PROJECT WORK 2015

KOFORIDUA POLYTECHNIC

FACULTY OF BUSINESS AND MANAGEMENT STUDIES

(DEPARTMENT OF MARKETING)

RESEARCH TOPIC:

ASSESSING THE ROLE OF RELATIONSHIP MARKETING ON CUSTOMER

RETENTION IN THE PHARMACEUTICAL INDUSTRY

(A STUDY OF INTRAVENOUS INFUSION LIMITED)

Submitted in partial fulfillment of the requirements for the award of the Higher National

Diploma (HND) in marketing to Koforidua Polytechnic.

BY

ABRAHAM NARH

(04/2012/1182D)

AND

GODFRED ADU BOAHENE

(04/2012/1125D)

JULY 2015

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DECLARATION

We (Abraham Narh and Godfred Adu Boahene) hereby declare that this project is our own work

towards the certification of HND in marketing and that, to the best of our knowledge, it contains

no material previously published by another person or a group of persons nor material which has

been accepted for the award of any other HND in polytechnic, except where due

acknowledgement has been made in the text. We personally accept criticisms for any errors and

shortcomings contained in the work.

Abraham Narh ………………………………… …………………..

Signature Date

Godfred Adu Boahene …………………………………. …………………..

Signature Date

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CERTIFICATION

I, the undersigned supervisor, hereby certify that the research embodied in this project work

entitled “ Assessing the role of Relationship Marketing on Customer Retention in the

Pharmaceutical Industry (A study of Intravenous Infusion Limited)” was carried out by Abraham

Narh and Godfred Adu Boahene and was supervised by me.

Mr. Timothy Fiadzoe …………………………………. …………………..

(SUPERVISOR) Signature Date

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DEDICATION

We dedicate this project to Almighty God who had seen us throughout the work to its success,

our parents for their love, care and support financially, our humble supervisor for his support and

guidance throughout the work and our loved ones for their support and prayers.

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ACKNOWLEDGEMENT

Our utmost profound gratitude goes to the Lord God Almighty for giving us the strength,

wisdom, and knowledge to come out with this project.

We also owe a special thanks to Mr. Timothy Fiadzoe whose supervision and guidance added to

the understanding, clarity, and quality of this project work.

Finally, we also wish to tender our sincere gratitude to our families and all who have supported

us in diverse ways.

God richly bless you.

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ABSTRACT

This project work is a survey designed to assess the Role of Relationship Marketing on Customer

Retention in the Pharmaceutical Industry in the New-Juabeng Municipality.

The objectives were to find out measures or mechanisms put in place by the company’s

management in order to facilitate effective relationship marketing practices, to find out if

relationship marketing activities used has satisfied customers, ascertain the level of customer

satisfaction in Intravenous Infusion Limited, examine how relationship marketing has helped the

company to retain customers and to find out if relationship marketing in Intravenous Infusion

limited has been able to solve the problem of customer defection or switching .

The population used for the study was made up of management, non-management staff and

customers of Intravenous Infusions Limited in the New-Juabeng municipality. Out of these

groups of people, samples were chosen using purposive sampling technique and simple random

sampling technique. The people who made up the sample were the respondents to the

researchers’ questionnaire and their opinions made it possible for the researchers to come out

with their findings.

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TABLE OF CONTENTS

COVER PAGE i

DECLARATION ii

CERTIFICATION iii

DEDICATION iv

ACKNOWLEDGEMENT v

ABSTRACT vi

TABLE OF CONTENT

LIST OF TABLES

LIST OF FIGURES

CHAPTER ONE

INTRODUCTION

1.0.0 BACKGROUND OF THE STUDY……………………………………… .…………1

1.0.1 BACKGROUND OF THE COMPANY …………………………………………..2

1.2.0 PROBLEM STATEMENT ……………………………………………………………...4

1.3.0 OBJECTIVES OF THE STUDY……………………………………………................ .4

1.4.0 RESEARCH QUESTIONS………………………………………………………..…...5

1.5.0 SIGNIFICANCE OF THE STUDY 5

1.6.0 SCOPE OF THE STUDY 6

1.7.0 LIMITATIONS OF THE STUDYS 6

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1.8.0 ORGANIZATION OF THE STUDY 6

CHAPTER TWO

LITERARURE REVIEW

2.0 INTRODUCTION……………………………………………………………………..….8

2.1 DEFINITIONS OF RELATIONSHIP MARKETING ………………………………. 8

2.2 REASONS FOR THE GROWTH OF RELATIONSHIP MARKETING…………… 11

2.3 BUYER-SELLER RELATIONSHIP………………………………………………... 12

2.3.1 BUYER-SELLER RELATIONSHIP LIFE CYCLE …………….. 14

2.4 RELATIONSHIP LEVELS ……………..…. 16

2.5 CONTENTS OF RELATIONSHIP MARKETING 19

2.6 COMPARISON BETWEEN RELATIONSHIP MARKETING AND TRANSACTIONAL

MARKETING 22

2.6.1 FROM TRANSACTIONAL MARKETING TO RELATIONSHIP MARKETING 23

2.7 PLANNING FOR RELATIONSHIP MARKETING 25

CHAPTER THREE

RESEARCH METHODLOGY

3.0 INTRODUCTION…………………………………………………………………………30

3.1 RESEARCH DESIGN…………………………………………….………………………30

3.2TARGET POPULATION…………………………………………………………………..30

3.3 SAMPLE SIZE AND SAMPLING TECHNIQUE …………………………… 31

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3.4 RESEARCH INSTRUMENTS…………………………………………………………....32

3.5DATA COLLECTION PROCEDURE…………………………………………………......32

3.6 METHODS OF DATA ANALYSIS……………………………………………………...33

CHAPTER FOUR

DATA ANALYSIS AND PRESENTATAION OF RESULTS

4.0 INTRODUCTION……………………………………………………………………….…34

4.1 PROFILE OF RESPONDENTS (CUSTOMERS)…………………………………… .35

4.2PROFILE OF RESPONDENTS (MANAGEMENT, NON-MANAGEMENT AND

CUSTOMERS)…..... 40

.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 INTRODUCTION…………………………………………………………………………. 54

5.1 SUMMARY OF FINDINGS 54

5.2 CONCLUSION 56

5.3 RECOMMENDATIONS 57

REFERENCES

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APPENDIX A: Questionnaire for Customers

APPENDIX B: Questionnaire for Management and Non-management staff

LIST OF TABLES

Table 1 Model on relationship levels 17

Table 2 The shift to relationship marketing 24

Table 3 A summary of questionnaires administered and collected 34

Table 4 How long have customers been dealing with intravenous infusions limited? 36

Table 5 What kind of customer relationship exists between customers and the company? 37

Table 6 How often do personnel of intravenous infusions limited visit customers? 38

Table 7 Why do personnel from intravenous infusions visit or contact you? 39

Table 8 When you express dissatisfaction, at what rate does intravenous infusions respond to

your complaints? 40

Table 9 Are you satisfied with the way the company reacts to your complaints? 41

Table 10 Does the relationship between you and intravenous infusions influence your decision to

buy their products? 41

Table 11 Are you satisfied with Intravenous Infusions Limited’s relationship with you? 42

Table 12 How will you describe the attitude of Intravenous Infusions Limited delivery men? 43

Table 13 Have you ever thought of switching to other competing firms to do business? 44

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LIST OF FIGURES

Fig. 1 The three levels of relationship marketing 18

Fig. 2 Customer loyalty ladder 26

Fig. 3 the three (3) dynamics to build trust 28

Fig. 4: A cone chart showing whether the company believes in the concept of relationship marketing 45

Fig. 5: The pie chart showing how long IIL have been practicing relationship marketing 46

Fig.6: A bar chart showing what the company has achieved from practicing relationship

marketing. 47

Fig. 7: A bar chart showing what hinders the company from practicing relationship marketing.48

Fig 8: What measures and mechanisms has the company put in place to ensure the building of

mutually satisfied long-term relation with key parties? 49

Fig. 9: A graph showing how often the company’s personnel visit customers. 50

Fig 10: Why does your company visit or contact customers? 51

Fig. 11: A chart showing the level of customer satisfaction in Intravenous Infusions Limited 52

Fig. 12: A pie chart showing the rate at which the company reacts to the complaints of their

customers. 53

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CHAPTER ONE

INTRODUCTION

1.0.0 BACKGROUND OF THE STUDY

The rampant introduction of companies in this generation has really rendered some companies

obsolete in the pharmaceutical industry. The advancement has also increased competition among

companies who produce similar products and even those producing differentiated products. This

is because, all companies are working desperately towards one objective and that is “The

attainment of customer retention”.

