IMPACT OF RELATIONSHIP MARKETING IN THE TELECOMMUNICATION INDUSTRY
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IMPACT OF RELATIONSHIP MARKETING IN THE TELECOMMUNICATION INDUSTRY
Chapter one
INTRODUCTION
1.1 Background for the Study
In today’s market, mobile technology is increasingly competitive, and service providers are moving actively to acquire diverse users by delivering meaningful, appealing promotions and services.
Nigerian consumers of telecommunications products and services have diverse tastes, demands, and expectations. According to Roger (2010), Nigeria has five GSM networks and 13 CDMA-based network operators.
GSM operators include Airtel, MTN, MTEL, Globacom, and Etisalat, while CDMA network operators include Multilinks, Starcomms, O’net, and Visafone, among others.
The telecommunications business is regarded as one of the largest and most powerful in the global market in terms of technological innovation, with operations spanning the entire globe and the world strongly reliant on communication.
Today, the telecommunications sector involves a variety of procedures, including service provision and the sale of items such as handsets, Subscriber Identity Module (SIM) packs, and other communication devices.
Leonard L. Berry first introduced the notion of relationship marketing to the service marketing industry in 1983. It is a strategy that emphasises development, maintenance, and enhancement.
In other words, it is designed with the goal of developing relationships with existing and potential customers, maintaining these relationships by meeting customer expectations on a regular basis, and increasing customer value by consistently providing high-quality products at reasonable prices. Relationship marketing’s merits have contributed to its growth in recent years.
Companies that gain a competitive advantage use it as a competitive marketing weapon. Companies are now adopting it as a tool for value creation, and customers are encouraged to provide feedback on crucial decision concerns such as product design, pricing, distribution, etc. Companies look forward to customers as co-producers and co-designers (Bhatia, 2015).
Relationship marketing is critical in today’s environment since consumers worldwide are sophisticated, have a wealth of knowledge, and want better deals. As a result of this issue, marketers are forced to transition from push to pull marketing. Organisations are increasingly relying on mass media and relationship marketing these days.
Building relationships with customers has been a basic function for many organisations in recent years. Building relationships is the only method for an organisation to gain a long-term competitive advantage, resulting in market survival and expansion (Jorgensen, 2001).
The move from a conventional economy to severe rivalry in modern dimensions, with the customer as the person for whom an organisation is willing to produce values that affect their behaviour, as the primary element and focal point of all organisational actions.
As a result, the competitiveness, viability, and survival of organisations in identifying and drawing new customers as well as retaining existing customers are expressed (Gilaninia et al, 2011).
On the other side, with improved communication, the evolution of the information age, and the introduction of new communication tools, organisations have faced a slew of new customers and a plethora of options, resulting in more customers and market instability (Rahbarinia, 2011).
Loyalty is a firmly held commitment to repurchase or patronise a chosen product or service in the future, notwithstanding the possibility of situational impact and marketing efforts leading to switching behaviour.
Kotler defined loyalty as a long-term commitment to family, friends, or country, and believes it first appeared in marketing literature as an emphasis on brand loyalty (Ranjbaryan and Barari, 2009). One of the most fundamental assumptions in relationship marketing is that long-term loyal clients are profitable.
There is undeniably an increasing interest in the topic of relationship marketing. The intense competition in today’s corporate environment has led in the development of stronger firm-customer ties (Ndubisi, 2007).
According to Ndubisi (2007), an increasing number of businesses are leveraging strong firm-customer relationships to gather vital insights into how to effectively serve customers and protect them from defecting to competitors. As a result, developing client relationships generates mutual benefits for both the organisation and the customer.
1.2 Statement of the Problem
A variety of relationship marketing components have become the industry norm, resulting in a fierce competition for market share. Customers are benefiting from many promotions, a pricing war, and tempting customer service.
They are assaulted with a variety of marketing activities and aggressive sales practices, including door-to-door selling, radio and television advertising, internet promotions, and other customer loyalty programmes.
However, a lot of money has been and continues to be spent on these strategies, causing some telecommunications operators to struggle to accomplish their primary goal of raising shareholder funds (Asare, 2008).
However, consumers are likely to respond differently towards the various mobile operators’ products and services; thus, ensuring maximum consumer satisfaction is of paramount importance to mobile service providers. It is critical to evaluate a mobile user’s perspective in a highly competitive telecommunications industry.
There is undeniably an increasing interest in the topic of relationship marketing. The intense competition in today’s corporate environment has led in the development of stronger firm-customer ties (Ndubisi, 2007).
According to Ndubisi (2007), an increasing number of businesses are leveraging strong firm-customer relationships to gather vital insights into how to effectively serve customers and protect them from defecting to competitors.
As a result, developing client relationships generates mutual benefits for both the organisation and the customer. Building relationships with customers allows an organisation to gather valuable sources of marketing intelligence for improved marketing strategy planning.
As a result, it is critical to do empirical research on the true impact of relationship marketing on client loyalty. Such insight will help to improve firm-customer relationships and increase consumer loyalty.
