Effects of Relationship Marketing on Customer Loyalty (The Case of Hibret Manufacturing and Machine Building Industry
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Date
2014-05
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Addis Ababa University
Abstract
The survival of any organization depends on its customers either profit oriented or non profit oriented organization. Customers are the source of profits to be earned by a profit making organization. Due to the more and more fierce competition in today’s business, many companies are required to build long-term profitable relationship with customers and to achieve customer loyalty. Therefore, relationship marketing has become more and more important since the last decade of 20th century.
There are many different relationship marketing dimensions implemented for retaining customers’. Therefore, this study is aimed to explain the effect of relationship marketing dimensions (trust, commitment, conflict handling, and empathy) on customer loyalty, by focusing on HMMBI. A conceptual framework was used as a guideline to test the relationships between relationship marketing dimensions and customer loyalty. A quantitative and qualitative approach is chosen in this research. In order to collect primary data, a questionnaire is designed and was given to the customers of the HMMBI. In addition to questionnaire, semi-structured interview questions are prepared to get information from the organization which is analysed qualitatively. The SPSS version 20.00 for windows is used to process the primary data which is collected through questionnaire. The findings show that relationship marketing dimensions have impact on customer loyalty. All the independent variables are positively and directly related to customer loyalty particularly in HMMBI and in general in manufacturing industry. The relationship between relationship marketing and customer loyalty is significant. Therefore, manufacturing industries should make the whole system on work with customers, not in opposite of customers. And the industry must develop an RM program that will help it build and support positive relationships with its customers and particularly a CRM program which enables it gather data about each individual customer of it to treat them knowing their individual needs also they are expected to invest more on attracting new customers and retaining the existed ones with regard to relationship marketing to increase customer loyalty
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profit, profit making organization, long-term profitable relationship