In addition, because Ghana is practicing a liberal system of trade, there has been an increase in

the establishment of companies in the country and this has accelerated competition. For this

reason, companies need to relate well with their customers in order to achieve competitive edge

and earn more profit. Customers are satisfied and loyal when their needs and wants are met.

They do not only remain loyal but tend to recommend their satisfaction experience to other

customers.

Relationship marketing helps competitors to develop a strong and mutual relationship with their

customers and this help prevent such customers from switching to competitors. The

pharmaceutical industry, just like the hospitality industry has seen tremendous competition since

its introduction. Companies that are able to survive the intense competition are those that

understand their customer’s needs and wants.

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Research has proven that the longer a customer stays with a company, the more money they are

willing to spend on the products of the company. It has also been proven by research that 68% of

customers defect if they receive bad service from an organization and only 5% report bad

services or customer service. Meaning, 95% leave without complaining. Melvin Brand Flu,

Psychology of customer defection in a digital world (2014).

Due to the factors outlined above, relationship marketing has become an important anchor when

it comes to strategies that companies in the pharmaceutical industry needs to adopt in order to

attain a competitive edge in a turbulent environment like the Ghanaian market.

Using Intravenous infusion limited as a point of study, the researchers hope to investigate into

the reasons why the relationship marketing is not effectively practiced in the pharmaceutical

industry.

1.0.1 BACKGROUND OF THE COMPANY

Intravenous Infusion Limited (IIL) is a private limited liability pharmaceutical company and a

leader in the manufacture of intravenous infusion in the country. The company was incorporated

under the company’s code 1963(Act179) on 12th December, 1969 and issued with the certificate

to commence business on 22nd December, 1969 the same year under certificate number C-3828.

The company is duly registered under the factories, offices, and shops Act 1970 under certificate

number 1/14/1019. It was founded by Mr. S.K Apenteng (late), the sole proprietor of the

company. The company was the first in the West African sub-region; it is located in Koforidua in

the Eastern Region of Ghana. Currently the company has more than 200 employees.

The company is authorized to undertake the following business objects:

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Manufacturing of infusions, drugs, medicines and other by-products.

Selling of pharmaceutical products on the local market and also for export.

The company manufactures 45 products with the major ones being Saline (0.9%), Dextrose

(5%), in normal saline solution and Hartman’s Ringer Lactate. This product line sets the

company above any manufacturer in the sub-region

The vision is to be the leading manufacturer and supplier of pharmaceutical and medical

products in Africa in the 21st Century.

The mission of intravenous infusion limited is to produce with the highest standards, good

quality products, meeting the health needs of valued African clients using cutting edge

technology

The corporate culture of intravenous infusion limited is guided by five fundamental values.

These values which will be brought to bear on the company’s operations are

Product quality and cleanliness

Commitment and dedication

Personalization and respect

Reliability and efficiency

Partnership approach to business. Building partnerships with clients to anticipate needs

and provide proactive solutions.

In the pursuit of expanding its main business, intravenous infusion limited has developed more

specialized fluids like Gastro Intestinal replacement fluid, Beddoes maintenance fluid and 5:4:1

single replacement fluid for cholera with the help of experts in the medical field. This came

about because of the outbreak of cholera in the year 2014. Also in meeting the ever changing

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need of the pharmaceutical market, the company in 2005 added IV Metronidazole to its range

of products.

1.2.0 PROBLEM STATEMENT

In Ghana, there is a problem with retention of customers in the pharmaceutical industry. Many

pharmaceutical companies have floating customers. Abdallah Q. Bataineh Ghaith M. Al-Abdallah1,

Hanadi A. Salhab and Amer M. Shoter (2014). Intravenous infusions limited and other

pharmaceutical companies face a problem with the retention of customers. They are always

switching from one company to another. Issaka Edward, B (2008). Intravenous infusions limited is

one of the companies using relationship marketing yet their effort and measures put in place to make

sure they satisfy their customers and possibly retain them has proven futile. Relationship marketing

is a customer relationship management strategy designed to encourage strong, lasting customer

connection to a brand. The goal is to generate repeat sales, encourage positive word-of-mouth

promotion, and gather customer information. Relationship marketing over the years has been

ignored by many pharmaceutical companies but has been picked up by companies who have realized

that the selling and production orientations they use are becoming outmoded and are now focusing

on customer orientation.

1.3.0OBJECTIVES OF THE STUDY

The study was carried out specifically to:

Find out measures or mechanisms put in place by the company’s management in order to

facilitate effective relationship marketing practices.

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Find out if relationship marketing activities used has satisfied customers.

Ascertain the level of customer satisfaction in Intravenous Infusion Limited.

Examine how relationship marketing has helped the company to retain customers.

Find out if relationship marketing in Intravenous Infusion limited has been able to solve the

problem of customer defection or switching.

1.4.0 RESEARCH QUESTIONS

The project work sought to address the following questions:

1. What are the control measures and mechanisms put in place by management in order to

facilitate effective relationship marketing practices?

2. How has the relationship marketing activities used satisfied customers?

3. What is the level of customer satisfaction in Intravenous Infusion Limited?

4. How has relationship marketing helped the company to retain customers?

5. Has relationship marketing in Intravenous Infusion Limited been able to solve the

problem of customer defection or switching?

1.5.0 SIGNIFICANCE OF THE STUDY.

The study into the concept of relationship marketing in the pharmaceutical industry in Ghana

was necessary due to the following reasons:

1. The study would benefit the pharmaceutical industry in Ghana as to the correct

implementation of relationship marketing in the industry.

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2. The findings of the research could serve as a manual for further study and research in the

field of relationship marketing.

3. The study, when accomplished will identify problems the industry faces in relationship

marketing and efforts to provide first class pharmaceutical products in the county.

4. It may also serve as a guide for management of Intravenous infusions limited in their

policies and decision making.

1.6.0 SCOPE OF THE STUDY

The study would be restricted to management staff, non- management staff and

customers of Intravenous infusion limited (Koforidua).

1.7.0 LIMITATIONS OF THE STUDYS

The problem the researchers face in an attempt to gather data and information for the research

work was as follows:

1. There was difficulty in getting information from management of the company.

2. There was difficulty in gathering information from the internet.

1.8.0 ORGANIZATION OF THE STUDY

The study is divided into five chapters:

Chapter one (1) which is the introduction chapter will address itself to the background

information, problem statement, objective of the study, significance, scope and limitations to the

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study, chapter two(2) will review literature on the theoretical framework, and related review

exiting literature.

Chapter three (3) will present the methodology with details regarding the research design,

population, sampling, data collection and analysis technique. Chapter four (4) will contain the

presentation and analysis of data collected. It will contain tables, graphs, methods among others.

Chapter five (5) which is the last chapter provides the summary of findings, conclusions, and

recommendations for the study.

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CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

This chapter reviews literature on the concept of relationship marketing and its relation

with customer retention. It covers introduction, definitions of relationship marketing, reasons for

the growth for relationship marketing, buyer- seller relationship, relationship levels, and content

of relationship marketing, comparison between relationship marketing and transactional

marketing, planning for relationship marketing, and improving customer retention and

satisfaction.

2.1 DEFINITIONS OF RELATIONSHIP MARKETING

The concept of relationship marketing has taken marketing back to its basic principle. It

recognizes the fundamental importance in sustaining customer relationship in order to generate

customer loyalty and repeat purchase.

According to Berkowitz (1997), Relationship marketing is the hallmark of developing

and maintaining effective customer relationship. It is today called relationship, linking the

organization to its individual customers, employees, suppliers, and other partners for their mutual

benefit. The database marketing is a step in a right direction which is more appropriate over the

traditional market segmentation and goes further to criticize its lack of personal interaction

between the seller and the consumer. The main steps in establishing relationship marketing

programs in a company are by Berkowitz(1997):

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A. Identify the key customers waxing relationship management, choose the largest or

best customers and designate them for relationship management. Other customers

can be added that show exceptional growth or pioneer new industry development.

B. Assign a skilled relationship manager to each key customer. The service provider

currently serving the customer should receive training in relationship management

or be replaced by someone more skilled in relationship management.

C. Develop a clear job description for relationship managers. Describe evaluation

criteria. Make the relationship manager focus on few customers.

D. Have each relationship manager develop annual and long range customer

relationship plans. These plans should state objectives, strategies, activities, and

required resources.

E. Appoint an overall manager to supervise the relationship managers. This will

develop job descriptions, evaluation and effectiveness.

