Physical Evidence and Customer Patronage: An Empirical Study of Nigeria Banking Sector

This study examines the impact of physical evidence on customer patronage of quoted Banks in south-south zone of Nigeria. 14 quoted Banks at the Nigeria Stock Exchange Market were used for the study. The research considered firm level of analysis and top managers unit of analysis. Customers of the chosen banks were also used. By this arrangement, 42 managers and 7 customers randomly selected constituted our respondents for the study. Descriptively, the study variables were presented and inferentially, the Spearman Rank Correlation Coefficient was used in testing the various hypotheses. In addition, we employed the Pearson Partial Correlation to ascertain the extent to which the organizational factors mediate the relationship between physical evidence and customer patronage. The result of the analysis showed that there is a strong positive and significant correlation between physical evidence and customer patronage. The study specifically revealed that efficient design of work place ambience; physical architecture and signs Original Research Article Adiele et al.; BJEMT, 7(3): 188-199, 2015; Article no.BJEMT.2015.083 189 significantly impact on sales volume, profit margin and customer retention. It was further found that organization size and information technology capability strongly mediated the relationship between the predictor and criterion variable. The study therefore concluded that physical evidence significantly affects customer patronage. Hence, it was recommended that the panacea to poor customer patronage is predicated on the bank’s ability to efficiently adopt physical evidence dimensions used for the study as significant conditioning factors of the business environment.


INTRODUCTION
The importance of physical evidence to customer perception of a service is gaining great interest in literature [1]. Service setting plays a critical role in shaping expectations, differentiating service firms, facilitating customer and employee goals, and influencing the nature of customer experiences [2].
The physical evidence framework recognizes the importance of physical surroundings on employees as well as customers [3]. The framework further illustrates that the environment is made up of a combination of environmental dimensions including Ambient Conditions (temperature, music), Physical architecture (layout and furnishing) and Signs (Corporate Branding). According to these researchers, ambience includes weather, temperature, and quality of air, sound, music, smell, colour and light. Physical architecture is all about the way the equipment and furniture are arranged. Signs entail the signage or directions and the décor used to communicate.
Resultantly, as asserted by Bitner [4], marketing researchers have come to the realization that if consumers are influenced by physical stimuli experienced at the point of purchase, then, the practice of creating influential atmospheres should be an important marketing strategy for most exchange environments. Bitner further noted that atmospheric planning can make the difference in business (success or failure).
Turley [5], emphasized the need for additional theoretical development and that the review of literature indicates that the atmospheric effects exists but there has not been enough effort devoted to explaining, predicting and controlling the behaviour of consumers. Even though there has been a surfeit of articles on services marketing, to the best of our knowledge there seems to be a surprising lack of empirical or theoretically based frameworks addressing the impact of physical evidence on Customer Patronage of Banks in Nigeria. Managers continually plan, build and change organization's physical surroundings; in an attempt to control its influence on Patronage but frequently the impact of a specific design or design changes on ultimate users of the facility is not fully understood [2]. This therefore will constitute our point of departure which anchored on the knowledge gap between physical evidence and Customer Patronage of Banks in the South-South Zone of Nigeria.

Physical Evidence
Physical Evidence (services cape) could be seen as the environment in which the service is assembled and in which the seller and customer interact; combined with tangible commodities that facilities performance or communication of the service [6]. It is important for service organizations including hospitality entities, to manipulate their physical environment effectively to enhance patronage and increase repeat business [7].
Remarkably, Bitner [4], defined physical evidence as the built environment which has artificial physical surroundings as opposed to the natural or social environment. Furthermore, [7] described physical Evidence as the physical environment of an organization encompassing several different elements, such as overall layout, design and décor of a store. The physical Evidence also includes aspects of atmospherics such as temperature, lighting, colours, music and scent [4,7]. Physical evidence is important since it influences not only consumers' cognitive, emotional and physiological states but also their behaviors [7].
Lucas [8] opined that there are three main dimensions of physical evidence which are: Building design, décor equipment and ambience. They considered the fixed elements of physical evidence: Its architecture, landscape and site design. More so, Baker et al. [9], used design perceptions, employee perception, music perceptions time / effort cost perceptions, monetary price perceptions, interpersonal service quality perceptions, merchandise quality perceptions, merchandise value perceptions and store patronage intentions. Furthermore, [8], measured physical evidence with: seating comfort, ambient conditions, interior décor, cleanliness, layout / navigation, staff friendliness and service promptness. However, in this work, we conceptualized and adopted a modified three dimensional framework similar to that of Bitner's [4]. The dimensions are ambient condition, physical Architecture and signs. The choice of these dimensions is anchored on the fact that they will best suit/match the firms under investigation.
In this study we operationally define physical evidence as the environment in which service is offered and where the company and customers interacts combined with tangible commodities that facilitates performance or communication of the service (See Fig. 1).