1.3 Research questions.
In order to fulfil the goal of this study on the influence of relationship marketing in the telecommunications business, the following research questions will be addressed.
Does a company’s commitment to customer service affect customer loyalty?
To what extent does conflict resolution effect consumer loyalty?
Does advertising affect consumer loyalty?
Does a company’s customer price perception affect customer loyalty?
1.4 Objectives of the Study
The primary goal of this study is to determine the influence of relationship marketing on client loyalty.
The study’s other objectives include:
Determine how a company’s dedication to customer service effects consumer loyalty.
Discover the extent to which dispute resolution influences consumer loyalty.
Discover the extent to which promotion effects consumer loyalty.
Find out how much price perception effects customer loyalty.
1.5 Statement of Hypothesis
For the purpose of this study and the research difficulties highlighted, the following hypothesis will be accepted and evaluated to assist the researcher in reaching a reasonable conclusion:
Ho: Relationship marketing has no meaningful impact on a company’s dedication to customer service or customer loyalty.
H1: Relationship marketing has a tremendous impact on a company’s dedication to customer service and loyalty.
1.6 Significance of the Study
By the time this study is finished, it is hoped that:
Partially complete the criteria for the award of a Bachelor of Science Degree (B. Sc) in Business Administration, as well as to give both theoretical development for academics and practical implications for marketing managers (contribution to knowledge).
Furthermore, the outcome is expected to tell Mobile operators about their customers’ response to the range of relationship marketing methods being deployed, as it is useful for marketers to assess the success of relationship marketing tactics from the consumer’s perspective.
Finally, to serve as a benchmark for those who execute and develop policies in the mobile telecommunications business. This study may also aid the academic world by serving as a foundation for future research in this field, the telecom sector, and the rest of the service industries.
1.7 SCOPE OF THE STUDY
The research looks on the impact of relationship marketing on customer loyalty in the Nigerian mobile telecommunications industry: A study of full-time Business Administration students at the University of Abuja.
The survey is planned to focus only on mobile consumers of Nigerian telecom operators. However, this study only includes MTN, Globacom, and other mobile service providers (Airtel, Etisalat) subscribers.
The survey also focuses on the following telecom services: mobile voice calls, SMS, and mobile internet. Furthermore, the geographic reach is limited to full-time Business Administration students at the University of Abuja.
The project will not be expanded to other departments within the institution. This research will be confined by the time frame of two semesters, which will constitute one session during the 2015/2016 academic year.
This research study and analysis will be based solely on the customer’s point of view; the perspective of service providers on this subject will not be considered.
The necessity to precisely define the scope of this study is unavoidable; the researcher will be primarily constrained by the accuracy of the information gathered from respondents during the course of this job.
1.8 Study Limitations
In every research of this sort, various limits will be encountered, either during the data collection process or throughout the research work compilation. Similar issues arise in this study. The main limitation in this study is the inaccessibility and unavailability of some critical information that would have brought credibility, correctness, and objectivity to the data, decision, and conclusion. Finally, time and finances hampered the smooth progress of this research project.
1.9 Definition of Terms
1. MARKETING: Marketing in the context of this work can be defined as a continuous process that identifies and meets the needs of consumers through the creation and delivery of value.
MARKET SHARE: The proportion of total sales in an industry or market earned by a single company over a given time period. Market share is calculated by dividing the company’s sales throughout the period by the industry’s total sales during the same time.
3. RELATIONSHIP MARKETING: Relationship marketing is fundamentally the development of clients as partners, with a different strategy than traditional transaction marketing.
TRANSACTION MARKETING: Short, discrete transactions with a clear beginning and end, based exclusively on pricing.
RELATIONSHIP MARKETING techniques: Relationship marketing techniques are deliberate acts performed by a firm or individual to persuade others to purchase their products or services. They frequently use psychological techniques to persuade you to buy their goods or service.
HYPOTHESIS: A hypothesis is intended to be tested and is open to approval or rejection. Bereh (2010) defines a “hypothesis as a tentative statement or solution to a problem which is tested by a statistical tool” .
SERVICE QUALITY: Service quality can be described as the consumer’s perception of a company’s overall excellence or superiority.
PRICE PERCEPTION: Is the monetary cost for a customer to purchase goods or services.
BRAND IMAGE: Can be described as the perception or mental image of a brand developed and held in customers’ minds as a result of their rational or emotional responses.
10. VALUE OFFERS: Providing value to a consumer implies adding something to the primary product that the client considers vital, beneficial, and of distinctive value.
11. CUSTOMER LOYALTY: The primary purpose of relationship marketing efforts is to increase customer loyalty. Customer loyalty is defined as a deep commitment to repeatedly purchasing or patronising a favoured product or service.
12. TELECOMMUNICATION: Telecommunication occurs when two entities share information (communication) through the use of technology.
13. PUSH MARKETING: A promotional approach in which a company strives to get its message in front of potential customers who have no desire or interest in purchasing or learning more about the product.
14. PULL MARKETING: When customers actively seek for a product, the store provides his advertisements, products, and the consumer’s path.
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