Kevin P. Gwinner, Dwayne D. Gremlar and Hennig-Thurau (1997) defined relationship

marketing as” an organization’s effort to develop a long term, cost effective link with individual

customers for mutual benefit ”. This depicts the fact that both the customers and the organization

twin (win-win) under this concept or relationship. Also, the relationship is maintained at a cost

which needs to be taken into consideration.

The relationship marketing concept is also a situation where an organization secures strong

economic and social ties with all its customers. It is a long-term approach to create and enhance a

strong relationship with customers and stakeholders.

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According to Philip Kotler (2001), Relationship marketing is creating, maintaining, and

enhancing strong relationships with customers and other stakeholders. He went on to say that

marketing is drifting away from a focused building value-laden relationships and marketing

networks. It requires all the company’s departments to work together as a team to serve the

customer. It involves building relationship at many levels; economic social, technical and legal-

resulting in high customer loyalty. It should carefully coordinate the whole company’s effort to

create value-laden, satisfying relationship with customers.

According to Zikmund/ d’Amico (2001), the term relationship marketing (relationship

management) communicate the idea that a major goal of marketing is to build long term

relationship between a company and the parties who contribute to the company’s success. Once

an exchange is made, effective marketing stresses managing relationship that will bring about

additional exchanges. Effective marketers view making a sale not as the end of a process but as

the start of the organizations relationship with customers. Satisfied customers who want to

purchase the same product in the future will return to a company that has treated them well in the

past.

Pride and Ferrell (1997) defined relationship marketing as “establishing long term mutually

satisfying buyer-seller relationships”. Relationship marketing refers to long-term mutually

beneficial arrangement in which both the buyer and the seller focus on value enhancement

through the creation of more satisfying exchanges.

Relationship marketing is an approach which emphasizes the continuing relationships that should

exist between the organization and its customers. It emphasizes the importance of customer

service and quality and developing a series of transaction with consumers.

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Cateora (1996), also stated that relationship marketing is built in effective communication

between the seller and buyer. It also focuses on building long-term alliances rather than treating

each sale as a one-time event. It attempts to ensure that an organization uses varying informal

and formal tactics that will ensure that customer, once gained, will not take away their business

to competitors.

According to Cateora, (1996), a salient feature that is a characteristic of all the above definitions

is that relationship marketing seeks to;

1. Ensure that a company uses effective communications and other activities to ensure that

customers once gained, will not switch to other competitors

2. The greater level of customer satisfaction with a relationship, not just the product or

service, the greater the likelihood that the customer will stay with and be retained in the

organization.

3. Emphasis on the interaction between suppliers and customers, implies that there is a shift

from a transaction oriented approach to a relation-oriented approach.

2.2 REASONS FOR THE GROWTH OF RELATIONSHIP MARKETING

The growth of intensive competition in the marketing environment has led to companies moving

from marketing to relationship marketing, in this sense; they can build strong mutual confidence

and long term effective communication with their customers and other stakeholders so as to

exchange information to prevent the customers from switching to competitors. Research

estimates may be different, but on the average, it is expensive to create or gain new customers

than maintaining the existing ones.

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Relationship marketing can also go a long way to benefit a buyer. Visually, a customer can buy

the brand from the same company, organization or supplier which will tend to reduce time and

effort to purchase.

Jackson (1997), suggested that developing a relationship marketing approach is not always for all

customers, because customers are dynamic and are better managed through the traditional

marketing approach. These customers seek for lower price from suppliers and for that matter do

not value long-term relationship.

Relationship marketing has the aim of building mutually satisfied long-term relation with key

parties-customers, suppliers, distributors- in order to earn and retain their business. Marketers

accomplish this by promising and delivering high quality products and services at fair prices to

the other parties over time. (Philip Kotler, 2001)

Berkowitz D. (2000), said that, huge manufacturers find this rigorous standard of relationship

marketing difficult to achieve but due to today’s information technology along with cutting edge

manufacturing and marketing process, has led to mass customization, tailoring goods and

services to the seats of individual customer in high volume at a relatively low cost. Thus you can

place an internet order for Dextrose(5%) from Intravenous infusions and have it delivered in 4 or

5 days- a configuration tailored to your unique wants.

2.3 BUYER- SELLER RELATIONSHIP

Many experts have sought to research on buyer and seller relationship in the business market and

their channels.

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Theodore Levitt (1983), said, the relationship between a seller and buyer seldom ends when the

sale is made. In a great and increasing proportion of transaction, the relationship actually

intensifies subsequent to the sale. This actually becomes the critical factor in the buyers choice

of the seller the next time around, the sale merely consummates the courtship. Then the marriage

begins. How good the marriage is depends on how well the relationship is managed by the seller.

Etzel and Gaski (2001) suggested that rather than focusing only on the immediate customer,

marketers should approach marketing as a series of link between buyers and sellers. The value

chain approach should consider the roles of suppliers, producers, distributors, and end benefits

from the final product. This perspective leads to a recognition and understanding of the roles

played by all the parties involved in successfully bringing the product to market. Research has

shown that it is as much as six times less expensive to make a repeat sale than it is to make a sale

to a new customer. Repeat sales are often the results of loyalty and willingness of the buyer to

purchase from the seller without an extensive evaluation of alternatives. Loyalty requires a high

level of trust of the part of the buyer.

Wilson and Moller (1988) developed a list of variables that have been successfully used in

modeling different relationship situations. The five variables by Wilson and Moller are listed

below in details:

1. REPUTATION; it can be negative or positive, but a firm who wants to build a strong

relationship with its customers must have a reputation that is positive. Poor reputation can

affect the firm’s aim of maintaining their existing customers.

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2. TRUST; it is one of the essential element that hold a relationship to it highest point. This

leads the parties to make investment, exchange information, share secret, and work

together in a way that will bring the objectives of the relationship into reality.

3. MUTUAL GOAL; mutual is the degree to which partners share goals that can only be

achieved through joint action and the maintenance of the relationship. Mutual goals

encourage the partners to more mutually understand and depend on each other in the

business.

4. COMMITMENT; this is most common independent variables used in a buyer seller

relationship. This independently follows the course of action or contains believe which

will lead to bringing satisfaction and profitability to them.

5. PERFORMANCE SATISFACTION; for a long lasting relationship to be succeeded,

the basic need of the customer has to be met. Satisfaction is not defined or not succeeded

when the business service or product under the expectation of customers and profitability

of the company is not met.

2.3.1 Buyer-Seller relationship life cycle

Buyers and sellers proceed through a relationship if they believe that staying in it will enable

them to achieve their objectives better than would be possible outside it. The decision whether to

invest or divest in a relationship can be seen as dependent on the quality of the relationship so

far. There has now been much research into the factors that hold buyers and sellers together in a

relationship. Emerging from the general modes of buyer behavior, a number of theoretical and

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empirical based models have been developed to explain the processes of interaction between

buyers and sellers both in the industrial sector and for consumer markets.

Dwyer F. Robert, Paul H. Schurr and Sejo Oh (1987), used a life cycle theoretical approach to

develop a model of buyer- seller relationship. This model identifies five stages of relationship

development- awareness, exploration, expansion, commitment and dissolution. They proposed

that a relationship begins to develop significance in the exploitation stage when the relationship

is characterized by attempts by the seller to attract the attention of the other party, to bargain and

to understand the nature of the power, norms and expectations held by the other. They see the

expansion phase of the relationship resulting from the successful conclusion of the initial

exploratory interaction between the parties. Exchanging outcomes at this stage provides clues

about the suitability of long-term relationships. The commitment phase of the relationship

implies some degree of exclusivity between the parties and results in a minimal information

search for alternatives- if it occurs at all. However, the possibility of a relationship being

terminated is always present and can occur during any of the previous stages. The consequences

of termination are greatest where a party has made significant investment in the relationship.

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2.4 RELATIONSHIP LEVELS

Kotler (2000) distinguished five (5) different levels of relationship that can be formed with

customers who purchase a company’s product as follows:

Basic level: In this level of relationship, the company’s salespersons sell the product but

do not follow up in any way. A company with many customers and low profit margins

usually would adopt this.

Reactive level: At this level the salespersons sell the product and encourage the customer

to call whenever they have problems or questions. This level may be adopted by a

company with few low-margin customers or one with many medium-margin customers.

Accountable level: The salesperson at this level goes further to call or phone the customer

a short time after the sale is made to check whether the product is meeting the customer’s

expectation. He solicits also from the customer any product improvement suggestions and

any specific disappointments. This information usually helps the company improve upon

their products. It is usually adopted by a company with many high margin customers, few

medium margin customers, or one with medium number of customers who have medium

profit margins.

