for employees
and organizations. Organizations have become more focused towards structures where higher designation means high
responsibility not authority and supervisor is to persuade rather command.34 So it is important for the organizations to
know what exactly effects towards increased commitment of the employees. Leadership style is said to encourage the
employee commitment and is essential to implement lucrative organizational strategies, accomplishing goals and
24
Ka Wai Chan and Thomas A. Wyatt, “Quality of Work Life: A Study of Employees in Shanghai, China,” Asia
Pacific Business Review 13, no. 4 (October 2007): 501–17
25
Robert Louis Kahn, Work and Health (New York: Wiley, 1981).
26
K Danna, “Health and Well-Being in the Workplace: A Review and Synthesis of the Literature,” Journal of
Management 25, no. 3 (1999): 357–84
27
Chan and Wyatt, “Quality of Work Life.”
28
29
Dong I. Jung and John J. Sosik, “Transformational Leadership in Work Groups: The Role of Empowerment,
Cohesiveness, and Collective-Efficacy on Perceived Group Performance,” Small Group Research 33, no. 3 (June
2002): 313–36
30
Bruce J. Avolio et al., “Transformational Leadership and Organizational Commitment: Mediating Role of
Psychological Empowerment and Moderating Role of Structural Distance,” Journal of Organizational Behavior 25,
no. 8 (December 2004): 951–68
31
Gill, Flaschner, and Shachar, “Mitigating Stress and Burnout by Implementing Transformational‐ leadership.”
32
Hinkin and Tracey, “Transformational Leadership in the Hospitality Industry.”
33
Lee and Ashforth, “A Meta-Analytic Examination of the Correlates of the Three Dimensions of Job Burnout.”
34
Peter F. Drucker, “Knowledge-Worker Productivity: The Biggest Challenge,” California Management Review 41,
no. 2 (January 1999): 79–94
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attain competitive advantage along with human capital optimization.35 There is considerable available research
suggesting that organizational commitment is positively associated with the transformational leadership in diverse
organizational cultures and settings.36 Transformational leaders encourage their followers to participate in critical
thought process and decision making that encourage organizational commitment of the followers. Hence, several
studies reported positive linkage between the transformational leadership and organizational commitment.37
H5 Positive impact of transformational leadership on organizational commitment.
3. METHODOLOGY
Lower and middle level administrative professionals and faculty members; lecturers, were selected for survey
purposes due to their career level. All the respondents participated in the survey voluntarily, the questionnaires were
distributed in order to collect the data. It is ensured to them that their identity will remain confidential hence
demographical data was collected anonymously.
3.1 Population:
The population was selected in this study are from public and private corporations and university located around
I.I.Chundrigar Road Karachi. The reason for selecting this particular area is that it is known as the “Pakistan’s Wall
Street” and can be well representative of salaried persons.
3.2 Sample Size and Sampling Techniques

It was targeted to collect sample that represents maximum number of employed persons in Pakistan i.e. 58million
approximately in 2015.38 Total number of 261 questionnaires were distributed after expelling the responses with
missing figures and removing the outliers the actual retrieval rate was approximately 80 percent. Hence, the sample
size for this research is 209 and non-probability convenience sampling technique is used in this study.
3.3 Scale and Measure

The questionnaire used in this study in divided into two sections. First section is based on demographical information
of the respondent comprises of six questions; age, qualification, gender, family income, profession and marital status.
Second section is further divided into five constructs. The questionnaire is comprised on 25 questions on seven point
Likert scale.
3.4 Data Analysis

Preliminary tests for normality, reliability and validity were conducted after coding the data. Simple regression for
each hypothesis is conducted in this study. PASW Statistics (SPSS) 18 is used as data analysis tool. The statistical
tests and results can be seen in the following section.
4. RESULTS
4.1 Descriptive Analysis
The descriptive analysis is conducted to overlook the normality and reliability of the data set in this study hence mean,
standard deviation (S.D.), skewness and kurtosis are observed for normality and alpha is representing the internal
consistency of the items as follows;
35
May-Chiun Lo, T Ramayah, and Hii Wei Min, “Leadership Styles and Organizational Commitment: A Test on
Malaysia Manufacturing Industry,” African Journal of Marketing Management 1, no. 6 (2009): 133–39.
36
Avolio et al., “Transformational Leadership and Organizational Commitment.”
37
Baek‐ Kyoo (Brian) Joo, Hea Jun Yoon, and Chang‐ Wook Jeung, “The Effects of Core Self‐ evaluations and
Transformational Leadership on Organizational Commitment,” Leadership & Organization Development Journal
33, no. 6 (August 24, 2012): 564–582
38
Tradingeconomics, “Trading Economics,” 2018, https://tradingeconomics.com/pakistan/employed-persons.
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309
309
Table 4.1: Descriptive Statistics
Construct Cronbach Alpha N Mean S.D. Skewness Kurtosis

Transformational Leadership 0.661 209 4.36 0.951 -0.015 -0.391
Quality of Work life 0.707 209 4.57 1.262 -0.186 -0.529
Leadership Development 0.511 209 4.59 1.087 -0.133 -0.484
Work Stress 0.509 209 4.47 1.003 -0.069 -0.118
Organizational Commitment 0.579 209 4.45 1.014 -0.099 -0.278
Table 4.1 shows quality of work life has highest Cronbach alpha i.e. 0.707 (Mean = 4.57 and S.D. = 1.262) and work
stress is with lowest reliability of 0.509 (Mean = 4.47 and S.D. = 1.003). Overall reliability for all 25 items is also
measured to check inter item consistency i.e. 0.877. Reliabilities in the range of 0.80 is tend to be accepted and
considered good.39 As far as normality of the data is concerned transformational leadership is least skewed having
value of -0.015. However, quality of work life is with the highest skewness of -0.186. Moreover, quality of work life
has highest kurtosis of -0.529 and work stress is with lowest kurtosis value of -0.118. As the values of Skewness and
Kurtosis are between ±2 hence it can be evaluated that the constructs have univariate normality.40
4.2 Bivariate Correlation

In order to examine the uniqueness, distinctiveness and multi—collinearity of the adopted constructs bivariate
correlation results are given below.
Table 4.2: Bivariate Correlations
Construct TL QWL LD WS OC
Transformational Leadership (TL) 1
Quality of Work life (QWL) 0.392 1
Leadership Development (LD) 0.381 0.870 1
Work Stress (WS) 0.415 0.804 0.743 1
Organizational Commitment (OC) 0.765 0.514 0.494 0.523 1
In table 4.2 bivariate correlation ‘r’ of all the variables is conducted. All the r values are between 0.30 to 0.90
identifying no issue regarding uniqueness, distinctiveness and multi—collinearity of the constructs. The relationship
between quality of work life and leadership development has highest positively correlation of 0.870 however,
transformational leadership is least positively correlated to leadership development r = 0.381.
4.3 Exploratory Factor Analysis

Exploratory factor analysis is conducted to check the theoretical relationship of indicator variables with the construct.
The analysis is carried out through Varimax rotation, results can be seen in the following table;
Table 4.3: EFA Results
Construct KMO1 BST2 VE3 Items

Transformational Leadership (TL) 0.655 238.700 53.370 7
Quality of Work life (QWL) 0.627 215.179 54.176 4
Leadership Development (LD) 0.583 85.818 68.081 4
Work Stress (WS) 0.590 98.116 58.381 5
Organizational Commitment (OC) 0.610 133.869 60.961 5
1 2 3
Kaiser-Mayer-Olkin Test, Bartle’s Sphericity Test (P<0.05), Variance Explained
39
Uma Sekaran and Roger Bougie, Research Methods for Business: A Skill-Builiding Approach, Sixth (New Delhi:
Wiley India Pvt Ltd, 2013).
40
Andy Field and Jeremy Miles, Discovering Statistics Using SAS (Sage Publications Ltd, 2011).
310
310
310
Kaiser-Meyer-Olkin (KMO) for transformational leadership and quality of work life is greater than 0.60, for leadership
development, work stress and organizational commitment are 0.583, 0.590 and 0.610 respectively. According to
Kaiser (1974), KMO value above 0.5 is acceptable, values between 0.5 and 0.7 are mediocre and values above 0.7 are
good. The Barlett’s test of Spericity for all the constructs are significant at significance level of 5%. The total variance
explained by the retained factors should also be examined in EFA, as per a general rule the VE should at least be
50%.41 In table 4.3 variance explained of all the constructs is greater than 0.50 hence confirming the theoretical
relationships.
4.4 Construct Validity

Validity of constructs is determine through convergent and discriminant analyses discussed in the following sections;
4.4.1 Convergent Validity

Convergent validity examines the convergence of each item in the relation to the construct shown in the following
table;
Table 4.4: Convergent Validity
Construct Mean S.D. VE Reliability

Transformational Leadership (TL) 4.36 0.951 53.370 0.661
Quality of Work life (QWL) 4.57 1.262 54.176 0.707
Leadership Development (LD) 4.59 1.087 68.081 0.511
Work Stress (WS) 4.47 1.003 58.381 0.509
Organizational Commitment (OC) 4.45 1.014 60.961 0.579
Table 4.4 indicates that total variance explained for each factor is greater than 0.53 and the reliability of each construct
is greater than 0.5 confirms that the construct accomplishing the requirement of convergent validity.
4.4.2 Discriminant Validity

