PROPOSAL
The importance of
consumer satisfaction and retention as a key to business survival can be fully
appreciated when one realizes dominant role it plays in the organization
(Private and Public sector) and the nation economy at large. Consumer
satisfaction is the main stay of an organization in that any firm fails in this
area will barely break even. It improves, increases the business activities and
promote economic growth. These projects continue five chapters, each chapter
concentrate on different aspect of human endeavour and the economy at large.
Chapter one is to
introduce the significant important of the study, and statement of the general
problem, object we and rational, the scope and limitation, the Definition of
the terms is not an exception.
Chapter two discusses
the literature review only.
Chapter three deals
with researcher methodology and the instrument used, research population, also,
it explains the sampling procedure employed, and the historical background of
the study, and the organizational structures.
Chapter four explain about the formulation
and hypothesis of the study, the presentation of data.
Chapter five which is
the last chapter of the research work stressed on the summary of the findings
and the recommendation, and also explains the conclusion in an organization.
TABLE OF CONTENTS
CHAPTER ONE
1.0 Introduction
1.1 Statements
of the problem
1.2 Aims
and Objectives of the study
1.3 Significance
of the Study
1.4 Scope
of the Study
1.5 Limitation
of the Study
1.6 Definition
of the term
CHAPTER TWO
2.0 Literature
Review
2.1 Tools
for tracking and measuring customer satisfaction
2.2 Deliverance
customer value and satisfaction
2.3 Value
Chain
2.4 Value
– Delivering Network
2.5 Attracting
and retaining customers
2.6 Attracting
customer
2.7 Computing
the cost of customer
CHAPTER THREE.
3.0 Research
methodology
3.1 Population
and sample size
3.2 Method
of Data Collections
3.3 Method
of Data Presentation
3.4 Method
of Data analysis
CHAPTER FOUR
4.1 Historical
Background of Berger Paints
4.2 Data
Presentation, Analysis, and Interpretation
4.3 Testing
of Hypothesis
4.4 Discussion
of Findings.
CHAPTER FIVE
5.1 Summary,
Recommendation and Conclusion
5.2 Summary
of the Research findings
5.3 Conclusion
5.4 Recommendation
5.5 Appendix
5.6 References
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
It's difficult to over-stress the importance of customer
satisfaction. Sustained profitability is only possible through building
customer value and satisfaction. Profit comes as a consequence of building
customer value.
As
Henry Ford said:
"Business
must be run at a profit... else it will die. But when anyone tries to run a
business solely for profit, then also the business must die, for it no longer
has a reason for existence."
Value Defined
Something that satisfies a consumer's need or want has value in the
eyes of the consumer. Whether or not a consumer will buy a product offering
depends on whether what it costs them is greater or less than the product's
perceived value. Furthermore, when choosing between similar offers, a consumer
will choose the product that offers the biggest difference between value and
cost. Costs to the customer include not only monetary costs, but everything
associated to acquiring it, such as time and hassle. For example, having to go
and pick up concert tickets you've already paid for online adds an additional
cost. Therefore, even if your product is more expensive, it will nevertheless
be chosen if it carries more value in the eyes of the customer.
The difference between what the consumer perceives as the
value of the product offering and its costs, are known by marketers as the delivered
value. The goal is to ensure that the delivered value for your product is
greater than the delivered value of the customer's alternatives.
Customer Satisfaction Defined
Customer satisfaction is closely related to customer
expectations. Once acquiring a product, the customer will compare the actual
performance of the product with what was expected. The customer will have
feelings of pleasure if product performance meets expectations, and feelings of
disappointment if it doesn't. If actual performance exceeds expectations, the
customer is highly satisfied or delighted.
Customers form their expectations from a variety of sources
such as friends, past experiences, competitors as well as the marketer's
messages and promises. A balancing act must be made here. If you set
expectations too high with your messages, your customers are more likely to be
disappointed. If you set them too low, fewer will buy. The most successful
firms set expectations high and then are able to deliver performance to match –
at a profit.
