jokonya dessertation-final draft (2)
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APPROVAL FORM
The undersigned certify that they have supervised the student Protasius Jokonya
dissertation entitled, An investigation into the impact of Customers Relationship
Marketing Strategies on customer retention in the financial service industry. A case
study of Standard Chartered Bank, submitted in partial fulfilment of the requirements of
the Bachelor of Commerce in Marketing Management (Honours) Degree at Midlands State
University.
....
SUPERVISOR DATE
CHAIRPERSON DATE
.. ...EXTERNAL EXAMINER DATE
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Dedication.
This work is a special dedication to my mother.
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Acknowledgements.
The process of this dissertation writing is a wonderful learning experience in my academic
life which is filled with challenges and rewards. The completion of this study leads to a
new beginning and a step forward towards attaining my first degree.
First of all, I would like to express my sincere appreciation to my supervisors Mr. Chuma
and Mr Mupemhi who has guided, supported and given feedback throughout this research.
Without his continuous support and encouragement, it would have not been possible for the
completion. I also would like to express my sincere gratitude Mrs. L Evans, head of Client
Relationship department at Standard Chartered Bank Zimbabwe for her continuous efforts
in supporting this research.
Furthermore, I would like to thank all respondents from SCB staff to customer for spending
their valuable time accepting my interviews and questionnaires sharing information with
me to make the present study successful.
Finally, greatest thanks are directed to my family. Being loved supported by them
especially financially made me believe that I can do well in my research. Special thanks go
to my brothers Tafara and Mugove. To all my friends, at college I say, you are great
people.
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Abstract.
With the continuous growth of competition in the market place, understanding customers
has become more and more important method of marketing. Therefore, the purpose of this
research was to analyse the impact of the Customer Relationship Marketing (CRM)
strategies on customer retention, and to identify the CRM strategies adopted as well as to
establish the role and importance of the CRM strategies used. Based on the literature
review, the two most frequently mentioned dimensions used in evaluating customer
retention were chosen in the present study as: customer loyalty and customer satisfaction.
A descriptive research design was used, thus allowed for the collection of both qualitative
and quantitative data. A quantitative research was adopted and surveys were conducted
from both customers and bank perspective in the study. A sample size of a total of sixty six
was used. Face to face interviews and questionnaires were selected as the source of data
collection. The results show that CRM strategies have a positive impact on customer
retention as suggested by their positive effect on customer loyalty and satisfaction.
Furthermore the study offers suggestions to bank managers to strengthen their IT systems
to enhance differentiated services which can meet and exceed customers needs and
expectations leading to stronger relationships and high customer retention.
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TABLE OF CONTENTS
APPROVAL FORM ................................................................................................................................ ..i
Dedication................................................................................................................................................. ii
Acknowledgements.................................................................................................................................iii
Abstract.................................................................................................................................................... ivTABLE OF CONTENTS ..........................................................................................................................vLIST OF ACRONYMS ............................................................................................................... ...... .....vii
LIST OF TABLES ............................................................................................................ ....................viii
LIST OF FIGURES .................................................................................................................. ...... ...... ...ix
LIST OF APPENDICES ...........................................................................................................................x
CHAPTER I ....................................................................................................................................................xii
GENERAL INTRODUCTION ......................................................................................................................xii
1.0 Introduction ..........................................................................................................................................xii
1.1 Background of the Study .....................................................................................................................xii1.2 Statement of the Problem ....................................................................................................................xiv
1.3 Research Objectives ............................................................................................................................xiv
1.4 Research Questions ..............................................................................................................................xv
1.5 Significance of the Study .....................................................................................................................xv1.6 Delimitations .......................................................................................................................................xvi
1.7 Assumptions of the Study ...................................................................................................................xvi
1.8 Limitations .........................................................................................................................................xvii
1.9 Definition of Terms ...........................................................................................................................xvii10.0 Summery ..........................................................................................................................................xviii
CHAPTER II ................................................................................................................................. ...... ...... ....xix
THEORETICAL FRAMEWORK ............................................................................................................. ....xix
2.0 Introduction ..........................................................................................................................................xix
2.1 The Development of Relationship Marketing.....................................................................................xix
2.2 What Is Customer Relationship Marketing? .........................................................................................xx
2.4 Scope of Relationship Marketing .....................................................................................................xxiii
2.5 The goals of relationship marketing ........................................................................................... ...... ..xxv
2.5.2 Customer Retention........................................................................................................................xxvi2.6.1 The Six Markets Model................................................................................................................xxviiiFigure 2.1: The Six Markets Model..........................................................................................................xxviii
2.7 Customer Relationship Marketing Strategies.................................................................................xxx
2.7.1 Personalised service....................................................................................................................... xxxii
2.7.2 Service Quality..............................................................................................................................xxxii
2.7.3 Key Account Management (KAM) ..............................................................................................xxxiii
2.7.4 Service Recovery.......................................................................................................................... xxxiv
2.7.5 Total Quality Management (TQM)..............................................................................................xxxiv
2.8 Role and Importance of Customer Relationship Marketing............................................................xxxiv2.8.1 Customer Relationship Management............................................................................................. xxxv
2.8.2 Key Account Management...........................................................................................................xxxvi
2.8.3 Internal Marketing.......................................................................................................................xxxvii
2.8.4 Customer Service........................................................................................................................ xxxviii
2.8.5 Total Quality Management...........................................................................................................xxxix
2.8.6 Communication ...................................................................................................................................xl
2.9 The Impact of Customer Relationship Marketing on Customer Retention...........................................xl
2.9.1 Customer Loyalty...............................................................................................................................xlFigure 2.2: The Relationship Ladder ......................................................................................................... .....xli
2.9.2 Improvements in Customer Satisfaction..........................................................................................xlii
2.9.3 Profitability.................................................................................................................................. xliii
2.9.4 Opportunities for Value Adding Through Customisation........................................................xliv
2.9.5 Employee Satisfaction......................................................................................................................xlv
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2.10 Summary. ........................................................................................................................................xlvi
CHAPTER III .............................................................................................................................................xlviii
METHODOLOGY .................................................................................................................................. ...xlviii
3.0 Introduction .....................................................................................................................................xlviii
3.1 Research Design ...............................................................................................................................xlviii3.1.1 Descriptive Research Design ..........................................................................................................xlix
3.2 Sampling .................................................................................................................................................l3.2.1 Sampling Techniques/Approaches ......................................................................................................l
3.2.1.1 Probability Sampling ........................................................................................................................l
3.2.1.2 Non-probability Sampling ............................................................................................................ ....li
3.2.2 Population ..........................................................................................................................................lii
