THE PRACTICE OF CUSTOMER RELATIONSHIP MANAGEMENT AND

ITS BENEFIT ON CUSTOMER LOYALITY (IN CASE OF AWASH; BANK

IN NEKEMTE TOWN)

Assessment of customer r/ship management at practice incase of awash bank

nekemte branch

A SENIOR ESSAY SUBMITTED TO DEPARTMENT OF MARKETING

MANAGEMENT FOR THEREQUIREMENTOF PARTIAL
FULMENTMEMNT ON BACHELOR OF ART (BA) DEGREE IN
MARKETING MANAGEMENT
 WALLOGE UNIVERSITY
COLLEGE OF COMMERCE AND BUSINESS ADMINISTRATION
DEPARTMENT OF MARKETING MANAGEMENT

BY; GROUP NAME ID/NO

1,
2,
3,
4,
5,
6,
7,

ADVISOR: WAKTOLE,(MBA)
FEB 2013/ 2021

NEKEMTE ,
ETHIOPIA
Acknowledgement
First and foremost I would like to give our glory and praise worthy to the almighty GOD for his
great cares and support throughout my life.

Next I am grateful to appreciate my advisor WAKTOLE (MBA) for his patience, motivation
and support to conduct this research proposal. Especially prompt advice, guidance through the
course in preparing this paper.

I sincerely to thanks Awash bank manager, employees and customers of the bank for their
valuable help.

Lastly I would like to thank and respect my families for their assistance to my academic and my
life successfulness with prayer, money support and encouragement.

I
 Abstract
This paper or study is conduct on the practice of customer relationship management and its
benefit on customer loyalty in case of Awash, bank NEKEMTE branch. This study provides
relevant data about the practice of customer relationship management and its benefit on
customer loyalty institution. The major of this study is to assess the practice of customer
relationship management and its benefit on customer loyalty and to identify the importance
of customer relationship management in Awash bank NEKEMTE, branch. The study will
conduct based on both primary and secondary data; more emphasis using primary data. The
primary data is collect by questioners; the secondary data collect from published documents,
website and annual report of company. The sampling techniques to be use simple random
sampling, techniques while the researcher will use different method of data interpretation
table and percentage, finally to conclude the study customers are satisfies with the bank
service and the researcher study will recommend the bank to retain its satisfied customers
the bank management must be use modern technologies to satisfies its customer and attract
new customers and also by train workers of the bank to improve their skills and knowledge
to handle the clients and to increase customer satisfaction.
Key terms: - Customer Relationship Management, Customer Loyalty

Contents page

II
Acknowledgement..................................................................................................................................I
Abstract..................................................................................................................................................II
CHAPTER ONE...................................................................................................................................1
INTRODUCTION................................................................................................................................1
1.1 Background of the Study.............................................................................................................1
1.2 Statement of the Problem............................................................................................................2
1.3 Research Objective......................................................................................................................2
1.3.1 General Objective.....................................................................................................................2
1.3.2 Specific Objective......................................................................................................................2
1.4 Research Question.................................................................................................................2
1.5Significance of the Study..............................................................................................................2
1.6 Scope of the Study.......................................................................................................................3
1.7 Organization of the Paper...........................................................................................................3
1.8. Definition of key terms...............................................................................................................3
CHAPTERTWO...................................................................................................................................4
LITERATURE REVIEW.....................................................................................................................4
2.1 definition of customer relationship management........................................................................4
2.2 Building customer value and satisfaction....................................................................................6
2.3 customer focus on relationship....................................................................................................7
2.4 Consumer expectation.................................................................................................................7
2.5 Factors affecting customer satisfaction.......................................................................................7
2.6 characteristics of service.............................................................................................................7
2.7 Customer handling procedure....................................................................................................7
2.8 Characteristics of excellent customer relationship management...............................................8
2.9 Barriers in Customer relationship management........................................................................8
2.10 People and customer relationship management........................................................................8
2.11 Benefit of customer relationship management..........................................................................8
2.12 Customer benefit and loyalty....................................................................................................8
2.13 Customer Relationship Management Practice..........................................................................9
2.14 Customer Relationship Management process.........................................................................10
2.15. Conceptual frameworks.........................................................................................................11
CHAPTERTHREE.............................................................................................................................13

