ABSTRACT
This study attempted to examine the determinants of satisfaction and loyalty of these products (bread biscuits and snacks). The main objective of this study is to investigate the determinants of customer loyalty and satisfaction in bakery enterprises in Abia state, Nigeria. The specific objectives are to: analyze the socio-economic characteristics of the consumers of bakery products; examine the customers according to their preferences in bakery products consumption; rating and analyze the customers according to level of satisfaction with bakery products; examine the extent of influence of some factors on customers’ satisfaction and loyalty; determine the relationship existing between customer satisfaction and customer Loyalty. About 250 bakery consumers were randomly selected from 6 local governments within the state and data collected with the administration of well-structured questionnaires. Subsequently, the data were analyzed using descriptive (charts, tables and frequencies) and inferential (logit, multiple regression and correlation models) statistics. The results show that majority of the consumers were still young. 50% of the consumers received a monthly income of N 10,000 – 100,000. Bakery products’ consumption was highest among civil servants (contributing 50% of the entire sample). Majority (48%) of the consumers preferred bread over the biscuits and snacks. The result also showed that 47% of biscuit consumers were satisfied while 44% and 9% were strongly satisfied and indifferent respectively. The logit result Nagelkerke R2 shows that 45.5%, 61.2% and 58% of changes in the satisfaction levels derived from the consumption of bread, biscuits and snacks respectively were accounted for the independent variables included in the model. Age negatively affected the satisfaction from all the products at 5% significant levels respectively. Education level was positively significant at 10% for biscuits and 5% for snacks. Product quality was positively signed at 10% for bread and snacks respectively indicating that consumers derived more satisfaction by consuming quality products. Product size was positively significant at 1% for biscuits indicating that consumers derived more satisfaction by consuming products that are large. Packaging had a positive correlation with satisfaction derived from bread and biscuits consumption at 1% respectively. Brand image positively affected the satisfaction derived from bread consumption at 10% significant level. Taste affected biscuit and snacks consumption and satisfaction at 1% level of significance respectively. Satisfaction derived from biscuits and snacks was positively correlated with product availability. A multiple regression analysis result showed that the F-ratios were significant at 1% for the three products. R2 shows that 54%, 64.1% and 69% of changes in the frequency of repeat buying (customers’ loyalty) was accounted for by the changes in the model variables for bread, biscuits and snacks respectively. A very strong and positive correlation of r = 0.872 existed between customers’ satisfaction and loyalty at 1% significant level. The study revealed that customers’ satisfaction and loyalty were jointly affected by consumers’ age, product quality and packaging. In line with the findings of the study, it is recommended that: these firms must develop strategic means of reaching all their customers’ needs. Product packaging and quality must be given serious consideration if the bakery firms are to retain and satisfy their customers. These commodities should be sold at affordable prices.
TABLE OF CONTENTS
Title
-------------------------------------------------------------------------------------------------------
i
Declaration-------------------------------------------------------------------------------------------------ii
Certification
-----------------------------------------------------------------------------------------------iii
Dedication
-------------------------------------------------------------------------------------------------iv
Acknowledgement-----------------------------------------------------------------------------------------v
Table of contents------------------------------------------------------------------------------------------vi
List of
tables------------------------------------------------------------------------------------------------ix
List of
figures-----------------------------------------------------------------------------------------------x
Abstract------------------------------------------------------------------------------------------------------xi
CHAPTER ONE:
INTRODUCTION
1.1
Background of the
study------------------------------------------------------------------------------1
1.2
Statement of
problem----------------------------------------------------------------------------------3
1.3
Objectives of the study
-------------------------------------------------------------------------------6
1.4
Research Questions
-----------------------------------------------------------------------------------6
1.5
Research Hypothesis
----------------------------------------------------------------------------------7
1.6
Significance of the
Study------------------------------------------------------------------------------7
1.7
Scope of the study
--------------------------------------------------------------------------------------7
1.8
Limitations of
Study------------------------------------------------------------------------------------7
CHAPTER
TWO: REVIEW OF RELATED LITERATURE
2.1 Over view of customer
satisfaction------------------------------------------------------------------8
2.2 Customer
satisfaction----------------------------------------------------------------------------------9
2.2.1 Dynamic nature of customer
satisfaction---------------------------------------------------------13
2.4 Customer
loyalty---------------------------------------------------------------------------------------13
2.5Determinants of customer
satisfaction---------------------------------------------------------------16
2.5.1
Product------------------------------------------------------------------------------------------------16