3.2.3 Sampling Frame .................................................................................................................................lii
3.2.4 Sampling Errors .................................................................................................................................lii3.2.5 Sample Size ......................................................................................................................................liii
3.3 Source of Data .....................................................................................................................................liv
3.3.1 Primary Sources ................................................................................................................................liv
3.3.2 Secondary Sources ............................................................................................................................liv
3.4 Research Instruments ...........................................................................................................................liv
3.4.1 Questionnaires ...................................................................................................................................lv
3.4.2 Interview ...........................................................................................................................................lvi
3.5 Data Collection Procedure ..................................................................................................................lvii3.5.1 Pilot Study .......................................................................................................................................lvii
3.5.2 Questionnaire Distribution .............................................................................................................lviii3.5.3 How Interviews Were Conducted ..................................................................................................lviii
3.6 Data Presentation and Analysis ..........................................................................................................lviii
3.7 Summery ............................................................................................................................................ ...lix
CHAPTER 4 ....................................................................................................................................................lx
DATA PRESENTATION AND ANALYSIS.................................................................................................lx
4.0 Introduction............................................................................................................................................ lx
4.1 Questionnaire Response......................................................................................................................... lx
Table 4.1: The Questionnaire Response Rate ..................................................................................................lx4.2 Customer Relationship Marketing Strategies used by Standard Chartered Bank................................lxi
Table 4.2: Staff Responses............................................................................................................................lxii
4.3.1 Customer Loyalty. ..........................................................................................................................lxiiiFigure 4.1 ......................................................................................................................................................lxiv
Figure 4.2 ................................................................................................................................................... ....lxv
Figure 4.3 ......................................................................................................................................................lxvi
4.3.2 Satisfaction......................................................................................................................................lxvi
Figure 4.4 .....................................................................................................................................................lxvii4.4 Importance and Roles of Customer Relationship Marketing...........................................................lxviii
Figure 4.5 ....................................................................................................................................................lxviii
Figure 4.6 ......................................................................................................................................................lxix
Table 4.3: Managers Responses....................................................................................................................lxx
4.5 Persistence of Problems ....................................................................................................................lxxi
4.6 Summery............................................................................................................................................. lxxi
CHAPTER V ...............................................................................................................................................lxxii
CONCLUSIONS AND RECOMMENDATIONS...................................................................................... lxxii5.0 Introduction.......................................................................................................................................lxxii
5.1 Summary..........................................................................................................................................lxxiii5.1 Conclusions ............................................................................................................................. ...... ...lxxiii
5.1.1 Customer Relationship Marketing Strategies Adopted By SCB...................................................lxxiii
5.1.2 Impact of Customer Relationship Marketing Strategies on Customer Retention .........................lxxiv
5.1.2.1 Customer Loyalty.......................................................................................................................lxxiv
5.1.2.2 Customer Satisfaction................................................................................................................. lxxiv
5.1.3 Importance and Roles of Customer Relationship Marketing. .......................................................lxxv
5.2 Recommendations............................................................................................................................lxxvi
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5.3 Suggestion for Future Research .......................................................................................................lxxix
References ..............................................................................................................................................lxxix
Appendix A: Approval letter....................................................................................................................lxxxiv
Appendix B: Customer Questionnaire .......................................................................................................lxxxv
Appendix C: Staff Questionnaire ....................................................................................................... ....lxxxviiiAppendix D: Interview Schedule for Managers .............................................................................................xc
LIST OF ACRONYMS
CRM Customer Relationship Marketing
SCB Standard Chartered Bank
KAM Key Account Management
TQM Total Quality Management
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SME Small to Medium Enterprises
NGO Non-Governmental Organisation
NPD New Product Development
LIST OF TABLES
Table 4.1: The Questionnaire Response Rate.....................Error: Reference source not found
Table 4.2: Staff Responses.................................................. Error: Reference source not foundTable 4.3: Managers Responses.........................................Error: Reference source not found
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LIST OF FIGURES
Figure 2.1: The Six Markets Model.................................... Error: Reference source not found
Figure 2.2: The Relationship Ladder..................................Error: Reference source not found
Figure 4.1: Customers Response.......................................Error: Reference source not foundFigure 4.2: Customers Response.......................................Error: Reference source not found
Figure 4.3............................................................................Error: Reference source not found
Figure 4.4: ..........................................................................Error: Reference source not found
Figure 4.5............................................................................Error: Reference source not found
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Figure 4.6............................................................................Error: Reference source not found
LIST OF APPENDICES
Appendix A: Approval letter..............................................Error: Reference source not found
Appendix B: Customer Questionnaire................................Error: Reference source not found
Appendix C: Staff Questionnaire........................................ Error: Reference source not foundAppendix D: Interview Schedule for Managers.................Error: Reference source not found
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CHAPTER I
GENERAL INTRODUCTION
1.0 Introduction
This chapter introduces the research problem. It focuses its attention on the background of
the problem. This chapter forms the back-borne of the research itself as it states the
statement of the problem, the main research objectives and questions as well as the
background of the study, which includes a brief history of the organisation. The
significance of the study was also discussed as well as the assumptions that will be made
when carrying out this work. The researcher encountered a number of drawbacks during
the study and they were also discussed at the end of this chapter as limitations.
1.1 Background of the Study
The Standard Chartered Group was formed in 1969 through a merger of two banks; The
Standard Bank of British South Africa founded in 1863, and the Chartered Bank of India,
Australia and China, founded in 1853. Both companies were keen to capitalise on the huge
expansion of trade and to earn handsome profits to be made from financing the movement
of goods from Europe to the East and to Africa.
Standard Chartered Bank (SCB) has a history of over 150 years in banking and operates in
many of the worlds fastest growing markets with an extensive global network of over
1400 branches (including subsidiaries, associates and joint ventures) in over 50 countries in
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the Asia Pacific region, South Asia, the Middle East, Africa, the United Kingdom and the
Americas.
By 1980 forty branches were established in Zimbabwe. In 2002 saw the aggressive policies
being implemented by the Reserve Bank of Zimbabwe in the banking sector, which caused
the reduction in the number of its retail shops (Banking Halls) to only twenty-four branches
in the entire Zimbabwean market.
Standard Chartered drives over 90% of its profits from Asia, Africa and the Middle East.
Serving both consumer and wholesale banking customers world wide, the bank combines
deep local knowledge with global capability to offer a wide range of innovative products
and services as well as award-winning solutions.
Trusted across its network for its standard of governance and corporate responsibility,
Standard Chartered takes a long-term view of the consequences of its actions to ensure that
the bank builds a sustainable business through social inclusion, environmental protection,
good governance and Customer Relationship Marketing (CRM) to ensure customer
retention. The intensity of competition over the past years of operation in the banking
industry world over has been increased, Standard Chartered Bank embedded a culture of
continuous improving the way it employs work to become operationally excellent through
Customer Relationship Marketing Strategies. Relationship Marketing is a strategy of
developing strong customer loyalty and forging long-term partnership by creating satisfied
customers who will buy additional services from the firm. Therefore Standard Chartered
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must adopt strategies that entail forging long-term partnerships with customers in order to
survive.
