Customer Relationship Management And Company Performance In The Nigerian Food And Beverages Industry

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Customer Relationship Management And Company Performance In The Nigerian Food And Beverages Industry


Abstract


This study is on customer relationship management and company performance in the Nigeria food and beverages industry. The total population for the study is 200 staff of selected food and beverages industries in portharcourt, Rivers state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made managers, supervisors, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


Chapter One


Introduction

1.1 Background of the Study

It is observable that a number of organizations are excellent at appearing or pretending to care for their customers. Some companies only pay “lip service” to their customer satisfaction. Others are remote from their customers and do not listen to them, while still some other companies believe that because they have a customer service department or a customer service manager, they automatically have become customer-driven. The employees on their part behave in such a way that suggests that they are not empowered to satisfy the customers in terms of rendering excellent customer service.

Some food and beverages firms in Nigeria could be traced under some or all of these conditions. It is, therefore, suspected that most of them have not efficiently and effectively adopted Customer Relationship Management which may have resulted in their unsatisfactory Company performance. In the Nigerian Bottling Company Plc, Nwokah and Maclayton (2006) observed that the company in introducing new products such as Fanta Chapman and Black Current, which suddenly failed in the market place was not customer centric but competitive centric resulting to the failure of

these products in the Market place at the test marketing stage of product development process. Nwokah (2008) further noted that these products as cited from their bulletin were subsequently replaced with Fanta Pineapple and Lemon. Companies are now more than ever focusing on high customer retention and maintaining good long term customer relationships. Customer relationships management (CRM) is a high customer retention strategy. It is very important to know more about customers’ needs and offer customized products and services in order to improve customer satisfaction and loyalty.

Two main strategies, collecting customers’ profiles and promoting customer participation, are used to probe customers’ needs. Customer Relationship Management (CRM) has attracted an expanded attention of practitioners and scholars. More and more companies are adopting customer-centric strategies, programs, tools, and technology for efficient and effective customer relationship management. They are realizing the need for in-depth and integrated customer knowledge in order to build close cooperative and partnering relationships with their customers. The emergence of new channels and technologies is significantly altering how companies interface with their customers, a development bringing about a greater degree of integration between marketing, sales, and customer service functions in organizations. It is observable that a number of organizations are excellent at appearing or pretending to care for their customers. Some companies only pay “lip service” to their customer satisfaction. Others are remote from their customers and do not listen to them, while still some other companies believe that because they have a customer service department or a customer service manager, they automatically have become customer-driven. The employees on their part behave in such a way that suggests that they are not empowered to satisfy the customer sin terms of rendering excellent customer service.

In Nigeria, some food and beverages companies seem to have embraced CRM and its capabilities because of the greater competition in the industry. Large sums of money may have been invested in the promise of this CRM. Despite the fanfare and large expenditures, CRM may not have fulfilled its promise. While some executives view CRM as a technological solution, they often even focus myopically on installing the latest computer system and overlook critical business issues. According to Nnabuko (2004), companies that view CRM as a technological “silver bullet” fail to develop a comprehensive strategy while neglecting to build a business case for CRM. In the food and beverages industry, the technology or some other variables may have produced little operational improvements and so the dimensions of their marketing performance over the years seem not to be significant (Nwokah, 2009). When an investment fails to meet expected return, it may probably not be because the resources failed to perform as specified but because the customer’s need may not have been defined upfront and the wrong decisions and plans chosen. Smith (2007) declared that many firms have failed to create value from CRM and dissatisfaction is growing.

Customers are the most important factors for the success of any business but less attention has been given by many organizations in this regard. This paper aims to evaluate the effects of CRM on Company performance in the context of food and beverages firms in Nigeria.


1.2 Statement of Problem

Nigeria food and beverages industry are increasing in Nigeria, yet the level of failure in their services indicate that ineffective relationship with customer seems to be pronounced. Some of the manufacturing firms, especially the food and beverage companies that are still in business and are listed in Nigeria stock exchange find it difficult pay dividend to their shareholders. Notable example include Champion Breweries which has not paid dividend

since 1988, Golden Breweries has not paid since 1997 (salandeen, 2001). Some Nigeria workers were forcefully disengaged from their services, example Ajaokuta steel industry reduced their staff from five thousand to one thousand in 2007, despite the above scenario, the companies post huge figures of their accounts receivables. It is as a result of the above problem that the researchers deemed it necessary to examine the effect of receivables management on corporate profitability of food and beverages manufacturing firms quoted on the Nigerian stock exchange.

Evidence from the literature suggests that employee‟s compensation plays a key role in any organisation because it is at the heart of the employment relationship and of critical importance to both employees and employers. Employees typically depend on wages, salaries, and so forth to provide a large share of their income and on benefits to provide income and health security. Relying on Vroom (1999) expectancy theory, several researches have confirmed positive relationship between rewards system and performance.

However, a recent study by Aberdeen Group (2008) reveals there is still much confusion on how to do it right observing a general lack of visibility into many compensation programs being created, and a lot of bad habits being brought into the process. Empirical evidence as to the perceived influence of compensation plan on the performance of food and beverage firms in a developing economy like Nigeria thus becomes imperative. This study remains germane by investigating the influence of compensation plan on the performance of selected employees in the Nigerian quoted foods and beverages industry.