Customer Patronage
According to the Concise Oxford English Dictionary (2008), the word customer or consumer patronage mean a person or thing that eats or uses something or a person who buys goods and services for personal consumption or use.
People patronize organizations products/services at one time or the other. In the context of this study, we may use customer patronage and loyalty interchangeably because customer patronage precedes loyalty. There is a strong relationship between patronage and loyalty. Patronage is burn out of a desire to be committed to an organization either based on its service quality or perceived service qualities. Hence, the extent to which a customer will patronize the services of a bank depends on how the customer perceives the banks physical environment (services cape) and how the customer also thinks and feels that the condition of the service environment is consistent with his / her personality.
Banks in the 21 st century often compete for customers in order to increase their market share. The possibility of any of these money deposit or retail banks to achieve their stated aims is hinged on their ability to evolve products (services) that will satisfy the needs and wants of their chosen target customers better than their competitors. Also, their service quality and delivery strategies should be improved while looking for new avenues to regularly attract and retain their customers. The importance or essence of repeat customer patronage is that an increase in sales volume will ultimately and significantly impact on the company's profitability level [10]. The works of previous researchers on patronage of Banks were anchored on related measures used by the researchers on Business performance, marketing performance or effectiveness etc. Here, in measuring customer patronage, most researchers adopted measures similar to business or marketing performance. Notwithstanding the enormously complex and dynamic nature of the environment in which banks compete, there is a growing body of evidence that suggests it is possible to discern relevant measures or indicators of patronage in banks.
Accordingly, and in line with previous studies, Goddard et al. [11], Akpan [12], Ramakrishnan [13], Ben Naceur [14], Asiegbu et al. [15], and especially Kosmidou et al. [16], this study views customer patronage as the means of a respondent's rating for his or her firm's sales volume / volume of transactions, profit margin and customer retention level.

Relationship between Physical Evidence and Customer Patronage
The physical evidence is the outward appearance of the organization and thus can be critical in forming initial impression or setting up customer expectations [17]. Therefore, the ability of physical surroundings to facilitate achievement of organizational as well as marketing goals is apparent.
A long standing marketing principle is that understanding and satisfying customers leads to superior business results. An organization relates to its customers to achieve the understanding and increase patronage through the design of its service environments, service quality and service personnel. In other words, if the service environment (i.e. ambient condition) and the Physical architecture of the equipment are consistent with customer expectations, satisfaction will increase which will significantly increase the level of customer patronage. A framework on customer patronage and its measures is shown in Fig. 2. Mukhtar [18] is of the view that firm size can also be an important determinant of firm performance and survival. James et al. [19] argue that bigger firms may enjoy better physical environment and create rooms for conducive ambience than smaller firms which may have a tight and crowded atmosphere. Furthermore, a study by Madueme [20], on Nigerian banking industry shows that information technology adoption of a company enhances efficiency, and strengthens service quality. In addition, banks and other service firms that improve their IT base services will attract benefits such as improved Sales Volume, higher productivity and improved financial performance.
Arguably, we believe that the design and efficient management of Bank service environment is critical to customer patronage and overall level of business performance and so we argue that it is possible the level of customer patronage of a firm (Bank) has a connection with the way it designs its service environment and the functional nature of its equipment. Therefore, from the review of the related literature we hypothesize as thus:

