ABSTRACT
The purpose of the study was to determine the effect of relationship marketing on customer loyalty in transport companies (ABC Transport, the Young Shall Grow, Peace Mass Transport, and Abia Line) in Abia State Nigeria. The study adopted the descriptive research design. Using 100 questionnaires distributed to the customers of the transport companies Abia State Nigeria. The study adopted Pearson Moment Correlation was used for analysis. It was found out that there is a significant relationship between trust, commitment, preferential treatment and customer loyalty. It is recommended that there is need for transport companies to train their staff periodically in the variables of relationship marketing. Other variables of relationship marketing should be reviewed and applied in transportation companies.
TABLE OF CONTENTS
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Table of Contents vi
List of Tables ix
Abstract x
CHAPTER
ONE: INTRODUCTION
1.1
Background To The Study 1
1.2 Statement of the Problem 5
1.3 Objective of the Study 8
1.4 Research Questions 8
1.5 Research Hypotheses 9
1.6 Significance of the Study 9
1.7 Scope of the Study 10
1.8 The
Assumption of the Study 10
1.9
Limitations of the study 11
CHAPTER
TWO: LITERATURE REVIEW
2.1 Development
in Relationship Marketing Research 12
2.1.1 The Definition, Domain And Dimension Of
Relationship Marketing 15
2.2 The Ways Transport Companies Retain Their
Customers in Abia State 22
2.2.2 Customer Portfolio Analysis 22
2.2.2 Customer Retaining Marketing Mix 24
2.2.3 Specialized Distribution 27
2.2.4 Post Patronage Commitment 28
2.2.5 Reorganization for Customer Retention 29
2.3 Impact of RM and Perceived SQ on Customer
Loyalty 30
2.4.
Empirical Study 32
2.4 RM and RM Tactics 37
2.4.1 Tangible Rewards 38
2.4.2 Interpersonal Communication 38
2.4.3 Preferential Treatment 39
2.4.4 Membership 39
2.4.5 Direct Mail 39
2.5 Theoretical Framework 40
CHAPTER THREE: RESEARCH METHODOLOGY
3.1
Research Design 45
3.2 Population of the Study 45
3.3 Sample
Size Determination/Sampling Techniques 45
3.4 Research Instruments (questionnaire) 46
3.5 Psychometric Properties of the Research
Instrument 46
3.5.1 Validity
of the Research Instruments 46
3.5.2 Reliability of Research Instruments. 47
3.6 Administration of Instruments 47
3.8
Sources of Data
Collection 47
3.9 Method
of Data Analysis 48
3.10 Method
For Test Of Hypotheses 48
3.11
Study Area 49
CHAPTER FOUR
4.0 PRESENTATION AND ANALYSIS OF DATA 50
4.1 Distribution
of Questionnaire and Rate of Returns 50
CHAPTER
FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION 58
5.1 Summary of Findings 58
5.2 Conclusion 58
5.3 Recommendation 58
References
LIST OF TABLES
Table
4.1.1: Distribution
and Retrieval of Questionnaire 50
Table
4.2: Respondents
of the Socio-Economic Characteristics 51
Table
4.3: Respondent
Opinion on the Key Research Questions 52
CHAPTER ONE
INTRODUCTION
1.1 Background
To The Study
Relationship marketing, according to
Gordon (1998) is not a wholly independent philosophy but draws on traditional
marketing principles. This view suggests that the basic focus upon customer
needs still applies but that it is the way upon customer practiced that
requires changing fundamentally Christopher et
al (1996). If RM is indeed a
descendant of traditional marketing then a good starting point in developing a
definition of relationship marketing would be to look at how marketing has
traditionally been perceived. This traditional view might be summed up
succinctly using the Chartered Institute of Marketing’s (CIM, 1963) definition
of marketing as: The management process of identifying anticipating and
satisfying customer requirements profitably.
This definition includes a number of
assumptions that are important in the discussion of relational strategy development.
‘Process’ assumes that traditional marketing is a series of activities carried
out as part (only) of a company’s other functions. It implies a functional
marketing department responsible for a fixed number of responsibilities
presumably closely associated with the ‘marketing mix’. It also implicitly
suggests that ‘identifying, anticipating and satisfying customer requirements’
is the singular responsibility of the marketing department. ‘Profitably’ is
assumed to mean that these responsibilities are carried out in a competitively
superior manner Gordon (1998), although there is no indication of the scale
over which this profitability should be measured.
This description of traditional marketing
and others of a similar nature emphasis, above all, the functional and process
nature of traditional marketing and make no explicit recognition of the
long-term value of the customer Buttle (1996). The focus of traditional or mass
marketing also implies that whatever status of the customer (non-customers,
current customers and past customers) they are all treated in the same way and
are of comparable worth status to the organization.
Berry (1983) was among the first to
introduce the term ‘relationship marketing’ as a modern concept in marketing.
He suggested that this ‘new approach should be defined as:Attracting,
maintaining and enhancing customer relationships. While recognizing that
customer acquisition was, and would remain, part of a marketer’s
responsibilities. This viewpoint emphasized that a ‘relationship view of
marketing’ implied that retention and development were of equal (or perhaps
even greater) importance to the company in the longer term than customer
acquisition. It further implied, by differentiating between customer types,
that not all customer or potential customers should be treated in the same way.