The distinctiveness and uniqueness of the adopted constructs are also examined through the discriminant validity
analysis given in the table below.
Table 4.5: Discriminant Validity
Construct TL QWL LD WS OC
Transformational Leadership (TL) 0.731
Quality of Work life (QWL) 0.154 0.736
Leadership Development (LD) 0.145 0.756 0.825
Work Stress (WS) 0.172 0.646 0.552 0.764
Organizational Commitment (OC) 0.585 0.264 0.244 0.274 0.781
Table 4.5 shows the square root of variance explained of the diagonal line is greater than the square of each pair of
correlation confirms that the data represents the requirement of discriminant validity.
4.5 Regression Analysis

Hypothesis 1: Transformational Leadership and Employee Wellbeing
The hypothesis transformational leadership has positive and significant effect on the wellbeing of employees is tested
through simple regression analysis, results are shown in table 4.6.
41
David L. Streiner, “Figuring Out Factors: The Use and Misuse of Factor Analysis,” The Canadian Journal of
Psychiatry 39, no. 3 (April 1994): 135–40.
311
311
311
Table 4.6: Regression Results

Model Beta T Sig.
Constant 8.231 0.000
Transformational Leadership 0.555 9.601 0.000
2
Dependent variable: Employee Wellbeing R = 0.305, F=92.179, p < 0.05
The regression analysis of hypothesis 1 shows that transformational leadership explains 30.5% of the variance towards
employee wellbeing (R2=0.305, F=92.179, p<0.05). Further, results suggests that transformational leadership has
statistically positive and significant effect on employee wellbeing.
Hypothesis 2: Transformational Leadership and Quality of Work life

Hypothesis transformational leadership has statistically positive and significant effect on quality of work life of
employees is measured through simple regression analysis, results are shown in table 4.7.
Model Beta T Sig.

Dependent variable: Quality of Work life R2 = 0.150, F=37.6, p < 0.05
The results of regression analysis shows that transformational leadership explains 15% of the variance towards the
quality of work life (R2=0.150, F=37.6, p<0.05). Results also suggests that transformational leadership has statistically
positive and significant effect on quality of work life.
Hypothesis 3: Transformational Leadership and Leadership Development

The hypothesis transformational leadership has significant and significant effect on the leadership development is
tested through regression analysis, results are shown in table 4.8.
Model Beta T Sig.

Dependent variable: Leadership Development R2 = 0.141, F=35.162, p < 0.05
The regression analysis of hypothesis 3 indicates that transformational leadership explains 14.1% of the variance in
leadership development (R2=0.141, F=35.162, p<0.05). Further, results suggests that transformational leadership has
statistically positive and significant effect on employee wellbeing.
Hypothesis 4: Transformational Leadership and Work Stress

Transformational leadership has positive effect on work stress is examined through simple regression analysis, results
are shown in table 4.9.
Model Beta T Sig.

Dependent variable: Work Stress R2 = 0.168, F=43.12, p < 0.05
The regression analysis results suggests that transformational leadership explains 16.8% of the variance towards work
312
312
312
stress (R2=0.168, F=43.12, p<0.05). Additionally, transformational leadership has statistically positive and significant
effect on work stress.
Hypothesis 5: Transformational Leadership and Organizational Commitment

The hypothesis 5 i.e. transformational leadership has positive and significant effect on the organizational commitment
is scrutinized through the analysis of simple regression as shown in table 4.10.
Model Beta T Sig.

Dependent variable: Organizational Commitment R2 = 0.583, F=291.279, p < 0.05
The regression analysis shows that transformational leadership explains 58.3% of the variance in organizational
commitment (R2=0.583, F=291.279, p<0.05). Further, results also suggests that transformational leadership has
statistically positive and significant effect on organizational commitment.
5. DISCUSSION
As prior studies suggested that perceived transformational leadership style is positively associated with the well-being
of employees. Constructs of well-being; quality of work life (QWL), leadership development (LD), work stress (WS)
and organizational commitment (OC) are regressed separately as well as all together with transformational leadership
in this study.
Results of regression analysis in table 7 suggest the validity of the previous researches as transformational leader leads
towards quality of work life; satisfaction in personal, work and overall life of an individual. Hence, transformational
leadership has positive and significant effect on the QWL. These results are consistent with the results of several prior
studies.42
Similarly, regression analysis in table 8 illustrates the significant relation between transformational leadership and
leadership development. These results are justifying the literature of employee development. These results can further
be explained as the perceived transformational style of leadership tend to encourage employees to take decisions and
develop their own skills for development.43
In table 4.9 regression results not consistent with the previously examined data as work stress is associated negatively
to the transformational leadership.44 However, the data collected in this study is failed to support and accept H4. Reason
for justifying these contradictory results can be most of the questionnaires were distributed during the second half and
late working hours so respondents probably were feeling exhausted due to all day of intense work hence reflected
stress factor in the response.
Regression results in table 4.10 reports consistency with the prior studies indicating the higher level of
transformational leadership will encourage high employee commitment. The transformational leadership is positive
and significantly associated with the organizational commitment. According to the literature of organizational
commitment, transformational leadership is one of the most crucial component to foster organizational commitment
and overall evidences depict that transformational leadership is strongly associated with the organizational
commitment.45 Therefore, in comparison to literature this study is consistent with all the constructs of well-being
except work stress. Overall analysis can be drawn through table 6 is that transformational leadership is strongly
associated with the employee well-being.
6. CONCLUSION
This study scrutinized the relation between transformational leadership and employee well-being; quality of work life,
leadership development, work stress and organizational commitment. Work stress is not supporting the established
fact of negative association between stress and leadership style. However all the other constructs of well-being; quality
42
43
44
Gill, Flaschner, and Shachar, “Mitigating Stress and Burnout by Implementing Transformational‐ leadership.”
45
Avolio et al., “Transformational Leadership and Organizational Commitment.”
313
313
313
of work life, leadership development and organizational commitment are positively supporting the results of prior
researches. It can be concluded that empirically transformational leadership styles is highly associated with the
employee well-being. Leaders fostering authority of decision making, encourage creative ideas and problem solving
skills in their subordinates tend to have increased level of employees’ well-being.
7. LIMITATION AND RECOMMENDATION

A rare empirical evident is found in this study i.e. stress is positive related to the transformational leadership. This
could be due to the sample which is taken through surveys only from lower and middle level administrative staffs and
faculty members (lecturers). There is a need to conduct qualitative research in this area through conducting in-depth
interviews from supervisors and their subordinates simultaneously to get better exploration and understanding of
relationship between variables. The survey is conducted in a selected region so future studies can be expanded to
multiple regions and organizations.
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BRAIN DRAIN OF BUSINESS AND IT GRADUATES IN PAKISTAN
Aamir Abbas* Subhash Guriro**
ABSTRACT
Brain drain is the migration of highly skilled professionals to developed countries in world and due
to this transfer the developing countries are facing the shortage of human talent and expertise in the
different fields of life. In Pakistan brain drain has become an increasing trend among the highly
qualified professionals in last decade and limited evidence available to understand the phenomenon
especially in business and Information Technology (IT) sectors. The main objective of this study was
to know the current trends in brain drain of graduates in business and IT fields and explore factors
responsible for that. In order to assess the causes of brain drain among graduate professionals of
Pakistan this study randomly recruited 150 respondents from IT and business sectors. A survey was
conducted in the Karachi city. Structured questionnaire was used to collect the data on different
variables of economic, political and social factors causing brain drain in Pakistan. SPSS version 22
was used for data analysis. The results support some socio-economic, social and political factors are
responsible for brain drain in Pakistan. Graduates’ perceptions of high salary packages, high living
standard, peace and better future of children are those factors which motivate them to migrate from
their own country. This original study has increased the understanding of drain of business and IT
graduates in Pakistan. Study findings can guide the government and policy makers to identify real
factors behind the migration of highly skilled graduates and make policies to retain its human capital.
Keywords: Brain drain, Pakistan, Business, Information Technology
JEL Classification: A2
1. INTRODUCTION
Brain drain is a multidimensional and complex phenomenon. Now a day we often come to listen about the term Brain
Drain in our daily routine life on media as well as by literary people and intellectuals, but only a few people are
familiar with this term of Brain Drain. Like people has been divided in different fields of life through different
definitions according to their profession. Academician of different sciences has categorized this world according to
their said profession and terms. It means that everyone has its own imaginations and observations. So they took this
brain drain phenomenon in perspective of their particular fields. According to the World Bank report, brain drain is
the migration of skilled and professional human resources for trade, education, business, quality of life and better job
opportunities.1
The population of the world had witness a theatrical economic growth in the recent years due to the effects of the
globalization and industrialization. Economic growth is much important for every country which not only indicates
the employment ratio, but it also indicates the quality of life, living standards as well as its health also. Due to the
rapid growth in globalization and industrialization it has made the developed countries to attract the highly qualified,
highly skilled and intellectuals from developing countries by providing the better opportunities, ultimately due to this
heavy flow of professionals’ external migration, developing countries are facing the shortage of human talent who
prefer to seek better opportunities in foreign countries2. Despite the facts those skilled and professionals people are
being considered the back bone of the country’s economy, who contribute to steer it in the positive direction for
achieving the desirous economic goals3.
Trained professionals of various fields either they are from health, business, computer science, information
technology, engineering or technical are much needed in every part of the world because these professionals and
skilled manpower play a significant role to beef up the economy of the country. Brain drain is an intended phenomenon
of migration from developing countries in favor of developed countries by skilled labor with a higher level of
education generally following a better income, living standards and job security as well as to enhance their professional
*Corresponding Author, MS Student, SMI University Karachi. E-mail: aamirrana798@gmail.com