1.2 Statement of the Problem
The current banking sector is characterised by intense competition due to many players and
also given the current harsh economic conditions in Zimbabwe, the players in the sector,
Standard Chartered Bank included, are being affected negatively by these variables. It has
thus become imperative for the company to seek the most economical and profitable
methods of retaining clients. In light of this problem, this research seeks to determine
whether or not the CRM strategies helped SCB on retaining customers to curb the
competition.
1.3 Research Objectives
To identify the CRM strategy adopted by Standard Chartered Bank.
To establish the relative importance and role of CRM strategies to the organisation.
To analyse the impact of CRM strategies on customer retention in the financial service
industry.
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1.4 Research Questions
What is the impact of CRM strategies on customer retention at SCB?
What are the CRM strategies used by SCB?
What is the importance and role of CRM strategies to the organisation?
How can SCB improve its improve its relationships with its customers to attain high
levels customer retention.
1.5 Significance of the Study
Having carried this research project, the researcher gained experience on carrying out a
detailed research hence this serve as a good foundation for future work.
The study focused on management issues and challenges and as such the recommended
solutions can be implemented without any conflict of interest or much resistance.
The research project provides information on how best can customers be delighted
through the CRM strategies.
The marketing information from the research can be used as a basis for improvements.
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Some of the loopholes in the strategies were exposed so that a course of action can be
taken.
This research project will help other students in their research work, especially those
who will be interested in the same subject.
The research project was done in partial fulfilment of the B. Com Marketing degree
hence will enable the researcher to attain his academic objective.
1.6 Delimitations
The research was conducted in Harare at Standard Chartered Bank head office at Old
Mutual Centre, Priority branch and at its largest branch, Africa Unity Square branch. The
Client Relationship department staff, the Marketing manager and some members of his
staff, Priority banking staff, Africa Unity Square branch staff as well as customers was
considered as respondents. The study undertaken covered the period from 2003 to the year
2008 with the year 2003 taken as the starting point as it is a year after most of economic
challenges unfolded in Zimbabwe which extremely needed the support of competitive
strategies like CRM.
1.7 Assumptions of the Study
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The researcher assumed that respondents were provided with accurate and right
information.
The researcher got favourable co-operation from proposed respondents. It was also
assumed that the data from respondents was adequate to deduce findings and conclusions.
The researcher assumed that the findings attained at the organisation apply to most banking
firms in Zimbabwe.
Also it was assumed that the limitations encountered did not affect negatively the validity
of the research.
1.8 Limitations
Confidentiality in the financial sector is very vital for competitive and security reasons,
therefore, some of the vital information required by the researcher was deemed confidential
by the bank, especially that of monetary figures.
1.9 Definition of Terms
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Customer Relationship Marketing is a business approach that integrates people,
processes and technology to maximise the relations of an organisation with all types of
customers.
Service quality is customers overall impressions of an organisations services in terms
of relative superiority or inferiority.
Service recovery is the actions of a service provider to mitigate and or spare the damage
to a customer that results from a providers failure to deliver a service as designed.
Total Quality management is a philosophy of management that is driven by customer
needs and expectations and touches on continual improvements in work processes
Customer Relationship Management - is a customer database management which
involves managing detailed information about an individual customers and carefully
managing customer touch points in order to maximise customer loyalty.
10.0 Summery
This chapter focused on the research topic, statement of the problem, objectives and the
significance of the study. It also focused on the definition of terms that were used in this
research.
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CHAPTER II
THEORETICAL FRAMEWORK
2.0 Introduction
One of the major developments within marketing has been the evolution from transaction
to relationship marketing. Rather than solely focussing on the 4Ps - product, price,
promotion, and place numerous companies have changed their business processes so that
they focus on the most important asset of their economical viability: their current and
potential new clients. In other words, today's companies are seeking to acquire, develop,
and retain profitable customer relationships (Peck 1999).
2.1 The Development of Relationship Marketing.
The initial research was done Berry L and Jagsheth (Berry L 1982) both of whom were
early users of the term Relationship Marketing and by marketing theorist Levitt T (1983)
who broaden the scope of marketing beyond individual transactions?
In practice Relationship Marketing originated in industrial business to business markets,
where long term contracts have been quite common for many years. According to Berry
(1982) Relationship Marketing can be applied where there are alternatives to choose from,
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when the customer makes selection decision and when there is an ongoing and periodic
desire for the product or service.
2.2 What Is Customer Relationship Marketing?
Customer Relationship Marketing is a subset of Relationship Marketing, therefore depends
with the existence of Relationship Marketing. Relationship marketing is a philosophy of
doing business, a strategic orientation that focuses on keeping and improving relationships
with current customers rather than on acquiring new customers (Berry1983). De Young B
(1998) also defined Relationship Marketing as the process of attracting, maintaining and
enhancing relationships with key people. By definition in its simplest form, Zikmund, et al,
2003 argued that Relationship Marketing is a process of how to manage an organisations
relationships with its customers. Similarly, Belch and Belch 2003 argued that the focus of
market driven companies is on developing and sustaining relationships with their
customers. This has led to a new emphasis on relationship marketing, which involves
creating, maintaining and enhancing long term relationships with individual customers as
well as other stakeholders for mutual benefit.
Customer Relationship Marketing can therefore be defined as a business approach that
integrates people, processes and technology to maximise the relations of an organisation
with all types of customers. Therefore Customer Relationship Marketing can also be
defined as a practice that encompasses all marketing activities directed towards
establishing, developing and maintaining successful customer relationships.
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The focus of Customer Relationship Marketing is on developing long term relationships
and improving corporate performance through customer loyalty and customer retention.
Egan (2001) also argued that, the true value of Customer Relationship Marketing is to
transform strategy, operational process and business functions in order to retain customers
and increase customer loyalty and profitability.
In todays competitive business environment it is important for a company to work as a
team to create and maintain successful customer relationships whilst in traditional
marketing, each sale and purchase follow an action flow that could be characterised as an
'attract exchange separate' process so that business growth and success is formed of a
continuum of independent profitable sales events (Egan, 2001). In contrast, relationship
marketing is about building long-term relationships with a network of influence markets in
order to understand and, if possible, anticipate their needs and wants to better satisfy and
retain them. It has been argued that this ultimately leads to increased market share and
profit (Buttle, 1996; Fornell, 1992; Hillier 1999; Rust, et al, 1996). Moreover, the
probability of a satisfied customer to repurchase is higher than the one of a dissatisfied one
(Reichheld, 1994). Indeed, relationships, networks, and interactions enable companies to
create a more appropriate business climate and to better satisfy the influence markets. For
most businesses the cost of acquiring a new customer is much higher than the cost of
selling more to existing customers, so companies find it more and more important to work
to improve customer satisfaction. Building constructive relationships with selected target
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audiences is more important to an organisations long term marketing success than
acquiring widespread public awareness.
