Impact Of Customers Complaint On Marketing Performance In The Service Industry (A Case Study Of MTN Nigeria)

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Impact Of Customers Complaint On Marketing Performance In The Service Industry (A Case Study Of MTN Nigeria)


Abstract


Companies sometimes think that they are doing well, only to discover later on that customers were dissatisfied and have not returned. It is better to encourage them to complain even about the petty things, than to wait until things become really bad. Not often the complaints simply arise because the customer does not feel he has been “treated right”. It may be astonishing to note that: the reason why large percentage of customers change suppliers may have less or nothing to do with the quality of the product or service. It was because customers feel “the company did not seem to care and did not communicate with them. They feel they were being taken for granted”. The first thing the customer who complains is looking for is a sympathetic ear. Handling complaints is probably the most common form of customer care and there is a standard procedure for dealing with it. May customers see the way an organization handles the complaint as the test of commitment to the things being practiced and preached about customer care. The major objective of this work is to establish the relevance of customer complaints and how service companies have fared or failed in handling customers’ complaints. In order to achieve the above aims, MTN Nigeria was used as a case study. Research questionnaire was designed and administered. Hypotheses tested were on the significance of: The level of attention accorded customers complaints by service-oriented companies; The benefits accruable from proper customer complaint handling and good customer relations. The findings of the study revealed that there are significant differences in the operation, benefits and perception of customer complaints handling by service oriented companies in Nigeria when compared with non-service companies.


Table Of Contents


Preliminary Page(s)

  • Title Page
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Question
  • 1.5 Hypotheses
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitations of the Study
  • References

Chapter Two:

Review of Related Literature

  • 2.1 Historical Background of MTN Nigeria
  • 2.2 The Features of Service Products and Service Industry
  • 2.3 Staffing and Staff Positioning in the Service Industry –
  • 2.4 Customer Value Company’s Performance – –
  • 2.5 Determinants for Customers Care and Satisfaction –
  • 2.6 Matters Involving Service Industry and Customer Complaint in Nigeria
  • 2.7 Customer Complaint Policy of Known Firms in Nigeria
  • References

Chapter Three:

Research Methodology

  • 3.1 Design of Survey Instruments
  • 3.2 Sources of Data
  • 3.3 Sample Population/Sample Size/Sample Area
  • 3.4 Data Analysis Technique
  • 3.5 Limitation of Methodology

Chapter Four:

Data Analysis, Interpretation and Presentation

  • 4.1 Introduction
  • 4.2 Analysis of Questionnaire
  • 4.3 Other Findings
  • References

Chapter Five:

Summary of Findings, Recommendations, Conclusion and Suggestions for Further Study

  • 5.1 Summary of Findings
  • 5.2 Recommendations
  • 5.3 Conclusion
  • 5.4 Suggestion for Further Study
  • Bibliography
  • Appendix
  • Research Questionnaire

Chapter One


Introduction

1.1 Background Of The Study

The dream of any good entrepreneur is not actually to sell what he can sell but to retain customers. In pursuance of this line of action, the customer must be placed at the centre of all marketing activities without which no marketing activity takes place. Customer satisfaction is the pivot on which all marketing activities revolves, be it in production or in marketing.

Although service oriented companies do not have any tangible good to their credit, the most effective means of measuring consumers satisfaction is by listening to their complaints. These complaints are not actually made to tarnish the image of the producers, but to improve on their services. Since the consumers do not own anything from the payment he makes, the perishable services he receives must offer enough satisfaction for the sums of money so expended.

To a good producer, these complaints will actually guide him in the planning of his product, by way of determining what his customers actually want and to the qualities they can afford to acquire. Appropriate pricing may be an outcome of a customer’s compliant. The prices at which the best service is offered could really affect its demand. If best decisions are taken in that line, the producer is likely to triumph over his competitors. Marketing concepts which involve letting the people know of the product and sending the product to where it is actually needed, will create no less impact. A good mix of product, price, place and planning will give a fantastic reap-off.

Empirical evidence has shown that service firms typically lay behind manufacturing firms in their use of marketing. In comparison to manufacturing firm, service firms appear to be generally less likely to have marketing-mix activities carried out, less likely to perform analysis in the offering area, more likely to handle their advertisement internally than to go to experts, less likely to have an overall sales plan, less likely to develop sales training progammes, less likely to use marketing research firms and consultants and less likely to spend as much on marketing when expressed as a percentage of gross sales.

There are several reasons why service firms have neglected marketing. One of this reasons is that many of them are small, so do not use expansive marketing technique because of cost. In some cases they are deemed irrelevant. Some of them are business firms like Law, Architecture, Accounting and Management consulting firms, who think it is unnecessary using professionals in other fields for their functional activities.

Most observers agree that competition in industry is becoming increasingly intense. More and more companies worldwide are searching for ways to build sustainable advantage to counter this threat. As costs rises, as productivity stagnates and as service quality deteriorates, more service firms need to take interest in marketing. More market sophistication is needed as competition intensifies. More pressure is now on service firms to increase productivity. Since the service business is highly labour intensive, cost has been rising rapidly. To this end, it is not enough to make workers work harder, but more training will provide the needed skill geared towards customer’s satisfaction. The quality of service may be improved by reducing quantity and vice versa. An increase in equipment has a lot to do with improvement in services rendered. Imaga and Ewurum (1998).

In a nutshell, customer services should be of prime importance to service or companies, which could be improved upon by taking customers complaints very seriously and acting in the direction that will bring a better satisfaction to the customers. To this end, it is important for companies to develop customer services that are desired by customers and effective against competitors. The company has to decide the most important services to offer, the level at which services should be provided and the form each service. The service-mix can be coordinated by a customer-service department that handles complaints and adjustments, credit maintenance, technical service and customer information. Marketing need to know more about marketing service products.

According to Imaga and Ewurum (1998), service are activities or benefits that one part offers essentially as intangible product to the other and do not result in the ownership of anything. Service are not only intangibles, they are also inseparable, variable and perishable. Two main types of service can be identified viz:

Material Service:

This consists of the actual product or service, which you are selling. It is all about getting the product right.

Personal Service:

This is the way in which the material service is delivered. It is about the interaction between your employees and your customers.

It is probably the most visible part of the operation and often the part in which a company is adjudged “good of bad”. Personal service is the focus of this research work.

Though service industries have always behind in the use of marketing concepts, there is compelling need for a change in attitude.

In another alternative expression, services can be classified into People or Equipment based. A good example in this case is a Lawyer or an Accounting consultant; a motor mechanic or an aircraft used in conveying passenger. While the former is people based, the latter is equipment based. It would also need the client’s presence. In this case, a doctor needs the presence of the patient (client) for him to do his work. The motive for providing such services may differ. Private and government hospitals provide close to the same service but while the private hospital wants to maximize profit, the government hospital wants to maximize service to the people. In whatever way they are looked at, all are service oriented. Admittedly, customer complaints must be geared towards maximum satisfaction and should be treated as such. However, the pill given in one case may not be the same with another and the dosage in one may differ from the other.

Customer’s complaints should not be a threat; it should be viewed on a positive side as an instrument of change that will improve the condition of the firm, industry and the economy in general. If marketing is a means of knowing customers’ needs, providing them, and making sure it gets to the target customers is expected to improve marketing performance if well handled.


1.2 Statement Of The Problem

From the study, the impact of customer complaints on the marketing of services is un-quantifiable. However, the neglect of this all-important aspect of marketing has caused untold problems to service firms, the industry in particular and the economy in general. This is due to slack in the general performance in the industry.

A very satisfied customer might tell one or two people how pleased he is, but research has shown that a dissatisfied customer would obviously tell so many people about his ugly experiences.

This has paved way for serious economic issues among which are dissatisfaction of customer’s needs and expectations, which leads to customer sourcing for alternatives where practicable. This results to loss of customer, loss of revenue and reliance on government subvention where available. This result in low level of capacity utilization, rise in fixed costs and retrenchments.

The few ones that are able to survive maintain monopoly advantage to the detriment of the consumer in particular and economy in general. What follows is that government advocate for privatization of such key but inefficient service industry. Most Nigerian entrepreneurs in the service industry are very unserious. Apart from keeping low customer relationships, they are never at their seat of businesses. They are always globetrotting. One wonders what business has he/she in Germany/Tokyo etc. when his customers are here unsatisfied. With government enterprises, authorities that should receive and act swiftly on complaints are not easily accessible. Customers who have been humiliated by the desk attendants leave with great disappointments.


1.3 Objectives Of The Study

The overall objective of the study is to ascertain the impact of customer complaints on marketing performance in the service with particular emphasis on MTN Nigeria.

The specific objectives are as follows

  1. To establish how MTN as a service industry have fared in handling customer complaints,
  2. To evaluate the problem created by ineffective handling of customers’ complaints and its impact on the marketing performances of MTN.
  3. To understudy the nature of these complains and how they affect MTN.
  4. Recommendation on a lasting solution to the problems which if implemented will go a long way to solving this menace, will be propounded.

1.4 Research Question

To ascertain the avenues through which MTN customers channel their complaints: the following research questions have been raised: the sub-objectives are as follows:

  1. Is it necessary for customer to complain?
  2. How do complaints help in either improving or demoralizing
  3. The efforts to provide good and efficient services?
  4. Whom should a customer complain to?
  5. What is the method of complaints?
  6. What benefits accrue to effective customer complaint handling?
  7. How do MTN customers react to non favourable business conditions due to poor condition of services or non-response to their complaints?
  8. What services marketing strategy has kept MTN company afloat despite the Nigerian economic meltdown?
  9. How does management of MTN Nigeria ensure that customers are satisfied?

1.5 Hypotheses

Being guided by the main purpose of this research and the need for a thorough investigation into the subject matter, the researcher formulated the following hypotheses to be tested in the study. It is therefore reasonable to insulate them as follows:

  1. H1: Customer complaints have been given the required attention in MTN.
    Ho: Customer complaints have not been given the required attention in MTN.
  2. H1: Customer complaints if properly handled, could affect economic performance of MTN.
    Ho: Customers complaints if not properly handled could affect the economic performance of MTN.

1.6 Significance Of The Study

This work is designed to be of immense benefit to various classes for entrepreneurs and people in the society. It will be mostly needed by researchers in the field of marketing, especially in the area of customer relation. Producers of service will need it to know how to handle customers’ complaints and satisfy them. The government may need it to make rules that would guide industries on minimum expectations by the governed shareholders and other interested parties. Employees will find it of immense benefit, because it will be handy for effective study of customers’ complaints and attitudes expected of them. This is because management efforts will be futile if the people served are not satisfied.


1.7 Scope Of The Study

The intention of this project is to determine the influence of customer complains on the performance of services companies. To this end, various marketing strategies adopted in the service industry will be over-viewed. Various classes of complaints laid by customers and their expectation will be discussed. Methods of handling these complain to ensure satisfaction will be looked into.

However, this study has no plan to go into any quantitative approach of measuring customer satisfaction and customer value determination. Even though many service industries exist within Enugu Metropolis. MTN Nigeria has been chosen because of its leading position in the communication industry, which is service oriented in Nature.


1.8 Limitations Of The Study

Though deliberate effort is being made to have a worthwhile study with sufficient validity and reliability, this work should not be viewed as a final solution to customer complaints handling in service industry.

An exploratory research such as this is aimed at providing preliminary information/analysis that will give insight into the main things (factors or variables) to take for in the next aspect of the research which should be more detailed. Most of the constraints might result from natural phenomena while some are manmade.

There is constraint of resources for reference purpose especially responses on collection of data. However the researcher is poised to make the research most reliably valid.


Chapter Five


Summary Of Findings, Recommendations, Conclusion And Suggestions For Further Study.

An overview of the research topic and necessary related literature were provided in the previous chapters and the immediate past chapter was a forum for the presentation and analysis of generated data. Working hypotheses were tested and appropriate inferences drawn.


5.1 Summary Of Findings

From the outcome of the hypotheses tested, it was confirmed that customer complaints have not been given adequate attention in service-oriented companies. Improvement or outright revamping could be done in the service industry in particular and the Nigerian economy in general if conscious efforts are made to handle these complaints. This will mean taking the bull by the horn.

Benefits that accrue to effective customer complaints handling are enormous. These benefits outweigh the cost. Customers do not just want to complain. They wear the shoe and hence know where it pinches. Their complaints should not be regarded as a bug or demoralize any good intention, but it should rather serve as a medium to establish what they want it to. It also exposes the area of organizational inefficiency, to help management buckle up.

Private organizations are prompt in action geared towards satisfying customer, as opposed to government enterprises. Because it is the government that funds the government organization, little effort is made towards customer satisfaction. This goes to say that government will do better if statutory corporations are privatized and commercialized.

Monopoly is what is rather keeping these organizations afloat today.

If government enterprises are privatized or competitors introduced in their line of operation, these organizations will likely make a deliberate effort to keep its customers through improved services.

Other observations were made though were not tested statistically. The outcome of this is that many service consumers are ignorant of their little right and in most cases direct their grievances to the wrong person. The educated ones are naïve, many will not commit their complaints into writing for reference purpose except where litigation could be applied, or expected to be instituted.

No service organization in Nigeria has a consumer panel; a forum that brings interaction between producers and consumers of service products. This interaction could have been of immense benefit to the service industry. The benefits of marketing research have eluded the Nigerian service sectors, as they do not embark on any. The continuous complaints from consumers stem from inability of their industry to nib their problems in the pod, which is only possible by a good marketing research. Customer service policies are mere paper work as there is hardly a good way of evaluating the performance of the policy.


5.2 Recommendations

Following the finding of this research work, it is worthy to make appropriate suggestions of the solution to the problems at hand.

To this end, the following recommendations are hereby suggested.

  1. Producers of service products should attempt to maximize the satisfaction of their customers because they form the bare of their business, without which they will have no need to invest in that sector let alone expect profit from such investment. The only way this is possible is by exhausting possible means of hearing and implementing customer complaints.
  2. Customers should not be dispersed because they have got complaints to make; rather the customer and his complaints should be appreciated because that is the only way the organization can know areas that needs improvement. The performance of the industry largely depends on how it listens to customers with a view to solving them.
  3. Government organizations should do their best to improve on their present level of activity. The inefficiency, which has caused low productivity should be addressed, otherwise the government should better decide to privatize companies to compete with them. The monopoly most government companies enjoy has not allowed them to make a step further towards effective business management.
  4. If customer will be educated on service products, that will go a long way to curtailing few unnecessary complaints made by ignorant consumers. Enlightened one should write as to create records for posterity and as a reference point.
  5. The establishment of consumer panels will assist service outfits to determine what its customer needs. This is a forum where customers and service product managers dialogue. Its formation will be to the benefit of Nigeria service organization.
  6. Marketing research is inevitable if service organization must triumph. To nib customer’s problems to the pod, a good marketing research is needed and should be conducted by every company. This is the only way the performance of customer service policy can be evaluated and properly implemented.

5.3 Conclusion

The twenty first century is evolving emphasis on service products and customers satisfaction. Competition and inflation would be so stiff that only the fittest can survive. Awareness is increasing and customers seek to have value for their hard earned money. Time has passed when expenses on frivolities are high. Our national economy is not growing well and needs to be resuscitated. All sectors of the economy should play its own part, putting all hands on deck to ‘paddle the canoe’ forward.

The service sector contributes to a very large extent to the economic indices of this country; producers and consumers alike should not be at slumber. All should be alert to revive our ailing economy. This will not only be beneficial to this generation, posterity also will blame us if we do otherwise. The ball is in our court and no effort to put Nigerian economy in the part of growth is wasted. To this end, the service sector should be alive to its responsibility of satisfying consumers, by keeping their flags flying; the Nigerian economy will gain by way of our ailing economy. Aside their profit and the joy of ownership and management, the Nigerian economy will gain by way of reducing unemployment level with its attendant high multiplier social effects.

Government effort is highly solicited especially in service firms owned by them. These firms are no longer the dream of the philosophy that established them. The use of government enterprise as political compensation grounds is moving the economy steps backward. Uncontrollable corruption rate ha become “a beautiful bride” hosting serious inefficiency.

Research effort should not be converted to library material; the recommendations made therein are for implementation. We all stand to benefit from the outcome of well-made materials. We are all guilty and convicted of these offences, so we should all retrace our steps for a better solution.


5.4 Suggestion For Further Study

Because of the cynical nature of research, and in an attempt to find the solution to one problem, another evolves. Some respondents who are of the opinion that customer complaint have not been properly handled called for improvement. They neither stated the area where improvement is needed nor did they say how we get to their expectation. By this the researcher calls on another researcher to take up another work in that light and specifically captioned “Improvement on service product marketing in Nigeria: the way forward”. This should go through service products, its improvement marketing and solution to achieving the best for Nigeria. This will make for an interesting reading.


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