**Assistant Professor, Department of Business Administration SMI University Karachi
1
World Bank, brain drain in developing countries, (2000)
2
Binod Khadria, “The Brain Drain from Developing Countries: Analysis of Impact and Policy Issues”, International
Migration Paper”, “Skilled Labour Migration”, 2002
3
Malik Fahem Bashir “Key Factors Determining the Rational for Brain Drain; An Irony Never Recovered, 2000
316
skills in a comfortable environment. So in this aspect better living standards, political stability, rule of law, equality,
better job opportunities, high salary packages, job security and better quality of education are those factors which
attract the highly skilled professionals of different fields from less developed countries towards the relative developed
countries. The migration from course of highly skilled migrants has been increasing after the world war two over the
last few decades.4 Eventually in 1980s and much of the 1990s concerning the migration of professionals and skilled
manpower became again mostly debatable topic and got the international community’s great concern for debate5.
According to United Nation population division report in 2002 almost 175 million people or 2.9% of the world
population were living outside their country of birth for more than a one year. Therefore, scholars and intellectuals of
the world are highlighting this brain drain issue very seriously across the world.6
So in this aspect there is a huge difference in the quality of life, better job opportunities and better living standards
between the relative developing countries and developed countries. Better socio economic figures, political stability
and rule of law are those factors which attracts the highly skilled manpower from developing countries to developed
countries. Pakistan is a developing south Asian country. Youth under the age of 25 constitutes 63% of total population
of Pakistan. Youth has the power to steer the country into the next phase of political stability and economic
developments if they effectively utilize their skills. Our Youth is socially responsible and moreover working
dedicatedly to see Pakistan attains and developed status.
With every passing year of Pakistan, it’s an Increasing trend among the youth of university graduates of business,
doctors, computer science, commerce and information technology who are migrating to developed countries like USA,
Europe and Middle East countries. According to Bureau of Immigration and Overseas Employment since 1971 up to
Sep 2016 almost 9.4 million overseas Pakistanis are working or living around the globe. Mostly overseas Pakistani
are working in Middle East 49.2%, Europe 28.3% and USA 16.2% (bureau of immigration and overseas employment).
There are several causes of the university graduates of Pakistan who are migrating to developed countries or might be
thinking for migration. The main causes may be unemployment, political, instability, social factor, economic factor,
bad governance, no quality of life, less foreign investment and specially the terrorism might be the key factor for
external migration of university graduates. A recent study by World Bank highlighted this issue like this way that
shortage of the skilled workers in a country is the main hurdle of power achievements of industrial growth and
development7.
1.1. Objective of the study

The purpose of this research is to explore the most influencing factor causing brain drain among Business and I.T
graduate professional of Pakistan.
Specific Objectives:
 To identify the economic factors causing brain drain for graduate professionals
 To identify the political factors causing brain drain for graduate professionals
 To identify the social factors causing brain drain for graduate professionals
1.2. Hypotheses
The research has developed following hypothesis.
H1: There is a significant relationship of job relevant to qualification/degree with brain drain of Business & I.T
graduate
H2: There is a significant relationship of family member living abroad with brain drain of Business & I.T graduate
H3: There is a significant relationship of high salary package with brain drain of Business & I.T graduate
The issue of external migration is always remained the matter of great concern for scholars, intellectuals and policy
makers across countries over last many decades 8. But in recent era, the issue of brain is again getting the focus of
4
Muhammad Aamir Hashmi, Ashi Zeeshan, Tariq Mehmood, Syed Abir Hussain Naqvi, Faiz M. Sheikh, “factors
driving brain drain in pakistan: an exploratory view”, Journal Of Asian Business Strategy, Vol 2 No 2, 2012 Pp. 9
5
ibid
6
Aubert,C. & Xiande.L, “Domestic Unemployment And Migration”, “Journal Of Domestic Unemployment”,
(2002) Vol.47
7
Gillani,I. & Malik, “Pakistan infrastructure implement capacity assessment”, Report no. 43186, Discussion Paper
Series: technical note 2, ( South Asia Sustainable Development Unit, 2007”.
8
M. Carolina Brandi, “Skilled Immigration in Rome”, International Migration, (2001), Vol. 39(4)
317
relative developing countries scholars, intellectuals and policy makers that why the skilled and professional manpower
is ready to migrate towards the developed countries9.
Since origin of the term brain drain, it is divided in three phases. In first phase from 1950s to 1960s decade, the term
brain drain first time it was introduced by British royal societies in early 1950s and 1960s when intellectuals and
professionals particularly scientist and technologist start migrating towards USA and Canada after the world war two.
Brain Drain is also known as human capital, where the heavy flow of highly skilled manpower is only in one direction.
After the 2nd world war in 1950s and 1960s decade, in the field of technology and science, the developed and less
advanced countries are contributing vocational and cognitive minds 10. The migration of highly skilled manpower has
a very bad impact socially and economically on experiencing country.
In 2nd phase from 1970s-1990s decade majority of scholars, intellectuals and policy makers finally stated that the
term brain drain is a great loss of highly skilled manpower from developing countries in the favor of developed
countries. By keeping all these facts, it is the need of the time to implement migration polices around the globe to find
out the solution of this brain drain. The purpose of this migration policy was to enhance the role of international
organization and institution to manage this heavy flow of external migration of highly skilled manpower 11.
In recent era most countries are facing the issue of brain drain across the globe, and his finding revealed that under
developed countries are losing their highly skilled intellectuals and professional manpower in all sciences whether
they are from information technology, computer science, engineering, doctors or business and all these highly skilled
professionals are migrating towards the USA, Europe and Middle East countries due to political instability and
economic change in experiencing country.
It is cited by Harrison & Francis that 75% skilled, semi-skilled and highly people of Ethiopia migrated between two
decades from 1980s to 1990s, which has resultantly affected the performance of such a developing countries to
alleviate poverty from their country12. In the continent of Africa the figures of brain drain is alarming. Among the
African continent countries figures of external migration are much alarming in Nigeria and Ethiopia due to political
instability, absence of rule of law, unemployment and declining economic growth. Both sides of the world, which are
brain drain and brain gain countries has started the debate on this issue for their own interest and concerns. Migration
of highly skilled people has become a global phenomenon and emerging trend among professionals in terms of
overseas engagements and job opportunities13. Where migration of this highly skilled manpower has filled the gap of
trained labor for developed countries but on the other hands it is promoting underemployment and unfeasible working
conditions. Economies of the world are directly indirectly depending on the knowledge: the migration of highly skilled
labor is also a great threat for the economy of developing countries 14.
15
One of the research has shown their equilibrium approach in brain drain and said “less number of overseas job
opportunities leads to less number of experiencing countries demand and low cost of living; a very low experiencing
country of brain drain cost of living supports the equilibrium, where only a few have advantages to work overseas
countries.
9
Binod Khadria, “The Brain Drain From Developing Countries: Analysis Of Impact And Policy Issues”,
International Migration Paper”, “Skilled Labor Migration”, 2002
10
Herbert G Grubel, Anthony Scott, “The brain drain: determinants measurement and welfare effects”, Canadian
journal of economics, 1978, vol 11 no 3
11
Jagdesh Bhagwati, “The Brain Drain International Integration Of Markets For Professional And Unemployment:
A Theoratical Analysis”, Journal Of The Economoics, (1974), 1, 19-24
12
Hashmi,A,M. Zeeshan,A, Mehmood,T. Naqvi,H,A,S. & M,Shiekh. (2012), “factors driving brain drain in
pakistan: journal of asian business strategy, Vol. 2, pp. 7-20
13
M. Carolina Brandi, “Skilled Immigration In Rome”, International Migration, (2001), Vol. 39(4)
14
Said Ouaked, “Translantic roundtable on high skilled migration and sending countries issues”, International
Migration, 2002, Vol 40 No 4, 155
15
Barry Mccormick, Jackline Wahba, Overseas employment and remittences to a dual economy, The Economic
Journal, 2000, 509- 34
318
Table 2.1: Skill composition of Pakistani emigrants
Year Highly Qualified Highly Skilled Skilled Semi-Skilled

