The general objective of this study, which got submitted as partial fulfillment to the requirement of the award of Master of Art, is to examine the effect of customer relationship marketing on customer loyalty of commercial banks in Ethiopia. Specifically, this study has the following objectives: To find out the level of the effect of trust on customer loyalty the case of commercial banks in Nekemte banks.
Banking industry in Ethiopia has stiff competition thus banks need to consider various strategic options and programs in order to survive and thrive. One of strategy is Customer Relationship Marketing. This study was aimed to examine the effect of customer relationship marketing dimensions (trust, commitment, conflict handling, communication, empathy competence and customer satisfaction) on customer loyalty of commercial banks in Nekemte town. The researcher was used both probability and non-probability sampling techniques to select sample respondents from the total population under this study. Data were collected through the five point’s likert scales of questionnaires and used mixed research approach was used. To achieve the objective of the study, questionnaire was physically distributed to 404 respondents of selected Commercial Banks in Nekemte town. Out of 404 customers 375 92.8% of customers were completed and collected. Descriptive and inferential statistics were used to analyze the collected data by using SPSS software version 24 and questionnaires reliability was estimated by calculating Cronbach’s Alpha. Descriptive analysis tools such as frequency, percentage, mean and standard deviation. Inferential statistical analysis tools such as correlation coefficient was worked out and used to explore the relationships between variables. And regression analysis was performed to study the effect of independent variables on dependent variable.
Table of Contents
CHAPTER ONE: INTRODUCTION
1.1. Background of Study
1.2. Statement of the Problem
1.3. Research Questions
1.4. Objective of the Study
1.4.1. General Objective
1.4.2. Specific Objectives
1.4.3. Research Hypothesis
1.5. Significance of the Study
1.6. Scope of the Study
1.7. Limitation of the Study
1.8. Operational Definition
1.9. Organization of the Study
CHAPTER TWO: REVIEW OF THE RELATED LITERATURE
2.1. Theoretical Review
2.1.1 The Concepts of Relationship Marketing
2.1.2. Theories of Relationship Marketing
2.1.3. Social Exchange Theory
2.1.4. Resource Based View Theory
2.1.5. The Commitment-Trust Theory
2.1.6. Relational Benefit Theory
2.1.7. Benefits of Customer Relationship Marketing
2.1.8. Customer Relationship Marketing in the Banking Industry
2.1.9. Customer Relationship Marketing Dimensions
2.1.12. Customer Loyalty
2.1.13. Customer Satisfaction
2.1.14. Customer Relationship Marketing and Customer loyalty
2.2. Related Empirical Studies in Other Country
2.2.1. Related Empirical Studies in Ethiopia
2.3. Conceptual Framework
CHAPTER THREE: RESEARCH DESIGN AND METHODS
3.1 INTRODUCTION
3.2. Research Design
3.3. Research Approach
3.4. Data type and Data Source
3.5. Target Population
3.6. Sampling Technique and Sample Size Determination
3.6.1. Sampling Techniques
3.6.2. Sample Size Determination
3.7. Data Collection instrument
3.7.1. The Questionnaire
3.8. Data Analysis Techniques
3.9. Reliability and Validity
3.10. Ethical Consideration
3.11. Model Specification
CHAPTER FOUR
DATA ANALYSIS, DISCUSSION, AND INTERPRETATION
4.1 Response Rates
4.2. Descriptive Analysis of the Variables
4.2.1. The Respondents Demographic profile
4.2.2. Descriptive Analysis of Customer Relationship Marketing Dimensions
4.2.2. Descriptive Statistics of Trust
4.3.3. Descriptive Statistics of Commitment
4.3.4. Descriptive Statistics of Conflict Handling
4.3.5. Descriptive Statistics of Communication
4.3.6. Descriptive Statistics of Empathy
4.3.7. Descriptive Statistics of Competence
4.3.8. Descriptive Statistics of Customer Satisfaction
4.3.9. Descriptive Statistics of Customer Loyalty
4.4. Inferential Statistics of Variables
4.4.1 Correlation Analysis
4.4.2. Regression Analysis
4.4.3 .Assumptions of Regression Analysis
4.4.4: Multi colinearity test
4.4.5: Test of Normal Distribution
4.4.6: Test of Linear Distribution
4.4.7 Homoscedasticity
4.4.8. Simple Linear Regression Analysis
4.5. Multiple Regression Analysis
4.5.1. Multiple Linear Regression Analysis of Customer Relationship Marketing Dimensions and Customers’ Loyalty
4.6 .Hypothesis Testing
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1. Summary
5.2. Conclusion
5.3. Recommendation
5.4. Directions for Future Researches
Research Objectives and Themes
This study aims to examine the effect of customer relationship marketing dimensions—specifically trust, commitment, conflict handling, communication, empathy, competence, and customer satisfaction—on customer loyalty within commercial banks in Nekemte town.