Rogers and Bitner (1995) quoted in Peck et al 19999, identified factors that have
contributed to the development and growth of in the importance of Customer Relationship
Marketing and these are the following:
The increasingly global and intense nature of competition.
More demanding type of customers.
Increased fragmented customer markets.
The inadequacy of quality in itself to create sustainable competitive advantage.
The influence of technology in almost all products and services.
Growth in service economies, which depend on the benefits of retaining existing
markets and / or customers.
Limitations of the traditional marketing elements.
Therefore I can conclude that, given such issues, organisations can no longer use the
traditional marketing mix elements alone, like for instance the use of product and pricing
strategies as the product differentiation tool to increase sales. The products and services are
now similar and thus the only way to attract customers is now through creating and
managing sustainable relationships with them.
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2.3 The Relationship Marketing Principle.
Customer Relationship Marketing is not about having a buddy to buddy relationship with
your customers. Customers do not want that. Customer Relationship Marketing uses the
event driven tactics of customer retention marketing, but treats marketing as a process over
time rather than single unconnected events. By moulding the marketing message and tactics
to the lifecycle of the customer the Relationship Marketing approach achieves very high
customer satisfaction and is highly profitable.
The Relationship Marketing process is usually defined as a series of stages and there are
many different names given to these stages depending on the marketing perspective and
type of business (enwikipedia.org/wiki/rm). Using the Relationship Marketing approach,
you customise programmes for individual customer groups and the stage of the process
they are going through as opposed to some forms of database marketing where everybody
would get virtually the same promotion, with perhaps a change in offer. The stage in the
customer lifecycle determines the marketing approach used with the customer.
2.4 Scope of Relationship Marketing
Relationship marketing has been strongly influenced by reengineering. According to the
reengineering theory, organisations should be structured according to complete tasks and
processes rather than functions. The marketing mix approach is too limited to provide a
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usable framework for assessing and developing customer relationships in many industries
and should be placed by an alternative model where the focus on customer and
relationships rather than markets or products.
In contrast relationship marketing is cross functional marketing. It is organized around
processes that involve all aspects of the organization. In fact, some commentators prefer to
call relationship marketing Relationship Management in recognition of the fact that it
involves much more than that which is normally included in marketing.
Christopher M, et al, (1991) claims that relationship marketing has the potential to forge a
new synthesis between quality management, customer service management and marketing.
They see marketing and customer service as inseparable.
In spite of this broad scope Relationship Marketing has not lost its marketing orientation
though. It involves the application of the marketing philosophy to all parts of the
organization. Every employee is said to be part time marketer. The way McKenna R (1991)
puts it, marketing is not a function, it is a way of doing business.marketing has to be all
pervasive, part of everyones job description from the receptionist to the board of
directors.
Because of this, I can safely remark that relationship marketing is a more pure form of
marketing than traditional marketing.
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NPV) depending on the industry. Carrol P and Reichheld (1992) dispute the calculation
they result from faulty cross-sectional analysis of data.
However according to Buchanan and Gilles (1990) the increased profitability associated
with customer retention efforts occurs because of several factors that occur once a
relationship has been established with a customer.
The cost of acquisition only occurs only at the beginning of a relationship.
Account maintenance costs decline as a percentage of total costs (or a percentage of
revenue).
Long term customers tend to be less inclined to switch, and also tend to be less
price sensitive.
Long term customers may initiate free word of mouth promotions and referrals.
Long term customers tend to be satisfied with the relationship and become loyal.
Regular customers tend to less expensive to service because they are familiar with
the process, require less education.
Increased customer retention and loyalty makes the employees jobs easier and
more satisfying. In turn happy employees' feedback into better customer satisfaction
in a virtuous circle.
In my opinion, it is clear that many studies have shown that it can cost anywhere from four
to ten times as much to acquire new customer as it does to maintain repeat buyers, therefore
Customer Relationship Marketing is viable, as it focuses its emphasis on customer retention
than customer attraction.
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2.6 Application.
Customer Relationship Marketing can be applied in an organisation with the aid of the Six
Markets Model by Christopher, Payne and Ballantyne (1991).
2.6.1 The Six Markets Model.
One of relationship marketings features is that it recognises a diversity of key markets,
which are to be considered and addressed by companies to successfully achieve their goals.
According to Christopher, et al (1991) the central market, the customer market, is
supported by five equally important markets (Figure 2.1) and to be effective and provide
value, marketers must consider all six markets. Many organisations have adopted the six
markets model to develop plans for each of their influence markets (Meldrum, 1999).
Figure 2.1: The Six Markets Model.
Source: Payne et al(1995)
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2.6.1.1 Referral Marketing - is developing and implementing a marketing plan to
stimulate referrals. This is often the most effective part of an overall marketing plan and the
best use of resources. Referral markets are a critical means of generating referrals of
business and increasing customer revenues (Peck H et al, 1999).
2.6.1.2 Marketing suppliers is aimed at ensuring a long term conflict-free relationship in
which all parties understand each others needs and exceeds each others expectations.
Such a strategy can reduce costs and improve quality.
2.6.1.3 Influence Markets involves a wide range of sub-markets including government
regulators, lobbyists, standard bodies, stockholders, bankers, venture capitalists and other
stakeholders. Campbell quoted by Peck H (1999) has provided some compelling arguments
for the need to consider the constituent groups in influence markets. He argues that
companies compete for space in an economic jungle and that to survive in this jungle a
company must win the loyalty of important groups and that it must maintain loyalty from
these groups; without this loyalty the companys space will gradually erode until it
disappears.
2.6.1.4 Customer Markets Chartered Institute of Marketing (1994) confirms that in the
views of experienced practitioners relationship building is rapidly becoming the most
powerful weapon in the professional marketers armoury and that this relationship building
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and maintenance is taking place at each level of the organization. Peck H (1999) also
argued that many organizations market both to trade customers (intermediaries) and
consumers (end users) but their relative power within the value system is likely to
determine which relationships are cultivated most assiduously.
2.6.1.5 Recruitment Markets If an organization want to attract the best people, it must
present itself to influential third parties like colleges, universities, recruitment agencies or
other employers and to the individuals themselves as the employer of first choice. But if it
wants to keep valuable employees, it must be the employer of first choice.
2.6.1.6 Internal Markets Judd (1987) quoted by Peck 1999 et al, observed that
substantive attempts to conceptualize the employees of an organization as an element of the
organisations marketing strategy were noticeably absent from the academic marketing
literature. In resent years Schlesinger and Heskett build on earlier research, emanating
initially from organizational behaviour specialists, which clearly linked the constructs of
employee satisfaction and retention to customer satisfaction and retention in service
business.