Proactive level: the salesperson or others in the company call the customer regularly with

suggestions about newly improved products. Companies with medium number of

customers who have high profit margins usually adopt this approach.

Partnership level: the company works continuously with the customer and with other

customers to discover ways to deliver better value. It may be adopted by a company with

few high profit margin customers.

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The above can be represented by a model as shown below:

Table 1: model on relationship levels as a function of profit margin and number of

customers.

PROFIT MARGINS

HIGH MEDIUM LOW

MANY Accountable Reactive Basic

MEDIUM Proactive Accountable Basic

FEW Partnership Accountable Reactive

Source: Kotler, P. et al (1999): principles of marketing.

To encourage loyalty, factors which influence customer retention should be considered. Among

such factors are the following:

1. High quality products

2. Excellent customer service

3. Taking long-term marketing decisions

4. Establishing customer profits or database

From a customer communication perspective, the most important factor in relationship marketing

is the creation of a dialogue between the organization and the customer. This results in the

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customer getting what they want and at the same time becoming loyal customers who

recommend others to the firm. Kotler, P. et al (1999).

Mcdaniel (2006) Suggested that relationship marketing can be practiced at three levels.

structural social financial

Social financial

financial

Fig. 1 The three levels of relationship marketing

Source: McDaniel (2006), introduction to marketing.

Level 1 Financial; the firm uses pricing incentives to encourage customer to continue doing

business with them. In a case where Intravenous Infusion limited gives 5% price discount on

Dextrose(5%), if the customer is able to buy ten boxes at a time. This level is the least effective

in the long-term because its price based advert is easily imitated by competitors.

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3. Creating value-added service not available elsewhere.

2. Design service to meet customer’s needs

1. Price incentives

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Level 2 Social Financial; this level of relationship marketing also uses pricing incentives but

seeks to build social bond with customers. The firm stays in touch with customers, learn about

their needs and design service to meet those needs. In this level relationship marketing has a

higher potential for keeping the firm ahead of the competition than it does in level one.

Level 3 Structural social financial; at this level, the firm again uses financial and social bond

but adds structural bond to the formula. Structural bonds are developed by offering value added

services that cannot be readily given by other firms. Marketing programs like this one have the

strongest potential for sustaining long-term relationships with customers.

2.5 CONTENTS OF RELATIONSHIP MARKETING BY PALMER, A. (2000)

1. I can get no satisfaction:

Relationship marketing relies on the communication and acquisition of consumer

requirements solely from existing customers in a mutually beneficial exchange usually

involving permission for contact by the customer through an “opt-in” system. With

particular relevance to customer satisfaction, the relative price and quality of goods and

services produced or sold through a company alongside customer service generally

determine the amount of sales relative to that of competing companies. Although groups

targeted through relationship marketing may be large, accuracy of communication and

overall relevancy to the customer remain higher than that of direct marketing, but has less

potential for generating new leads than direct marketing and is limited to viral marketing

for the acquisition of further customers.

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2. Relationship selling:

All businesses grow on good relationship with customers. However, few companies

spend much effort in equipping their sales people with this skill. Sales representatives are

well trained to present their products benefits and features but the need to build lasting

customer relationship is often overlooked. Today, selling is no longer about pushing a

product and achieving good or quick sales, it is about building lasting and long-term

customer loyalty. Product knowledge is important for every salesperson because it helps

to present whatever they are trying to sell. Unfortunately, this misses the more important

aspect of creating or selling value to customer. A good customer relationship is only built

when the customer truly gains value from what he or she purchases.

3. Retention:

A key principle of relationship marketing is the retention of customers through varying

means and practices to ensure repeated trade from pre-existing customers by satisfying

requirements above that of competing firms through a mutually beneficial relationship.

This technique is now used as a means of counter-balancing new customers and

opportunities with current and existing customers as a means of maximizing profit and

counteracting the “leaky bucket theory of business” where new customers gained in older

direct marketing oriented business were at the expense of or coincided with the loss of

older customers. The process of “churning” is less economically viable than retaining all

or majority of customers using both direct and relationship management. It is claimed by

Reichheld and Sasser (1990) that a 5% improvement in customer retention can cause an

increase in profitability of between 25 and 85 percent (in terms of net present value),

depending on the industry.

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According to Buchanan and Gilles (1990), the increased profitability associated with customer

retention effort occurs because of several factors that occur once a relationship has been

established with a customer. Long-term customers tend to be less inclined to switch, and also are

less price sensitive. This can result in stable unit sales volume and increases in dollar sales

volume. Long-term customers may initiate free word of mouth promotions and referrals. Long-

term customers are more likely to purchase auxilliary and high margin supplemented products.

Customers that stay with you tend to be satisfied with the relationship and are less likely to

switch to competitors, making it difficult for competitors to enter the market or gain market

share. Increased customer retention and loyalty makes the employees jobs easier and more

satisfying. In turn, happy employees feed back into better customer satisfaction in a virtuous

cycle.

Buchanan and Gilles (1990), suggested that customer retention efforts involves considerations

such as the following:

1. Customer valuation—Gordon(1990), describes how to value customers and categorize

them according to their financial and strategic value so that companies can decide where

to invest for deeper relationship and which relationships need to be served differently or

even terminated.

2. Customer retention measurement- Dawkins and Reichheld (1990), calculated a

company’s “customer retention”. This is simply the percentage of customers at the

beginning of the year, that are still customers by the end of the year.

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3. Determine reasons for defection—look for the root causes not the mere symptoms. This

involves probing for details when talking to formal customers. Other techniques include

the analysis of customer’s complaints and competitive benchmarking.

4. Develop and implement corrective plan—this would involve actions to improve

employee practices, using the benchmarking to determine best corrective practices,

visible endorsement of top management, adjustment to the company’s reward and

recognition system, and the use “recovery teams” to eliminate the causes of defections.

Many relationship marketers use a team-based approach. The rationale is that the more

point of contact between the organization and customer, the stronger the bond and secure

the relationship.

2.6 COMPARISON BETWEEN RELATIONSHIP MARKETING AND

TRANSACTIONAL MARKETING

To understand the nature of relationship marketing, it is useful to compare and contrast it with

the transactional marketing approach. In transactional marketing, sellers base their immediate

sale on offering an attractive combination of products, price, technical support and others. In the

case of relationship marketing the focus is not on a “one-off” transaction but on a long term

interactive relationship that has mutual benefits to both the marketer and the customer. Thus

where transaction marketing is “one-off”, relationship marketing is long- term.

Relationship marketing and transactional marketing are not mutually exclusive and there is no

need for a conflict between them. However, one approach may be more suitable in some

situations than others. Transactional marketing is most appropriate when marketing relatively

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low value consumer products, when the product is a commodity, when switching costs are low,

when customers prefer single transactions to relationships and when customer involvement in

production is low. When the reverse of all the above is true, as in typical industrial and service

markets, then relationship marketing can be more appropriate. (Lancaster et al, 1990).

2.6.1 From Transactional Marketing To Relationship Marketing

Berry, L.,(1983) suggested that a more conventional approach to marketing has been the old

transactional marketing, whereby the functions of marketing, customer service and quality has

been separate entities within the organization. However, the disintegrated approach to marketing

meant that the potential to optimize marketing relationship was being lost, As the lack of co-

ordination between gave way to a fragmented approach to achieving customer satisfaction.

Ultimately and in many instances, this started to prove problematic with many organizations, as

they were suffering from lack of market share, to the more-relationship focused businesses.

There are a number of significant differences between the concepts and context of transactional

and relationship marketing.

Principally, the key difference in the management of the relationship is that the basis of it will be

a long-term relationship, a long-term view achieving and long term customer loyalty. Payne A.

and Sue H. (1991) suggested that in order to establish and construct a relationship program, there

are four (4) factors that the organization will need to concentrate on. These factors include:

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1. Defining the value proposition

2. Identifying the appropriate customer value segments

3. Designing value delivery systems

4. Managing and maintaining delivered satisfaction.

Table 2:The shift to relationship marketing

Transactional focus Relationship focus

1. Orientation to single sales Orientation to customers

2. Discontinuous customer contact Continuous customer contact

3. Focus on product features Focus on customer value

4. Quality is the concern of staff Quality is the concern of all staffs

5. Limited commitment to meeting customer expectations

High commitment to meeting customer satisfaction

6. Limited emphasis on customer service High customer service emphasis

Source: Payne et al (1991), Relationship Marketing

For an organization to succeed, it is essential that the value proposition meets the expectation of

customers, so that the expectations in their minds meet those in the mind of the supplier and that

there is little scope for customer uncertainties, a concept that one comes across in selling.