2.5.2
Packaging---------------------------------------------------------------------------------------------17
2.5.3
Prices--------------------------------------------------------------------------------------------------17
2.5.4
Promotions-------------------------------------------------------------------------------------------20
2.5.5 Brand image-----------------------------------------------------------------------------------------20
2.5.6
Taste--------------------------------------------------------------------------------------------------21
2.6 Determinants of customer
loyalty-------------------------------------------------------------------21
2.6.1 Product
quality---------------------------------------------------------------------------------------21
2.6.2
Price---------------------------------------------------------------------------------------------------21
2.6.3
Promotion---------------------------------------------------------------------------------------------23
2.6.4 Customer
satisfaction--------------------------------------------------------------------------------23
2.6.5 Price of
substitutes ----------------------------------------------------------------------------------24
2.6.6
Brand
Image-------------------------------------------------------------------------------------------24
2.7 Relationship existing between customer satisfaction and
loyalty---------------------------------25
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Research
Design-----------------------------------------------------------------------------------------26
3.2 Study area
----------------------------------------------------------------------------------------------
26
3.3
Population of study -------------------------------------------------------------------------------------27
3.4 Sampling techniques
-----------------------------------------------------------------------------------27
3.5 Method of Data
Collection-----------------------------------------------------------------------------27
3.5.1 Questionnaire
design---------------------------------------------------------------------------------28
3.6
Method of data
analysis--------------------------------------------------------------------------------28
3.6.1Model specification------------------------------------------------------------------------------------28
CHAPTER FOUR: RESULTS AND
DISCUSSION
4.1 Data presentation and analysis ------------------------------------------------------------------------30
4.2 Socio-economic characteristics of the
respondents-------------------------------------------------30
4.2 Consumers’ preferences of bakery products in Abia State ----------------------------------------35
4.3 Consumers’ level of satisfaction with bakery products--------------------------------------------36
4.4 Factors Influencing Consumers’ satisfaction with
Bakery product-------------------------------39
4.5 Factors Influencing Consumers’ loyalty to Bakery
products -------------------------------------42
4.6 Relationship Existing Between Customer Satisfaction and Customer Loyalty-----------------45
CHAPTER
FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary-----------------------------------------------------------------------------------------------46
5.2 Conclusion---------------------------------------------------------------------------------------------48
5.3 Recommendations -----------------------------------------------------------------------------------48
References
LIST OF TABLES
Table 1 Distribution of questionnaires-----------------------------------------------------------------30
Table
2 Frequency Distribution of Bakery Products’ According to
Age--------------------------30
Table
3 Frequency distribution of respondents according to gender-------------------------------32
Table
4 Frequency distribution of respondents according to marital
status-----------------------32
Table
5 Frequency distribution of the consumers by level of
education---------------------------33
Table
6 Frequency distribution of respondents according to household
size----------------------34
Table
7 Frequency distribution of enterprises by yearly
income-----------------------------------34
Table
8 Frequency distribution of respondents by
occupation--------------------------------------35
Table 9 Logit
regression result for factors affecting customers satisfaction to the
consumption of selected bakery
products---------------------------------------------------40
Table
10 Regression result for factors affecting customers’ loyalty to the
consumption of
selected bakery products
--------------------------------------------------------------------44
Table
11 Correlation result of effect of Customers’ satisfaction on
loyalty------------------------45
List
of figures
Figure
1 Consumers’ preferences of
bakery products in Abia State 36
Figure
2 Consumers’ Level of
Satisfaction with Biscuits 37
Figure 3 Consumers’ level of satisfaction with
bread
38
Figure 4 Consumers’
level of satisfaction with snacks
39
CHAPTER
ONE
INTRODUCTION
1.1
Background of the study
The bakery industry which has been
increasing steadily in the country is among the largest processed food
industries in Nigeria. The two major bakery industries viz bread and biscuit
account for about 82% of the total bakery products. BFW, (2005).This industry
in Nigeria comprises of organized and unorganized sectors. The organized sector
consists of large, medium and small scale manufacturers who produce packaged
biscuits and bread. The unorganized sector consists of small bakery units,
cottage and household type manufacturing goods and distributing their goods in
the surrounding areas (World Bank; 2000; BFW, 2005 and Warren 2003).
Bakery product contain high
nutritive value and are manufactured from combinations of wheat or other
flours, sugar, baking powder, condensed milk, fat (ghee), salt, jelly, dry
fruits, various essences and flavoring.
Different types of bakery products
can be classified as dry bakery products and moist bakery products. Dry bakery
products include soft biscuits, hard biscuits, cookies, crackers, fancy
biscuits and cream wafer biscuits.