III
RESEARCH METHDOLOGY..........................................................................................................13
3.1 INTRODUCTION.........................................................................................................................13
3.2. Description of the study area....................................................................................................13
3.3. Research Design and Strategies..............................................................................................13
3.4. Source of Data and Data Collection Techniques......................................................................13
3.5. Population of the Study and Sample Size.................................................................................13
3.6. Sampling Technique.................................................................................................................14
3.7. Data Analysis Techniques........................................................................................................14

Reference...................................................................................................................................................17

IV
 CHAPTER ONE

INTRODUCTION
1.1 Background of the Study
Customer relationship management is the process of building and retain profitable customer with
long term relation by delivering superior customer value and satisfaction.it is about managing
customer in order to maximize customer loyalty. It deals with all aspect of acquiring, keeping
and growing customers. In broad sense customer relationship management is widely implement
strategy for managing company interaction with its customer and it require a long term plan. The
key to building customer relationship is to create superior customer value and satisfaction.
Satisfied customers are more likely to be loyal customers ( Kottler & Armstrong, 2006).

The relationship is established based on mutual benefit customer relationship management is

always associate with loyalty and customer satisfaction customer satisfaction occurs because
their needs are meet, customer loyalty occurs because their expectation are meet. If an
organization truly meets and exceeds customer expectation, the customers will be to the
organization. Good customer relationship management creates customer delight. In turn, delight
customers remain loyal and favorably to others about the company and its products. Highly
satisfied customers are always assets of the organization. They have less price sensitiveness and
generally talk constructively about the company to outsiders. They will be also showed their
trustworthiness for a longer period (Kottler& Armstrong, 2006).

In order to develop customer loyalty or better customer relation there should be

• Set relationship management strategy.

• Non transaction orientation long term orientation.

• Willingness from both organization customer to stay committed to the relation

Which is based on mutual benefit and The Company should provide good quality service to
customer with reasonable prices (Ellen Gifford, 2008).in this study; the researcher will be
assessing Awash, bank interaction with its customers and implementation of customer
relationship management. The researcher will be tire to investigate the practice of customer
relationship management and its benefit on its customer loyalty in case of Awash; bank in
NEKEMTE town.

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1.2 Statement of the Problem
In fact maintaining an effective customer relationship management is a big and concentrating
issue in any organization. There is no study undertake on the area of the practice of customer
relationship management on customer loyalty in Awash bank in NEKEMTE town. This is the
reason that initiates the researcher to conduct the research on the topic the practice of customer
relationship management and its benefit on customer loyalty. Any organization whether it is
providing or manufacturing companies the key for their existence of success is their ability to
satisfy their customers. The advantage of customer loyalty has gradually recognized throughout
the developed countries. But in many companies of under developed countries the customer
loyalty is still a critical action for the operation in providing the extend service delivery (Sharp,
2008).

However some problems may be occurs, this problems may disappoint customers and can be
used as prerequisite to loss of customers to same extent delay during service delivery, moment of
truth, absence of integration by internet technology with other banks for same service providing
and also absence of ATM service in related to the problems of the bank specifically the Awash
bank in NEKEMTE town.

1.3 Research Objective

1.3.1 GENERAL OBJECTIVE

The general objective of the study is to assess the practice of Customer Relationship
Management and its benefit on customer loyalty in case of Awash, bank in NEKEMTE town.

1.3.2 S PECIFIC OBJECTIVE

• To identify the strength and weakness of the company in practicing customer relationship
management.

• To identify the performance of the bank in handling customers complain.

• To identify methods of measuring level of customer satisfaction used in Awash; bank

NEKEMTE town.

1.4 Research Question

1. What is the strength and weaknesses of the bank in practicing customer relationship
management?

2. What measure are taken by the bank to handle the customers complain?

3. Are the methods that are used by the bank to measure the satisfaction level of customer?

1.5Significance of the Study

The study will attempt to provide the following significance for Awash bank and other related
business sector: The first significance is to identify the main customer oriented areas that will be

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address to improve organization performance, to identify the strength and weakness of the
company, It will be help to create awareness about customer relationship management for
employees, Significance to other researcher and the study will be significance for the researcher
to get experience.

