ABSTARCT
The research is a critical analysis of service quality and customer retention in obudu cattle ranch. The need for service companies to understand service quality as one of the most effective means of establishing a competitive position and improving customer retention became imperative considering the growing development in services as well as competition pressures locally and globally. Business must offer services that are of high quality, with the employees of the service business serving as important link to delivering such service to customers. Three theories that are closely related to the topic were employed as tools to analyze this topic. The Resource-Based View Theory, Expectancy Discontinuation Theory and Entrepreneurial Opportunity Identification and Development Theory. These theories suggest that a firm should not be seen as an isolated entity, but need to be viewed as existing in an operating environment that is being connected with other institutions, facilitated and supported by many factors. To this end, customer’s satisfaction level is a result of the difference between expected and perceived service performance or quality. The research utilized the survey research design and assessed the perception of customers of Obudu cattle ranch with regards to the study variable. The result of the investigation in this study showed that all the variables as Tangibility, Reliability, Responsiveness, Assurance and Empathy have a positive and significance relationship with customers’ retention. However, there is a proof of a strong relationship between service quality and customer retention in Nigerian hospitality industry. It is therefore, concluded that service quality must be achieved by the Nigerian hospitality organizations if the industry is to attract customer retention and remain relevance in improving profitability. Based on the findings from this research, it was recommended that there is the need for organizations in the hospitality industry to continue to improve the tangible aspect of their service to enhance customer retention which will in turn enhance profitability and competitive advantage.
TABLE OF CONTENTS
Page
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Table of Contents vi
List of Tables x
List of Figures xi
Abstract xii
CHAPTER 1: INTRODUCTION 1
1.2.1 Background to the Study 1
1.2 Statement of the Problem 5
1.3 Objectives of Study 5
1.4 Research Questions 6
1.5 Research Hypotheses 7
1.6 Significance of the Study 8
1.7 Scope of the Study 8
1.8 Operational Definition of Terms 9
CHAPTER 2: REVIEW OF RELATED LITERATURE 10
2.1 Conceptual frame work 11
2.1.1 Service quality 11
2.1.2 Dimension of service quality 14
2.1.3 Tangibility 16
2.1.4 Reliability 17
2.1.5 Responsiveness 17
2.1.6 Assurance 18
2.1.7 Empathy 18
2.1.8 Customer satisfaction and dissatisfaction 20
2.1.9 Customer retention 22
2.1.10 Factors influencing customer retention 23
2.2 Theoretical framework 23
2.2.1 Resource base view (RBV) theory 23
2.2.2 Expectancy discontinuation theory 25
2.2.3 Entrepreneurial opportunity identification and
Development theory 26
2.2.4 Bridging the gaps between customer’s
expectations and perceptions 29
2.2.5 Strategies to close the gaps in service execution 34
2.3 Empirical review 36
2.4 Summary of Literature Review 40
CHAPTER 3: METHODOLOGY 41
3.1 Research Design 41
3.2. Population of the Study 41
3.3 Sample Size Determination 41
3.4 Source of Data 42
3.5 Data Collection Instruments and Methods 43
3.6 Measurement of Variables 43
3.7 Validity and Reliability of the Instrument 44
3.8 Model Specification 44
3.9 Method of the Data Analysis 46
CHAPTER 4: DATA PRESENTATION,
ANALYSIS AND INTERPRETATION 47
4.1 Questionnaire administration 47
4.2 Socio-economic characteristics of the respondents 47
4.2.1 Age distribution of respondents in the study area 48
4.2.2 Distribution of respondents based on gender 49
4.2.3 Marital status of respondents in the area 50
4.2.4 Education qualification of respondents 51
4.2.5 Years of purchasing experience distribution
of respondents in the study area 52
4.2.6 Research questions on tangibility 53
4.2 Effect of tangibility on customer retention of obudu cattle ranch 57
4.3 Extent that reliability affects customer retention of obudu
cattle ranch 62
4.4 Extent that responsiveness affects customer retention of
obudu cattle ranch 67
4.5 Research questions on assurance 68
4.6 Relationship between assurance and customer
retention of obudu cattle ranch 72
4.7 Relationship between empathy and customer retention of
obudu cattle ranch 77
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 79
5.1 Conclusion 79
5.2 Recommendation 80
5.3 Limitations and Suggestions for Future Research 81
References 82
LIST OF TABLES Page
4.2.1 Distribution of respondents according to age 48
4.2.2 Distribution of respondents by gender 49
4.2.3 Distribution of respondents according to marital status 50
4.2.4 Distribution of respondents according to education qualification 51
4.2.5 Distribution of respondents according to purchasing years
of experience 52
4.2.6 Research question on tangibility 53
4.3 Computation of simple regression for effect of tangibility on
customer retention of obudu cattle ranch 57
4.3.1 Computation of simple regression for extent that reliability affects
customer retention of obudu cattle ranch 59
4.4 Extent that reliability affects customer retention of obudu
cattle ranch 62
4.5 Computation of simple regression for extent that responsiveness
affects customer retention of obudu cattle ranch 67
4.6 Correlation estimate of relationship between assurance
and customer retention of obudu cattle ranch 72
4.7 Correlation estimate of relationship between empathy and
customer retention of obudu cattle ran
LIST OF FIGURES
Page
1. Service Quality model by Caruana, A. (2002) 11
2. The Gaps model 30
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Hospitality industry in Nigeria today has grown significantly with so many institutions actively involved in hospitality and tourism business. Success of this industry depends on the amount of quality service rendered and positioning strategies put in place in a highly competitive environment (Ibok,2010).
Therefore, it is now increasingly necessary for service companies to understand service quality as one of the most effective means of establishing a competitive position and improving customer retention. The business must offer services that are of high quality, with the employees of the service business serving as important link to delivering such service to customers (Egade & Amangala, 2013). These employees beyond being well trained and skillful must be committed to the firm if they are to really deliver on the firms promises (Egade & Amangala, 2013).
Service quality (SQ) tends to focus on meeting customers’ needs and requirements and how well the service delivered meets customer expectations (Lewis and Booms, 1983). A firm ability to provide customer satisfaction depends on the firm overall service factor for customer retention (Rahmara, Khan & Haque, 2012).
Customer retention is the “Holy Grail” of success for business in the customer service industry. (Leon and Lestlie 2000). The goal of every successful business is to maintain a high level of customer satisfaction by providing their client with value added transaction through positive customer interaction. In turn, the customer’s expectation is to fell important and assisted during the interactions that ultimately lead to fulfillment of their desire and positive end result (Leon and Lestlie, 2000).
The hospitality/ Tourism industry contributes 34% to Nigeria GDP, generates 20% employment. (The National Bureau of Statistic NBS, 2018) In Nigeria, the hospitality industry is highly competitive in recent times. However, lack of proper data base appears to make it difficult to ascertain the number of hotels and other travel organizations, but one can obviously note in big cities like Lagos, Abuja, Port Harcourt, Enugu etc. their numbers keep increasing yearly, (Ibok, 2010). Therefore, in order to remain competitive and profitable, hotels and other tourist centers must have to offer services that would be perceived to be of high quality by existing and potential customers who would in turn lead to continuous patronage. Kottler and Armstrong (2008) affirmed that customers are great assets to hotel and retaining them would boost high profit in turn.
As competition in hospitality industry increases the need for customer perception of service quality and customer retention cannot be ignored by companies that are involve in moving people and goods from one place to another. The high degree of this increase must have to be accompanied by the need to improve service quality. The airline companies and land transporters must have to listen to customers so as to design and offer service in line with customer stated and anticipated needs which customers would consider as high quality and which would lead to satisfied and retained customers (Egede and Amangala,2013). Oliver (1980), Kumar, Smart, Maddern and Maull (2008), all agreed that in the service industry, consistent quality improvement is the key factor that affects customers satisfaction and increase purchase intentions among customers. Quality service can lead to increase in firms overall organizational performance and reputation which are considered as great assets that give the firm a chance to differentiate itself from its competitors by maximizing its market share, attracting new customers, retaining existing ones, neutralizing competitors action, generating high profit and above all retaining success and survival in the markets. (Kotler and Armstrong 2008).
In Nigeria today, Agriculture has been relegated to the background and with recent fall in price of crude oil in the market it calls for a redirection to other sectors of the economy. Hospitality industry if properly managed will help curtail the adverse effect of fall in price of crude oil to Nigeria economy.
More importantly, the choice of Obudu Cattle Ranch for this research work came out of the fact that Benue State government over the years has been using Obudu Cattle Ranch for her Executive and Legislative meetings. However, in recent time this choice has changed for other hospitality organizations like Double K Resort, Benue Hotels and others. This could probably be as a result of high charges and inability to sustain quality services in the recent times. And my question is ‘why not other thousands and one of hospitality companies spread all over the country?’ The answer to this question could be that the relevant features of the place, satisfaction derivable from Obudu Cattle Ranch and the production and delivery of the service compared to other places may be better off. Therefore, this research work will broaden the researcher and readers of this work to know how Obudu Cattle Ranch retain and keep her customers loyal in the industry.
In measuring service quality, several researchers widely use SERVQUAL and SERVPERF in different business environments. Though, the various dimensions and model of service quality and the measurement approach to service quality and its relationship with customer retention are still being debated, many researchers are in agreement with the fact that service quality impact customer satisfaction and customer retention. Despite the ongoing debates about the best services quality model, this study with little modifications relied on the conceptual models of service quality by Caurana (2002), and Sammy and Kerongo (2013) which were based on Parasuraman et al. (1988) SERVQUAL scale for measuring service quality that identified five basic determinants or dimensions of service quality which include tangibility, reliability, responsiveness, assurance and empathy. Thus consumers make service repurchase decisions because their point of delivery provides them with certain benefits, thereby satisfying their needs, demands and expectations.
Therefore, as competition becomes high in the hospitality industry globally and in Nigeria in particular, Obudu Cattle Ranch which is also a hospitality organization is expected to provide quality service to its teaming customers to ensure customer satisfaction and retention which will in turn enhance its competitive advantage and the overall growth of the industry.
1.2 STATEMENT OF PROBLEM
The effects of globalization, local economic conditions, developments in the service, as well as increasing competitive pressure have led customers of the industry to be aware of the desired quality of service and satisfaction derivable from the industry. Failure of the management in the hospitality industry to provide this desired service quality leads to customer dissatisfaction.
The constant in hotels number in Nigeria led to increase competition which led an increase in the level of customer’s expectation for provided hospitality service quality. Consequently, the need for an appropriate competitive environment that enhances new customer’s customer attraction and retention. According to quality literature, the researcher believers that there is the need to provide high service quality that benefit providers because of its benefits for all parties. Based on the survey carried out, Obudu Cattle Ranch is aware of the importance of perceived service quality dimension and their impact on customer retention and thus this will negatively affect the competitiveness of Obudu Cattle Ranch.
1.3 OBJECTIVES OF STUDY
The main objective of this study is to examine the impact of service quality on customer retention in the Nigerian hospitality industry with specific concentration on Obudu Cattle Ranch in Cross river.
The specific objectives were to;
i. examine the effect of tangibility on customer retention in Obudu Cattle Ranch in Cross River state.
ii. find out the extent that reliability affects customer retention inObudu Cattle Ranch in Cross River state.
iii. determine the extent to which responsiveness affects customer retention in Obudu Cattle Ranch in Cross River state.
iv. examine the relationship between assurance and customer retention in Obudu Cattle Ranch in Cross River state.
v. examine the relationship between empathy and customer retention in Obudu cattle ranch
1.4 RESEARCH QUESTIONS
The following research questions were developed to enable the researcher achieve the objectives of the study.
i. To what extent does service tangibility affect customer retention in Obudu Cattle Ranch?
ii. What is the relationship between service reliability and customer retention in Obudu Cattle Ranch?
iii. To what extent does the responsiveness of service employee increase customer retention at Obudu Cattle Ranch?
iv. What is the relationship between service assurance and customer retention in Obudu Cattle Ranch?
v. To what extent does empathy affect customer retention in Obudu Cattle Ranch?
1.5 RESEARCH HYPOTHESES
HO1: There is no significant effect of Tangibility on customer retention in Obudu Cattle Ranch.
HO2: The reliability of Obudu Cattle Ranch in rendering quality service does not affect the customer retention of the ranch.
HO3: The responsiveness of the staff of Obudu Cattle Ranch in rendering quality service does not positively affect the customer retention of the ranch.
HO4: There is no significant relationship between assurance of quality service of Obudu Cattle Ranch and its customer retention.
HO5: There exists no significant positive relationship between empathy of service employees and customer retention in Obudu Cattle Ranch.
1.6 SIGNIFICANCE OF THE STUDY
This research work will be beneficial to the following groups in the society;
The Government: Government will benefit through increase in GDP as hospitality industry increase its profit through customer retention. Especially with the adverse effect of fall in price of crude oil in the world market, government can get the short fall of revenue from the service industry.
Entrepreneurs/investors: The goal of every business is to make profit, therefore, through service quality improvement in the hospitality industry customer will be retained and thereby increase profit making of the investors service quality can be used as a competitive weapon by the entrepreneur against its competitors.
The researcher; This research work will be used for reference purpose for other researchers in the hospitality industry in Nigeria.
1.7 SCOPE OF THE STUDY
The scope of the study is restricted to Obudu cattle Ranch, Sankwala and the study of service quality in hospitality industry in Cross River State. The study covers Ranch local government area in Cross Rivers State. The classes of people to be evaluated in the study are the management staff, the desk officers and customers.
1.8 OPERATIONAL DEFINITION OF TERMS:
Service equality: Service quality is the result of the customer’s evaluation process of the firm’s service offer that meets the customers’ expectations.
Customer needs: These comprise the basic reason or requirement that prompt a customer to approach a service provider.
Hospitality: The friendly and generous reception and entertainment of guest or visitors relating to or denoting the business of entertaining the clients or official visitors.
Recreation: An activity that diverts amuses or stimulates activities that refreshes or recreates any activity that renews your health and spirit by enjoyment and relaxation.
Customer retention: The act of retaining customer or state of being retained in an organization or firm.
Customer satisfaction: this is where the services delivered match up with customer expectations.
Tourism: The commercial organization and operations of holidays and visits to places of interest.
Customer dissatisfaction: This involves a situation where the service delivered fails to meet up with the customer’s expectation. The customer does not perceive any value for the money spent.
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment