0

SUCCESS OF E-CRM PROGRAM IN BUDGET AIRLINES INDUSTRY

BY

NURAL

1

TABLE OF CONTENTS

1 CHAPTER 1: INTRODUCTION 3

1.1 Background of the study 3

1.2 Research Problem 7

1.3 Research Objectives 8

1.4 Significance of the study 9

1.4.1 To the researcher 9

1.4.2 To Malaysian budget airlines 10

1.4.3 To the respondents 10

1.4.4 To the budget airlines industry 10

1.4.5 To the aviation industry 10

1.5 Rationale of the study 11

1.6 Research questions 12

1.7 The scope of the study 12

2 CHAPTER TWO: LITRATURE REVIEW 14

2.1 Definition of terms 14

2.1.1 eCRM 14

2.1.2 Critical success factors of eCRM 14

2.2 Organization of Study 18

3 CHAPTER THREE: METHODOLOGY 20

3.1 Introduction 20

3.1.1 Variables 20

3.1.2 Independent variable 20

3.1.3 Dependent variable 20

3.2 Description of Instrument 21

3.3 Conceptual Framework 23

3.4 Research Approach 24

3.5 Research strategy 25

3.6 Data Collection Method 27

3.6.1 Primary Data 27

3.6.2 Secondary Data 34

3.7 Sampling strategy 35

3.8 Research Ethics 36

3.9 Reliability and Validity of Research 37

3.10 Reliability test 37

3.11 Validity 38

3.11.1 Face validity 38

3.11.2 Content Validity 39

2

3.12 Time frame 39

3.13 Conclusion of the chapter 39

4 CHAPTER FOUR: RESULT OF STUDY 41

4.1 Introduction 41

4.2 Descriptive analyse 42

4.2.1 Characteristics of the Respondents 42

4.2.2 Frequency of respondents toward Technological Factors in

Success of E-CRM program 47

4.2.3 Frequency of respondents toward Organizational Factors in

Success of e-CRM program 49

4.2.4 Frequency of respondents toward Organizational Factors in

Success of e-CRM program 51

4.2.5 Descriptive statistics report (characteristic part) 52

4.3 Inferential statistic 53

4.3.1 Testing hypothesis 53

5 CHAPTER FIVE : DISCUSSION 56

5.1 Introduction 56

5.2 Discussion 56

5.3 Implication 56

5.4 Limitations 56

5.5 Future Research Needs 56

6 REFRENCES 57

3

1 CHAPTER 1: INTRODUCTION

1.1 Background of the study

Customer relationship management (CRM) is defined as the process of developing,

attracting and maintaining customer relationship over time (Massey et al., 2001).

Traditionally, CRM is a set of systems and processes used in physical business locations

such as physical retail space and offices. It was a standard business process before

internet was introduced for communication purpose. The traditional CRM focuses on the

business-customer relationship (Chalmeta, 2006). The phrase CRM is used to refer to

the business strategy that is employed to interact with anyone it conducts business with.

This includes the sales prospects and customers. It is a system that defines the way a

business handles its marketing, sales and support projects to fulfill the goal of

strengthening existing customer relationships as well as forming new ones.

With the increasing competitive pressure and the dynamic nature of the global business

environment, many organizations are shifting from product-focused strategy to

consumer-focused strategy. In the late 1990s, internet had changed the physical retail

space or the brick-and-mortar business model (Smith, 2006). The onset of the Web-

based communications had changed the way a business was conducted as well as the

way in which a business communicates with its customers. With the availability of the

internet, the customers are becoming more aware and knowledgeable of the various

opportunities available to them. The internet has enabled the customers to have an easy

access to new products as well as make comparison between the products. Customer

4

retention and loyalty have posed as challenges to the majority of the organizations as

there is an increase in competition (Uwagwuna, 2011). The customers can easily switch

to another organization by a click of the mouse.

In order to survive in this competitive world, many organizations have invested in

technologies which enable customer-focused relationship marketing strategy for

instance, new hardware, systems and web applications. It is necessary to develop new

processes to manage marketing, sales, support and customer relations using the Web for

those business processes (Schullin et al., 2004). The term CRM has been changed to

Electronic Customer Relationship Management (eCRM) which reflects the web

experience and the use of wireless web for communication (Farooqi & Dhusia, 2011).

eCRM can help to smoothen customer-related business processes via internet as well as

reduce costs of interfacing with customers drastically while achieving the primary goal

of CRM which is enhance customers experience (Uwagwuna, 2011). Many

organizations have employed eCRM features into their web portals to increase customer

loyalty, retention and satisfaction level (Feinberg & Kadam, 2002). The features include

site customization, information for first time users, mailing list, e-mailing capability,

frequently asked questions (FAQ), chat rooms, ability to complain and bulletin board.

With the implementation of eCRM, both the investor and the customer can gain various

benefits from it. Among the benefits of eCRM implementation to the investors are it

helps the investors to track the customer behaviour, match the customer behaviour with

5

their offers, enable quick segmentation of customer database which makes marketing

cheaper, enhance relationship with the customers, increase customer satisfaction level as

6

Table 1.1 The difference between CRM and

eCRM (Farooqi & Dhusia, 2011)

7

well as retain the customers (Jackson, 2009). On the other hand, it is convenient for the

customers and they are able to receive quality services, short transaction and quick

processing, time (Market Pain, 2013).

The differences between CRM and eCRM are shown in Table 1.1.

Among the organizations that have adopted eCRM in Malaysia are the Malaysian

Budget Airlines. As at April 2013, there are 4 budget airlines in Malaysia namely

AirAsia Sdn. Bhd., MASwings Sdn. Bhd., FlyFirefly Sdn. Bhd. and Malindo Air.

AirAsia is the first budget airline in Malaysia. It was founded in 1993. This is followed

by Firefly and MASwings which were founded in 2007 and the new entrant Malindo Air

founded in 2012. eCRM is an important feature for these three budget airlines as they

depend heavily on the internet for their sales. eCRM plays an important role for these

three airlines to attract new customers and retain customers from all around the world.

There is an increasing competition in the Budget Airlines Industry. Thus, it is necessary

to strengthen their relationships with the customers and the best way to achieve this goal

is through the internet.

1.2 Research Problem

The emergence of new budget airlines in Asia, Scoot Pte. Ltd which commenced its

operation in June 2012 has posed a challenge to Malaysian budget airlines. In addition,

Malaysian budget airlines are facing challenges from other existing budget airlines like

Jetstar Asia Airways, Tiger Airways, Lion Air and Mandala Airlines as well as other

8

full-service international airlines like Singapore Airlines, Thai Airways and Philippines

Airlines. Malaysian budget airlines also face stiff competition from MAS, Malaysias

national carrier.

Both the budget airlines and full-service airlines have to compete with each other and

among themselves. The customers have a variety of choices since there are many

airlines available now. In addition, the customers are able to compare the prices of the

tickets through the internet. All the information that the customers need regarding the

airlines can be easily found on the web. Two out of four of the Malaysian budget airlines

have some similar destinations as the newly established Scoot Ptd Ltd. For instance,

both AirAsia and Scoot Ptd. Ltd. fly to Bangkok, Gold Coast, Sydney, Seoul, Taipei and

Tokyo (Appendix 1 and 2). On the other hand, Malindo Air plans to fly to Bangkok in

the near future (Appendix 3). In order to survive in this competitive aviation industry,

Malaysian budget airlines have to find ways to attract new customers as well as retain

their old customers. eCRM is the best option to achieve these goals.

Therefore, in this study, the author wishes to find out the factors that influence the

eCRM of Malaysian budget airlines and further strengthens eCRM of Malaysian budget

airlines with the findings of the research.

1.3 Research Objectives

RO1: To analyse the factors that influence the success of eCRM program in budget

airlines industry

9

RO2: To evaluate the effectiveness of the eCRM program implemented by budget

airlines industry.

RO3:To analyse how the eCRM of budget airlines industry can be further improved to

enhance customer service and satisfaction.

RO4: To develop a conceptual framework integrating factors that influences the success

of eCRM program and its effect on customer service and satisfaction in the budget

airlines industry.

1.4 Significance of the study

The significances of the study are as follows

1.4.1 To the researcher

This study can help the researcher to gain a better understanding regarding the factors

that influences the success of eCRM program in Malaysian budget airlines. In addition,

the researcher will be able to find out what is the effective eCRM to attract new

customers as well as retain the old customers. This knowledge will be very useful for the

researcher to manage his own organization in future.

10

1.4.2 To Malaysian budget airlines

This study helps Malaysian budget airlines to evaluate the effectiveness of its current

eCRM in attracting new customers and in retaining its old customers. Upon completion

of this study, Malaysian budget airlines can further improve their eCRM to enhance

customer satisfaction level as well as to promote customer loyalty by overcoming its

weaknesses and strengthening its strengths.

1.4.3 To the respondents

Through this study, the respondents are able to gain a better insight of their organization.

In addition, this study can help to create awareness among the respondents regarding the

roles that they can play to make eCRM a success.

1.4.4 To the budget airlines industry

This study can serve as a reference to other budget airlines on how they can improve

their eCRM to obtain competitive advantage over their competitors.

1.4.5 To the aviation industry

This research can be used as a guideline for other airlines in the aviation industry to

improve their eCRM.

11

1.5 Rationale of the study

Electronic Customer Relationship Management (eCRM) is a business and marketing

strategy that is gaining popularity. Although studies have been done on the factors that

affect the success of eCRM, a detail study on eCRM of Malaysian budget airlines has

not been carried out. Besides, the competition in the low-cost aviation industry in Asia

has increased due to the new entrant, Scoot Ptd. Ltd. which had just started its operation

in June 2012. Besides facing increasing competition from Scoot Ptd. Ltd., Malaysian

budget airlines is also facing competition from Malaysia Airlines. In addition, AirAsia

also faces competition from other foreign airlines and their partnerships.

As such, it is essential to carry out this research to analyze the factors that contributes to

the success of eCRM program in Malaysian budget airlines. By analyzing these factors,

the researcher hopes to give suggestions to improve on the eCRM of Malaysian budget

airlines. Strengthening the eCRM of Malaysian budget airlines can help to enhance the

customer services and satisfaction. eCRM needs to be managed well in order to achieve

the goals of the organization.

By conducting this research, a conceptual framework integrating the factors that

influence the success of eCRM program and its effects of customer satisfaction can also

be done. This will give an insight to how eCRM can be implemented not only in the

budget airline industry in Malaysia but also to all the other organizations that uses online

12

marketing. Besides, the knowledge obtained from this research can be used by the

researcher to improve the management of his organization in the future.

1.6 Research questions

This paper seeks the answers for the following questions.

RQ1: What is the connection between the technological factors and the success of

eCRM program in the budget airlines industry?

RQ2: What is the connection between the organizational factors and the success of

eCRM program in the budget airlines industry?

1.7 The scope of the study

This study is conducted to examine the factors that influence the success of eCRM

program in Malaysian budget airlines. In particular, this study will analyze:-

a. The connection between the technological factor and the success of eCRM program

in the budget airlines industry.

b. The connection between the organizational factor and the success of eCRM

program in the budget airlines industry

13

However, this research has several limitations. First of all, this research only covers one

budget airline, which is AirAsia. There are 118 low-cost airlines in the world with 4

located in Malaysia (Discount Air Fares, 2013).

Another limitation of this research is the questionnaire will be distributed to 100 staffs of

AirAsia at Senai International Airport. There are 8119 staffs in AirAsia Sdn. Bhd.

(EMIS, 2012). The number of respondents in this study is limited.

Next, this research only covers two factors that influence the success of eCRM in budget

airlines industry. The two factors that will be studied are technological factor and

organizational factor. There are many critical success factors of eCRM as proposed by

various authors. These factors are shown in Table 2.

14

2 CHAPTER TWO: LITRATURE REVIEW

2.1 Definition of terms

2.1.1 eCRM

eCRM refers to electronic customer relationship management or customer relationship

management that is Web-based (Dyche, 2004). eCRM provides organizations with a

means to conduct relevant, interactive and personalized communications with the

customers. It uses a complete view of the customers to make decisions about channel

delivery, messaging and offers. In addition, it respects individuals preferences about

how and whether they wish to communicate with you. eCRM focuses on understanding

how the economics of customer relationships influence the business. Evolving to eCRM

from CRM requires organizational and process changes, a non-trivial technical

architecture as well as a suite of integrated applications to support both the organization

applications that automate the process and the eCRM process (Parvatiyar & Shainesh,

2008).

2.1.2 Critical success factors of eCRM

2.1.2.1 The critical success factors of eCRM that are proposed by several

researchers are as follows:-

15

16

Table 2.1: Critical success factors of eCRM

2.1.2.2 The factors that are analyzed in this research are as follows:-

a. Technological factor

I. Relative advantage which refers to the degree to which the technology of eCRM

develops customer information that leads to improved customer service. It also

refers to how CRM technology will bring benefits to the organization when

competing with other organizations (Kittipong,2008).

II. Compatibility refers to how well eCRM matches with the organizations

previous experiences and current requirement (Kittipong,2008).

III. Complexity refers to the degree to which the innovation is recognised as

comparatively hard to use and understand, and therefore considered as a barrier

for adoption (Kittipong,2008).

IV. Triability refers to the degree to which an innovation is tested according to some

limits (Kittipong,2008).

V. Observability refers to the degree to which the outcome of an innovation can be

seen by others (Kittipong,2008).

b. Organizational factor

17

I. Firm size refers to magnitude of an organization which includes the economies

scale and the amount of resources available to run the operations (Graubner,

2006).

II. Organization structure refers to a structure that designate formal relationships

which includes the number of levels in the hierarchy, the span control of

managers and supervisors (Daft, 2009). It also includes grouping of individuals

into departments and the design of the systems (Daft, 2009).

III. Organization culture is defined as a glue that holds an organization together via a

shared pattern (Inceoglu, 2002).

IV. Organizational strategy refers to a plan of an organization to interact with the

competitive environment in order to achieve organizational goals (Daft, 2009).

V. Top management support refers to the degree to which the top management

understands an activity in the organization and is involved in the activity (Lee,

2012).

VI. Human resource management refers to the practices and policies involved in

carrying out the human resource aspects of a management position including

screening, recruiting, training, appraising and rewarding (Randhawa, 2007).

18

VII. Knowledge management capabilities refers to the ability to create, integrate,

transfer and leverage related knowledge across its business units (Remenyi,

2008).

2.2 Organization of Study

This study conducted on the factors that influence the success of eCRM program in

budget airlines industry is divided into 5 chapters stated below along with other basic

components of dissertation such as abstract, acknowledgement, table of content, list of

figures and tables, reference list, and appendices:

Chapter 1

This chapter introduces how CRM evolves into eCRM and the differences between

CRM and eCRM. Chapter 1 also discusses the number of budget airlines in Malaysia

and a short introduction on these budget airlines. In addition, this chapter also includes

the research problem, research objectives, significances of this research, rationale of the

study, research questions, scope of the study and definition of terms.

Chapter 2

Chapter 2 will focus upon the views of various scholars concerning the success criteria

of eCRM. In addition, this chapter will discuss various research frameworks by different

authors that was used to explore critical success factors of eCRM. Lastly, this chapter

19

includes evaluation of key studies, gaps in the literature and the usefulness of the past

researches.

Chapter 3

The third chapter is the methodology part of the paper that encompass the research

purpose, research philosophy, research approach, research approach, project plan and

timing, research methods, data analysis, data quality (reliability and validity) and ethical

consideration applied during collection of data.

Chapter 4

Fourth chapter will conclude the results drawn from data analysis and discuss on these

results.

Chapter 5

Chapter 5 reflects the research objectives. This chapter also includes recommendations

for the budget airlines which can help to further improve their eCRM, limitations of the

research and suggestions for further research.

20

3 CHAPTER THREE: METHODOLOGY

3.1 Introduction

This chapter of research study provides detailed illustrations concerning research

methodology used to achieve research objectives. This chapter covers the discussion of

conceptual framework, research approach, research strategy, research design, data

collection methods, sampling techniques, data analysis methods, reliability and validity

of research and research ethics. At the end of the chapter, the overall summary of this

methodology chapter is provided.

3.1.1 Variables

Two independent and one dependent variables have investigated in this research, which

has explained as following.

3.1.2 Independent variable

As literature review suggested, in this research two Independent variables:

Technological Factors and Organizational Factors in Success of eCRM program

3.1.3 Dependent variable

Success of eCRM program

21

3.2 Description of Instrument

Three set of questionnaire have developed to measure variables of the study which is

shows un table below:

22

Str

on

gly

dis

agree

Dis

agree

Neit

her

agree

Agree

Str

on

gly

agree

1 2 3 4 5

To measure Independent Variable Technological Factors in Success of

eCRM program

1 eCRM can be successfully implemented because it employs the latest

technology.

2 eCRM which has the relative advantage over its competitors in terms

of delivering accurate information to the customers is able to ensure

the success of eCRM implementation.

3 The compatibility of the eCRM to the organizations previous experience and current requirements plays an important role in

ensuring the success of eCRM implementation.

4 An innovation that meets the needs of the customers play an important

role in determining the success of eCRM implementation.

5 eCRM is adopted well if it is compatible with individuals job responsibility.