1.6 Scope of the Study

Awash bank of Ethiopia has different branch office in the country like NEKEMTE branch and
other branches. But this study will delimit to in Awash; bank. Therefore, this is limited to Awash
bank in NEKEMTE, branch on the researcher title of the practice of customer relationship
management and its benefit on customer loyalty. The study manners of the research will
descriptive method. This study will complete within eight month. It starts from December 2019,
and it will complete in June 2020.

1.7 Organization of the Paper

The general structure of the study will be consist three chapters. The first chapter will
introduction of the study, background of the organization and, statement of problem,
objective of the study, Research question, significance, and scope the study, organization of
the paper. The second chapter contains review of related literature. The third chapter consists
of the methodology of the study

1.8. Definition of key terms

 Customer relationship management: Managing detailed information about
individual customers and carefully managing customer touch points in order to
maximize customer loyalty.
 Customer Loyalty: it is the behavioral and attitude of customer that is customer
repeat buying behavior, customer referrals to friends, customers’ emotional
commitment to the relationship, high customer satisfaction.

Page 3
 CHAPTERTWO

LITERATURE REVIEW
2.1 definition of customer relationship management
Different authors define customer relationship management in different time in different way.
Customer relationship management is perhaps the most important concept of modern marketing.
Until recently, customer relationship management has defined narrowly as a customer data
management activity. By this definition, it involves managing detailed information about
individual customers and carefully managing customer touch points in order to maximize
customer loyalty. More recently, however customer relationship management takes on a boarder
meaning. In this broader sense, customer relationship management is the overall process of
building and maintaining profitable customer relationships by delivering superior customer value
and satisfaction. It deals with all aspects of acquiring, keeping and growing customers (Kotler
and Armstrong, 2006).

Various models and frameworks have proposed to show how CRM can be effectively
implemented and managed, and to illustrate the process. Many of these stress the need for sound
vision and strategy, followed by proper assessment and setting of business objectives and
processes required, before any consideration of technology They indicated that companies can
minimize their risk of failure by first having a clear vision for their CRM target application,
infrastructure, or transformation and then by understanding and addressing the issues typically
associated with it.

Successful CRM depends on how four key components: strategy, people, technology and
processes are dealt with observed that when all the four key areas are well addressed. a higher
customer -relationship competence may emerge and that superior customer relationship
capability was achieved when the four work in harmony or as a unit. In other words success in
one of the key factors may not necessarily enhance effective and efficient CRM.

CRM implementations usually involve four specific ongoing strategic activities: focusing on key
customers, organizing around, managing knowledge, and incorporating CRM based technology.
In the same vein, hypothesized that CRM is a multidimensional construct consisting of
four broad behavioral components: key customer focus, CRM organization, knowledge
management, and technology-based CRM (Zeblah, 2004).

They opined that for a business to maximize its long-term performance in such aspects as
customer satisfaction, trust, return on sales, and return on investment, it must build, maintain,
and enhance long-term and mutually beneficial relationships with its target buyers. All business
is based on relationships. The firm only has to make them visible and meaningful for its
customers provided that the customer wants.

Page 4
CRM is an attempt to modify customer behavior over time and strengthen the bond between the
customer and the company, with the purpose of maximizing the value of the relationship to the
customer for the customer’s benefits and the company’s benefits. CRM could enhance a
company’s ability to achieve the ultimate goal of retaining customers and so gain strategic
advantage over its competitors. CRM allows organizations to distinguish between customers that
are profitable, nearly profitable, and unprofitable and have the potential to be profitable (Bull,
2003).

The customer awareness of organization customer relationships could raise their loyalty toward
the corporation which would in turn increase company income, enhance market share and
achieve other corporate objectives (Bull, 2003).

Customer relationship management is a corporate wide approach to understanding customer

behavior, influencing it through continuous relevant communication and developing long term
relationship to enhance customer loyalty, acquisition, retention and profitability (Sharp, 2006).

Many CRM-oriented activities, such as knowledge management, cannot be optimized without

leveraging the latest technology. CRM technology as one of the organizational resources that
serves as an input into the CRM process and is intended to enhance firms’ ability to productively
build and maintain a profit maximizing portfolio of customer relationships. Although the specific
CRM tools individual firms choose to deploy are likely to vary significantly. CRM technology
can be categorized according to the organizational function it is intended to support and by its
functionality.