Moist bakery products include sweet
bread, milk bread, masala bread, wheat bread, cassava bread, garlic bread,
various types of buns, cakes, pastries, muffins etc. these products are
available in various sizes, shapes and forms (Indian food industry, 2001;
beverage and food world 1998)
The current demand for biscuits is
likely to exceed 2.2 million times considering their leading role as one of the
major sources of energy, protein, iron, calcium and several vitamins. Some
commercial bread and biscuits contains around 7.5% to 7.8% protein
respectively. In terms of cost, biscuits are amongst the lowest cost processed
food in the country when compared to other salted snacks. Most of the bakery
products are easy to use during travel or at home because of its availability
in variety as a luxury tea-time snacks but essentially daily food component for
an average Nigerian household. Onwumere et
al..,(2012).
In the contemporary global and
highly competitive economy it is fatal for a business organization to be
non-customer oriented. Indeed to survive organizations need to produce products
and services of very good quality that yield highly satisfied and loyal
customers (Fecikeva, 2004). For many years customer satisfaction has been a
major goal of business organization, since it has been deemed to affect
customer retention and companies market share (Hansemark and Albinsson, 2004).
Customers are the key elements for
any business because if you have no customer then you have no business.
Satisfaction is an overall customer
attitude or behaviour towards a service provider, or an emotional reaction
towards the difference between what customers expect and what they receive,
regarding the fulfilment of some desire, need or goal (Hansemark, &
Albinsson, 2004; Kotler, 2000; Hoyer, & MacInnis, 2001).
Customer satisfaction is the one element which
can measure the business worth as well as business growth. Customer
satisfaction is very important in any business because it can lead your
business in profit side or loss side.
Customer satisfaction is a business
philosophy which tends to the creation of value for customers anticipating and
managing their expectations and demonstrating ability and responsibility to
satisfy their needs (Dominici and Guzzo 2010).
Qualities of service and customers
satisfaction are critical factors for the success of a business. Customer satisfaction depends on the products
perceived performance relative to a buyer's expectations (Kotler and armstrong
2010).
Customer satisfaction is the heart
of marketing. The ability of an organization to satisfy customers is vital for
a number of reasons. For example, it has been shown that dissatisfied customers
tend to complain to the company and in some cases seek redress from them more
often to relieve cognitive dissonance and bad consumption experiences (Oliver, 1997)
Outstanding companies go out of
their way to keep customers satisfied. most studies shows that higher levels of
customer satisfaction leads to greater customer
loyalty, which in turns results in better company performance. Customers
are the actual agents or stakeholders for determining or best judging the
success of any product.
Evans and Lindsay (1996) stated that
companies with satisfied customers have a good opportunity to convert them into
loyal customers who purchases from those firms over an extended time period.
Customer satisfaction and loyalty
among products can be determined by demographic attributes of the consumers,
product quality and reliability, price, promotion, taste, brand image and
availability/ distribution.
1.2
Statement of problem
Competitors prospering in the new
global economy recognized that measuring customer satisfaction is the key. The
basis of consumer satisfaction or dissatisfaction lies in mankind’s ability to
learn from past experiences. The customer satisfaction can be measured by
various ways one of the way of measuring the customers satisfaction is the
expectation of customers about the benefits and the cost association depends
upon the experience of the past suggested by Mouri (2005), and the other way is
through the life cycle of the relationship of the customer proposed by the
Spath and Fahnrich (2007)
One of the major factors which
influence the customer satisfaction is the quality of product; Quality of
product is an important factor of customer satisfaction in manufacturing
industries. The customer’s satisfaction and trust are influenced by the
perceived quality of the product. The high quality of a product will have a
positive impact on the customer satisfaction. When the customers will not get
the quality of product which they were expecting before the purchase their
trust will shake which in turn makes the customer dissatisfied and this ends up
in the customer switching to other products. For building long term good trust
worthy relation with the customers the firms should provide the customers what
they need and want.
The customer satisfaction is also directly
influenced by the price factor. The price fairness effect the customer
satisfaction in a positive way but the perceived price fairness can be
negatively affected by the customer’s vulnerability (Herrmann, Xia, Monroe
& Huber, 2007). The customer perceives the price in accordance with the
quality whose result end up in satisfaction or dissatisfaction (Oliver, 1997).
