CUSTOMER VALUE DELIVERY STRATEGY AND MARKETING PERFORMANCE OF ALUMINIUM COMPANIES IN DELTA STATE.
ABSTRACT
This research work examines the Entrepreneurship Strategies for Youth Development in Warri South Local Government Area, Delta State. Since entrepreneurship strategies remain vital in the real sector and the sustenance of economic development, it has become necessary for Nigerian Government to pay attention to this sector. This study, therefore, argues that entrepreneurship strategies will equip and develop the unemployed youths with the skills with which to be self-reliant. Chapter two deals with the literature review, conceptual framework, review of empirical studies and theoretical framework. Chapter three deals with the methods used in sourcing for data which comprises mainly questionnaires and the use of chi-square in analyzing the data in the next chapter. In other words, it deals with the methodology. Chapter four deals with data presentation and analysis. Also, the study in chapter five recommended that educational programmes at all levels of education should be made relevant to provide the youths the needed entrepreneurial skills. It also recommended that the Nigerian Government should give adequate attention to full blown entrepreneurial education in Nigeria.
TABLE OF CONTENTS
Cover Page i
Title Page ii
Certification iii
Dedication iv
Acknowledgements v
Table of Contents vi
Abstract viii
CHAPTER ONE: Introduction
1.1 Background to the Study 1
1.2 Statement of Problem 7
1.3 Objectives of the Study 9
1.4 Research Questions 10
1.5 Research Hypothesis 10
1.6 Significance of the Study 111.7 Scope of the Study 12
1.8 Limitations of the Study 13
1.9 Definition of Terms 14
CHAPTER TWO: Literature Review
2.1 Conceptual Framework 16
2.2 Review of Empirical Studies 39
2.3 Theoretical Framework 56
CHAPTER THREE: Research Methodology
3.1 Research Design 61
3.2 Population Design 61
3.3 Sample Size 62
3.4 Sampling Method/Procedure 62
3.5Method of Data Collection 64
3.6 Validity and Reliability of the Instrument 65
3.7 Method of Data Analysis 66
CHAPTER FOUR: Data Presentation, Analysis and Discussion
4.1 Data Presentation 67
4.2 Analysis of Data 68
4.3 Hypothesis Testing 73
4.4 Discussion of Findings 84
CHAPTER FIVE: Summary, Conclusion, Recommendations
5.1 Summary 88
5.2 Conclusion 89
5.3 Recommendations 905.4 Suggestion for Further Research 91
References 92-97
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Over the years, the overriding importance of identifying, creating, delivering and communicating customer value can never be overemphasized. Customer value has become an area of increasing interest to marketers as it has emerged as a key determinant of consumer decision making and behaviour and has developed into a new “mania” in marketing. Unfortunately, there have been few studies that have examined the customer value construct empirically. Holbrook (2014) notes that “despite the obvious importance of customer value to the study of marketing in general and buyer behaviour in particular, consumer researchers have, thus far, devoted surprisingly little attention to central questions concerning the nature of value”, More recently, Sinha and Sarbo (1998) argued that research in marketing has lagged in the systematic investigation, explication and measurement of the perceived value construct. While Sweency, Soutar and Johnson (2007, 2009) have examined various aspects of customer value, additional research in a variety of settings is needed to increase understanding of this construct.
However, customer value is more used as an overarching concept that encompasses both the shopping value and the product value provided by a specific company or store (Chen and Dubinsky, 2003). It is being regarded as the new source of competitive advantage for companies who have the capability of providing excellent customer value which has been looked on as one of the most successful strategies in the 21st century. The customer value is not only related with tactic, but also a strategy problem. The essence of strategy is to create value for customers, but not to conquer rivals in product market (Kenichi, 1998). Therefore. modern companies acquire good marketing performance by the aid of customer value delivery strategy. The customer value delivery strategy is a decision made by company about which customer value would be accepted by target market, and how to create, transfer, and communicate customer value in order to win customer satisfaction and loyalty (Diao and Cheng, 2010). To Kotler (2002) the key to building a relationship is the creation of superior customer value and satisfactions, satisfied customers are more likely to be loyal customers, and loyal customers are more likely to give the company a large share of their business. Companies must find the satisfactory value delivery method and make a strategy of creating, transferring, and communicating customer value. By so doing, implementing customer value delivery strategy could better satisfy customer demand, improve customer value, and build higher customer satisfaction, and enhance company performance and profitability effectively (Diao and Cheng. 2010).
