TABLE OF CONTENTS
TITLE ……………………………………………………………………………….. i
DECLARATION ……………………………………………………………….. ii
APPROVAL …………………………………………………………………….. iii
DEDICATION …………………………………………………………………. iv
ACKNOWLEDGEMENT ………………………………………………….. v
TABLE OF CONTENTS …………………………………………………. vii
LIST OF TABLES……………………………………………………………
xii
LIST OF FIGURES ………………………………………………………… xiii
ABSTRACT…………………………………………………………………… xiv
CHAPTER
ONE
INTRODUCTION
1.1 Background of the Study ………………………………………… 1
1.2Statement
of the Problem …………………………………………… 5
1.3 Objective of the Study ……………………………………………. 5
1.4 Research Questions ………………………………………………. 6
1.5 Research Hypotheses……………………………………………..
6
1.6 Significance of the Study…………………………………………
7
1.7Limitations
of the Study……………………………………………….
8
1.8Scope
of the Study …………………………………………………….. 9
1.9Contextual
Definition of Terms…………………………………….
9
CHAPTER
TWO
LITERATURE
REVIEW
2.1 The Components of CRM …………………………………….. 14
2.1.1 Key Customer Focus …………………………………… 15
2.1.2 CRM Organization ……………………………………….. 17
2.1.3 Knowledge Management …………………………….. 19
2.1.4 Technology Based CRM ……………………………… 20
2.2 The Impact
of CRM on Organizational
Performance ………………………………………………………… 22
2.2.1Impact
of Key Customer Focus on
Organizational Performance ………………………… 24
2.2.2Impact
of CRM Organization on
Organizational Performance………………………… 27
2.2.3Impact
of Knowledge Management on Organizational
Performance ……………………………………………….. 30
2.2.4Impact
of Technology Based
CRM on Organizational Performance …………… 33
2.3Measuring
CRM ………………………………………………………. 36
2.3.1 CRM
Measurement Frameworks and
Metrics ………………………………………………………… 38
2.3.2Traditional
Financial Analysis of CRM …………………… 39
2.4The
Real Options …………………………………………………….. 41
2.5CLV
and Customer Equity Measurements ……………….. 44
2.6The
Balanced Scorecard …………………………………………. 49
2.7CRM
Measurement Scale Development ………………….. 53
2.8Operational
and Strategies Benefits of CRM …………….. 55
2.8.1Top
Management …………………………………………………. 58
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1 Research Approach ……………………………………………. 61
3.2Sample
Size …………………………………………………………….. 63
3.3Questionnaire
Design and Administration ………………… 63
3.4Sources
of Data ………………………………………………………. 64
3.4.1 Primary and Secondary Data………………………… 64
3.5Data
Analytical Technique ……………………………………….. 65
CHAPTER
FOUR
DATA
PRESENTATION AND ANALYSIS
4.1 Data Presentation ……………………………………………….. 67
4.2Data
Analysis and Interpretation ………………………………. 73
4.3Test
of Hypotheses ………………………………………………… 76
CHAPTER
FIVE
SUMMARY OF FINDINGS,
CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings …………………………………………… 78
5.2 Conclusion …………………………………………………………… 81
5.3 Recommendations ……………………………………………… 82
5.4Suggestions
for Further Research …………………………… 83
BIBLIOGRAPHY
………………………………………………….. 85
APPENDICES …………………………………………………….. 95
LIST
OF TABLES
Table
1:Sample Characteristics …………………………………….. 67
Table
2:Distribution Statistics and Construct reliability…….. 69
Table
3:Discriminate Validity ………………………………………… 71
LIST
OF FIGURES
Figure
1:Structural Model for CRM ………………………………… 73
ABSTRACT
Customer relationship management (CRM) is a
comprehensive business and marketing strategy that integrates technology,
process and business activities around the customer. CRM is assumed to lead to
bottom line benefits for the organization. Advances in information and
communication technologies have provided an effective platform to deliver
electronic CRM functions. Despite widespread agreement that CRM can have a
direct and indirect satisfaction, loyalty, sales and profit, the significance
of CRM and its features in influencing customer satisfaction has not been well
researched in construction firms. The thesis examines the critical success
factor of CRM implementation by using a questionnaire survey to obtain data
from 68 building material suppliers. Using a structural model and the
evaluation technique of partial least squares the analysis revealed that CRM
technological initiatives are successful when adequate top management support
and accurate knowledge management capabilities, supported by a suitable
information technology structure, measured by technological readiness are in
place. Construction organizations who are considering the implementation of CRM
technological initiatives. The need to justify the impact of CRM on
organizational performance in the boardroom has never been more important.
