The Effect of Customer Relationship Management on Customer Loyalty: The Case of Ethiopian Airlines
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Date
2017-06-10
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Addis Ababa University
Abstract
Because of immense competition in today’s business market, organizations are struggling to apply different marketing strategies and programs to gain more market share and acquire more customers on one hand, and to make them satisfied and loyal to their company, on the other hand. The aim of this study was to investigate the effect of customer relationship management components on customer loyalty. A questionnaire was designed consisting of thirty items to obtain the required information from the study sample. Primary data was obtained through structured questionnaire from frequent flyers of Ethiopian Airlines. Convenient sampling technique was used to sample customers. 400 questionnaires were distributed to the airline customers and 382 of the questionnaires were properly filled and used for further analysis. Usable questionnaires were analyzed using descriptive and inferential statistical tools to analyze and examine the hypothesis. The application used to analyze the collected data was the Statistical Package for Social Sciences version 20. Pearson Correlation and multiple regression analysis were used to establish the relationship between the independent and dependent constructs of the research. Findings of this study revealed that there is a significant and strong correlation between relationship marketing and customer loyalty. Moreover, the study indicated that there is significant effect of trust, communication, competence and conflict handling on predicting customers’ loyalty. Of these relationships, conflict handling emerged as the strongest factor which influences customers’ loyalty while commitment remained statistically insignificant and negligible influence on customers’ loyalty. Depending on the findings, practical implications of this study is, in order to ensure loyalty among frequent flyer members of Ethiopian Airlines; the airline should build a better relationship marketing strategy and build strong relationship bonds with its customers continuously. Furthermore, future research directions were also suggested on this study.
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Customer Relationship Management, Trust, Communication