ABSTRACT
This study will examine the analysis of customer satisfaction among consumers of non alcoholic beverage firm in Umuahia metropolis in Abia state, Nigeria. There is an increase in the number of firms producing non alcoholic beverages in Nigeria. Due to the massive increase in the number of firms, there is persistent increase in the level of competition in the market. Customer satisfaction and quality of the non-alcoholic products will determine the competitive performance of the non-alcoholic beverage firms. A random sample of 50 non-alcoholic beverage were collected from Umuahia and Aba respectively, making a sample size of 100. 200 copies of well structured questionnaire will be used to collect the data. Descriptive statistics, regression analysis and correlation analysis will be used to achieve the objectieves and test the hypothesis. It is expected that customer satisfaction and quality of the non-alcoholic beverage have an effect on the competitive performance of the beverage firms.
TABLE OF CONTENT
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table of content vi
List of tables viii
Abstract ix
CHAPTER ONE
1.0 Introduction - - - - - - - - - 1
1.1 Background of the study - - - - - - - 1
1.2 Statement of the problem - - - - - - - 5
1.3 Objective of the study - - - - - - - 8
1.4 Research questions - - - - - - - - 9
1.5 Research hypothesis - - - - - - - - 10
1.6 Significance of the study - - - - - - - 10
1.7 Scope of the study - - - - - - - - 11
1.8 Limitations of the scope - - - - - - - 11
CHAPTER TWO
REVIEW OF LITERATURE
2.1 Customer satisfaction - - - - - - - 12
2.2 Service quality - - - - - - - - 17
2.3 Customer satisfaction and service quality - - - - 24
2.4 Conceptual framework - - - - - - - 32
2.5 The need for sustainable food and beverage production - - 34
2.6 Developing local food and beverage markets.- - - - - 35
2.7 Improving access to local foodstuff for beverage production - 36
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Area of study - - - - - - - - - 37
3.2 Population of the study - - - - - - - 38
3.3 Sample techniques - - - - - - - - 38
3.4 Sample size determination - - - - - - - 38
3.5 Data collection and instrument - - - - - - 39
3.6 Validity and reliability research instrument - - - - 39
3.7 Methods of data analysis - - - - - - - 39
3.8 Model specification - - - - - - - - 40
CHAPTER FOUR
4.0 Data presentation and analysis - - - - - - 41
4.1 Response rate of the total questionnaire distributed - - - 41
4.2 The socio-economic profile of the non alcoholic beverage consumers 42
4.3 The level of consumer satisfaction with beverage products - - 45
4.4 The level of product quality of the non-alcoholic beverage consumers. 47
4.4.1The quality and satisfaction level of the consumers - - - 48
4.5 The relationship between product quality and satisfaction - - 59
4.6 The effect of quality, packaging, and price on consumer satisfaction of non-
Alcoholic beverage products - - - - - - 50
CHAPTER FIVE
5.0 Summary, conclusion and recommendation - - - - 52
5.1 Summary - - - - - - - - - 52
5.2 Conclusion - - - - - - - - - 53
5.3 Recommendation - - - - - - - - 54
References
Questionnaire
LIST OF TABLES
Table 4.1: Response rate of the total questionnaire distributed
Table 4.2: The socio-economic profile of the non-alcoholic beverage consumers.
Table 4.3: The level of consumer satisfaction with beverage products
Table 4.4: The level of product quality of the non-alcoholic beverage consumers.
Table 4.5: The relationship between product quality and satisfaction.
Table 4.6: The effect of quality, packaging and price on consumer satisfaction of
non alcoholic beverage products.
CHAPTER ONE
1.0 INTRODUCTION
The aim of this section is to identify the research topic and to formulate research questions. Thus the chapter begins with an introductory background which includes the importance of customer satisfaction in business and the reasons for researching in this area, the research questions and purpose of the study will follow. Delimitation.
1.1 BACKGROUND OF THE STUDY
Customer satisfaction has been a subject of great interest to organizations and researchers alike. The principal objective of organizations is to maximize profits and to minimize cost. Profit maximization can be achieved through increase in sales with lesser costs. One of the factors that can help to increase sales is customer satisfaction, because satisfaction leads to customer loyalty (Wilson et al., 2008), recommendation and repeat purchase.