More specifically, CRM tools are designed to support sales (e.g. opportunity management),
marketing (e.g. Campaign management), and service and support tasks (e.g. case management),
and serve to either enable the coordination of tasks within a process or across functions,
automate routine tasks, provide detailed insight regarding organizational and individual
employee performance, or standardize common tasks and processes (Zeblah,2005).

No wonder, it is said that most CRM applications take great advantage of technology
innovations, with their ability to collect and analyze data on customer patterns, develop
prediction models, respond with timely and effective customized communications, and
efficiently deliver personalized value offerings to individual customers. They noted that the
expansion of sophisticated information management tools. such as database marketing, data
warehousing, data mining, and push technology keep firms in a continuous search for the
latest technology that could be built-in into their CRM systems. With the right CRM technology,
firms are able to collect, analyze, and distribute information firm-wide.

The appropriate CRM technology for data collection and distribution, firms is in the position to
enhance Prospecting, improve communication and sales presentations, and able to customize
their product configurations. Another advantage of CRM technology is that it aids cross

Page 5
referencing of customers of the various sections of a firm to identify trends of customer
buying behavior and this is a potential source of more sales opportunities.

They identified enhanced customer satisfaction, higher customer retention, and more
profitable long-term customer relationships as the main expected outcomes of CRM-based
technology.

In summary, successful CRM Implementations depends on combining the four aforementioned

dimensions; focusing on key customers, organizing around CRM, managing knowledge, and
incorporating CRM based technology into an effective overall CRM strategy. They opined
that deficiencies in any of these areas can render the firm‘s CRM endeavors in effective (Zablah,
2005).

2.2 Building customer value and satisfaction

Customer perceived value is the difference between the prospective customer’s evaluation of all
the benefits and all costs of an offering and the perceived alternative in order to loyal customer.
Total customer value is perceived monetary value of the bundle of economic, functional and
psychological benefit customers expect from a company.

Total customer cost is the bundle of costs customers expects to incur in evaluating, obtaining,
using and disposing of the given market offering. Include monetary, time energy and etc. (Philip
Kotler, 2002).

Customer satisfaction:

Generally, satisfaction is a person’s feelings of pleasure or disappointment resulting from

comparing a product perceived performance in relation to his or her expectations. If the
performance fall short expectations, the customer is dissatisfied. If the performance matches the
expectation, the customer is satisfied. If the performance exceeds expectation, the customer is
highly satisfied (Kotler and Keller, 2006).

Satisfaction is one of the several antecedents of loyalty. Customer satisfaction is the ability to
bridge the gap between customer expectations and product/service delivery (Safety, 2011). It is
achieved when the customer expectations about the performance of service or product being
consumed are meeting or exceed. The strong focus on customer satisfaction is based on the
implicit assumption that there is strong positive relationship between customer satisfaction and
loyalty.

Failure to meet customer needs and expectations is considered as a major Cause of customers
exit from organizations because it is assumed to result in dissatisfaction. Therefore organizations
must be customer focus/driven to gain intrinsic knowledge of the customers’ needs and
expectations (Kottler and Killer 2006).

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2.3 customer focus on relationship
Ellen Gifford is mentioning the three steps to build customer relationship. The first step is
determining mutually satisfying goals between organization and its customer. The second steps
are established and maintain rapport and produce positive feelings in the organization and
customer (Ellen Gifford, 2002).

2.4 Consumer expectation

According to (Kottler, 2006) consumer service expectation rises from many sources. Such as
past experiences word of mouth and advertising. In general customer compares the perceived
service with the expected service. If the perceived service falls

Below the expect service. Consumers are disappointed (dissatisfied) if the perceived service
meet or exceed their expectation they are appropriate to use the provided again. Successful
companies add benefit to their offering that not only satisfy customers but surprise and delight
them. Delighting customer is matter of exceeding expectation (Kottler, 2006).

2.5 Factors affecting customer satisfaction

Customer satisfaction is the ultimate and the final opinion of customers about the vendor and its
product. The following factors affecting customer satisfaction: customer service, complaint
handling, vendor behavior and vendor’s product and service performance, delay service giving
system and so on (Kottler, 2002).

2.6 characteristics of service

Service have four distinctive characteristics that greatly affect the design of marketing program
this are intangibility, inseparability, variability, perishability.

Intangibility: Service is intangible means cannot be seen, tested, heard or smell before they are
purchased.

Inseparability: Service are typically produced and consumed simultaneously. This not true of
physical good which are manufactured put in to inventory distribute through reseller and
consumed later.

Variability: Because service depends on who provides and when and where they are highly
variable. Service providers give service the same products to different customers.

Perishability: Perishability service cannot be stored; perishability is not a problem when

demand is steady, when demand fluctuates service firm has a problem (Kottler and Keller, 2006).

2.7 Customer handling procedure

Customers must feel an immediate sense that the company truth cares. (Kottler, 2006) states the
following procedures that can help us to recover customer good will.

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 • Set up 7-days, 24 hour toll-free “hot line” (by phone, fax, or e-mail) to receive an act on
customer complaints.

• Contact the complying as quickly as possible. The lower the company is to respond the
more dissatisfaction may grow and lead negative word of mouth.

• Accept responsibility for the customer disappointment does not blame the customer.

2.8 Characteristics of excellent customer relationship management

The according to (Ellen Gifford) the following characteristics are associated with delivering of
excellent customer relationship management reliability, responsiveness, accessibility, safety,
courtesy communication, recognizing the customer and competences are some of the
characteristic of excellent customer relationship management (Ellen Gifford, 2002).

2.9 Barriers in Customer relationship management

The marketers need to overcome some barriers so as to be successful implementer of CRM such
as information barriers, poor marketing practice, inadequate , un integrated information system,
inability to access and understand customer needs and also lack of marketing tools to manage
customer relationship ( (Antony Lawrence, 2010)

2.10 People and customer relationship management

As with any other business processes of your people have huge impact on success of the
customer relationship management process. Successful and effective customer relationship
management people tend to display the following key characteristics; positive attitude, people
orientation organizational skill, analytical skill, customer focus and understand of the link
between customer relationship management and profitability (Kottler,2006).

2.11 Benefit of customer relationship management

There are significant business benefits which accrue from an effective, integrated customer
relationship management approach. This include reduce costs because the right things are being
done, increase customer satisfaction because they are getting exactly what they want insure that
the focus of the organization is external, growth in number of customer, maximization of
opportunity and long term profitability (Ellen Gifford 2002) .

2.12 Customer benefit and loyalty

Business leaders are making concerted efforts at driving customer loyalty through various loyalty
schemes; customer relationship management is also regarded potent weapon to drive loyalty. The
concept of loyalty has been interpreted in several ways such as customer repeat buying behavior,
customer referrals to friends, customers’ emotional commitment to the relationship, high
customer satisfaction, and customer trust based on high value and customer spending more
overtime (sharp 2002).

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2.13 Customer Relationship Management Practice

The identity of CRM has become intangible (you can feel it but you can‘t see it). The
problem is worsening off by the volume of quite distinct definitions and perspectives of
CRM in the books of marketing management. The definitions of CRM range from very
narrow Interpretations to very broad ones with no two being the same. They observed that the
lack of consensus on the meaning of CRM not only impedes academic discourse on the subject,
but also adds to business practitioner skepticism and indecisiveness in establishing CRM
systems. Consequently, generally accepted CRM process and practices are yet to be established
(Kottler 2002).

However, many scholars have made great efforts to describe the CRM practices of firms and had
interesting findings found that customers select services base on CRM practices of the service
provider. They identified amenities, comfort, timely services, supportive staff and trust as the
most valuable CRM practices in the transport business .They observed that technology-based
CRM is prominent in service firms.

Observe that quality of service is one practice of CRM that customers give much attention.
Identified service delivery, reliability , assurance and responsiveness as factors that
influence customer’s perception of service quality. They found that customers give high
ranks to value preposition and low ranks to personalization from a list of seven variables
related to customer satisfaction (value preposition, recognition, customer orientation,
reliability, relationship oriented, credibility, personalization and gestures) (Kottler 2006).

(Bennett, 1996) identified openness, genuine concern for delivery of high quality services,
responsiveness to customer suggestions, fair dealings and willingness to sacrifice short-term
advantage for long-term gains as the characteristics of CRM strategy and practices.