Creating Customer Value
Given the importance of customer value, it's useful to use
what Micheal Porter of Harvard calls the value chain as a tool to find
ways to create more customer value. The value chain consists of company
activities that create value and add costs in an organization. The primary
activities in the value chain are:
- Bringing materials into the
company (inbound logistics)
- Converting materials into
finished products (operations)
- Shipping out finished products
(outbound logistics)
- Marketing the products (sales
and other marketing activities)
- Servicing the products
(customer service)
Primary
activities have secondary support activities which include procurement (or
purchasing), technology development, human resource management and firm
infrastructure. These support activities may be handled by specialized
departments or by multiple departments.
Your job as a marketer is to examine the costs and
performance of each value-creating activity, and find ways to improve in each
area. It's helpful to compare competitors costs and performance in the value
chain as a benchmark. If you can outperform your competitors you can gain a
competitive advantage.
It's important to note that internal departments sometimes
act in ways to maximize their interests rather than those of the company or
customers. For example, a credit department may take too long ensuring the
credit worthiness of a customer to avoid the possibility of a bad debt. During
this time, the customer is waits and waits, and the sales person becomes
frustrated.
The solution to this problem, is to ensure the core business
processes are managed smoothly, by using cross disciplinary teams to manage
core processes.
It's important to look beyond your own operations as well.
Finding competitive advantages beyond your own operations will increase your
chances of success. For example, Walmart's suppliers are plugged directly into
its inventory system so that they can track sales and replenish items as
needed. This reduces the chances of stock outages.
The importance of customer retention
Often, organizations focus a lot or their marketing efforts
on attracting new customers and far less attention retaining customers.
Satisfied customers are loyal customers. Here are some interesting statistics
from the Harvard Business Review (The Loyalty Effect by Frederick F. Reichheld
and Thomas Teal):
- It can cost 5 times more to get
a new customer than to satisfy and retain a current customer
- In a typical company, customers
are defecting at the rate of 10-30% per year
- The profitability of a customer
tends to increase the longer the customer is retained
A 5% reduction in the customer defection rate can increase
profits by 25% - 80%, depending on the industry
The consumer is faced
with an infinite number of choices in his buying behavior. He makes a decision
on whether to spend his money or save it. If he chooses to spend it, he has a
wide range of product choices available to him. Even within the relatively
narrow field of paint industries the consumer has, from five to ten different
brands of paints from which to choose in the average paint shop or depot,
obviously, no one brand is going to be sold for long if it stops giving the
customer what he wants. Hence, it is a total error for a marketing manager to
believe that the consumer must buy his product.
The consumer bestows
his favor on those who give him what he wants in product, price, promotion and
convenience. The penalty for disobeying his mandate is almost certain failure. There
are numerous illustrations of firms that refused to obey “Key consumer”,
thereby incurring his wrath. At one time, the Waltham Watch Company was held in
high esteem by watch buyers decided that the wrist watch was preferable to the
pocket watch and subsequently, the consumers changed their buying habit,
Waltham was a stubborn until the consumer forced it to do so by refusing to buy
pocket watches. Meanwhile, key consumer decided that he wishes his wrist watch
to do more than ten times, he wanted a fashionably styled time piece. The
majority of firm in that country immediately entered a competitive race on a
fashion basis, but not Waltham. His refusal to produce a properly style watch
eventually caused its failure.
Obviously, the consumer
seldom directly commands a manufacturer.
1.2 STATEMENT OF THE PROBLEM
In the cause of
research, answer will be provided to the following research question problems
1.
Of what quality and quantity would they
prefer to buy?
2.
Is the price charged on the product not
too high enough for them to bear?
3.
Is there any welfare package available
for the consumer at all?
4.
Are company products readily available
to any shortest possible notice from consumer?
5.
Are there any positive responses from
consumer as to the prospect of the business?