6 eCRM is adopted well if it is compatible with individuals value system.

7 eCRM can be successfully adopted if it is easy to use and understand.

8 The availability of trial in eCRM enables the organization to

familiarise each of the optional and this ensures the success of eCRM

implementation.

9 Triability helps to boost confidence among the adopters and this plays

an important role in ensuring the success of eCRM implementation.

10 The positive outcomes of eCRM employment in other organizations

can help to reduce uncertainties among new adopters.

To measure Independent Variable Organizational Factors in Success of

eCRM program

11 The organization easily adopts eCRM due to its firm size.

12 Organization structure and culture influence the success of eCRM

implementation.

13 Customer-centric strategy can enhance customer satisfaction and

influences the success of eCRM.

14 Customer touch points can help the organization to understand the

customers lifestyle and thus enhances eCRM.

15 The support from the top management encourages the adoption of

eCRM among the customers.

16 The alignment of visions and goals of the organization can ensure the

success of eCRM.

23

3.3 Conceptual Framework

The conceptual framework for the research study is illustrated below:

17 The success of eCRM depends on the employees who are equiped

with IT knowledge and skills.

18 Training can enhance the skills of the employees and ensure the

success of eCRM.

19 The ability to use knowledge management with technologies can

encourage the decision about strategies,product offering and how to

interact with the customers.

20 Financial resources influences the success of eCRM implementation.

To measure Dependent Variable the success of eCRM program

Do you think the airline which you are working with, eCRM is

successfully applied because

21 The organization employs the latest technology

22 of delivering accurate information to the customers

23 of innovation that meets the needs of the customers

24 it is easy to use and understand.

25 other organizations can help to reduce uncertainties among new

adopters.

26 of using Customer-centric strategy

27 the organization try to understand the customers lifestyle.

28 it is supported by the top management

29 of The alignment of visions and goals of the organization

30 the employees equipped with IT knowledge and skills.

31 of Financial resources

32 The organization employs the latest technology?

24

3.4 Research Approach

The research approach is the technique which is utilized to respond to the research

questions while the appropriate selection of research approach depends on the main

purpose of the research (Goddard, Melville and Goddard 2004). It is observed that

mainly three types of research approach used for conducting the research which include

explanatory approach, descriptive approach and exploratory approach (Dawson, 2002).

The writer chose the explanatory research in order to conduct this research and to

achieve the research objectives. It is chosen as it provides the explanation for the nature

of relationships that exist between the variables. For instance, the relationship between

the critical success factors of eCRM and the success of eCRM program in Malaysian

budget airlines industry. In addition, it attempts to build as well as detailed the theories

Figure 3.1 Conceptual framework

Organizational Factors

1. Firm size 2. Organizational structure and culture 3. Organizational strategy 4. Top management support 5. IT knowledge 6. Knowledge management capabilities

7. Financial resources

Technological Factors

1. Perceived relative advantage 2. Compatibility 3. Complexity 4. Triability

5. Observability

Success of eCRM program

in Malaysian Budget

Airlines Industry

25

and principles related to research study (Dawson, 2002; Goddard, Melville, & Goddard,

2004). Dawson (2002) stated that explanatory research strives to build theories that

explain and predict social and natural events. Furthermore, the explanatory research can

help to answer the question why (McNabb, 2008). For instance, why the eCRM

program can be successfully implemented in Malaysian budget airlines industry.

Descriptive approach is not chosen as this method focuses on describing the phenomena

rather than explaining the reason behind the phenomena. For instance, the descriptive

approach can describe that the eCRM program is successfully implemented in Malaysian

budget airlines industry but it does not state why it is successfully implemented. On the

other hand, explanatory approach can explain the reasons behind this phenomena.

Exploratory research is not chosen because the purpose of the exploratory research is to

gain familiarity with a phenomenon. Exploratory research aims to find out how people

get along in the setting under question. It does not explicit expectations unlike

explanatory research.

3.5 Research strategy

a. There are different research strategies that are used to conduct a research

by the researchers such as qualitative research strategy, quantitative research

strategy and triangulation research strategy.

26

In this research, quantitative research strategy is chosen. The type of quantitative

research method that is chosen is survey questionnaire. A questionnaire is a printed self-

reported form designed to elicit information that can be obtained via written responses of

the participants.

The quantitative research strategy is done by carrying out multiple regression analysis

and random sampling. The quantitative research strategy is chosen as it enables the

researcher to measure and analyze the collected data. In addition, the quantitative

research strategy allows the connection between the dependent and independent variable

to be studied. Quantitative research also helps to summarize the data and allows the

researcher to analyze as well as to compare with other similar studies. It is possible to

clarify question meaning for respondents based on the response choices. Besides,

quantitative research involves fewer variables and hence the results are more accurate

and objective. Quantitative research can help to eliminate bias also. It can eliminate

irrelevant or confused answers to questions,therefore obtain a more accurate conclusions

compared to qualitative research strategy. In other words, it filters out all the external

factors and provides real results. Quantitative research in the form of close ended

questionnaires is quicker and easier for the participants to answer. Finally, quantitative

research is chosen as it helps to finalize results and can help the researcher to prove his

hypothesis as it has the ability to measure data via statistics.

27

3.6 Data Collection Method

The data collection method emphasizes on the collection of the data by using a variety of

primary and secondary sources of information. It is considered an optimal way to gather

information, in order to keep the information on record and in decision-making,

contiguous to the issues existing in the considered research (Khanzode, 2004). On the

other hand, the data collection for this research study deals with general data collection

method; therefore, primary and secondary data collection for the research is illustrated as

follows (Goddard, Melville, & Goddard, 2004):

3.6.1 Primary Data

According to Ranjit Kumar (2005) primary sources are original document such as

diaries, letters, interviews, and speeches etc. which gives first hand contemporary

account written by individual who experience or witness an event. In this study, primary

data is collected through questionnaires.

