EFFECT OF RELATIONSHIP MARKETING ON MARKETING PERFORMANCE OF SELECTED LEATHER PRODUCTS MANUFACTURING ENTERPRISES IN ABA, ABIA STATE NIGERIA

ABSTRACT

This study critically analyzed the relationship marketing and its effect on the performance of the leather based manufacturing enterprise in Abia State, Nigeria. The study has five specific objectives which were to identify the features of the selected leather product manufacturing enterprises in Abia State, ascertain the relationship marketing practices adopted by the manufacturing enterprises, determine factors affecting relationship marketing among the enterprises, analyze the marketing performance of manufacturing enterprises with respect to profit margin, marketing margin returns on sales, analyze the effect of relationship marketing on the marketing performance indicators of the selected manufacturing enterprises. Random samples of 45 leather based manufacturing firms were obtained and the data were collected using a well structured questionnaire. The tools used for data analysis were tables, frequencies, percentages, multiple regression and income statement analysis. It was observed that the relationship marketing mostly used to enhance performance among leather manufacturing enterprises were discount to customers, call after sales and credit sales. Specifically, relationship marketing has a positive significant effect on the performance on the (profit) of the enterprise. The significant determinants of relationship marketing were no of new customers in a year, service quality, channel exchanges, business markets, experience, effect of rivalry, post purchase services and influence of fraudsters. Also, while relationship marketing was one of the significant determinants of enterprises performance, it is therefore recommended that cooperate bodies and government should encourage the leather manufacturing enterprises by buying from them

TABLE OF CONTENTS

Title page - - - - - - - - - i

Declaration - - - - - - - - ii

Certification - - - - - - - - iii

Dedication - - - - - - - - - iv

Acknowledgement - - - - - - - - v

Table of Contents - - - - - - - - - vi

List of Tables - - - - - - - - viii

Abstract - - - - - - - - - -  ix

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study - - - - - - 1

1.2 Statement of the Problem   - - - - - 3

1.3      Objectives of the Study - - - - - - 5

1.4      Research Questions - - - - - - 6

1.5 Research hypothesis - - - - - - 6

1.6 Significant of the Study - - - - - - 7

1.7    Scope of the Study - - - - - - - 7

1.8 Limitation of the Study - - - - - - - 8

CHAPTER TWO

2.0    REVIEW OF RELATED LITERATURE

2.1 Conceptual Review - - - - - - 9

2.2 Customer Loyalty - - - - - - 10

2.3      Challenges of Leather Product in Aba - - - - 12

2.4 Scope of Relationship Marketing - - - - 13

2.5 Evaluation of Relationship marketing - - - - 14

2.6 Role of Relationship Marketing in Competitive Market - 16

2.7 Multiple uses of the term relationship marketing - - 17

2.7.1 Dual focus of relationship marketing - - - - 18

2.8 Advantages of Relationship Marketing (RM) - - - 19

2.9 Disadvantages of Relationship Marketing - - - 21

CHAPTER THREE

3.0   RESEARCH METHODOLOGY

3.1 Study Area -- - - - - - - - 23

3.2 Sampling Techniques - - - - - - 24

3.3 Sources of Data - - - - - - 24

3.4 Analysis of Data - - - - - - - 24

3.5 Model Specification - - - - - - 25

CHAPTER FOUR

4.0 RESULTS AND DISCUSSIONS

4.1 Results - - - - - - - - 28

4.2 Distribution on leather manufacturing enterprises according to socio

economic factors and the features of the selected leather products - 28

4.3 Distribution of leather enterprise according to Relationship marketing

adopted - - - - - - - - 31

4.4 Factors Affecting relationship marketing - - - - 32

4.4.1 Regression Analysis of Factors that affect the marketing performance

of the selected leather manufacturing enterprises - - - 34

CHAPTER FIVE

5.0   SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary - - - - - - - - 38

5.2 Conclusion - - - - - - -- - - 39

5.3 Recommendation - - - -- - - - 39

References - - - - - - - 41

Questionnaire

LIST OF TABLES

Table 4.1 Distribution and Return of Questionnaires - - 28

Table 4.2:   Distribution of socio-economic characteristics of leather products 29

Table 4.3 Distribution of relationship marketing - - - 31

Table 4.4: Analysis of Factors affecting relationship marketing among

leather enterprises - - - - - - 32

Table 4.4.1:  Analysis of Factors Affecting leather manufacturing enterprises 34

Table 4.5 Income Statement of Leather enterprises in the area of study - 36

.      

CHAPTER ONE

1.0   INTRODUCTION

 1.1 Background of the study

Stakeholders in the leather and foot wear enterprises in Nigeria have continued to point out that the potentials in the sub-sector is enormous.  (Nnoli, 2012) claimed that  vibrant leather enterprise is capable of contributing much to the nation gross domestic product (GDP) of a country . Nigerians developed penchant for foreign leather materials such as bags, shoes, belt and upholstery of the local manufacturers. The leather enterprise is very important to the Abia state economy and Nigerians at large; this is because it generates foreign exchange.  (Onovo, 2013) opined that in other to foster  the leather enterprise, special skills  in manufacturing is required , many producers of leather product such as shoes, belt, hand bags  needs to be aware on the current strategies  to get their products to those who are in need  of it .

A key principle of marketing is the retention of customers through varying means and practices to ensure repeated trade from the pre-existing customers by satisfying the requirements above those enterprises through mutually beneficial relationship. Relationship marketing can be applied when there are competitive product alternatives for customers to choose from and there is an on-going and periodic desire for the product or services (Morgan and Hunt, 2010).  

Relationship marketing is a customer designed to encourage strong, lasting customer connections to a brand, the goal is to generate repeated sales, encourage world of mouth promotion and gather information (John, 2008).