Relationship marketing (RM) has been a
topic of serious discussion among academics and marketing practitioners for the
best part of 20 years. It was, however, during the last decade of the 20th
century that relational strategies gained a wider following, and that debate on
relationship marketing began to dominate the marketing agenda. During this
period relationship marketing was probably the major trend in marketing and
certainly the major (and arguably the most controversial) talking point in
business management. Relationship marketing in the 1990s became the leading
topic of discussions at academic conferences in Europe, North America,
Australia and elsewhere around the globe. Relationship marketing was frequently
the subject of dedicated practitioner conferences, academic journal articles, as
a general topic, in relationship marketing editions of major publications as
well as in at least one dedicated Relationship Marketing Journal, (the
International Journal of Consumer Relationship Management), and specialist
marketing magazines. Relationship marketing was the basis of academic and
practitioner texts by major marketing writes e.g. McKenna, (1991); Christopher
et al, (1991); Payne et al, (1995), and such was RM’s perceived importance that
all, marketing books will include at least one section dedicated to the
concept.
RM’s rise to prominence was rapid. As the
last decade of the 20th century passed into history, the number of
devotees to the concept continued to grow fast. Indeed, RM had according to one
prominent marketing writer became an important reference point in marketing and
management academics, then marketing practitioners were just as enthusiastic.
Indeed, practitionerinterest became the driving force behind RM’s growth
O’Malley and Tynan, (1999), with innumerable case studies reported at
conferences, in magazines and in texts supporting and justifying the relational
approach.
Claims for the benefits of relational
strategies were numerous, not least that RM was becoming a unifying force
within marketing. Mattson (1997b) suggested that here at least, there was a
concept within marketing research that served as the generic context for all
marketing transaction, whether products or services, consumer or industrial. Gronroos
(1996) believed that RM represented the biggest change in 50 years, in effect
‘taking marketing back to its roots’. Relationship marketing, it was being
suggested, was a (or is the) ‘new marketing paradigm’ Kotler, (1992),
Gummesson, (1999) and a ‘paradigm shift’ Sheth and Parvatiya, (1983); Gronroos,
(1994); Morgan and Hunt, (1994) and was taking place in marketing practice and
though. Major companies (e.g. British Airways, Boots, Coca Cola Nigeria, First
Bank, Union Bank, Virgin Nigeria Airways, Tescoetc) were confident enough about
RM’s capabilities to appoint RM managers and directors whose principal function
was to operationalize the concept. At around the same time Safeway became the
first UK supermarket chain to set up a dedicated RM team. Relationship
marketing was in vogue among contemporary marketing academics and
practitioners, not only in service and inter-organizational contexts, from
where it had developed, but even in consumer markets, where it had initially
been overtly shunned O’Malley and Tynan, (1999).
While most marketers approached the
concept with some level of rationality, there were some claims that were almost
messianic in nature. Reichheld (1990) suggested that the relational concept
represented a ‘shift in business thinking, as fundamental as the shift to c Copernican
sun-centered system was for astronomers’. Elsewhere, he suggested that the
benefits of loyalty-based marketing represented ‘a kind or miracle of loaves
and fishes’. According to Reichheld (1990) relationship marketing was the
‘battle cry’ of the 1990s. The ‘marketing mix’ and other aspects of
‘traditional marketing’ were, it was suggested, dying: ‘Long live Relationship
Marketing’.
Businesses and Companies, especially the
transport companies in Abia State have for long used Relationship marketing
Strategy to attract and retain customers. It is not an entirely new concept,
but a refocusing of the traditional marketing concept, with the emphasis now on
customer value. The attempt to provide answers to the Role of Relationship
Marketing Concept and Strategies as a competitive tool by transport companies
has led to this study. The focus of this study therefore shall be to analyze
the Role of Relationship Marketing Strategies and Concepts, as a competitive
strategy to the growth of transport companies in Abia State. The study will
also examine the various RM strategies and theories, the procedures to handle
customer complaints, and what the transport companies must do to attract,
maintain, retain and enhance customers’ relationships which will in effect lead
to profitability.
1.2 Statement of the Problem
There is that tendency that when new ideas
in management emerge, a lot of people tend to embrace them keenly for a while
and to see them as the ultimate solution to whatever problem that we perceive
to exist (Payne et al, 1998). Equally there is a tendency to put them aside
after the initial novelty has worn off, and they are found to be not quite the
panacea that are once thought. Marketing has been proved to this “flavor of the
mouth” syndrome. The experience curve, the Boston Matix, all useful tools in
themselves are recent examples of ideas that achieved widespread coverage and
brief acclaim, only to be quietly drooped by many of their advocates shortly
afterwards. Already there are people who would claim that “relationship
marketing” is another of these short-life cycled management phenomena. Indeed
there is always a danger that when something is presented as new and different,
it will be oversold and thus be rejected when it fails to deliver everything
that was promised. Relationship marketing as it presented is not in itself a
new concept; rather it s refocusing of traditionally marketing with a greater
emphasis being placed upon the creation of customer value. Customer value is
the summation of all the positive effects that a supplier has upon the
customer’s business or in the case of end users, their personal satisfaction.