3.6.1.1 Questionnaires

The questionnaires for this study consisted of two parts. The first part includes the open

ended questions and the second part includes the close ended questions.

3.6.1.1.1 Open-ended questionnaires

28

The open-ended questionaires include the background information of the respondents.

This section will help the researcher to identify the participants and compare the

respondents in groups. The questions that are included in the open-ended questionaires

are as follows:

1. Demographic information:

i. Gender

ii. Age

iii. Race

iv. Occupation

v. Working experience with the budget airlines industry

3.4.1.1.2 Close-ended questionnaires

The close-ended questionnaires are given to 100 employees of Malaysian budget airlines

industry at Senai International Airport, Johor Bahru. The employees are selected by

using stratified random sampling whereby the employees are divided into subgroups

according to their age groups, race and occupation.

a) In this study, the writer will conduct a survey on the employees who are

categorized according to the following age group:-

b) 21 to 55 years old

29

c) 21 to 55 years old consumers are chosen as this age group falls under the

working adult category. The majority of the employees of Malaysian budget

airlines industry falls under this age group. Hence, this age group is selected by

the writer.

In Malaysia, Malays and other indigenous make up 61.4%, Chinese 23.7%, Indians

7.1% and others 7.8% (WonderfulMalaysia, 2012). Therefore, the writer selects the

sample according to race as in Figure 3.2.

21-55years old

No of Malay participants 63

No. of Chinese

participants

28

No. of Indian participants 9

Total no of participants 100

Figure 3.2 stratified random sampling

The participants include 7 Malay CEOs, 4 Chinese CEOs, 1 Indian CEO, 7 Malay

managers, 3 Chinese managers, 1 Indian manager, 7 Malay supervisors, 3 Chinese

supervisors, 1 Indian supervisor, 7 Malay pilots, 3 Chinese pilots, 1 Indian pilot, 7

Malay stewardesses, 3 Chinese stewardesses, 1 Indian stewardesses, 7 Malay customer

care officers, 3 Chinese customer care officers, 1 Indian customer care officer, 7 Malay

licensed aircraft engineers, 3 Chinese licensed aircraft engineers, 1 Indian licensed

30

aircraft engineer, 7 Malay executives, 4 Chinese executives, 1 Indian executive, 7

Malay creative designers, 4 Chinese creative designers and 1 Indian creative designer.

CEO Manager Supervisor Pilot Stewardess Customer

care

officer

Licensed

aircraft

engineer

Executive Creative

designer

No. of Malay

participants

7 7 7 7 7 7 7 7 7

No. of Chinese

participants

4 3 3 3 3 3 3 3 3

No. of Indian

participants

1 1 1 1 1 1 1 1 1

Total no. of

participants

12 11 11 11 11 11 11 11 11

Figure 3.3: Participants in the close-ended questionnaire

All items are accessed on a 5-point Likert-type scales that ranges from strongly

disagree to strongly agree to get a better response from the respondents (Clason &

Dormody, 1994). The respondents will rate each item with 5 points scale which is shown

in the following table.

Strongly agree 5

Agree 4

Neither agree nor disagree 3

Disagree 2

Strongly disagree 1

Figure 3.4: 5-point Likert-type scales

The distribution process includes offline process only. It involves distributing the

questionnaires in paper form at Senai International Airport, Johor Bahru. The questions

in the questionnaires are designed to identify the interrelationship of the technological

31

factors, organizational factors and the success of eCRM program in Malaysian budget

airlines industry.

3.6.1.1.2 Questionnaires for the employees of Malaysian budget airlines

There are 32 questions in the questionnaires for the employees of Malaysian budget

airlines in order to prove the 2 hypotheses that are stated in Chapter 1. They are as

follows:

32

Table 3.1Questionnaires for the employees of Malaysian budget airlines

Str

on

gly

dis

agree

Dis

agree

Neit

her

agree

Agree

Str

on

gly

agree

1 2 3 4 5

To measure Independent Variable Technological Factors in Success of

eCRM program

1 eCRM can be successfully implemented because it employs the latest

technology.

2 eCRM which has the relative advantage over its competitors in terms

of delivering accurate information to the customers is able to ensure

the success of eCRM implementation.

3 The compatibility of the eCRM to the organizations previous experience and current requirements plays an important role in

ensuring the success of eCRM implementation.

4 An innovation that meets the needs of the customers play an important

role in determining the success of eCRM implementation.

5 eCRM is adopted well if it is compatible with individuals job responsibility.

6 eCRM is adopted well if it is compatible with individuals value system.

7 eCRM can be successfully adopted if it is easy to use and understand.

8 The availability of trial in eCRM enables the organization to

familiarise each of the optional and this ensures the success of eCRM

implementation.

9 Triability helps to boost confidence among the adopters and this plays

an important role in ensuring the success of eCRM implementation.

10 The positive outcomes of eCRM employment in other organizations

can help to reduce uncertainties among new adopters.

To measure Independent Variable Organizational Factors in Success of

eCRM program

11 The organization easily adopts eCRM due to its firm size.

12 Organization structure and culture influence the success of eCRM

implementation.

13 Customer-centric strategy can enhance customer satisfaction and

influences the success of eCRM.

14 Customer touch points can help the organization to understand the

customers lifestyle and thus enhances eCRM.

15 The support from the top management encourages the adoption of

eCRM among the customers.

16 The alignment of visions and goals of the organization can ensure the

33

The questionnaires will be pre-tested by 10 participants to ensure clarity and ease of

comprehension. The participants will be asked to evaluate the clarity of the wordings,

level of language in terms of sensitivity, ease of comprehension, as well as format,

length, instructions for overall survey to minimise ambiguities and communication

errors.

success of eCRM.

17 The success of eCRM depends on the employees who are equiped

with IT knowledge and skills.

18 Training can enhance the skills of the employees and ensure the

success of eCRM.