CRM as systematic process which encompasses managing customer relationship initiatives

(maintenance, and termination across all customer contact points) in order to maximize the
value of the relationship portfolio.

Retaining customers and achieving profitability largely depends on practices such as building
reciprocal relationships founded on safeguarding and affirming customer security, fairness and
self-esteem. It is also observed that maintaining lifelong relationships has its roots in values and
practices such as mutual exchange, fulfillment of promises, ethical business practices, effective
communication and emotional bonding.

Successful implementation of CRM programs require a strategic approach in carrying out

activities such as developing customer centric process, selecting and implementing
technology solutions, employee empowerment, customer information and knowledge

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generation capabilities to differentiate them, and the ability to learn from the best practices
(Bennett 2000).

2.14 Customer Relationship Management process

Since the CRM process requires a vast amount of customer information, privacy issues
remain an important and sensitive issue with firms and customers alike. In order to
customize products and services for individual customers, personal information is collected and
stored in CRM databases. There is a fine line, however, between collecting and capitalizing
on information and stepping over customer privacy boundaries. According to Forrester
Research, individuals have reported feelings of irritation and violation and some have
admitted that they are fearful about internet usage tracking (Philip Kottler 2002).

When firms violate customer privacy by sending unwanted e-mails and mailings or by
sharing private information, customers can backlash and boycott the firms. Some privacy
issues can be resolved by an “opt-in” option in which the customer must explicitly give consent
to personal data collection or by an “opt-out” option in which customers must forbid the
use of data.

As more firms adopt and develop CRM processes, privacy issues should be addressed in order to
ensure that consumers feel comfortable and confident with the firms and with the data those
firms are collecting and using although there are many advocates for the adoption of customer
relationship management, many skeptics criticize the practice for a number of reasons. The
initial criticism attacks the fact that no top marketers, or executives of the same firm for
that matter, can agree on a single definition of CRM; this lack of consistency makes it
difficult for an organization to create a united front regarding CRM objectives and programs.
This lack of definition may not be critical, however, if the firms are able to successfully
implement their own individual working systems. Other critics believe that CRM is failing to
meet customer needs; CRM practitioners are too focused on managing the customer and
not enough on satisfying the customer. Finally, marketing executives often view
technology as the most important part of CRM, but many see technology as the only
requirement for CRM implementation. Technology does not build relationships, and critics
argue that the process of CRM puts too much emphasis on databases and not enough on
personal interactions (Philip Kottler 2006).

The concept of process approach of CRM maintains that relationships evolve over distinct
phases, which require different levels of interactions and actions between customers and
organizations. The process perspective is noted as the only perspective of CRM that
acknowledge the lifecycle aspect of the relationship, and has been examined at two levels –
one is managing interactions with the customer, the other at a broader macro level
incorporating a wider range of activities. One of the notable contributions in this respect is
the CRM process framework model. they designed a four-stage process frame work for the

Page
10
formation, maintenance and promotion of effective and efficient CRM. The four processes of the
model are designated as: Customer relationship formation process, relationship management
and governance process, relationship performance and evaluation process, CRM and
evaluation enhancement process. The model portrays the above processes as sequential and less
interactive. However it must be noted that the processes of the model should be interactive and
circular in design rather than sequential. The five important cross functional processes of CRM
and they include strategy development, value creation, multichannel integration, information
management, and performance assessment.

It is often not clear to companies that all embracing customer focused business process re-
engineering is necessary when implementing CRM. They add that CRM is a “continuous
effort” which should begin with a customer centric view taking customer feedback into
consideration and thus making sure marketing and other business processes are integrated
and organized in a manner that best serves the customers according to their individual needs and
values. Also recognize the need for firms to become more customers centric and that this could
be achieved through the linkage between CRM and business process re-engineering.

(Philip Kottler,2006) states that implementing CRM means changes throughout the whole
organization which is in accordance with integrating all business processes their view also
supports the idea that CRM requires everyone within the organization to be committed to
building strong customer relationships This, again, means changes in the way firms are
organized.

According to Payne, (2005) the organizational structural designs best suited for building
strong customer relationships are the ones based on inter-functional cooperation and
integration. Highlights the importance of a cross functional approach to customer
relationships, reminding(Philip Kottler 2006).