RESEARCH METHODOLOGY
This study adopted the cross -sectional survey method and the objectivist research strategies where major decisions of the study were based on the nomothetic methodology which lays emphasis on the importance of basing research upon systematic protocol and technique. This approach focuses attention upon the process of developing questionnaire and testing hypotheses in accordance with the canons of scientific rigor [21].
However, primary data were drawn from fourteen (14) functional and registered quoted banks in the south-south zone of Nigeria which also constitute our level of analysis and target population. Moreso, these banks were registered with the Corporate Affairs Commission (CAC), Nigerian Deposit and Insurance company (NDIC) and the Nigeria Stock Exchange (NSE). Forty two (42) copies of structured questionnaire were distributed on the ratio of three copies per bank and our unit of analysis constitutes the bank's general managers and other top management staff who have direct contact with the customers. Ideographically, qualitative data were obtained from seven customers of these banks which were randomly selected. Furthermore, the generated data were presented using tables and percentages and the various hypotheses were tested by employing the Spearman Rank Correlation Coefficient to test the nature of relationship between the predictor and criterion variable while the Pearson Partial Correlation Coefficient was used to ascertain the extent to which the organizational factors (firm's size and Information Technology Capability mediate the relationship between physical evidence and customer patronage). This was however facilitated by the Statistical Packages for the Social Sciences (SPSS) Version 15.0. Moreso, the research instrument was designed to adopt the likert scale point method in the measurement of the two Constructs Physical Evidence and Customer Patronage which ranges from "very high extent" to "very low extent" most of the instruments used to measure the constructs in this study are adapted from previous studies in order to ensure content validity. Items measuring physical evidence include ambient condition, physical architecture and signs are adapted from Bitner [2], Rosembaum and Messiah [22] and Lucas, [8]. Customer patronage was measured by items which include sales volume, profit level and customer retention which were adapted from Cronin [23], Asiegbu et al. [24], Adiele et al. [25] and Athanasoglou et al. [26]. The validation process led us to seeking the opinion of experts in services marketing and service environment strategist. Towards this end, the questionnaire was pretested on selected managers of the different banks within the context of our study. Moreso, academic knowledgeable in this area of study were consulted to help correct errors in the questionnaire such as ambiguity, contradictory questions, poor wording of questions, misleading or poor instructions etc.
Similarly, the Cronbach's Alpha coefficient was used to ascertain or test for instrument reliability. It is also an indicator of the internal consistency of a measure [27]; [3]. After the analysis the results were all above the threshold of 0.70 as suggested by Nunnaly [28], indicating that our research instrument were both reliable and valid. We therefore regard the items in the instrument as being internally related to the factors they are expected to measure (See Table 1).

ANALYSES OF DATA
The hypotheses and data on the effect of physical evidence on customer patronage of retail banks in the south-south zone of Nigeria are presented and discussed in Table 2.
Ho 1 : There is no significant relationship between physical evidence and customer patronage in Banks in South-South Zone of Nigerian.
The framework on Fig. 3 shows the relationship amongst the study variables. It clearly depicts how customer patronage is influenced by physical evidence and how the organizational factors -firm's size and information technology adoption mediate the relationship.