2.7 Customer Relationship Marketing Strategies.
Strategy is the art of creating value. It provides the intellectual frameworks, conceptual
models and governing ideas that allow a companys managers to identify opportunities for
bringing value at a profit. In this respect, strategy is the way accompany defines its
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business and links together the only two resources that really matter in todays economy,
knowledge and relationships or an organisations competitors and customers.
Relationship Marketing, unlike the traditional marketing approach which was based upon
the management of the marketing mix, instead is built upon the management of a number
of stakeholder domains. That is the six markets. The Relationship Marketing philosophy
that is now is grounded on the tenet that as long as customers and consumers continues to
perceive that they are receiving superior value from a specific source of supply, then they
will remain loyal (Peck H 1999). Whilst the conventional marketing mix elements
product, price, promotion, and place are still critical strategies they need to be augmented
by elements like people and processes which enable customer and value to be enhanced.
People are the brand hence the significant attention paid to attracting, training and
motivating employees who can share the values of the business and the project those values
at every point of customer interaction. Much has been written on the connection between
employee satisfaction and customer satisfaction and the importance of the internal market
is now generally recognised.
Processes are the way we do things. They are linked sets of activities that enable market
demand to be satisfied. Processes must be managed on a cross-functional basis because
they are integrative they are the means by which customer and consumer value is generated
and determined.
The core processes of any business include:
The new product development process.
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The order fulfilment process.
The supplier management process.
The customer management process.
Therefore some of the Customer Relationship Marketing Strategies that can be used are as
follows:
2.7.1 Personalised service.
One of the key to success in the demanding markets the way the customers are supported
and serviced. Customer service is the result of the combined impact of all the points of
contract between the firm and its customers. It is increasingly seen as a powerful
differentiator in markets where the core products is essentially the same. There is a
significant advantage to be gained for seeking out the precise requirements of individual
customers and then, wherever possible, personalising and customising the service package
(Peck H 1999).
2.7.2 Service Quality.
Service quality has been defined as customers overall impressions of an organisations
services in terms of relative superiority or inferiority (Johnston, 1995). Service quality is
commonly noted as a critical prerequisite and determinant of competitiveness for
establishing and sustaining satisfying relationships with customers. Previous studying
suggests that service quality is an important indicator of customer satisfaction (Spreng and
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Machoy, 1996). Attention to service quality can lead an organization different from other
organizations and gain a lasting competitive advantage (Morre, 1987).
It should not only meet but also exceed customer expectations and should include a
continuous improvement process (Lloyd-Walker & Cheung, 1998). Banks have realised the
importance of concentrating on building strong customer relationships through service
quality as a way to increase customer satisfaction and loyalty, and to improve their core
competence and business performance. This realisation stems from believing that service
quality is difficult for competitors to copy (Reichheld & Sasser, 1990). Customers
evaluate banks performance mainly on the basis of their personal contact and interaction
(Grnroos, 1990). Judgments are formed by comparing service expectations with the
service actually received (Bloemer et al., 1998). Financing service quality is considered a
winning strategy because it increases customer satisfaction, and maximizes a companys
profits and market share (Lee et al., 2000; Newman et al., 1998).
2.7.3 Key Account Management (KAM)
If a company keeps on acquiring customers, the quality of the customers acquired may
decline resulting in higher costs and lower revenues. There is thus a diminishing return on
acquired customers (Anderson and Mittal, 2000). Bearing this in mind, companies focuses
on their most profitable customers and keep relationship marketing a relatively
discriminated practice. This CRM strategy is called Key Account Management.
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2.7.4 Service Recovery.
Service Recovery can also be used as a strategy in Customer Relationship Marketing.
Zeithaml and Bitner (2003) defined service recovery as all the actions that an organisation
takes in response to a service failure. An effective service recovery can turn angry
frustrated customers into loyal clients and may create more goodwill than if things had
gone smoothly in the first time. Gummerson (2002) also reiterated that service recovery is
the answer to service failures that cause dissatisfactions. In every relationship disputes and
misunderstandings due to service failures are inevitable, and then service recovery is the
answer to such problems.
2.7.5 Total Quality Management (TQM).
Dale et al (2004) defined TQM as a philosophy of management that is driven by customer
needs and expectations and touches on continual improvements in work processes. TQM
focuses on customer needs, emphasises participation and teamwork amongst employees. It
seek to create a culture in which all employees strive to continuously improve the quality of
organisations products or services, customer response time and work processes.
2.8 Role and Importance of Customer Relationship Marketing.
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2.8.1 Customer Relationship Management.
Customer Relationship Management is a customer database management activity (Kotler
2000). By this definition it involves managing detailed information about an individual
customers and carefully managing customer touch points in order to maximise customer
loyalty. The Gartner Group argues that the term Customer Relationship Management
describes methodologies, software, and usually internet capabilities that help an enterprise
manage customer relationships in an organised way. Customer database is an organised
collection of comprehensive data about individual customers or prospects that is current,
accessible and actionable for such marketing purposes as lead generation, lead
qualification, and sale of a product or service or maintenance of customer relationships.
Database marketing is the process of building, maintain and using customer databases and
other databases (products, suppliers, resellers) for the purpose of containing and attracting
in a way that builds relationships with customers.
Companies that know their individual customers can customise their products, services,
offer, message, shipment method and payment method to maximise customer appeal.
Therefore the focus of Customer Relationship Management is also on best serving the
needs of each customer on a personal level rather than service the needs of target markets
as a whole (www.freeesays.com).
The database can be used to craft strategies that will meet the different customers and also
in improving service delivery. Armed with information in its customers database, a
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company can achieve much more target precision that it can under mass marketing,
segment marketing, or niche marketing, (Kotler P 2000). The company can identify small
groups of customers to receive fine-tuned marketing offers and communications. Customer
Relationship Marketing can provide analysis of customer data that can result in an
improvement in process or product. They can also achieve an improvement in marketing
process because they help enterprises identify and target their best customers. An important
question to consider is if 20 percent of customers bring in 80 percent of revenue, why not
serve that 20 percent?
The customer databases provide information for, and perform, customer segmentation
which helps marketers focus their efforts on where they will make the greatest impact on
retaining their customers.
2.8.2 Key Account Management.
One of the successful roles of Customer Relationship Marketing is customer retention
aided by key account management (KAM). A key account is a customer in business to
business market identified by the selling company as of strategic importance (Buchanan, &
Gilles, 1990). KAM is based on the Parreto Law which states that 80 percent of the total
sales volume of a business is generated by just 20 percent of the customers, therefore the
importance of identifying and retaining the best customers. Thus these customers need a lot
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of attention and there is need to develop them profitably. A number of companies adopted
this concept of KAM through Customer Relationship Marketing, for example Standard
Chartered Bank Priority Banking and Barclays Banks Prestige Banking where only the
lucrative customers are served luxuriously. For this to be achieved there is need for the
company to train its staff to be able to effectively manage the key accounts.