Relationship marketing stands in contrast to the move traditional transactional marketing  approach, which focuses on increasing the number of the individual sales in a manufacturing enterprise.

In the transactional model (Shoth and Parvatiya, 2013) they said that the return on customer acquisition cost may be insufficient. A customer may be convinced to select that brand one time, but without  a strong relationship marketing strategy,  the customer may not come back to that brand in future. While organization combined elements of  both relationship and transactional marketing, customer  relationship marketing is starting to play a more important role for many manufacturing enterprises.

The arrangement where both the buyer and the seller have an interest in providing a more satisfying exchange is the purpose of relationship marketing. This approach tries to disambiguiously transcend the simple post purchase exchanges process with a customer to make more truthful and richer contact by providing a more holistic, personalized purchased and uses the experience to create stronger ties. This marketing strategy has its own challenges that could cause some firms or enterprises not to optimally use them.  

1.2 Statement of the problem  

It is a well known fact that any enterprise that do not retain its customers will certainly not last long in competitive market. Some enterprise fails to understand this fact; Retention of customers has its own special strategy which requires special skill.

Some companies have refused to build barriers for customer switching, this barrier switching is combining of several products or services into one “package” and offering there at a single price, mostly in competitive market.

Lack of customer valuation is another area that enterprises are still lacking, (Gordin, 2009) describes how to value a customer and categories them according to their financial and strategic value to enable an enterprise know where  to invest for deeper relationship and  which relationship need to be served differently  or even terminated.

Most often enterprises do not include analysis of customers complaints and competitive bench marketing its place, even when they do not develop and implement a corrective plan. Most firm or manufacturing firms do not have good strategy on how to interact with their customers, in long term, rather they simply try to make quick sales, (John, 2011) focusing on learning customers personal tastes and understanding their individual issues, which can eventually get to the point where an enterprise will make actual sales, because the enterprise will know how product or services specifically solve their problems.

Okoli (2012) said that relationship marketing is good strategy that affects multiple aspects of customer loyalty. Many firms do not build relationship with customers slowly; they do not know that building relationship with customers slowly will build a relationship as a firm that cares about people and individuals. This can certainly become part of brand of the company or enterprises.

According to the journals, “management” science brand loyalty allows enterprises flexibility in setting price with the customer’s relationship, achieving this can improve the enterprise profit margin, because you do not have to attract customers on the basis of bargaining prices, instead customers return to you because they have a relationship with you.

Most enterprises do not have the skills to make customers become attracted to the company. Customers can specifically become attached to specific sales people while you run the risk of losing the sales person and having to re - build the relationship with the customer. This kind of loyalty can increase sales dramatically.

If enterprise can have but focuses in the customer, they will effectively sale more services to an existing customers or client than to find new customers. Enterprise often time do not have comprehensive customers client  list which should be their  most valuable asset because through that list they can develop long lasting  relationship by keeping  in touch in good times and bad  (Nnoli, 2012).

1.3        Objectives of the study

The broad objective of this study is to determine the effect of  relationship marketing on performance of selected leather products manufacturing enterprises in Ariaria main market, Aba  Abia State, Nigeria. Specifically this work addressed the following objectives which include to:

1) identified the features of the selected leather product manufacturing enterprises in Ariria main market.

2) ascertained the relationship marketing practices adopted by the manufacturing enterprises.

3) determined factors affecting relationship marketing among the enterprises.

4) analyze the marketing performance of manufacturing enterprises with respect to profit margin, marketing margin returns on sales.

5) analyze the effect of relationship marketing on the marketing performance indicators of the selected manufacturing enterprises.

1.4      Research question

Considering the problems and objectives stated above the following research questions were examined:-

1)  What are the features of the selected leather product manufacturing enterprises?

2) What type of relationship marketing practices adopted by the manufacturing enterprises?

3) What are the factors that affect relationship marketing?

4) Does relationship marketing enhance the performance of manufacturing enterprises, in respect to profit margin, marketing margin?

5) What are the factors that can affect relationship marketing among manufacturing enterprises?

1.5 Research hypothesis

This study disprove or prove the following hypotheses which were stated in null (H_O) forms.  

H_O1: There is no significant relationship between no of relationship marketing practices adopted by a firm and marketing performance of selected leather product manufacturing enterprises.

H_O2: Relationship marketing does not affect the marketing performance of selected leather products manufacturing enterprises.    

1.6 Significant of the study

This study ascertained the role relationship marketing plays in leather  product manufacturing enterprise  in Ariaria main market , Aba Abia state , Nigeria .

This research work adds to knowledge the importance of relationship marketing and to the extent it will add value to an enterprise. It also informs the leather enterprises the possible danger faced by any firm, Enterprise that fails to practice it.

1.7          Scope of the study

The extent coverage of the study is within the   frame of the topic.

This study examined the concept of relationship marketing as it affects selected  leather  product manufacturing enterprises in Ariaria main market in Aba, Abia State Nigeria.

The research could be based on relationship marketing and performance of selected leather product manufacturing enterprises. This is because most of these patronages of these selected manufacturing companies are somehow customers who in one time or the other purchase consistently to a particular enterprise, therefore this work studied the level upon which relationship marketing is practice in this leather product manufacturing enterprises. Any other marketing components that do not contribute on relationship marketing is not within the frame of this research.

1.8 Limitation of the study

The study was limited by some difficulties which acted as limitation to the successful completion and generalization of the work. These are time constraint, finance and unfriendly attitude of respondents.

The researcher found it difficult to gather all the necessary information needed for the work, there was not enough time to conduct a more thorough work coupled with high cost of transportation which affected the movement of the researcher.

Since the research work was carried out alongside with other academic activities, it affected the study but not much. However, despite the above limitations, the study was comprehensive and thorough as the method of investigation.

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