Therefore, the value proposition needs to fill any gap in expectation. At the end of the day, the

better the value proposition, the better customers are treated and the more likely it is that the

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organization can establish competitive advantage. The quality and strength of customer

relationship is vital to the survival and profitability of all organizations, it is essential for

competitive advantage to be sustained, customer loyalty to be achieved, that the process of

delivering customer satisfaction is clearly defined to avoid any potential gaps in customer

perception of the value proposition and their expectations. Payne et al (1991).

2.7 PLANNING FOR RELATIONSHIP MARKETING

According to Palmer A, (2000), a marketing relationship does not just happen, evolve or emerge,

it has to be planned. As with all other aspects of marketing, it requires a structured approach to

ensuring that relationship marketing does maximize business potential, provides the basis for

profitability, create sustainable competitive advantage through robust and long-term customer

and supplier stakeholder relationships. In order to plan for relationship marketing, there is the

need to understand some key factors; customer loyalty, the dimensions of quality, building trust

and the basis of continuous improvement.

1. Customer Loyalty:

To achieve customer loyalty is highly challenging, as it looks at the loyalty of all

customer groups that are involved in the relationship marketing process. In order for

relationship marketing to be truly implemented as part of the business culture, it focuses

on all customer groups. Relationship marketing is a long-term process, and in order for

customer loyalty to be considered and achieved, there are a number of key identifiable

stages that the relationship moves through. This is more formally known as the ladder of

customer loyalty. It is illustrated in figure (2) below.

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Emphasis on customers

(Customer catching)

Emphasis on developing

And enhancing relationships

(Customer keeping)

Fig. 2 Customer loyalty ladder

Source: Palmer A, (2000), Principles of Marketing

The ladder highlights the process for targeting the customer to adoption and to developing the

relationship from customer to long-term client. From here, it is then essential to encourage the

customer to become both supporters and advocates of the company in order that they can become

a marketing tool on your behalf not just retaining them but to grow your market. Customer

loyalty however has two dimensions-a long-term loyalty, which is the basis of a true relationship

marketing scenario, and of course, false loyalty. This will essentially be driven by a number of

key factors which are limited completion of the task, high switching cost, propriety technology,

37

Advocate

Supporter

Client

Customer

prospect

PROJECT WORK 2015

and the attraction of the same loyalty scheme. The key objectives in this context are to actually

switch the power base of loyalty to a more long term relationship and indeed partnership.

Customer loyalty of course is very much linked with brand loyalty.

2. The key dimension of relationship marketing:

According to Palmer A, (2000), quality is the core of the business and the relationship

with customers. Therefore there are some key dimensions that an organization must deliver in

order to provide a basis upon which a relationship is built. These are;

Reliability- this is the ability to perform the promised services dependably and

accurately.

Responsiveness- this is the willingness to help customers provide prompt service

Assurance- this has to do with the knowledge and courtesy of employees and their

ability to inspire trust and confidence in customers.

Empathy- this involves caring, individualism, attention, which the firm provides

to the customers

Tangibles- this are the physical facilities equipment and appearance of personnel.

In order for the relationship to be established, the basis of the quality gap must be

filled, that is the difference between the customer expectations and the

organizational perception of what is being delivered must be a keen consideration.

3. Building a relationship based on trust:

Morgan and Hunt (1994), suggested three dynamics to build trust within a relationship.

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Fig.3 the three (3) dynamics to build trust

Source: Morgan and Hunt (1994), what builds trust?

There are three simplistic components that will form the basis of any relationship. The basis of

trust provides the opportunity to develop a relationship that includes co-operation, leading to

relationship commitment. Relationship marketing is an ideal concept, typically this three

components tend to be overlooked perhaps assumed or even ignored. Principally, there should be

a basis for relationship marketing aims and objectives. However, in figure 6, you will see the

benefit of building a relationship on trust, as you can save relationship termination cost, gain

many benefit, and look towards a relationship, based on shared value.

Opportunistic behavior will be great benefit of partnership in a relationship management context.

Communication is absolute, this is because the more inward and outward bound communication

that exist, the more you will find out about the customer, their needs, wants and perhaps their

39

Relationship , commitment

Co-operation

Trust

PROJECT WORK 2015

competitive experience of which will only serve to strengthen the basis of which you would

operate.

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CHAPTER THREE

METHODOLOGY

3.0 INTRODUCTION

This chapter presents the research method adopted for this research. This chapter is discussed

under the following sub-headings; population, sample size and sampling procedure, research

instrument, procedure followed in data collection and method of data analysis.

3.1 RESEARCH DESIGN

This is a detailed outline of how the investigation will take place. A research design will include

how data is to be collected, what instruments will be employed, how the instruments will be used

and the intended means for analyzing data collected. For the purpose of this study, interviews

and questionnaires will be administered to collect data from the field. Purposive sampling

technique and simple random sampling will be the sampling techniques to be used. The received

questionnaires will be analyzed to bring out the findings in a statistical manner.

3.2 POPULATION

A population is a summation of all the organisms of the same group or species, which live in a

particular geographical area, and have the capability of interbreeding.

All elements, individuals, or units that meet the selection criteria for a group to be studied, and

from which a representative sample is taken for detailed examination. The total of all populations

is called a universe. By this definition, the universe was made up of all hospitals, clinics and

pharmacies in the Eastern Region of Ghana which were 394 of which the 25 were chosen from

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the New Juabeng municipality as the population of the study in addition to 25 staff of

Intravenous infusions limited.

The population was made up of management and non-management staff of intravenous

infusions limited and its customers (hospitals clinics and pharmacies) in Koforidua and its

immediate environment. The researchers settled on the population based on the fact that the

constituent members have an in-depth knowledge about the company and its relationship

marketing activities. The population, for analytical reason, was divided into two (that is;’A’ and

‘B’). Population for sub-category A comprised both management and non-management staff of

intravenous infusions limited, while population sub-category B comprised of customers of

intravenous infusions limited.

3.3 SAMPLE SIZE AND SAMPLING TECHNIQUE

The study considered two major categories of sub-samples (that is ‘A’ and ‘B’). In the case of

sub-sample A, five (5) managers were selected and twenty (20) other staff. Sub- sample B, was

made up of twenty-five (25) customers of intravenous infusions limited. In all, the sample size

was fifty (50). For sample A, the purposive sampling technique was used to select the

management and non- management staff of intravenous infusions limited. The researchers used

the purposive sampling technique because, in their view, the managers and staff are the best

people to provide them with the type of information needed about the company. For the

customers (that is the hospitals, clinics and the pharmacies), simple random sampling was used

to select them. This is because they all stood a chance of being chosen.

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3.4 RESEARCH INSTRUMENT

The researchers used interviews and questionnaire as their research instrument for the project

work.

The questionnaires were administered to management and non-management staff of intravenous

infusions limited and their customers. The researchers also used open- ended and close- ended

questions. The closed-ended questions pre-specified all the possible answers for the respondent

to make a choice. While the open-ended questions allowed the respondent to answer in their own

words.

The questionnaire was employed because, it effectively eliminates interviewer’s biases and

control inhibitions of workers.

Interviews were also conducted with some hospitals and clinics. Both structured and

unstructured interviews were used for soliciting for information. For structured interviews, the

researchers used it to pre-design to make it possible for responses from different individuals to

be compared. For the unstructured interviews, the researchers used it to ensure the completeness

of the research work by obtaining additional information not obtained through the administration

of the questionnaire.

The interview was conducted because it offers the opportunity to answer more complex

questions. Since the presence of the interviewer can assist in answering the questions.

3.5 PROCEDURE FOLLOWED IN DATA COLLECTION.

The researchers, prior to going to the field to collect data took and introductory letter from the

head of marketing department, Koforidua Polytechnic. The introductory letter was presented to

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the management of intravenous infusions limited and some hospitals, clinics and pharmacies in

Koforidua in the quest of soliciting their permission to conduct the research in their respective

outfits.

In the case of intravenous infusions limited upon receiving the letter, the researchers were

introduced by management to the staff members of the company. The management of the other

respective firms (ie hospitals, clinics and pharmacies) also informed their staff members and

entreated them to cooperate, as appropriate, with the researchers to achieve the objectives of the

study.

The study’s questionnaires were distributed personally by the researchers with the aid of one

staff member of the firm. The individual members of the study’s sample were assured that

answers would be treated with the highest level of confidence. The researchers allowed a

maximum of 10 days for the various respondents to complete the questionnaires. Two days after

the specified period the researchers did a follow up to retrieve the entire questionnaires.