2010 7081 31650 165726 5181
2011 6974 3018 171672 73247
2012 9298 4202 261531 104240
2013 12057 5032 263138 102963
2014 14647 6216 287649 120204
2015 17484 7853 397317 151636
2016 16510 8172 335671 152235
2017 16029 9886 188745 195940
Total 100080 76029 2071449 905646
Source: Bureau of emigration and overseas employment Pakistan (Annual plan 2010-17)
According to UNESCO 127th executive conference discussed about the migration of highly skilled manpower of
Pakistan. The migration of highly skilled manpower of Pakistan increased by more than 50% from 6.1 in 1990 to 9.2
in 2000. Since 1971 the migration of highly skilled and qualified professional consisting of engineers, doctors, IT
specialists, business and computer science are trained by the Government institutions. But with the migration of
doctors, engineers, business and computer science graduates the profession related to all these concerns are badly
affected.
Table 2.2: Country wise migration of Pakistanis for employment purpose
Country 2010 2011 2012 2013 2014 2015 2016 2017 Total
KSA 189888 222247 358560 270502 312489 522750 462598 143363 2482397
UAE 113312 156353 182630 273234 350522 326986 295647 275436 1974120
Oman 37878 53525 69407 47794 39793 47788 45085 42362 383632
Qatar 3039 5121 7320 8119 10042 12741 9706 11592 67680
Malysia 3287 2092 1309 2031 20577 20216 10625 7174 67311
Bahrain 5877 10641 10530 9600 9226 9029 8226 7919 71048
U.K 430 308 183 158 250 260 346 340 2275
U.S.A 196 182 164 226 351 350 289 229 1987
Italy 3738 2875 3361 2068 1563 431 242 141 14419
Pakistani government to provide those better opportunities and comfortable environment to retain its qualified
professionals. According to Gallup survey which was conducted in year 2000, the objective of this survey was to know
about the youth of Pakistan that either they want to go abroad or not. After conducting the survey report, it was
highlighted that two third youth of Pakistan is willing to go abroad for better job opportunities, while among those,
half of the youth don’t want to come back in Pakistan and they wanted to settle down their self in abroad. Finally,
Gallup survey concluded that economy is a key push factor for youth of Pakistan that they prefer to go and live in
developed countries,
A similar kind of a survey was conducted in 1984, at that time 17% of the youth population showed their desire to to
go abroad for work or they wanted to settle down their self in foreign countries 16. Gallup survey of (2000) highlighted
that if we compare issue of brain drain in Pakistan with previous conducted surveys then it has increased since two
decades. Survey indicates that youth of Pakistan are ready and willing whether they are skilled, semi-skilled, and
unskilled along with highly skilled, professionals like doctors, engineers, I.T, business and computer science
university graduates in pursuit of better job opportunities and perspectives.
16
319
Table 2.3: Profession wise migration of Pakistanis for employment in abroad
Profession 2010 2011 2012 2013 2014 2015 2016 2017 Total
Engineer 2408 2951 3577 2764 6668 7322 2453 4021 32164
Doctor 819 1453 1218 1131 2074 2276 2779 1632 13382
Accountant 1381 1802 2593 3473 3573 4698 4768 5856 28144
Manager 1936 2272 2797 3849 4990 6459 6698 7739 36740
Teacher 537 615 956 868 975 1171 1203 1854 8179
According to Gallup survey of Pakistan About 63% youth of Pakistan showed their interest to go abroad for job. As
many as 38% youth of Pakistan said they would like to prefer settle down their self in abroad. After the Gallup survey
of Pakistan (2000) it was an eye opener for the concerning authorizes and policy makers of Pakistan to identify main
causes of brain drain among youth17.
World Bank study of (2007) highlighted that Pakistan infrastructure capacity of skill man power was 1.236 million
from 1971-2000, but within five years of time period, skilled manpower increased up to 1.641 million during 2000-
2005. After the deep study of previous researches, literature review, scholars & intellectuals interviews it is identified
that which are the main causes of brain drain in Pakistan among youth.
Causes of brain drain are mainly categorized in two main factors and those are push and pull factors which are totally
concerned with unequal economic developments of the under develop and developed countries, beside these causes
there are certain other contrasting issues relating to brain drain according to the previous literature, researches and
professional opinion. They are as following.
• Economic factors
• Political factors
• Social factors
One of the study investigate the economic aspect, better job opportunities, better economic growth, healthy and
feasible working environment, high salary packages, labor laws and labor rights are those main causes which attracts
the professional, intellectuals and highly skilled manpower from developing countries towards the developed
countries18.
Political stability, condition of law and order, mutual harmony, national integration, provision of justice, equality,
balance in tiers of government national cohesion are also main causes which are driving factors of brain drain among
professional and highly skilled manpower in political aspect 19.
One of the study describes social aspect like this that social security, provision of equal rights, freedom of expression,
freedom of life, culture and social norms are those social indicators in developed countries which attracts the
professional and highly skilled manpower from developing countries. Now a day’s terrorism and less economic
developments are the two main causes of this phenomenon of brain drain of highly skilled and graduates of different
sciences towards the developed countries20.
3. METHODOLOGY
Present study was designed to determine the causes of brain drain among graduate professionals in Pakistan, a survey
was conducted in Karachi to assess the causes of brain drain in Pakistan. Karachi is the biggest city and most populous
city of Pakistan and it has a population of 24 million and it is comprised of different ethnicities and identities from all
over the Pakistan. Researcher selected a particular universe for data collection which are Business and I.T graduate
professionals of Pakistan. Data was collected through well-structured questionnaire. A sample size of 150 respondents
17
Gallup Pakistan Press Release (878) - In Logical Order “Annual Hope and despair/ Optimistic and Pessimistic
Index for Pakistan 2000-2009”.
18
Faroq Azam, “New Frontiers Of Social Policy”, Journal Of Public Policy To Supply International Migration In
Pak 2005 – Pp 72-95
19
20
ibid
320
was selected through stratified random sampling technique. 75 respondents were selected from each stratum to assess
the causes of brain drain among graduate professionals of Pakistan. Questionnaire was consisting on demographic,
social, economic and political factors. Likert scale was used to assess the causes of brain drain from the respondents.
SPSS version 22 was used for data analysis. After data analysis, it is presented in the shape of appropriate charts and
graph.
4. RESULTS AND DISCUSSION

In present study 50% of the respondents were business graduate and remaining 50% respondents were I.T graduate.
Results of the table 4.1 contains demographic characteristics and it is indicated that 54 % of the respondents were
male followed by 46% were female.
Table 4.1 Demographic characteristics of the respondents
Var Freq Per Var Freq Per

Gender Marital Status
Male 81 54 Single 68 45.3
Female 69 46 Married 82 54.7
Age Group Level Of Education
21-25 years 11 7.3 Graduate 91 60.7
26-30 years 45 30.0 Master 56 37.3
31-35 years 72 48.0 PhD 3 2.0
36-40 years 10 6.7 Job Status
41 & above 12 8.0 Unemployed 27 18.0
Family members/relatives live in abroad Employed 49 32.7
Yes 56 37.3 Student 48 32.0
No 94 62.7 Business 26 17.3
Job relevant to study/degree

Variable Frequency Percentage
Yes 63 42
No 87 58
It is indicated in the table in terms of marital status that 45.3% of the respondents were single followed by 54.7% were
married. In terms of age group majority of the respondents 48% belong to 31-35 years’ age group and majority of the
respondent’s 60.7% education level was graduate. In terms of employment status of the respondent’s majority of the
respondents 32.7% of the respondents were employed followed by 32% student, 18% were unemployed and remaining
17.3% of the respondents were associated with their own business.
In terms of the job relevant to degree or qualification results of the table highlights that majority of the respondents
58% revealed that their job was not relevant to their professional degree of qualification and remaining 42% of the
respondent’s highlights that their job is relevant to their professional degree or qualification.
During the study respondents were investigated about the family member or friends live in abroad. Results of the table
indicate that 62.7% of the respondents stated that their family members don’t live in abroad whereas 37.3% of the
respondents stated that their family members/friends live in abroad.
Table 4.2 Trends of brain drain
Applied for job in foreign countries

Yes 72 48.0
No 78 52.0
Results of the table 4.2 also highlights that 48% of the respondents applied for job in foreign countries and remaining
52% of the respondents revealed that they did not apply for jobs in foreign countries.
321
Try for Immigration

Yes 46 30.7
No 88 58.7
In process 16 10.7
During the study it was highlighted that majority of the respondents 58.7% of the respondents did not try for
immigration whereas 30% of the respondents revealed that they tried for immigration and remaining 10.7% of the
respondents stated that their try for immigration is under process.
Willing to go abroad
Yes 87 58.0
No 63 42.0
Results of the table 4.4 highlights the respondent’s intention in terms of willing to go abroad. It shows that significant
figure 58% of the respondents were willing to go abroad and remaining 42% of the respondents did not show their
intention to go abroad.
4.1 Analysis of agreement level regarding most influencing factors responsible for brain drain
Table 4.5 High salary package are causing brain drain
High salary packages

Strongly agree 62 41.3
Agree 37 24.6
Neutral 38 25.3
Strongly disagree 3 2.0
Disagree 10 6.6
In above mentioned table 4.5 results shows that 40% of the respondents strongly agree that high salary package is
attracting the immigrants towards the developed countries followed by 26% agree, 22.7% neutral, 9.3% disagree and
remaining 2% of the respondents strongly disagree about the statement.
Table 4.6 Better employment opportunities are causing brain drain
Better employment opportunities

Agree 45 30.0
Neutral 23 15.3
Disagree 15 10.0
Results of the Table 4.6 indicates that 42.7% of the respondents strongly agree that better employment opportunities
are attracting the immigrants towards the developed countries followed by 30% responded as agree.
322
Table 4.7 Quality of education are causing brain drain
Quality of education
Agree 31 20.7
Neutral 22 14.7
Disagree 15 10.0
Results of the table 4.7 shows that the quality of education is attracting the immigrants towards the developed countries
in which majority of the respondents 52.7% strongly agree followed by 20.7% agree and 14.7% responded as neutral.
Table 4.8 Quality of life is causing brain drain
Quality of life
Agree 29 19.3
Neutral 26 17.3
Disagree 15 10.0
In above mentioned table 4.8 majority of the respondents 44% strongly agree followed by 19.3% agree that quality of
life is attracting the immigrants towards the developed countries.
Table 4.9 Better law and order situation is causing brain drain
Better law and order situation

Agree 32 21.3
Neutral 27 18.0
Disagree 16 10.7
Results of the table 4.9 shows that majority of the respondents 40.7% strongly agree followed by 21.3% agree and
18% respondent’s response was neutral about the statement that provision of better law and order situation is attracting
the immigrants towards the developed countries.
Table 4.10 Stable political situation is causing brain drain
Stable political situation

Agree 46 30.7
Neutral 39 26.0
Disagree 14 9.3
Results of the table 4.10 shows that 23.3% of the respondents strongly agree followed by 30.7% agree that stable
political situation is attracting the immigrants towards the developed countries whereas 27% responded as neutral.
323
Table 4.11 Better opportunities for children and family future is causing brain drain
Better opportunity for children and family future

Agree 61 40.7
Neutral 35 23.3
Disagree 2 1.3
Results of the table 4.11 shows that 40.7% of the respondents agree followed by 27.3% strongly agree and 23.3%
respondent’s response was neutral about the statement that better opportunity for family and children future is
attracting the immigrants towards the developed countries.
Hypothesis 1: There is a significant relationship of job relevant to qualification/degree with brain drain of
business and IT graduates
Table 4.12: Hypothesis 1
Job Relevant Try for Immigration Total

Degree Yes No In process
Yes 46 1 16 63
No 0 87 0 87
Total 46 88 16 150
Chi square: 145.942a; DF: 2; Sig: 0.000; P value: .702; Sig: 0.000
The above mentioned table indicates the chi square test results to check the relationship between two variable jobs
relevant to qualification/degree and try for immigration. Chi square value 145.942a which is higher than the DF value
2 which is highly significant at 0.000 values. Therefore, the existing hypothesis entitled “There is a significant
influence of job relevant to qualification/degree is causing brain drain” is statistically accepted. The P value of co-
efficient is .702 which shows a strong relationship between these two variables.
Hypotheses 2: There is a significant relationship of family members living in abroad with brain drain of
business and IT graduates
Family Member Try for Immigration

Total
Live in Abroad Yes No In process
Yes 37 5 14 56
No 9 83 2 94
Total 46 88 16 150
The above mentioned table indicates the chi square test results to check the relationship between two variable family
members live in abroad and try for immigration. Chi square value (91.420a) which is higher than the DF value 2 which
is highly significant at 0.000 values. Therefore, the existing hypothesis entitled “influence of family member living in
abroad causing brain drain is statistically accepted.
The P value of co-efficient is .615 which shows a strong relationship between these two variables.
324
Hypothesis 3: There is a significant relationship of high salary package with brain drain of business and IT
graduates
High Salary Try for Immigration Total

Package Yes No In process
Strongly agree 24 31 5 60
Agree 9 25 5 39
Neutral 10 21 3 34
Strongly disagree 0 1 2 3
Disagree 3 10 1 14
Total 46 88 16 150
The above mentioned table indicates the chi square test results to check the relationship between two variable high
salary package and try for immigration. Chi square value 14.801a which is higher than the DF value 8 which is highly
significant at 0.063 values. Therefore, the existing hypothesis entitled “There is a significant influence of high salary
package is causing brain drain” is statistically accepted. The P value of co-efficient is .300 which shows a moderate
relationship between these two variables.
5. CONCLUSION & RECOMMENDATIONS

Pakistan is a developing country and subsequently facing the increasing trend of highly qualified and highly skilled
professional in the form of brain drain. Present study assessed the 150 business and I.T graduate through Random
sampling technique. Finding of the study explored that economic factors have a great influence causing brain drain
and the variable high salary packages and better employment opportunities in overseas countries are attracting the
professional and graduate towards the developed countries.
Similarly, in political factors the results of the variable “stable political system” and “better law & order situation”
were found were significant. In terms of the social factors the variable “better opportunity for family and children
future” has a great influence causing brain drain among graduate professional of Pakistan.
In terms of demographic characteristics of the respondents it is explored that variable gender differences and marital
status don’t have any significant influence on causing brain drain. However, there is a difference of perception of
respondents who have relatives or family members and friends live in abroad and those respondents who don’t have
relatives or family members live in abroad. There is also difference of perception about influencing factors of brain
drain among the Business and I.T graduates and those respondents who have tried for immigration. It is the dire need
of the time that government and policy makers should take necessary measures to combat the influencing factors of
brain drain among the graduate professionals. It should be the prime responsibility of the government to improve the
Economic, political and social indicators of the country. Government should create better employment opportunities;
jobs according to their professional degrees and qualification, salary packages should be increased to improve their
economic status.
6. FUTURE RESEARCH
Future research should be conducted on the perception of other graduate professionals of Pakistan about influencing
factors of brain drain. Additionally, research should be conducting that how to convert brain drain into phenomenon
of brain gain.
References
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Gallup Pakistan Press Release (878) - In Logical Order “Annual Hope and despair/ Optimistic And Pessimistic
Index For Pakistan 2000-2009”.
Faroq Azam, “New Frontiers Of Social Policy”,“Journal Of Public Policy To Supply International Migration In Pak
2005 – Pp 72-95
326
ROLE OF CHARM PRICING IN PURCHASE DECISION – A STUDY OF ONLINE

CONSUMERS OF PAKISTAN
Asif Hussain Samo* Hadeeqa** Yusra Asif** Muhammad Danish Mujtaba***
ABSTRACT
This research aims to explore the role of charm pricing in purchase decision of online customers of
Pakistan. After extensive literature review, a gap is found to explore specifically the role of “charm
pricing strategy” in the purchase decision of customers with emerging online shopping context. This
study is potentially beneficial for marketers and advertisers of those companies doing online business
in Pakistan to enhance their sales through relevant pricing mix. Based on constructivist philosophy,
this study has taken qualitative approach and exploratory strategy is used. Non-numeric qualitative
data is collected through semi-structured interview from the online consumers. Purposive sampling
technique is used, as we have selected the participants who are actively involved in online shopping.
There were total 14 interviews conducted and 13th interview manifested the saturation point, the 14th
was conducted to validate it. Interview protocol was designed with semi-structured design. Consent
forms were also prepared which were filled by the participants. Axial codes were prepared from the
transcripts and field notes. Thematic analysis was performed on the codes and results were extracted.
Result suggests that, in the online shopping setting, urban customers tend to perceive charm pricing
as marketing tool by companies to lure customers, and therefore they usually do not take this into
their considering while making purchase decisions. Customers with rural background, however, tend
to perceive charm pricing as discount and it usually lures them to explore those products further on
websites and make purchase decision. Researches on the same domain, albeit with quantitative
approach, on the impact of different pricing strategies and discounts on consumers have been
conducted internationally, however, no qualitative research is yet undertaken on specifically the role
of charm pricing on online customer’s purchase decisions in the local context.
Keywords - Charm pricing, pricing strategy, consumer’s perception, consumer’s purchase decision.
JEL Classification: M3
1. INTRODUCTION
Pricing has always been an integral component of marketing 1 of the traditional marketing elements, only pricing
creates revenue2. From the most prime and basic decision for business, it is more critical decision that what would be
the price of product and service they should ask with their customer 3.
Pricing strategies are used by marketers when they take any decision about 4ps of marketing. Psychological pricing is
one of those pricing strategies in which different psychological aspects are used by marketers to influence consumers
mind positively4.
Often Retail prices are showed as “charm prices or odd prices “a round number little less than actual. From all the
tactics of listing prices, the tactic of psychological pricing is draft to get the attention of customers who react on
*Corresponding Author, Lecturer, Department of Business Administration, Sindh Madressatul Islam University
Karachi, Pakistan. E-mail: asif.samo@smiu.edu.pk
** Student, Department of Business Administration, Sindh Madressatul Islam University Karachi, Pakistan.
*** Lecturer, Department of Business Administration, Sindh Madressatul Islam University Karachi
1
Grewal, Dhruv, Kusum L. Ailawadi, Dinesh Gauri, Kevin Hall, Praveen Kopalle, and Jane R. Robertson. 2011.
“Innovations in Retail Pricing and Promotions.” Journal of Retailing 87 (SUPPL. 1).
2
Mazumdar, Tridib, S.P. Raj, and Indrajit Sinha. 2005. “Reference Price Research: Review and Propositions.”
Journal of Marketing 69 (4): 84–102.
3
Kohli, Chiranjeev, and Rajneesh Suri. 2011. “The Price Is Right? Guidelines for Pricing to Enhance Profitability.”
Business Horizons 54 (6): 563–73.
4
Homburg, Christian, Nicole Koschate, and Wayne D. Hoyer. 2005. “Do Satisfied Customers Really Pay More? A
Study of the Relationship between Customer Satisfaction and Willingness to Pay.” Journal of Marketing 69 (2): 84–
96.
327
emotional responses to pricing other than highly rational thinking5. The purpose of charm pricing is to make the
customer think that the product is on sale or it has become cheaper than it was in. For instance, the price of a shampoo
is written 99rs instead of 100rs. The customers are more likely to remember the odd ending prices of product rather
than even ending prices6. Odd prices, also have other names such as charm prices, intuitive prices psychological prices,
magic prices irrational prices7. And now the use of charm pricing is now taking place in many countries of the world.
The purchaser reaction mark name, shading, bundle, measure, name and cost8. The association of these data signals
as buy choice information sources relies upon the perceptual procedure an individual users to offer significance to the
item9.
Psychological & mental variables like appeal valuing configuration can impact purchasers buy choice in web-based
shopping division of Pakistan10. This study fulfills this gap. The procedure of appeal estimating is utilized as a part of
Pakistan in various divisions like nourishment and lodging area. Relationship exists within the same consumer
regarding a broader array of involvements toward a given object (e.g., a product, purchase decision, advertising or
consumption11. The cognitive characteristics and enduring nature of involvement has not always been evident in the
treatment of involvement within consumer behavior, especially when determining involvement through goals and
consequences associated with a purchasing situation or information processing occasion. Within this context, the
enduring nature of involvement may be easily overlooked or neglected 12.
Up to this point, there was no indisputable research proof to help the presumption that odd evaluating expands request
in internet shopping sections of Pakistan, so this examination is intended to satisfy this hole 13.
1.1. History of Charm Pricing