Shareholders expect value for their investments; organizations have invested
large sums of money in people, processes and technology in order to imbibe the
CRM culture. The promises of CRM are enormous. Yet, various organizations cry
out for help over lost investments and damaged relationships. Is CRM promising
too much or perhaps are the executives expecting more than they can get?
Literature suggests that in order to justify the investments of CRM, there is
the need to develop a universally accepted holistic framework for the
measurement of CRM activities is the lack of a universally acceptable
definition of CRM. The concept of CRM is multi faceted involving investments in
people, processes and technology to various degrees.
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Traditionally,
`many organizations were structured around their products and service’.
Emphasis was on the delivery of a good mist of the 4Ps – product, price, place
and promotion. The focus was on exchange, once this was achieved, organizations
were sure to remain in business. Needless to say, this was the era of
transaction marketing.
In the
late 1990s however, most organizations began to realize that the 4Ps were no
longer sufficient to remain in business. Products were easily copied to desired
standards, price and easily matched, Product accessibility was no longer an
issue and mass Promotions were no longer as effective. In many cases, customers
and consumers had become more sophisticated and less responsive to the
traditional marketing pressures – particularly `advertising’. This as a result
of the availability of more choice, partly as a result of globalization of
markets and new sources of competition. Also, many markets had reached the
matured stage of their lifecycle
(Christopher, Payne and Ballantyne, 2002). The
response to these changes in the business environment was that organizations
began to transform themselves as well as adopt a more customer focused
orientation. This lead to the emergence of relationship marketing.
To some
schools, relationship marketing is used synonymous with customer relationship
marketing. This view defines relationship marketing as a management approach
that enables organizations identify, attract and increase retention of
profitable customers by managing relationships with them (Reinartz and Kumar,
2003). To other schools, customer relationship management involves the use of
information technology (IT) in the implementation of relationship marketing
strategies (Wilson et al, 2005). Customer Relationship Management is often
times referred to by its acronym – `CRM’ and will henceforth be referred to as
such in the present study.
The CRM philosophy focuses on a pan-company orientation in which the specific capabilities of an organization are focused around creating and delivering value to targeted market segments in the expectation that this would developed into a relationship such that the organization is able to determine, fulfil and even predict the needs of the customer while attaining customer loyalty so as to increase profits over time (Rigby et al 2002). Thus, successful CRM activities are expected to enable organizations gather customer data swiftly, retain existing customers, identify the most valuable customer’s overtime, increase customer loyalty, acquire new customers and grow relationships with existing customers thereby placing the organization in a better financial position for the future.
To
obtain the benefits of investing in such IT applications there is a need for
construction organizations to better understand and be aware of the bottom-line
financial returns of business automation initiatives (Love and Irani, 2004).
Moreover, having knowledge about customers and what their requirements are is
deemed to be a critical for long term business success (Nargundkar and
Srivastava, 2002). Yet only a small percentage of businesses have basic
information about their customer (McKeen and Smith, 2003; Kale, 2004). In
recognizing the need to be more customers centric many businesses have adopted
CRM applications to
gather, organize, understand, anticipate, and respond
to the constant evolution of customers’ requirements and demands (Reinatz and
Chugh, 2002). Effective CRM is assumed to lead to bottom line benefits fro the
organization. Advances in IT have provided an effective platform to deliver CRM
functions. Despite widespread agreement that CRM can have a direct and indirect
impact on customer.
Many
businesses operating the construction industry have been trying to respond to
the demands being imposed on them by utilizing IT applications such as CRM and
ERP, but immediate benefits and improvements in business performance have not
been forthcoming: the `Red Queen’ syndrome. With this in mind, the research
presented in this paper aims to provide material suppliers operating the
construction industry with underlying knowledge to overcome the `Red Queen’
syndrome often associated with enterprise applications such as CRM and
ameliorate their chances of obtaining improvements in business performance.
1.2 STATEMENT
OF PROBLEM
IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT ON THE PERFORMANCE OF THE BUILDING MATERIAL FIRMS IN THE SOUTH EAST NIGERIA