2.15. Conceptual frameworks

The Practice of Customer Relationship Management and Its Benefit on Customer Loyalty
in Awash bank
1. Dependent Variable:-Customers loyalty
2. Independent variable: - The Practice of Customer Relationship Management
 Handling costomers complain
 Use of modern technology
 Give efficient quality service
 create new strategies
 Smooth Customer Centric behavior

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11
 (IV)

(DV) Handling costomers complain

Customer loyalty Use of modern technology

Give efficient quality service

Create new strategies

Smooth customer centric behavior

The above diagram show the dependent and independent variable of customer relationship
management and it benefit on customer loyalty in Awash bank in NEKEMTE,town.

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12
 CHAPTERTHREE

RESEARCH METHDOLOGY

3.1 INTRODUCTION
This chapter consists of description of the study area, research design, source of data, data
collection techniques, population of the study, sample size of the study, sampling techniques,
data analysis and presentation.

3.2. Description of the study area

This study will conduct in NEKEMTE, town in Southern Nations Nationalities and People
Region in Oromia western which is 514 kilometer distance from the capital city of the country
and 255 kilometer from NEKEMTE city and its located at altitude of 1300 meter Above sea level
and average temperature 28 degree Celsius and average rainfall 1250 millimeter (mm) and the
area is located Southern part of NEKEMTE city and the area is mostly known by maize
production.

3.3. Research Design and Strategies

In this study, the student researcher will use descriptive methods, because the nature of the
subject is to identify or describe the phenomena and the nature of the subject is suitable for
descriptive manner for customer.

3.4. Source of Data and Data Collection Techniques

In This study the researcher will use both primary and secondary source of data. The primary
data are questionnaires and interview. The primary data will collect by questionnaires from
customers and employees and interview from the manager. The secondary data will gather from
articles wrote by authors, Journals, and published books that are related with the research
proposal and case study. All this will help us to examine and assess perception level based up on
the data that collects. The researcher will use both quantitative and qualitative Data Collection
research approaches.

3.5. Population of the Study and Sample Size

The total population of Awash, bank customer is known so that the researcher will use
probability sampling technique. From probability sampling the student researcher will use simple
random sampling technique for customers and employees because of the number of total
population are finite. in this study the student researcher will takes 91 customers from 960
customers of Awash bank and the remaining 13 sample will takes from employee and 1
manager. The following is determining of sample size the total population.

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13
 when:
n=N/1+N (e) 2

n=No of population

N=total population
n=960/1+960(0.1)2

n=960/1+960(0.01) e=error of margin

n=960/1+9.6 Source: Sampliner (2008)

n=960/10.6

n=91
3.6. Sampling Technique
To reach respondent, researcher will use probability sampling. From probability sampling the
researcher will select simple random sampling technique, because it serves as the basic for
sampling technique, easy to practice, easy to use and it’s cost effective. The total population of
Awash, bank customer is known so that the student researcher will use probability sampling
technique.so researcher takes 91 customers of the bank as a sample. Also the student researcher
will select 13 employees and 1manager as a sample. The researcher will be use simple random
sampling technique in order to select experience employees so that the researcher will getting
accurate information and data from the selected member.

3.7. Data Analysis Techniques

After selecting both primary and secondary source of data the next step is data analysis. The data
will collect from the employees are more qualitative in nature. The student researcher will be use
simple random technique of data analysis and will be analyze the data through simple statistical
tools like tabulation and percentage in order to analyze the result of collected data clearly and
efficiently

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14
Reference

1, Antony Lawrence, (2010).Customer relationship management 2 nd edition, Himaly publishing

house New Delhi

2, Armstrong G and Kottler, (2006).customer relationship management, London

3, Bennett, (2000).customer relationship management, London

4, Ellen Gifford, (2002).customer relationship management

5, Gary Armstrong and Philip Kottler, (2006) Principle of marketing, 11 th edition prentice hall of
India Pot-ltd. New Delhi

6, Philip Kottler and Kevin Killer, (2002 and 2006).Marketing management 12th edition

7, Sharp (2002). Customer relationship management, United Kingdom London

8, Zeblah, (2004).Customer relationship management

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