Relationship between physical evidence and customer patronage
The test of hypothesis one, in (Table 2) shows that there is a strong positive relationship between physical evidence and customer patronage in the sample of banks in south-south zone of Nigeria.
The positive value of (0.847) shows the strength of the relationship between the variables. The Pvalue (0.00) is less than the level of significance at (0.05). More so, their Cronbach's Alpha values are physical evidence (0.969), sales volume (0.906), profit margin (.875) and customer retention (.935) respectively. They are all indicative of the reliable nature of our research instruments. This suggests that a strong and positive relationship exists between physical evidence, sales volume, profit margin and customer retention. Hence, the null hypothesis is rejected.
However, this finding corroborates with the views of [29] that when people or customers are physically uncomfortable because of ambient temperature, their affective response to strangers is less positive than when they are physically relaxed. Hence, a good ambient temperature significantly impacts on patronage [30]. The role of marketing in an organization is basically to generate sales for the organization [31]. And these are generated whether the company is product or service oriented. An organization (Bank) sales volume is one of the major indicators of patronage and business effectiveness. A higher sales volume depicts an appreciable customer retention level and a good customer retention level will resultantly lead to an increase in the level of profit.
Furthermore, [32] opined that ambience is in general more important in service settings because customers as well as employees often experience the firm's facility. The ambience in a bank can aid or hinder the accomplishment of both internal organizational goals and external marketing goals. Nowadays, Banks have learnt how to design their physical settings/environment in such a way that can get their customers attracted and satisfied [33]. Every firm should in principle seek profitable growth over maximum sales alone. For example profit index management studies (PIMS) find that a strong positive link exists between sales volume and retention on investment [34]. Further, they argued that superior market performance (Customer Patronage) likely results in superior financial performance (profit margin).
In addition, [12], asserts that maximizing returns and optimizing profitability became the focus of banks and these can only be achieved through enhanced patronage, that is, increased customer base, sales volume with attendant satisfaction sufficient to consolidate customer loyalty and retention. From this discussion, it is apparent that physical evidence has the capability to influence sales volume, profit margin and customer retention in banks. We therefore, conclude that physical evidence positively and significantly affect customer patronage.

Relationship between organization size and how it mediates between physical evidence and customer patronage
The partial correlation coefficient result as shown in Table 3 indicated that the size of the firm does significantly mediate the relationship between physical evidence and customer patronage in the Banks in south-south zone of Nigeria. The zero order correlation between physical evidence and customer patronage shows the correlation coefficient where organization size is not mediating the variables; and this is fairly high at (.888) and statistically significant p-value (0.000). The partial correlation controlling for organization size however is a high (.809) and statistically significant p-value (0.000 <0.05). The observed positive "relationship" between physical evidence sand customer patronages is due to underlying relationships between each of those variables and organization size. Looking at the zero correlation, we find that both physical evidence and customer patronage are highly positively correlated with organization size, the control variable. Removing the effect of this control variable reduces the correlation between the other two variables to be 0.809 and significant at α = 0.05, therefore we reject the null hypothesis and conclude that: The Size of an organization does significantly mediate the relationship between physical evidence and customer patronage in the banks in South-South Zone of Nigeria. Notably, from the forgone discussion, it is revealed that the size of an organization does significantly mediate the relationship between physical evidence and customer patronage in the banks in south-south zone of Nigeria. This finding is in line with the views of [35,36]. They opined that firm size can reflect past success and may influence current firm performance. More so, [18] is of the view that firm size can also be an important determinant of firm performance and survival. Bigger firms may enjoy better physical environment and create rooms for conducive ambience than smaller firms which may have a tight and crowded atmosphere. Furthermore, bigger firms also benefit from improved capacity to access critical resources such as business finance [37], which will help them to gain competitive advantage and achieve better performance. In the tourism and hospitality industry, the size of a hotel room, sitting room and convenience significantly influences customer patronage and re-patronage intentions. Also cinema firms that do not make available ample sitting space for customers' convenience and satisfaction will stand the risk of losing them for competitors. Hence, it is pertinent to reiterate the fact that a company's ability to enhance its customer patronage is predicated on its deliberate effort to increase both the size of its firm and physical ambience of its operations. Therefore, we conclude that organization size mediate the relationship between physical evidence and customer patronage of banks in the south-south zone of Nigeria.