3.6 METHODS OF DATA ANALYSIS

Data collected from primary sources were meticulously edited to crosscheck that relevant data

needed to achieve the purpose of the research study had been provided. This were then classified

and counted to determine their respective frequencies and percentages. Some of the date

provided have been provided in simplified graphs, chats, and tables. The researchers used the

above statistical tools because, in the researchers view it is simple to understand.

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CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0 INTRODUCTION

This chapter focuses on the presentation and analysis of data collected from the questionnaires

administered to get the opinion or the views of management and non-management and

customers.

In all, fifty (50) questionnaires were sent out. Five (5) went to management and twenty (20) went

to non-management staff of Intravenous infusions limited. Twenty-five (25) also went to

customers of Intravenous infusions limited especially (hospitals, clinics and pharmacies). The

analysis has been presented in graphs charts and tables.

TABLE 1:A SUMMARY OF QUESTIONNAIRES ADMINISTERED AND COLLECTED

GROUP NUMBER ISSUED NUMBER

COLLECTED

PERCENTAGE (%)

Management 5 4 80

Staff 20 15 75

Customers 25 20 80

Total 50 39 78

The table above explains or represents the number of questionnaires administered and retrieved

from management, staff and customers of Intravenous infusions limited.

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Even though 50 questionnaires were administered, only 39 representing 78% of the total number

of the questionnaires were retrieved and 11 representing 22% could not be retrieved.

4.1 PROFILE OF RESPONDENTS

Out of the thirty-nine (39) questionnaires retrieved, 23 respondents, representing (59%) were

males and sixteen (16) respondents representing (41%) were females from the various age

groups.

It can be deduced that, majority of the respondents were between the ages of 31 to 40 years

representing 30.4% males and 31.3% females respectively. It can be deduced that, more males

than females responded to the questionnaires.

TABLE 3: HOW LONG HAVE CUSTOMERS BEEN DEALING WITH INTRAVENOUS

INFUSIONS LIMITED?

DURATION NUMBER OF RESPONDENTS PERCENTAGES (%)

Below 1 year 2 10

1-5 years 5 25

6-10 years 10 50

11 and above 3 15

TOTAL 20 100

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Source: Field Survey June 2015

From the table above, it can be deduced that, most of the customers of Intravenous infusions

limited have been dealing with them for the period of 6-10 years which represents 50% of the

total respondents. This shows that customers have been dealing with the company for a very long

time.

TABLE 4: WHAT KIND OF CUSTOMER RELATIONSHIP EXISTS BETWEEN

CUSTOMERS AND THE COMPANY?

RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGES (%)

Corporate customers 11 55

Individual customers 7 35

Others 2 10

TOTAL 20 100

Source: Field Survey June 2015

From the table above, it shows clearly that, the customers of the company are mostly corporate

customers representing 55% of the total responses from customers. This means that, the

respondents answered the questionnaires for their respective institutions that purchase the

products of Intravenous infusions limited.

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TABLE 5: HOW OFTEN DO PERSONNEL OF INTRAVENOUS INFUSIONS LIMITED

VISIT CUSTOMERS?

RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGES (%)

Frequently 2 10

Always 3 15

Once a while 11 55

Never 4 20

TOTAL 20 100

Source: Field Survey June 2015

The information from the data above indicates that, most of the company personnel visit their

customers once a while. This deduction was made because eleven (11) respondents who

represent 55% of the total 100% said that the company’s personnel visit them once a while,

while three (3) out of the total twenty (20) respondents representing (15%) responded that the

company’s personnel visit their organization always and two (2) out of the total twenty (20)

respondents representing (10%) said the company personnel visit them frequently and out of the

twenty (20) respondents, four (4) respondents representing (20%) also said the company’s

personnel never visit them. This is represented in a diagram below.

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TABLE 6: WHY DO PERSONNEL FROM INTRAVENOUS INFUSIONS VISIT OR

CONTACT YOU?

RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGES (%)

To explain new product

features and uses

3 19

To introduce the company’s

new products

9 56

To find out if there is any

problem associated with the

use of IIL products

4 25

Others 0 0

TOTAL 16 100

Source: Field Survey June 2015

From the previous survey it was said that the company’s personnel never visit four (4)

customers. Therefore the only customers they visit are sixteen (16) out of the twenty (20)

respondents. The above table indicates that, the primary reason why the company’s personnel

visit or contact customers are to introduce the company’s new products. This is indicated in the

table above, where (56%) of the respondents agreed to this.

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TABLE 7: WHEN YOU EXPRESS DISSATISFACTION, AT WHAT RATE DOES

INTRAVENOUS INFUSIONS RESPOND TO YOUR COMPLAINTS?

RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGES (%)

Very quickly 3 15

Quickly 13 65

Not quickly 4 20

TOTAL 20 100

Source: Field Survey June 2015

From the table above, it can be noticed that, three (3) respondents representing 15% responded

“very quickly” to the question above. Also 13 respondents representing 65% responded

“quickly” to the question above. Four (4) respondents who represent 20% responded “not

quickly” to the question above.

Based on the data above, it can then be confirmed that, the intravenous infusions limited respond

quickly to their customers (hospitals, clinics and pharmacies) in the New-Juabeng municipality.

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TABLE 8: ARE YOU SATISFIED WITH THE WAY THE COMPANY REACTS TO YOUR

COMPLAINTS?

RESPONDENTS NUMBER OF RESPONDENTS PERCENTAGE (%)

Yes 7 35

No 13 65

TOTAL 20 100

Source: Field Survey June 2015

Information from the above table shows clearly that, (7) respondents representing 35% of the

total respondents, responded “YES” to the question above and (13) respondents out of the (20)

respondents representing 65% responded “NO” to the question above. This implies that majority

of the customers are dissatisfied with the way the company reacts to their complaints. This is

clearly indicated by (13) respondents responding “NO” to the question.

TABLE 9: DOES THE RELATIONSHIP BETWEEN YOU AND INTRAVENOUS

INFUSIONS INFLUENCE YOUR DECISION TO BUY THEIR PRODUCTS?

RESPONSES NUMBER OF

RESPONDENT

PERCENTAGES (%)

Yes 12 60

No 8 40

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TOTAL 20 100

Source: Field Survey June 2015

From the table above, it can be noticed that, 12 respondents representing 60% of the total

respondents responded “YES” while 8 respondents representing 40% answered “NO” to the

question above. It implies that customers purposely buy from intravenous infusions limited

because of their relationship with them.

It indicated clearly that the relationship between Intravenous infusions limited and their

customers influence the customer’s decision to buy their products.

TABLE 10: ARE YOU SATISFIED WITH INTRAVENOUS INFUSIONS LIMITED’S

RELATIONSHIP WITH YOU?

RESPONDENTS NUMBER OF

RESPONDENTS

PERCENTAGES (%)

Yes 6 30

No 14 70

TOTAL 20 100

Source: Field Survey June 2015

The table above shows that intravenous infusions limited customers are dissatisfied with the

company’s relationship with them i.e. customers. This can be confirmed by 14 out of the total 20

respondents representing 70% answering “NO” to the question.

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TABLE 11: HOW WILL YOU DESCRIBE THE ATTITUDE OF INTRAVENOUS

INFUSIONS DELIVERY MEN?

RESPONDENTS NUMBER OF

RESPONDENTS

PERCENTAGES (%)

Very friendly 5 25

Friendly 13 65

Unfriendly 2 10

TOTAL 20 100

Source: Field Survey June 2015

The information above indicates clearly that, the attitude of the company’s delivery men is

friendly. To support this, the 13 respondents from the total respondents, representing 65%

responding that the attitude of the company’s delivery men is friendly.

Also 5 respondents responded “very friendly” to the question asked. They represent 25% of the

total respondents.

Finally, 3 respondents representing 10% responded that they were unfriendly to the above

question.

They came out that, they want the company to maintain the level of product quality, easy access

to their products, good pricing policies and packaging. Some also said that, the delivery time of

the company was also accurate. Those who said it wasn’t, suggested the company should not

focus on product quality only but equal attention should be given to issues like, having meeting

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with the customers once every 2 months, so that the customers can also be part of the decision

making.

TABLE 12: HAVE YOU EVER THOUGHT OF SWITCHING TO OTHER COMPETING

FIRMS TO DO BUSINESS?

RESPONSES NUMBER OF

RESPONDENTS

PERCENTAGES (%)

YES 8 40

NO 12 60

TOTAL 20 100

Source: Field Survey June 2015

From the above table, it can be seen clearly that, most of the respondents responded “NO” to the

question. About 12 of the respondents representing 60% of the total respondents responded

“NO” to the question. Also 8 of the respondents representing 40% of the total respondents

responded “YES” to the question above. This means that more customers have thought of

switching then staying with the company.

