Impact Of After Sales Service On Customer Retention Of Lafarge Cement

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Impact Of After Sales Service On Customer Retention Of Lafarge Cement


Abstract


There is a general concern for safety in most African cities, including Nigeria. This concern has continuously given rise to the emergence of an enclosed neighbourhood in the prevention and the control of crime, violence and incivility. This study examined users’ perception of gated estates in Largelu Local Government Area, Ibadan South East Local Government Area Ibadan. The study adopted survey research design. Simple random sampling techniques was used in selecting the respondents of the study. The data for the study were collected using questionnaire. The data collected were analysed using descriptive statistics of frequency, percentage, mean and correlation.

The result from the analysis revealed that housing pattern is one of the characteristics that differentiate properties in gated estate from non-gated properties in Largelu Local Government Area. Also, the facilities infrastructure like electricity, good drainage system, water system and management system were other characteristics that differentiate gated estate from non-gated estates. The public perceived that gated estates are not affordable, not available. Also perceived that gated estate have bad security condition. However, majority of the public have indifferent perception about the affordability, availability, choice of construction design, security, location, social status and return on investment of gated estate. Furthermore, the study revealed that security, privacy, luxurious lifestyle, location, prestige and segregation, facilities and amenities, availability of infrastructure and social homogeneity are the factors influencing users’ perception of gated estates in the study area. Furthermore, It was revealed that, After sales services has significant impact on customer retention. After sales services has significant impact on service quality. There are components of after sales services on organizational performance. There are challenges encountered in the implementation of after sales services in Lafarge Cement. Based on this findings, the study recommends among others that since housing pattern are some of the basic futures that differentiate gated estate from non-gated estate, gated estate should have a unified housing pattern as this will assist in distinguishing gated estate from non-gated.


Chapter One


Introduction

1.1. Background to the Study

In contemporary age, organizations are faced with huge pressures to persistently improve the quality of their products/services while at the same time reducing costs to meet ever-increasing legal and environmental requirements and shorten product life cycles to meet changing customer needs and remain competitive. The aim of every organization is to earn profit through customer retention and satisfaction. Creating a good relationship is to generate value for both ends: seller and buyer (Cannon & Perreault, 2019; Palmatier, Dant, Grewal, & Evans, 2016). After-sales service is considered as a tool for enhancing a valuable advantage for the customer as well as it is a business opportunity for the company (Saccani, Johansson, & Perona, 2017). It was generally acknowledged as a potential source of revenue, profit and competitive advantage in most manufacturing industries and suppliers (Bundschuh & Dezvane, 2015; Palmatier et al., 2016).

After-sales service is activities organized by business organizations after the products have been delivered and is a part of customer relationship management. It is noteworthy to point out that after-sales plays a key role in supporting marketing activities to enhance customer retention and loyalty, and thus to increase profitability in the long term (Saccani, et. al, 2017). According to Alexander et al., (2013) and Wise and Baumgartner (2016) profit margins can be generated higher by delivering the after sale service compared to product sale without it. It may generate at least three times turnover of the original purchase during a given product lifecycle. After sale services represent one of the few constant connections those customers have with a brand (Gallagher, Mitchke, & Rogers, 2015). Gaiardelli, Saccani, and Songini (2016) point to after-sales as a way to recover profits lost as a result of the fierce competition on sales prices of original equipment. Thus, after-sales service is a potential source of competitive advantage for an organization (Goffin, 2018).

However, a lot of organizations are not aware about the after-sales service factors and its effect on customer retention. Failing to realize the importance of the factors can lead to a disastrous and threatening business relationship. Dissatisfied customers will turn to competitors who can offer better after-sales services (Murthy, 2017). According to Murthy (2017) customer dissatisfaction can occur as a result of poor performance of the purchased item and/or the quality of after sales service provided by a company. In either case, it leads in an adverse effect on the overall performance of an organization. Thus, a dissatisfied customer will likely switch to a competitor or the company would likely lose potential new customers as a result of negative word-of-mouth effect. This implies that good after sales service support is very important to achieve customer retention and loyalty by organizations, suppliers, manufacturers, dealers and so on in order to maximize profit.

In Nigeria, it is very prevalent to hear and read words like “sold goods cannot be returned” from various shops and supermarkets to big companies. This showed that the relationship between buyers and sellers cease after the delivery of goods or services. As Kotler (2002) stated, selling process should go beyond the delivery of goods and services and there should be “follow-up” step that a company should apply to ensure customer are satisfied and thus encourage a repeat purchase. After sale service is more than giving the customer what they expect; it is about surpassing their expectations so that they become loyal advocates for the brand.

Fleming and Asplundh (2012) revealed that, engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers’ returns a revenue gain of 3.4 times the norm. Customer retention refers to keeping a client’s business rather than have the client use competitors’ services or products. A lot of businesses want to reduce customer defections to their competitors, as a reduction in their market share and profits could lead in the collapse of the company, (Johnson, 2015). Customer service retention is a popular marketing strategy as it involves focusing on meeting or exceeding clients’ expectations in order to maintain their loyalty. When people feel loyal to a certain brand or business, they are less likely to be persuaded by a competitor’s adverts and offers, (ibid).

Therefore, it is very important to carry out a study on the impact of after sales service on customer retention in Lafarge Cement, Lagos State.


1.2. Statement of Problems

A lot of scholars Gadiesh and Gilbert, (2014), Oliva and Kallenberg (2016) have stressed the importance of integrating after sale services into the core offerings in manufacturing industries. Although, after-sales strategy is sometimes a time and cost consuming strategy, however, it is a way of staying competitive and a prospect to expand business (Lele, 2017). Ehinlanwo and Zairi (2016) indicated that organizations are dedicating more and more resources to after-sales and large number of organizations have after-sales department with employees focusing only on providing after-sales services and developing after-sales offers. A lot of organizations have realized that providing better after sales service leads to an enhanced and improved financial gains (Kearns & Nadler, 2012). It is as well a social responsibility to deliver what is promised by the service provider.

Goffin and New (2014) discovered that after-sales services maximize the value extracted by customers over the entire product life cycle. Kurata and Nam (2010) and Ahn and Sohn (2015) agreed that after-sales services can create sustainable relationships with customers and contribute greatly to customer satisfaction by offering different after-sales services during the various stages of the primary product lifecycle, the provider can ensure product functionality and thereby customer satisfaction. This may lead to a fruitful relationship between the provider and the customer over time, allowing for more transactions.

Though, the manufacturing industry in Nigeria has been studied before, not all of its areas were examined. Besides, limited studies were made to after-sales service of manufacturing companies in Nigeria. Based on the researcher’s knowledge, presently there is no study made on the impact of after sales service on customer retention in Lafarge Cement. Thus, this is a gap this study seeks to address. Therefore, it is on this note that this study seeks to examine the impact of after sales service dimensions on customer retention with special emphasis to Lafarge Cement, Lagos State.


1.3. Objectives of the Study

The main objective of the study is to the impact of after sales service on customer retention of Lafarge Cement, Lagos State, Nigeria.

However, the specific objectives are;

  1. To examine the impact of after sales service on customer retention
  2. To find out the impact of after sales services on service quality
  3. To investigate the components of after sales services on organizational performance
  4. To identify the challenges in the implementation of after sales services in Lafarge Cement

1.4. Research Questions

The following research questions will be poised for the study

  1. What is the impact of after sales services on customer retention?
  2. What is the impact of after sales services on service quality?
  3. What are the components of after sales services on organizational performance?
  4. What are the challenges encountered in the implementation of after sales services in Lafarge Cement?

1.5. Research Hypotheses

The following research hypotheses is formulated in their null form

  • Ho1: After sales services has no significant impact on customer retention
  • Ho2: After sales services has no significant impact on service quality
  • Ho3: There are no components of after sales services on organizational performance.
  • Ho4: There are no challenges encountered in the implementation of after sales services in Lafarge Cement

1.6. Significance of the Study

It is hoped that, the findings from this study help educate the managements of companies on the impacts of practicing after sales services as it ensures the satisfaction of customers, enhance their loyalty and ultimately improve the overall performance of an organization.

Furthermore, it is believed that, the findings of this study will be contribute to the body of academic literature in the area of the impact of after sales services on customer retention.

Similarly, this study as well provide information to organizations management on how critical after sales services can be in terms of ensuring customer retention and satisfaction, and as well as making vital organizational decisions.

Finally, this study will be of importance to undergraduates and future researchers who want to carry out future research in relation to after sales services on customer retention.


1.7. Scope of the Study

The study is limited to the impact of after sales services on customer retention in Lafarge Cement Plc, Lagos State. The study is carried out in Lafarge Cement Plc, Lagos State. The unit of analysis of the study is the employees of Lafarge Cement Plc, Lagos State at Junior, Middle level, Senior and Management level positions. In addition, the population of the study comprised 3,630 employees of Lafarge Cement Plc, Lagos State. The study is carried out using a primary source of data, and data is gathered using a self-structured questionnaire for the purpose of eliciting information from the respondents.


1.8. Methodology

The methodology of this study is quantitative in nature, which involves the use of questionnaire to gather data from the respondents, which is a primary source of data collection. The secondary sources are sourced through journals, reports, articles, newspapers, treaties, and textbooks which are obtained from online sources.


1.9. Operational Definition of Terms

After Sales Services:

Refers to activities that takes place after the purchase of a product and devoted to supporting customers in the usage and disposal of the goods to make them loyal.

Customer Retention:

Is the activity that a selling organization undertakes so as to reduce customer defections. It also refers to keeping a client’s business rather than have the client use competitors’ services or products.

Customer Satisfaction:

Is a business term which implies to evaluate as how much a product or service supplied by company has been able to satisfy or please the customer

Service Quality:

Is an attitude formed by a long-term overall evaluation of the performance of an organization

Loyalty:

Is the incessant belief of a customer to the products or services offered by the company

Quality:

Is defined as the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs


1.10. Organization of Chapters

This study is organized into five main chapters.

  • Chapter one entails the background, statement of problems, research objectives, research questions and hypotheses, and significance and scope of the study.
  • Chapter two consists of the literature review that reveals the findings and research that already exists on the topic.
  • Chapter three summarizes the research methodology used to organize and carry out this study.
  • Chapter four entails the analysis and interpretation of findings.
  • Chapter five provides the summary of the study, conclusion and recommendations.

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