- Influence of customer relationship management dimensions on long-term loyalty
- Evaluation of banking strategies to increase customer retention
- Correlation between communication quality and customer service satisfaction
- Impact of staff competence on building long-term customer trust
- Strategies for handling conflict to foster loyalty in the banking sector
Excerpt from the Book
1.1. Background of Study
During the early 1990s era where the traditional marketing was done through transactional marketing but as so far world was moving into a millionaire 20th century, the scenario was changed. New advancements in technology brought revolution in the field of service marketing which has rapidly grown over time. In the present age, changes happen quickly in the service sector. In this challenging environment, among organizations and companies accelerating change is being forced to communicate with customers and make them loyal to their priority. Organizations have been forced to change their response to the market. They have focused more on customers and less on products. They have to have a long-term view rather than short-term view. In this path, organizations have turned to new strategies for relationship marketing (Taleghani et al., 2014).
Relationship marketing is a strategic process aiming to establish, develop, maintain and strengthen the network of relationships with various stakeholders on the basis of strong economic and social standards and the achievement of common objectives(Benouakrim,& ElKandoussi, 2013).
According to Kotler et al.(2005) Relationship marketing involves creating, maintaining and enhancing strong relationships with customers and other stakeholders. Increasingly, marketing is moving away from a focus on individual transactions and towards a focus on building value-laden relationships and marketing networks. The goal of relationship marketing is to deliver long-term value to customers and the measure of success is long-term customer satisfaction. According to Wibowo, (2006) relationship marketing is defined as a process in which a company builds a long-term alliance with its customers or prospective customers, and work together to achieve the goals that have been set. Relationship marketing requires that all of the company’s departments work together with marketing as a team to serve the customer. It involves building relationships at many levels – economic, social, technical and legal resulting in high customer loyalty.
Summary of Chapters
CHAPTER ONE: INTRODUCTION: This chapter establishes the study's context, research problem, and defines the core objectives and hypotheses regarding relationship marketing in the banking sector.
CHAPTER TWO: REVIEW OF THE RELATED LITERATURE: This chapter reviews theoretical models and previous empirical research on customer relationship management dimensions and their influence on customer loyalty.
CHAPTER THREE: RESEARCH DESIGN AND METHODS: This chapter outlines the research approach, target population, sampling techniques, and data collection instruments used to conduct the study.
CHAPTER FOUR: DATA ANALYSIS, DISCUSSION, AND INTERPRETATION: This chapter provides descriptive and inferential statistics to analyze the survey results and evaluate the research hypotheses.
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION: This chapter provides a summary of findings, conclusions drawn from the study, and actionable recommendations for commercial banks to enhance customer loyalty.
Keywords
Customer Relationship Marketing, Trust, Commitment, Communication, Conflict Handling, Empathy, Competence, Customer Satisfaction, Customer Loyalty, Banking Industry, Retention, Service Quality, Strategic Marketing, Relationship Management, Regression Analysis
Frequently Asked Questions
What is the primary focus of this research?
The research focuses on investigating the impact of seven specific dimensions of customer relationship marketing (trust, commitment, conflict handling, communication, empathy, competence, and satisfaction) on customer loyalty in commercial banks located in Nekemte town, Ethiopia.
What is the central research question?
The study seeks to determine the extent to which these relationship marketing components influence the loyalty of customers towards their respective banking institutions.
What methodology was applied in this study?
The researcher utilized a mixed research approach, employing both descriptive and inferential statistical tools, specifically using SPSS version 24 to analyze survey data collected via Likert-scale questionnaires.
What are the key thematic areas addressed?
The study covers relationship marketing theories, the role of organizational trust and commitment, communication strategies, and the impact of service competence on maintaining long-term customer relationships.
What did the analysis of the main body reveal?
The analysis revealed that all examined relationship marketing dimensions have statistically significant positive relationships with customer loyalty, confirming that effective CRM strategies are vital for banking survival and growth.
Which dimensions were most influential according to the study?
The regression results indicated that customer satisfaction and effective communication are among the strongest drivers for predicting and enhancing customer loyalty in the banking sector.
How were the sample banks selected?
The researcher utilized a combination of stratified and convenience sampling techniques to select customers from the Commercial Bank of Ethiopia, Awash International Bank, and the Cooperative Bank of Oromia in Nekemte town.
What are the practical implications for bank managers?
Bank managers are advised to prioritize staff training, improve communication channels, and ensure efficient conflict handling to build stronger, more profitable relationships with their customers.
- Quote paper
- Musefa Yesin (Author), 2021, The Effect of Customer Relationship Marketing on Customer Loyalty. Case Study of Commercial Banks in Nekemte Town, Munich, GRIN Verlag, https://www.grin.com/document/1160755