The importance of KAM seems to be growing in importance as a tool to retain customers,
particularly in the organisational market sector of the marketing environment. McDonald,
Rogers and Woodburn quoted in Beamish K (2001), basing on the components of customer
retention management, highlighted on how do you continue to satisfy customers in this
changing environment. They formulated a table which provides with an insight into the
issues driving customers and perhaps a company can respond to them directly through their
customer relationship strategy. Beamish (2001) went on to say that it is essential when
pursuing relationships and indeed managing relationships that organisations have a good
understanding of each other.
2.8.3 Internal Marketing.
Employee satisfaction and retention is directly linked to customer satisfaction and retention
in service business (Schlesinger & Heskett, 1991 in Peck et al 1999). Hence the importance
of internal marketing an offspring of Customer Relationship Marketing, which is an
approach by a service firm to effectively train and motivate its customer contact employees
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and all the supporting service people to work as a team to provide customer satisfaction
(Kotler P & Armstrong 2000). This will in turn lead to customer retention.
Payne (1995) went on to say that Internal Marketing is also used to internally sell strategic
initiative and objective. Internal Marketing often forms part of the quality and service
initiatives with the objectives of getting everyone in the organisation oriented towards the
same direction, to develop awareness of internal and external customers and to foster a
team spirit within business units. To this research this will be to develop and maintain
relationships that will lead to the growth of the business through customer retention.
2.8.4 Customer Service.
Customer Relationship Marketing plays a role of overseeing the provision of effective
customer service. Customer service encompasses all points of contact between a supplier
and a buyer and includes tangible as well as intangible elements (Christopher et al 1991).
Customer service is the service provided in support of a companys core products
(Zeithaml V & Bitner M 2003). They went on to say that quality customer service is
essential to build customer relationships and that it should not be confused by the service
provided for sale by accompany. Maintaining effective customer service helps to build and
maintain customers relationship that is the key success in e-commerce (Kotler, 2003). The
customer pays for the service provided by the company but customer service is not paid
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for. Customer service help customers in a number of ways which includes, answering
questions, taking orders, dealing with billing issues and handling complaints leading high
levels of satisfaction and retention.
2.8.5 Total Quality Management.
Total Quality Management (TQM) is an organisation wide approach to improve the quality
of all the organisations processes, products and services (Kotler P 2000). John Lindgren
quoted by Kotler (2000) said TQM is the commitment by all departments to the strategic
goals of achieving quality. It is also the role Customer Relationship Marketing to keep the
quality of service delivery high through TQM to make sure its key customers are satisfied.
Standard Chartered Bank implemented TQM courtesy of Customer Relationship Marketing
by encouraging its departments, through rewarding them for improving the quality of their
own operations with the goal of improving the quality of the overall product or service.
Continuous improvement in quality means that the customer will continue to be part of the
organisation since each he or she visits the company, he or she will experience something
new and will not be bored by the service. The general principle of TQM is important if an
organisation is to have excellent customer relationships. It emphasise on continuous
improvement thus allowing the customer to get satisfaction each time they receive services
or products from the company.
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2.8.6 Communication
Another role of Customer Relationship Marketing is to enhance effective communication
within and outside the organisation knowledge transfer to clients and developing client
relationships are intertwined, and the success of each depends largely on how customer
contact is structured and managed (Dawson, 1999). He went on to say that knowledge
transfer is pivotal in adding value to clients.
For a successful Customer Relationship Marketing there is need for effective
communication. The customer must be able to contact the organisation, to return a product,
to contact technical support and to communicate with human customer service
representatives.
2.9 The Impact of Customer Relationship Marketing on Customer Retention.
2.9.1 Customer Loyalty.
To achieve customer loyalty is highly challenging, as it looks at all customer groups that
are involved in the relationship marketing process. Beamish (2000) highlighted that in
order for CRM to be truly implemented and part of the business culture, it focuses on all
customer groups. Relationship building is a long term process, and in order for customer
loyalty to be achieved, there are a number of key identifiable stages that the relationship
moves through. Payne developed he called the relationship ladder of customer loyalty
shown below.
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Figure 2.2: The Relationship Ladder
Source: Payne et al (1995)
Advocate
Supporter
Client
Customer
Prospect
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The ladder highlights the process from targeting the customer, to adoption, to developing
the relationship from customer to long term client. From here it is then essential to
encourage them to become both a support and advocate of the company, in order that they
can become marketing tools, not only retaining them, but also using them to grow the
market. The key objective of CRM in this context therefore will be to actually switch the
power base of loyalty to a more long term relationship and indeed partnership which is the
highest level of customer retention.
Newman et al. (1998) also indicated that an increase of only 5 per cent in customer loyalty
would lift profitability about 2585 per cent.
2.9.2 Improvements in Customer Satisfaction.
Customer satisfaction depends on the products perceived performance relative to a buyers
expectations. Customer satisfaction is the extent to which a products perceived
performance matches a buyers expectations (Kotler P, 2000). Adrian Payne established the
link between customer satisfaction and relation strength. He concluded that customer
satisfaction is only one dimension in increasing relationship strength.
Customer Relationship Marketing leads to customer satisfaction since all the organisational
activities will be directed the overall customer satisfaction. Customer Relationship
Marketing aim to delight customers by promising only what the company can deliver, then
delivering more than it promised through customised products and services.
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Bain & Co maintained that one of the key elements of business success and profitability is
customer satisfaction, the more satisfied the customer, the more durable the relationship,
and the longer this lasts, the more money the company stands to make (Buchanan and
Gilles 1990). Furthermore, Zairi (2000) found that satisfied customers possibly share their
experiences with five or six people while dissatisfied clients might inform another ten.
We can see the importance of not just finding customers but of keeping them, satisfying
them and growing with them as well. Customer Relationship Marketing is oriented toward
the long term, this means that companies must aim high if they want to hold on to their
customers. Highly satisfied customers produce several benefits it the company, they are
less price sensitive and they talk favourably to others about the company and its products
and remain loyal a longer period that are high customer retention levels.
2.9.3 Profitability.
It is indeed the time that big databases are expensive to develop and maintain different
organisations like Wal Mat have spent literally hundreds of millions of dollars on their
technology to develop and maintain their database. In most marketing texts, it is known
that acquiring customers is much more expensive than keeping them. Many studies have
shown that it can cost anywhere from 4 to 10 times as much times to acquire a new
profitable customer as which does to maintain repeat buyers. These statistics are one of the
driving forces behind the move to Customer Relationship Marketing, which is more
profitable.