According to a source charm pricing initiated in a competition of a newspaper pricing, proposing to value it at one
penny to contend with the nickel papers of the day. The story asserts that pennies were not basic money at the time,
thus Stone connived with publicists to set entire dollar costs a penny lower, in this way ensuring clients would get
adequate pennies in change14.
Precisely how mental estimating came into regular utilize isn't clear, however, it is known the training emerged amid
the late nineteenth century. One source hypothesizes it started in a daily paper evaluating rivalry 15, meaning to value
it at one penny to contend with the nickel papers of the day. The story guarantees that pennies were not normal money
at the time, thus Stone conspired with sponsors to set entire dollar costs a penny lower—accordingly ensuring that
5
Zuroni, Md Jusoh, and Hai Ling Goh. 2012. “Factors Influencing Consumers’ Attitude towards E-Commerce
Purchases through Online Shopping.” International Journal of Humanities and Social Science 2 (4): 223–30.
6
Javadi, Mohammad Hossein Moshref, Hossein Rezaie Dolatabadi, Mojtaba Nourbakhsh, Amir Poursaeedi, and
Ahmad Reza Asadollahi. 2012. “An Analysis of Factors Affecting on Online Shopping Behavior of Consumers.”
International Journal of Marketing Studies 4 (5): 81–98.
7
Nazir, Sajjad, Arsalan Tayyab, Aziz Sajid, Haroon Ur Rashid, and Irum Javed. 2012. “How Online Shopping Is
Affecting Consumers Buying Behavior in Pakistan?” IJCSI International Journal of Computer Science 9 (3): 486–
95.
8
Seiler, Michael J, Poornima Madhavan, and Molly Liechty. 2012. “Toward an Understanding of Real Estate
Homebuyer Internet Search Behavior: An Application of Ocular Tracking Technology.” Journal of Real Estate
Research 34 (2): 211–41.
9
Larson, Ronald B. 2014. “Psychological Pricing Principles for Organizations with Market Power.” Journal of
Applied Business and Economics 16 (1): 11–25.
10
Kinard, Brian R., Michael L. Capella, and Greg Bonner. 2013. “Odd Pricing Effects: An Examination Using
Adaptation‐level Theory.” Journal of Product & Brand Management 22 (1): 87–94.
11
Wieseke, Jan, Sascha Alavi, and Johannes Habel. 2014. “Willing to Pay More, Eager to Pay Less: The Role of
Customer Loyalty in Price Negotiations.” Journal of Marketing 78 (6): 17–37.
12
Zhou, Lina, Liwei Dai, and Dongsong Zhang. 2007. “Online Shopping Acceptance Model: Critical Survey of
Consumer Factors in Online Shopping.” Journal of Electronic Commerce Research 8 (1): 41–62.
13
Holdershaw, Judith. 1997. “The Widespread Use of Odd Pricing in the Retail Sector.” Marketing Bulletin 8
(1997): 53–58.
14
Boyes, William J., Allen K. Lynch, and Wm Stewart Mounts. 2007. “Why Odd Pricing?” Journal of Applied
Social Psychology 37 (5): 1130–40.
15
Gendall, Philip. 1998. “Estimating the Effect of Odd Pricing.” Journal of Product & Brand Management 7 (5):
421–32.
328
clients would get abundant pennies in change 16. One would surmise that something just a couple of pennies under an
entire dollar would really be painful to the cost. This hypothesis works so well on account of how the "reference cost"
is built up by the purchaser. The reference cost for something that is $19.98 would be $20. This sets up the odd
evaluating as a superior arrangement17.
A few examinations have demonstrated that when costs are introduced to a prospect in diving request (as opposed to
climbing request) constructive outcomes result, predominantly an eagerness to pay a higher cost, higher view of
significant worth, and higher likelihood of procurement 18. The explanation behind this is when exhibited in the
previous, the higher value fills in as a source of perspective point, and the lower costs are seen positive accordingly19.
1.2. Research Problem

Psychological aspects which affects the consumer’s mind and ultimately their purchase decision. Charm pricing can
be one of those strategies which affects the consumer’s purchasing decision positively. In Pakistan, many companies
are using this strategy.
“The aim of this research is to explore the role of charm pricing strategy in decision of online consumers in Pakistan”
1.3. Objectives of the Study

 To explore the consumer’s perception about charm pricing.
 To explore the specific reasons associated with the strategy of charm pricing which change the perception of
consumers.
Assessing systems have been tentatively inspected since in any occasion observe that the overwhelming piece of
customer incredible expenses in the U.S. end with an odd number, particularly 9 or 5. 20 Subsequently, most retail
nourishment things, for instance, are estimated utilizing this procedure 21. Pricing has always been an integral
component of marketing; of the traditional marketing elements, only pricing creates revenue 22. One of the more basic,
yet critical decisions facing a business is what price to charge customers for products and services 23.
The broad use of "just beneath" valuing isn't one of a kind to a modest bunch of nations or to a specific area of the
world,60 % of all costs end in a "9," while just 7 % end with a "0" 24. A progression of concentrates from the 1990s
backings the idea that "just underneath" estimating brings about more prominent deals volume than adjusted valued
merchandise25.Psychological pricing is a tactic of pricing which is draft to attract customers who react on emotional
rather than rational responses to pricing messages26. The purpose of charm pricing is to make the customer believe the
product is cheaper than it really.
Not at all like most customer merchandise and fluid budgetary resources where the purchaser pays the spot cost or
leaves, is it conceivable that a similar evaluating systems that advantage the merchant of cleanser or a chunk of bread
16
Hinterhuber, Andreas, and Stephan M. Liozu. 2014. “Behavioral and Psychological Aspects of B2b Pricing.”
Industrial Marketing Management 47: 4–5.
17
Grewal et al., Innovations in Retail Pricing and Promotions. 87
18
Carver, James R., and Daniel T. Padgett. 2012. “Product Category Pricing and Future Price Attractiveness: 99-
Ending Pricing in a Memory-Based Context.” Journal of Retailing 88 (4): 497–511.
19
Zuroni et al., Factors Influencing Consumers’ Attitude towards E-Commerce Purchases through Online Shopping,
223–30.
20
Kinard et al., Odd Pricing Effects: An Examination Using Adaptation‐level Theory, 87–94.
21
Bizer, George Y., and Robert M. Schindler. 2005. “Direct Evidence of Ending-Digit Drop-off in Price
Information Processing.” Psychology and Marketing.
22
Ater, Itai, and Omri Gerlitz. 2017. “Round Pric Es and Price Rigidity: Evidence from Outlawing Odd Prices.”
Journal of Economic Behavior and Organization 144: 188–203.
23
Hong, Weiyin, James Y.L. Thong, and Kar Yan Tam. 2004. “The Effects of Information Format and Shopping
Task on Consumers’ Online Shopping Behavior: A Cognitive Fit Perspective.” Journal of Management Information
Systems 21 (3): 149–84.
24
Mazumdar et al., Reference Price Research: Review and Propositions, 84–102.
25
Collins, Michael, and H. G. Parsa. 2006. “Pricing Strategies to Maximize Revenues in the Lodging Industry.”
International Journal of Hospitality Management 25 (1): 91–107.
26
Salter, Sean P., Ken H. Johnson, and Ernest W. King. 2010. “Listing Specialization and Pricing Precision.”
Journal of Real Estate Finance and Economics 40 (3): 245–59
329
don't specifically mean home sellers27. There is possibility that the charm pricing strategy may not be beneficial or
effective for every kind of products 28. So we have to be careful to implement this pricing strategy on any kind of
product. Currently, there has been an emerging awareness of the complicated role of price as a determiner of a purchase
decision, recent behavior study show that there is no simple explanation of price influences individual buyers purchase
decision29. There are many pricing strategies which are used by marketers when they take any decision about 4ps of
marketing. Psychological pricing is one of those pricing strategies in which different psychological aspects are used
by marketers to influence consumers mind positively30.
2.1. Charm pricing

You can impact individuals' memory at your cost. At the point when individuals contrast your cost with a reference
value, you can impact them to maneuver a lower cost into that correlation31. Value data about an item is probably not
going to be coded into memory as far as correct numerical digits at the same time, rather, is coded suddenly in more
broad size terms (e.g., "low," "high"). Consequently, the numerical cost is defenseless to the impact of its unique
setting when individuals endeavor to reproduce it later32. This is one of the estimating system utilized by advertisers
to pull in clients, as per this methodology advertisers demonstrates the cost of an item in odd numbers or in round
figures like 99 rupees rather than 100 rupees33.
2.2. A trick to make your price seem lower

Advertisers have utilized appeal evaluating costs that end in 9, 99, or 95. Appeal valuing is best when the left digit
changes34. A one-penny distinction amongst $3.80 and $3.79 won't make any difference. Be that as it may, a one-
penny contrast amongst $3.00 and $2.99 will have an enormous effect 35. Mental evaluating systems and shopper’s
reaction conduct.
2.3. Why is the left digit so important?

Since it stays the apparent magnitude. Our brains encode numbers so rapidly (and past cognizance) that we encode
the measure of a number before we complete the process of understanding it 36.While assessing "2.99," the size
encoding process begins when our eyes experience the digit "2." Consequently, the encoded extent of $2.99 gets
secured on the furthest left digit (i.e., $2) and turns out to be altogether lower than the encoded greatness of $3.00" 37.So
this how the brain science factor impact the recognition about the cost.
2.4. Charm pricing & Consumer buying behaviour

The process of deciding and putting on the price for some goods and services is pricing strategy 38. Charm pricing is
defined by various authors and experts in many ways, one its explanations says the customer usually sees the price of
product in its nearest round figure39. For example, if a price of any product is 4.99 $ (nearest to 5 $) so consumer
perceive it around 4$. Pricing is the element which have an impact on consumer buying behavior through psychology.
27
Zhou et al., Online Shopping Acceptance Model: Critical Survey of Consumer Factors in Online Shopping, 41–
62.
28
Nazir et al., How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan? 486–95.
29
Gendall and Philip, Estimating the Effect of Odd Pricing, 421–32.
30
Carver et al., Product Category Pricing and Future Price Attractiveness: 99-Ending Pricing in a Memory-Based
Context, 497–511.
31
Collins et al., Pricing Strategies to Maximize Revenues in the Lodging Industry, 91–107
32
Hinterhuber et al., Behavioral and Psychological Aspects of B2b Pricing, 47: 4–5.
33
Javadi et al., An Analysis of Factors Affecting on Online Shopping Behavior of Consumers, 81–98.
34
Seiler et al., Toward an Understanding of Real Estate Homebuyer Internet Search Behavior: An Application of
Ocular Tracking Technology, 211–41.
35
Cotes-Torres, Alejandro, Pablo A. Muñoz-Gallego, and José Miguel Cotes-Torres. 2012. “S-Shape Relationship
between Customer Satisfaction and Willingness to Pay Premium Prices for High Quality Cured Pork Products in
Spain.” Meat Science 90 (3): 814–18.
36
Kohli et al., The Price Is Right? Guidelines for Pricing to Enhance Profitability, 563–73.
37
Boyes et al., Why Odd Pricing?, 1130–40.
38
Anderson, Eric T., and Duncan I. Simester. 2003. “Effects of $9 Price Endings on Retail Sales: Evidence from
Field Experiments.” Quantitative Marketing and Economics 1 (1): 93–110.
39
Zhou et al., Online Shopping Acceptance Model: Critical Survey of Consumer Factors in Online Shopping, 41–
62.
330
Psychology is the intermediator between price and buying behavior of consumer40. Studies state that any lacking and
mistake in pricing strategy negatively effect on consumer buying behavior 41.One of the study state that online
consumers have a different buying behavior rather than offline consumers as they have more areas to get information
about the product and its price42.Consumer buying behavior is influenced by many factors one of the major factor is
perception which further influenced the other factors mainly perceived value perceived willingness, perceived quality
etc.43 Consumer’s usually perceive psychological pricing as a fair pricing so they accept this pricing strategy and
effects on its buying behavior directly or indirectly44. Looking deeply on both variables we can notice that one variable
which is charm pricing can influence the buying behavior or purchase decision of the consumers.
2.5. Prices and online shopping

Web has made in new transport channels electronic trades are extending rapidly45.This need has risen to perceive how
they see particularly to buy purchasers. By far most of the all-inclusive community who use the web to purchase stock
on the web, yet that there are as yet a couple of clarifications behind which customers are reluctant to buy on the
web46.The perspectives of people toward the purchase online are various in Pakistan. The inspiration driving this
examination is to review the components felt reservation of buyers in web shopping. It has been more than a long time
since the web business at first created47. Researchers and experts in the electronic exchange constantly try to gain a
prevalent comprehension in purchaser direct in the web. With the change of the retail E-business, researchers continue
clarifying E-perspective of purchasers of substitute perspectives 48. Fundamental cognizance of buyer lead in the
electronic condition, as in this physical world, can be expert if the components that impact the purchase decision are
neglected or unequivocal49. For example, online purchasers' sentiments of fear about the need opportunity to take a
gander at things before purchase especially saw as capable factors in facilitate purchase decision. Hence, a couple of
researchers have proposed that the customers' purchasing conduct in online shops can be on an exceptionally essential
level not the same as that in the ordinary condition50.
Mosteller clears up the association between purchaser lead and exhibiting technique 51. He communicates that
framework is tied in with growing the probability and repeat of buyer lead. Essentials for winning concerning doing
this are to know the customer and understand the client's needs and needs. Exactly when a customers to make
purchases online to buy something, he or she is affected by orchestrated component 52. The central affecting variables
have been recognized as, esteem, conviction, security, comfort, time, after arrangement advantage and diminished
game plans53. The esteem factor exists in light of the fact that the expenses are frequently lower through electronic
40
Larson and Ronald, Psychological Pricing Principles for Organizations with Market Power, 11–25.
41
Gaston-Breton, C, and Lc Duque. 2012. “Promotional Benefits of 99-Ending Prices: The Moderating Role of
Intuitive and Analytical Decision Style.” Proceedings of the 41th Conference of the European Marketing Academy
(EMAC), no. December.
42
Wieseke et al., Willing to Pay More, Eager to Pay Less: The Role of Customer Loyalty in Price Negotiations, 17–
37.
43
Mazumdar et al., Reference Price Research: Review and Propositions, 84–102.
44
Gendall and Philip, Estimating the Effect of Odd Pricing, 421–32.
45
Ater et al., Round Pric Es and Price Rigidity: Evidence from Outlawing Odd Prices, 188–203.
46
Mosteller, Jill, Naveen Donthu, and Sevgin Eroglu. 2014. “The Fluent Online Shopping Experience.” Journal of
Business Research 67 (11): 2486–93.
47
223–30.
48
Choi, Jungsil, Yexin Jessica Li, Priyamvadha Rangan, Promothesh Chatterjee, and Surendra N. Singh. 2014. “The
Odd-Ending Price Justification Effect: The Influence of Price-Endings on Hedonic and Utilitarian Consumption.”
Journal of the Academy of Marketing Science 42 (5): 545–57.
49
Hong et al., The Effects of Information Format and Shopping Task on Consumers’ Online Shopping Behavior: A
Cognitive Fit Perspective, 149–84.
50
Nazir et al., How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan? 486–95.
51
Mosteller et al., The Fluent Online Shopping Experience, 2486–93.
52
Breton et al., Promotional Benefits of 99-Ending Prices: The Moderating Role of Intuitive and Analytical
Decision Style
53
Bizer et al., Direct Evidence of Ending-Digit Drop-off in Price Information Processing
331
shopping as differentiated and physical purchases in the market. Buy online can be of unimaginable favorable position
to the client to the extent comfort, saving time and money 54.
An examination conducted on web shopping was related to online some interesting parts which will affect online
clients when they purchase from a webpage, essentially feedback to buy or to the website 55. They have been discussed
the accomplishment of the business online weight on their ability to attract and hold for customers to their customers
can best usage of their chance over the expenses and to get any sort of thing information through web. With the change
of the Internet and the extending notoriety of online commercial centers, be that as it may, buyers are offered more
decisions not just as far as the item grouping yet moreover to the extent item estimating56.
So, at different parts of the world charm pricing strategy is in practice like corner stores in the U.S. take the "reasonable
underneath" assessing technique to the exceptional when they offer their gas at an esteem that completions in 9/10 of
a penny paying little regard to the way that no bona fide trade this little out classification exists 57. The wide utilization
of "just underneath" evaluating isn't novel to only an unobtrusive cluster of countries or to a particular region of the
world. Schindler documented that 60 % of all costs end in a "9," while only 7 % end with a "0" 58. A movement of
concentrates from the 1990s support "just underneath" esteeming achieves more essential arrangements volume than
balanced assessed items59. Accommodating impression of broadcasted retail costs all through New Zealand includes
the beneficial use of odd evaluating, the demonstration of esteeming just underneath the nearest round number (for
example, $9.99 instead of $10.00, or $99.95 as opposed to $100)60. The notoriety of costs completing off with the
digit 9 and, to a lesser degree, the digit 5, reflects the conviction that odd esteeming will make higher than expected
demand at the esteem level concerned 61. In a manner of speaking, the acknowledged demand twist is accepted to be
"wrinkled" upwards at odd esteem centers. This exploration is done in our country on gas costs just yet not in other
sectors and not even in particularly online clients so we will satisfy this hole. We address these request by first
proposing a general sensible framework to verbalize how unique components effect on the web and detached choices.
Despite the way that there are numerous factors that impact online choice direct, we focus especially on looking over
whether draw in assessing technique have more impact on choices on the web or detached, and whether cost and other
chase qualities have higher impact on the web or separated.
3. RESEARCH METHODOLOGY
3.1. Research Design
Based on constructivist philosophy, this study has taken qualitative approach and exploratory strategy is used for
exploring the role of charm pricing and purchase decision of online customers of Pakistan. Non-numeric qualitative
data is collected through semi-structured interview from the online consumers.
3.2. Frame of references