Customers became very vital in business during the marketing era of the 1950s when companies could produce what they can sell and not just selling what they can produce as it was during the production era. Since the beginning of the consumption era in marketing, (business.business-key.com) the focus on customers/consumers has increased more as the consumption era also shifts to post-consumption; where organizations are obliged to render more services in addition to what they provide as offers to their customers. (David, 2009). What are the qualities of these services provided to customers? Are the customers satisfied with these services? Thus, this research originated from the fact that customer/consumer is the key to business. In fact, their satisfaction is the most important tool that helps to increase sales and generate profits in the business environment. Moreover, the importance of customer satisfaction and service quality has been proven relevant to help improve the overall performance of
organizations. (Magi & Julander, 1996,).
From the view of operations management, it is obvious that customers play important roles in the organizational process (Lee & Ritzman, 2005). Before the placement of strategies and organizational structure, the customers are the first aspect considered by managements. The questions asked in the strategic planning ranges from who will need to consume these offers, where are they and for how much can they buy to how to reach the customers and will it yield them maximum satisfaction? After these questions, the organization will then designs the product, segment the markets and create awareness. This does not only show the importance of customers in the business environment but also the importance of satisfying them. Customers are always aiming to get maximum satisfaction from the products or services that they buy. Winning in today’s marketplace entails the need to build customer relationship and not just building the products; building customer relationship means delivering superior value over competitors to the target customers (Kotler et al., 2002,). Whether an organization provides quality services or not will depend on the customers’ feedback on the satisfaction they get from consuming the products, since higher levels of quality lead to higher levels of customer satisfaction (Kotler & Keller.2009).
Most companies are adopting quality management programs which aim at improving the quality of their products and marketing processes, because it has been proven that “quality has a direct impact on product performance, and thus on customer satisfaction” (Kotler et al., 2002). The reason for this is to satisfy the customers.
Customer service has become the buzz word for business in the nineties. Executives and upper management would like to believe that their companies and employees are dedicated to giving the best possible service to their clients. However, most of the time, just lip service is payed to this ideology. It takes a lot of time, dedication, and resources to create and maintain a “customer first” culture in the workplace. Head office management must really believe in the notion and pass this belief on to unit management in order to make it seen and felt throughout the organization.
The importance of customers in the business process has made it vital to always conduct research about customers. There has always been the need for customer research before, during and after sales, because of changes that may occur in the business process.
Any organization that consistently satisfies its customers, enjoy higher retention levels and greater profitability due to increase customer loyalty” (Wicks & Roethlein, 2009,). For this reason every company works hard daily to win the hearts of customers by satisfying them in order that they become loyal customers to their brands in order to increase sales and profit. When customers have good perceptions about a brand, they will always choose to go for the brand, because consumers form their preferences relative to perceptions and attitudes about the brands competing in their minds. (Larreche, 1998,). To get these loyal customers, companies must create relationships with the customers. To create relationship with customers, companies need to conduct research to answer questions on how the customers make their purchasing decision and whether they are pleased with what the organization provides to them as offer in terms of product quality, service quality, price, etc.
Thus, customers will always prefer a product or service that gives them maximum
satisfaction. But how will the organization know whether the consumers’ consumption habits have changed, or if they are well served? How will the organization know if competitors’ brands are doing better than theirs, which can trap their customers? With the increasing number of businesses and growing competitions today, each company wants to be the customers’ first choice. To achieve this, organizations need to answer the questions above via continuous research in this area so as to lead the organizations to their twin objective of satisfying their customers and making profits.
Although there are other factors such as price, product quality etc other than service quality that determine customer satisfaction (Wilson et al. 2008,) my interest on service quality alone for this study is because service quality has been proven to be the best determinant of customer satisfaction when it come to service sectors.
1.2 STATEMENT OF THE PROBLEM
Studies have shown that there are several factors that influence a customer’s decision to repurchase a product or service or to be loyal to be a particular product. Lau et al.(2006) in his article mentioned that there were several factors that influenced consumers brand loyalty and satisfaction towards certain brands. The factors were; brand name, product quality, price promotion and service-quality (Achumba, 2000). Other scholars and experts have also come up with factors that influence brand loyalty and one thing remains common with them; they believe that products quality or perceived product quality plays a role in customer satisfaction however, a review of literature on the relationship between product quality, commitment to quality, customer satisfaction and firm performance has highlighted the gap in literature that critically analyses the product quality, customer satisfaction and to construct the degree of effect that product quality has on the firm performance (Kehimde, 2009). A review of different product quality models also emphasize the gap in models that are constructed solely to explain the degree to which product quality influences customer satisfaction. This is because most of the product quality models available highlight the chain of reaction from customer expectations to brand loyalty without breaking down the quality constructs into the different degrees that may be responsible for brand loyalty. However, these models have been constructed to explain the product quality and brand loyalty process for different countries and their marketing environment. Till date, there is little or no product quality model that has been constructed to suit the Nigerian environment or to explain how product quality and brand loyalty works in the Nigerian context.