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According to Peck et al (1999) it is customers that generate profits not products. Products
create costs but customers create profit. One of the key tenets of Customer Relationship
Marketing is that ideally the firm should only seek high intensity relationships with those
customers who are, or who have the ability to become high performing clients in terms of
profitability. The Parreto Law us not only that 80 percent of the total sales volume of a
business is generated by just 20 percent of the customers, but the likelihood is that 80
percent of the total costs of servicing all the customers will be caused by only 20 percent of
the customer (but probably not the same 20 percent) this means Customer Relationship
Marketing reduces costs by servicing not everyone, hence increase profits. A profit making
organisation is able to retain its customers for longer period of time than a loss making
organisation.
2.9.4 Opportunities for Value Adding Through Customisation.
High intensity customer relationships are based upon long-term collaboration and
interaction. These types of relationships are really partnerships and alliances and they work
best when customers seek tailored solutions for their own specific buying problems. In
other words, the customer and the supplier organise the advantages to be gained through
closer relationships.
In industrial marketing, these collaborations often extend to strategic alliances and joint
ventures. There will be recognition of the mutual benefits of linking each others value
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chains, in sharing resources, knowledge bases and capabilities to achieve agreed strategic
goals. A noticeable example of such a scenario is a strategic alliance formed between Delta
Beverages and Zimglass. This was as a result of Deltas demand for tailored packaging
empty bottles for their numerous kinds of beverages.
In consumer markets the opportunities where standard products are subsequently
personalised and marketing communication tailored, particularly through direct mail and
database marketing leads to customer profitability and high customer loyalty hence higher
customer retention.
2.9.5 Employee Satisfaction.
Customer Relationship Marketing has an element of Internal Marketing Orientation as
suggested by Kotler P (2000) that a dissatisfied employee is a terrorist to the organisation.
The logic behind internal marketing is, by satisfying the needs of internal groups of the
customers an organisation must be in abetter position to deliver quality desired to satisfy an
external group of customers towards retention.
On the other hand Bain & Co. (Buchanan et al, 1990) suggested a strong link between
employee satisfaction and Customer Relationship Marketing from another perspective.
They maintain that Customer Relationship Marketing will lead higher employee
satisfaction as employees find their job much easier dealing with satisfied customers rather
than dissatisfied customers. As a result employees will tend to stay longer with the
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company. High retention of the right calibre of employees creates a stable and experienced
labour force that delivers higher service quality at lower cost. This leads to higher customer
retention and of course increased profitability (Buchanan, 1990). The advantages of long
term employees are that they are able to form personal relationships with customers, and
understand their needs, and possibly are able to pre-empt dissatisfied customers leaving the
company.
Therefore employee satisfaction is advantageous to the organisation as the quality of
service is determined mostly by the employees' morale in terms of moods and attitudes. All
employees are part of the process which connects with the customer at the point of sale,
employees remain the key to success at these service encounters or the moment of truth
(Carizon 1987 quoted by Buchanan, 1990). The extent to which the organisation can
motivate and satisfy its personnel will influence its ability to offer quality service to their
customers leading to satisfied customers and customer retention. Hence the importance of a
motivated workforce.
2.10 Summary.
It is to my discovery that the shift to Customer Relationship Marketing , though many of
todays marketing practices have evolved due to increasing technology, the marketing
environment still centres around the traditional four Ps of marketing that are Product, Price,
Promotion And Place. However, in order to remain competitive companies must create a
unique set of those four Ps which appeal each individual customer and sets them apart from
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their competitors. Target marketing is no longer an efficient use of marketing efforts
because a great deal of resources can be lost to uninterested individuals while in the process
of trying to capture potential customers. Because of the potential loss resources there is
now a movement away from targets markets to specific individual customers. What is now
required is Customer Oriented Relationship Marketing.
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CHAPTER III
METHODOLOGY
3.0 Introduction
This section explains how the research was carried out. It looks at the research design and
instruments that were used for collection of data. In other words the researcher is going to
discuss different methods used in gathering data and research designs for this study which
entailed the effectiveness of customer relationship marketing strategies at Standard
Chartered Bank. The researcher used sources of data such as primary sources, which are
personal interviews and questionnaires. The instruments used are important so as to ensure
their validity and reliability.
3.1 Research Design
A research design is a master plan specifying the methods and procedures for collecting
and analysing the needed information (Zikmund, 1994). Borg and Gall (1989:324) also
defined research design as, a process of creating an empirical test to support or refute a
knowledge claim. Therefore, the research design provides a blue print for reacting to the
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objectives of the research hence gives a framework for the research plan of action (Smith,
1996). In this research study, case study and descriptive research design were used.
Murimba and Moyo (1987:14) defined case study research design as the intensive
investigation into aspects of an individual, a social unit, or a small portion of the
community in an effort to gain deeper insight about these. In this regard, the researcher
therefore focused on Standard Chartered Bank Group using this design on intensive
investigation into the impact of CRM strategies on organisations performance.
3.1.1 Descriptive Research Design
The researcher conducted in-depth surveys through open interviews and questionnaires
with the small number of the intended target respondents to investigate the impact and
effectiveness of CRM strategies employed by SCB. Descriptive research design provides
answers to questions such as who, what, when, where and how of topic under study,
(Kotler, 1997). It is concerned with the conditions or relationships that exist, opinions that
are held processes that are going on and effects that are evident (Best and Khan 1993:105).
The method was chosen because the data solicited is not static, how the market
environment reacts to the effect of CRM strategies may not be the same in future.
Descriptive research thus allowed for the collection of both qualitative and quantitative
data, therefore, some statistical techniques were used to summarise the information.
Through descriptive research, the researcher was also able to use both primary and
secondary data, which could not have been utilised if exploratory research had been used.
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3.2 Sampling
The researcher used both probability and non-probability sampling techniques. Goddard
and Nelville (2005) quoted by Collins et al (2000) defined a sample as a finite part of a
statistical population whose properties are studied to gain information about the whole. A
sample is a part of the whole or a sub-set of measurements drawn form a population
(Collins et al 2000:149). A sample then is a selected group of elements from a defined
population.
3.2.1 Sampling Techniques/Approaches
Sampling theory distinguishes between two basic sampling approaches: probability or
random sampling and non-probability sampling of which both approaches were used in this
research study. Sampling approaches are also referred to as sampling procedures, sampling
methods or sampling plans.
3.2.1.1 Probability Sampling
Probability sampling or random sampling refers to a procedure whereby each person
(element) has an equal chance of being chosen in the sample. Gilbert (1993:71) refers to an
equal chance as a known, non-zero chance of selection. In other words, random selection
takes place when each element in the population has an equal, independent chance of being
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selected for the sample (De Vos 1998:193. The researcher selected elements from the
population basing on some form of random procedure. The most commonly used
probability sampling methods are simple random, systematic, stratified random and cluster
sampling methods. The researcher then used simple random sampling to collect data from
floor workers, which included tellers. It entails that each element of the sampling frame has
an equal chance of being included in the sample, (De Vos 1998:195). However, the method
has a limitation of that, it relies on the availability of a complete population list, (sampling
frame) but was utilised because it allowed the researcher to project sample results to the
target population free from sampling bias.