1.3 Objectives of the Study

The general objectives is to examine the Customer Relationship Management and Company Performance while the specific sub-objectives are:

  1. To examine the relationship between Trust and Company Performance in the Nigerian food and Beverages Industry.
  2. To examine the extent to which Empathy influences Company Performance in the Nigerian food and Beverages Industry.
  3. To examine extent to which Communication influences Company Performance in the Nigerian food and Beverages Industry.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0There is no significant relationship between Trust and market share in Nigerian food and Beverages Industry.
    H1: There is significant relationship between Trust and market share in Nigerian food and Beverages Industry.
  2. H02: There is no significant relationship between communication and market share in Nigerian food and Beverages Industry.
    H2: There is significant relationship between communication and market share in Nigerian food and Beverages Industry.

1.5 Significance of the Study

This study will be of benefits and interest not only to Nigerian Food and Beverages in Nigeria, but it will be valuable to other service sectors in Nigeria as a whole. The study will also be a source of secondary data to other researchers who wish to conduct studies on related issues. It will again act as mainstream for generating, keeping and maintaining customers.

The research also provided the management of Nigerian Food and Beverages in Nigeria with a better understanding of the CRM concept and assisted them to improve their own service quality.

Students, Lecturers, Academia, bank Management Staff, Researchers, and the general public will avail themselves of wealth of knowledge offered by this study. The study will also serve as a useful reference material for students, academicians, institutions, corporate bodies and corporate managers who are interested in the subject of Nigerian Food and Beverages in Nigeria.


1.6 Scope and Limitation of the Study

The general scope of this study covers Customer relationship management and company performance. The geographical scope is Rivers State of Nigeria. The units of analysis covers randomly selected Nigerian Food and Beverages Industry in Rivers State. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.


1.7 Definition of Terms

Customer Relationship Management:

Customer relationship management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth.

Empathy:

The provision of caring, individualized attention to customers

Customer Retention:

Customer retention is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship.

Profitability:

This is a function of customer satisfaction with the firms produce or service offerings.


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  1. Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  2. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  3. Chapter three deals on the research design and methodology adopted in the study.
  4. Chapter four concentrate on the data collection and analysis and presentation of finding.
  5. Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain customer relationship management and company performance in the Nigerian food and beverages industry

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges customer relationship management and company performance in the Nigerian food and beverages industry


5.2 Summary

This study was on customer relationship management and company performance in the Nigerian food and beverages industry. Three objectives were raised which included:To examine the relationship between Trust and Company Performance in the Nigerian food and Beverages Industry, to examine the extent to which Empathy influences Company Performance in the Nigerian food and Beverages Industry, to examine extent to which Communication influences Company Performance in the Nigerian food and Beverages Industry. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of selected food and beverages industries in portharcourt, Rivers state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made managers, supervisors, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

The primary outcome of this study includes the process level CRM measurement tool or model. The instrument can easily be used by firms as a self-evaluation form. The results of such an application can show the performance of the organization in fulfilling the CRM processes. These items and dimensions provide an understanding of CRM and could be used to redesign or refine existing process and as a checklist to pinpoint areas of weakness which may be corrected. Different items within the different dimensions of the Customer Relationship Management in the food and beverages sector have different rating depending on the importance of that item or dimension to the different firms. In other words, the items regarded as the most important in a particular firm may not mean the same to another firm even though they are all in the same industry. This is true because inter-firm performance variations were identified and explained by heterogeneity in organizational capabilities. The distribution of significant weights differs over the different dimensions of the variables. For example, it was shown that technology based CRM has a moderate relationship with sales growth but weakly related with market share and profitability. It is possible that even when the market share and profitability arc increasing, some other factors were responsible. It is also possible that with more awareness and more efficient and effective use of technology, there could be evidence of sales growth without reasonable impact on the market share or on the profitability


5.4 Recommendation

Based on the findings of this study, the recommendations are stated as follows:

  1. The food and beverages industry in Nigeria needs to greatly improve on the practice of Customer Relationship Management, as a new marketing paradigm to outwit competitors in the battle for the acquisition and retention of the highly controversial, informed and most profitable customers. The companies should emphasize the nurturing of a sound C R M orientation if they are to benefit fully from very important increased marketing performanc e rates.
  2. The companies’ core values should be centered on the dimensions of CRM, rather than giving blanket strategic policy that would yield little or no result.
  3. Since Customer Relationship Management is a cross-functional organizational process, there is therefore need to encourage a high level of marketing integration and control across all the major marketing functions. Indeed, every staff of the food and beverages firms in Nigeria should be conversant with CRM variables. iv. Management must consistently motivate the marketing team so that it will analyze customers’ needs, seek to satisfy them and try to adapt the products to these needs and react to competitors’ actions and responses. Management should also share information about customers and competitors in collaboration with workers.
  4. It is of importance not only to implement a sophisticated C R M technology for the acquisition storage dissemination and use of customer information but to ensure that the technology is appropriately used. This is consistent with Jayachandran ct al. (200-1) and Reinartz et al (200-4) Therefore firms should not only possess unique valuable C RM resources but also learn how to deploy those resources to build strong C RM capabilities, which will then contribute to superior marketing performance.

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