Creating or enhancing customer value
clearly requires a detailed understanding of the customer’s value chain and in
particular whereabouts in that chain, the opportunities for value enhancement
lies.
The fundamental principle upon which
relationship marketing is founded is that greater the level of customer
satisfaction with the relationship, not just the products or services, then
greater the likelihood that the customer will stay with us.
The importance of retaining customers is that
there is strong evidence that customer retention and profitability are directly
related. It seems that the longer the customer stays with a seller/producer,
the higher the likelihood that they will place a greater amount of business
with them, even to the extent of single sourcing. Further, there is likelihood
that these retained customers will cost less to service and that they will be less
likely to be motivated by price.
Over the years in Nigeria, few companies
in particular the transport companies have practiced RM concept, strategy and
practice. Especially among the transport companies in Abia State, it has been a
fairly old practice, although used ignorantly and crudely. In some of the
companies it was not used at all or is inappropriately used. Inspite of the
apparent usefulness of marketing and relationship marketing in particular, the
transport companies in Abia State are yet to properly accept, adopt and use it.
RM has not been fully integrated into the normal marketing and Business
strategy of the transport companies. Transport companies are yet to fully
understand the usefulness of customer retention as compared to customer
acquisition. RM has not been appropriately used by transport companies.
Transport companies devote much time to customer acquisition, only to lose such
customers to competitors and competing products in a short period of time.
Customer acquisition by companies and their managers was akin to looking for a
needle in the haystack, finding it and then throwing it back, only to look for
it once again. It is not worth the time and money to get customers if one
cannot keep them.
The study therefore will address the main
impact of Relationship Marketing as a strategy and concept to be used by the
transport companies, and discover why most of the companies are yet to accord
it a proper place in the life of a business. It will identify the modern
strategies involved, how to treat customer complaints, how to attract, enhance,
maintain, adopt and retain customers, for the purpose of customers
satisfaction, loyalty and profitability.
1.3 Objective of the Study
As implied from the statement of research
problems, this study has the following objectives. The main objective is to
provide the basis for the understanding of the relationship marketing concept
and strategies as used by the transport companies in Abia State.
The specific objectives are to:
i. To
examine the extent of adoption of the relationship marketing concept and
strategies.
ii. To
ascertain if there is a significant relationship between trust and customer
loyalty.
iii. To
ascertain if there is a significant relationship between commitment and
customer loyalty
iv. To
ascertain if there is a significant relationship between preferential treatment
and customer loyalty
1.4 Research Questions
This study aims to provide answers to the
following questions:
i. Do
transport companies accept, use and adopt the relationship marketing concept
and strategies?
ii. Is
there any significant relationship between trust and customer loyalty?
iii. Is
there any significant relationship between commitment and customer loyalty?
iv. Is
there any significant relationship between preferential treatment and customer
loyalty?
1.5 Research Hypotheses
This research shall attempt to test and
find solutions to the following formulated hypotheses. They are:
Ho: That transport companies
do not accept, use and adopt the relationship marketing concept and strategies.
Ho: There is no significant
relationship between trust and loyalty.
Ho: There is no significant
relationship between commitment and customer loyalty.
Ho: There is no significant
relationship between preferential treatment and customer loyalty.
1.6 Significance of the Study
This study on completion will help transport
sector to be efficient at all times by improving on the customer relationship so
as to satisfy their teeming customers and contribute to the growth of economy
and national development.
The study will help to explain and
expansiate the concept and operations of relationship marketing as a strategy
used to retain customers and attract their patronage and loyalty on a long time
bases, which will lead to great market shear expansion.
Future researchers will heave a sigh of
relief as the study will serve as a base point and or reference for their great
future research endeavours thereby helping them to come out with very improved
and reliable findings.
1.7 Scope of the Study
The boundaries of the area covered by this
study are determined by its time dimension, the type and nature of the industry
and the number and spread of the transport companies. The study is concerned
with transport companies in Abia State of Nigeria. The period of 15years (1999
- 2014) is considered long enough to enable us have the within the population
of our study, those that are old enough and well established, and transport
companies of various sizes with diverse relationship marketing practices and
performance profiles. Specifically the study focuses on the adoption of
effective, efficient and reliable relationship marketing strategy that will
unite the transport companies and their teeming customers.
1.10
The Assumption of the Study
In the course of this study, the
researcher assumed that the transport companies do not adopt nor use an efficient
relationship marketing.
1.11
Limitations
of the study
The study was constrained to its scope as
a result of the following reasons:
1. Abia
state was chosen as a study area to represent the entire nation. The researcher
believes that the findings shall be used to study the country at large.
2. That
ABC transport, The Young Shall Grow, Peace Mass transport and Abia Line where
use as a case hoping that they will serve the purpose.
3. That
information on relationship marketing is not easy to come by as a result of the
new concept.
Login To Comment