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4.2 PROFILE OF RESPONDENTS FROM MANAGEMENT AND NON-

MANAGEMENT STAFF

The graph above clearly indicates that the company strongly believes in the building a mutually

beneficial long-term relationship with customers. This is shown by 15 respondents representing

79% of the total respondents responding “YES” and 4 respondents representing 21% if the total

respondents responding “NO” to the question.

In support of the analysis management explained that there is a mutual interaction between the

company and its customers, where the customers visit the company from time to time.

The company also regularly communicates with its customers and also pays a critical attention to

their social responsibility.

YES NO0

10

20

30

40

50

60

70

80

15

4

79

21

RESPONSESPERCENTAGES(%)

FIG. 1: A BAR CHARTS SHOWING WHETHER THE COMPANY BELIEVES IN THE

CONCEPT OF RELATIONSHIP MARKETING.

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From the graph below, it can be noticed that out of the 19 respondents, 11 of them representing

58% responded that the company has been practicing relationship marketing for 11-15 years.

Also 4 respondents representing 21% of the total respondents responded that the company has

been practicing relationship marketing for 6-10 years to the question above. 2 responded 1-5

years, 1 answered 16-20 years and 1 also responded 21 years and above to the question.

11

21

58

55

PERCENTAGES (%)

1-5 years6-10 years11-15 years16-20 years21 and above

FIG. 2: THE PIE CHART SHOWING HOW LONG IIL HAVE BEEN PRACTICING

RELATIONSHIP MARKETING.

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PROJECT WORK 2015

The graph indicated that the company has achieved customer loyalty as a result of practicing

relationship marketing. This is indicated by 8 out of the total respondents representing 42%

responding “customer loyalty” to the question above. 4 out of the total respondents representing

21% responding “higher sales” and “goodwill” respectively. Also 2 respondents representing

11% responded “all the above” while only 1 respondent representing 5% responded “others” to

the question.

Higher sales Customer loyalty

Goodwill All the above Others0

5

10

15

20

25

30

35

40

45

4

8

42 1

21

42

21

11

5

RESPONDENTSPERCENTAGES (%)

FIG.4: A BAR CHART SHOWING THE WHAT THE COMPANY HAS ACHIEVED FROM

PRACTICING RELATIONSHIP MARKETING.

The graph indicates that the company’s major challenge is effective communication skills for

building of the mutually beneficial relationship with customers. To support this fact, 8

respondents representing 41% responded communication problem to the question above. They

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PROJECT WORK 2015

are also faced with financial and managerial problems,6 respondents representing 32% and 3

representing 16% responded to the question above respectively.

Finan

cial p

roblem

s

Manage

rial p

roblem

Communication problem

All the a

boveOther

0

5

10

15

20

25

30

35

40

45

63

8

20

32

16

41

11

0

RESPONDENTSPERCENTAGES (%)

FIG. 5: A BAR CHART SHOWING WHAT HINDERS THE COMPANY FROM

PRACTICING RELATIONSHIP MARKETING.

From the graph above, it is indicated that the company is doing something to address the

communication problem. In support of this, the company is developing an effective

communication skills to curb the problem.

From the graph below, it can be seen that the company is vividly putting in place resources to

ensure the effective building of mutually satisfying relationship with key parties. To support this

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fact, 15 respondents representing 79% answered that they are putting in resources to curb the

problem whiles 4 out of the total respondents representing 21% answered that rewards are being

given in terms of remuneration to employees who help foster the better relationship.

Resources Rewards0

10

20

30

40

50

60

70

80

79

2115

4

PERCENTAGES(%)RESPONDENTS

FIG. 6 : WHAT MEASURES AND MECHANISMS HAS THE COMPANY PUT IN PLACE

TO ENSURE THE BUILDING OF MUTUALLY SATISFIED LONG-TERM RELATION

WITH KEY PARTIES?

The information from the graph below indicates that, the company’s personnel visits their

customers once a while. This analysis was made because, 9 respondents who representing 47%

of the total 100% said that the company’s personnel visit them once a while. Two (2) out of the

total 19 respondents representing 11% responded that the company’s personnel visit them

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frequently. Also 5 of the respondents representing 16% responded that they visit always and 5

representing 26% responded that they never visit.

FrequentlyAlways

Once a whileNever

05

101520253035404550

11 16

47

26

PERCENTAGES (%)

PERCENTAGES (%)

FIG. 7: A GRAPH SHOWING HOW OFTEN THE COMPANY’S PERSONNEL VISIT

CUSTOMERS.

The pie chart below shows that the main reason why the company visit or contact customers is to

introduce their new product. This is indicated in the table above where,13 out of the total

respondent representing 68% of the respondent agreed to this. Also the company contact

customers to explain new product features and to find out if there is any problem associated with

the use of their product representing 21% and 11% respectively.

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21

68

11

PERCENTAGES (%)

To explain hew product fea-turesTo introduce the company’s new productsTo find out if there is any prob-lem associated with the use of their products

FIG. 8: WHY DOES YOUR COMPANY VISIT OR CONTACT CUSTOMERS?

From the chart below it is seen clearly that management are of the view that the level of

customer satisfaction in the company is medium. This is shown where 10 of them representing

53% responded that customer satisfaction in the company is medium. Five (5) were also of the

view that the level of satisfaction was high and four (4) were of the view that it was low.

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HIGH MEDIUM LOW0

10

20

30

40

50

60

26

53

21

PERCENTAGES (%)

PERCENTAGES (%)

FIG. 9: A BAR CHART SHOWING THE LEVEL OF CUSTOMER SATISFACTION IN

INTRAVENOUS INFUSIONS LIMITED.

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From the pie chart below, it can be noticed that, 4 respondents representing 21% responded

“very quickly” to the question above, 10 respondents representing 53% responded “quickly” to

the question above and 5 of the respondents representing 26% responded “not quickly” to the

question.

21

53

26

PERCENTAGES (%)

very quicklyquicklynot quickly

FIG. 10: A PIE CHART SHOWING THE RATE AT WHICH THE COMPANY REACTS TO

THE COMPLAINTS OF THEIR CUSTOMERS.

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CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 INTRODUCTION

This chapter will focus on summary of findings, conclusion and recommendation based on the

profile of customers, management and non-management staff.

5.1 SUMMARY OF FINDINGS (MANAGEMENT, NON-MANAGEMENT AND

CUSTOMERS)

More males responded than females, majority of the respondents fell between 31 and 40 years.

Also according to the data analysis the kind of customer relationship that exist between the

respondents and the company is corporate. This means that the respondents purchase the product

on behalf of their prospective organizations (hospitals, clinics and pharmacies).

It was found out that personnel from intravenous infusions limited visit or contact customers

once a while to introduce the company’s new products. These personnel visit their customers

mainly to introduce new products and check or examine the products performance.

About how often personnel of intravenous infusions limited visit their customers, it was noted

that, they visit once a while. This serves as weakness to the building of strong relationship

marketing by the company.

Concerning the rate at which intravenous infusions limited responds to their customer

complaints, majority of the respondents said the company responds to their complaints quickly.

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This is to some extent a good sign in terms of building strong relationship marketing. The

customers also responded that they are satisfied with the way the company reacts to their

complaints.

The external customers describe the relationship between them and the company as good. They

also responded that their decision to purchase the company’s products are being influenced by

their relationship with company, showing clearly that relationship marketing is one of the

important techniques that the company should put into critical consideration. About how

satisfied the external customers are, with the company’s relationship with them, majority of the

respondents responded “YES” showing that they are satisfied.

According to the analysis, more males responded than female. Majority of the respondents fell

between the ages of 30 and 40 years. Also, majority of management and non-management staff

have been working with the company for the past 10 years and below.

The analysis also indicated that the company believes in relationship marketing. Taking the

majority views into consideration, the company has been practicing relationship marketing for

about 11 to 15 years. As a result of the relationship marketing, the company has achieved

customer loyalty.

Also taking the majority into consideration, the challenge hindering the practicing of relationship

marketing by the organization, was communication problem. From the data analysis, on what the

company is doing to tackle the problem, it was confirmed that, the company is developing an

effective communication skills to care for the problem.

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Most respondents also said that because customers are allowed to share their views and at times

take part in decision making, they are in a partnership relationship with customers, because the

company takes customer needs and wants into consideration before production. This shows that

they believe in the concept of relationship marketing.