Price reasonability also plays an important role in creating the customer
satisfaction. The reason for a consumer to switch to any other product is the
price reasonability from where they get it they went there (Imran, Safwan,
Rehman, Afzal, Ali, & Ali, 2010).The high, unreasonable and unreliable
pricing policies affect the customer satisfaction negatively. Customer wants
the good quality products with reasonable prices which they can afford easily
and if any firm provides this to the customer it will build long term good
relation with the customer (Peng& Wang, 2006).
Brand image also play a role in
creating the satisfaction of the customers. (Brady et al, 2005) proposed that
the perception of the customer about the characteristics of the product and
service is influenced by the Perceptions about the brand and branding. The
vital aim of the brand and product management is to build strong brand image
which in turn generate the huge short term and long term profit (Aaker,
1997).The brand image is negatively influenced by the brand extensions (Arslan
and Altuna 2010). So there is a positive impact of brand image on the customer
loyalty and commitment towards the offerings of the market.
Promotion is one of the factors
through which you can enhance the satisfaction level. According to (Khan 2012)
promotion of product and services helps to build the relationship with
customers.
The bakery industry has shown a
tremendous growth rate in current years. Numerous new competitors have entered
in this sector to gather the advantages of this sector. So, every company is
now striving hard to launch attractive and innovative products and services in
order to attract the new customers. Those firms which consist of large number
of customers are trying to retain their customers. Therefore the main issue of
firms is not only to attract the new customers and earn huge profit but also to
retain their customers for the longer period of time. And this retention is
possible when the customers are satisfied with the bakery product.
Despite numerous studies, we still
do not have a full understanding of how determinants influence customer
satisfaction and loyalty and which are the central ones that managers should
focus on (Brady et al, 2005). In this
study, we have selected a group of commonly used perceptual determinants. The
aim is to further explore the nature and influence of these selected determinants.
So, the objective of this study is
to find the impact of brand image, price, and product quality, taste, promotion,
product size, packaging and other demographic factors on the customer
satisfaction with bakery products.
1.3
Objectives of study
The main objective of this study is
to investigate the determinants of customer loyalty and satisfaction in bakery
enterprises in Abia state, Nigeria.
The specific objectives are to:
i.
analyze the socio-economic characteristics of
the consumers of bakery products.
ii.
examine
the customers according to their preferences in bakery products consumption.
iii.
rating
and analyze the customers according to level of satisfaction with bakery
products.
iv.
examine
the extent of influence of some factors on customers’ satisfaction and loyalty.
v.
determine the relationship existing between
customer satisfaction and customer Loyalty.
1.4
Research questions
The following research questions are
to be addressed by this study:
i.
What
are the socio-economic characteristics of consumers of bakery products?
ii.
What
are the preferences of the customers in bakery products?
iii.
How
can the customers be rated and analyzed according to level of satisfaction and
loyalty in bakery products?
iv.
What
is the extent of influence of some factors on customers’ satisfaction and
loyalty?
v.
Does
a significant relationship exist among customer satisfaction and customer
loyalty?
1.5
Research hypotheses
HO1: There is no significant influence of these
factors on customers’ satisfaction and loyalty.
HO2: There is no significant
relationship existing between customer’s satisfaction and customer Loyalty.
1.6
Significance of study
A thorough understanding and
knowledge of the factors that have impact on customer satisfaction and loyalty
are very useful in guiding bakery owners and managers to design and deliver the
right offering to their consumers. Also, it can determine the mediating role of
customer satisfaction and its impact on brand or customer loyalty.
The result of the study will be
beneficial to consumers, traders, bakery owners, scholars and others that might
be interested in the subject matter. Finally, the study will serve as a further
spring board for those researchers that will like to research in other related
areas of the subject matter.
1.7
Scope of study
The scope of this study is to
investigate the determinants of customer’s satisfaction and loyalty among
bakery products in Abia State Nigeria. Studying the whole Abia state will be
too unmanageable. Therefore the scope was further reduced to six (6) Local
Government Areas in Abia State namely: Aba North, Aba South, Osisioma, Umuahia
North, Umuahia South and Ikwuano Local Government Areas.
1.8
Limitation of study
In
a study of this nature, a lot of problems are bound to appear. It was then a
task for the researcher to strive to achieve the best I could in spite of these
problems.
This
study however, was limited by lack of relevant material. Past studies in this
area of study are very scanty and difficult to come by
Finance:
The researcher was constrained by lack of finance . A lot of expenses were also
incurred in questionnaire typing and interview schedule. This constraint also
posed a problem
The
researcher being a graduating student had to allocate the available time between
lecture hours and appointment schedule with these respondents. Even some of the
educated people were reluctant filling their questionnaires.
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment