Do the competitors affect cross-buying decisions?

Understanding the effect of competitor’s marketing activities as well as analyzing the impact of one’s own marketing activities is equally important. The purpose of this paper is to determine the role of competing bank’s marketing activities (i.e. competitor’s price and product variety) and main bank’s characteristics (bank’s reputation and expertise) in the cross-buying intentions of customers by studying the interrelationships among these.

This study has adopted a hybrid model of confirmatory factor analysis and the decision-making trial and evaluation laboratory. Data were gathered from two different samples of bank customers and bank experts, using closed-ended questionnaire.

The results revealed that competitor’s price influences the cross-buying intentions of customers more than the reputation and expertise of primary bank. Bank’s reputation, expertise and competitor’s price were found causing factors. The remaining two factors, namely competitor’s product variety and cross-buying intentions, were belonging to the effect group.

For practice, this study guides banking institutions for resource allocation. Continuous and extensive staff training should be provided to sales staff. Bank should realize customers that they are getting much more value in return of what they are paying.

This study is one of few studies in marketing literature which investigates the effect of competitors on cross-buying.