Taking into consideration, what measures or mechanisms the company is putting in place to

ensure good relationship marketing, the company is strongly putting in place resources (money,

competence and equipment). Also when asked how often do personnel visit customers, the

company said they visit or contact customers once a while, to introduce new products to them

and also when customers express dissatisfaction, the company is able to respond to them quickly,

which is a plus to the company in this competitive environment.

5.2 CONCLUSION

It can be concluded that relationship marketing really has impact on intravenous’ marketing and

sales activities. However, their relationship marketing practice is not all that effective and

efficient. The company, instead of being proactive to steer their own destiny is rather react, the

problem must occur before they react to it, which is not the best strategy in this competitive

marketing environment.

Even though majority of the respondents said that they are satisfied with the company’s

relationship with them, the company has to go the extra mile to delight the customer if they want

to survive in this competitive marketing environment.

It can be concluded that, the company’s believe in the relationship marketing is not all that

strong. This is because they normally visit their customers once a while to introduce new

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products to them and or to check or find out about their product performance of which

relationship marketing goes beyond.

In addition to this, the company understands the concept of relationship marketing but their main

problem is resources.

5.3 RECOMMENDATIONS

Staff of the company, should be trained to know the need of becoming proactive

rather than reactive.

The company’s personnel attitude (friendliness) towards customers is a plus to the

company. These personnel should be motivated or rewarded so that they can keep up

with their work.

The company should also improve their communication system with both the external

and the internal customers.

Adequate resources should be allocated to the marketing department to help enhance

the practicing of relationship marketing.

The marketing department should educate all the departments especially the finance

and accounting about the need to invest in relationship marketing to be able to delight

their customers.

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REFERENCES

1. Berry, L., (1983), Relationship Marketing. American Marketing Association (AMA).

2. Buchanan, R and Gilles, C. (1990), Value Managed Relationship; the key to customer

retention and profitability. European Management Journal (EMJ)

3. Berkowitz N., Hartley W., Kerin A and Rudelius W (2000) Marketing, 6th Edition,

McGraw Hill: USA

4. Dwyer F, and Tanner J, (1999)Business Marketing, McGraw Hill: USA

5. Gordon (1991), Relationship Marketing; New Strategies Techniques and Technologies to

Win the Customer You Want and Keep Them Forever. John Wiley and Sons Publishers

6. Hair J., Lamb C. and McDaniel C. (2006) Introduction to Marketing, 8th Edition,

Thomson: South Western

7. Isobe Doole and Rubin Howe, (1999),International Strategy, 2nd Edition, Thomson

Learning.

8. Jackson B. (1985), Build Customer Relationship That Last . Harvard Business Review.

9. Kotler P.(2003),Marketing Management,11th Edition,Prentice Hall Inc.,New York,U.S.A.

10. Kotler P. and Keller K.(2006), Marketing Management, 12th Edition, Pearson Prentice

Hall.

11. Kevin, Hartley, Berkowtz and Rudelias (1997), Marketing, 5th Edition. David Kendrick

Brake.

12. Lancaster, G. and Massingham, L.(1990), Essential of Marketing,2nd Edition , McGraw

Hill Inc, United Kingdom.

13. Levitt T. (1983), After Sale Is Over, Harvard Business Review.

14. Morgan and Hunt (1994), Marketing. Harvard Business Review.

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15. Nigel Hill (1994) Marketing, 2nd Edition, Business Education

16. Payne et al (1991) Relationship Marketing. Prentice Hall Inc., New York, U.S.A.

17. Pride and Ferrell (1997),Marketing, 10th edition. Houghton.

18. Palmer, A. (2000) Principles of Marketing, Oxford University Press, Inc., New York.

19. Zikimund, G .W. and d ’Amico, M.(2001),The Power of Marketing,7th edition, South-

Western College Publishing.

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A SAMPLE OF QUESTIONNAIRE FOR CUSTOMERS

(HOSPITALS, CLINICS AND PHARMACIES)

KOFORIDUA POLYTECHNIC

FACULTY OF BUSINESS AND MANAGEMENT STUDIES

DEPARTMENT OF MARKETING

This study entitled “Assessing the role of relationship marketing on customer retention in the

pharmaceutical industry; A study of intravenous infusions limited” is in partial fulfillment of the

requirement for the award of higher national diploma (marketing) in Koforidua Polytechnic. The

researchers would be most grateful if you could provide candid responses to itemized questions

that follows. Any information offered would be kept confidential and used only for the above

purpose of the study.

Thank you for your cooperation.

Instruction: please tick [√ ] the answer that most suits you and comment in your own words

where appropriate.

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PROJECT WORK 2015

1. Gender: Male [ ] Female [ ]

2. Age: Below 20years [ ] 21-30years [ ] 31-40years [ ] 41-50years [ ]

51years and above [ ]

3. How long have you been a customer of intravenous infusions limited?

Below 1year [ ] 1-5years [ ] 6-10years [ ] 11 and above [ ]

4. What kind of customer relationship exists between you and the company?

Corporate customer [ ] Individual customer [ ] others [ ]

5. How often do personnel of intravenous infusions limited visit your organization?

Frequently [ ] Always [ ] Once a while [ ] Never [ ]

6. Why do personnel from intravenous infusions limited visit or contact you?

To explain new product features and uses [ ]

To find out if there are any problems associated with the use of intravenous infusions

limited products [ ]

To introduce new products [ ]

Others [ ]

7. When you express dissatisfaction, at what rate does intravenous infusions limited respond

to your complaint?

Very quickly [ ] Quickly [ ] Not quickly [ ]

8. Are you satisfied with the way intravenous infusions limited reacts to your complaints?

Yes [ ] No [ ]

9. Does your relationship with intravenous infusions limited influence your decision?

Yes [ ] No [ ]

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10. Are you satisfied with intravenous infusions Limited’s relationship with you?

Yes [ ] No [ ]

11. How would you describe the attitude of intravenous infusions limited delivery men?

Very friendly [ ] Friendly [ ] Not friendly [ ]

12. What suggestions can you make to improve your relationship with intravenous infusions

limited?

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

13. Have you ever thought of switching to any other pharmaceutical company to do business?Yes [ ] No [ ]

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A SAMPLE OF QUESTIONNAIRE FOR MANAGEMENT AND NON-

MANAGEMENT STAFFS

KOFORIDUA POLYTECHNIC

FACULTY OF BUSINESS AND MANAGEMENT STUDIES

DEPARTMENT OF MARKETING

This study entitled “Assessing the role of relationship marketing on customer retention in the

pharmaceutical industry; A study of intravenous infusions limited” is in partial fulfillment of the

requirement for the award of higher national diploma (marketing) in Koforidua Polytechnic. The

researchers would be most grateful if you could provide candid responses to itemized questions

that follow. Any information offered would be kept confidential and used only for the above

purpose of the study.

Thank you for your cooperation.

Instruction: please tick [√ ] the answer that most suits you and comment in your own words

where appropriate.

1. Gender: Male [ ] Female [ ]

2. Age: Below 20years [ ] 21-30years [ ] 31-40years [ ] 41-50years [ ]

51years and above [ ]

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PROJECT WORK 2015

3. What is your current position? …………………………………………………..

4. For how long have you been working with intravenous infusions limited?

………………………………………………………………………………………….

5. Does the company believe in building mutually beneficial long-term relationships with

customers?

Yes [ ] No [ ]

6. How long has intravenous infusion limited been practicing the building of mutually

beneficial long-term relationship with customers?

1-5years [ ] 6-10years [ ] 11-15years [ ] 16-20years [ ] 21years and above [ ]

7. What are some of the benefits or achievement the company has achieved as a result of

practicing this long-term relationship with customers?

Higher sales [ ] customer loyalty [ ] Goodwill [ ] All the above [ ]

Others , please state:……………………………………………………………………

8. What are the major challenges hindering the effective practice of establishing long-term

beneficial relationship with customers?

Managerial problems [ ] Communication problems [ ] Financial problems [ ]

All the above [ ] others, please state:………………………………………………..

9. Is the company doing something to curb this problem?

Yes [ ] No [ ]

10. What measures and mechanisms has the company put in place to ensure the building of

mutually satisfied long-term relation with key parties ?

………………………………………………………………………………………………

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………………………………………………………………………………………………

………………………………………………………………………………………………

11. How often does you personnel visit or contact customers?

Frequently [ ] Always [ ] Once a while [ ] Never [ ]

12. Why does your company visit or contact customers?

………………………………………………………………………………………………

………………………………………………………………………………………………

13. What is the level of customer satisfaction in intravenous infusions limited?

High [ ] Medium [ ] Low [ ]

14. When your customers express dissatisfaction, at what rate does your company respond to

their complaints?

Very quickly [ ] Quickly [ ] Not quickly [ ]

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