19 The ability to use knowledge management with technologies can

encourage the decision about strategies,product offering and how to

interact with the customers.

20 Financial resources influences the success of eCRM implementation.

To measure Dependent Variable the success of eCRM program

Do you think the airline which you are working with, eCRM is

successfully applied because

21 The organization employs the latest technology

22 of delivering accurate information to the customers

23 of innovation that meets the needs of the customers

24 it is easy to use and understand.

25 other organizations can help to reduce uncertainties among new

adopters.

26 of using Customer-centric strategy

27 the organization try to understand the customers lifestyle.

28 it is supported by the top management

29 of The alignment of visions and goals of the organization

30 the employees equipped with IT knowledge and skills.

31 of Financial resources

32 The organization employs the latest technology?

34

A verbal consent will be obtained from the participants prior to distributing the

questionnaire. All participants are informed the study is on a voluntary basis and that the

information provided will be kept confidential.

3.6.2 Secondary Data

The secondary data is collected for the review of previous literature and for conducting

the background study for the research topic. The secondary data for the research study

is collected from authentic journal articles, newspaper publications, reports and books

(Goddard, Melville, & Goddard, 2004).

In order to find out information to about the factors that influence the success of eCRM

program, the writer used secondary sources obtained online. The key words used in the

search process are factors that influence eCRM and critical success factors of

eCRM.

3.5 Data analysis methods

The data analysis methods are those that are used to de-synthesize data to answer the

research questions (Goddard, Melville, & Goddard, 2004). The data analysis methods

are also utilized to break down research issue by using the collected data and

information. Usually, there are two types of data analysis methods including qualitative

and quantitative that are used in the research studies. In the qualitative data analysis, the

data are based on observation and interpretation of interview responses while in the

quantitative approach, the data are based on numerical measurements using survey data

acquired from the responses of participants (Dawson, 2002).

35

To conduct the research, quantitative analysis approach is used. The quantitative data

obtained from the questionnaires will be analysed by using SPSS 20.0. Results will be

shown in the form of tables.

Later, a report will be made based on the information obtained from the SPSS 20.0 and

secondary sources information.

In addition, the writer will examine whether the 2 hypotheses that have been formed in

Chapter 1 are accurate and a conclusion will be drawn.

3.7 Sampling strategy

The use of probability sampling enables every individual in the population to possess an

equal opportunity to be selected as a part of the sample. There are three types of

probability sampling named as random sampling, stratified sampling, and cluster

sampling (Singh, 2010). Random Sampling is obtained by selecting the consumers

randomly in which every participant has equal opportunity of being selected for the

study. Stratified Sampling permits the researcher to consider the subgroups of

participating consumers within the population. It represents the most accurate features of

the population within the same sample. Cluster Sampling is used by the researchers

when the organizations of the sample are a part of the group (Goddard, Melville, &

Goddard, 2004).

36

The sampling strategy selected for this study is stratified and random sampling. First of

all, the writer will identify the total number of employees in Malaysian budget airlines at

Senai International Airport, Johor Bahru. Later, the employees are subdivided according

to race, age group and occupation. The writer will select the employees randomly from

each subgroup as shown in Figure 3.3. A total of 100 employees will be selected

randomly to participate in the research. The sample has equal opportunity to get

selected for participating in the research study.

3.8 Research Ethics

The research ethics refers to the implementation of several ethical principles that are

used for the safeguarding of the rights of the research participants (Goddard, Melville

and Goddard 2004).Therefore, this research is conducted after giving strong

considerations of the several ethical principles to deal with the ethical issues concerning

voluntary participation, informed consent, confidentiality, plagiarism, validity, and

reliability. However, in this research, it is ascertained that every member of the research

is participated voluntarily and research will be made and survey will be conducted with

complete authorization. However, proper citation and referencing of research material is

performed in order to avoid plagiarism issue within the research study (Dawson, 2002).

The actual name of the budget airlines are not revealed and the term Malaysian budget

airlines are used. This is a measure to safeguard the privacy and integrity of the budget

airlines concern.

37

3.9 Reliability and Validity of Research

The research is reliable and valid because it employs quantitative approach whereby it

can eliminate irrelevant or confused answers to questions. It filters out all the external

factors and provides real results. Therefore, the writer is able to obtain more accurate

conclusions compared to qualitative research strategy.

The data is reliable also because the information to be obtained from the participants is

tested using regression analysis, which is being analyzed critically under the light of

previous studies. The findings gathered from the employees of Malaysian budget airlines

are critically analyzed and the validity of such information is compared with the

information obtained from the findings of the previous studies.

Alternatively, it can be said that the research is valid and reliable based on the data and

information being gathered along with the interpretation. The data and information

provided are meeting the research aims and objectives while answering the research

questions.

3.10 Reliability test

To determine the reliability of the instrument, the questionnaires were tested using

Cronbach's alpha. The result of the pre-test and actual test is shown in tables below:

Variables Number of

Items

Cronbach's Alpha

Pre test

Cronbach's Alpha

actual test

38

Variables Number of

Items

Cronbach's Alpha

Pre test

Cronbach's Alpha

actual test

Organizational Factor 10 .788 .848

Technological Factor 10 .712 .765

Success of E- CRM 12 .742 .819

As the table shows, Alpha value for all variable ranged from .712 to .848 which is

acceptable (Cronbach, 1951). Since the internal consistency is statistically significant, all

items of measurement are accepted for actual data collection. Accordingly, all of items

which is developed to measure three variables of study, meet the reliability criteria.

3.11 Validity

Validity means that the concept we are measuring is actually what we are measuring

rather than some other concepts. Validity of written is established through an exact

process of research and development verifying the measures characteristics and

usefulness (Thyer, 2009). There is two typs of validity ,which researches have to achive:

face validity and content validity.

3.11.1 Face validity

Face validity assumes that when we look at the questionnaire the concepts intended and

is often dependent on the perception of the reviewer of the measurement instrument.