Nonetheless, at broad level, the term value shows up in several very different contexts. An increasingly common perspective on managing organizations argues that creating and delivering superior customer value to high-value customers will increase the value of an organization. The later two value concepts consider value from the perspective of an organization. High-value customers quantify the monetary worth of individual customers to the organization, whereas value of an organization quantifies an organization’s worth to owners (Slywotzky, 1996). Customer value, on the other hand, takes the perspective of an organization’s customers, considering what they want believe that they get from buying and using a seller’s product. More often than not commentaries on customer oriented management practice provide only a vague sense of what customer value means. Fortunately, some of these commentaries recognize that making customer value strategies work begins with an actionable understanding of the concept itself (Robert, 1997). Yet a cursory look at their definitions reveals a surprising diversity of meaning: Value is the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given (Zeithnil. 1988). In business markets, value is the perceived worth in monetary units of the set of economic, technical, service and social benefits received by a customer firm in exchange for the price paid for a product, taking into consideration the available suppliers offerings and prices. Buyers perception of value represents a tradeoff between the quality or benefits they perceive in the product relative to the sacrifice they perceive by paying the price Informally. Williams (2009) defines value as “what the customer gets for what the customer pays”, what the customer gets is a bundle of non-price characteristics that can be examined on the basis of both real and perceived quality measures. What the customer pays can include both initial costs and ongoing cost. Therefore, to Gale (1994) customer value is market perceived quality adjusted for the relative price of product. The term customer value could also mean the emotional bond established between a customer and a producer after the customer has used a salient product or service produced by that supplier and found the product to provide an added value (Butz and Goodstein, 1996). It could also be regarded as the ratio between the customers’ perceived benefits (economic, social, functional and psychological) and the resources (monetary value, time, and efforts) used to obtain these benefits. To Kotler (2002) customer delivered value is the difference between total customer value and total customer cost of a marketing offer-profit to a customer. Succinctly put, customer value is net benefit relative to cost. In addition to these, Gale (2008) empirically concludes that; customers buy on perceived value; value is defined as benefits relative to cost; benefits include all non- cost attributes such as product, service, relationship and image, benefits, costs and value are perceived by customers relative to competitions.
Nevertheless, customer value is the fundamental basis for all marketing activities (Holbrook. 1994) and is the super ordinate goal which is a behavioral intention and then, customer value regulates behavioral intentions of loyalty toward the service or product provider/seller as long as such relational exchanges provide superior value (Sirdeshmukh, 2002). Therefore, customer is the final accepter and valuator, and every company should consider which kind of customer value they could create and offer to win a leading market position and good performance in a given industry. However, Yang and Peterson (2004) contend that perceived customer value has serious effect on customer satisfaction and loyalty given costs as moderating element. Diao and Cheng (2010) positsthat identifying, communicating, creating and delivering customer value enhances organizational profitability and customer satisfaction and loyalty.
Besides, few or no studies have been carried out in Nigeria to ascertain the extent to which customer value delivery strategy affect marketing performance. Given the identified knowledge gap in our point of departure from previous researches is to empirically establish a relationship between customer value delivery strategy and marketing performance. Hence, this study hopes to investigate customer value delivery strategy and marketing performance of Aluminum companies in Delta States.
1.2 Statement of the Problem
It has been an established fact that the performance of organization largely depends upon its ability to identify, create, deliver and communicate customer value. Frankly speaking customer value delivery strategy is intricately related to the customer satisfaction, retention, loyalty, and profitability.
Indeed, attracting and retaining customers can be a difficult task. Today’s customers face a vast array of product and brand choices, prices and suppliers, companies must know that customers choose the marketing offer that they believe will give them the most value. They are satisfied with and continue to buy offers that consistently meet or exceed their value expectations.’ However, adopting a customer value delivery orientation requires organizations to learn extensively about their markets and target customers.
Deciding how to compete on superior customer value delivery raise difficult questions like, of what exactly do customer value? Of all the things customer value, which ones should the company focus to achieve advantage? How do customers think the firm delivers that value? How will what customers value change in future? What tools or method to use in delivering this value? The challenge for organizations is to ensure that these questions are taken cognizance of and good strategies are used to delivering customer value. Therefore, this study hopes to bridge the gap and evaluate the impact of customer value delivery strategy on marketing performance.
1.3 Objective of the Study
The main objective of this study is to determine the extent of relationship between customer value delivery strategy and marketing performance.
Hence:
1. To examine the impact of product quality on customer satisfaction.
2. To ascertain the effect of product quality on customer loyalty.
3. To find out the implication of product quality on marketing profitability.
4. To critically assess the effect of brand image on customer satisfaction.
5. To examine the extent in which brand image affect customer loyalty
1.4 Research Questions
This study considers the following research questions to be relevant for the study
1. To what extent does product quality affect customer satisfaction?
2. To what extent does product quality affect customer loyalty?
3. To what customer satisfaction?
4. To what extent does brand image affect customer loyalty?
5. To what extent does brand image affect profitability?
1.5 Research Hypotheses
Hypothesis is a statement of the expected relationship between the dependent and independent variables (Baridam, 2001). For the purpose of this study, the following null hypotheses are formulated;
Ho: There is no significant relationship between product quality and customer satisfaction.
Ho: There is no significant relationship quality and customer loyalty.
Ho: There is no significant relationship between product quality and profitability.
Ho: There is no significant relationship between brand image and customer satisfaction.
Ho: There is no significant relationship between brand image and customer loyalty.
1.6 Significance of the Study
Several studies have been carried out in the area of customer value and marketing performance by different scholars. Their findings have established the indispensability of this variable on corporate performance. Therefore, research efforts in this area are not exhaustive there is a lotthat still needs to be done in this area especially in critically investigating the effect of customer value delivery strategy on marketing performance.
However, the findings of this study are expected to be beneficial to private and public sectors, practicing managers, entrepreneurs, and academic practitioners. It will serve as a reference material and a body of knowledge for both professional and academics. The study will add to the existing body of knowledge and will reveal the benefits and importance of identifying, creating, delivering and communicating customer value in business operations.
1.7 Scope of the Study
Ideally, the scope of the study covers three areas — theoretical area, geographical location and unit of analysis.
To this effect, customer value delivery strategy in terms of product quality, and brand image were looked at but other dimensions such as functional, emotional, epistemic, social value in use, product value and others were not considered in this study.
However, the study ordinarily would have covered all the Aluminum companies in the states but only the ones registered with Corporate Affairs Commission (CAC) were considered such as First Aluminum Nigeria Plc, Asaba Aluminum Company Ltd. Alo Aluminum Company Ltd. Differential Aluminum and Steel Company Ltd, Etag. uminum Nig. Ltd, Integrated Aluminum and Steel Company Ltd, Charles Aluminum, PON Aluminum. Sit as olomon Aluminum, and Von Aluminum Ltd.
Finally, top level managers of these firms were considered as unit of analysis of the study.
1.8 Limitations of the Study
The research work of this magnitude is bound to be affected by a lot of factors. One of the challenges faced in this study was climatic problem that is excessive rain fall which prevented the researcher from reaching the respondents on time. The study was also limited by industrial action (strike) on the part of Academic and non-academic staff of universities which prevented the researcher from having access to library to access books. Enough times was not given to really handle this work the way it ought to have been done. Also infrastructure problem such as bad roads was a limitation.
Finally, top level managers’ reluctant to release some of the important documents of the organization was a limitation.
1.9 Definition of Terms
Customer loyalty: The level of consumer faithfulness in continuing purchasing a particular brand of a product.
Customer satisfaction: The extent to which product’s perceived performance matches the buyer’s expectation.
Customer value: The trade-off between customers’ perceived product benefits and the resources used to acquire such a product.
Customer value delivery strategy: A decision made by a company about which customer value would be accepted by the target market, and how to create, transfer, and communicate customer value in order to win customer satisfaction and loyalty (Diao and Cheng 2010).
Marketing performance: A measure of a firm’s efficiency and effectiveness in its marketing efforts.
Product quality: The superiority of a product over others and has ability to satisfy its users.
Service delivery: The manner and time which companies attend to customers.
Value: Conformance of a product to customers expectation or a tradeoff between what is received and what is given.
Costs: Those psychological costs like time, effort and psychic cost including monetary costs incurred in the process of delivering value or acquiring products or services.
Brand Image: An impression in the consumers’ mind of a brand’s total personality i.e. real and imagining qualities and shortcomings.
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