3.2.1.2 Non-probability Sampling
It is where data is collected from a population that is accessible to you and one may only
generate about the characteristics of that part of the population (Murimba and Moyo, 1987).
Non-probability sampling was used in this research study because probability sampling was
extremely expensive for collection of data from customers, Standard Chartered Banks
customer base is very broad and extensive for probability samples. Then the non-
probability sampling technique used was convenience or accidental sampling.
With convenience sampling technique, the researcher selected those customers he was able
to access easily until the sample reached the desired size. However, though the technique
was easy and cheaper to use it introduces serious bias, because certain elements in the
population may be over-presented or under-presented.
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3.2.2 Population
A population is the entire group of persons or set of objects and events the researcher wants
to study (Collins et al 2000:147). A Population contains all the variables of interest to the
researcher, it is sometimes referred to as target population or universe. In this study,
identification of the target population was necessary so as to provide a base from which
sample units and sample size were deduced. The population that the researcher in this
research study would reach is defined as the accessible population or study population,
(Brink 1996:132). It was highly improbable that the researcher would be able to locate all
Standard Chartered Banks customers and employees. The researcher then planned to
generalise the findings to this accessible population and not to the entire population
customers and staff.
3.2.3 Sampling Frame
It is a comprehensive list of all the units or elements in the target population (Collins et al
2000:150). In this regard, the sampling frame included all Standard Chartered Bank
employees and customers in the whole Harare community. This is where the researcher
drew a sample from.
3.2.4 Sampling Errors
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Sampling errors refers to the difference between population parameters and sample
statistics (Gilbert 1993:69). Using the sample surveys involved some unavoidable errors,
systematic errors in particular.
Systematic error resulted from non-responses, self-selected bias and response bias. In
trying to rectify the problem of non-response errors, the researcher distributed the
questionnaires to various respondents personally. The researcher constantly contacted and
reminded the researcher through personal visits and telephones the respondents to complete
the questionnaires, after which the researcher personally collected the distributed
questionnaire. The questionnaire working was also made easier to comprehend, with some
closed questions which are easy to answer.
3.2.5 Sample Size
The sample size refers to the number of elements in a sample. As the sample increases (to a
point) the accuracy of the findings increases. As the size of the population increases,
progressively smaller proportion of subjects can be selected. In this research, the sample
size consisted of six manager, six supervisors, twenty employees and thirty customers,
bringing to a total of sixty six.
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3.3 Source of Data
3.3.1 Primary Sources
This information collected at the original source. In this research the information collected
consisted of findings obtained through original sources, which are interviews with
managers and questionnaire responses from customers and staff members.
3.3.2 Secondary Sources
Secondary data is Information taken from a source that was not involved in the original
investigation secondary sources of data consisted of materials that come from someone
other than the original source. Because secondary data is always someone elses
interpretation of primary data, therefore secondary data must be carefully cross checked for
accuracy. In this study the researcher made use of company profiles and documents and
customer relationship marketing journals text books as well as other researchers reports.
These had a relative advantage of efficient time utilisation and use of less financial
resources.
3.4 Research Instruments
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Data was collected using physical distribution of questionnaires, observations and
interviews.
3.4.1 Questionnaires
A questionnaire is a printed document that contains instructions and statements that are
compiled to obtain answers from respondents. According to Cole (1996), it is a document
containing designed to solicit information appropriate for analysis. The questionnaire
differs from interview schedules or interview guides, because respondents fill in the
questionnaire without the researchers assistance. This is known as a self-administered
questionnaire.
In this study, the researcher used self-administered questionnaires to solicit information
from customers and non-management staff of Standard Chartered. This enabled the
respondents to fill in the questionnaires at their own times. This also means that the
respondents had to think and evaluate their responses.
Both structured and unstructured questionnaires were used to collect primary data from
SCB employees and customers. While structure (closed) questions would help in saving
respondents time, unstructured (open-ended) questionnaires ensured that respondents
feelings would not be limited.
The questionnaires were preferred by the researcher because the interviewer bias was
eliminated since the questionnaires were filled in the absence of the researcher.
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Standardised questions and response format of the questionnaires ensured that every
participant responded in identical stimuli and this facilitated easy results presentation,
analysis and discussion of findings. Also, questionnaires did not require the respondents to
leave their job and attend to them so there was no problem with management as no working
time was wasted.
However, questionnaires had its set backs which includes that, some respondents took their
time to respond to the questionnaires hence delay the analysis of data. The questionnaires
did not allow the researcher to ask follow-up questions to probe a particular answer. And
also some shop floor workers did not understand the terms used in the questionnaires,
hence the researcher had to follow-up for explanations.
3.4.2 Interview
An interview, as a data-collection method was used in this research, there was personal
contact and interactions between the researcher and the interviewees. The personal contact
was used to pursue in-depth information about the CRM strategies adopted and their impact
to Standard Chartered operations. Open-ended questions were asked during such interview
such that much of the information collected from the interview was qualitative.
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The reason why interviews were used is because they are flexible, they provide the
researcher with detailed and fresh information the researcher have predicted or anticipated.
They also involved dialogue between interviewer and respondents, unclear questions were
clarified. Personal contact allowed the research to establish rapport and even personal
relationship, with respondents hence helping the researcher build future career prospects.
3.5 Data Collection Procedure
According to Kotler (1996), data collection procedure entails how the primary and
secondary data was collected.
3.5.1 Pilot Study
Bell (1995) described a pilot study as the one where the researcher tests how long it takes
the recipients to complete them check that all questions and instruments are clear and it
enables you to remove any items which do not yield usable data. The researcher distributed
three questionnaires to customers and the bank staff for the purpose of pilot study. The
respondents had problems in understanding the CRM terms. Therefore, the researcher had
to explain the terms.
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3.5.2 Questionnaire Distribution
The researcher physically distributed the questionnaires in person by hand to respondents
who had been conveniently elected. Firstly, the questionnaires were distributed to
customers, then to non-management staff at Standard Chartered Bank. Questionnaires were
collected after five days, however, it took ten days to collect all the questionnaires for
results, presentation and analysis.
3.5.3 How Interviews Were Conducted
Managers were contacted for appointment bookings for face to face direct interview.
Having given an appointment slot, the researcher would conduct the interview within time
limits using interview questions guidelines. The time limits ranged from 15 to 20 minutes.
All respondents were recorded on the interview question papers.
3.6 Data Presentation and Analysis
Marshall and Rossman (1999) explain that qualitative data analysis focuses on data in the
form of words. They stated that qualitative data analysis is concerning of three flows of
activity: data reduction, data display and conclusion drawing/verification. Data reduction
activity involves the process of selecting, focusing, simplifying, abstracting and
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transf