The researcher must
however bear in mind and proffer proficient solution and answers to these
numerous questions if he is to guarantee himself of success or survival of the
business entrusted to him.
1.3 AIMS AND OBJECTIVES OF THE STUDY
i. To
know whether the price charged on the Berger paint product is too high and
ambiguous or not.
ii. To
know if Berger Paint product is readily available for the consumers
iii. To
ascertain if there is any package available for the consumers/customers who are
frequent users of the Berger paint product.
iv. To
know the quantity and quality rate which the consumers want to buy.
1.4 SIGNIFICANCE OF THE STUDY
The important of the
study is that it broadens and widens the researcher’s knowledge. The topic
chosen has really increases or improves the standard of living of the
researcher. The study serves as an impetus to participate actively without
allaying fears or panic in the field of practice. The study being “Consumer
Satisfaction and Retention as a key to business survival” plays a dominant role
in any business ramification.
The study of this
research work is a pre-requisite in partial fulfillment of the requirement for
the award of Higher National Diploma in Marketing. The research equally creates
awareness to the society at large as regards what consumer satisfaction is all
about in running of the organization in the respect that it helps in solving problems
associated with the satisfaction of consumers how consumer can be valued at a profit.
1.5 SCOPE OF THE STUDY
The scope of this study
is limited to paint industry. It is therefore imperative for the researcher to
carry out all necessary enquiries and activities within the boundary specified
in the study. The scope will also cover the conceptual aspect in terms of user,
colour, behavior, reaction and modes, friends and relative.
The market scope covers
Ilorin Township to immediate consumer areas. The industrial scope will cover
all the manufacturers of paint product. But the case study of this research
will be BERGER PAINT NIGERIA LIMITED. The geographical aspect of the scope is
going cover Ilorin metropolis area directed to the consumer.
The area of interest
will be on the number of sales recorded in the five consecutive years (2007 –
2012).
1.6 LIMITATION OF THE STUDY
This is varieties of
problems faced white carrying out this research work. One of this is thane
constraint. There is no adequate time or sufficient time for the researcher to
visit and consult all necessary sales depots, distributors, and consumers of
Berger paint Nigeria Limited, since they are not geographically sited in one
region. In view of the limited time available for the final submission of this
project work, the researcher has to limit the research finding to Ilorin depot
of the company since they offer likely services or operations.
The researcher is also
faced with some administration problems from the staff of Berger Paint Nigeria
Limited. The staffs were always reluctant to grant interview being carried out
by the researcher. The solution to this is achieved by re-orientate them and
give a kind of incentives as motivation in order to change their lackadaisical
attitude towards the researcher and their customer at large. Consumer
satisfaction and retention. A key to business survival.
1.7 DEFINITION
OF TERMS
(a) CONSUMERS:
These are groups of individuals in an organization who are buyers for
consumption purpose. They are not buying to make profit, but to satisfy basic
or psychology needs or wants.
(b) TOTAL
CONSUMER VALUE: This is the bundle of benefits consumer expect to derive from a
given product or service.
(c) TOTAL
CONSUMER COST: This is the bundle of cost consumer expect to incur in
evaluating, obtained using, and disposing of the product or services.
(d) MARKETING:
Marketing is the total system of interrelating business activities designed to
play price, promote and distribute want, satisfying goods and services to
prospective customers. (would be customers).
(e) SATISFACTION:
Is all about pleasing the consumer by making available what they want, need at
the right time, in the right place and with the right price. To provide them
with what they want, needed or asked for.
(f) RETENTION:
All the activities involved in finding and retaining consumers and growing the
business.
(g) CONSUMER
SATISFACTION: This is the way by which the consumer pleased with the company
aim and objective to make profit. It is the way by which the company makes
every effort to make goods and services available for the consumer at the right
time, in the right place and at the right prices.
(h) BUSINESS
SURVIVAL: This is all about the improvement or growth of the business.
Meanwhile, the primary aim of any business is to minimize loss.
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