Information technology capability and the mediation in the relationship between physical evidence and customer patronage
The partial correlation coefficient result (in Table 4) shown in Table (1) indicated that   information technology capability does significantly mediate the relationship between physical evidence and customer patronage of banks in south-south zone. The zero order correlation between physical evidence and customer patronage shows the correlation coefficient where information technology capability is not mediating the variables and this is fairly high at (.888) and statistical significant (pvalue 0.00) < 0.05). The partial correlation controlling for ITC is however a high (.847). The observed positive "relationship" between physical evidence and Customer Patronage is due to underlying relationships between each of those variables and Information Technology Capability. Looking at the zero order correlation, we find that both physical evidence and customer patronage are highly positively correlated with Information Technology Capability, the control variable. Removing the effect of this control variable reduces the correlation between the other two variables to be 0.847 and significant at α = 0.05, therefore we reject the null hypothesis and conclude that: Information Technology Capability of an organization does significantly mediate the relationship between physical evidence and customer patronage of the banks in South-South Zone of Nigeria.
The findings corroborates with the views of [38,39] that information technology capabilities of a firm can moderate its level of patronage and performance. It has been said therefore, that only organization that recognize the power of customers and satisfy their needs will move toward sustainability [40]. In many firms, information technology (IT) gives a major transforming advantage in marketing operations and other activities of an organization by providing the sales force with the wide array of hand held and laptop computers that enables the firms to collect detailed customer data and demand planning [41].
Woherem [42] Claimed that only banks that overhaul the whole of their payment and delivery systems and apply ICT to their operations are likely to survive and prosper in the new millennium. He advices banks to re-examine their services and delivery systems in order to properly position them within the frameworks of the dictates of the dynamism of information and communication technology. Furthermore, he observed that Nigerian banks since 1980's have performed better in their investment profile and use of ICT systems than the rest of industrial sector of the economy.
[43] observed that the revolution of ICT has made the banking sector to change from the traditional mode of operations to presumably better ways with technological innovation that improves efficiency. This finding supports the views of [44] that ICT impacts positively on the speed of banking service delivery as well as productivity and profitability. Furthermore, a study by Madueme [20], on Nigerian banking industry shows that information technology capabilities of a company enhances efficiency and strengthens service quality. In addition, banks and other service firms that improve their IT base services will attract benefits such as improved Sales Volume, higher productivity and improved financial performance.
Jeffers [45], discovers that a potential contribution of IT to a firm's performance is it's complementarities with other resources in leveraging customer service performance which can be a major factor in determining the viability and competitive edge of the firm. In the views of [38], firms with superior IT capability enjoy superior financial performance by boosting their revenues, increasing productivity, and/or decreasing cost. Hence, a firm (Bank's) IT capability should be beneficial to its performance in the long run and also influence the level of customer patronage. From the foregone discussions on the review of empirical literature, we have the impetus to conclude that information technology capability positively and significantly mediate the relationship between physical evidence and customer patronage.

CONCLUSION, IMPLICATIONS AND FUTURE RESEARCH
This article has explored some of the essential areas in which physical evidence and customer patronage are predicated upon and also established the relationship between these constructs.
Based on the findings obtained from summary of discussion, empirical data analyses, and the review of empirical related literature thus far, we conclude that physical evidence affect customer patronage of banks in the south-south zone of Nigeria. Consequently, the implication of the study is that the use of physical evidence dimensions used for this study as strategies to improve customer patronage in banks should be recognized since both theoretical and empirical evidence has proven that the dimensions of physical evidence positively correlate with customer patronage.
Theoretically, banks should recognize that the environment of their business can help increase or reduce their level of business viability, employee performance and sales volume. From our findings and discussions, we develop a new physical evidence and customer patronage heuristic model presented in Fig. 4 above. Fig. 4 above indicates that the three physical evidence dimensions / variables-ambient condition, physical architecture and signs influences customer patronage in the context of organizational factors-organization size and information technology capability of banks in the south-south zone of Nigeria. The practical implications of the study to bank management are that it will help them to recognize the need to take cognizance of their organization size and level of information technology. Organizations (bank) that are technologically balanced seem to have a better distinctive competence and competitive edge over their competitors. Banks that cultivate the culture of adopting and implementing new technology has the possibility of becoming more innovative and creative in the evolvement of products / services that will positively and significantly impact on customer patronage and the company overall level of business performance.