Swan and William, (2004) argued that a major organizational problem that most companies face is that the various components of the promotional mix are often seen as the responsibility of different departments or agencies. (Nowak & Phelps, 2004; Belch and Belch, 2004). Consequently, many organization executives are craving for ways of minimizing cost of marketing communications with better results. (Picton & Hartley, 1998; Copley, 2004; Raid, 2003; Fill, 2006). One of the trends in recent time according to Pelsmacker, Geuens and Bergh (2004) is the increasing need by companies to build customer relationship in order to sustain brand loyalty through enhanced customer satisfaction.
Many Nigerian beverage producers are using different promotional mixes without due consideration for the cost and appropriateness of the stage of product in its life cycle (Thomas, 2001; Fadipe, 2004), etc. They are often skeptical as to how to properly coordinate the communication mix at different stages of a product life (Thomas, 2001). Many beverage producers have not fully appreciated the fact that communicating effectively with customers and other stakeholders involves not only a mix of the traditional tools. Many Nigerian Beverage producers are constantly looking for how to catch and retain the youth especially school children (catch them young syndrome) and build strong brand loyalty with these school age children (Achumba 2000; Thomas 2001).
These reviews have shown that there is a need to understand how the product quality and customer satisfaction construct works especially in the Nigerian market for beverage product with the increasing level of competition. Since these models have been constructed without bearing the Nigerian competitive market for non alcoholic beverage, there is a need to construct one which will suit the Nigerian market and also breakdown the quality construct into degrees and highlight other reasons that may be responsible for customer satisfaction. Since it have been observed that the non alcoholic beverage sector is been faced with the following challenges .i.e. High level of competition, Excessive supply, High competition from foreign brands, Poor product quality, Adulteration of product, Economic hardship and downtown turns.
It is therefore very important to analyze customer satisfaction among consumers of non alcoholic beverage in Abia state, Nigeria.
1.3 OBJECTIEVE OF THE STUDY
The main objective of this study is to analyze customer satisfaction among consumers of non alcoholic beverage in Abia state, Nigeria.
The specific objectives of the study are to;
· To examine the level of consumer satisfaction with beverage products.
· Examine the level of product quality of the non alcoholic beverage consumers.
· To ascertain the quality and the satisfaction level of the consumers.
· To examine the customer relationship between customer satisfaction and product quality.
1.4 RESEARCH QUESTIONS
· Is there a significant relationship between customer satisfaction and the product quality dimensions?
· Is there a significant relationship between Service quality and the service quality?
· What is the significant relationship between customer satisfaction and service quality?
In answering the above questions, I aimed at contributing to the study of the relationship between customer satisfaction and product quality whereby I will be able to confirm if actually, customer satisfaction is related to the service quality dimensions and proves if there are factors other than service quality that affects customer satisfaction.
1.5 RESEARCH HYPOTHESIS
H01: There is no significant relationship between customer satisfaction and Product quality.
H02: Customer satisfaction and product quality has no significant effect on Beverage firm performance.
1.6 SIGNIFICANCE OF THE STUDY
The present study enhances the marketing knowledge in theory as well as in practice. This project makes a significant academic contribution by attempting to provide ‘scientific’ proof for the literature’s anecdotal theories. Furthermore, the study deals with the role of unit managers as customer service role models and their impact on profitability. In this way the important managerial implications for marketing practitioners are relevant for customer service managers and human resource trainers.
Booms and Bitner (1981) and Grooms (1983) have proposed organizational structures for service firms. However, they concentrated on head office reorganization with the marketing department taking on a new role and using internal marketing as a potential motivational tool. Benjamin Schneider (1991) has explored and confirmed the intuitive correlation between the employees seeing their organization as having a strong service orientation and the customers reporting more positive service experiences. However, he limits management’s interaction with this process to their supervision and managerial behavior. He does not study the unit management’s influence as a leader and role model.
1.7 SCOPE OF THE STUDY
The study focuses basically on Umuahia and Aba as a study location. This is mainly because of limited availability of resources and time to undertake the study on a wider scale.
1.8 LIMITATIONS OF THE SCOPE
Some of the non alcoholic beverage firms are reluctant to frankly respond to some of the questions and also the future is uncertain i.e. There are political, cultural and technological changes taking place every day. This affects the satisfaction of the consumers.
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