Face validity also refers to how the questionnaire looks and how a measure or procedure

appears. Asking items should be reasonable to gain the information and have to be easy

39

to understand it means the sentences structure and the vocabulary used must be suitable

for respondents to their level of understanding (Thyer, 2009). In this study, to insure that

all items are fully understanding by respondents, pre test was done.

3.11.2 Content Validity

Content validity, which includes elements of face validity is refers to evaluation items of

measure to determine if they are representative perception that the measure seeks to

examine (Thyer, 2009).

3.12 Time frame

Below is the schedule for questionnaires distribution at Senai International Airport,

Johor Bahru.

Senai International Airport 28th April 2013

Figure 3.6 10 Schedule for the questionaires on site distribution

3.13 Conclusion of the chapter

It can be concluded that the research methodology created for the research study can

enable the writer to conduct the study by using the most appropriate tools. Using these

effective tools selected in this chapter, the writer can obtain the results and findings of the

study that are presented in the next chapter.

40

41

4 CHAPTER FOUR: RESULT OF STUDY

4.1 Introduction

This chapter has contained finding and results of the study include of descriptive

analyses, interpret demographics information of participants, preliminary analyses of the

data, and the statistical analyzes used to answer the research questions. This chapter

organized into three sections: (1) characteristic of respondents, (2) descriptive analyze

and (3) inferential analyses.

During data collection, 100 employees of Malaysian budget airlines industry at Senai

International Airport, Johor Bahru have asked to respond the questionnaire.

Table 4.1. The number of send questionnaire and received respondents

Name of airline Number of send

questionnaire

Number of received

questionnaire

100 100

Total 100 100

42

4.2 Descriptive analyse

4.2.1 Characteristics of the Respondents

In the first section of this chapter, characteristics of the respondents in term of gender,

age, race and occupation have discussed. All of characteristics of the respondents have

measured at nominal data level (The nominal level of measurement is the lowest level

out of four ways to characterize data: Nominal, Ordinal, Interval, and ratio Nominal.

Nominal level means that data we name data to remember what this level is all about.

Nominal data deals with names, categories, or labels).

Table shows the distribution of respondents.

43

Table 4.2 characteristic of respondents

Demographic Factors Categories Frequency Percentages

Gender

Female 46 46.0

Male 54 54.0

Age

21-32 42 42.0

33-44 51 51.0

45-55 7 7.0

Race

Malay 63 63.0

Chinese 28 28.0

Indian 9 9.0

Occupation

CEO 12 12.0

Manager 11 11.0

Supervisor 11 11.0

Pilot 11 11.0

Executive Creative

designer

11 11.0

Customer care officer 11 11.0

Licensed aircraft engineer 11 11.0

Executive 11 11.0

Creative designer 11 11.0

As table shows the proportion of female was 46% and proportion of male was 54 %. The

numbers of female respondents were 46 individuals, and male were 54 individuals. It

shows the majority of respondents were male and the less than half of respondents were

female.

44

From the category of age position, slightly more than half of respondents have 33-44

years old (51%), following 42% were between 22-33 years old, and have 7% were

between 45-55 years old.

In term of race categories, majority of respondents were Malay (63%) following by

Chinese (28%) and Indian (9%).

The last parametric information, which has showed Occupation of respondents, in

immediate airline indicated that respondents have different position with almost same

percentages.

Table 4.3 Descriptive statistics report (characteristic part)

N Range Sum Mean

Std.

Deviation Variance

Gender 100 1.00 154.00 1.5400 .50091 .251

Age 100 2.00 165.00 1.6500 .60927 .371

Race 100 2.00 146.00 1.4600 .65782 .433

Occupation 100 8.00 496.00 4.9600 2.61279 6.827

Valid N

(listwise)

100

45

46

47

4.2.2 Frequency of respondents toward Technological Factors in Success of E-

CRM program

Table 4.4. The percentage, mean and standard deviation of respondents

(variable 4: Technological Factor)

Items Frequency of respondents Mean Std.

Deviation 1 2 3 4 5

eCRM can be successfully

implemented because it employs the

latest technology.

1 22 47 30 4.1 .74

eCRM which has the relative

advantage over its competitors in

terms of delivering accurate

information to the customers is able

to ensure the success of eCRM

implementation.

1 19 31 29 20 3.5 1.04

The compatibility of the eCRM to the

organizations previous experience and current requirements plays an

important role in ensuring the success

of eCRM implementation.

9 15 31 27 18 3.3 1.19

An innovation that meets the needs

of the customers play an important

role in determining the success of

eCRM implementation.

1 8 22 46 23 3.8 .91

eCRM is adopted well if it is

compatible with individuals job responsibility.

1 5 24 42 28 3.9 .90

eCRM is adopted well if it is

compatible with individuals value system.

3 6 23 41 27 3.8 .99

eCRM can be successfully adopted if

it is easy to use and understand.

4 12 32 37 15 3.5 1.019

The availability of trial in eCRM

enables the organization to

familiarise each of the optional and

4 15 26 40 15 3.5 1.048

48

this ensures the success of eCRM

implementation.

Triability helps to boost confidence

among the adopters and this plays an

important role in ensuring the success

of eCRM implementation.

14 35 30 21 3.6 .976

The positive outcomes of eCRM

employment in other organizations

can help to reduce uncertainties

among new adopters.

1 4 28 31 26 3.8 .919

*five-Lykert scales from (1: strongly disagree, 2: agree, 3: somehow agree, 4: disagree

and 5: strongly agree )

*Number of respondents:100

According to table above, majority of respondents have believed that eCRM can be

successfully implemented if the organization meet the criteria of technological factors

(mean ranged from 3.3 to 4.1) mean shows that the majority of respondents were almost

agree with an idea that technological factors effect on eCRM to be successful.

Standard deviation value shows how much difference exists from the average or mean

value.

