Description
In Sri Lanka, Telecommunication sector is highly competitive and also contribution of telecommunication for Gross Domestic Product (GDP) is continuously increasing
© 2012. Dr. T.Velnampy & S.Sivesan. This is a research/review paper, distributed under the terms of the Creative Commons
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Global Journal of Management and Business Research
Volume 12 Issue 18 Version 1.0 Year 2012
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
Online ISSN: 2249-4588 & Print ISSN: 0975-5853
Customer Relationship Marketing and Customer Satisfaction:
A Study on Mobile Service Providing Companies in Srilanka
By Dr. T.Velnampy & S.Sivesan
University of Jaffna, Sri Lanka
Abstract - In the present era, customer relationship marketing plays a vital role. The major goals
of customer relationship marketing can be expressed simply as understanding and treating
customers better for increased loyalty and profit. Main purpose of the study is examining the
relationship between customer relationship marketing and customer satisfaction. Customer
relationship marketing can be measured through following ten variables trust, commitment,
empathy and equity. Data were collected through a seven points Likert type summated rating
scales of questionnaire. A sample of one hundred and seven customers was surveyed from three
mobile service providing companies such as Airtel, Dialog, and Mobitel. Correlation and
regression analyzed has been employed to measure relationship and contribution among the
dependent and independent variables.
Keywords : Customer relationship marketing, customer satisfaction, service quality.
GJMBR-A Classification : FOR Code : 150502,150501 JEL Code : M31, D11
CustomerRelationshipMarketingandCustomerSatisfactionAStudyonMobileServiceProvidingCompaniesinSriLanka
Strictly as per the compliance and regulations of:
Customer Relationship Marketing and Customer
Satisfaction: A Study on Mobile Service
Providing Companies in Srilanka
Dr. T.Velnampy
?
& S.Sivesan
?
Abstract - In the present era, customer relationship marketing
plays a vital role. The major goals of customer relationship
marketing can be expressed simply as understanding and
treating customers better for increased loyalty and profit. Main
purpose of the study is examining the relationship between
customer relationship marketing and customer satisfaction.
Customer relationship marketing can be measured through
following ten variables trust, commitment, empathy and equity.
Data were collected through a seven points Likert type
summated rating scales of questionnaire. A sample of one
hundred and seven customers was surveyed from three
mobile service providing companies such as Airtel, Dialog,
and Mobitel. Correlation and regression analyzed has been
employed to measure relationship and contribution among the
dependent and independent variables. .
Keyword : Customer relationship marketing, customer
satisfaction, service quality.
I.
Introduction
n today’s highly competitive business environment,
companies
are unable to longer survive with a
transactional attitude towards customers. They have
to focus their marketing lenses more rational dimension,
which is considered to be the most suitable approach
for satisfying and maintaining customers
(Hollensen2010).
For this reason, nowadays customer
satisfaction has been viewed as an important theoretical
and practical issue for most of the marketers and
researchers (Ramin Rakhsha & Majidazar2011). Kotler
(2000) defines it as a feeling in individuals after
comparing product and service performances with
their expectations. Satisfaction also refers to pleasant or
unpleasant feeling caused with comparison between
imaginative function and expectations. Customer
relationship marketing is the biggest paradigmatic shift
in marketing theory and practice in recent decades. It is
taking back to its roots (Gronroos, 1996). In industries
and service markets, customer relationship marketing is
becoming a necessity in order to survive. The main goal
of the relationship marketing is to build mutually
satisfactory long-
term relationship with key
constituents
Author ?
:
Dean, Faculty of Management Studies and Commerce,
University of Jaffna, Sri Lanka. E-mail :
[email protected]
Author
?
:
Lecturer, Department of Marketing, Faculty of Management
Studies and Commerce, University of Jaffna, Sri Lanka.
E-mail : [email protected]
in order to gain and maintain their business
(Gummesson, 2008).
In Sri Lanka, Telecommunication sector is highly
competitive and also contribution of telecommunication
for Gross Domestic Product (GDP) is continuously
increasing. At 2010, Growth rate of Cellular phones
users was increased by 16.3% (Annual report of Sri
Lankan regulates committee 2010). The growth in the
telecommunications sector in recent years was largely
fuelled by the increased penetration of services in the
northern and eastern provinces and provision of value
added services at competitive rates. Five mobile
service providing companies such Dialog, Mobitel,
Airtel, Hutch and Erislt are providing the services. Each
company is using different kinds of attractive packages
to attract their valuable customers.
Significant of study are this study tries to
disclose effect of customer relationship marketing on
customer satisfaction on the mobile service providing
companies in Sri Lanka. This study is intended to help
them to formulate more rational strategies aimed at
attracting and retaining consumers. This study is able
articulates appropriate path to enhance the customer
relationship marketing and customer satisfaction.
II. Research Problem
Customer relationship marketing (CRM) is
replacing the traditional 'four Ps' of marketing - product,
price, place and promotion. Long-term relationships with
customers are the key to stability in an increasingly
dynamic market. Customer relationship management
(CRM) has become the main strategy to retain
customers for companies regardless of its size. The
emergence of customer satisfaction at financial
institutions has been widely studied and focus on
customer satisfaction is the primary goal of any
organization, especially bank. Full understanding of this
issue is important for researchers and officials [Arbore,
2009]. A survey of 1,500 companies found that 91% of
businesses plan or have deployed CRM solutions,
however 41% of the firms with CRM projects were
experiencing serious implementation problems (The
Data Warehousing Institute, 2000). Therefore the
present study is initialed to find out what extent
I
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customer relationship marketing impact on customer
satisfaction in mobile service providing companies?
III.
Objective of the Study
The main objective of the study is to examine
the relationship between the customer relationship
marketing and customer satisfaction in mobile service
providing companies.
•
To identify the role of customer relationship
marketing on customer satisfaction;
•
Investigate the impact of customer relationship
marketing on customer satisfaction;
•
To suggest the mobile service companies to build
the customer value;
IV.
Contribution of the Study
Customer relationship marketing is the biggest
paradigmatic shift in marketing theory and practice in
existing world. Customer relationship marketing
concerns attracting, developing and retaining customer
relationship (Berry and Parasuraman 1991). Customer
relationship marketing is to identify establish, maintain,
enhance, and when necessary, terminate relationship
with customers and other stakeholders (Gronroos).
Customer satisfaction is difference function between
customer perception and customer expectation
(Kotler1996). Customer relationship marketing assists to
build the good relationship between customer and
organization. Every organization try to fulfill their
customer required with pleasure. An Examination of
Relationship between Customer Relationship Marketing
and Customer Satisfaction on Mobile Service Providing
Companies in Sri Lanka is very important study in Sri
Lanka. Nowadays, in Sri Lanka, five mobile service
providing companies are running successfully but every
companies faced more completion to survey in the
market. This study is intended to help them to formulate
more rational strategies aimed at attracting and
retaining consumer, this research should
contribute to a
better appreciation and understanding of customer
satisfaction related factors. This study helps to
recognize that what are factors determine the customer
relationship marketing.
V.
Review of Literature
Customer relationship marketing is one of the
best contemporary marketing strategies for all
companies to satisfy their customer needs and wants. In
customer point of view, trust, commitment, mutuality
and long-
term relationship with customer which are very
essential factors to satisfy their customer needs and
wants. Customer relationship marketing concerns
attracting, developing, and retaining customer
relationship (Berry and Parasuraman 1991).
Customer relationship marketing goal is to
provide increased
value to the customer and results in a
lifetime value for the service provider (Liu, 2000). Trust
has been defined as “a willingness to rely on an
exchange partner in whom one has confidence”
(Moorman 1993). In addition trust provides the basis for
loyalty, relationship enhancement (decreased
perception of risk), and yet is mediated by customer
perceived value of the relationship (i.e., perceived net
benefits) (Morgan & Hunt, 1994; Selnes, 1998;
Sirdeshmukh, 2002).
Customer satisfaction is a dimension of multiple
items evaluated as a satisfaction measurement, which
can vary from business to business (1991). Customer
satisfaction is very important concept and also has been
extremely analyzed subject in the marketing research
(Hunt, 1977). In recent time, customer satisfaction has
gained attention within the context of the paradigm shift
from transaction marketing to relationship marketing
(Gronroos, 1994: Sheth &Parvatiyar, 1994).
Customer satisfaction is the feeling or attitude
of a customer towards a product or service after it has
been used. The confirmation model treats satisfaction
as a meeting
of customer expectations (East, 1997;
Oliver 1989) and is generally related to habitual usage of
products (East, 1997). However, research on customer
satisfaction has moved towards the disconfirmation
paradigm which views satisfaction with products and
brands as a result of two cognitive variables: pre
purchase expectations and disconfirmation (Churchill
and Surprenant, 1982; Peter and Olson, 1996).
Customer satisfaction has traditionally been
regarded as a fundamental determinant of long –
term
consumer behavior (Oliver, 1980; Yi 1990). Satisfied
customers are valuable assets for every organization to
gain the customer loyalty and retention.
Customer satisfaction and its related research is
not merely a tool that measures the attitudes of
customers but can be used by relationship marketers as
a tool to manage the relationships with the customers
(Gengler and leszczyc,1997). Satisfaction
and
quality
research “ have
evolved
along
parallel
tracks”
(Strandvik
&
Liljander,
1995).
The
relation
of
both
constructs
is
currently
subject
to
a
passionate
and
controversial
debate
(Gotlieb, Grewal,&Brown,
1994; Patterson
&
Johnson,
1993). For the
investigation
undertaken
here,
the
following
aspects
for
the
distinction of satisfaction
and quality are of particular importance .Because
quality
is
a
dynamic
construct,
additional
consumption
experiences
influence
and
modify
the
existing
quality
perception
and
cause
changes
in
this
perception
(Thompson
&
Getty, 1994).
Customer relationship marketing has been the
subject of increasing interest globally with the absolute
volume of research on the subject; however, most of the
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© Global Journals Inc. (US) © 2012 Global Journals Inc. (US)
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
research has been done in developed countries. Other
issue is lack of researcher paid the attention to find the
relationship between the customer relationship
marketing and customer satisfaction.
VI.
Data Collection
The primary and secondary data were collected
for the survey. Primary data were collected through
questionnaires and secondary data were collected from
books, journals, magazine and etc.
VII.
Hypotheses
Following hypothesis were taken for the present
study
H1-
these is relationship between Customer relationship
marketing and customer satisfaction.
H0-
there is no relationship between Customer
relationship marketing and customer satisfaction.
VIII.
Conceptualization
Below conceptualization model shows the
relationship between variables. Thus customer
satisfaction is considered as dependent variable
whereas customer relationship marketing is the
independent variable.
IX. SAMPLING
A survey instrument in the form of close-ended
questionnaire was developed for the purpose of
collecting the main data for the study. Systematic quasi-
random sampling method was taken to select the
respondents of the study. It selected every second
customer to enter the selected reload center on each
day of the survey, starting with the first to come through
the doors at start of business, at 9.30 am. This sampling
method was chosen because it permits analysis of
possible selection bias or error (Ndubisi, 2006). One
hundred and thirty respondents were selected as a
sample of the study. One hundred and seventeen
respondents completed the questionnaire but fifteen
questionnaires were damaged.
Table 1
Characteristics
Frequency
Percentage
Age
18 –
25
21
20.6
26 -45
48
47.1
46 –
55
20
19.6
56 and Above
13
12.7
Gender
Male
60
58.8
Female
42
41.7
Occupation
Government
42
41.2
Private sector
30
29.4
Self
employment
22
21.6
Others
8
7.8
Income level
Below 5000
8
7.8
5000 -
15000
24
23.5
15000-
30000
44
43.1
30000-
50000
13
12.7
Above 50000
13
12.7
Company
Dialog
39
38.2
Airtel
27
26.47
Mobitel
12
11.76
Dialog and
Mobitel
09
8.82
Dialog and
Airtel
11
10.78
Mobitel and
Airtel
04
3.92
X.
Questionnaires
An instrument/questionnaire was used to collect
data.
This questionnaire consists of three sections A,
B, and C. section A consists personal details such as
sex, status, age, education, monthly income, company
name, and length of time customer has been in brand,
kinds of packages.
Sections –
B consists of ten statements such as
trust, commitment, equity and empathy to measure the
customer relationship marketing.
Sections –
C consists of ten statements to
evaluate customer satisfaction.
Above information/ data were collected through
the questionnaire which is prepared with seven point
Likert scale ranging from excellent to poor. Then data
were converted into quantitative manner and then the
analyses were made. Using the above information the
following model was formulated.
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
CRM
Trust
Commitment
Equity
Empathy
Customer
Satisfaction
CVC= f (CRM)
CS = ?0
+
?
1
x
1 +
?
2
x
2+
?
3
x
3+
?
4
x
4 --------------------------- (1)
Where,
CRM- Customer relationship marketing
CS – Customer Satisfaction
X
1-
Trust
X
2
– Commitment
X
3
– Empathy
X
4 –
Equity
XI. Empirical Results
a) Reliability
Before applying statistical tools, testing of the
reliability of the scale is very much important as its
shows the extent to which a scale produces consistent
result if measurements are made repeatedly. This is
done by determining the association in between scores
obtained from different administrations of the scales. If
the association is high, the scale yields consistent result,
thus is reliable. Cronbach’s alpha is most widely used
method. It may be mentioned that its value varies from 0
to 1 but, satisfactory value is required to be more than
0.6 for the scale to be reliable (Malhotra, 2002;
Cronbach, 1951). The Cronbach alpha estimated for
trust was 0.889, Commitment scale was 0.890, Empathy
scale was 0.908, Equity scale was 0.901, customer
relationship marketing 0.855 and the overall customer
value creation scale was 0.726. As the Cronbach’s
alpha in this study were all much higher than 0.6, the
constructs were therefore deemed to have adequate
reliability.
Table 2
:
Details of reliability.
S.No
Details
Cronbach
alpha
01
Customer Relationship Marketing
0.855
02
Trust
0.889
03
Commitment
0.890
04
Empathy
0.908
05
Equity
0.908
06
Customer Value Creation
0.726
b)
Validity
An important aspect of increased rigor in
conducting scientific research in the modern positivist
paradigm is the testing for content and convergent
validity.
The Content validity ensures that the measure
includes an adequate and representative set of items
that tap the
domain of the concept (Malhothra 2005,
S2004, Warnakulasuriya, 2009). An exact literature
review was carried out to ensure the content validity of
the both construct.
Convergent validity can be measured through
the inter correlation value. If inter correlation are
available among the more than 50% items
(Hatcher,1994 ). Those are showing strong evidence of
convergent validity.
c) Multi-Collinearity
Two major methods were utilized in order to
determine the presence of multi collinearity among
independent variables in this study. These
methodologies involved calculation of both a Tolerance
test and Variance Inflation Factor –VIF (Kleinbaum et.al,
1988).The results of this analysis are presented in Table
03.
Table 3 : Test of Collinearity.
Variable Tolerance VIF
Trust 0.995 1.005
Commitment 0.988 1.012
Empathy 0.900 1.111
Equity 0.909 1.100
As can be seen from this data, none of the
Tolerance level is < or equal to 01; and all VIF values
are well below 10. Thus the measures selected for
assessing independent variables in this study, do not
reach multicolinearity.
Table 4 : Test of Durbin-Watson.
Variable Durbin-Watson
Reliability 1.732
Responsiveness 2.124
Functionality 1.698
Call charges 1.899
The acceptable Durbin – Watson range is
between 1.5 and 2.5. In this analysis Durbin – Watson
values for all depended variable are well below 2.5.
There was no auto correlation problems in the data used
in the research. Thus, regression model was applied.
d) Regression
Regression test was carried out to find the
contribution of the customer relationship management in
customer satisfaction.
Table 5 : Standard regression coefficient.
Independent variable:-
Customer
relationship marketing
Dependent:-
Variable customer
satisfaction
ß
0.460
Significance of F
0.000
R
2
0.211
Adjusted R
2
0.204
According to the regression results in the Table
-
5, the fitted model encountered a significant relation
between customer relationship marketing and customer
satisfaction. The R
2
value multiplied by 100 tells the
percentage of variance in one variable accounted for by
the predictor variables. The R
2
value is 0.211so, that
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
21% Percentage or almost quarter the variance in
Customer satisfaction is accounted for by the predictor
variable CRM. Further it means customer relationship
marketing positively impact on customer satisfaction.
Table 6 : Correlation analysis for mobile service
providing companies.
Variable Customer
relationship
marketing
Customer
satisfaction
Customer
relationship
marketing
1
460**
.000
Customer
satisfaction
460**
.000
1
Significant at; *P < 0.05, **P< 0.01
Scale; Strong (r>.5), Moderate (r=5), Weak (r < .5)
Four main dimensions such as trust,
commitment, empathy, and equity were used to
measure the customer relationship marketing and four
main dimensions such as reliability, responsiveness,
functionality, and call charges were used to measure
customer satisfaction. Therefore
Correlation (matrix) analysis was applied to
identify the relationship among these variables and
results are revealed in the table -7. Results revealed
significant correlation among dimension of customer
relationship marketing and customer satisfaction.
Correlation between CRM and dimensions of the
customer satisfaction such reliability, responsiveness,
functionality and call charges were positively correlated.
Finally hypotheses testing
Ho: There is no relationship between customer
relationship marketing and customer satisfaction.
H1: There is relationship between customer relationship
marketing and customer satisfaction.
Null hypothesis has to be rejected when p value
is 0.05 as a rule. Here, researcher has tested in 1 % of
the significant level. However, p value is less than 0.05
at 1 % of the significant level. There is chance to reject
null and accept alternative hypothesis. Therefore,
researcher rejects null and accept alternative one. There
refers to that researcher rejects there is no relationship
and accepts that there is relationship between customer
relationship marketing and customer satisfaction.
XII. Conclusion and Managerial
Implication
Although there are only five mobile service
providing companies (Dialog, Mobitel, Airtel, Etisalate,
Airtel) in the Sri Lankan mobile service market, the
completion between them is more intense than ever.
They compete not only in infrastructure facilities like
network, tower. They have invested the lot of amount of
money to provide effective service for customers. This
research clearly expressed that important of functionality
of service in service quality and customer satisfaction.
Customer relationship marketing has significant impact
on customer satisfaction. However, proportion of impact
CRM on customer was low level. Reason for that most
of mobile service providing companies fails to build the
trust among their customers. Companies spent lot of
time and money to build and maintain their companies’
infrastructure facilities but their fail to take fruit full effort
to satisfy their customer needs with psychological view.
According to this research, as to what mobile service
providing companies have been doing, the priority
should be given to how to reduce customer
dissatisfaction and improve mobile service network
facilities, service quality, customer retention, customer
loyalty.
XIII. Limitation and Directions of
Future Research
This research has been successfully applied
what has been learnt from the literature with the support
from Sri Lankan mobile service market. In Sri Lanka, five
mobile services providing companies are providing
mobile services but three mobile service providing
companies like Airtel, Mobitel, and Dialog have been
taken to this study and remaining other two companies
have been not considered into this study. Furthermore,
to provide even more convincing evidence for the casual
relationship among constructs. In addition, it is also of
practical and theoretical significance to extend behavior
intentions of customers and take constructs such
customer relationship marketing and customer
satisfaction into consideration to provide more useful
suggestions for mobile service providers.
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
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Table 6 shows correlation the relationship
between customer relationship marketing and
customer satisfaction. Results indicate that the
customer relationship marketing is weakly but positively
correlated with customer satisfaction. However,
correlation was highly significant.
Table 7 : Correlation matrix.
RE RN FU CC T C EM E CRM CS
RE 1
RN .709** 1
FU .720** .656** 1
CC .692** .607** .756** 1
T .319** .188** .282** .425** 1
C .283** .207** .430** .356** .547** 1
EM .289** .260** .302** .465** ..534** .457** 1
E .411** .274** .460** ..242** .438** .477** .411** 1
CRM .401** .291** .467** .484** .797** .835** .780** .691** 1
CS .909** .879** .883** .849** .335** .358** .363** .399** .460** 1
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
doc_125997261.pdf
In Sri Lanka, Telecommunication sector is highly competitive and also contribution of telecommunication for Gross Domestic Product (GDP) is continuously increasing
© 2012. Dr. T.Velnampy & S.Sivesan. This is a research/review paper, distributed under the terms of the Creative Commons
Attribution-Noncommercial 3.0 Unported Licensehttp://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial
use, distribution, and reproduction in any medium, provided the original work is properly cited.
Global Journal of Management and Business Research
Volume 12 Issue 18 Version 1.0 Year 2012
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
Online ISSN: 2249-4588 & Print ISSN: 0975-5853
Customer Relationship Marketing and Customer Satisfaction:
A Study on Mobile Service Providing Companies in Srilanka
By Dr. T.Velnampy & S.Sivesan
University of Jaffna, Sri Lanka
Abstract - In the present era, customer relationship marketing plays a vital role. The major goals
of customer relationship marketing can be expressed simply as understanding and treating
customers better for increased loyalty and profit. Main purpose of the study is examining the
relationship between customer relationship marketing and customer satisfaction. Customer
relationship marketing can be measured through following ten variables trust, commitment,
empathy and equity. Data were collected through a seven points Likert type summated rating
scales of questionnaire. A sample of one hundred and seven customers was surveyed from three
mobile service providing companies such as Airtel, Dialog, and Mobitel. Correlation and
regression analyzed has been employed to measure relationship and contribution among the
dependent and independent variables.
Keywords : Customer relationship marketing, customer satisfaction, service quality.
GJMBR-A Classification : FOR Code : 150502,150501 JEL Code : M31, D11
CustomerRelationshipMarketingandCustomerSatisfactionAStudyonMobileServiceProvidingCompaniesinSriLanka
Strictly as per the compliance and regulations of:
Customer Relationship Marketing and Customer
Satisfaction: A Study on Mobile Service
Providing Companies in Srilanka
Dr. T.Velnampy
?
& S.Sivesan
?
Abstract - In the present era, customer relationship marketing
plays a vital role. The major goals of customer relationship
marketing can be expressed simply as understanding and
treating customers better for increased loyalty and profit. Main
purpose of the study is examining the relationship between
customer relationship marketing and customer satisfaction.
Customer relationship marketing can be measured through
following ten variables trust, commitment, empathy and equity.
Data were collected through a seven points Likert type
summated rating scales of questionnaire. A sample of one
hundred and seven customers was surveyed from three
mobile service providing companies such as Airtel, Dialog,
and Mobitel. Correlation and regression analyzed has been
employed to measure relationship and contribution among the
dependent and independent variables. .
Keyword : Customer relationship marketing, customer
satisfaction, service quality.
I.
Introduction
n today’s highly competitive business environment,
companies
are unable to longer survive with a
transactional attitude towards customers. They have
to focus their marketing lenses more rational dimension,
which is considered to be the most suitable approach
for satisfying and maintaining customers
(Hollensen2010).
For this reason, nowadays customer
satisfaction has been viewed as an important theoretical
and practical issue for most of the marketers and
researchers (Ramin Rakhsha & Majidazar2011). Kotler
(2000) defines it as a feeling in individuals after
comparing product and service performances with
their expectations. Satisfaction also refers to pleasant or
unpleasant feeling caused with comparison between
imaginative function and expectations. Customer
relationship marketing is the biggest paradigmatic shift
in marketing theory and practice in recent decades. It is
taking back to its roots (Gronroos, 1996). In industries
and service markets, customer relationship marketing is
becoming a necessity in order to survive. The main goal
of the relationship marketing is to build mutually
satisfactory long-
term relationship with key
constituents
Author ?
:
Dean, Faculty of Management Studies and Commerce,
University of Jaffna, Sri Lanka. E-mail :
[email protected]
Author
?
:
Lecturer, Department of Marketing, Faculty of Management
Studies and Commerce, University of Jaffna, Sri Lanka.
E-mail : [email protected]
in order to gain and maintain their business
(Gummesson, 2008).
In Sri Lanka, Telecommunication sector is highly
competitive and also contribution of telecommunication
for Gross Domestic Product (GDP) is continuously
increasing. At 2010, Growth rate of Cellular phones
users was increased by 16.3% (Annual report of Sri
Lankan regulates committee 2010). The growth in the
telecommunications sector in recent years was largely
fuelled by the increased penetration of services in the
northern and eastern provinces and provision of value
added services at competitive rates. Five mobile
service providing companies such Dialog, Mobitel,
Airtel, Hutch and Erislt are providing the services. Each
company is using different kinds of attractive packages
to attract their valuable customers.
Significant of study are this study tries to
disclose effect of customer relationship marketing on
customer satisfaction on the mobile service providing
companies in Sri Lanka. This study is intended to help
them to formulate more rational strategies aimed at
attracting and retaining consumers. This study is able
articulates appropriate path to enhance the customer
relationship marketing and customer satisfaction.
II. Research Problem
Customer relationship marketing (CRM) is
replacing the traditional 'four Ps' of marketing - product,
price, place and promotion. Long-term relationships with
customers are the key to stability in an increasingly
dynamic market. Customer relationship management
(CRM) has become the main strategy to retain
customers for companies regardless of its size. The
emergence of customer satisfaction at financial
institutions has been widely studied and focus on
customer satisfaction is the primary goal of any
organization, especially bank. Full understanding of this
issue is important for researchers and officials [Arbore,
2009]. A survey of 1,500 companies found that 91% of
businesses plan or have deployed CRM solutions,
however 41% of the firms with CRM projects were
experiencing serious implementation problems (The
Data Warehousing Institute, 2000). Therefore the
present study is initialed to find out what extent
I
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customer relationship marketing impact on customer
satisfaction in mobile service providing companies?
III.
Objective of the Study
The main objective of the study is to examine
the relationship between the customer relationship
marketing and customer satisfaction in mobile service
providing companies.
•
To identify the role of customer relationship
marketing on customer satisfaction;
•
Investigate the impact of customer relationship
marketing on customer satisfaction;
•
To suggest the mobile service companies to build
the customer value;
IV.
Contribution of the Study
Customer relationship marketing is the biggest
paradigmatic shift in marketing theory and practice in
existing world. Customer relationship marketing
concerns attracting, developing and retaining customer
relationship (Berry and Parasuraman 1991). Customer
relationship marketing is to identify establish, maintain,
enhance, and when necessary, terminate relationship
with customers and other stakeholders (Gronroos).
Customer satisfaction is difference function between
customer perception and customer expectation
(Kotler1996). Customer relationship marketing assists to
build the good relationship between customer and
organization. Every organization try to fulfill their
customer required with pleasure. An Examination of
Relationship between Customer Relationship Marketing
and Customer Satisfaction on Mobile Service Providing
Companies in Sri Lanka is very important study in Sri
Lanka. Nowadays, in Sri Lanka, five mobile service
providing companies are running successfully but every
companies faced more completion to survey in the
market. This study is intended to help them to formulate
more rational strategies aimed at attracting and
retaining consumer, this research should
contribute to a
better appreciation and understanding of customer
satisfaction related factors. This study helps to
recognize that what are factors determine the customer
relationship marketing.
V.
Review of Literature
Customer relationship marketing is one of the
best contemporary marketing strategies for all
companies to satisfy their customer needs and wants. In
customer point of view, trust, commitment, mutuality
and long-
term relationship with customer which are very
essential factors to satisfy their customer needs and
wants. Customer relationship marketing concerns
attracting, developing, and retaining customer
relationship (Berry and Parasuraman 1991).
Customer relationship marketing goal is to
provide increased
value to the customer and results in a
lifetime value for the service provider (Liu, 2000). Trust
has been defined as “a willingness to rely on an
exchange partner in whom one has confidence”
(Moorman 1993). In addition trust provides the basis for
loyalty, relationship enhancement (decreased
perception of risk), and yet is mediated by customer
perceived value of the relationship (i.e., perceived net
benefits) (Morgan & Hunt, 1994; Selnes, 1998;
Sirdeshmukh, 2002).
Customer satisfaction is a dimension of multiple
items evaluated as a satisfaction measurement, which
can vary from business to business (1991). Customer
satisfaction is very important concept and also has been
extremely analyzed subject in the marketing research
(Hunt, 1977). In recent time, customer satisfaction has
gained attention within the context of the paradigm shift
from transaction marketing to relationship marketing
(Gronroos, 1994: Sheth &Parvatiyar, 1994).
Customer satisfaction is the feeling or attitude
of a customer towards a product or service after it has
been used. The confirmation model treats satisfaction
as a meeting
of customer expectations (East, 1997;
Oliver 1989) and is generally related to habitual usage of
products (East, 1997). However, research on customer
satisfaction has moved towards the disconfirmation
paradigm which views satisfaction with products and
brands as a result of two cognitive variables: pre
purchase expectations and disconfirmation (Churchill
and Surprenant, 1982; Peter and Olson, 1996).
Customer satisfaction has traditionally been
regarded as a fundamental determinant of long –
term
consumer behavior (Oliver, 1980; Yi 1990). Satisfied
customers are valuable assets for every organization to
gain the customer loyalty and retention.
Customer satisfaction and its related research is
not merely a tool that measures the attitudes of
customers but can be used by relationship marketers as
a tool to manage the relationships with the customers
(Gengler and leszczyc,1997). Satisfaction
and
quality
research “ have
evolved
along
parallel
tracks”
(Strandvik
&
Liljander,
1995).
The
relation
of
both
constructs
is
currently
subject
to
a
passionate
and
controversial
debate
(Gotlieb, Grewal,&Brown,
1994; Patterson
&
Johnson,
1993). For the
investigation
undertaken
here,
the
following
aspects
for
the
distinction of satisfaction
and quality are of particular importance .Because
quality
is
a
dynamic
construct,
additional
consumption
experiences
influence
and
modify
the
existing
quality
perception
and
cause
changes
in
this
perception
(Thompson
&
Getty, 1994).
Customer relationship marketing has been the
subject of increasing interest globally with the absolute
volume of research on the subject; however, most of the
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
research has been done in developed countries. Other
issue is lack of researcher paid the attention to find the
relationship between the customer relationship
marketing and customer satisfaction.
VI.
Data Collection
The primary and secondary data were collected
for the survey. Primary data were collected through
questionnaires and secondary data were collected from
books, journals, magazine and etc.
VII.
Hypotheses
Following hypothesis were taken for the present
study
H1-
these is relationship between Customer relationship
marketing and customer satisfaction.
H0-
there is no relationship between Customer
relationship marketing and customer satisfaction.
VIII.
Conceptualization
Below conceptualization model shows the
relationship between variables. Thus customer
satisfaction is considered as dependent variable
whereas customer relationship marketing is the
independent variable.
IX. SAMPLING
A survey instrument in the form of close-ended
questionnaire was developed for the purpose of
collecting the main data for the study. Systematic quasi-
random sampling method was taken to select the
respondents of the study. It selected every second
customer to enter the selected reload center on each
day of the survey, starting with the first to come through
the doors at start of business, at 9.30 am. This sampling
method was chosen because it permits analysis of
possible selection bias or error (Ndubisi, 2006). One
hundred and thirty respondents were selected as a
sample of the study. One hundred and seventeen
respondents completed the questionnaire but fifteen
questionnaires were damaged.
Table 1
Characteristics
Frequency
Percentage
Age
18 –
25
21
20.6
26 -45
48
47.1
46 –
55
20
19.6
56 and Above
13
12.7
Gender
Male
60
58.8
Female
42
41.7
Occupation
Government
42
41.2
Private sector
30
29.4
Self
employment
22
21.6
Others
8
7.8
Income level
Below 5000
8
7.8
5000 -
15000
24
23.5
15000-
30000
44
43.1
30000-
50000
13
12.7
Above 50000
13
12.7
Company
Dialog
39
38.2
Airtel
27
26.47
Mobitel
12
11.76
Dialog and
Mobitel
09
8.82
Dialog and
Airtel
11
10.78
Mobitel and
Airtel
04
3.92
X.
Questionnaires
An instrument/questionnaire was used to collect
data.
This questionnaire consists of three sections A,
B, and C. section A consists personal details such as
sex, status, age, education, monthly income, company
name, and length of time customer has been in brand,
kinds of packages.
Sections –
B consists of ten statements such as
trust, commitment, equity and empathy to measure the
customer relationship marketing.
Sections –
C consists of ten statements to
evaluate customer satisfaction.
Above information/ data were collected through
the questionnaire which is prepared with seven point
Likert scale ranging from excellent to poor. Then data
were converted into quantitative manner and then the
analyses were made. Using the above information the
following model was formulated.
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
CRM
Trust
Commitment
Equity
Empathy
Customer
Satisfaction
CVC= f (CRM)
CS = ?0
+
?
1
x
1 +
?
2
x
2+
?
3
x
3+
?
4
x
4 --------------------------- (1)
Where,
CRM- Customer relationship marketing
CS – Customer Satisfaction
X
1-
Trust
X
2
– Commitment
X
3
– Empathy
X
4 –
Equity
XI. Empirical Results
a) Reliability
Before applying statistical tools, testing of the
reliability of the scale is very much important as its
shows the extent to which a scale produces consistent
result if measurements are made repeatedly. This is
done by determining the association in between scores
obtained from different administrations of the scales. If
the association is high, the scale yields consistent result,
thus is reliable. Cronbach’s alpha is most widely used
method. It may be mentioned that its value varies from 0
to 1 but, satisfactory value is required to be more than
0.6 for the scale to be reliable (Malhotra, 2002;
Cronbach, 1951). The Cronbach alpha estimated for
trust was 0.889, Commitment scale was 0.890, Empathy
scale was 0.908, Equity scale was 0.901, customer
relationship marketing 0.855 and the overall customer
value creation scale was 0.726. As the Cronbach’s
alpha in this study were all much higher than 0.6, the
constructs were therefore deemed to have adequate
reliability.
Table 2
:
Details of reliability.
S.No
Details
Cronbach
alpha
01
Customer Relationship Marketing
0.855
02
Trust
0.889
03
Commitment
0.890
04
Empathy
0.908
05
Equity
0.908
06
Customer Value Creation
0.726
b)
Validity
An important aspect of increased rigor in
conducting scientific research in the modern positivist
paradigm is the testing for content and convergent
validity.
The Content validity ensures that the measure
includes an adequate and representative set of items
that tap the
domain of the concept (Malhothra 2005,
S2004, Warnakulasuriya, 2009). An exact literature
review was carried out to ensure the content validity of
the both construct.
Convergent validity can be measured through
the inter correlation value. If inter correlation are
available among the more than 50% items
(Hatcher,1994 ). Those are showing strong evidence of
convergent validity.
c) Multi-Collinearity
Two major methods were utilized in order to
determine the presence of multi collinearity among
independent variables in this study. These
methodologies involved calculation of both a Tolerance
test and Variance Inflation Factor –VIF (Kleinbaum et.al,
1988).The results of this analysis are presented in Table
03.
Table 3 : Test of Collinearity.
Variable Tolerance VIF
Trust 0.995 1.005
Commitment 0.988 1.012
Empathy 0.900 1.111
Equity 0.909 1.100
As can be seen from this data, none of the
Tolerance level is < or equal to 01; and all VIF values
are well below 10. Thus the measures selected for
assessing independent variables in this study, do not
reach multicolinearity.
Table 4 : Test of Durbin-Watson.
Variable Durbin-Watson
Reliability 1.732
Responsiveness 2.124
Functionality 1.698
Call charges 1.899
The acceptable Durbin – Watson range is
between 1.5 and 2.5. In this analysis Durbin – Watson
values for all depended variable are well below 2.5.
There was no auto correlation problems in the data used
in the research. Thus, regression model was applied.
d) Regression
Regression test was carried out to find the
contribution of the customer relationship management in
customer satisfaction.
Table 5 : Standard regression coefficient.
Independent variable:-
Customer
relationship marketing
Dependent:-
Variable customer
satisfaction
ß
0.460
Significance of F
0.000
R
2
0.211
Adjusted R
2
0.204
According to the regression results in the Table
-
5, the fitted model encountered a significant relation
between customer relationship marketing and customer
satisfaction. The R
2
value multiplied by 100 tells the
percentage of variance in one variable accounted for by
the predictor variables. The R
2
value is 0.211so, that
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
Companies in Sri Lanka
21% Percentage or almost quarter the variance in
Customer satisfaction is accounted for by the predictor
variable CRM. Further it means customer relationship
marketing positively impact on customer satisfaction.
Table 6 : Correlation analysis for mobile service
providing companies.
Variable Customer
relationship
marketing
Customer
satisfaction
Customer
relationship
marketing
1
460**
.000
Customer
satisfaction
460**
.000
1
Significant at; *P < 0.05, **P< 0.01
Scale; Strong (r>.5), Moderate (r=5), Weak (r < .5)
Four main dimensions such as trust,
commitment, empathy, and equity were used to
measure the customer relationship marketing and four
main dimensions such as reliability, responsiveness,
functionality, and call charges were used to measure
customer satisfaction. Therefore
Correlation (matrix) analysis was applied to
identify the relationship among these variables and
results are revealed in the table -7. Results revealed
significant correlation among dimension of customer
relationship marketing and customer satisfaction.
Correlation between CRM and dimensions of the
customer satisfaction such reliability, responsiveness,
functionality and call charges were positively correlated.
Finally hypotheses testing
Ho: There is no relationship between customer
relationship marketing and customer satisfaction.
H1: There is relationship between customer relationship
marketing and customer satisfaction.
Null hypothesis has to be rejected when p value
is 0.05 as a rule. Here, researcher has tested in 1 % of
the significant level. However, p value is less than 0.05
at 1 % of the significant level. There is chance to reject
null and accept alternative hypothesis. Therefore,
researcher rejects null and accept alternative one. There
refers to that researcher rejects there is no relationship
and accepts that there is relationship between customer
relationship marketing and customer satisfaction.
XII. Conclusion and Managerial
Implication
Although there are only five mobile service
providing companies (Dialog, Mobitel, Airtel, Etisalate,
Airtel) in the Sri Lankan mobile service market, the
completion between them is more intense than ever.
They compete not only in infrastructure facilities like
network, tower. They have invested the lot of amount of
money to provide effective service for customers. This
research clearly expressed that important of functionality
of service in service quality and customer satisfaction.
Customer relationship marketing has significant impact
on customer satisfaction. However, proportion of impact
CRM on customer was low level. Reason for that most
of mobile service providing companies fails to build the
trust among their customers. Companies spent lot of
time and money to build and maintain their companies’
infrastructure facilities but their fail to take fruit full effort
to satisfy their customer needs with psychological view.
According to this research, as to what mobile service
providing companies have been doing, the priority
should be given to how to reduce customer
dissatisfaction and improve mobile service network
facilities, service quality, customer retention, customer
loyalty.
XIII. Limitation and Directions of
Future Research
This research has been successfully applied
what has been learnt from the literature with the support
from Sri Lankan mobile service market. In Sri Lanka, five
mobile services providing companies are providing
mobile services but three mobile service providing
companies like Airtel, Mobitel, and Dialog have been
taken to this study and remaining other two companies
have been not considered into this study. Furthermore,
to provide even more convincing evidence for the casual
relationship among constructs. In addition, it is also of
practical and theoretical significance to extend behavior
intentions of customers and take constructs such
customer relationship marketing and customer
satisfaction into consideration to provide more useful
suggestions for mobile service providers.
© 2012 Global Journals Inc. (US)
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Customer Relationship Marketing and Customer Satisfaction: A Study on Mobile Service Providing
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Table 6 shows correlation the relationship
between customer relationship marketing and
customer satisfaction. Results indicate that the
customer relationship marketing is weakly but positively
correlated with customer satisfaction. However,
correlation was highly significant.
Table 7 : Correlation matrix.
RE RN FU CC T C EM E CRM CS
RE 1
RN .709** 1
FU .720** .656** 1
CC .692** .607** .756** 1
T .319** .188** .282** .425** 1
C .283** .207** .430** .356** .547** 1
EM .289** .260** .302** .465** ..534** .457** 1
E .411** .274** .460** ..242** .438** .477** .411** 1
CRM .401** .291** .467** .484** .797** .835** .780** .691** 1
CS .909** .879** .883** .849** .335** .358** .363** .399** .460** 1
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