The population of this study is consisted of online consumers of Pakistan who frequently shop online. The reason of
choosing them is that we can directly came to know about consumer’s perception in their own wording and
understanding. With the help of the knowledge and information they have, we can find the exact and accurate face of
this study and can get the present and future place of this strategy as well.
3.3. Sample & Sampling method

Purposive sampling technique is used, as we have selected the participants who are actively involved in online
shopping. There were total 14 interviews conducted and 13 th interview manifested the saturation point, the 14 th was
conducted to validate it.
54
Torres et al., S-Shape Relationship between Customer Satisfaction and Willingness to Pay Premium Prices for
High Quality Cured Pork Products in Spain, 814–18.
55
Nazir et al., How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan?, 486–95.
56
Hong et al., The Effects of Information Format and Shopping Task on Consumers’ Online Shopping Behavior: A
Cognitive Fit Perspective, 149–84.
57
58
Schindler, Robert M. 2006. “The 99 Price Ending as a Signal of a Low-Price Appeal.” Journal of Retailing 82 (1):
71–77.
59
Boyes et al., Why Odd Pricing?, 1130–40.
60
Breton et al., Promotional Benefits of 99-Ending Prices: The Moderating Role of Intuitive and Analytical
Decision Style
61
Salter et al., Listing Specialization and Pricing Precision, 245–59.
332
3.4. Data collection method

Interview protocol was designed with semi-structured design. Consent forms were also prepared which were filled by
the participants. The interviews were conducted in calm and disturbing atmosphere, and with the consent of
participant, their interviews were audio recorded
3.5. Analysis
Recorded interviews were changed into written transcripts. Axial codes were prepared from the transcripts and field
notes. Thematic analysis was performed on the codes and results were extracted.
3.6. Propositions
3.6.1. Charm prices has influence on the perception of consumers, however, it may vary from customer to customer,
based on their demographic and geographic background.
3.6.2. Consumers might tend to perceive charm pricing as tricks and discount, however, it may lead them to look for
such product in detail if they come across charm prices.
4. ANALYSIS
4.1. Codified categories from Interviews
Table 4.1: Codified Categories from Interviews
 Time saving
Why do you go for online
 Easily availability of brands
shopping?
 Reasonable prices and discounts influence me to go for online
shopping
 Price
Important factors customers  Quality
consider  Delivery time (TAT)
 Authenticity of website and Brands
 Product Reviews
 1st Ranking for price
Ranking  1st or Quality 2nd for Price
 1st for Brand 2nd for Price 3rd for Quality
 Company’s honesty
What do you think about odd  Attractive pricing strategy
numbers pricing?  Tax saving
 It's kind of discount
 Not that much because firstly I consider other factors as well
Does it attract you?  Yes because I go for online shopping due to discounts etc.
 Yes it does because it is kind of SALE
Suppose a scenario  I see the nature of my purchase decision then decide
 599.9 obviously
In % terms how often you see  80%
this type of pricing online?  60%
 Above 50%
In which type of products you  It do care about price in those products which we purchase often
care about the price most?  Not for less often purchase decision especially home appliances etc.
 For me brand and quality etc. are more important
What did you recently  Food & Beverages
purchase on charm pricing?  Clothing
 Personal care products
333
Suppose the price of a  Yes

product is 89.99, is it under  Its discount
the category of 80?  Its Trick
5. DISCUSSION
5.1 Consumer perception of charm pricing
Marketing tool: People who belong to the urban areas of Pakistan basically perceive this type of pricing as a marketing
trick. They are aware that this pricing is used by many companies to attract the customers. One of the interviewee
said;
“Yeah! When companies do quote their products as like this so actually they are playing with customer’s mind as we
tend to go cheaper products they just make their prices look attractive”.
It is supporting the research finding that advertisers have utilized appeal evaluating costs that end in 9, 99, or 95.
Appeal valuing is best when the left digit changes 62.
Discount/sale offer: And those who are predominately belong to the rural areas of Pakistan consider charm pricing a
kind of discounted price. Even they perceive this like the product is on sale and at least some minor portion of saving
is being offered. Wordings of an interviewer were;
“Yes! I often observe this thing, this is a kind of sale the companies offer to their customers and for me it is quite
attractive since I like sale and discounts. And I think those companies who are most customer care conscious do this
thing that rather than quoting whole price like 100 they quote it 99.9, this thing shows that they care for customers
that they even make them save point one paisa even this is a kind of honesty as well that they exactly charge as
minimum as possible.”
This study is adding new knowledge in an existing researcher’s finding that, the customer usually sees the price of
product in its nearest round figure. For example if a price of any product is 4.99$ (nearest to 5$) so consumer perceive
it around 4$ 63.
5.2 Influence in customer’s purchase decision

Other factors consideration first: There are some customers who are very conscious about many other factors other
than price. These people are generally city residents so when they see charm prices of products they first consider
other factors like brand, quality and reviews and other factors before making purchase decision and these all things
have greater impact on their purchase decision as compared to charm pricing. As one consumer in interview said; “I
will see the situation and other factors. I will compare the brand and quality then I will decide either to purchase or
not”.
Our this study is supporting the finding of a researcher that consumer buying behavior is influenced by many factors
one of the major factor is perception which further influenced the other factors mainly perceived value perceived
willingness, perceived quality64.
Positive influence: Mostly rural residents and people who are not that conscious about the brands and website get
attracted by charm pricing. When they see charm prices of products online, at first sight, the prices catch their attention
because they perceive it as discount then they just click on these types of links to explore more about the products
which are being sell on charm pricing. One customer during interview exactly said;
“Yes, it becomes attractive to me. Since I like sale and discounts and I frequently purchase products on these types of
discounted prices online. I shop online because different sales and discounts are frequently being offered in online
context like this what you call (Charm pricing)”.
This research is contradicting with the finding of a research that the central affecting variables have been recognized
as, esteem, conviction, security, comfort, time and after arrangement advantage 65.
6. CONCLUSION
Hence the findings of this study are that the category of urban residents perceive Cham pricing as marketing tool to
attract customer and this thing do not influence their purchase decision that much but on the other hand for the residents
of rural areas charm pricing is attractive kind of price discount and it influence their purchase decision positively in
62
Schindler and Robert, The 99 Price Ending as a Signal of a Low-Price Appeal, 71–77.
63
64
Javadi et al., An Analysis of Factors Affecting on Online Shopping Behavior of Consumers, 81–98.
65
223–30.
334
online shopping context. So the marketers of the companies may use this pricing strategy in online context as well to
increase their sales.
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Journal of Business

Faculty of Management, Business Administration and Commerce

Keeping in view the significance of knowledge building in different academic disciplines, it is

Scope of the Journal

Prof. Dr. Mohammad Ali Shaikh, Vice Chancellor

Prof. Dr. Zahid Ali Channar, Dean Faculty of

Dr. Saima Tabassum, Associate Professor / In-charge

Mr. Shahid Obaid, Lecturer, Department of Business

Manager Publications & Communication ORIC, SMI

Faculty of Management Business Administration and Commerce

SMI University Press Karachi

1. Dr. Rathin Rathinasamy

2. Professor Wallace Ford

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1. Professor Dr. Iqbal A Panhawar

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12. Dr. Abdullah Tahir

13. Dr. Mubashir Ali Khan

1 Role of Digital Marketing as a Platform for Promoting Consumer Products/Brands 268-283

2 Measuring Customers’ Perception and Expectation of Quality in Retail Stores 284-292

3 Credit Risk Management’s Influence on Loan Performance in Commercial Banks in 293-304

4 Effects of Transformational Leadership Style on Employee Well-Being 305-315

5 Brain Drain of Business and IT Graduates In Pakistan 316-326

6 Role of Charm Pricing in Purchase Decision – A Study of Online Consumers of 327-336

ROLE OF DIGITAL MARKETING AS A PLATFORM FOR PROMOTING

brand, he broke down this resonance factor into four stages;

Figure 1.1: (Keller) Brand Equity Model

1.1 Problem Statement

1.2 Research Questions

1.3 Research Objectives

2.1 Digital Marketing

2.2 Digital Marketing of Today

2.2.2.2 Content Marketing

2.2.2.3 Inbound Marketing

2.2.2.4 Social Media Marketing

2.2.2.5 Pay per Click (PPC)

2.2.2.6 Affiliate Marketing

2.2.2.7 Native Advertising

2.2.2.8 Marketing Automation

2.2.2.9 Email Marketing

2.2.2.10 Online Public Relations (PR)

2.3 Digital Marketing as a Tool for Promoting Brands

2.3.1 Being Consistent with Branding

2.3.2 Website Optimization

2.3.3 Social Media

2.3.5 Press Release Marketing

2.3.6 Video Marketing

2.4 Social Media Marketing

2.5 Social Media Influence on Consumer Purchase Decision

Areeba Bhutto* Summya Khatoon Wajiha Saghir*