49

4.2.3 Frequency of respondents toward Organizational Factors in Success of e-

CRM program

Table 4.5. The percentage, mean and standard deviation of respondents

(variable 4: Organizational Factor)

Items Frequency of respondents Mean Std.

Deviation 1 2 3 4 5

The organization easily adopts eCRM

due to its firm size.

1 23 42 34 4.1 .78

Organization structure and culture

influence the success of eCRM

implementation.

1 2 30 36 31 3.9 .89

Customer-centric strategy can enhance

customer satisfaction and influences

the success of eCRM.

3 15 25 25 32 3.7 1.16

Customer touch points can help the

organization to understand the

customers lifestyle and thus enhances

eCRM.

3 15 50 32 4.1 .76

The support from the top management

encourages the adoption of eCRM

among the customers.

3 25 36 36 4.1 .86

The alignment of visions and goals of

the organization can ensure the success

of eCRM.

2 28 44 26 3.9 .79

The success of eCRM depends on the

employees who are equiped with IT

knowledge and skills.

6 33 36 25 3.8 .89

Training can enhance the skills of the

employees and ensure the success of

3 30 40 27 3.9 .83

50

eCRM.

The ability to use knowledge

management with technologies can

encourage the decision about

strategies,product offering and how to

interact with the customers.

1 3 22 45 29 4 .85

Financial resources influences the

success of eCRM implementation.

2 2 29 33 34 4 .94

*five-Lykert scales from (1: strongly disagree, 2: agree, 3: somehow agree, 4: disagree

and 5: strongly agree )

*Number of respondents:100

Recent table shows that majority of respondents have believed that eCRM can be

successfully implemented if the organization meet the criteria of technological factors

(mean ranged from 3.7 to 4.1) mean shows that the majority of respondents were almost

agree with an idea that organizational factors effect on eCRM to be successful.

51

4.2.4 Frequency of respondents toward Organizational Factors in Success of e-

CRM program

Table 4.6. The percentage, mean and standard deviation of respondents

(variable 4: Organizational Factor)

Items Frequency of respondents Mean Std.

Deviation 1 2 3 4 5

The organization employs the latest

technology

1 23 48 28 4.1 .749

of delivering accurate information to

the customers

1 16 31 30 22 3.5 1.049

of innovation that meets the needs of

the customers

7 13 34 25 21 3.3 1.193

it is easy to use and understand. 1 7 25 42 25 3.8 .914

other organizations can help to

reduce uncertainties among new

adopters.

1 2 26 42 29 3.9 .90

of using Customer-centric strategy 2 5 27 42 24 3.8 .995

the organization try to understand the

customers lifestyle. 4 10 34 36 16 3.5 1.019

it is supported by the top

management

3 14 26 38 19 3.5 1.048

of The alignment of visions and goals

of the organization

12 36 29 23 3.6 .976

the employees equipped with IT

knowledge and skills.

1 4 40 29 26 3.8 .919

of Financial resources 4.1 .74968

The organization employs the latest

technology?

3.5 1.04910

*five-Lykert scales from (1: strongly disagree, 2: agree, 3: somehow agree, 4: disagree

and 5: strongly agree ) *Number of respondents:100

52

According to table above, majority of respondents have believed that eCRM is

successfully implemented in the airline (mean ranged from 3.3 to 4.1) mean shows that

the majority of respondents were almost agree with an idea that eCRM is applied

successfully in the airline.

4.2.5 Descriptive statistics report (characteristic part)

Descriptive Statistics

N Range Mean

Std.

Deviation Variance

Organizational factors of

Successful of E-CRM

100 2.80 4 .57 .329

Technological factors of

Successful of E-CRM

100 2.90 3.7 .55 .310

Successful of E-CRM 100 3.00 3.7 .54 .301

To know the level of agreement, the mean of all items of variables computed separately

which is shows in table above. Mean of variables scale shows that the level of

respondents agreement were high.

53

4.3 Inferential statistic

Pearson correlation was used to test the hypothesis of the study since it is a parametric

test that requires both variables (independent variable and dependent variable) to be

normally distributed.

For interpretation correlation it was referd to Guilford's rule of thumb, which interpreted

r-value as following: (Guilford, 1973) p.145

If r-value is smaller than 0.20, it will indicate almost negligible correlation.

If r-value is between 0.20 and 0.40, it will indicate low correlation.

If r-value is between 0.40 and 0.70, it will indicate moderate correlation.

If r-value is between 0.70 and 0.90, it will indicate high correlation.

If r-value is between 0.90 and 1, it will indicate very high correlation.

4.3.1 Testing hypothesis

4.3.1.1 Relationship between the technological factors and the success of eCRM

program.

HO1: There is no significant relationship between the technological factors and the

success of eCRM program.

H1: There is relationship between the technological factors and the success of eCRM

program.

54

The correlation between the technological factors and the success of eCRM program

was found to be statistically significant [ r (n:100) = .95, p=.00

55

These findings suggest that there is a positive relationship between the organizational

factors and the success of eCRM program and it is statistically significant, hence we

accepted H2. The positive relationship indicated that if organizational factors is

improved, E-CRM would be successful accordingly and vice versa.

Since the r-value (correlation value) is positive, it means organizational factors

associated to the success of eCRM program directly. Nevertheless, according to

Guilford's rule of thumb, r-value (.54) is between 0.40 and 0.70; it means moderate

correlation between variables. P value (P=0.00

56

5 CHAPTER FIVE : DISCUSSION

5.1 Introduction

5.2 Discussion

5.3 Implication

5.4 Limitations

5.5 Future Research Needs

57

6 REFRENCES

Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests.

Psychometrika, 16(3), 297334

Thyer, B. A. (2009). The Handbook of Social Work Research Methods. USA: SAGE.

Guildford, J. P. (1973). Fundamental statistics in psychology and education. (5th

ed.) New York: McGraw-Hill.